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COMMONWEALTH OF AUSTRALIA

Proof Committee Hansard

SENATE

ENVIRONMENT AND COMMUNICATIONS LEGISLATION

COMMITTEE

Estimates

(Public)

MONDAY, 23 FEBRUARY 2015

CANBERRA

BY AUTHORITY OF THE SENATE

[PROOF COPY]

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SENATE

ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE

Monday, 23 February 2015

Members in attendance: Senators Back, Canavan, Heffernan, Leyonhjelm, Lines, Ludlam, Madigan, Milne,

Rhiannon, Rice, Ruston, Siewert, Singh, Sinodinos, Waters, Whish-Wilson, Wright, Xenophon.

Monday, 23 February 2015 Senate Page 1


ENVIRONMENT PORTFOLIO

In Attendance

Senator Birmingham, Assistant Minister for Education and Training

Department of the Environment

Executive

Dr Gordon de Brouwer, Secretary

Mr Malcolm Thompson, Deputy Secretary

Dr Kimberley Dripps, Deputy Secretary

Mr David Parker, Deputy Secretary

Dr Steven Kennedy, Deputy Secretary

Corporate Strategies

Ms Mary Wiley-Smith, Chief Operating Officer

Ms Lily Viertmann, Chief Financial Officer

General Counsel

Mr Simon Writer, General Counsel

Policy Analysis and Implementation

Ms Benedikte Jensen, First Assistant Secretary

Mr Matthew Whitfort, Assistant Secretary, Strategic Policy and International Branch

Ms Tanja Cvijanovic, Assistant Secretary Economics and Deregulation Branch

Ms Lara Musgrave, Assistant Secretary Engagement and Evaluation Branch

Ms Robyn Kemp, Assistant Secretary Implementation and Governance Branch

Outcome 1

Biodiversity and Conservation

Mr Sean Sullivan, First Assistant Secretary

Ms Peta Lane, Assistant Secretary, Green Army and Reef

Ms Emma Campbell, Acting Assistant Secretary, Landcare and Biodiversity Policy

Mr James Barker, Assistant Secretary Programme Support

Ms Ami McGrath, Acting Assistant Secretary, Programme Delivery

Mr Gregory Andrews, Threatened Species Commissioner

Environment Assessment and Compliance

Mr Dean Knudson, First Assistant Secretary

Mr James Tregurtha, Assistant Secretary, Policy and Reform Branch

Ms Paula Stagg, Acting Assistant Secretary, South-Eastern Australia Assessment Branch

Ms Deb Callister, Assistant Secretary, Queensland and Sea Dumping Assessment Branch

Dr Simon Banks, Assistant Secretary, West Assessment Branch

Ms Carolyn Cameron, Assistant Secretary, Great Barrier Reef Taskforce

Mr Shane Gaddes, Assistant Secretary, Compliance and Enforcement Branch

Environment Quality

Mr Bruce Edwards, Acting First Assistant Secretary

Mr Andrew McNee, Assistant Secretary, Environment Protection Branch

Mr Matthew Dadswell, Assistant Secretary, Environment Standards Branch

Mr Declan O'Connor, Acting Assistant Secretary, Waste Policy Branch

Wildlife, Heritage and Marine

Mr Stephen Oxley, First Assistant Secretary

Mr Paul Murphy, Assistant Secretary, Wildlife Trade and Biosecurity Branch

Senate Monday, 23 February 2015


Ms Chris Schweizer, Assistant Secretary, Marine and International Heritage Branch

Mr Geoff Richardson, Assistant Secretary, Species and Ecological Communities Branch

Mr Chris Johnston, Assistant Secretary, Heritage Branch

Outcome 2

Emissions Reduction Fund Taskforce

Ms Shayleen Thompson, First Assistant Secretary

Mr Hilton Taylor, Assistant Secretary, Land Sector Abatement Branch

Mr James White, Assistant Secretary, Safeguard Mechanism Branch

Ms Kristin Tilley, Assistant Secretary, Methodology Development Branch

Climate Change and Renewable Energy

Mr Brad Archer, First Assistant Secretary

Ms Lyndall Hoitink, Assistant Secretary Renewables, Projections and Analysis Branch

Mr Rob Sturgiss, Assistant Secretary National Inventory Systems and International Reporting Branch

Ms Beth Brunoro, Assistant Secretary Adaptation and International Climate Change Policy Branch

Mr Paul Locke, Assistant Secretary Renewables, Projections and Analysis Branch

Mr Ross Lum, Director Renewables, Projections and Analysis Branch

Mr Chris Faris, Director

Ms Ami McGrath, Acting Assistant Secretary Programme Support Branch, Biodiversity & Conservation

Dr Scott Power, Senior Principal Research Scientist, Bureau of Meteorology

Science

Dr Diana Wright, First Assistant Secretary

Ms Gayle Milnes, Assistant Secretary, Office of Water Science

Mr Richard McAllister, Supervising Scientist

Ms Kerry Olsson, Assistant Secretary, Environment Resources Information Network

Dr Scott Power, Senior Principal Research Scientist, Bureau of Meteorology

Outcome 3

Australian Antarctic

Dr Tony Fleming, Director

Dr Rob Wooding, General Manager, Support Centre

Mr Matthew Sutton, Finance Manager

Dr Nick Gales, Chief Scientist

Outcome 4

Commonwealth Environmental Water Office

Mr David Papps, Commonwealth Environmental Water Holder

Mr Steve Costello, Assistant Secretary, Policy, Community Engagement and Portfolio Management Branch

Dr Benjamin Docker, Acting Assistant Secretary, Environmental Water Delivery Branch

Mr Greg Manning, Assistant Secretary, Wetlands Policy and Project Branch

Water

Mr Tony Slatyer, First Assistant Secretary

Mr Tim Fisher, Assistant Secretary, Water Policy Branch

Ms Mary Colreavy, Assistant Secretary, Water Recovery Branch

Ms Lucy Vincent, Assistant Secretary, Water Infrastructure Northern Branch

Mr John Robertson, Assistant Secretary, Water Infrastructure Southern Branch

Science

Dr Diana Wright, First Assistant Secretary



Mr Richard McAllister, Supervising Scientist

Ms Gayle Milnes, Assistant Secretary, Office of Water Science

Ms Kerry Olsson, Assistant Secretary, Environmental Resources Information Network

Agencies and Statutory Authorities

Bureau of Meteorology

Dr Rob Vertessy, Director of Meteorology

Dr Ray Canterford, Deputy Director, Hazards, Warnings and Forecasts

Ms Vicki Middleton, Deputy Director, Corporate Services

Dr Lesley Seebeck, Deputy Director, Information Systems and Services

Mr Graham Hawke, Deputy Director, Environment and Research

Dr Sue Barrell, Deputy Director, Observations and Infrastructure

Dr Anthony Rea, Acting Assistant Director, Observing Strategy and Operations

Mr Alasdair Hainsworth, Acting Assistant Director, Hazards Prediction Services

Clean Energy Regulator

Ms Chloe Munro, Chair and Chief Executive Officer

Dr Lesley Dowling, General Manager Emissions Reduction Fund Implementation

Mr Geoff Purvis-Smith, General Counsel

Mr Christopher Ramsden, Operations Division

Mr Tas Sakellaris, Strategic Advisor to the Chief Executive Officer

Mr Amar Singh Rathore, General Manager, Renewable Energy Target Market Operations Branch

Ms Jackie Raynor, Acting General Manager, Registrations and Reporting Branch

Ms Jody Swirepik, Executive General Manager, Reporting and Carbon Market Division

Mr Mark Williamson, Executive General Manager, Renewables and Carbon Farming Division

Ms Mary-Anne Wilson, General Manager, Carbon Farming Branch

Climate Change Authority

Mr Bernie Fraser, Chair

Ms Anthea Harris, Chief Executive Officer

Ms Kath Rowley, General Manager

Mr Michael Everett, Director Corporate Services

Director of National Parks

Ms Sally Barnes, Director of National Parks

Mr Charlton Clark, Assistant Secretary, Parks Business and Policy Branch

Great Barrier Reef Marine Park Authority

Dr Russell Reichelt, Chairman

Ms Margaret Johnson, General Manager Policy and Stewardship

Mr Bruce Elliot, General Manager, Biodiversity, Conservation and Sustainable Use

Mr Andrew Skeat, General Manager Great Barrier Reef Operations

Mr John Barrett, Chief Finance Officer

Ms Patricia Clive, Project Manager Parliamentary

Murray-Darling Basin Authority

Dr Rhondda Dickson, Chief Executive

Mr David Dreverman, Executive Director, River Management Division

Mr Russell James, Executive Director, Policy and Planning

Ms Jo Schumann, Executive Director, Corporate and Business Services Division

Mr Brent Williams, General Manager, Constraints Management Taskforce, River Management



Mr David Galeano, General Manager, Social and Economic Policy Analysis

Mr Colin Mues, Executive Director, Environmental Management

National Water Commission

Mr Richard McLoughlin, Acting Chief Executive

Committee met at 09:00

CHAIR (Senator Ruston): I declare open this public hearing of the Senate Environment and

Communications Legislation Committee. The Senate has referred to the committee the particulars of proposed

additional expenditure for 2014-15 for the environment and communication portfolios and other related

documents. Today the committee is examining the department and agencies of the environment portfolio. The

committee has set Friday 10 April, 2015 as the date by which answers to questions on notice are to be returned.

Under standing order 26 the committee must take all evidence in public session. This includes answers to

questions on notice. 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 the committee. The Senate by resolution in 1999 endorsed the following test of

relevance of questions at estimates hearings: any questions going to the operations of financial positions of the

departments and agencies which are seeking funds in the estimates are relevant questions for the purpose of

estimates hearings. I remind officers that the Senate has resolved that there are no areas in connection with the

expenditure of public funds where any person has a discretion to withhold details or explanations from the

parliament or its committee unless the parliament has expressly provided otherwise. The Senate has also resolved

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 officers to superior officers or to a minister. This

resolution prohibits only questions asking for opinions on matters of policy and does not preclude questions

asking for explanations of policies or factual questions about when and how policies were adopted.

I particularly draw the attention of witnesses to an order of the Senate of 13 May, 2009 specifying the process

by which a claim of public interest immunity should be raised. Witnesses are specifically reminded that stating

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 information in the document.

The extract read as follows—

Public interest immunity claims

That the Senate—

(a) notes that ministers and officers have continued to refuse to provide information to Senate committees without properly

raising claims of public interest immunity as required by past resolutions of the Senate;

(b) reaffirms the principles of past resolutions of the Senate by this order, to provide ministers and officers with guidance

as to the proper process for raising public interest immunity claims and to consolidate those past resolutions of the Senate;

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

(1) If:

(a) a Senate committee, or a senator in the course of proceedings of a committee, requests information or a document from

a Commonwealth department or agency; and

(b) an officer of the department or agency to whom the request is directed believes that it may not be in the public interest

to disclose the information or document to the committee, the officer shall state to the committee the ground on which the

officer believes that it may not be in the public interest to disclose the information or document to the committee, and specify

the harm to the public interest that could result from the disclosure of the information or document.

(2) If, after receiving the officer’s statement under paragraph (1), the committee or the senator requests the officer to refer

the question of the disclosure of the information or document to a responsible minister, the officer shall refer that question to

the minister.

(3) If a minister, on a reference by an officer under paragraph (2), concludes that it would not be in the public interest to

disclose the information or document to the committee, the minister shall provide to the committee a statement of the ground

for that conclusion, specifying the harm to the public interest that could result from the disclosure of the information or

document.

(4) A minister, in a statement under paragraph (3), shall indicate whether the harm to the public interest that could result

from the disclosure of the information or document to the committee could result only from the publication of the information



or document by the committee, or could result, equally or in part, from the disclosure of the information or document to the

committee as in camera evidence.

(5) If, after considering a statement by a minister provided under paragraph (3), the committee concludes that the statement

does not sufficiently justify the withholding of the information or document from the committee, the committee shall report

the matter to the Senate.

(6) A decision by a committee not to report a matter to the Senate under paragraph (5) does not prevent a senator from

raising the matter in the Senate in accordance with other procedures of the Senate.

(7) A statement that information or a document is not published, or is confidential, or consists of advice to, or internal

deliberations of, government, in the absence of specification of the harm to the public interest that could result from the

disclosure of the information or document, is not a statement that meets the requirements of paragraph (1) or (4).

(8) If a minister concludes that a statement under paragraph (3) should more appropriately be made by the head of an

agency, by reason of the independence of that agency from ministerial direction or control, the minister shall inform the

committee of that conclusion and the reason for that conclusion, and shall refer the matter to the head of the agency, who shall

then be required to provide a statement in accordance with paragraph (3).

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


[09:02]

CHAIR: I welcome the Hon. Senator Birmingham, Assistant Minister for Education and Training,

representing the Minister for the Environment and portfolio officers from the department. Dr de Brouwer, would

you like to make an opening statement?

Dr de Brouwer: No, thank you.

CHAIR: Minister?

Senator Birmingham: No, thank you.

CHAIR: Senator Singh.

Senator SINGH: Dr de Brouwer, I want to start with some questions about the linkages between this

department and the Department of Agriculture, specifically on biosecurity. How do the two departments work

together in a structured and formal way on biosecurity matters?

Dr de Brouwer: I might ask Mr Thompson, who works more directly on that.

Mr Thompson: I will provide an answer to that. We can cover in more detail some of these issues in 1.4,

which is where this issue is managed. The lead agency on biosecurity matters is the Department of Agriculture.

They lead a whole-of-government response through the National Biosecurity Committee, the NBC. The

department is an active member of that committee with other agencies and also with state and territory agencies.

That is the main mechanism through which we cooperate. There are other arms of cooperation, including in

relation to similar spending that occurs under the National Landcare Programme, if there are biosecurity threats.

We contribute to the development of the management arrangements to be put in place when the biosecurity

threats occur, including the clarification of roles and responsibilities of the Commonwealth and the states and,

within the Commonwealth, the Department of the Environment and the Department of Agriculture and other

agencies, including Customs and Border Protection et cetera.

Senator SINGH: With the committee that the Department of Agriculture leads, do you have some detail as to

how many and who from this department participate in it? How many state entities are a part of that? Can you

break down the actual detail of the structure?

Mr Thompson: I would have to come back to you in that later session, if that is alright, with the precise

details. We participate through one of our departmental officers. I am a nominated lead contact, I think, for that

committee. But participation is mainly through one of the more junior officers.

Senator SINGH: With the Department of Agriculture as a lead, how do you deal with the state and territory

governments on biosecurity matters?

Mr Thompson: As you are probably aware, a lot of the on-the-ground effort to deal with biosecurity

outbreaks and threats is undertaken by the state and territory governments themselves. For example, the

Commonwealth has provided funding and coordination for the yellow crazy ant outbreaks in Queensland. But a

lot of the on ground effort is carried out by the state itself. The Queensland government, in that instance, has

provided significant funding to address that threat.

Senator SINGH: What is the structure by which this department coordinates with the state and territory

governments? Is it through COAG or through ministerial councils?



Mr Thompson: Again, it is through the National Biosecurity Committee. That is the main mechanism, and it

has an established management plan and arrangements for dealing with biosecurity threats and outbreaks.

Senator SINGH: That doesn't sit under COAG, does it?

Mr Thompson: No, it is an officials level committee within the agricultural portfolio. So it does not sit under

COAG.

Senator SINGH: How often does that committee meet?

Mr Thompson: I would have to take that on notice. I do know that it does a lot of its work out of session as

well. There is a constant flow of work through that committee.

Senator SINGH: With the states and territories?

Mr Thompson: With all members of the committee, yes.

Senator SINGH: You said the states and territories are on that committee.

Mr Thompson: Yes. I will confirm that but that is my understanding.

Senator SINGH: I will now move to some staffing questions. At the last estimates you indicated that, with a

couple of staff members in the process of transferring or deciding their future, the department had met its 2014

budget redundancy target of 250. Can you confirm that this is the case?

Dr de Brouwer: We have gone through three voluntary redundancy rounds and one EL2 capability round.

The exit from the department through voluntary redundancies has been 375 people. So we are on budget for 2014-

15. I might ask Ms Wiley-Smith to comment on the different numbers on the rounds. There have been three

rounds and we thought that that 250 was one of those rounds. I will check whether that 250 is exactly right.

Ms Wiley-Smith: I can confirm that we have had 177 employees depart prior to 1 July 2014. We have had a

further 186 who have departed this financial year. That is at 31 January. We have another 12 who are scheduled to

depart before the end of this financial year. This year it is 198 staff in total. It is a little under the 250 but we have

also had quite a number of staff initiated separations. As Dr de Brouwer has mentioned, we are well on track for

this financial year and going into the next.

Dr de Brouwer: I think that we anticipated that there would be less natural attrition and more on the VR side.

It turned out that there was more natural attrition—people leaving themselves—rather than the VR. The

combination of those has meant that we are on budget.

Senator SINGH: I was going to refer to the question on notice that you provided, question 335—which

perhaps is a little out of date now based on what Ms Wiley-Smith has provided—where you have a list of the

redundancies for the 2013-14 financial year and the period 1 July to 30 September last year. It says that 66

employees are expected to depart by the end of this financial year. I want to know if those 66 have already

departed. But I think your answer supersedes that.

Ms Wiley-Smith: Yes, the majority of the 66 have departed but there are 12 of the 66 still to go.

Senator SINGH: Will they have departed by the end of this financial year?

Ms Wiley-Smith: Correct.

Senator LINES: On that number of 198 for the financial year, you said that some of them were natural

attrition. What percentage is natural attrition and what happens and to that post number?

Ms Wiley-Smith: The 198 were staff who left through the voluntary redundancy round. On top of that,

towards the 250, is staff that have left through natural attrition. It could be that they have transferred to another

agency, they have resigned or they may have also retired. So there are a number of things there. But they are

employee initiated separations.

Senator LINES: What happens to that post number? Is that a vacancy? Sorry, I am not up with the public

sector jargon. If someone leaves through natural attrition, what happens to that position?

Ms Wiley-Smith: It depends, Senator. It could be reclassified, it could be that the work is continuing and then

we might need to fill the position going forward. But it is really up to, I guess, the area concerned and the

workload that they have into the future.

Dr de Brouwer: It may also be that the position is not filled because the budget means that we have to fit the

staff numbers to the budget. So there has been a net reduction in staff.

Senator LINES: So some of those vacancies will be used to offset targets?

Dr de Brouwer: Yes.



Senator LINES: Can you give a precise breakdown, please, of the employees initiated separations, and what

is happening to the posts that they were filling? You can take the question on notice.

Ms Wiley-Smith: I will take it on notice. Thank you.

Senator LINES: But you understand what I am asking?

Ms Wiley-Smith: Yes.

Senator SINGH: Can we go into some of the detail about how this is done within the department? For

example, looking at the EL2 capability round, I understand that that was a spill and fill. How many EL2s were not

offered their jobs, or a job, after that spill and fill process?

Dr de Brouwer: In that process, people who were not successful and who left generally all took a voluntary

redundancy. We have not separately identified those people. So they are part of that total VR number. We have

not identified them separately because we proceeded in this in a way of not separating people who were leaving

on a voluntary basis and people who were leaving on an involuntary basis. That is not the practice of some other

departments. Generally, if people, through this process, have been offered a VR and have chosen to accept it, then

those numbers are included in the VR numbers and not identified separately.

Senator SINGH: Right. It is not really a genuine VR, is it? Obviously they have taken a VR as their way of

having to leave the department. But really that choice was potentially not to leave the department to start with.

Dr de Brouwer: I understand, Senator. But they have in the end chosen to take a VR. Part of that is them,

with their colleagues, not being able to identify people separately who have had less choice in departing the

department. That is to provide them with a sense of greater control over their lives and not to isolate those people.

That is why we have not talked about those numbers specifically.

Senator SINGH: To be clear, your VR numbers don't breakdown those that actually wanted to remain in the

department but missed out through that spill and fill process?

Dr de Brouwer: They don't in that sense, but the people who chose to take a VR rather than go through the

involuntary exit processes. So, they do not.

Senator LINES: Do you have any non-ongoing staff in the department at the moment?

Dr de Brouwer: Yes, Senator. We can give you those numbers.

Ms Wiley-Smith: There is a total of 364 non-ongoing staff as at 1 February this year.

Dr de Brouwer: Do you have that broken down into position levels and divisions that they work in?

Ms Wiley-Smith: We can, Senator. I should point out that the majority of our non-ongoing staff are in the

Antarctic division. They are employed seasonally for the summer. There are 236 at the moment in the Antarctic.

Dr de Brouwer: Typically for Antarctic we have about 500 people who go down there over the summer

period. A lot of those positions are in fact on a non-ongoing basis. They are for each season.

Senator LINES: So would that 236 non-ongoing in AAD be the usual number for non-ongoing each year?

Dr Kennedy: Yes. The practice around the Australian Antarctic Division has not change from year to year. So

each season there is a number of non-ongoing people engaged, called expeditioners. Electricians, diesel

mechanics, plant operators and some scientists come on board and they go down for the summer season. There

are also people engaged in the winter season. It is a long-standing practice. When we come to that outcome in

today's discussion, we are happy to go through those particular numbers. But it is a practice that has not changed.

Senator Birmingham: I think, Senator, I used to ask the same questions.

Senator LINES: Did you?

Senator Birmingham: And get the same answers.

Senator LINES: Are you having deja vu, Minister?

Dr Kennedy: I am happy to go through those. We will get a breakdown when we get to the Antarctic division.

We can go through those for you.

Senator LINES: I asked the question because there is one difference, and that is that the AAD is under a

significant budget constraint now, which has been put on it by this government. I am trying to see whether the

non-ongoing—the 236 of the 364, which you have said is attributed to the AAD—is to do with any budget

constraint issues that the AAD is currently having to face.

Dr de Brouwer: It is a normal operating procedures, Senator. With the AAD session, if we go through what

some of those positions are then you will see why they are non-ongoing. But it is normal behaviour.



Senator LINES: You may have answered this, but I got a bit confused. If you take out the Antarctic staff

component, what is the number of non-ongoing?

Ms Wiley-Smith: I will get someone to do a quick calculation for us. But I should also point out that there is a

significant number of non-ongoing staff in parks, and it is for very similar reasons—that is, supporting our

operations in Parks Australia around the country. With other divisions it depends. It is two or three in other

divisions.

Senator LINES: Maybe if you could identify for us the seasonal people—the normal seasonal workers in

your department—and then what the other non-ongoing component is.

Dr Kennedy: Perhaps if we got you a table showing by division the ongoing and non-ongoing staff.

Senator LINES: That would be very helpful.

Senator SINGH: Are there any other further redundancies for this financial year?

Dr de Brouwer: No, Senator.

Senator SINGH: None at all?

Dr de Brouwer: There are the exits that are still in process. But in general there is no other redundancy

process in place.

Senator LINES: Have you got any contactors?

Ms Wiley-Smith: We normally call our non-ongoing staff contractors.

Senator LINES: Are you using KPMG or any of those sorts of agencies?

Dr de Brouwer: Do you mean for consulting?

Senator LINES: Yes.

Dr de Brouwer: We have a range of consultants that we use.

Ms Wiley-Smith: In terms of consultancies, that is something that we do not have information on at the

moment. It is not something that we control centrally. It depends on whether the line areas have a particular need

for expertise. They go out and test the market and actually employ a company to do a specific task. We can

certainly provide more information on that, perhaps on notice.

Mr Thompson: Typically those consultancies are engaged on a project-by-project basis. For example, to do

regulatory impact cost benefit analysis and that sort of thing. It is more technical work around fuel quality and

those sorts of things.

Dr de Brouwer: In general, with a tighter budget, my sense of the consultancy side is that it is just as tight. It

has not been used as another form of increased expenditure. The overall budget is tight and so any consultancies

are also tight. A clear business case has to be made for the use of consultancies.

Ms Wiley-Smith: I can respond now to your earlier question on the number of non-ongoing staff that are not

currently working in AAD. It is 128.

Senator SINGH: You are going to take Parks out of that as well.

Ms Wiley-Smith: If we take Parks out then it is around 80 staff.

Senator SINGH: And what divisions are they in?

Senator LINES: I think they are going to give us a table.

Senator SINGH: Okay. I want to go back to the capability assessment process. Can you update us on the

scope of this process? For this year, are there any more spill-and-fills?

Dr de Brouwer: No, the EL2 process has been completed. There are no other general processes in play for

2014-15.

Senator SINGH: You were saying before that the voluntary redundancies are not separated out from other

voluntary redundancies—those from the capability assessment process. But you must have some kind of list. Can

you provide us with how many have left the department as a result of the capability assessment process?

Dr de Brouwer: All of these people took voluntary redundancies. We are trying not to isolate particular

individuals on that basis.

Senator SINGH: Can you tell this committee the number of staff that left the department as a result of the

capability assessment process?

Dr de Brouwer: Can I take that question on notice? I do not have that in front of me.



CHAIR: Senator Canavan.

Senator CANAVAN: I have some questions on the register of environmental organisations. I have some basic

questions to start with so I can get my head across things. If I want to register as an environmental organisation to

get the DGR status, what information do I have to provide the department?

Dr Kennedy: I will call some colleagues up who can take you through that administrative process. I will draw

your attention to the guidelines on the—

Senator CANAVAN: I have been through those.

Dr Kennedy: Okay. We would be largely talking to those in response to this question. Is there something in

particular?

Senator CANAVAN: What I am in particular getting at is that, as you would know, under those guidelines

organisations must have a principle purpose of protecting the environment or providing education about the

environment. I am paraphrasing here. How do they establish that one or both of those activities are their principle

purpose? How do you establish it?

Dr Kennedy: I'll ask my colleague Ms Jensen to respond. But in broad terms, the applicant is going to provide

information where they have to address, as you said, the principle purpose test in general terms. We administer it

against the test in light of the manner in which it is set. As long as the organisation applying can firstly satisfy the

technical aspects—so how many members they have and all those sorts of things—and then get to the principle

purpose of explaining what their organisation is going to be for, we would do some diligence around the

information they have provided. But it is just exactly as it is laid out in the guidelines. If it is for the purpose of

education or for the purpose of action to improve environmental outcomes, then that is how we would evaluate it.

It is a broad purpose.

Senator CANAVAN: I understand that.

Dr Kennedy: We administer it within the manner in which it is put down.

Senator CANAVAN: In the guidelines it says on page 9 of section 2:

An organisation seeking registration must provide evidence of its environmental purpose or purposes by listing its formal

objects as part of its constitutional documents.

Do I take from that that all I have to do is list my constitution and that is enough evidence for you to accept it?

Dr Kennedy: It is not just that. That would be an important part of it. As you know, the department will

provide a recommendation to the minister, and the minister will make a decision which will go to the Assistant

Treasurer, ultimately. Then the Assistant Treasurer will make the final decision about whether the entity is on the

register. In providing that advice, we would look further than simply just whether someone's got more than 50

members and a constitution that says these things. I will say again that we set it out in broad terms and we would

check that their activities and the manner in which their constitution outlines their activities are consistent.

Senator CANAVAN: So you do check what they do and not just what they say?

Dr Kennedy: We would do some due diligence, but I do not want over emphasise it. We do not have a large

team of people who go out and do surveys and all of these arrangements.

Senator SINODINOS: So you might, for example, Google to see whether there are references to the

organisation and its activities? Is it that sort of thing? Is it desktop staff? How would you do it?

Dr Kennedy: Google is a popular way for people to undertake research, I suppose. But we would make some

phone calls, of course. We have to check the bona fides of the arrangement—that the entity exists, its constitution

and those sorts of things. So it is not a simple thing of whether they have turned up.

Senator SINODINOS: How do you determine if the same people have set up a number of organisations with

related purposes? You get what I mean?

Dr Kennedy: Yes. As far as I am aware, but I will double check this by taking the question on notice, there is

nothing to preclude people being part of different organisations for similar purposes.

Senator SINODINOS: It is just that you do not want a situation where some people can set up a number of

similar organisations with a relatively similar membership just to take advantage of being registered as

environmental organisations.

Dr Kennedy: The policy that we administer does not go to that particular issue. The policy as it is, and I will

double check for you, would allow what you have just described.

Senator CANAVAN: Just to clarify, I could set up an organisation with 50 members, achieve accreditation

and have another organisation with exactly the same 50 members with a different name and different constitution



and still qualify. There are no restrictions on the overlap of membership. That is my understanding, but can you

confirm that?

Dr Kennedy: I would say that I do not know of any examples like that.

Senator CANAVAN: I know that. That is just to put it in stark relief.

Dr Kennedy: We do not tend to get into hypotheticals, but I will confirm whether that is a plausible scenario.

It is a reasonable point to make that there would be reasonable overlaps across some of the organisations you see

among the over 500 organisations listed on the register of environmental organisations.

Senator CANAVAN: Can I just clarify with you that it is not enough for an organisation simply to put in a

constitution that that principle purpose is such and such?

Dr Kennedy: As you know, if it is brought to our attention that a body is not complying with the actions that

it should be complying with—

Senator CANAVAN: I am only talking about the registration right now. I will come to the compliance.

Dr Kennedy: The point I was simply going to make is that the same principle applies on compliance as it does

for registration. We expect the entity to act in line with its constitution. It is in the nature of the compliance

arrangements we do that we would also be considering that in the registration arrangements. We want to have a

reasonable expectation of that when we advise the minister. No minister would accept trying to make a

recommendation to the Assistant Treasurer without some more knowledge beyond simply what the constitution

was of the organisation.

Senator CANAVAN: One of the principle purposes, as you would know, is education about the natural

environment. How do you draw a distinction between the word 'education' and advocacy, or is there no

distinction? I know that you do not like dealing with hypotheticals, but if I were an organisation that went around

doorknocking about a particular issue, is that education under these principles or is that political advocacy?

Dr Kennedy: You are identifying a difficult part of the register to administer. What we would do in our

advice to the minister on whether an organisation should be registered, whether its activities are educational

activities or have become other activities that were not consistent with the intent of the principle purpose, is

simply provide advice. You are right to draw attention to the fact that that it is a difficult part to administer. Some

people would argue, reasonably, that not talking to people about environmental issues and providing educational

information, say scientific information in a direct way, is education. Other people might see that as direct

advocacy. Because that is very much in the eyes of each person, it is part of the policy that we tend to administer

broadly. The policy and the acts as they currently are is what we are asked to administer.

Senator CANAVAN: If an organisation's principal purpose is education, is there any obligation on them not

to make misleading or deceptive claims?

Dr Kennedy: That is a good question. If it were drawn to our attention that one of the bodies were making

claims that did not have educational value—let's put it that way—so they were deliberately misleading, then they

would be—

Senator CANAVAN: Have you ever investigated an organisation for those reasons?

Dr Kennedy: I do not know off the top of my head. I will have to take that on notice. When we say 'education'

we do not mean you can just make up something and say something patently misleading. But there would be a

point—and this again would be a spectrum—where a set of statements are clearly misleading, are advocacy and

are beyond education. Then there would be a set of contested areas.

Senator CANAVAN: I am really interested in how this is enforced, because, whatever the law says, if it is not

enforced then it does not matter—if you could take that on notice. I know from last estimates you gave me some

information. But could you take on notice if anyone has been even investigated for not complying with that

particular principal purpose.

Senator SINODINOS: Let me give you a hypothetical to follow up.

Dr Kennedy: I am very uncomfortable with these hypotheticals, Senator.

Senator SINODINOS: Let's say Ian Plimer sets up the 'Ian Plimer Appreciation Society' as a vehicle for

pushing his views on climate change. How would that sort of example be treated? You can go away and think

about this, but is that education? What I am getting at is that there are some areas that are potentially contested.

How do you treat those sorts of areas when it comes to the education criteria?



Dr Kennedy: I will take that on notice. We will try and respond in the way that Senator Canavan has outlined.

We will have to be careful talking about specific cases. We will try and find one that can give you more insight

about the compliance.

Senator CANAVAN: I have a few more questions. On the compliance side of things, as you would be aware,

they are required to provide financial information. What happens if they don't provide that on time?

Dr Kennedy: We can go to the precise administrative arrangements if you wish. But, effectively, if people are

not complying by putting forward their statistical information, it would be brought to their attention and they

would be given some time to remedy it. If they do not remedy it, they would be taken off the register.

Senator CANAVAN: I notice in the guidelines there is information on expenditure provided. What level of

detail is that to? Does it break it up into things like advertising and wages et cetera or is it broader than that?

Ms Jensen: We can take the specific breakdowns on notice. It does depend on the nature of the compliance

activity. It is important to recall that compliance activities are conducted by the ATO and the Australian Charities

and Not-for-profits Commission as well as the department. So it does depend on the nature of the activity.

Senator CANAVAN: But you receive the information? My question just relates to the information.

Ms Jensen: All three organisations will receive financial information and conduct compliance activity

depending on the particular aspect of compliance.

Dr Kennedy: What we can provide you on notice is the breakdown of the annual returns that come to this

department for our aspect of compliance. I think that is what you are seeking.

Senator CANAVAN: Yes. One final question on this issue of not acting as a conduit. At the last estimates, I

asked questions about whether or not any organisation had been taken off for a breach of section 30-270(2),

which deals with the conduit issue. You didn't quite answer my question. You did answer that, in the last couple

of years, no-one has been taken off. But has anyone ever been taken off?

Ms Jensen: We cannot talk about specific organisations, due to confidentiality issues.

Senator CANAVAN: I am not asking about an organisation.

Ms Jensen: However, I can say that conduit activities are explicitly ruled out. If it comes to our attention that

there may be a conduit activity taking place, then we will bring that to the attention of the organisation. We would

ask them to provide assurances that would give us the degree of assurance that we need either to show that there

may be some or that actually they have provided evidence that the claim is without any basis. If we are not

assured, then we will take them off the register.

Senator CANAVAN: I understand all of that. But I directly asked at the last estimates if an organisation has

been taken off of the register because of noncompliance with section 30-270(2). You have provided some

information there but you have not actually said whether anyone has been taken off because of noncompliance

with section 30-270(2). I am happy for you to take that on notice again. You gave me information for the last

year. Can you take that on notice again, Ms Jensen?

Ms Jensen: We noted that we had issued in 2013-14 approximately 40 compliance warnings and that we are

taking appropriate action. But in this period there have not been organisations taken off of the register.

Senator CANAVAN: 'In this period'—I took that to mean this year.

Dr Kennedy: I might be able to help you. I will tell you this and I will also confirm it on notice: for just the

conduit issue, I am not aware of any organisation being taken off the register.

Senator CANAVAN: I was asking specifically about the issue between Friends of the Earth and GetUp!. I

believe that since the last estimates you have cleared or finished the investigations in regards to this matter; is that

correct?

Dr Kennedy: We have.

Senator CANAVAN: What were the conclusions of that investigation?

Dr Kennedy: We do not talk about specific organisations. But no further action is being undertaken.

Senator CANAVAN: Did you in your investigations ask to see the board papers of GetUp! that The

Australian reported on?

Dr Kennedy: I will take that on notice. We are very careful about these compliance arrangements because of

their interaction with the tax law and the things that officials typically do. To be frank, tax officials are much

more practised with that information. But I appreciate your interest in that.



Senator CANAVAN: Do you have the powers to do that right now? This is an Income Tax Assessment Act

issue, so would you have the powers to subpoena documents and those types of things?

Dr Kennedy: I will take on notice the particulars of whether we sought that information. That will also allow

me to just consult with colleagues about the usual practice—and we will do everything we can to respond to you

in the usual way—of revealing information about particular compliance cases. I am sure we can address the issue.

Senator CANAVAN: Thank you, Dr Kennedy.

CHAIR: Senator Waters.

Senator WATERS: Pardon me if I missed this at the beginning of the session. Can I have an update on the

total level of full-time-equivalent staff in in the department at the minute? Do you have the latest up-to-date

figure?

Ms Wiley-Smith: The total full-time equivalents in the department as at 1 February were 2,233.8.

Senator WATERS: Can you tell me the current staffing in the Environment Assessment and Compliance

Division at the same date?

Ms Wiley-Smith: In terms of paid FTEs?

Senator WATERS: Yes.

Ms Wiley-Smith: It is 173.5.

Senator WATERS: That is down from, I think, 236 as at May last year. Is that correct?

Ms Wiley-Smith: I think that the 236 you are referring to is actually a headcount, not an FTE figure.

Senator WATERS: Okay. Can you take on notice for me the FTE equivalent figure for May 2014 so I can

compare apples with apples?

Ms Wiley-Smith: Certainly.

Senator WATERS: And the FTEs for the Compliance and Enforcement Branch?

Ms Wiley-Smith: I do not have in front of me the exact numbers for the Compliance and Enforcement

Branch, but they are on a little bit later today and should be able to provide a breakdown. I have divisional

breakdowns at the moment. It is at that level.

Mr Thompson: We can provide that number at 1.5. I am aware that those numbers remain at current levels or

slightly higher. We will confirm that and come back to you.

Senator WATERS: I have some detailed questions about that. Should I leave that to 1.5?

Mr Thompson: Yes.

Senator WATERS: Can I just seek your guidance? I am keen to ask either today, or a different agency if it is

not appropriate to you mob, about the interaction between fracking and earthquakes and who, if anybody, is

charged with looking at that and feeding it into the regulatory process. Can you give me some guidance on who I

should ask those questions?

Dr Dripps: I think that you will find that the Chief Scientist undertook a detailed inquiry into those matters as

part of his consideration of shale gas, as reported by ACOLA, the Australian Council of Learned Academies,

about 12 months ago.

Senator WATERS: Was that about coal seam gas as well? I am not just interested in shale.

Dr Dripps: If I recall correctly, that study drew on both shale and coal seam gas.

Senator WATERS: And they are on, I presume, at some point this week?

Dr Dripps: They are in the industry portfolio.

Senator WATERS: Great. Thank you.

CHAIR: Senator Singh.

Senator SINGH: I want to go back to the national bodies that we were talking about at the beginning. We

talked about the National Biosecurity Committee, but we did not actually touch on any other national bodies that

this department is engaging with to carry out the environmental and water reforms of this government. What other

national bodies or forums does this department engage with, including with states and territories? I know that

there is a lot of bilateral engagement. I am not talking about bilateral engagement with the states. I am talking

about specific committees, forums and official bodies that this department engages with.

Dr de Brouwer: On environment, water and those issues, we engage very broadly, I would have to say. It is a

very general question. Is it just in relation to biosecurity or just in general?



Senator SINGH: No, I am not asking about biosecurity, and we canvassed that. I am asking about the rest—

the government's environment and water reforms. For example, there was the COAG Standing Council on

Environment and Water, SCEW, which was abolished by this government. Now it is uncertain what

intergovernmental forums exist to carry out water and environment reforms.

Dr de Brouwer: We might go through some of those. But in general, even though SCEW was abolished, it

was left open that environment and water ministers would meet as required by their policy agenda. The

Commonwealth, state and territory environment and water ministers do meet as required with particular issues.

For example, the environment ministers met, I think, last May. We can go through some of the issues that they

talked about. They can range from anything to air quality type issues through to environment protection and

climate change policies as well, both mitigation and adaptation.

Senator SINGH: So that is a MINCO?

Dr de Brouwer: It is not a MINCO. It is an informal, ad hoc meeting of ministers.

Senator SINGH: Who decides?

Dr de Brouwer: Ministers do.

Senator WATERS: Any minister?

Dr de Brouwer: Typically the Commonwealth minister calls together and invites—

Senator SINGH: The Commonwealth minister decides when to have this informal meeting of ministers?

Senator Birmingham: There would be nothing to stop a state minister from requesting the Commonwealth

minister to convene such a meeting, if they thought that one was due. As Dr de Brouwer has said, it has happened.

In other spaces, ministerial councils remain—for example, for the Murray-Darling Basin and the Lake Eyre

Basin. It depends on the nature of the portfolio area. But, at that broader environment ministers level, that is the

way they have met.

Senator SINGH: Perhaps we could have a list of all of the bodies, some of which the minister has just alluded

to, that do exist and when they have met. Also, in relation to this informal minister's meeting, if we can have on

notice a list of when that particular body, whatever it is known as—

Dr de Brouwer: It is an environment ministers meeting.

Senator SINGH: has met since the abolition of SCEW.

Dr de Brouwer: Certainly. Typically after these meetings ministers also issue a press release to summarise

the things that have come from those meetings. That is a standard form.

Senator Birmingham: I am pretty sure that my recollection from that environment ministers meeting was that

there was a communique or media statement issued. It had a very formal and structured agenda and process to it.

It is not that the Commonwealth undertakes everything that is necessarily on the agenda at those meetings.

Different jurisdictions may take a lead responsibility for presenting a paper on a particular topic. It is still quite a

formal and structured ministerial meeting process.

Senator SINGH: Is there one in train in the next little while?

Dr de Brouwer: There is one this week.

Senator SINGH: Whereabouts is that?

Dr de Brouwer: It will be here.

Senator SINGH: In Canberra?

Dr de Brouwer: Yes.

Senator SINGH: Has that been under the ask of the Commonwealth minister?

Dr de Brouwer: It is the Commonwealth minister working with his state and territory colleagues.

Senator SINGH: So Minister Hunt asked for this informal meeting?

Dr de Brouwer: Typically, other state and territory ministers, as Minister Birmingham said, will put issues on

the agenda or ask for a meeting as well. The lead is by the Commonwealth minister.

Senator SINGH: How many have happened since the abolition of SCEW?

Dr de Brouwer: The one this week will be the second. We will come back—

Senator SINGH: With a list of all of the other bodies as well.

Dr de Brouwer: There are other formal bodies under legislation, including the National Environmental

Protection Council and a broad range of others.



Senator SINGH: And all of those bodies that this department participates in?

Dr de Brouwer: Yes, Senator.

CHAIR: Thank you very much. I now call to the table officers from the Bureau of Meteorology.

Bureau of Meteorology

[09:48]

CHAIR: Dr Vertessy, would you like to make an opening statement?

Dr Vertessy: I would. Thank you very much. Good morning. Our thoughts are with the communities and

businesses that have been impacted by severe tropical cyclones Lam and Marcia and the ensuing floods as these

communities recover from these terrible natural disasters. It is a massive relief that there were no fatalities or

serious injuries resulting from these very dangerous events. That is largely due to the excellence of the emergency

services in the Northern Territory, Queensland and New South Wales, who provided superb guidance and were

well supported by the media. The communities impacted are to be congratulated also for heeding the advice of the

emergency services.

Although our country is exposed to some of the world's most serious natural disasters, we rank with the best in

terms of our preparedness and our resilience. I am gratified that the bureau's services once again played such an

important part in keeping people safe. Never before have we observed two severe tropical cyclones impacting the

Australian coastline near simultaneously. Each of those two systems presented particular challenges to forecast

accurately. Our preliminary assessment is that we performed well.

I would like to record my appreciation to the front-line operational staff of the bureau—in particular, the skill

of our weather and flood forecasters in providing timely and accurate forecasts and warning, the field teams that

keep critical observations coming in during such adverse conditions, the IT professionals who keep our systems

working under such heavy loads and our communication teams who are flooded with requests for information

from the media. We delivered over 200 radio interviews during that time as well as much on television, and had a

presence in emergency services meetings. All of our staff operate under great stress for protracted periods but do

so with relish because of their commitment to the public good. Thank you, Chair.

CHAIR: With the introduction of the new supercomputer, was its services used during the last few days? If

so, what advantage did that new capacity and capability provide, with this pair of weather events?

Dr Vertessy: We are still in the process of procuring the supercomputer. It is not scheduled to become

operational until mid-2016. When it does, we will be at a very significant advantage compared to where we are

today. Our current tropical cyclone modelling system operates at a resolution of about 12 kilometres and we get

something in the order of four updates per day from that model. With the new supercomputer, we will be able to

step that resolution down significantly by about a factor of five—in fact, down to 2.5 kilometre grid cells. We will

also be able to run the models more frequently, about six times a day. So we will not only be getting a higher

resolution, higher accuracy, but also be getting more regular updates and fresher, and therefore more accurate,

forecasts. So it is going to be a particular advantage for modelling tropical cyclone systems.

CHAIR: In terms of its implementation, is it on track and are you happy that it is progressing along the time

frames that you had hoped for?

Dr Vertessy: Yes, it is. Everything is running on track at the moment. We can provide further detail on the

process if you would like.

CHAIR: No, that is great. Senator Singh.

Senator SINGH: Since we last met in October estimates, we canvassed at the time whether the BOM had

provided any advice to the minister on matters relating to climate change. You alluded to the fact that you had in

the State of the climate 2014 report. Since that time, I have managed to have a decent read of that report and I

have to say that it is very compelling in its findings. What I first want to ask you kind of relates to some of the

findings in this report. Can you give a very brief summary of the temperature record that was broken in 2014 in

Australia?

Dr Vertessy: 2013 was the record warm year for Australia.

Senator SINGH: Sorry, I mean that record year. You are right; it is on page 4.

Dr Vertessy: 2013 was Australia's warmest year by a very wide margin. Pretty much the whole continent was

subject to multiple and extended heatwaves, which is the chief reason that the record was broken when averaged

over the year. Is there any particular other feature of that that you would like me to expand on?



Senator SINGH: What does it mean that these records are being consistently broken? On page 4 you

highlight that seven of the 10 warmest years on record have occurred since 1998. What does this mean?

Dr Vertessy: I think that statement speaks for itself in many ways. I would not read too much into 2013 alone.

One does need to look over an extended period. But, if you look at the global climate system at the moment, 14 of

the planet's 15 hottest years, at least in the historical record, have occurred this century. So it provides a very

compelling picture of a planet that is warming. With regard to Australia, there are a fewer number of years in this

century in that top group, but I think it is still in the order of seven or eight. So it is all consistent with a pretty

general global pattern of a warming world.

Senator SINGH: But what does that actually mean, Dr Vertessy? Why is there this pattern of record-breaking

hottest temperatures?

Dr Vertessy: It is chiefly attributable to rising greenhouse gas emissions, which are enhancing the so-called

greenhouse effect which is warming the atmosphere and the oceans. What you tend to see is that, when the

average temperature of the planet increases, so do the extremes. The hot extremes are more common and the cold

extremes are less common. We can see, when we look at a breakdown of the distribution of temperatures, there is

certainly a shift towards much hotter events. If we look at some of these very low frequency heatwaves, we are

seeing something in the order of a fourfold or fivefold increase in the frequency of those in the modern record as

compared to the mid-century's last years. Heatwaves, I think, are going to be one of the most serious expressions

of climate change that we will have to adapt to in this country.

Senator SINGH: So that is why seven of the 10 warmest years on record have occurred since 1998? That is

directly attributable to rising greenhouse emissions, which have also been increasing for some decades now?

Dr Vertessy: Yes, it is consistent with the global pattern of the world's atmosphere and the world's oceans

incrementally warming up from the middle of the 20th century to the present. That trend is continuing.

Senator SINGH: Because of the increasing greenhouse gas emissions in the atmosphere.

Dr Vertessy: Correct. That is right.

Senator SINGH: Thank you. Are you familiar with the Climate Council's recent report that showed the

record-breaking heatwaves and temperatures of 2013 would not have happened if climate change was not already

having an impact?

Dr Vertessy: Only in broad terms. I have scanned the report. It is consistent with a small number of detailed

attribution studies which are starting now to look at weather extremes and asking to what extent those extremes

might be associated with climate change. I would hasten to add that that is an area of research. These attribution

studies are largely in their infancy, but they are starting to show that climate change is certainly heavily involved

in the occurrence of some of these extreme heatwaves.

Senator SINGH: Based on your understanding of that report, you would agree with its findings?

Dr Vertessy: I have not read it in detail, so I would not say that.

Senator SINGH: Can you recall how many staff at the bureau worked on climate issues as at 30 June 2013?

Ms Middleton: I do not have a breakdown as at 30 June, but we have not had a significant change in our

staffing levels in our climate science area.

Senator SINGH: I was going to ask you how many staff currently work on climate issues in the BOM. But

could you take the question on notice, if you do not have the figure about how many staff worked in the same area

in 2013.

Ms Middleton: We can take it on notice and give you a breakdown. We certainly have a number of research

scientists that work in the climate area. That covers everything from seasonal forecasting right through to a very

small number who work on the climate record. I am happy to take that on notice.

Senator SINGH: Do you have the current number? I also want to know what aspects of climate change the

bureau is currently working on. Obviously, there was this report from last year, with the CSIRO, the State of the climate 2014 report. Post that report, what areas of climate change is the BOM working on now?

Dr Vertessy: To deal with your first question, in the area of climate change science we have two people

working in the Climate Information Services branch. They are chiefly the people working on the ACORN-SAT

information. That is the long-term climate record. There are a further 13 working in our research branch. So there

are 15 in total working on what you might call purely climate change science. From memory, there are a further

70 people working in the climate information branch on other aspects of climate, including climate analysis, the

climate observation record, seasonal forecasting of climate and so on. So it is a much bigger group of people.



Senator SINGH: Is there an actual climate change division within the BOM?

Dr Vertessy: No, there is not.

Senator SINGH: Did there use to be?

Dr Vertessy: No.

Senator SINGH: So it is just spread out?

Dr Vertessy: It really has chiefly been the province of our research area, and the research branch is a large

group. There are probably a bit over 100 people involved in research. The majority of the research that we do is

related to numerical weather prediction and developing the weather forecasting models up for the bureau. But

always within the research division, or at least for the past couple of decades, there have been a number of

projects on climate change science as well. At present, about 13 of them are involved in that work. That is chiefly

around looking at the key climate drivers in the Australasian region and how they are affected by climate change.

There has been a little bit of work on ozone depletion and its effect on the climate system as well and a bit of

modelling work for climate change projections. But that is chiefly done by the CSIRO. We are kind of

peripherally involved in it.

Senator SINGH: I want to ask about the structure of the BOM. Has the structure changed?

Dr Vertessy: Yes.

Senator SINGH: Since when?

Dr Vertessy: Since the middle of 2013. We undertook a major restructure of the organisation.

Senator SINGH: What are the main changes in relation to that restructure?

Dr Vertessy: We went from four operating divisions to five. The chief focus of the reorganisation was to give

greater emphasis to our IT and data management functions, which were hitherto spread across the organisation.

We are very much an organisation that relies on data and IT. We felt that we needed to consolidate our resources

in that area so that we could enhance, I suppose, the rate of progress in that area.

Senator SINGH: Is it called the data and IT division?

Dr Vertessy: Yes, it is called the information systems and services division.

Senator SINGH: That focuses on climate change?

Dr Vertessy: No, it does not. The environment and research division does. The environment and research

division has the following functions: water information, climate information, environmental information and

research. They are the four branches in that division.

Senator SINGH: Is there any reason that the BOM doesn't focus on climate change in its data and IT branch?

Is it kind of day to day ongoing monitoring and data collection and so forth?

Dr Vertessy: We are active in the area, so I'm not quite sure if I understand the question.

Senator SINGH: I thought you were kind of isolating climate change to a research division as opposed to—

Dr Vertessy: Okay, I understand. Well, albeit small, there is an operational aspect in the climate information

services branch, which is the ACORN-SAT. Also, we have a climate change tracker—

Senator SINGH: That is the one with two people?

Dr Vertessy: There are two people working on ACORN-SAT and the climate change tracker as well. When a

report like the State of the climate 2014 report comes out every two years, that is a point in time probably when

we bring in more resources to work on that report. We team up with the CSIRO on this as well. I should mention

as well that the work that we do in climate change is done in collaboration with the CSIRO under a joint venture

called the Australian Centre for Climate and Weather Research. So there is a much larger number of people in the

CSIRO that are working on climate change and are much larger number in the bureau that are working on

numerical weather prediction. That has just been our historic emphases and probably where we feel the emphasis

is most needed at the moment.

Senator SINGH: And you are continuing now to work with the CSIRO and that agency on the next report?

Dr Vertessy: No, we haven't contemplated that at this stage. The next one would be due in March 2016. So in

the next couple of months we will probably initiate a conversation about that.

Senator SINGH: Finally, when I asked you last time about whether you would provide any advice to the

minister on the State of the climate 2014 report you did highlight that you had. Have you provided any further

advice to the minister since October, when we last met, in relation to climate change and the findings of this

report—the warmest years on record, the heat waves and their connection to rising greenhouse gas emissions?



Dr Vertessy: Yes, I have. There was a strategy meeting with the minister and the department where I spoke

about climate change matters. I can't remember the exact date but I am almost certain it was since October last

year.

Senator SINODINOS: I want to ask about cyclone monitoring. I think it was Senator McGrath at the last

estimates who asked you about cyclone warning updates. You were doing a review. Do you have any information

on where you got to in the review?

Dr Vertessy: Yes. After Tropical Cyclone Dylan last year there was a request for us to review the frequency

of warnings of tropical cyclones. The chief outcome of that review was that for non-severe category 2 cyclones

approaching the coast we should provide hourly updates of the tropical cyclones where we had hitherto provided

three hourly updates at that time.

Senator SINODINOS: So for category 3 and above, what do you do?

Dr Vertessy: It has always been hourly.

Senator SINODINOS: That is fine.

Senator CANAVAN: Can I ask some specific questions about Marcia last week. My questions are not

pejorative in any sense, because I agree with your opening statement, Dr Vertessy, about the response from the

emergency services and also yourselves. Information was very timely and the response was enough to save lives

and certainly avoid serious injury. But I also understand the unpredictability of cyclones. I live in Yeppoon, and

the cyclone went right over my house. I went to bed on Thursday night thinking, 'There is no way it can come to

us now,' and it did an acute left turn overnight and headed straight for our city. So they are very unpredictable. I

want to get a handle on how you actually assess the category? First of all, could you outline how quickly it

deteriorated, because it did deteriorate very quickly? When did it go from a category 2 to a category 4 and then to

5?

Dr Vertessy: I will make a start on it and then I might throw to Alasdair Hainsworth, our acting deputy

director, hazards. First of all, how do we estimate the strength of the cyclone? It is chiefly through satellite image

analysis. The models tend not to be particularly useful for that, particularly for small systems. Tropical Cyclone

Marcia, while very strong, was actually quite small—about half the size of an average cyclone and more like the

size of Tropical Cyclone Tracy, in fact. It had a radius of about 75 kilometres. If you take something like Tropical

Cyclone Yasi, at the other end of the extreme, it had a radius of about 250 km. They are much easier to estimate

the internal parameters. The small cyclones have another feature, which is they intensify very quickly and they

are able to decay very quickly as well. They do not necessarily decay quickly but they are more apt to do so.

When the cyclones come close to the coast and are in the coverage of the radar, we have another tool that we can

use as well to estimate the intensity of the cyclone. But the chief way that we do it is using satellite imagery.

Unfortunately, those images only come to us every hour. When we get access to the new Japanese Himawari

satellite in July this year we will be getting updates every 10 minutes and the imagery will be about four times the

resolution. So our job is going to be a lot easier. But for the time being we use what we have got.

Senator CANAVAN: Before you go to the second part of the question, are you confident that through the

satellite imagery you assess the strength of the cyclone accurately every hour, or are you not sure, given the

limitations of the satellite, whether it is a certain category or not?

Dr Vertessy: Yes, there are some limitations in the satellite images themselves. It depends a little bit on the

individual cyclone. In this case we were lucky. This one was well formed and very symmetrical and not a bad one

to be estimating. But, once again, we are a slave to the coarse resolution and the coarse temporal resolution of the

satellite imagery. As for this one, I might throw to Mr Hainsworth here, but I believe we are reasonably confident

in the intensity estimates that have been made. But these are always reviewed after the event. Sometimes that

takes many months to ascertain, but there is always a post event review to confirm.

Mr Hainsworth: The forecasters in Brisbane were quite confident about this particular cyclone. As Dr

Vertessy has said, it was a very symmetrical and extremely well formed. But it was extremely small. So the

forecasters were very confident. It underwent a rapid intensification during the morning of Wednesday 18. It was

very rapid indeed. We issued an initial tropical cyclone watch at 4:48 am on Wednesday. It went to category 1 by

8 am on Thursday the 19th. It rapidly intensified to a category 2 by 11 am on Thursday and a category 3 by 4 pm

that day, which shows the extraordinary intensification process. It was a category 4 by 6 pm and a category 5 by 4

am on the morning of the 20th. It really did go through an extraordinary rapid—

Senator CANAVAN: Have you seen anything like it?

Mr Hainsworth: I personally have not seen anything quite as rapid as that. There are a few people in the

Queensland office who felt that Tropical Cyclone Ului, which from memory was in 2010, undertook something of



a similar rapid intensification. But that was over the Coral Sea around the Solomon Islands. It wasn't as close to

the coast as this intensification.

Senator CANAVAN: Following on from Dr Vertessy, you are confident that it was the cyclone that

strengthened—the actual wind strengthened—and not our measuring got better or picked up. It was actually that

our measuring was perfect, but it is just that it comes every hour?

Mr Hainsworth: To start off with, it was a very loose circulation, as detected by satellite pictures. Then we

saw the structure improve in terms of its development. The mechanism by which it sustains itself and intensifies

lined up vertically and then it became like a spinning top, if you like. It just spun up. So, yes, we are very

confident. And the track was really very accurate.

Senator CANAVAN: So next time you will have 10 minutes updates on cyclones approaching the Australian

coast?

Mr Hainsworth: We will, yes.

Senator CANAVAN: Will you issue 10-minute updates or will you issue them in real time or on an as-needed

basis? What is your decision at this stage?

Mr Hainsworth: At this stage 60-minute warnings would be about what we could achieve, because it takes

time to assimilate all that information and actually get the warning out. Even 60 minutes with three people

working on it is really very busy indeed. It is extremely difficult to actually accelerate that process. But that is

certainly something we could look at in the future.

Dr Vertessy: You may have noticed that we began tweeting on cyclones this summer for the first time.

Senator CANAVAN: I did not know that.

Dr Vertessy: We have found that that has been a great adjunct to the formal warnings that we do every hour.

As Mr Hainsworth has mentioned, logistically it is a very challenging to do anything more frequently. But

tweeting allows us to at least inject a little more situational awareness. We have been really struck by the colossal

following that we have garnered in just the last two weeks. I think an extra 30,000 people have come on.

Senator CANAVAN: I will add myself to that list. What exactly is the review that you mentioned? What is

that process? What do you go through after one of these events?

Dr Vertessy: There are a few things. Internally in the bureau we will look carefully at the satellite imagery

and perform some further analysis on it. We will look at the radar imagery as well. Typically we will put out a

request to other people with weather stations to see what information we can get from other weather stations.

Finally, we'll get reports from damage assessments on the ground—looking at fallen vegetation, destroyed

structures and the like. All of that can be used to infer a particular strength. This was done for Cyclone Yasi in

great detail. That process took a little over a year, in fact, because that was a huge system with a lot of damage.

But, ultimately, it confirmed that Yasi was a category 5 as well.

CHAIR: Thank you very much for your report on the cyclones. I now call the Supervising Scientist Division

to the table.


[10:17]

CHAIR: Welcome, Dr Wright and Mr McAllister. Would either of you like to make an opening statement?

Mr McAllister: No, thank you.

Senator LUDLAM: I will just put a quick question to Senator Birmingham, chasing up some follow-up from

the last session. On 27 May you made a commitment to pursue some answers from the Department of Industry

and Science and ERA, the company that operates the Ranger uranium mine in Kakadu regarding how the

Commonwealth evaluates the adequacy of the rehabilitation security bond and the cost of rehabilitation. Do you

recall off the top of your head that undertaking?

Senator Birmingham: I recall it. I do recall asking the department to seek some further information from

industry at the time. I cannot recall the detail of the information that came back. I know some detail did come

back. I cannot recall the details sufficiently to explain to you now the processes they undertake. But I can say that

I was satisfied at the time that sufficient safeguards are in place.

Senator LUDLAM: To clarify, when you made that undertaking, I was presuming that you were undertaking

to provide the information to us, not doing some homework on your own behalf. Can you confirm whether any

material was made available to the committee or to myself? I'm not aware that it was.



Senator Birmingham: Senator, you are aware as well as everybody else around here that the committee

secretariat compose a list of questions taken on notice after these estimates hearings. All answers taken on notice

have been provided by the department. I cannot recall the exact Hansard transcript from the time, but if you

would like me to take it on notice now and actually provide a response based on what information I may have

sought.

Senator LUDLAM: It feels a bit pedantic.

Senator Birmingham: In an exchange such as the nature we had, for me to have said, 'Yes, I will go away

and look at it' is not necessarily a commitment that I am taking a question on notice and providing information

back to the committee. If I say I am taking it on notice, then I will take it on notice. If I say that we will bring

information back to the committee, that is what we will do. But if I said, 'Yes, Senator, I'll go away and reassure

myself,' then that is what I do.

Senator LUDLAM: Okay. To short-circuit this taking another 10 months, can I ask you now please—

Senator Birmingham: We have had estimates hearings since then, Senator, before you throw the 10 month

figure around.

Senator LUDLAM: I am asking you now. Could you make an undertaking to provide us—and it should be

reasonably quick if that policy was assembled for you quite a period of time ago now—the basis of your

confidence in the company's ability, whether it has the bond salted away that it is going to be need and whether

the requirements are appropriate? Could you please provide that on notice to the committee at your earliest

convenience?

Senator Birmingham: I should say yes, I am sure we will take it on notice. Obviously I am not the minister

responsible in this portfolio any more, but the best endeavours to provide that will certainly be made at the earliest

convenience, as with all questions on notice.

Senator LUDLAM: On page 19 of the company’s 2014 annual report, they effectively—again, as they did in

their 2013 annual report—make potential rehabilitation funding conditional on the opening of the Ranger 3 Deeps

underground operation. I will put this firstly to you, Senator Birmingham, representing the executive. Does it

concern the government that the company has openly admitted on at least two occasions in its annual filings that

it may not have enough money to complete the rehabilitation?

Senator Birmingham: I will let Mr McAllister or others talk through the detailed undertakings that have been

required of the company to ensure that appropriate rehabilitation can be undertaken, including the bond that they

are required to have in place. Obviously the company is obliged to make certain statements and provisions under

corporations law through their reporting mechanisms, including through their annual report. So far as I am aware,

they continue to meet all of the obligations that are required of them under their environmental approvals and

mining approvals in relation to site rehabilitation.

Senator LUDLAM: I understand all of that. Senator Birmingham, I am just confirming to you that the

company has indicated twice now in its annual reports that it may not be able to meet its future obligations. Just to

be clear. That is the concern that I'm putting to you.

Senator Birmingham: Senator Ludlam, you are choosing to paraphrase an annual report.

Senator LUDLAM: I can read it directly. It says:

… ERA may require an additional source of funding to fully fund the rehabilitation of the Ranger Project Area.

They are setting out the possibility that if the mine does not expand, which will involve mining after they are

meant to be cleaning the site—

Senator Birmingham: That statement in no way suggests to me that ERA are not accepting of their

responsibility.

Senator LUDLAM: They are accepting of their responsibility. They do not know how they are going to pay

for it.

Senator Birmingham: ERA's primary shareholder, as we all know around this table, is Rio Tinto, for

example.

Senator LUDLAM: The legal obligation resides with ERA.

Senator Birmingham: That statement from ERA that you have quoted does not suggest to me that they are

saying they would not be meeting their responsibilities. It simply says they may require other sources of revenue,

which it sounds to me like they would be expecting to source, if that were required.



Senator LUDLAM: This has actually drifted off into a bit of a hypothetical. So to you, Mr McAllister: in the

same 2014 annual report, ERA has downgraded its estimated rehabilitation liability by $81 million and references

technological improvements as one of the reasons for making that case. Has the OSS been consulted or have you

provided any advice to validate these so-called technological improvements? If so, can you give us a bit of an idea

of what the scope is that the company has in mind.

Mr McAllister: We have not been personally asked by ERA to validate it. I presume the technological

improvements that are in place include things such as a brine concentrator, which has been commissioned. That

massively reduces the inventory of processed water in place over time. So that is an expenditure that has occurred.

I am not exactly sure what the $81 million refers to in their annual report. In relation to the rehabilitation, our role

is to technically assess the amended plan that occurs every year on 31 March. Once that process is complete each

year, that then goes to an independent costing company who then provide the Department of Industry and Science

an independent cost, which then puts in place a bond which is held in trust and in cash. We are satisfied that the

technical side is complete each year and the bond itself, which is in place, is held in cash and bank guarantees by

the Commonwealth government. So whether ERA has reported themselves that they need to seek support from

Rio Tinto or not in their annual report is really a matter for them. We are satisfied that the money that is in place

and held in bond by the Commonwealth government would be sufficient.

Senator LUDLAM: Just to be clear, it does not say that. I am not implying that it says that they are going to

have to go the parent company. They do not identify where the funding could come from. They just say that they

may need it. I do not want to be accused of verballing the company, that is all. We have been through this before

on a couple of occasions. Can you explain to me the basis for your confidence that the company has set aside

enough money for rehabilitation when the company says that if Ranger 3 Deeps is not developed they may not

have enough money. When the company expresses, in black and white, concerns that they may have an unfunded

liabilities in rehabilitation, how can you sit here and express confidence when the company itself can't express

that confidence?

Mr McAllister: My confidence is in the fact that we have technically reviewed the amended plan each year

and that plan is costed separately to the company’s finances. The company's finances are a matter for themselves.

The Commonwealth holds a bond.

Senator LUDLAM: How much do you hold at the present time?

Mr McAllister: I believe it is in the order of $300 million, but you would have to direct those questions to the

Department of Industry and Science. They are the ones who hold the bond and they are the appropriate people to

talk to.

Senator LUDLAM: But that is the order of magnitude. It is in cash and bank guarantees, you said.

Mr McAllister: That is my understanding, yes.

Senator LUDLAM: So it is of no real concern that the company says that if they don't get to expand this

mine, they might not have enough money.

Mr McAllister: I do not believe that is exactly what they have said, but it is not a concern in that, as I have

said, each year we go through the process of planning a rehabilitation to the highest technical level and then that

is costed independently. So that provides me with enough satisfaction that there is a bond in place, funding in

place, to rehabilitate regardless of ERA's financial position.

Senator LUDLAM: In terms of the headline legal obligations of the company, is the $300 million, or

whatever the exact amount is, required to bring that site back up such that it could be reincorporated into the

World Heritage area? Is that your understanding?

Mr McAllister: Yes.

Senator LUDLAM: To confirm for us, they are downgrading their rehabilitation liability by $81 million. You

are assuming that it is the brine concentrators but you were not asked to go and check?

Mr McAllister: Their downgrading is their own costing. That has nothing to do with the bond that is set by

the Commonwealth.

Senator Birmingham: But presumably whatever changes they have made, and Mr McAllister can correct me

if I get this wrong, are incorporated in their updated annual plan for rehabilitation, which is then assessed by the

OSS and then separately and independently costed.

Mr McAllister: That is correct.



Senator LUDLAM: But you have not at this stage—and it is only the 2014 annual report so it has not been on

the table that long I guess—gone back and assessed their numbers. That would be something that you would have

to do.

Mr McAllister: No, we do not assess ERA's numbers. We assess the technical veracity of their management

plan for rehabilitation based on the crash closure of 31 March each year. That is independently costed, so that is

nothing to do with ERA's costings.

Senator Birmingham: What the rehabilitation plan costs is something that is assessed. It is assessed not by

the OSS but by an independent audit. That is then assessed against the bond, as Mr McAllister has said.


Senator Birmingham: We do not assess ERA's corporate finances.

Senator LUDLAM: And I think, Senator Birmingham, one of the things that I thought I had asked you to take

on notice, which was not your understanding, was who the third-party auditor was. Can I make sure that that goes

into the post box.

Senator Birmingham: Certainly. We can do that, and we will do that—I do not want to push you from

committee to committee, although, again, that may be a contract that is issued by the Department of Industry and

Science.

Senator LUDLAM: Presumably it is not a national security secret.

Senator Birmingham: No, that is right. The department can talk to the Department of Industry and Science; I

am just being clear to you that if you are wanting to come back at another stage and ask questions, once we have

given you that answer about how that procurement is undertaken or what work they do, then we would have to

take all of those on notice next time around, because our department will not necessarily instantly know those

answers, and you would be better off going to the Department of Industry and Science.

Senator LUDLAM: Can you tell us the status of the Ranger closure plan, since we have started getting into

that issue. Have any works under that plan commenced or concluded?

Mr McAllister: In relation to the amended plan, yes, certainly—the construction of the brine concentrator,

that is one significant component; the capping of pit one is currently under way, so there is a certain amount of

works that have been done in relation to that. But outside of that, in costing terms the bulk of works really relates

to the reshaping of the land form and the treatment of processed water. So that is still a major cost ahead for the

company. At this point in time they have not completed those tasks.

Senator LUDLAM: Thank you. So are there specific studies relating to mine closure that still need to be

either initiated or completed?

Mr McAllister: Certainly in relation to research, the setting of closure criteria is well under way. A lot of the

work that the Environmental Research Institute of the Supervising Scientist undertakes is in relation to setting

those parameters, and that will be a process that goes on for the next probably three to five years. The process of

setting those closure criteria ultimately guide the closure plans for Ranger—where the siting of stockpiles goes,

processed water, tailings in pits et cetera.

Senator LUDLAM: Those criteria, I am presuming, would be public? They would not be commercial-in-

confidence or anything like that?

Mr McAllister: I do not know at this point in time whether they will necessarily be public—certainly not

commercial-in confidence, it is just something that we are working through with the minesite technical committee

and various sub-committees of the minesite technical committee. There is nothing that is particularly confidential

about those—we just have not discussed the issue of releasing them publicly.

Senator LUDLAM: I invite you to have that discussion with the MTC, and bring that back for next time,

which I guess would be after the next budget. When are the criteria expected to be finalised, or are they

contingent on the establishment of 3 Deeps?

Mr McAllister: Certainly it is not contingent on the establishment of 3 Deeps. The criteria will be finalised

depending on the relevant importance to the closure timelines that Ranger have in place. For instance, surface

water is one of our key criteria that we need to address, because a lot of the other criteria come back from surface

water. So that is one of the first ones that should be ready, and that should be ready, I suspect, in the next year.

The flow-on criteria for that, then, depending on what activities ERA are undertaking in their timeline, will set

when those criteria are needed, because they need the criteria to design the landforms, et cetera.



Senator LUDLAM: Because time is a little short, could you put to us on notice your expected timeline for

when the various components would be set down and either made public or at least put to the MTC.

Mr McAllister: I can take that on notice, yes.

Senator LUDLAM: Even explaining, as you have done there, the order in which it rolls out?

Mr McAllister: I think if I can explain it, on notice, that is probably the best way, because it is a bit of a fluid

thing, depending on ERA's current priorities in terms of closure?

Senator LUDLAM: Let us talk about those then. A couple of recent company statements included in the 2014

annual report have indicated the company has a desire to mine past their legally mandated end-of-lease date of

2021. So the company wants to do that: that is between itself and its shareholders—that is a corporate decision

that you are not responsible for. How does that uncertainty impact on your work, within the OSS, with the

company towards closure and rehabilitation?

Mr McAllister: We are working on the premise that the mine milling ceases at 2021, and that the mine needs

to be rehabilitated by 2026. The time lines in place that we are dealing with are based on those strict deadlines.

Senator LUDLAM: So everything that you are working on is entirely consistent with that legal obligation—

Mr McAllister: Yes.

Senator LUDLAM: and the company's decisions about extension of lease are really outside your—


Senator LUDLAM: I want to ask some fairly specific questions on environmental monitoring and off-lease

impacts on Kakadu. Obviously, your whole mandate and the company's obligation is that there be no off-site

contamination outside the project area. In the past, there was monitoring data in 2014 and earlier indicating that

sulfates and electrical conductivity readings at monitoring stations at Gulungul Creek, which are outside the

ranger of project area, have escalated past identified trigger values and do show clear upward trends. Firstly, do

you agree with that premise?

Mr McAllister: No. Gulungul Creek is actually within the Ranger project area. The elevated EC levels we are

seeing are specific to a tributary named GCT2—

Senator LUDLAM: Slow that down for us, sorry?

Mr McAllister: They are in relation to a tributary to the west of the tailings dam called GCT2. We have

noticed over a number of years that there are elevated salts within that tributary that are contributing to spikes that

we do see downstream in Gulungul. None of those spikes have triggered our eco-tox limits, so, to that extent,

there has been no adverse impact on Kakadu National Park. We are working with the mining company on trying

to identify the source of those EC spikes.

Senator LUDLAM: Yes, I was going to come to that next.

Mr McAllister: At this point, we certainly have not identified their origins, but one of the things that has

occurred, after discussion with the company, is that they have instituted essentially what is called a cut-off trench

to the west of the north-west part of the tailings dam, which is where GCT2 sources its catchment from. That cut-

off trench is designed to extract water from the shallow groundwater and, hopefully, reduce the elevated EC

readings we are getting in the creek. To date, the water that has been extracted from that cut-off trench generally

exhibits qualities similar to that of run-off from waste rock, which is not surprising given the tailings dam is

constructed out of 100 per cent waste rock.

Hopefully, this cut-off trench will have the effect of reducing those values in the creek. Obviously, it is fairly

early in the wet season and it will take a good wet season's monitoring data to be able to assess that. As far as this

wet season goes, it has been a fairly poor wet season, so conclusions at the end of this wet season may need to go

into next wet season to come up with something definitive.

Senator LUDLAM: So your two potential contamination pathways are run-off from waste rock piles or

groundwater seepage.

Mr McAllister: Yes.

Senator LUDLAM: Or a combination of the two.


Senator LUDLAM: How long do you anticipate it will be before you actually know where that is coming

from?



Mr McAllister: The source itself is quite difficult to pick. The contaminant levels that you get from waste

rock run-off exhibit values that are similar to other sources from around the site. I guess, without a definitive link

to where the source is, our major concern is ensuring that, whatever the source is, it is being cut off and not

impacting on the creek.

Senator LUDLAM: You would need to identify what it is. I do not have a map of the project area in front of

me, but it is my understanding that that creek does extend well off the project area and into the park. Are you

disputing that?

Mr McAllister: Downstream from the mine site, yes, but where we are seeing the elevated levels is just

adjacent to the tailings dam. The downstream site, Gulungul Creek downstream, is not seeing the same elevated

levels.

Senator LUDLAM: It has seen elevated levels, though. It is not that the water contamination stops at the

boundary.

Mr McAllister: Below our limits.

Senator LUDLAM: Below your trigger levels?

Mr McAllister: Yes.

Senator LUDLAM: I might put some more material on notice.

Senator SINGH: How many people are employed in the supervising scientist division?

Mr McAllister: Our current ASL is 46.

Senator SINGH: Mr McAllister, in your position as the supervising scientist, what is the tenure? Are you on a

contract or are you ongoing?

Mr McAllister: I am just a regular public servant.

Senator SINGH: With the work that the division does and, particularly, the work that you do, how much of it

is reacting to the advice asked of you and how much of it is your own research?

Mr McAllister: Is terms of persons or in terms of projects?

Senator SINGH: Projects.

Mr McAllister: We have two parts to the Supervising Scientist. One part is called the Office of the

Supervising Scientist and they are the people who deal, I guess, in what you might determine as a reactionary

component. That includes four dedicated technical staff. They also manage our operations as well, which at this

point in time includes another six to eight staff. That is, essentially, the business unit that manages our facilities

both in Darwin and in Jabiru. In addition to that, we have what is called the Environmental Research Institute of

the Supervising Scientist. That has about 33 staff who are dedicated to undertaking research projects in the

Alligator Rivers region with the specific remit of protection of that region from uranium mining.

Senator SINGH: Thank you.

CHAIR: Thank you very much, Mr McAllister and Dr Wright. The committee will now suspend.

Proceedings suspended from 10:41 to 10:52

Great Barrier Reef Marine Park Authority

CHAIR: I do not need to call officers from the Great Barrier Reef Marine Park Authority because they are

already here. Dr Reichelt, would you like to make an opening statement.

Dr Reichelt: Thank you, Chair and senators. I would like to make a short opening statement. I would like to

begin with expressing sympathies for the people affected by severe tropical cyclone Marcia. I had officers in the

air yesterday over the site near where the cyclone crossed. While I think the thing is to look after the people in

those remote communities and restore their services, I am pleased that so far there has been no loss of life. The

initial report on the impact is that the stripping of trees and the disturbance to the coast is not comparable with

superstorms like Yasi and Hamish, and we will have people in the water in the next few weeks once it is safe to

operate in the area and do underwater assessments. We are probably very fortunate that it did not spin up until it

was quite close to the coast, and it is a wide continental shelf in that region. Habitats at risk will be mainly

seagrasses, I think, rather than the offshore corals. Again, we will wait for the scientists to get underwater and do

some quantitative work.

On a couple of other quick points, the outlook report and the strategic assessment which we produced last year

for the federal minister are now providing a strong basis not only for our work program but for the Reef 2050

Long-Term Sustainability Plan. The scientific reports have confirmed our earlier assessments that the reef's big,



stunningly beautiful, massive scale, its biological diversity and complexity and the major threats to the reef have

not changed substantially since 2009. Those threats continue to be the effects of climate change, declining water

quality from catchment run-off, loss of habitats from a range of land use practices, particularly coastal

development, and some types of fishing activity. Under climate change, we would include ocean acidity, extreme

weather events—including storms and floods—and rising sea temperatures or spikes in summer temperatures.

The northern third of the system remains in good condition. Since last estimates I have joined several surveys

in the region, including flying all of the fringing reefs between Cairns and Wongi, Princess Charlotte Bay, and it

is stunningly beautiful to see large colonies of coral right against the mainland, which just reinforces that there are

large areas of the reef that are in good condition that need to stay that way. The reef does have strong

characteristics in its favour. Between the storms and floods and starfish outbreaks, the corals and seagrasses do

recover. It takes years, though, and the resilience of the system is under pressure, but it is retaining its capacity to

recover if those pressures are reduced. Our objective is to remove the pressures as quickly as possible to avoid the

system going further down to a place where it becomes uncertain about its resilience. Since last estimates there

have been some important positive developments. The minister has announced recently that a regulation will be

introduced to ban the disposal of capital dredged material in the Great Barrier Reef Marine Park. This will lower

the pressure on water quality near the ports along the Great Barrier Reef coast, but, importantly, it will signal that

all future port development must find other ways to manage the shipping channels in these port areas.

Finally, a partnership group drawn from a cross-section of community and industry sectors has been working

with the Australian and Queensland governments to continue work on the long-term sustainability plan, Reef

2050. This plan, once finalised between the federal minister and the Queensland government, will be based on

clear outcomes and targets, have work programs focused on resilience and address the risks that I mentioned

earlier from the outlook report. Importantly, from our perspective, the plan will put in place a very strong

monitoring and reporting system. So it will be clear in the coming years what progress has been made and

whether more needs to be done to meet the aspirations of all Australians to protect the Great Barrier Reef.

CHAIR: Thank you, Dr Reichelt.

Senator CANAVAN: Could I just ask about the changes to the policy on dumping of dredge spoil and the

impact of that on the reef. Have you looked at that yourself or provided advice to the government on the issue?

Dr Reichelt: We are working with the department and the minister to implement his policy intent which was

announced at the World Parks Congress late last year. That work is still in train, but, in simple terms, capital

dredge means the creation of new channels, and the disposal in the marine park from that activity will be banned

from the time that regulation comes into effect. I would probably have to refer you to the minister for the details

of it because they are subject to ministerial decisions.

Senator CANAVAN: Are the Caley Valley wetlands part of that area or are they outside?

Dr Reichelt: The status of that project is that the offshore disposal is on hold. The focus now for the last four

or five months has been on onshore disposal, and it will be a matter for, principally, I think, incoming the

Queensland government to make clear some of their policy statements around the Caley Valley wetlands. I

understood that that was subject of commitments made prior to the Queensland election.

Senator CANAVAN: So the Caley Valley wetlands are included as an onshore in your terminology.

Dr Reichelt: Yes, they are. They are essentially above the low-water mark.

Senator CANAVAN: What are these wetlands. My understanding is they were man-made. Is that correct?

Dr Reichelt: Large areas of what is called the Caley Valley wetlands were created as bunded pasture. There is

a big wall that has been built to enhance cattle grazing up close to the coast, which is quite common right along

the barrier reef. So, yes, it was a small saltwater wetland, important for barramundi and birds, that has been made

into a larger man-made freshwater system.

Senator CANAVAN: So it is largely freshwater.

Dr Reichelt: I believe it is largely freshwater now, the vast amount of it. There is, I believe, an inlet creek up

in the northern end of it.

Senator CANAVAN: Is it tidal at all? Does any saline material come into it?

Dr Reichelt: Inside the wetland, I do not believe it is. I think it is driven by river run-off. I would probably

have to refer you to the experts in the department who were involved in that assessment.

Senator CANAVAN: Okay.



Mr Thompson: Just to add to that, there is a portion of it which is tidal but a very small portion, and then

there is another portion which is effectively cut off that has been affected by salt, and so it is hypersaline at the

moment.

Senator CANAVAN: Okay, but did I hear correctly that it is a separate part. It is not really joined at the top?

Mr Thompson: Because of the operation of the bunds and the roads, it is segmented.

Senator CANAVAN: Does it connect up at all during a major event?

Mr Thompson: During major flooding events, yes.

Senator CANAVAN: During flooding events it can connect up.

Mr Thompson: That is my understanding.

Senator CANAVAN: Dr Reichelt, do you monitor the various campaigns that are occurring right now to stop

financing of projects in the Great Barrier Reef marine area or the claims that they make?

Dr Reichelt: No, I do not.

Senator CANAVAN: You do not do any of that at all.

Dr Reichelt: No.

Senator CANAVAN: Do you provide any advice to the government of the veracity of some of the claims

made in those campaigns?

Dr Reichelt: Through estimates, we speak about the state of the reef and the pressures on it and to any

approvals we might have given, but we do not get involved, in the sense of the political sphere and the financial

sphere. It is beyond our brief to do that.

Senator CANAVAN: I thought as much.

Senator SINODINOS: I am going to ask about the crown-of-thorns starfish, which has been a pretty big

danger to the reef over the last couple of decades. Can you give us a run-down on the progress you are making in

eradicating this particular menace?

Dr Reichelt: The crown-of-thorns has been on the radar since the University of Queensland's Robert Endean

publicised it in the 1960s. Anecdotally, he told me when he was alive that people told him it was around in the

fifties as well. The scientists have since studied its biology and they say it is a species prone to outbreak, but

probably every 50 to 100 years would be more normal for something that was not influenced by river run-off or

loss of predators. There is quite good statistical evidence now that there is a strong link with wet decades, and the

waves of outbreaks, which may last over a decade, tend to preceded by some wet years. The models even go as

far as pointing to particular catchments—the Barron, north of the Burdekin—in the wet tropics, which is where

the major outbreaks begin.

You asked about control. It is only in the last five years that the idea of controlling starfish to the point of

disrupting the outbreaks came to the fore. Before that it was a way of protecting local tourism sites and small

areas. We are talking the size of this room or not much larger. With the discovery of the one injection using the ox

bile salts by James Cook University in the last year or two, now the thinking around the control is much more like

the plague locust: the pest management thing that you can model and work on. The research on that is in early

days, but I have been very encouraged by the figures that have been reported by the people doing the work, which

is contracted. Some hundreds of thousands of starfish within a year or two would have been unthinkable five or

10 years ago.

I would have said there were billions of starfish out there when I was studying them 30 years ago, but I am told

that the estimates are something like only a few million. Three or four million was one estimate recently from the

Institute of Marine Science, and if you think that a figure of 10 per cent of those have been culled by this last two

years of operation, it gives me encouragement that, ultimately, a disruption of this cycle is quite feasible. I think it

needs a sustained effort, possibly an increased effort, and it does need all of that work on modelling. The same as

was done for the plague locust how long ago needs to be done for the starfish.

Just finally, it is treating a symptom, if all of that science is correct. But treating that symptom could buy the

reef 20 years of coral life, if you like, rather than lose it again in a cycle of up and down. That gives us time to

work on the catchments and the water quality.

Senator SINODINOS: You are saying 'a symptom'. What are the causes? Is it run-off?

Dr Reichelt: It is poor water quality, and enhanced nutrients in the run-off, specifically.

Senator SINODINOS: What would be an example of an enhanced nutrient?



Dr Reichelt: Excess fertiliser applied to high-intensity agriculture in the wet tropics—like sugar, for

instance—runs off the farm into the creeks and when it reaches the sea it travels further than the sediment. It

causes big green blooms that stretch over the reef and it creates more food for the small starfish that are drifting.

Senator SINODINOS: It is a classic externality.

Dr Reichelt: Exactly.

Senator SINGH: In your opening statement we talked about the threats to the reef, particularly coming out of

the Reef 2050 Long-Term Sustainability Plan. Are there any other reports that GBRMPA are looking at, or refer

to, when it looks at the threats to the reef?

Dr Reichelt: We monitor the scientific literature constantly and there is new science emerging practically on a

weekly basis. There are a lot of people studying coral reefs worldwide—and the Barrier Reef specifically. We

bring that together every five years in the statutory reporting but we continue to update. I am trying to think of an

example where something significant happened. The discovery of the single shot for the crown-of-thorns starfish

was a scientific exercise a few years ago. We worked quickly with scientists to make sure that it was safe for the

ecosystem to use, and issued permits and guidelines. So we react when there is something to react to.

We get regular reports. We look at the annual reporting that AIMS, the Institute of Marine Science, do on the

state of corals. We look at the reports after the scientists come back from the trip in case there is something that

we can react to immediately. There is a very tight cooperation between the authority and the scientific work at

AIMS, for instance.

Senator SINGH: You have looked at the Bureau of Meteorology and CSIRO's State of the Climate report.

Dr Reichelt: Yes.

Senator SINGH: I know you went through a number of threats to the reef and you said that they had not

changed since 2009 but could you list the greatest threat to the reef.

Dr Reichelt: I could go further. They have not changed much since the World Heritage listing in 1981, but

that is another story. The greatest risk to the reef is the rising summer temperatures and increasing acidity of the

ocean and, to some extent, sea-level rise for coastal habitats—all of which have been measured, particularly

acidity. Essentially the corals have been growing with less dense skeletons since about 1993. The coral cores

consistently show that. Hundreds of coral cores from the entire Great Barrier Reef have all shown that, at about

the same time, the skeletal densities began to become less dense. It has not killed the coral but they are growing

slightly more fragile than they would have been 30 years ago.

Senator SINGH: So the greatest threat is the rise of summer temperatures and the acidity of the ocean.

Dr Reichelt: The summer temperatures causes the mass bleaching phenomenon that we have seen in 1998 and

three or four times since then. It is essentially a lottery every summer. You hope that the temperatures do not

reach the point where the corals lose their algae. Corals are half algae. If they lose those they go white, and if the

temperatures stay up for more than two months they will die.

Senator SINGH: Rising summer temperatures being the greatest threat to the reef, are you attributing that to

climate change?

Dr Reichelt: Yes.

Senator SINGH: With respect to water quality I think that is also a threat to the reef.

Dr Reichelt: Absolutely. Climate change is measurable now on the reef. We have hard statistics and the pH is

a simple chemical equation—rising CO2 in the atmosphere, more carbonic acid in the ocean—but the water-

quality issue is a more complex, longer-century scale phenomenon. Seventy per cent of the southern Barrier Reef

catchment has at some stage been cleared or highly modified for agriculture. That does not mean it is bare earth

now; other things have grown. The amount of sediment that is coming down the rivers now is four or five times

what it would have been 100 years ago.

Senator SINGH: Can you explain what are the most effective methods for improving water quality that is a

result of the run-off of land based activities.

Dr Reichelt: Someone said there is no silver bullet but there is silver buckshot. You need to do a whole lot of

things at the same time. The work that has been done on improving farm practice and grazing practice—and I

always take the opportunity to thank the farmers who are changing practices, because they are making a

difference and need to keep that work up—is by keeping ground cover in drought. So do not overgraze in dry

conditions to prevent sheet erosion. Gully erosion in the tropics is another source of sediment. Farmers that



maintain their vegetation along creeks and allow the flood plains to function properly are the sorts of things that

can be done.

Changing farm practice probably will only get us half the way that we need to go. We also need to restore the

functionality of flood plains in the southern part of the Great Barrier Reef. I forgot the figure, it is 10,000 or

15,000 obstructions to river flow have been built in the Fitzroy and Dawson Catchment, for instance. Because

they happen on a small scale, they add up. And particularly in Goorganga Wetlands, behind the Whitsunday

Islands, those flood plains are no longer functioning as they would have 100 years ago. You have got accelerated

erosion and sediments pushing it out into the ocean as opposed to spreading out on a delta and settling out. It is

that functionality which is why we argue strongly for not developing the mouth of the Fitzroy. It is a big,

functioning delta system and is essentially a silt trap for the southern GBR. Those are some examples.

Senator Birmingham: Senator, in listening to some of the information before me, there are some positive

advances being made. I understand the 2013 Reef plan report card found the average pollutant loads entering the

reef had reduced by 10 per cent for nitrogen, 11 per cent for sediment, and 28 per cent for pesticides. They are all,

of course, positive indicators that some of the investments over a long period of time by successive governments

are starting to make a difference—and indeed the work of land practice and of farmers that the Dr Reichelt

acknowledged.

Senator SINGH: So that goes to the heart of improving farm practices, that reduction in nitrogen run-off and

the like. But, Dr Reichelt, you have said that improving farm practices alone is not going to improve the water

quality issue.

Dr Reichelt: Yes.

Senator SINGH: It is also about—

Dr Reichelt: Restoring—

Senator SINGH: Restoring the functionality of the flood plains. So what do you mean by that? You mean no

development, basically?

Dr Reichelt: No, what I mean is that we have mapped the areas along the coast that are highly connected to

the Barrier Reef waters using Queensland's data on hydrology and land use information. Some areas are more

suitable for development than others. The areas where the natural function needs to remain should be protected.

The government's Reef Trust was conceived with the idea of creating resources to intervene beyond simply

incentives for farmers but to intervene to improve the functioning of creeks and perhaps remove bund walls that

were built 100 years ago that are no longer needed. There are opportunities to improve the workings of flood

plains that will need extra resources. I think the Reef Trust concept is an ideal vehicle for that.

Senator SINGH: So other than the development on the mouth of the Fitzroy, is that the one you referred to

just before?

Dr Reichelt: Yes, as an important delta.

Senator SINGH: As an important delta. Are there other areas in the Great Barrier Reef like that that need

addressing as far as ensuring the functionality of the flood plains can be restored?

Dr Reichelt: Yes there would be. I am getting out of my personal expertise and I should draw on colleagues

and reports, but I know the work to define the coastal systems that are important for the reef. It could be for water

quality reasons or it could be for connection. Some 70-plus species of fish rely on the inshore creeks. It is not only

about water quality; it is about habitat connection. Removing a bund wall might well allow saltwater fish like

barramundi and mangrove jack and others to move more freely in and out of wetlands. That was mapped some

years ago and a coastal plan was developed over a decade or so. One of the commitments I saw in the pre-election

period in Queensland was to revisit the need for that. I think the only long-term solution for this type of approach

is a transparent planning regime—one that can be adapted if more information is found about some areas being

more sensitive than others. There are highly modified watercourses stretching from Port Douglas to Bundaberg,

and they vary a lot in the wet and dry tropics. It has been the subject of quite large reviews in past five years.

There are specific maps that you could refer to.

Senator SINGH: How much has been invested to date in improving the reef's water quality?

Dr Reichelt: I could not say. Perhaps I can take it on notice. It is substantial.

Senator SINGH: Does the department know?

Dr de Brouwer: We can come back to this in program 1.1 tonight. One of the things that is highlighted in the

long-term sustainability plan is that the Queensland and Commonwealth governments spend over $200 million a

year on a variety of reef activities, and water quality is one big part of that. We can come back with the specific



numbers. There is a considerable set of activities and funding that is provided for that. That is just from the

Commonwealth and state, and then there are other contributions, say from councils and others, on top of that,

which are also quite considerable.

Senator SINGH: So you do not have that investment figure on you now?

Dr de Brouwer: I do not have it here.

Senator SINGH: We will talk about that later.

Senator BIRMINGHAM: I am sure later on we can talk about current investments. If your question was how

much is being spent today to date, that is a bit of an open-ended question.

Senator SINGH: True enough, but we will raise it under 1.1. Dr Reichelt, at our last hearing you spoke about

the cumulative impacts currently affecting the health of the reef. Has the authority made any changes to your

business priorities or the like that accommodate this new approach of addressing the cumulative impacts on the

reef?

Dr Reichelt: We have restructured in the last 12 months. We are taking our lead from the program report of

the strategic assessment we did last year. The new policy around cumulative impact assessment is in its infancy.

We have identified it as something we are working on. It is early days for us. The intention will be to prevent

incremental change—what scientists call shifting baselines—where, by ignoring all of the previous decisions and

the state of the system you run the risk of simply continuing to excess on what it was like most recently, rather

than where you would like to be, which might be back where you were 50 years ago in some cases. Worldwide, it

is a very topical thing for environmental impact assessment policies and regulations. I think it will take us a year

or more to make substantial progress on it. We would want to do that both with Queensland and with the

colleagues in the federal department. We want to maintain consistency, but we have the imprimatur. The minister

has endorsed our strategic assessment. It includes work on developing that policy. It is just early days for us. I

think it is terribly important in the way we can manage the system to where it should be to be healthy, as opposed

to whether or not an impact will have an adverse effect.

Senator SINGH: In your restructure to focus on this, what are your resources currently?

Dr Reichelt: We have a couple of people looking at it.

Senator SINGH: Two people?

Dr Reichelt: Yes.

Senator SINGH: Enough?

Dr Reichelt: That is always a good question for a public servant—that we need more resources. We will

prioritise to get the result we need. It is a high priority for us.

Senator SINGH: Is there an authority involved in the government's representation to the World Heritage

Committee with respect to the reef's World Heritage listing.

Dr Reichelt: Yes. We have been called on to explain some of the reports that are available to the members of

the committee. We have a long history of relationship with the scientists among the members of the committee.

We communicate with them and they ask us questions, with some along the lines of what a cumulative impact

policy would look like. We have worked with one or two of the European colleagues. They tend to be institutional

relationships that we draw on. Because of the intense interest in recent times, they want to know what the outlook

means and what the strategic assessment means. Our role is to make sure that the state of the reef, the state of its

resilience and the pressures on the reef are well understood. So, yes, we are actively doing that.

Senator SINGH: So you are actively doing that now?

Dr Reichelt: Yes. We have been working with member countries for possibly five or 10 years. We have good

relations with their scientists. One of our specialists who is working on the cumulative impact co-organised an

international conference in Germany a short while ago—last year—on how to do strategic assessments. We have

had good reviews of the quality of that assessment for the authority. But we always feel we can learn from how

people are doing things in other countries. We have those connections but we are getting more questions now

about what the indicators are telling us.

Senator SINGH: So you are getting more questions now?

Dr Reichelt: Yes, because of the intense interest in the World Heritage Committee's processes.

Senator SINGH: In your initial answer you said you were also providing advice on reports to the minister or

something. Was that it?

Dr Reichelt: No, to the technical experts in member countries who have been following this since 2012.



Senator SINGH: But what about domestically?

Dr Reichelt: Internally, we are constantly in touch with the federal department, our minister and the

Queensland government, but less so other governments in Australia. We are also in very close working

relationship with the 13 coastal councils and local government. In fact, they are all what we call Reef Guardian

Councils. We endorse their environmental best practices. So we have fairly extensive links with governments and

the scientific community.

Senator SINGH: Just finally, the Reef Advisory Committees for 2015, can you provide the membership and

the meeting schedule for the Reef Advisory Committee? I might have to take this on notice.

Dr Reichelt: I will do that, yes. We have two operating now—one established and another one coming. We

have reviewed them recently and we are still looking at the best way for us to get those technical advices. We will

give you a state of play with those committees.

Senator WATERS: I want to start with the sea dumping permit for the Abbot Point coal terminal. What is the

status of that permit?

Mr Elliot: The current status of that permit is that it is still under legal challenge in the courts—in the tribunal.

Senator WATERS: Is it cancellable?

Mr Elliot: The Great Barrier Reef Marine Park legislation, the act and the regulations, do have conditions

under which permits can be revoked. But it has to satisfy certain criteria for that to occur.

Senator WATERS: In your view, are any of those criteria satisfied as yet?

Mr Elliot: They would not be met under the current circumstances.

Senator WATERS: Has the minister or even the Queensland government asked for the authority's advice on

those criteria to cancel the sea dumping permit?

Mr Elliot: No, they have not.

Senator WATERS: Moving to the dumping regulation that the minister announced at the World Parks

Congress, which is, I understand, still under development, you said earlier in response to another senator's

question that you were working with the minister to implement that commitment. What input are you having into

the formulation of those regulations?

Dr Reichelt: When I say 'working with it', it is really hard for me to say too much about it because it is

essentially with the minister. So I would have to refer you to the minister for the specifics. But I can assure you

that we are having considerable input and providing information about the policy intent of the minister, and I

think I should leave it there, do you think?

Mr de Brouwer: We can come back, in the later session on the reef and regulation about these matters, when

officers are here.

Senator WATERS: Is that 1.1 or 1.5, just to be clear?

Dr Reichelt: It is 1.5. I was just conferring with my colleague. I should make it clear that we are leading the

development of the regulation for our act, and our board has taken a decision already to put in place what is

needed at the board level. That is on our website at the moment, and we are leading the development for the

minister.

Senator WATERS: So the board has had input into the policy formulation and the advice that has gone to the

minister?

Dr Reichelt: At this stage they have endorsed management to work with the minister because it is the

authority, meaning the board, who, under the provisions of making regulations, would, once the direction comes

from the minister, formally, under the act, make a decision to progress that back with government, and we are

now working with the minister.

Senator WATERS: Has the board had any input into the details of the regulation?

Dr Reichelt: I could refer you to the decision of the board. The board discussed it very soon after the policy

intention was made by the minister and endorsed the in-principle development of a ban on capital dredge spoil.

Senator WATERS: Have they had any further involvement, other than simply endorsing the minister's

announcement?

Dr Reichelt: They have not met since then, but they are meeting in a few weeks. It will be on our agenda to

discuss it and brief the board.



Senator WATERS: This is the same board that has been investigated for having conflicts of interest for

mining and gas interests, or have you had a change of board since that investigation?

Dr Reichelt: No, it is the same.

Senator Birmingham: And it was cleared.

Senator WATERS: That is true. That investigation did clear them, although I personally disagree with the

investigation. But that is irrelevant for the present purposes. Thank you. I might follow up with some more

questions on notice on that particular point. I am interested in whether the authority has heard from the

Queensland government regarding extending the dumping ban to the World Heritage area rather than just the

marine park.

Dr Reichelt: No, I have not. We have not had dialogue, simply exchanged correspondence with the incoming

minister, Minister Miles. He has agreed that we will meet in due course. I think it was too soon after the election,

but I am looking forward to having that dialogue with Queensland.

Senator WATERS: How will the authority be placed in those negotiations, given that the federal government

wants to limit capital dumping in the marine park, whereas the incoming Queensland government wants that to

occur in the larger World Heritage area?

Dr Reichelt: I think that will be worked out between ministers, in terms of how the policies interact. In other

words, the policy intention would come from the government and from the minister, just as Minister Hunt has

made his policy intention clear. I think the interaction with the World Heritage area for the Queensland legislation

and the national legislation, it being outside the marine park, is yet to unfold. I have not had those conversations

with colleagues as yet.

Senator WATERS: Would you be expected to provide scientific advice to either of those governments about

the preferred area for that ban to cover?

Dr Reichelt: I am sure that we would be consulted about the implications of policy ideas that the Queensland

government have promised in the election, but we have yet to see the detail.

Senator WATERS: Has Minister Hunt yet sought your views on whether or not the ban should be extended

to the full World Heritage area?

Dr Reichelt: Minister Hunt has given us his policy intent with capital in the marine park. To the extent that he

may be in discussions with his Queensland colleagues, I would refer you to the minister on that one.

Senator WATERS: Can I move quickly to the 180 degree policy change of the Queensland government, at

least, and arguably of the federal government as well, to move away from offshore dumping, particularly for the

Abbot Point coal terminal expansion, and to then insist that that be an onshore dump site in a very rapid manner.

Do you have any sense of what the cause of that change of position was? Did the authority provide any scientific

basis that might have caused that change in position?

Senator Birmingham: I think the second half of that question is okay. It was getting perilously close to

asking for opinions.

Dr Reichelt: There were a number of things occurring in the middle of last year, including the release of our

outlook report, which revised downwards concerns about water quality. I think I would just be giving opinions if I

were to prioritise the other things, many of which are political. We did give advice on options for compaction and

drying of material that was new in the middle of last year.

Senator WATERS: The middle of last year, did you say?

Dr Reichelt: Yes, when I became aware of them. I think technology changed and our assessments changed,

but beyond that there are so many other factors, financial, public opinion and things, that would just be an opinion

of mine.

Senator WATERS: Thank you. You mentioned earlier that water quality is one of the key threats to the reef,

after, of course, climate change, which I hope we all accept is the biggest threat to the reef. What is the impact of

cutting $40 million out of that $200 million Reef Rescue program which was supporting farmers to improve their

sustainability practices and reduce runoff to the reef?

Dr Reichelt: I think I would have to refer that to the department.

Mr Thompson: Are you referring there to the Reef Trust, the $40 million in Reef Trust—

Senator WATERS: Yes, that was taken out of Reef Rescue.

Mr Thompson: That came out of the National Landcare Program, yes. There are a number of projects which

are being funded under the first phase of Reef Rescue.



Senator WATERS: I am particularly interested in whether the marine park authority has a view on the

scientific implications of reducing funding to that program, which you inferred was a successful one. I agree; it

has made some good gains.

Dr Reichelt: We have not done a specific analysis along those lines. We work very closely with the

intergovernmental organising committee. We sit on that. We help set priorities for best outcomes for investment,

which then goes on to the ministerial forums. We are actively involved, but we have not done a specific analysis.

I will say, though, that the interaction with the Reef Trust is highly relevant. They are very compatible pieces of

policy to influence farmers and to restore habitats. It would not be a simple matter to take them apart in terms of

the outcomes.

Senator WATERS: So it is just a different. Essentially, the same sort of stuff is happening. Is that your view?

Dr Reichelt: I think we have seen a shift to restoration. The issue is much complex than simply farm practice.

That is what we are seeing in the last year, which I would agree with.

Senator WATERS: But you have not done a specific analysis of the impact on the reef of the reduction of the

$40 million from the Reef Rescue program?

Dr Reichelt: Not the way you have framed that, no. I agree with you that it is an important program, as is the

Reef Trust.

Senator Birmingham: Senator, I would not just characterise it as a change of name. I think the Reef Trust has

ambitions of a longer sense than a program that, as is often the case with programs, has a defined funding period.

The Reef Trust is, of course, seeking to establish itself in a longer term duration in terms of being able to provide

leadership in the funding and rollout of programs that support the successful management of the reef. As Mr

Thompson has indicated, we can happily go through what some of those are and other areas of the couple of

hundred million dollars in expenditure in the relevant section.

Senator WATERS: Thank you. I will do that later on today. You mentioned earlier, again in response to

another senator's question, that the mouth of the Fitzroy should not be developed. Have you shared that view with

Minister Hunt?

Dr Reichelt: What I was implying there was that, whatever occurred there, the functionality of that delta

should be retained. Any more human activity in that area would need to be sensitive to allowing the delta to

function. What that means for development would be individually assessed, no doubt. I would say Minister Hunt

is very well aware of the importance of the lower Fitzroy, from discussions I have had with him.

Senator WATERS: So you have specifically mentioned that to him in your discussions?

Dr Reichelt: Yes, it is a widely held view. It is an important area.

Senator WATERS: Indeed. Are you aware whether there is anything being done about that?

Dr Reichelt: Can I just check with my colleagues? It would be EPBC rather than the marine park. The

department may be able to answer.

Senator WATERS: Again, now or later?

Mr Thompson: Later.

Senator WATERS: Thank you. So, again, GBRMPA has not yet provided advice to the minister on how to

better protect the delta, for example?

Dr Reichelt: No, other than to retain its functionality as a place where water spreads out, slows down and acts

as a silt trap.

Senator WATERS: I have one further question before we move to Reef Plan. The dredge synthesis panel—I

think we were due to see the results of that mid-last year. What has happened? Where is that?

Dr Reichelt: The project began mid-last year, I think May, and it is very close to finalising. I am thinking

weeks, not months. It is in formatting and pre-production.

Senator WATERS: I thought that it had begun earlier and was due to report in the second half of last year?

Have the time frames changed?

Dr Reichelt: The panel might have had ambitions to report in the second half of last year, but I thought it did

in May.

Senator WATERS: What was the cause for the delayed report date?

Dr Reichelt: The panel set their own time lines and we did not give them a cut-off date to finish it. They met

at least three times, is that right, or were consulted three times?



Mr Elliot: The panel came together for a workshop once, but there was a lot of interaction between panel

members and the lead authors in compiling the document. The document was still undergoing production up to

late last year. The pre-publication activities, such as formatting, proofing, ensuring it is correct for accessibility

for web production et cetera, are what has been going on since. As Dr Reichelt said, it is very near ready for

publication.

Senator WATERS: Okay. So you have had seven weeks to do formatting. What is the interaction between

the release of that report and the dumping regulations? Have you been asked to go slow on the report until the

regs are released?

Dr Reichelt: No; it is available resources. We have had no go-slow, no direction at all, on that report. The

sooner we can get it out, the better, from my point of view.

Senator WATERS: Sure. Do you anticipate that the results of that report will be factored into the drafting of

the dumping regulation?

Dr Reichelt: It all depends on the timing. I am sure that the report will inform all future decisions around

dredging, including scientific research. I think the report should speak for itself when it is released.

Senator WATERS: How are you anticipating the report will influence decisions? Is it going to be a

mandatory consideration under the EPBC Act? Is it going to be a tool for the minister? What is the intended

purpose for the influence of the report?

Dr Reichelt: It is meant to inform the public, the scientific community and government on the state of

knowledge of dredging activities. I think it will set scientific agendas, because any group of scientists will always

find more research is needed, and I think it will inform future environmental impact assessments in what they

specify as information they may need. Can I just check for any other implications with Mr Elliot?

Mr Elliot: The only thing I would add is on that last point. I would expect it to inform things like terms of

reference or impact assessments et cetera. It will very much help guide the sorts of questions that need to be

answered.

Dr Reichelt: From a marine park authority point of view and from colleagues at AIMS, we have been very

careful to let the panel do their work. We have not edited it and they have seen all the drafts that the rapporteurs

put together. We will publish it, but we want it really clearly understood that it is the panel's work.

Senator WATERS: Sure. Just back on that terms of reference point, Mr Elliot, given that much of the big

dredging proposals have already been applied for and those terms of reference have therefore already been set, do

you anticipate that any of those terms of reference will be amended to require consideration of this new report, or

is it going to be something that applies to future dredging applications, of which there may be few?

Dr Reichelt: There is nothing to prevent information being included at any stage of an environmental impact

process The number of proposals has decreased steadily over the last 12 months for various reasons. That is

documented, or I believe it will be documented, in a preface or something to give a context for the review. I

would assume that any project at any stage will now need to look at this. Whether it can affect a terms of

reference is probably more of a legal question. Once they are set they have been set.

Senator WATERS: I am pleased to hear you say that you think any project should take these findings into

account. Likewise, I agree. Let us hope that that happens. Moving now to the reef plan, the Academy of Science

was quite critical of the draft reef plan when it was released on a number of fronts. Firstly, it was on climate

change. It says that it virtually ignores climate change. How do you respond to that?

Dr Reichelt: We have had a very strong input into the long-term sustainability plan. There were parts of the

academy's submission that I agreed with, some of their priorities and risks. I think they were commenting on an

exposure draft put out, I believe, in October or November—late last year.

Senator WATERS: They were commenting on the draft plan?

Dr Reichelt: Yes, on the draft plan. I know that the comments they and many other people made have had a

substantial input into the revisions of that draft.

Senator WATERS: Not in relation to climate change, though.

Dr Reichelt: It is up to when it is finally released. Climate change featured strongly in their report. For me,

the long-term plan is such a critical thing, because it is the first document after the strategic assessment that talks

about solutions and the long term. So I remain very positive. It would be very surprising if, when the plan is

released, it does not continue to evolve. I base that on my 10 years of experience with the Reef Water Quality

Protection Plan. When it was released, people thought it was an impossible task to halt and reverse the decline of

water quality, and nothing happened for a few years. The targets were revised and now, 10 years later, we are



seeing positive signs. This is a more complex, ambitious thing—to look at all sources of pressure. I am fully

expecting the plan to evolve. There will be future versions that will fill gaps as knowledge comes in and as

monitoring information emerges. I encourage the public and government to treat the long-term plan as a long-

term project.

Senator WATERS: Just coming back to the academy's criticism, they also talked about dredging and

observed correctly that it did not set any hard targets for cumulative impacts like dredging. In fact, they say:

Instead, the draft 2050 plan will ensure growth in new impacts (such as more dredging, coastal development and fossil fuel

extraction) …

Why is there not a concrete proposal to put limits on dredging?

Dr Reichelt: The federal minister has made concrete policy direction.

Senator WATERS: Not to set a limit. My question is about the setting of a limit.

Dr Reichelt: It is a complex question if you are talking about the actual limits for all dredging, and we have

covered those in the discussions with Queensland's pre-election commitments. We have already published a

policy, several years ago, that talks about the setting of limits to dredging and managing the amounts downwards,

but since we have made that policy statement quite a bit has changed in the policy space with the minister's

announcement, and it likely will again, once the Queensland intentions become clear.

Senator WATERS: I am just a bit confused. The minister's announcement was about dumping, not about

dredging.

Dr Reichelt: Sorry, yes—

Senator WATERS: I am talking about the limits on dredging, and you are saying you published a paper a few

years ago calling for those, but that is not in the draft reef plan.

Dr Reichelt: I talked about a cap on total maintenance dredging some years ago. I think probably I should

refer you to it later when the draft does emerge.

Senator WATERS: Is that something that you hope future versions might deal better with?

Dr Reichelt: I cannot recall if it is the academy or others that have talked about the boundaries of ports, and

the fear of port boundaries seems to be quite big. For me the boundary of the port is the marine park. The lines

that have been drawn by harbourmasters to show the limit of their ship navigation interests and other things to me

should not be taken as things in the marine park that will be overridden by those port boundaries. The federal

legislation would prevail over any state decision or state-owned port decision, and so to me there already is a

sharp limit on the spatial extent of the ports in the reef. I do expect them to evolve within those limits. I

mentioned the concept of a reef class vessel, essentially matching the scale of the ships operating in the Great

Barrier Reef to the geography of the reef. It is done elsewhere—it is done Port Headland, Newcastle and ports

internationally. I think we will see a change in policies around shipping. Some of them take time. There was a

policy on ballast water disposal 15 years ago, and they tend to be grandfathered through ship designs. But the

trend that I can see in ports and shipping is a tightening not a loosening of the limits to environmental effects

around ports. That is a very broad statement.

Senator WATERS: It is indeed.

Dr Reichelt: I think dredging and disposal will be caught up in that.

Senator WATERS: Let's hope so. Moving to the water quality targets, or rather the lack thereof, in that draft

reef plan, there is an overarching target—although you could hardly call it a target—of 'no detrimental impact'.

There are no figures attached to that. There is no timeframe attached to that. How does that come close to

UNESCO's request for a target-driven framework?

Dr Reichelt: There are strong targets in water quality. I think some of the concepts about no detrimental harm

are going to take quite a while to be specific. I think the science would not be there, for instance. If you had

noticed, in the academy submission there was quite a lot of detail around the risks and the shortfalls but not a lot

on the solutions. I think that is because the science will take quite a while to complete, as the water quality

protection plan did. I am not worried by in some areas it being difficult to set targets. There are specific water

quality targets and we have specific water quality guidelines for what constitutes healthy water in the reef and we

have had those for five or six years now, and they will be informing the evolution of the long-term plan, I am

sure.

Mr Thompson: Senator, just to further clarify Dr Reichelt's answer, the language you used I think in respect

of the long-term sustainability plan, or the draft of it, is a reference to an outcome or an objective, not a target.

There are specific targets related to reduction.



Senator WATERS: That sit underneath that, but you are not able to define what 'no detrimental impact'

would mean.

Mr Thompson: I think Dr Reichelt's answer stands, in that sense. As you would also be aware the reef water

quality—

Senator WATERS: So it is a sort of motherhood aspiration as opposed to a target per se?

Mr Thompson: The reef plan, which proceeded the long-term sustainability plan, updated as the science got

better and evolved, updated, the management of the reef water quality aspects.

Senator WATERS: So 'no detrimental impact' is not a target as such?

Mr Thompson: Within the hierarchy of the documents and outcomes it is an objective that is being sought,

and the targets inform and support that.

Senator WATERS: The Academy of Science also said:

… the reduction targets in the draft plan are also likely to be swamped by increased sediment, nutrient and pesticide loads

from dredging and new agricultural expansion in the reef catchment.

Have those extra impacts been accounted for in the plan?

Dr Reichelt: I did not fully follow the academy's comment there. I do not partially agree with—it depends on

how it is interpreted. The dredging does remobilise nutrients and sediment. It is locally significant, and about to

get more local with the minister's announcements. Ports are highly constrained. There do not appear to be avenues

for new ports now under any government's intentions, so I think I disagree with the implication that a wave of

expansions of ports is about to break.

Senator WATERS: I am sorry, you disagree that there are port expansions planned?

Dr Reichelt: There is about to be a wave of, not—

Senator WATERS: Or that there are new ports planned? They are obviously a bit different. Just to be clear

with your words.

Dr Reichelt: Sorry, multiplication of ports is what I was talking about, as there was five years ago—the 12-

mile channel through Repulse Bay, for instance, for the shale. I think I am being diverted off the question here. I

disagreed with the implication of the generic comment about swamped and pesticides and so on. I think there are

too many things being mixed up in there to give a—it is a general statements.

Senator WATERS: Noted. Can I just finally go to the noise issue. The strategic assessment talked about how

underwater noise pollution is obviously a growing problem and a risk to the reef, and the 2050 plan includes an

action to develop guideline on assessing and managing underwater noise. How many staff have been assigned to

prepare that guideline?

Dr Reichelt: I would have to talk with my colleagues at Maritime Safety Authority about how to deliver that.

It is part of the north-east Australia shipping plan. I was very pleased that colleagues in AMSA included that as a

goal because I think it is a potential impact, amongst many other effects of shipping. I cannot answer your

question on numbers of people, because it—

Senator WATERS: You do not have any in the authority working on that?

Dr Reichelt: Pardon?

Senator WATERS: Are there no staff within GBRMPA working on that? Are they working under the

auspices of AMSA?

Dr Reichelt: It would most likely be done through the linkages with AMSA, at the authority at the moment,

where it was one of 18 initiatives that we asked to be put into the plan. I think it was 18, a figure like that. We are

giving priority at the moment to the cumulative impact study, to the setting of standards and guidelines for the

biodiversity targets in the long-term plan. The problem of noise at the moment is not the highest of our priorities,

but I would like it to stay in there as something that needs to be solved.

Senator WATERS: But will your staff be the ones that develop that guideline or is that going to be somebody

else's responsibility?

Dr Reichelt: It is more likely to become a partnership with AMSA and us, but it is hypothetical because we

have not done the decision making around it yet.

Senator WATERS: So that process has not even begun.

Dr Reichelt: No.

Senator WATERS: The guidelines have not started be to prepared yet?



Dr Reichelt: That is correct.

Senator WATERS: Is there a time frame on when they will be prepared?

Dr Reichelt: Not at this stage. The north-east shipping plan is explicitly mentioned in the long-term plan, and

I am sure actions under there will be prioritised along with all the other ones.

Senator WATERS: Given that the World Heritage Committee had asked Australia to develop, amongst other

things, a shipping policy which will ensure that port and shipping activities do not negatively impact the overall

universal value of the reef, do you think the absence of the development of the noise guideline and the lack of

time frame is going to satisfy them in relation to that small aspect?

Dr Reichelt: I cannot speak for the committee; what I can say is that there are quite a few issues there that are

seen as important, but the bigger issues for ports and shipping would be around the port development—and that is

being very strongly addressed, as we have talked about. With Shipping Australia, the Barrier Reef is the most

highly protected shipping waterway on the planet and it is one of the more lightly used ones, so there are quite a

lot of actions taken under the particularly sensitive sea area designation for the reef.

Senator WATERS: I think my colleague has questions about marine piloting.

Dr Reichelt: My point is that it is not as though nothing is happening. There is huge effort. Forty per cent of

Australia's navigational aids in its entire marine territories are in the Barrier Reef, so it is a highly managed area.

But where we identify risks we will keep putting them on the list of things and keep prioritising them.

Senator RICE: I want to continue on some questions about issues of shipping, in particular about mandatory

pilotage through areas of the Great Barrier Reef. Last week, we had the Chinese ship captain being charged for

sailing through part of the Great Barrier Reef Marine Park without a pilot. I want to return to that issue in a

minute, but in particular I want to talk about the areas that currently are not protected under compulsory pilotage

provisions where there have been significant numbers of groundings of ships. Have you done any work on

whether the areas covered by mandatory pilotage should be expanded?

Dr Reichelt: We have relied on the Det Norske Veritas review that was done for the north-east shipping plan.

Where there have been groundings in the past, there is now pilotage, with one exception: the Shen Neng coal

carrier. In that case, the accident was caused by crew. I think the pilot would have left the ship by that stage. The

issue of pilotage will continue to be important. Some of the groundings that have occurred with pilots on board,

so it is not the only issue that we need to look at.

I was pleased that the compliance for the incident last week was pursued hard. The ship did not actually enter

the Hydrographers Passage without a pilot; it was detected having that intention and stopped. They put a pilot on,

it navigated safely, it went to China, it left its coal in China and then, when that master came back to Newcastle,

he was charged with the intention to leave through the channel, and that is what he was convicted of. The vessel

traffic service tracks 40 or 50 vessels that go through every day. The pilotage areas could well come under review

if the risks change. The high-risk area for the reef is ships leaving through the matrix of the reef through the

Hydrographers Passage and the northern route, and they are protected by mandatory pilotage.

Senator RICE: So you are not currently doing any work as to whether the area should be expanded? Looking

at the statistics, there seem to be two areas where significant groundings have occurred over the last 15 years,

both outside the mandatory pilotage areas: Gladstone and Mourilyan. I am interested in whether you are currently

doing work on looking at those areas outside the current mandatory pilotage areas.

Dr Reichelt: I am not aware of anything right at the minute. As I say, I understood it was fully reviewed about

12 months ago, but I should check that I am correct in that, I think.

Senator RICE: Okay, get back to us as to whether you are doing any work looking at the necessity to expand

the areas.

Dr Reichelt: Yes, or what other parts of government are doing that. The pilotage is legislated under the

marine park act but policed principally by AMSA and the vessel traffic service. It is a joint arrangement.

Senator RICE: Going back to the issue of the Chinese ship as an example of breaching of the standards, in

recent years major shipping accidents in Australia that have posed a threat to the environment have all involved

foreign flagged vessels. For example, in September last year alone, AMSA inspected 351 foreign ships and found

1,030 deficiencies; 31 ships were detained because the deficiencies were so bad. In comparison, zero Australian

ships were detained. I am interested in whether the authority has any reflections on or responses to the increasing

issue of managing international ships to Australian standards.

Dr Reichelt: We take a very strong interest in it and participate with Maritime Safety Queensland and the

Australian Maritime Safety Authority. As a group, we are actively reviewing risks and incidents around the



Barrier Reef. You were speaking nationally as well, but its intensive focus is in the Barrier Reef. We will explore

and argue for and pursue any action that Australia can take to improve the safety of shipping in the reef. I will

follow up on the question you raised about the extent of pilotage.

I do know that maritime safety used its global network and international maritime organisation links to raise

the watch-keepers convention for ship crew quality and tiredness. That resonated around the shipping world.

Arms of Australian government are very active in where they can use influence to improve shipping safety. I

know AMSA takes a strong line and it is considered globally to be the strongest in terms of detention and port

state control. I know there have been ships banned recently because they had three strikes of too many faults with

their equipment.

Senator RICE: We do have very high standards. The issue is that you have a lot of these ships which are

irregular or infrequent visitors. They might get pinged once and they do not think they are going to be back here

for a while, and that is obviously going to be an increasing concern with the increasing shipping traffic through

the Great Barrier Reef. Is that an issue of concern to you given the increasing amount of our shipping being

foreign owned ships? In particular, we have the proposed deregulation of coastal shipping, which is likely to

increase that further still. Have you considered that against the implications for protecting the reef? With only one

small accident from an irregular visitor, massive damage can be done.

Dr Reichelt: The way I think of shipping safety is that more is always needed. There is no such thing as being

complacent about it, for the reason you just gave about one accident or one lapse from a crew or a pilot. So I want

to put that on the record. Anytime some avenue to pursue heightened protection comes up, we pursue it to the best

of our ability.

Senator RICE: Will you be making representations to the government or to the minister about the proposed

deregulation of coastal shipping?

Dr Reichelt: I am not aware of any of our team looking at that aspect of the governance of shipping. I would

look to and I will approach AMSA management for their analysis of the impact on shipping safety generally and

especially in the Barrier Reef. It is out of my expertise and, frankly, my authority probably, but it is a matter of

intense interest if there is a new risk.

Senator CANAVAN: Do you have any data on what percentage of shipping through the Great Barrier Reef is

Australian flagged?

Dr Reichelt: It would be available; I do not have it to hand.

Senator CANAVAN: That would be AMSA, I suppose.

Dr Reichelt: Yes. Most of the questions the senator has asked are under the direct control of maritime safety.

Senator CANAVAN: It would be mostly foreign, wouldn't it? We would be lucky to have, I think, 12 ships

out there at the moment.

Senator RICE: If we could put that on notice, I might ask the same question of AMSA during this session of

estimates.

Dr Reichelt: I think they would be better placed to brief you on it.

Senator RICE: But, given the increased risk of accidents from foreign owned ships, it sounds like it would be

something that would be useful for the authority to know as well.

Dr Reichelt: It would be. In shipping, there are risks of movement of exotic organisms and in the rise in free

on-board-versus cost insurance freight loading, which means ships park for long time. We do work closely with

the maritime people enough to assess the directions the shipping industry and the resource industries might take to

lower the risks to the reef. That is a constant topic of discussion. I am not familiar with the one you raised.

CHAIR: Thank you very much, Dr Reichelt, and officers of GBRMPA.

[12:04]

CHAIR: We will now move on to program 4.2. I call the Commonwealth Environmental Water Holder.

Would you like to make an opening statement?

Mr Papps: No, thank you.

CHAIR: Perhaps you could give us a bit of an update on how your regional officers are coming along and

whether they are proving to be delivering you the kind of regional information that obviously you were seeking

when you appointed them.

Mr Papps: I think the question around the recent employment of the local engagement officers takes me to

localism and the importance of localism, so I might start there, if you do not mind, and then move through to



where we are up to with local engagement officers and how they are going. Localism, or the involvement of local

communities in decision making, is an obligation on me under the basin plan in terms of my decision making. But

even if it were not a legal obligation I would be an enthusiastic participant, principally for two reasons: (1) I think

we get better decisions out of involving local communities and we are able to put local knowledge in alongside

science and get better outcomes and (2) that sort of engagement, that localism approach, is very important to

building trust with local communities. And being relatively new on the scene as a large holder of water, trust is

very important.

The nature of localism is also important—and this is part of the feedback we get very strongly from basin

communities. It goes beyond consultation. Basin communities will often tell you they are suffering consultation

fatigue; they really want engagement. So, we are trying in a very practical way to move from mere consultation to

direct engagement with communities. While it is true that I remain the statutory decision maker for the allocation

of environmental water, we are building a system where local communities or individuals, if they are interested,

can have influence over my statutory decision making. So, the question around the approach on localism is much

more than just consultation; it is about listening to understand, it is about reporting back to communities about

what we have done with the information they have given us—if we have used it, letting them know if we have not

used it, and explaining why.

We have some specific mechanisms. The local engagement officers are part of those. I will just touch on a few

others before I get there, if you do not mind. We have set in train a range of processes for community

engagement. It is a work in progress; we are learning as we go. For example, in the Edward Wakool, a major

system based around Deniliquin, we have established with the local land service a stakeholder working group,

particularly around the design of long-term intervention monitoring, which is a monitoring and evaluation

program. And the locals there have actually helped us design the monitoring program, and we have actually

changed a number of things—for example, where and how we were going to monitor for fish.

In planning for water use, which is another area of great interest to basin communities—they really want to

understand where we are going to use the water and why—we have continued to work through the established

practices in New South Wales through things like the environmental watering advisory groups and in Victoria

through things like this catchment management authorities and other local structures, such as customer service

committees, or more directly, where we as the Commonwealth Environmental Water Office engage more directly

with stakeholders who are not represented on any of those forums. So, we are making sure we listen to the

community to ensure that there are responses to people who do not feel engaged through those existing processes

but are happy to use them wherever we can.

Perhaps I could go now to the LEOs. Yes, we have appointed six people now to these positions. They have

been in the positions for a while, based in Berri, South Australia; Mildura, Victoria; Deniliquin, New South

Wales; Leighton, New South Wales; Dubbo, New South Wales; and Goondiwindi, Queensland. The feedback

from communities in those areas—or in fact more broadly, of course, because the local engagement officers,

although based in those towns, service a wider range of catchments—has been positive. We can see the impact

already of those local engagement officers. We can see that the quality of information going from us to the

community is improving. It is improving in terms of the relevance and in terms of responding more quickly to

community needs. And we can see the effect that local engagement officers are having in distributing that

information within the community and indeed helping build the capacity of the community to respond.

It is fair to say that in many basin communities the bureaucracy remains a mystery. They are not clear about

who is responsible for what decision. They are not clear of the distinction between federal and state. Our local

engagement officers are helping to break down those barriers. People know that there is a person they can talk to

about environmental watering. And if it is an inquiry that goes directly to the state's responsibilities then they will

get a name and a phone number of who they need to talk to in the state. So, we can already see the value, and I

expect that to simply increase over time as the LEOs get more engaged.

The last thing I would mention is the importance of direct engagement from myself and my staff. My senior

staff and I spend a lot of time in the basin. I did not count it last calendar year, but I am pretty confident that I

spent more days in the basin than I did in my office in Canberra—which is as it should be. And we will continue,

notwithstanding having appointed the LEOs, to ensure that as senior officials we get out and have direct

conversations with affected communities. I am sorry: I whipped through that very quick. But it is a matter of

some import to us.

CHAIR: No, that is great, and it is some really good news.

Senator SINGH: I just want to get a bit of an update on water holdings and sales. How much environmental

water is currently being held by the CEWH?



Mr Papps: As at 31 January 2015, which is the most reliable data we have, the holdings totalled 2,254

gigalitres, which translates into 1,546 gigalitres long-term average annual yield—which, as you would appreciate,

is the currency of the plan.

Senator SINGH: Out of that, how much has been released for environmental flows from Commonwealth

holdings?

Mr Papps: For this year—and these figures will change, because we are not at the end of the water year, so I

am reporting on a live water year; like a financial year, it goes from midyear to midyear—we have available for

use 1,403 gigalitres. I have approved already for delivery—not yet delivered, but approved for delivery—1,801

gigalitres. The difference between those two numbers is largely accounted for by water in the unregulated

northern part of the basin, which is counted in a different way. But if we look over the life of the Commonwealth

Environmental Water Holder, which started in 2008-09—so, if we look over the entire life of the office and the

decisions made—we have used, up to 31 January, 4,056 gigalitres.

Senator SINGH: That is since 2008?

Mr Papps: Yes.

Senator SINGH: Since last estimates hearings, has the Commonwealth water entitlement been sold back to

the market?

Mr Papps: No. Since we last spoke there have been no trades. And, as you will recall from our conversation

at the last estimates, we have a commitment—an obligation, but a commitment—to ensure that the market is

informed. So, we provide what we call portfolio management updates, which are available on our website—a

much-read document within the basin—and we publish those quarterly. The current one relates to January 2015 to

March 2015, and that basically advises the market that we have no intention to buy or sell water in that quarter.

Of course, we monitor the situation constantly, and should that change we would put those updates on the web

and make sure that our intention was publicly known throughout the basin.

Senator SINGH: So there will be one more report before the end of this water year, or financial year?

Mr Papps: Yes, that is correct.

Senator SINODINOS: How do you make sure you are managing the water holdings in an effective and

efficient manner so that other water holders do not feel that they are being disadvantaged by your activities?

Mr Papps: That is a very important question, because, as I said before, although we have been around since

2008-09—not me personally; there have been other CEWHs—the volume of water we now hold and use is

significant. So, it is critically important that communities in the basin, particularly irrigation communities, have a

level of confidence in what we do. In terms of our holdings, the first thing I would make mention of—and these

are not in any order of priority—is a good-neighbour policy that we have adopted. This is an approach or a

strategy around our behaviour. It is aimed squarely at ensuring that there are no negative third-party impacts on

irrigation communities. That goes to, for example, inundation of private land—making sure our decisions are very

conservative and prudent, based on a risk assessment, so that there is no inundation of private land, except where

that inundation is approved. There are some circumstances in which a private landholder is quite happy to have

their land inundated. So, if it is approved, it is okay; if it is not, we do not.

And there are other things, like channel capacity. In the southern-connected basin we often use the same

irrigation channels that irrigators use to get our water from storage to a wetland or to a river. And there is

competition for space. We will, except under very rare circumstances, concede space in the channel to ensure that

irrigators can get their consumptive water to their crops in a very effective way. There are other elements to it, but

I will not go through all of those. And we will respond to specific concerns. So, we are tuned in to the fact that

our behaviour might be different to what is being expected, and to specific concerns. In the Goulburn River, for

example, there was a series of specific concerns about flow rates, which we responded to.

The second thing I wanted to mention, apart from our own choices around our behaviour, is the safety and

security that is afforded by the rules and procedures that apply in the basin. All the entitlements I hold on behalf

of the Commonwealth have the same characteristics that they had before they were required by the

Commonwealth and therefore are covered by the same rules and procedures as would apply if they were, for

example, owned by a rice farmer. And we of course have to comply with those rules and procedures. Many of

those rules and procedures go to security of supply and reliability. For example, the rules around carryover, with

which we comply, are designed by the basin states to protect everyone's interests so that no-one can do anything

in terms of their behaviour that would have a significant negative impact. We are very careful to observe those

rules. Similar rules apply to trading. We mentioned trading and the need to comply with those.



And then the final element I would mention in response to your question is around adaptive management. You

asked about efficiency and effectiveness as well. I think there is an obligation on me to ensure that

Commonwealth environmental water is used as efficiently and as effectively as you would expect, say, an

irrigator, a rice farmer or a cotton farmer would use their water. We use an adaptive management approach. We

have very clear objectives in mind for environmental watering. We apply the water. We are very careful and

prudent when we do so. Then we monitor the effect and we evaluate the monitoring. It is not just a matter of

measuring it and storing data somewhere in a database that no-one ever sees. We monitor it. We evaluate it. We

publish the results. We publish the individual results. We publish annually the outcomes of environmental

watering, and we make sure that that data is available to communities.

Most importantly of all, in adaptive management, we learn from it. For example, in the Edward Wakool, we

have undertaken some watering to improve outcomes for Murray cod and other fish species. We have not got the

outcomes to the level that we would expect. We will evaluate that with the community and we will change our

behaviour accordingly. It is that constant rolling process of looking at what we do, understanding what is working

and what is not working, and then making adjustments. The results can be spectacular. In the Goulburn River, for

example, where we were trying to get the golden perch and others fish species to breed, we tried for two years in a

row—we varied our watering in cooperation with the local CMA and local farmer input—but for two years in a

row we got no results. In the third year, in the third set of variations—the third set of changes—we got a very

good result. It is that adaptive management that, I think, will drive effective and efficient use of the water.

Senator CANAVAN: Do you have any carryover water at the moment?

Mr Papps: That is right, we do. There are three things we can do with Commonwealth environmental water.

We can use it in the current water year—that is, we put it into the environment. We can carry it over where we are

allowed to. That is not a universal right across all entitlements. In many entitlements in the southern connected

basin in the Murray and Murrumbidgee, we have carryover rights. And then we can trade it. They are the three

things that we can do. We do carryover water. We carryover water within the rules that are attached to each of

those entitlements. More importantly than that, we use it as a management tool. Just like a farmer growing rice

and thinking about the next year's crop and the next year's weather, if the indicators are in part of the basin that we

are in for a dry period, we will consciously choose to carryover within the limits—

Senator CANAVAN: The chair is giving me the wind up. I am sorry, Mr Papps, other committee might like

to hear about that, but I was specifically asking how much of the 1,403 gigalitres you have available this year is

carryover water from the previous water year.

Mr Papps: The carryover from previous water year was 450 gigalitres.

Senator CANAVAN: Are you going to use all of that water in this water year?

Mr Papps: We put the carryover water together with the allocations and use that proportion of it which is

most efficient, and we will carryover more water into the next year.

Senator CANAVAN: Will you have any water that you cannot carryover again? Unless things have changed,

my understanding is that you cannot usually carryover more than one season.

Mr Papps: No, we can continue. We have a continuous carryover capacity in many of those entitlements. It

might be physically different water—

Senator CANAVAN: Just very briefly, is there anything that you are not going to be able to carryover or use

out of the 1,403 gigalitres you have this year?

Mr Papps: There might be a very, very small amount attached to very specific entitlements that we cannot

use, carryover or trade. They are very, very small amounts.

Senator CANAVAN: Why can't you trade them if you are not going to use them or carry them over?

Mr Papps: Because there are attachments or conditions to the entitlements. They are very, very small

amounts, which would be re-allocated under the rules of the basin state.

Senator CANAVAN: Is one of the reasons you cannot trade them the restrictions in the Water Act?

Mr Papps: That sometimes applies—that there are specific restrictions.

Senator CANAVAN: Will it apply this year in this water year?

Mr Papps: It is too early to say, but we are monitoring those trade restrictions very carefully.

Senator CANAVAN: You have said you used 4,056 gigs since 2008. Could you take on notice how much

water you have not been able to use—that you have been allocated, but that you have not been able to use either

for an environmental purpose—



Mr Papps: Yes, we can give you those figures. They are figures of a gigalitre in the 0.1-type range. We can

provide you with those.

Senator CANAVAN: I notice that there was a review of the Water Act last year that recommended you

should be able to use the revenue earned from trading water to fund other projects, not just more environmental

watering. This might be a question for the minister not for yourself. Has the government responded to that at this

stage?

Senator Birmingham: No, not unless that has happened without me noticing very, very recently. I am

confident that it has not. The government gave an indication of support for, I think, two of the recommendations

in the review of the Water Act and is, of course, preparing a response to the other recommendations.

Senator CANAVAN: I have not caught up, myself. Is one of those this particular recommendation?

Senator Birmingham: No. They were both recommendations that required further work—further reviews of

certain issues like the market rules that exist around water trading. So the approval was given—or the support for

those recommendations—on the basis that that work could continue. Others, such as those which relate more to

change in legislation or a change in policy structure, are matters that I am sure the parliamentary secretary and the

minister—

Senator CANAVAN: They are still being considered, are they?

Senator Birmingham: Yes. Two have been accepted; the rest are under consideration.

CHAIR: Minister, with your carryover water, what storage do you have locked up? Could you carry over,

over a number of seasons, or can you only carry over from one season to the next? You could not increase the

amount of your carryover year after year upon year.

Mr Papps: It is a complicated answer to an apparently simple question, but the carrier depends on the

particular basin state in which you are working, the particular catchment and the type of entitlement. It is not a

right that is attached to all entitlements. I have, I think, on the last occasion, 75 different types of entitlements in

the holdings. To give you a more specific answer I would have to go down into the details as it relates to the

holdings. But there are very strict rules around carryover to ensure that neither I nor any other major holder of

water can disadvantage other holders. That, of course, goes to the question of how much you can have in a storage

so that you are not occupying a disproportionate amount of those storage facilities. As a percentage of major

storage capacity, for example, the carryover from last year was around about two per cent across the basin. Across

all the major storages, we occupied, on average, two per cent.

Murray-Darling Basin Authority

[12:27]

CHAIR: I welcome officers from the Murray-Darling Basin Authority. Dr Dickson, would you like to make

an opening statement?

Dr Dickson: No, thanks very much.

CHAIR: I am just wondering how your constraints management strategy is playing out in terms of its

implementation and the physical and actual consequences as we try to manage these flows of water in various

places. Are you seeing any problems on the ground or is everything going along swimmingly?

Dr Dickson: I will just backtrack a little bit. Since the strategy was endorsed at the end of 2013, this last year

we did a lot of work doing more of the pre-feasibility work with various landholders in the river reaches. As you

would be aware there are seven key regions where we have been working very closely with landholders to

understand the impact of different flow levels. We are also doing a lot more of the scientific work—the modelling

and estimations—but most particularly we are getting information from landholders about their concerns and the

effects. So in a large part of last year we were working closely with communities on that part of the work.

At the end of last year the state and Commonwealth ministers agreed to proceed with business cases. So all of

the work done to date was really just prefeasibility work to get a sense of what the scale of the costs would be to

mitigate any changes—what the likely effects of different levels would be.

This year we are assisting the states. These are now state projects that are going to be developed by the states.

We are assisting those, particularly in the Murray stem. There are three areas: Hume to Yarrawonga, downstream

from Yarrawonga, and then in South Australia. So this is in the key parts of the Murray, looking at all the

different types of impacts from different flow levels. Although this work has been done by the states, they have

asked us, as their agent, to work with them on that. In the Goulburn, Victoria is managing that project, but again

we are providing technical support and also working closely with the CMA to continue the work we have been



doing with the various advisory committees that are helping us with the work. Similarly, the Murrumbidgee

would be a New South Wales project—the Gwydir as well and the lower Darling.

CHAIR: Has anything in that research indicated that there are any issues popping up that are anticipated,

particularly in relation to the constraints that you face?

Dr Dickson: There are many issues of concern to communities, and the whole point of the work that we have

been doing is to very clearly identify what they are, to see how they can be mitigated. A lot of the issues are to do

with access. The purpose of the constraints strategy is just to increase the rate small to medium flows. All of these

are below minor flood level, so they are in the nature of nuisance flows. But this means that some of the little

flood runners and creeks might flow more often than they used to. This means that there is often an access

problem as landholders might want to go from one part of their property to another. That might happen more

frequently. If the flows are at a time of year when they need to move around their farm and their low-level

causeways are inundated, they need to be able to look at some of the options to get better access. They are the

sorts of things we are looking at.

CHAIR: I think I was probably more meaning that the constraints were proving to prevent you from being

able to deliver your outcomes. I know that we have often talked about it here—the 80,000 megalitres a day across

the border at that border straight up from Renmark. Is that physically possible in a forced event? There is nothing

you can do about it when it happens naturally, but are there constraints on achieving that? Is it actually

achievable?

Dr Dickson: It has to be a mixture of a number of different things. We are assessing the estimates of different

flow levels. For example, in the most complex area, which is downstream from Yarrawonga, we are exploring I

think two different levels this time round, and those are designed to be able to achieve the environmental benefits

along with the flow limits in the other areas. But there is a lot more work to be done, that we need to do—over

this coming year and in future years, really—to look at the detail on the ground. These are very complex systems.

There are many landholders who live along those areas, so we need to make sure we cover off every type of

concern and issues that people are raising.

CHAIR: Thank you, Dr Dickson. Senator Madigan?

Senator MADIGAN: Thank you, Chair. Initially I refer to the MDBA proposal to release 2,750 gigalitres of

water per year for nine out of every 10 years, to be piggybacked on the Murray and Murrumbidgee water and on

top of several smaller rivers. Ultimately, people fear causing massive riverbank notch erosion, damage to flood

plain farming, land and property, with stock and crop damage and with long-term income loss to people in towns

throughout the three basin states. How can a mere $200 million offered by the federal government ever hope to

cover the enormous loss generated throughout the basin by this proposal?

Dr Dickson: I think, Senator Madigan, the proposal you are referring to is the long-term average recovery

amount that has been part of the basin plan that came into law at the end of 2012. Is that what you are referring

to? We do not have a proposal that is about delivering 2,750 in one go, so I need to be clear on what your

proposal is.

Senator MADIGAN: The fear amongst communities is that you are proposing to piggyback your water on

top of current water that is running down the river system. We have already seen massive problems with

inundation of land. We have the constraints problems along the rivers that I am sure you are well aware of. People

are concerned that the federal government is offering $200 million to cover proposed flooding events, and they

are saying it is not enough.

Dr Dickson: Probably I should run through the whole breadth of the Basin Plan which, as I said, has now been

adopted by the government and agreed by the states, and is currently being implemented. In the first instance,

there is an adjustment process that is underway to look at where there are potential offsets to the recovery

amount—the 2,750—as well as looking at whether there is an opportunity to adjust it for further environmental

benefit. The constraints strategy—which you say has $200 million earmarked for that—is part of that process.

The government has invested—and the Department of the Environment will probably say more about that—I

think close to over $4 billion that has been contracted in infrastructure works for farmers, and that is part of the

effort to improve the efficiency for infrastructure operators and individual farmers as part of the Basin Plan. The

$200 million you refer to is really only to help look at the options for constraints—some of the things I was

talking to Senator Rushton about—such as whether you needed to provide additional access bridges or look at

easements and those sorts of things. By far the bulk of the funds that are being spent on the Basin Plan are for

infrastructure investments, which are now far overtaking water purchase.



Senator CANAVAN: Are you negotiating with any landowners right now about purchasing easements or

land?

Dr Dickson: No, at this stage we are only doing the feasibility work, the business case work, for governments

to make their decisions in the future.

Senator CANAVAN: Are you taking charge of that, Dr Dickson, or the department?

Dr Dickson: No, we are responsible for, as I said, assisting the states now as they are doing their constraints.

They are doing the constraints studies; we are providing their assistance. Up until last year we were doing the pre-

feasibility work. The basin states have now made the decision to continue with it, so we are now assisting the

states in doing the further work.

Senator CANAVAN: Who ultimately will be responsible for negotiating these easements and purchasing

them?

Dr Dickson: That is probably going to be a decision for the states when they go ahead with it and how they

want to manage that process. We have been currently doing it on behalf of the states for some of the other works

that we manage, such as the living Murray works, where there are associated easements. It could be that the states

might ask us to do that, or they may use a different process.

Senator CANAVAN: Under your modelling, how many landowners would you need to negotiate with under

the current plan?

Dr Dickson: I do not think I can answer that. I do not think we have done enough work.

Senator CANAVAN: You do not have any information?

Dr Dickson: I do not think we have done enough work to really identify it, because it depends what—

Senator CANAVAN: This really goes to my next question. We have signed up to this plan. We have decided

to spend billions of dollars, and you cannot tell us how many people are going to be impacted—even in a ballpark

sense?

Dr Dickson: It all depends on flow levels and what governments' decisions are on that.

Senator CANAVAN: Specifically, how many would you need to negotiate with? We have just signed this

$200 million package and got some information about what the requirements would be. How many landowners

do you think we need to negotiate with to see the plan to fruition? You do not know, or you cannot tell us?

Dr Dickson: We have not yet done enough work to be able to estimate how many landholders would be

involved. As I said, at this stage we are only doing the feasibility. We are only talking about the constraints

strategy here—this is just one element of the Basin Plan.

Senator CANAVAN: I am not just talking about the constraints strategy. Obviously, this was a key element

of the design of the plan. I am talking about how many people are going to be impacted with flooding on their

properties and, therefore, needing a form of compensation. We do not know. We do not have an answer to that

question.

Dr Dickson: As I said to Senator Ruston, the levels that we are looking at are really quite low levels. These

are floods that happen anyway. The type of flows that we are looking at do not create the sort of flooding that

builds fears in people's mind of massive devastation and homes gone.

Senator CANAVAN: No, but it does impact their businesses. As you would appreciate, Dr Dickson, it only

takes a small flow and then cows cannot graze their anymore or you cannot grow crops there anymore. That is

going to impact on people's livelihoods. We do not know how many people are going to be impacted.

Dr Dickson: The whole purpose of the constraints strategy is to be able to avoid those impacts. There are

things that you can do, such as with the timing of when the flows come through. If you go early enough, it

sometimes creates beneficial soil moisture for people to graze. Also, you need to avoid the times when people

need to move stock around or go from one place to another. The whole purpose of this work is to be able to avoid

impacts as much as possible and to be able to identify whether you need to provide either things such as structures

to help people get over those impacts or things such as easements which we need to negotiate, which is what we

have done in the past.

Senator Birmingham: This, of course, goes very much to what Mr Papp, as the Commonwealth

Environmental Water Holder, outlined in his previous evidence: that much of the work he undertakes, as the

person who actually administers the Commonwealth environmental water holdings, is to work with local

landowners and local communities to ensure that decisions about the timing and volume of releases of



Commonwealth environmental water are made in a way that avoid negative impacts in the local community and

possibly deliver complementary positive impacts—if the right decisions are made in the right way.

It is always important to understand in these discussions—I know you appreciate it, and I am sure Senator

Madigan does, as well, but sometimes other people, when they look at the Hansard afterwards, do not—that the

bulk of damaging flooding activities that occur through the river system occur as a result of major unregulated

flood events. The Basin Plan will have no impact on the nature of those types of events because, of course, just as

droughts will still happen under the Basin Plan floods will still happen under the Basin Plan. The question comes

down to how an entitlement—a very large body of water, admittedly, of potentially 2,750 gigalitres—is used and

is used in a careful way. Certainly, the government is very committed to ensure that it is used in a way where we

do not have adverse impacts on landowners. As the plan is finalised—and there is a significant point that will

come next year with the decisions around the adjustment mechanism—the work of the constraints management

strategy is, indeed, about working through how we can, if required, invest funding to ensure that such negative

impacts on landowners are compensated for, should they arise, with that finalisation that will come from the

adjustment mechanism.

Senator MADIGAN: Some would say science is clear that we are going to have reductions in rainfall and less

water in the basin storages. As we are likely to have reduced flows to food-growing areas, with further reductions

from evaporation and seepage, flows strong enough to reach the Lower Lakes and to clear the Murray Mouth will

be impossible. I seek the MDBA's urgent responses to why it believes that it will have enough additional water to

release to piggyback over existing river water to send down at 2½ thousand kilometre system in attempt to clear

the Murray Mouth when current reduced flows have already given cause to dredge the river mouth once again.

Dr Dickson: The issue of future climate change certainly is a challenge—and certainly in the future years.

Under the Basin Plan there was always an expectation that, I think, for over 10 per cent of years there was always

going to be a likelihood of needing to dredge the Murray Mouth. It was never intended that there was going to be

sufficient water to prevent that happening in releasing those flows. So it is not surprising that, with the current

situation over the last year or so, we would need to start dredging the Murray mouth. The other point, of course, is

that the Basin Plan is not yet fully implemented. It is probably still early days to make that assessment. But there

always was an expectation that dredging would be required.

Mr James: One of the important things about the basin water reforms is that the Commonwealth has invested

a large amount of money to improve the efficiency of irrigation systems. You talked about leakage in channels

and so on. When we were visiting Coleambally Irrigation last week, they talked about the investment that they

have made and government has also helped them make over the last 10 years or so. That has increased their

efficiency in delivering water from the river to the farm gate, so farmers can then use it, from previously 25 per

cent leakage—so 25 per cent losses—to only around five per cent. So what is really happening here is that

irrigators are able to really grow the same amount of product but use a lot less water in doing that. That is an

important part of the reform that is sometimes lost.

Senator MADIGAN: This question concerns the Lower Lakes and the Murray mouth and a refusal by the

MDBA to acknowledge it is no longer a viable solution if huge volumes of fresh water worth billions annually are

wasting away through evaporation and scouring. The MDBA ignores the question of revitalising the Lower Lakes

by returning them to an estuarine state. With inexpensive modifications, I would suggest that with the help from

barrages, Southern Ocean water, assisted by 1,800 gigalitres a year of fresh water, would provide the means to

keep the mouth clear and the lake productively alive and save 2,700 gigalitres for growers and for the

environment. Is the MDBA familiar with the Lock Zero proposal and what is your response to that?

Dr Dickson: These issues that you have just outlined came up a lot in the development of the Basin Plan and

it was not a solution where governments wanted to go. We are familiar with the Lock Zero proposal and have

done extensive work, not only recently but also during the drought, on what some of the implications might be.

Senator Birmingham: In relation to the water recovery targets under the Basin Plan, not all of the 2,750

gigalitres is earmarked for end-of-system flows, so you should not be assuming that that is all designated to make

its way to the end because that is not way the Basin Plan has been structured. Secondly, to the broader point of

your issue, you can certainly say that you could remove the barrages and put in a lock or some other structure

around Wellington or somewhere towards the end of the river channel. I hear people say from time to time that

that would be returning the lakes to their natural state and, indeed, of course, before man came along and built the

barrages there were not barrages there—but there also were not locks, weirs and dams upstream. There also was

not in excess of 10,000 gigalitres, even under the Basin Plan, of extraction occurring upstream, which, of course,

has a dramatic impact on the downstream flow and the flow of freshwater into those lakes. I have always

acknowledged that the construction of the barrages has meant that the lakes have gone from an oceanly estuarine



environment to a predominantly freshwater environment. But if you were to remove them, they would not go

back to a natural state in terms of what occurred pre-development of the Basin, they would become a more

saltwater environment than they were previously because of that reduced inflow as a result of our development. I

fully support the utilisation of water upstream for economic and agricultural activity, but we have to acknowledge

that that has consequences downstream. That is exactly what the basin plan seeks to try to do: to balance those

upstream and downstream needs. People will, as they have forever, no doubt continue to debate whether it

provides the right balance and the correct answers. But, as Dr Dickson has said, governments, collectively, of

different political persuasions, in considering how to best manage the basin, have not believed that a

decommissioning of the barrages and construction of some new lock or weir would be the solution. Instead, it is

believed that having a sustainable cap on extractions across the basin is the solution, and that is what the basin

plan seeks to shift towards. But we should not forget that, under the basin plan, it is still allowing for a very

significant level of extraction of water for productive purposes, which is incredibly important to our economy and

to the communities that you and Senator Canavan and Senator Ruston and I all represent. I will have a look

around to see if there is anybody I have missed there. There are others too.

Senator MADIGAN: Earlier you said that the plan is still being finalised in some way. In 2013 the Senate

voted on the Murray-Darling Basin Plan. So the people in the Senate voted for a plan that is still open to

finalisation. So people did not know what they were voting on.

Senator Birmingham: No, that is not correct. The structures around how the plan is implemented and,

therefore, what all of the different components of it will finally look like, indeed, have a number of processes to

still go through because the Senate, equally, in 2013, voted to put within the Water Act terms for the sustainable

diversion limits adjustment mechanism, which then became a part of the Basin Plan that the parliament accepted

in 2013. That adjustment mechanism provides a capacity not only for up to 650 gigalitres of the 2,750 to be offset

through environmental works and measures through the more efficient use of water for environmental purposes

but also, potentially, for an additional 450 gigalitres to be recovered, taking that figure, potentially, up to 3,200

gigalitres of recovery, subject to a range of conditions. All of the work underpinning that adjustment mechanism

is subject to the authority and the department and the states doing a body of work that leads to the Murray-Darling

Basin Ministerial Council making some decisions in the middle of next year. So that is why there is some

variance around it. But that is all completely reflected in the plan that was adopted by the parliament and

completely reflected in the legislation that was adopted by the parliament.

Senator MADIGAN: When you go out and you speak to people at the coalface who are affected by our

decisions in this place and by the Murray-Darling Basin Plan, they are terribly concerned. For instance, the other

day I saw minutes of a meeting with the Murray-Darling Basin Authority that were taken very studiously by a

member of this particular community. When I saw the minutes that were printed up of this meeting by the

MDBA, you would think you were at two different meetings. This is the concern of people, if you speak to

farmers, to irrigators and to people in the towns. I do not get where this whole thing is going. I can tell you now

that there seems to be a great void of difference between the rhetoric and the reality in the communities. I am at a

loss to understand—

Senator Birmingham: I am sure that if you want to put some specific questions or allegations around minutes

or what happens at meetings, Dr Dickson and her team can respond to those and should respond to those, if there

are particular concerns in that regard.

Senator SINGH: I understand you have a new chair. When was the appointment of that new chair?

Dr Dickson: The appointment started on 1 February.

Senator SINGH: Can you give the committee a run-down on the process of how the new chair was

appointed?

Dr Dickson: I might asked the department to respond to that one. We do not appoint him. The department

appoints him.

Mr de Brouwer: It is a ministerial matter.

Senator Birmingham: That is right. It is an appointment of government. Whilst the commencement of Mr

Andrew's term only occurred on 1 February, I will happily acknowledge that the process of his appointment was

largely under my watch. I am pretty sure the process I took to appoint Mr Andrew was pretty much identical to

the process that former minister Tony Burke took to appoint Craig Knowles to the role.

Senator SINGH: So, Minister Birmingham, that was under your watch as parliamentary secretary.

Senator Birmingham: Correct. It is ultimately a cabinet decision, but I happily take responsibility for the

process.



Senator SINGH: So it is a ministerial appointment. In saying that—that it is your understanding that the

process was the same as that put in place and carried out under Minister Burke—are you certain on that?

Senator Birmingham: From what I understand, Mr Burke considered potential candidates, just as I

considered potential candidates. I listened over a period of time to ideas—

Senator SINGH: Candidates provided by the department?

Senator Birmingham: From a range of sources. I was open to thoughts that people gave me as I travelled

around the community. Ultimately, I think that Mr Andrew, who has spent much of his life working with river

communities and has a very deep understanding of them, will be able to continue what I think was a very good

job that Mr Knowles did in the role. Given that I have this opportunity, I do want to pay tribute to Craig for what I

think was a very effective role he performed during a very difficult time that he took over in terms of the

development of the Basin Plan.

Senator SINGH: He did indeed. I was just interested in the process, rather than the outcome of the

appointments—the process that took place. I do not think you have anything else to add to that.

Senator Birmingham: Not really.

Senator SINGH: We will leave it at that. I would like to move on to the grants list. This is the list of grants

that was provided to the President of the Senate from the minister, Mr Greg Hunt. Within that list there are grants

for environmental management and grants for corporate and business services under the Murray-Darling Basin

Authority. I have the list here. I wanted to ask you, particularly, firstly about the list under the corporate and

business services, of which there are two grants. One is the Northern Basin Aboriginal Nations (NBAN) grant,

with value of $616,000; and the other is the Amaroo Environmental Education Centre, $8,800.

In relation to the NBAN grant, the period of funding is from October 2014 to June 2016. I think that is around

20 months. Is that a usual funding period?

Dr Dickson: It had been year by year. We provide support to the Northern Basin Aboriginal Nations for them

to be able to contribute their advice to us on the Indigenous values and uses in the Basin in terms of the things we

need to do on environmental watering; their views on whether it is constraints management, as we were talking

about before; their views on water resource planning and so on. It is over a period of two years this time to give

them some certainty so that they can employ an executive officer to support the organisation. This gives them

enough time to give them some certainty for that.

Senator SINGH: All right. So it is not usual to have a grant for that length of time, but you have it just for this

particular NBAN organisation.

Dr Dickson: Yes. It is not so much in the nature of a grant; it is a contract that we have with them where we

provide support for their gatherings and meetings and support for them to provide advice to us. They are an

independent group of Aboriginal nations that have their own self-sufficiency. We provide the support for them to

provide meetings and advice to us. So it is more like a service provision than a grant.

Senator SINGH: The rest of the list—that is, the environmental management list—shows 15 grants to the

value of around $8.5 million. Can you run us through where this money comes from?

Dr Dickson: I do not have the list in front of me so I really do not know what list you are using, I am sorry. So

I cannot provide advice.

Senator SINGH: This is the department and agency grants list. It is list relating to the minister's

responsibilities under the environment portfolio. He released it to the Presiding Officers on 12 February, and it is

for the period 29 September to 1 February. Oh, you have it now.

Dr Dickson: Yes, I do now. Thanks very much.

Senator SINGH: Where does this money come from?

Dr Dickson: These are all categorised as grants. They are funds that we provide under the joint program,

which is where the Basin states contribute to joint programs that we manage on their behalf. So most of these

programs—sorry; there is a whole list of them here—come from different things. The demonstration reach

toolbox, for example, is a service that was agreed by the joint governments, and they contribute funding to those.

So there is actually a mixture here—

Senator SINGH: So it is a mixture of joint state and federal government funding?

Dr Dickson: Yes, state and federal governments. I am just having a look at these. Perhaps the simplest way of

providing an answer to you—because there are a mixture of things that we provide as part of a Basin Plan, which



is a Commonwealth appropriation, and things through the joint programs, where we get contributions from the

states—is to take it on notice and give you a breakdown.

Senator SINGH: Maybe you could take on notice what is Commonwealth and what is joint funding. That

would be good. What is the process for distributing the grants? Is that done through the authority or through the

department?

Dr Dickson: It is not a grant as in a competitive grant. These are programs that we fund that are agreed by the

states, if they are joint. It is our decision, for example, with the northern basin nations, on the range of projects

that we have to undertake to support the implementation of the Basin Plan.

Senator SINGH: For all of these $8.5 million worth of grants that are in this list, how are the funds

disbursed?

Dr Dickson: For example—I just looked at one of them—there is the National Centre for Groundwater

Research and Training. We make a retainer payment to the national groundwater centre for a series of research

projects over the next year or so. We sit on their advisory committee and we provide input into the strategic

direction of the research.

Senator SINGH: So you are saying that out of all of the 15—and you are including the other two above, the

corporate and business services grants that are under the Murray-Darling Basin Authority heading—the funds for

these grants are dispersed differently based on each branch. Is that what you are saying?

Dr Dickson: Yes. They are specific projects that we fund to enable us to deliver on our responsibilities under

the Basin Plan. There are a series of grants for that—although, they are contracts rather than grants. Then there

are a number of services that we pay for on behalf the basin governments, which are the joint programs. So I can

provide a breakdown of the Basin Plan and the joint programs.

Senator SINGH: How much total funding does the MDBA have for this stream of grants in the forward

estimates?

Dr Dickson: We do not have a grant program. Our funding is all direct departmental funding. We do not have

an administered program, except for one, which is the South Australian flood plain restoration program. The rest

of the funding is directly departmental.

Senator SINGH: Can the department answer the question, then?

Dr Dickson: No, sorry. We pay for these projects as part of our direct funding of different projects.

Senator Birmingham: When the MDBA develops its annual corporate plan it basically sets out its work

program and priorities that have to be agreed by the states under the joint partnership each year. Out of that, when

the Commonwealth and states agree that certain priority works and activities and things need to occur, there are

certain grants. They might be more accurately described as contracts for the delivery of the particular service

rather than grants in the traditional sense of, 'Here's a bucket of money; come and apply for it under these terms.'

These are contracts arranged to—

Senator SINGH: I understand that, as opposed to how it is written down here. It says 'value for grants', so it

reads as if it is a grant. But there must be a bucket of money where this comes from.

Senator Birmingham: The bucket is the budget, broken up into a whole lot of different components.

Dr Dickson: That is right. Sorry, I do not have a PBS with me but our budget is set out in the portfolio budget

statements.

Senator SINGH: What is the amount in the PBS for the forward estimates for these particular services, if not

grants? They are listed as grants, obviously, here.

Dr Dickson: I have the details here and I can certainly provide this table to you out of the PBS. Jurisdictional

contributions, say, for this current year—2014-15—is $72 million and that goes to the whole range of services, as

Senator Birmingham said, that are set out under our corporate plan, for running the River Murray, maintaining

assets and so on, and a number of projects that you refer to in this list.

In addition to that, we have a direct contribution from Commonwealth appropriation which, for this financial

year, is $48 million, which includes the work that we do on the constraint strategy, the SDL adjustments and a

whole range of our Basin Plan activities.

Senator SINGH: You will table that. Does that have the forward estimates?

Dr Dickson: I can send you, in response to a question on notice, the detailed table in the portfolio budget

statements.

Senator SINGH: Including the forward estimates?



Dr Dickson: It has the forward estimates, yes.

Senator RHIANNON: I wanted to clarify some of the processes associated with the Living Murray and the

Water for Rivers projects as supply measures. I understand that the Living Murray projects were already

completed and operational, and that their environmental objectives were set prior to the Basin Plan. So I was

wondering, how is it claimed that the environmental outcomes of these projects—the ones set prior to the Basin

Plan—are additional. I am trying to understand how they are additional to the 2,750 gigalitres environmental base

line.

Dr Dickson: In the finalising of the Basin Plan, as part of the settlement of the details of the SDL adjustment

process—which includes the aim to get the offsets as well as the additional water and the work on the constraints:

the three elements of the adjustment process—the Living Murray projects were removed from the modelling that

was done for the Basin Plan. The water that was recovered under the Living Murray, which was 500 gigalitres,

was included in the previous estimates so that the 2,750 gigalitres built on top of that water. But, to enable to the

adjustment mechanism to work, you really needed to have those works projects set outside the Basin Plan. So two

things happened; one was that a new model called the benchmark model was developed, which has taken those

projects out to enable them to be evaluated with the adjustment mechanism.

Senator RHIANNON: I am still trying to understand this.

Dr Dickson: It is a bit complex.

Senator RHIANNON: Could we bring the baseline diversion units into it, because I understand that the

Living Murray projects are considered in the baselines for the Basin Plan. So how can they be considered

potential supply measures?

Dr Dickson: There are two parts to the Living Murray. One is the water, which is 500 gigalitres that was

recovered; the other is the whole series of environmental works such as Koondrook-Perricoota works, Chowilla

works and Gunbower works. There are two different parts. The water, which is the 500 gigalitres, was included as

part of the baseline recovery. So that did happen before the Basin Plan and is counted as happening before the

Basin Plan. The projects or the environmental works, which are the ones being considered as potential supply

measures, were taken out of the modelling. A new modelling run was done, and that is creating the benchmark to

assess those projects.

Senator RHIANNON: So is it correct that the River Murray Increased Flows have not been delivered to date.

That is correct, isn't it?

Dr Dickson: Yes. You asked that question last time, I recall.

Senator RHIANNON: So nobody is trying to pull it all together. How can the long overdue delivery be

considered a supply measure?

Dr Dickson: I do not think that I have seen a proposal for the River Murray Increased Flows, which is the

specific flow related to the Snowy Hydro. If they were to be a supply measure, they would be operating in a

different manner than the current rules have dictated. So that would make them a supply measure. To be a supply

measure, the rules would have to change to manage the water in a different way.

Senator RHIANNON: I will probably come back to that one. I also want to cover some of the issues to do

with public scrutiny of the environmental outcomes of those proposed supply measures. I understand that they are

to be assessed from 2015 onwards under this equivalence test. From what I can see, the only formal requirement

for public consultation on the SDL adjustment mechanism is when you publish a draft determination of the

amount of the proposed adjustment. From what I can see, that is not until the end of June 2016. Is the first time

that the public can engage after the fact?

Dr Dickson: The states are responsible for developing the supply measures, and the states are responsible for

doing the consultation with the public, which I understand they have done to quite some degree. So they consult

with their local communities on the proposals that they are putting forward for assessment.

Senator RHIANNON: In terms of my question about the overall assessment using the equivalence test, the

public scrutiny, from what I understood, is set out but it is after the fact; it does not kick in until 30 June 2016.

Irrespective of what the states are doing, I am interested in how it works for you.

Dr Dickson: The MDBA's responsibility is to do the assessment using that method. We published that method

on our website last year and we have also provided information material to people on it, so the test is there for

public scrutiny. It has also had a lot of review by an independent scientific group who have reviewed the method.

So the method that we use and our trial implementation of it has been reviewed not broadly by the public but by

those experts who are best able to assess its robustness.



Senator RHIANNON: Will the environmental trade-offs resulting from the proposed supply measures be

made public?

Dr Dickson: The assessment method itself identifies what the trade-offs are and what the limits of change are.

That is all in the method and also in the method in the basin plan.

Senator RHIANNON: I am not sure if that was a yes or a no. I think it is important for this to be

understood—about how the public can engage. If it was a yes, how and when will the public be consulted?

Dr Dickson: As I said, the method itself is available publicly, and we have also made that available to a range

of peak representative groups. It is on the website for anyone to query or ask questions about. The projects

themselves are the responsibility of the states, and that is their responsibility for consultation. Again, under the

plan our key responsibility is in doing the assessments at the time we get all the proposals agreed to by the states.

At that point we will be making a determination and having consultation with the public on that.

Senator RHIANNON: You said the method is available publicly on the website and that you can take queries

on that. On the website do you actually invite people to give feedback, and do you then engage with that

feedback? Or do people have to take their own initiative to do that?

Dr Dickson: The method as set out in the plan was in the plan itself; the process for the method was set out

quite clearly. With the equivalence test you mentioned, the requirement is for that to be science based and

independently reviewed, which it has been. It is put on the website for information. In terms of a test, we believe

that the scientific rigour and the independence of the review are sufficient. We are very happy, as we always are,

to have any discussions with the public on the nature of the method.

Senator RHIANNON: Is it correct that there will be no public consultation on the proposed supply measures

prior to 30 June 2016?

Dr Dickson: As I said, it is the responsibility of the states to do the consultation on the projects.

Senator RHIANNON: So it is correct; therefore, the MDBA does not—

Dr Dickson: No, we are not responsible for the projects. We are responsible for their assessment.

Senator RHIANNON: If you are not responsible—

Senator Birmingham: Hang on a second, Senator Rhiannon.

Senator RHIANNON: I have got one more question.

Dr Dickson: Sorry, Senator, we were just confirming that what I said was correct.

Senator RHIANNON: Thank you very much. My final question is: is the MDBA proactively working to

enhance public confidence in the rigour and outcomes of the environmental equivalence test?

Dr Dickson: Sorry, was that: are we undertaking any public activities?

Senator RHIANNON: Are you undertaking anything to enhance public confidence?

Dr Dickson: Yes. As I said, we have a long process in developing a science based method, which we had a

CSIRO consortium do. We consulted throughout that period with basin states so the states were comfortable with

the rigour of the method. We have had it reviewed by an independent review panel, twice, with a couple of stages

there. We are currently completing a trial of the implementation of the method, with some examples of supply

measures, to see if it works. When that is completed, and the final scientific review is done, we will release that

publicly. We are doing it every step along the way to ensure confidence in the method.

Senator RHIANNON: Right. But are you saying that, in terms of the actual engagement with the public,

whether it is the general public, community groups, environment groups or any types of users, it is all up to the

states?

Dr Dickson: We have been having consultations, as I said, with a range of groups, including environmental

groups, to bring them up to speed with the method, so that they can be confident in it, as well as engaging with

different scientific groups outside the independent review panel to make sure they are comfortable with the

method and that it is robust.

Senator RHIANNON: Thank you very much. Thank you, Chair.

CHAIR: Thank you very much representatives of the Murray-Darling Basin Authority. I hope we have not

made you too late for your afternoon meeting.


CHAIR: We move to program 3.1—Antarctica: Science, Policy and Presence. I welcome officers. Dr Fleming

do you wish to make any opening remarks?



Dr Fleming: No.

CHAIR: I will hand over to Senator Whish-Wilson.

Senator WHISH-WILSON: I have a couple of quick questions on Chinese involvement in the Antarctic and

a couple of reports we have seen including the 7.30 report recently and an article in The Economist of 7

November 2013. The reason I am very interested in this of course is that there is a lot of excitement in Tasmania

about a joint venture with China potentially out of Hobart and their Antarctic base, but there is speculation that

much of their work in Antarctica is geared towards oil and gas exploration and other mineral exploration. Can I

just confirm that the Antarctic is currently subject to a mining ban until 2048? Is the government aware of the

Chinese government having expressed interest in bringing forward the expiry date of the ban on mining?

Dr Fleming: The mining ban is indefinite. In 2048 any party can review that, any party can call through the

Antarctic treaty to review that protocol. I have not seen any references to China pulling that date forward.

Dr de Brouwer: The memorandum of understanding between Australia and China on this matter reaffirms

those principles.

Senator Birmingham: I would just add that there are no circumstances under which the government would be

countenancing a change on the mining ban.

Senator WHISH-WILSON: I would certainly hope that would be the case. The 7:30 Report revealed that

much of China's Antarctic research output was about mining exploration. Are you aware of this and can you

elaborate on it at all?

Dr Gales: I have visited the Chinese reviews of their Antarctic program on a number of occasions. They have

a large and growing program. It is actually mirrored very closely on the Australian program. The very first

Chinese scientists went south with us in the early 1980s. So their program is actually structured across most of the

themes that we currently have in Australia's Antarctic program. They certainly have a geoscience element to their

program, like many nations. It did not appear to be particularly focused on anything other than looking at the

broad range of geoscience that every country is involved in. They have expressed, especially on the back of their

visit, a desire to collaborate and work with us and other nations on a broad range of issues outside of the

geoscience space.

Senator WHISH-WILSON: Did you see the 7:30 Report story?

Dr Gales: Yes, I did.

Senator WHISH-WILSON: Do you have any comments on methodology they used to come to this

conclusion?

Dr Gales: I do not know where they got the information from. I can only really react to my own experience

with the Chinese program.

Senator WHISH-WILSON: My understanding was that somebody actually went through all the published

data—somebody who could convert the language—and that was how they quantified it. But has the department or

the government done a similar thing?

Dr Gales: No.

Senator WHISH-WILSON: When Australia gave approval for the new Chinese Antarctic base, Tai-shan,

was an environmental impact statement carried out on that approval.

Dr Fleming: Australia did not approval for Tai-shan. The Antarctic treaty considered an environmental

impact statement. A committee of environmental protection provided advice to the Chinese program.

Senator WHISH-WILSON: That would be the same for the new airfield at Zhongshan?

Dr Gales: Yes.

Senator WHISH-WILSON: It is done by the treaty approval process?

Dr Gales: Yes.

Senator WHISH-WILSON: Is the Australian government aware if the Chinese government intends to

operate this airfield for international flights—ingoing, outgoing or intra-Antarctic flights?

Dr Wooding: We talk to the Chinese about their aviation program and we are not aware of a Chinese

intention to run international flights. We are aware of them wanting to build a ski-way for intracontinental flights.

From my communications with them that is the only plan they currently have.

Senator SINGH: Thank you for the responses to our questions on notice from the last hearing. I want to refer

to one of them in particular, question on notice No. 151, which related to consultation on the released strategic



vision. First, could you give the committee an update on the government's response to the 20-year strategic plan.

Have you received a response from government yet?

Dr Fleming: We are coordinating the government's response. Many departments are undertaking that

response. We are coordinating workshops into interdepartmental committees. The government response will be

later this year.

Senator SINGH: In the answer to question 151 you outlined that the government had initiated

interdepartmental processes to consider the recommendations. It first convened on 26 September. Four separate

focus groups were established. Has there been any further interdepartmental meetings since September?

Dr Fleming: I think there are focus groups between September and now.

Dr Gales: There are four separate focus groups, I think.

Senator SINGH: Yes, in your answer to the question you mentioned four separate focus groups. What are

those focus groups?

Dr Fleming: Focusing on Australia's national interest in Antarctic; supporting and leading national and

international Antarctic science; building economic benefits for Tasmania as an Antarctic gateway city; and

Antarctic station operations, transport and deep-field traverse.

Senator SINGH: What is the membership makeup of each of those focus groups?

Dr Fleming: Can I take that on notice? I can provide you with the departmental membership of the focus

groups.

Dr Kennedy: If you would like a broad indication now, we could probably come up with a list, but not a

complete one. For example, the Department of Foreign Affairs; the Department of Prime Minister and Cabinet,

the Finance Department, the Department of Industry, some agencies within Industry—

Senator SINGH: It says 24 agencies in the answer to question 151. Specifically I wanted to know about the

clusters or the focus groups—their structures and their meetings. You have a time frame and government is going

to respond by the end of the year. Is there a specific date by which the government is going to respond—the end

of the year could be anything from July onwards?

Dr Kennedy: When the government chooses to respond it will make that clear. But we can inform you that we

are still preparing advice for government across those groups. Dr Gales can possibly help. He chairs the science

cluster. If you want a sense of how that group is working through the issues, that may help.

Senator SINGH: Is it just Commonwealth agencies or is there state government or outside government

individuals.

Dr Gales: This was just Commonwealth government agencies. They are slightly different with each of the

cluster groups, as would be appropriate with the group. The science one included the education department, with a

representative additionally from the Australian Research Council, within the education department; the

Department of Industry; the officers responsible for the cooperative research programs, in particular; Geoscience

Australia was part of it; and Department of Prime Minister and Cabinet were part of it. That would be the make-

up.

Senator SINGH: Does the AAD play a leading role with all of these focus groups?

Dr Fleming: Yes.

Dr Gales: There is a lead coordinator—

Senator SINGH: Do you chair them all?

Dr Fleming: We chair all of them. DFAT co-chairs the strategic interests in Antarctica.

Dr Kennedy: In answer to your earlier question, I think on the economic capability development one we will

come back to you. There is direct engagement with the Tasmanian government and the other bodies in Tasmania

that are interested in economic development. But we will confirm on notice for you exactly how that group is

engaging with those players.

Senator SINGH: Through the interdepartmental process and the focus groups, is the government on track in

delivering its response to the strategic plan by the end of the year?

Dr Kennedy: When Dr Press did his strategic review he was really trying to lay the base for a 20-year plan. It

is very much focused on this being the enduring plan set, ensuring that the division is appropriately resourced and

able to respond to the things that we can foresee. I understand that it sounds a little bureaucratic to be running all

of these focus groups, but there is a lot of both state and Commonwealth government involvement around AAD



activities. We would be advising the government, and again it would be a decision for the government, around not

only the response to Dr Press's recommendations, but a very clear sense of what Antarctic program activities

would look like for 20 years. As part of that—this is open, so I am able to discuss it—we also will be talking how

the new icebreaker arrangements will support it, along with the current air arrangements. They are all significant

expenditure components of the AAD program. For this program it is an important opportunity to bring a focus

from around the Commonwealth on this program, which, as you know costs hundreds of millions of dollars to run

each year, and ensure that all agencies understand and are brought into that process, including some

parliamentarians of course.

It is the government's decision as to when it will respond. In preparing advice for them we frankly have been

very thorough in ensuring we have covered all of the issues, such that this then hopefully will become an enduring

plan.

Senator SINGH: We were told this morning in our general questions to the department that in relation to the

budget and staffing there were 236 AAD non-ongoing staff. Is that correct?

Dr Fleming: Yes.

Senator SINGH: Which was a fair proportion of the total non-ongoing staff in the department. Are these non-

ongoing staff related to the government budget situation that has been put on the AAD.

Dr Fleming: Regarding the non-ongoing staff, last year the number was 258. This year it is 236. It is an

equivalent proportion to last year.

Senator SINGH: And voluntary redundancies?

Dr Fleming: I think 16 people left this year.

Dr Gales: They were all from the ongoing component of the staff sector.

Dr Fleming: In the last three VR rounds, 44 were accepted for voluntary redundancies.

Senator SINGH: Taking out those numbers, what is the current staffing number of AAD?

Dr Fleming: The head count on 31 January was 451.

Senator SINGH: Will this staffing reduction impact on the work going on in AAD to deliver this 2020

strategic vision?

Dr Fleming: It will depend on the government's response to Tony Press's report.

Senator SINGH: I was mainly asking about the interdepartmental process and the focus groups and all of the

work leading up to the end of the year. Will the reduction in staff impact AAD's ability to do that work?

Dr Fleming: It does not impact on AAD's ability to do that work.

Senator SINGH: We will come back to the future question once we have the government's response to the

strategic vision.

Dr de Brouwer: On the use of the term 'focus group', they really are IDC, or interdepartmental committees.

That is probably a more conventional and well-understood term than focus group.

Senator SINGH: I was using the term that was used in the answer to question 151, which is 'four separate

focus groups'.

Dr de Brouwer: The intention of using the term 'focus group' there is to say that it is a focus of interest across

various government departments and agencies.

Senator Sinodinos interjecting—

Dr de Brouwer: Within government, yes. It is really an interdepartmental committee across government of

relevant agencies and departments. I just do not want any confusion around that term.

Senator SINGH: I will move now to the Antarctic icebreaker tender process. Minister Hunt put out a press

release on the 19 December where he stated that:

Before the election, the Coalition pledged that there would be a new ice-breaker and a new era for Australia in Antarctica

through the 20 year Strategic Plan - both have now been delivered.

Obviously, there has been a bit of a blow to the tender process with P&O pulling out of that process. Can you

provide the committee with where that leaves the tender process now?

Dr Fleming: The Department of the Environment is working proactively with the remaining prequalified

bidder, DMS Maritime, to ensure it delivers a cost-effective and capable solution for consideration by the

Australian government. The tender will finish on 2 March, and we will do an evaluation of the tender.



Senator SINGH: That is DMS Maritime that is owned by Serco?

Dr Fleming: Yes.

Senator SINGH: Now it is going to be a non-competitive tender then? Is that correct, because there is only

one bidder?

Dr Fleming: There is only one bidder, yes.

Senator SINGH: If it is a non-competitive tender, how does the government ensure that it is going to be value

for money—what is put forward by that one bidder?

Dr Fleming: The department has added additional subject matter expertise to support its evaluation team,

from both the private and public sectors. This includes significant commercial, technical and maritime expertise.

The department's subject matter expert consultants will do a detailed cost investigation program, as well as a

clarification process with the tenderer in parallel with a tender evaluation process.

Senator SINGH: So 2 March is the conclusion of that process?

Dr Fleming: Yes, conclusion of the tender.

Senator Birmingham: When they have to have concluded their bid. The evaluation process then continues

beyond that.

Senator SINGH: What is the date of the end of the evaluation process?

Dr Fleming: There is no date.

Senator SINGH: There is no date, okay. What happens if, after this comprehensive evaluation process, the

government reaches the conclusion that this single tender offered by DMS Maritime is not a value-for-money

proposition, for example?

Dr Fleming: We will—

Senator SINGH: Back to the drawing board?

Dr Fleming: start the process again.

Senator SINGH: Why did P&O pull out of the tender process?

Dr Fleming: They made a public statement on 13 January. Due to the commercial nature of these reasons, and

because there is still a procurement process underway, the department is precluded from making any further

comments on P&O's withdrawal.

Senator SINGH: I understand, though, that P&O suggested that it was an unusual tender process. I was

interested in what is a more usual tender process if this is unusual?

Dr Fleming: That is their view.

Senator Birmingham: You would probably have to ask them.

Senator SINGH: Just a last question—another response to question 153 that you provided to the committee in

relation to the minister, who verbally recommitted to the Antarctic Treaty. I am really unclear as to what that

recommitment entails. Has the minister signed another treaty, or is he just reaffirming Australia's commitment to

a treaty that we have committed to for the last 60 years?

Dr Fleming: It reaffirms Australia's commitment to the Antarctic Treaty.

Senator SINGH: Okay. Thank you.

Senator WRIGHT: I am hoping that I am in the right spot. We have gone to a lot of work to try and find

where I ask this question. It is about a new acronym that I now know about called IMOS—Integrated Marine

Observing System. Can I ask you about that? Do you know what it is?

Dr Gales: I guess somebody knows the acronym!

Senator WRIGHT: Or is it new to you as well?

Dr Gales: It looks like a—

Senator WRIGHT: I actually know what it is; I do not what you to explain it, but I want to know if I am

asking in the right spot?

This is the infrastructure capability in relation to acoustic observatories. It is my understanding that one of the

Integrated Marine Observing System underwater acoustic observatories is currently deployed off Kangaroo Island

in South Australia. First, I would be interested to confirm if that is the case.



Dr Gales: We probably are not the right people to ask specifically around that. We work closely with IMOS

as part of the broader national collaborative infrastructure program, but we are not responsible for the elements of

IMOS that sit outside of Antarctica, outside of the immediate Southern Ocean Antarctic region. So we do not deal

with the moorings around Kangaroo Island or the rest of the Australian coastline.

Senator WRIGHT: I am going to need to seek some guidance here, Chair, because my staff have worked

quite hard to try and find where I ask these brief but important questions, and the department does not seem able

to tell us.

Dr Fleming: You should ask that question of the Department of Education.

Senator WRIGHT: The Department of Education?

Senator Birmingham: I am as surprised as you are.

Dr Fleming: They funded IMOS.

Senator WRIGHT: For the Integrated Marine Observing System and the data that comes from that,

acoustically listening to whales underwater, the Department of Education is the agency?

Dr Gales: My understanding is that, with the responsibilities that sit with the education department now, the

funding of national research infrastructure moved to the Department of Education. Therefore, the funding of

NCRIS, the broader collaborative framework in which IMOS sits, is the responsibility of Minister Pyne.

Senator WRIGHT: Thank you. I wish that the department had been able to tell me that because it would have

saved a lot of time for everyone.

Dr Gales: I am sorry we were not more help.

Senator WRIGHT: I will follow those up.

Senator Birmingham: Thank you, Senator Wright. I now know I need to look something up before

Wednesday.

Senator SINODINOS: On Antarctica, I do not know whether it is public or not, but how much have we

committed to fund the icebreaker? It is meant to be our largest ever investment in the Antarctic. Is that

commercial in confidence?

Dr Fleming: Yes.

Senator Birmingham: Indeed, we hope to get the best price possible for it. It is a very significant

procurement.

Senator SINGH: According to the minister, it has now been delivered.

Senator Birmingham: It is a lot closer to delivery than it was under your government.

Senator SINGH: We started it.

Senator SINODINOS: Just a quick follow-up question, then. In terms of Tasmania as a gateway to

Antarctica, how much, overall, is the federal government putting into the state to do with its Antarctic

responsibilities? We seem to have a vision of it as a logistics hub for Antarctic activities.

Dr Wooding: Not all the money comes from the environment portfolio. There is the amount appropriated for

the Antarctic Division. There are also other measures such as the Antarctic Gateway Partnership, the airport

extension and a range of other measures across other portfolios. So I do not know that I can give you an answer of

all of that together, but, certainly, it is in the order of somewhere up towards $200 million. But we would have to

take the figures on notice. We would have to pull the information from a number of sources.

Senator SINODINOS: This is in terms of initiatives since the change of government we are talking about?

Can you take it on notice?

Dr Wooding: I will take it on notice. I think it is a cross-portfolio question.

Senator SINODINOS: If you could do it across portfolios, that would be good.

Dr Wooding: Yes.

CHAIR: Thank you for your appearance.

Mr de Brouwer: I table, at the request by Senator Singh, divisional numbers for non-ongoing and ongoing by

classification.

Director of National Parks

[14:29]



CHAIR: Welcome to officers from National Parks. Welcome, Ms Barnes. Do you wish to make an opening

statement?

Ms Barnes: No, thank you.

Senator LEYONHJELM: Ms Barnes, are you the Director of National Parks?

Ms Barnes: Yes, I am.

Senator LEYONHJELM: Good. I am talking to the right person. How many national parks do you manage?

Ms Barnes: I manage six national parks, Commonwealth reserves and the Australian Botanic Gardens, as well

as the Australian marine parks.

Senator LEYONHJELM: Parks Australia supports you in the management of national parks, as I understand

it. How many staff are employed by Parks Australia?

Ms Barnes: I am a sole corporation under the EPBC Act, and my position exists in isolation, but the

Department of the Environment, as you say, provides me with staff to manage the parks and gardens. In total, the

current headcount is about 320 people.

Senator LEYONHJELM: I understand you have 57 staff, including you, based in Canberra. Is that correct?

Ms Barnes: Approximately, yes. The bulk are in the field in our large, jointly managed parks, but there is a

core of some people in Canberra and some specialists as well.

Senator LEYONHJELM: How much was spent by your office and Parks Australia performing your duties in

the 2013-14 financial year?

Ms Barnes: In 2013-14 the total expenses were just over $73 million, and that includes depreciation, the

appropriation and also revenue earned through the park system.

Senator LEYONHJELM: Where is the nearest park you manage?

Ms Barnes: The Australian Botanic Gardens here in Canberra is a place, a reserve, that we manage. The next

closest park is at Booderee on the South Coast in Jervis Bay. I look after the national parks that are on

Commonwealth land. The states look after the bulk of national parks, but where there is land that the

Commonwealth owns, and there is a national park, I have responsibility for that. Booderee on the South Coast is

in Jervis Bay—Commonwealth land. Norfolk Island, once again, is Commonwealth territory. Christmas Island is

Commonwealth territory. The other two large, jointly managed parks are in Kakadu and Uluru. They are land that

was Commonwealth reserve in the Territory. When the land was handed back to the traditional owners, the

Aboriginal people, it was then leased to me as the Director of National Parks to manage jointly with them.

Senator LEYONHJELM: What is the visitation trend over the last five years of the land reserves, the

terrestrial reserves, that you manage?

Ms Barnes: Regarding the larger, jointly managed parks, Booderee on the far South Coast has enjoyed a

steady increase in visitation, a steady trend, over the last five years. The parks in the Northern Territory have had

a different trajectory, in that they, like the other parks in the Northern Territory and other destinations that attract

international travellers, have had a more bumpy ride, in that they had a decline after the global financial crisis,

they had a decline after the SARS outbreak and there were also some changes to aviation with Ansett leaving the

market. The Northern Territory parks have had a dip in the last five or six years, but the good news is that that

seems to have changed, and the trend now is up. We have had two years of good growth in Uluru, and we have

seen growth in Kakadu, and that is a good steady trend. So we are coming back.

The Northern Territory tourism people, the board, and the Northern Territory tourism operators, are feeling

very positive about 2015. They are seeing an increase of interest from traditional markets like the United

Kingdom, the US and Germany, and growing markets from China. They are also seeing a shift between domestic

and international visitors. More domestic visitors are actually interested in going to the Northern Territory parks

as well. They are hoping that the drop in the Australian dollar will also make the destination more attractive both

to those traditional markets and also to Australian travellers.

Senator LEYONHJELM: Do you, as the director, pay any money to the Australian Landscape Trust?

Ms Barnes: I will take that on notice, but I do not think so.

Senator LEYONHJELM: If you would, please. And if you do pay any money to them, how much and for

what purpose? Could add that to the questions on notice, please.

Ms Barnes: Certainly.



Senator LEYONHJELM: One of your responsibilities as director, as I understand it, is to cooperate with

other countries to establish and manage national parks and nature reserves in those countries. Can you tell me

what action you undertook to fulfil this responsibility and how much it cost taxpayers?

Ms Barnes: It is not a distinct line item in my budget. It is more an influencing role. But last year there was a

major event held in Australia, the World Parks Congress, which happens every 10 years or so. It is a congress

organised by the International Union for the Conservation of Nature. Both the Australian government and the

New South Wales government were responsible for getting the congress to Australian and then also responsible

for delivering a very successful congress. The success can be seen in the number of people coming to Australia

for the congress. The previous World Parks Congress in Durban, South Africa, in 2003 attracted 3,000 people. In

Sydney, in November 2014, we attracted 6,000 people. These included parks practitioners, scientists, academics

and business people interested in working with parks as partners. That was the major role we played over the last

two or three years—assisting park practitioners from across the world and talking to them about the main themes

in parks, changes, where things were going and strategic directions.

Senator LEYONHJELM: How many Parks Australia staff are devoted to work on marine reserves?

Ms Barnes: I will ask my colleague Mr Clark to respond on that.

Mr Clark: We have 36 staff working on Commonwealth marine reserves at the moment.

Senator LEYONHJELM: How many of the Canberra based staff are devoted to work on marine reserves?

Mr Clark: Twelve.

Senator LEYONHJELM: In relation to the six terrestrial parks, do you have a figure for the staffing and

expenditure per hectare?

Ms Barnes: I do not think we have it per hectare, mainly because they are very different places with very

different threats and very different needs from the perspective of delivering on the biodiversity and cultural

heritage values. You could take our budget and divide it by the hectares but it would not really give you a feel for

the effectiveness of the money spent.

Senator LEYONHJELM: What sort of ratio would be reasonable?

Ms Barnes: I could not answer that question.

Senator LEYONHJELM: How about expenditure per hectare?

Ms Barnes: I can get back to you on that. We could do a crude division of the budget by the number of

hectares, but, as I said, that would not give you a very good indication of the effectiveness of the use of the public

funds.

Dr de Brouwer: Some of the state parks systems have done those sorts of analyses and tried to compare

across jurisdictions, but again, as Ms Barnes said, it is quite difficult to do because of the different nature of the

parks—high-visitation parks which might need more infrastructure versus low-visitation but high-threat parks,

where the threat might be fire or weeds.

Senator LEYONHJELM: I accept that, but—you previously managed New South Wales parks, didn't you?

Ms Barnes: Indeed.

Senator LEYONHJELM: From the perspective of value for taxpayers' money, then, what measure would

you use to suggest that the Commonwealth national parks are managed on a better basis than New South Wales

parks? Or would you not argue that at the moment?

Ms Barnes: In each of the parks services I have worked in, we have looked at the outcomes we were trying to

achieve, we have set objectives and then we have measured against those objectives. For example, in the

Commonwealth parks, as Director of National Parks for the Australian government, we are looking at outcomes

related to conserving biodiversity and cultural heritage values. We are also looking at outcomes related to

maintaining or increasing threatened species within national parks. We are looking at increasing visitation within

parks. We are also looking at increasing or maintaining visitor satisfaction.

That is going to be a tricky one because at the moment 98 per cent of people who visit Uluru and Kakadu

would recommend it to anybody else. So it is a very high level; it is a high base anyway. But we are setting

targets, as I say, for threatened species, biodiversity, cultural heritage protection. The other thing we are setting

ourselves targets for and working with the traditional owners is around Indigenous employment. We are looking

to increase the number of traditional owners who are either working for us or actually managing part of the parks

as contractors or managing part of the parks as traditional owners themselves. It varies, depending on what you

are trying to achieve.



Senator LEYONHJELM: Are visitation numbers a useful indication of the success with which you are

running these parks overall?

Ms Barnes : I think if you set yourself the objective to be a major contributor to the regional economy, if you

are setting yourself an objective to increase Indigenous employment and benefits to Indigenous people, then you

have to look at visitation as a way of doing that in a way that is consistent with the values of the park, the plans of

management. The other thing, working closely with the tourism industry, is that they have asked, and we have

agreed, that we need to maintain those values to the highest standard because that is what actually the big

international pull to Australia is. Those World Heritage values in Kakadu and Uluru are as important for them to

pull visitors to Australia as the infrastructure was in the past.

Senator LEYONHJELM: If I understand you correctly, subject to maintaining the environmental values for

which the park was established in the first place, you would regard it as at least one measure of success as

increasing visitor numbers?

Ms Barnes : For example, in those three parks it is the board that sets the management goals. The board is a

jointly managed board where the chair is a traditional owner. The board sets the targets through the plans of

management and, if that is where the board wanted to head, in that it is Aboriginal land we are managing, then

Parks Australia would work with them to put strategies in place.

Senator LEYONHJELM: Are there any parks where there is no desire to increase visitor numbers?

Ms Barnes : Certainly in the draft Kakadu plan of management that is out for comment at the moment there is

a target to increase visitation, which has come through the board. The Booderee board in Jervis Bay are keen for

greater economic benefits form the park but they are also very wary of overcrowding. So at the moment visitation

to Booderee is focussed on Christmas holidays, summer holidays, and at the board level the board is having

discussions about how you might spread that visitation to shoulder periods or non-peak periods, because they are

very conscious that they do not want more visitors that would then impact on the values of the park.

Dr de Brouwer: Senator, the factors that Ms Barnes has gone through are really endogenous drivers of

demand. There are also, though, exogenous drivers of demand which can affect revenue, be it the income level or

recessions or the level of the exchange rate. We would like to take those factors into account as much as we can,

but the policy focus is really on how we drive that demand in a sustainable way, as Ms Barnes went through.

Senator LEYONHJELM: All right. Thank you, Chair.

Senator SINGH: How much is the government spending on the Marine Reserves Review?

Mr Clark: Senator, we have budgeted this financial year approximately $2.3 million.

Senator SINGH: And was there a spend from last financial year as well?

Mr Clark: No, Senator. The review commenced in this financial year.

Senator SINGH: The minister has complained about fishers being locked out of key coastal areas by the

previous management plans, which he dissolved. What key coastal areas are they, specifically?

Mr Clark: The previous management arrangements put in place not only declared the national network of

marine reserves; it also then set in place the management zones that would apply in each of those reserves. Each

of those reserves has different conditions attached to them, depending on the IUCN category that applies to those

zones—from highly protected areas to IUCN category II, IUCN category IV, habitat protection zones and

multiple use areas. Two-thirds of that network allowed various forms of commercial fishing to exist, depending

on the type of the activity, and it is the nature and relationship of that activity to the values of the reserve.

Senator SINGH: But I am asking which key coastal areas specifically the minister complained fishers were

being locked out of? What were the key coastal areas

Mr Clark: I am not sure what statement you are referring to.

Senator SINGH: It is a press release by Greg Hunt and Richard Colbeck from December 2013. It specifically

relates to the government not supporting locking out large areas of oceans to prevent fishers from taking out a

boat and casting a line et cetera. I would like to know which are these key coastal areas specifically that the

minister is referring to.

Mr Clark: The review that has been put in place is the process by which the government is currently looking

at the management arrangements for the future marine reserve estate. At the moment, only those reserves declared

and that were in place prior to 2012 have an impact on either commercial or recreational fishers. All of the

reserves that were declared in 2012 currently have no management arrangements in place and are subject to the

current review.



Senator SINGH: I am aware of that, but that does not answer my question. If you are not going to give me the

key coastal areas, can you take that on notice, perhaps.

Mr Clark: I am happy to provide a map of the locations of the reserves that were proposed and declared in

2012.

Senator SINGH: I refer to the review's terms of reference, which state that the panels will report to the

government six months after their first meeting. When did the panels first meet?

Mr Clark: The panels have met on a number of occasions. I will refer to the panels themselves but also the

chairs that have met as well. The first meeting of the biregional advisory panels occurred on 5 and 6 November in

Sydney.

Senator SINGH: When is the report due then?

Mr Clark: The minister has subsequently announced with Senator Colbeck that he anticipates to receive a

report from the chairs in the middle of 2015.

Senator SINGH: Is that June or July? That is usually the middle. Six months after the first meeting would be

April. I am asking this because there has already been a huge delay in the government implementing this review

of $2.3 million. So now there is going to be a further delay before the reports are due, because they are now due

midyear, which would be nine months later as opposed to what the terms of reference laid out. Is that correct? Is it

now going to be more like nine months than the six months stipulated by the terms of reference?

Mr Clark: The terms of reference did state it would be within six months of the first meeting of the biregional

advisory panels; that is correct. The minister has subsequently said, though, that it is important that the

consultation not be rushed, and the chairs have reiterated that to stakeholders on a number of occasions. In

response to meetings of the biregional advisory panels and national-level stakeholders, the chairs have publicly

stated on a number of occasions that their intention is to get the consultation right. They have subsequently moved

some aspects of the program, including the period to make public submissions and to make submissions to an

online public survey, to the end of March. At the end of that period they will have to wrap-up their consultation

period and then put together a report to government.

Senator SINGH: So there will be a report to government by midyear. The 2013-14 budget promised a new set

of draft management plans by July this year. So clearly that deadline is not going to be met, is it?

Mr Clark: No.

Senator SINGH: Why is that?

Mr Clark: I think for the reason I have just outlined in that the review will produce a report and the

government will obviously have to reflect on the findings of that review before responding and then commencing

the process to put new management plans in place.

Senator SINGH: When will the management plans be delivered?

Mr Clark: I cannot give you an exact time frame because we will be waiting for the review and obviously the

response by government before preparing those management plans.

Senator SINGH: Has government given a new date—compared to the old date—as to when the management

plans will be delivered?

Senator Birmingham: I think, as you have heard, we do not intend to rush the process. We intend to get the

process right, and that means having consultation, appropriately, with affected stakeholders and communities. If

that takes an extra couple of months, then so be it. We would rather have that consultation, bring people with us,

and get the outcome right—and then we will proceed through the normal processes of government. I am not going

to, nor am I in a position to, put a time frame on it right here.

Senator SINGH: So you do not stand by your own 2013-14 budget promised time frame?

Senator Birmingham: I am not sure exactly what you are quoting there—in fact you do not sound like you

are quoting—or what it is you might be paraphrasing there, but what I have said stands—that is, that the

government is determined to get this right. Had your government got it right in the first place—

Senator SINGH: We did get it right.

Senator Birmingham: in terms of undertaking proper consultation—

Senator SINGH: You know we got it right.

Senator Birmingham: and bringing people with you—

Senator SINGH: This is just a big waste of money.



Senator Birmingham: then we would not be having to do this work at present.

Senator SINGH: A big waste of money. Anyway, let's go to the consultation. This delay—it seems the

minister is saying—is because you want to get the consultation right and you want to get the process right. How is

this genuine consultation occurring?

Mr Clark: The terms of reference for the review set out the arrangements. There are two separate parts to the

review. There is the scientific review and—what I will focus on now—the bioregional advisory panels, which are

the real focus of the public consultation.

Each bioregional advisory panel, in consultation with national-level stakeholders and peak bodies, have

informed those who may and will be interested in participating in the review. The secretariat that is supporting the

review has also contacted individuals and organisations, which have previously been part of the process, and

asked or requested if they want to be involved in the review. We have also put ads in the paper, made

announcements on websites, and put out information through key stakeholder groups to inform them that the

review is on. We have made the offer for interested stakeholders to either make an online submission, fill out a

survey or actually meet with the chairs or the bioregional panels who are conducting the review. They are doing

that in various locations around Australia. That process has started. Meetings have recently been held in the

temperate east region, which is in New South Wales.

Senator SINGH: It started last week, didn't it?

Mr Clark: They started on 13 February. The bioregional panels have met with a range of groups in Ulladulla

and Sydney and Port Stephens. Those meetings will continue through the next month and a half.

Senator SINGH: I basically got that answer from your answer to question 374 in relation to the consultation

process and how its taking place. In that answer you stated that the nature and scope of the consultation will be

determined by the review panels. Does this imply that each review panel will undertake different consultations in

different regions?

Mr Clark: Each of the panels are focusing their consultation on the region that they are linked to. We have

two co-chairs for the review: Mr Peter Cochrane and Professor Colin Buxton. They are overseeing all of the

bioregional advisory panels. Their intention is to attend most of those meetings so that they provide a consistent

oversight and approach to the consultation. But in each region there are specific issues that may just be pertinent

to that region, so there will be a tailoring of the consultation to meet those needs.

Senator SINGH: These two co-chairs will attend every consultation?

Mr Clark: No. They are not necessarily attending every consultation meeting, but they are aiming to attend a

high number of them to ensure that there is a consistent approach in the rollout.

Senator SINGH: How can they ensure a consistent approach to the process if they are not attending each

consultation?

Mr Clark: Obviously, we have not sent the bioregional advisory panels out without an induction around the

terms of reference. They have been given consistent background information to the review, but also, in the early

national-level meetings dealing with the bioregional advisory panels, the chairs articulated their approach to the

review and how they see it rolling out. To date, that approach has received some good feedback from stakeholders

and they feel they have had an opportunity to have their say.

Senator SINGH: How is the process community driven? You are consulting with the community at large,

aren't you?

Mr Clark: Yes, Senator.

Senator SINGH: So how is the process community driven?

Mr Clark: I am not sure what you are asking, Senator.

Senator SINGH: How is the process community driven? That is a pretty straightforward question. Is it

bureaucratically driven or is it community driven? I am asking: how is it community driven?

Dr de Brouwer: Community driven in this sense is that it is engaged with the community. That is the

definition. There are different ways of describing 'community driven', and this means it is based with the

community.

Mr Clark: The framework for the review includes opportunities for individual stakeholders, businesses, local

government organisations and environmental NGOs to participate at a detailed level by attending meetings. Some

are making submissions. There is also outreach to the broader community, with the ability for members of the



public to fill out online surveys. There is a broader consultation process that is available to members of the

general community.

Senator SINGH: The surveys are a community driven consultation process?

Mr Clark: It is in part asking members of the public who may not have the opportunity otherwise to

participate in the process.

Senator SINGH: Is the survey like a tick-a-box type thing?

Mr Clark: The survey is designed to get a better understanding of people's interests and an understanding

about the reserves. There are opportunities where they can express their views or write comments.

Senator SINGH: Qualitative and quantitative?

Mr Clark: Yes.

Senator SINGH: What were the main deficiencies with the previous government's consultation process?

Obviously, with this review, one would think that spending $2.3 million would be attempting to address?

Senator Birmingham: That obviously goes to the heart of the policy decision the government took in terms

of initiating the review. As we made clear when we were in opposition, we had a concern about the level of

community angst that existed in relation to the plans as they have been developed. If you want a bit more detail

about what that community angst was and the concerns that we had about how your government undertook those

consultations, then I am more than happy to speak to Minister Hunt and Parliamentary Secretary Colbeck and get

a bit more information for you.

Senator SINGH: That would be good. Thank you, Minister. Let's go back to the survey. When did the survey

go online? How many responses have you received to the survey?

Mr Clark: We have received 70 survey responses and 8,066 written submissions. That was as at last week.

Senator SINGH: Seventy survey responses. When did it go online?

Mr Clark: Written submissions opened on 28 November and the online survey was launched on 19

December.

Senator SINGH: So after three months you had 70 responses to your survey? Is that correct?

Mr Clark: It was launched on 19 December.

Senator SINGH: Not 28 November?

Mr Clark: The submissions were opened on the—

Senator SINGH: So 19 December. That is not very many people who are opting to use the service. The

survey has eight questions, six of which are multiple choice. That is fairly basic consultation process, wouldn't

you say? How does that improve on the previous government's consultation process, having a survey with six

multiple-choice questions?

Senator Birmingham: Come on, Senator, you've just sat here and asked questions about the meetings that are

happening, the on-ground consultations about the submission process—

Senator SINGH: I am asking you how—

Senator Birmingham: Do not pretend it is just a six-question survey.

Senator SINGH: Well, it is. Have you seen it? You can go online and have a look.

Senator Birmingham: But that is not the only part of the consultation.

Senator SINGH: I am asking how does that improve on the previous government's consultation process?

Senator Birmingham: It is an integrated package of consultation. That is but one element of it.

Senator SINGH: When does the response period close?

Mr Clark: Both the response period for the survey and the submissions close on 31 March.

Senator SINGH: Okay. Finally, just to respond to Minister Birmingham's query as to where I was referring to

the date by which government set July this year for the new draft management plans to be initiated and provided.

It was in the portfolio budget statements 2014-15, Budget Related Paper No. 1.7; Environment Portfolio, 'budget

initiatives', page 177. There in black and white—your government.

Senator Birmingham: Thank you, Senator. We will get the process right.



Senator CANAVAN: I was just noticed in your annual report that you had nine cases go to court this year,

when over the previous four years there was only a total of four. What has happened in the last year that so many

court cases have been actioned?

Ms Barnes: They are mainly marine park related—

Senator CANAVAN: No, I do not believe so. I think some of them relate to hunting. This is table 2 on page

10 of your annual report 2013-14—nine cases taken to court.

Ms Barnes: Compliance and enforcement is important to managing parks. Putting the regulations in place—

the plans and the management in place—is obviously one tool but actually making sure you then implement that

is very important. In a range of parks, there are illegal activities that not only impact on the natural and the

cultural values but also on visitor safety.

Senator CANAVAN: But you do not have a reason why they have increased so much in the last year?

Ms Barnes: No.

Senator CANAVAN: There is nothing specific that you have done?

Ms Barnes: We Do take it very seriously. I am not seeing a huge trend at the moment, but it is something we

take seriously in each place.

Senator CANAVAN: I think I saw that about four of the five that have been convicted were for hunting in

Kakadu National Park—is that right?

Ms Barnes: Yes.

Senator CANAVAN: What were those people hunting?

Ms Barnes: I can get back to you with the details, but often it is pigs or—

Senator CANAVAN: Pigs?

Ms Barnes: Yes.

Senator CANAVAN: How do you control pigs in your national parks?

Ms Barnes: Through pest plans and looking at where the pigs are doing the most damage, and then putting in

place programs either with our staff or with contractors through the local Indigenous communities.

Senator CANAVAN: Do you shoot the pigs?

Ms Barnes: We do.

Senator CANAVAN: And you say you engage contractors to do that?

Ms Barnes: We do some ourselves and sometimes we might engage Indigenous groups to help us, but I can

get you details if you like?

Senator CANAVAN: What about dogs? How do you manage them? Is there a big issue with dogs?

Ms Barnes: Dogs—not as much as pigs. Cats are a bigger problem than dogs. But cats are trapped.

Senator CANAVAN: You just trap them?

Ms Barnes: Yes.

Senator CANAVAN: Do you ever get any complaints from adjoining property owners that you are not

managing your pests as well as you should?

Ms Barnes: We all know we have to manage pests together and it is better done across the landscape.

Senator CANAVAN: Do you ever get complaints, though?

Ms Barnes: I have not had any. I have been in the job now for 12 months.

Senator CANAVAN: Can you take on notice if there have been any complaints in the last 12 months about

the pest management practises in your national parks?

Ms Barnes: Yes, I can check that.

CHAIR: Thank you very much, Ms Barnes and Mr Clark.

[15:05]

CHAIR: Welcome, officers from the department in relation to program 1.2, Environmental information and

research. Does anybody wish to make any statement before we proceed to questions?

Dr de Brouwer: No.



Senator SINGH: I want to go to this list of grants. I referred to it earlier when we were questioning the

Murray-Darling Basin Authority. It is the Department of the Environment's portfolio-wide list of grants. I note

from that list of grants for this portfolio that there was a one-off ad hoc grant for an OSGC summer scholarship in

2014-15, value of $3,800, GST excluded. Can you tell us what this is for? I do not know the acronym—OSGG.

Dr de Brouwer: I do not have that sheet in front of me. We are just trying to find out what that grant is.

Senator SINGH: You do not have your department's list of grants? I can give you my sheet, but it is the one

that Minister Hunt provides to the Presiding Officers.

Senator Birmingham: We had it before, when you were asking about it before. I am sure the officials are just

finding a copy of it again.

Dr de Brouwer: Excuse me, Senator; what page is it on?

Senator SINGH: It does not have page numbers, but it is the first page after the covering letter by Minister

Hunt. It is the very first grant under Environment Quality Division.

Mr Thompson: We could come back to that one. That is covered under outcome 1.6 at 8 o'clock tonight. If it

has come out of the Environment Quality Division, it is likely to be chemical related and is likely to be in

management of hazardous waste substances and pollutants. I do not know that grant off the top of my head, but

we are happy to come back to you with an answer directly on that.

Senator SINGH: All right. Well, let us go to the bottom of that page—

Senator Birmingham: And, with a bit of forewarning, the officials appearing then can make sure they have

got an answer for you.

Senator SINGH: Sorry?

Senator Birmingham: I was just saying that, with that bit of forewarning, the officials appearing then can

make sure they have an answer for you as to what it is.

Senator SINGH: Thank you. Let us go to the bottom of the page, where there are grants which are awarded

under program 1.2, which is the one we are in at the moment. There are six grants there under 1.2, to the value of

around $146 million. Most of them, but not all, are excluding GST. Can you run us through these grants and what

they are for?

Dr Kennedy: These are grants made, I believe, under the National Environmental Science Program, but I will

just get my colleagues to get some detail for you.

Ms Olsson: These are the contracts for the National Environmental Science Program research hubs, and the

institutions that are listed there are the hosting institutions for the hubs.

Dr Kennedy: By way of context, this is the program that has followed on from what was previously called the

National Environmental Research Program. This is a replacement program for that program, now called the

National Environmental Science Program. It includes the activities that were formerly under the NERP but also

what was previously a climate science program and is now inside the National Environmental Science Program.

The grants that you are seeing there are the grants being made under that program for contracts that will see those

hubs running for six years.

Senator SINGH: So these are grants for six years worth of funding—funding for the next six years?

Dr Kennedy: We should be clear: in the PAES you will see that the amount of money that is budgeted for the

National Environmental Science Program is $23,754,000 and then you will see the numbers as they go out. The

grants you have in front of you, I think, are the full six-year value of that program. You can see an annual break-

out in the PAES, the portfolio additional estimates statements. The sum of those grants will not equal, in every

year, the sum of the money that is in the PAES, because there are some moneys, a small amount, that are

unallocated for other environmental priorities and research priorities that arise from year to year.

Senator SINGH: What page is that on in the PAES?

Dr Kennedy: It is 29.

Senator SINGH: It was the NERP and now it is the NESP?

Dr Kennedy: That is correct.

Senator SINGH: You said something there about the climate science program that was part of the NERP?

Dr Kennedy: There were previously two programs. There was a program run in the—I cannot remember its

exact name—former environment department, which was the NERP, and in the former Department of Climate

Change and Energy Efficiency there was a science program. Those two programs, with the coming together of the



responsibilities, have come together, and they are now both run out of a single program, which is the National

Environmental Science Program.

Senator SINGH: Is climate science still a feature and a part of the NESP?

Dr Kennedy: Yes, it is. It is one of the hubs within this program, and I believe it is called the Earth Systems

Hub. I would have to take on notice the changes in the amounts of moneys that were previously allocated and are

now allocated to that, but they are funding similar activities to those that used to be funded under the climate

science program.

Senator SINGH: Can we have a list of the hubs and what their attributed science research is, according to the

recipients that have received these grants?

Dr Kennedy: Yes. If you like, we can read out what the hubs are.

Senator SINGH: Yes. There are only six.

Ms Olsson: We have the Earth Systems Hub, which is hosted by CSIRO. That has $23.92 million. The full

annual funding for that is not available until the 2016-17 financial year because we are actually honouring the

current contracts under the Australian Climate Change Science Program, so there is a transition period there.

We have the Clean Air and Urban Landscapes Hub, which is hosted from the University of Melbourne and has

$8.88 million. The Threatened Species Recovery Hub is hosted out of the University of Queensland and has

$29.98 million. The Northern Australia Environmental Resources Hub is hosted out of Charles Darwin University

with $23.88 million. The Tropical Water Quality Hub is hosted by the Reef and Rainforest Research Centre with

$31.98 million, and the Marine Biodiversity Hub is hosted by the University of Tasmania with $23.88 million.

Senator CANAVAN: Exactly what work is the Northern Australia hub doing?

Ms Olsson: The new hubs are in the process of developing their research priorities, so we do not have them

fully established with a work plan at the moment. It will be looking at issues around planning, threatened species

and environmental resource management in Northern Australia. The theme of all the hubs is to be very practical

and applied, to result in on-the-ground outcomes.

Senator CANAVAN: In terms of practical outcomes, can it do work that can help develop better biodiversity

assessments of particular regions? I am thinking in particular of those that could then be used to submit EPBC

applications.

Ms Olsson: While we are still going through the research priority development process, that would not, on its

face, be out of scope.

Senator CANAVAN: This is more of a comment than a question: one of the great frustrations I hear from

people trying to put in major development applications in Northern Australia is that there is a dearth of scientific

work and therefore they struggle to meet the requirements of the EPBC Act. That does not seem to be something

that should be their problem but, given that we put the act in place, I think it would be worthwhile for us to help

them develop the science around those areas.

Dr Kennedy: The minister has made it very clear that these hubs will be funding work that will support

decision making—not broad, basic research or curiosity-driven research, which are, rightly, activities to be

undertaken in other portfolios. The purpose of this program is to improve the environmental-based information

and to support better quality decisions, and it would, judging by your comment, be consistent with what you are

talking about.

[15:15]

CHAIR: I thank officers from environment, information and research. I now welcome officers for the carbon

pollution reduction and land sector initiatives, which is program 1.3. In the absence of anybody wanting to make a

comment I will hand over to Senator Singh.

Senator SINGH: Last estimates we discussed NRM organisations and their incorporation of climate change

adaptation and mitigation approaches into their regional plans. I think it was noted that 16 of the 52 draft plans

had not been approved. Have the 16 now been approved?

Mr Sullivan: At that point it was a milestone. It was completing the first draft. All of those regions have now

completed that process. Under the NRM planning for climate change stream 1, final drafts are due by February

2016, with the final milestones to be finalised by June 2016.

Senator SINGH: They are called milestones, are they?

Mr Sullivan: Yes. So contractually, the majority of the funding under that stream of NRM planning for

climate change has been expended. The remaining money is to be finalised in terms of finalising updated plans



for mid-2016. Obviously, some are ahead of that schedule and some are based on circumstances that range from

jurisdiction to jurisdiction.

Senator SINGH: Can you give us a bit more detail on the some that are ahead and the some that are still—

Mr Sullivan: Would it help if I just ran through some of the updates of where particular regions are up to to

give you a flavour of the types of investment?

Senator SINGH: Yes, but some figures would be good. Last time you gave us figures.

Mr Sullivan: Figures around the numbers—

Senator SINGH: Yes.

Mr Sullivan: At the moment, all of them are on track in terms of the milestones. All of them are on track in

terms of where they had to have draft plans.

Senator SINGH: But are they regional plans specifically?

Mr Sullivan: Yes. They have submitted draft plans—

Senator SINGH: All of them?

Mr Sullivan: that incorporate climate change information in terms of this plan. The final plan is being

updated. Drafts are due in February next year and are to be finalised by June. I am also happy to give you some

examples of where organisations are up to in terms of the products that are being delivered. In the past I know I

have talked more generally about planning processes.

Senator SINGH: That would be useful. Would you give that to us on notice, because I know that the chair is

trying to get us back on time.

[15:21]

CHAIR: Thank you for the speedy execution of that program. I now call officers from program 2.1, Reducing

Australia's greenhouse gas emissions.

Senator SINGH: Can you advise the committee as to the reasons for the delay in the first ERF auction?

Dr Kennedy: Just so we are clear for the questions as they run, the Clean Energy Regulator will be appearing

soon. They are responsible for administering and undertaking the auctions and have a substantial amount of

decision-making discretion around the timing of those auctions. We are happy to sit with Ms Chloe Munro but, if

we are going to get into a series of questions about auction timing or future auctions et cetera, it would be best if

Ms Munro were here answering those questions with me. She is responsible for administering it and she has

responsibility for running and timing around those auctions.

CHAIR: Is she not here?

Dr Kennedy: She is not here. She is scheduled to appear in front of you later. She has a separate half an hour

with you coming up.

Senator SINGH: I want to ask about the ERF process and that is in 2.1.

Dr Kennedy: So I am clearer, the department is obviously responsible for advising the government around a

policy around the ERF. With the legislation to amend the CFI and commence the introduction of the Emissions

Reduction Fund, administration of the Emissions Reduction Fund primarily falls to the Clean Energy Regulator

now legislation is in place. The department has responsibility for developing methods and putting them to the

Emissions Reduction Assurance Committee, previously the Domestic Offsets Integrity Committee under the CFI,

and advice that goes to the minister for the making of the methods. But the registration of projects all the way

through to auctions and contracts is the responsibility of the Clean Energy Regulator in administering those

arrangements underpinned by legislation.

Senator SINGH: So you would prefer that I waited till then?

Dr Kennedy: Anything that goes to administration. But if you want to our questions about the policy aspects,

if you like, we are more than happy to take those of the ERF.

Senator SINGH: I do have a number of questions in relation to the ERF. I want to ask whether you anticipate

any additional methodologies being settled before the auction.

Dr Kennedy: We are happy to take that question. That is an area of responsibility that we have. I might ask

Ms Thompson to speak to you. Would you like us to quickly precis what methods have come now and what

methods we expect to settle in the coming weeks et cetera? Would that be helpful?

Senator SINGH: Yes, thank you.



Ms Thompson: The first point to be aware of is that there are currently 33 methods available for use under the

Emissions Reduction Fund. Twenty-six of those are methods that were done under the Carbon Farming Initiative

and are transitioning across. In addition to those we have seven new methods that have been made now as

legislative instruments for the ERF. They cover alternative waste treatment; landfill gas; land and sea transport;

aviation transport; avoided clearing of native regrowth; coalmine and waste gas; and commercial building energy

efficiency. We also have 10 methods that have been released for public consultation and are scheduled for the

Emissions Reduction Assurance Committee, the independent committee that reviews the methods, to have a look

at in the next few months. Of those 10, four have actually received endorsement or are expected to be endorsed by

the ERAC in the next few days. They cover avoided land clearing; savannah fire management; domestic,

commercial and industrial waste water treatment; and industrial electricity and fuel efficiency. We also have a

number of other methods that cover issues related to forestry, carbon and soil, irrigated cotton, beef herd

management and a facilities method, which is one of our new higher level methods that will cover a range of

different activities and is basically geared around providing credit for improvements in emissions intensity from

production.

Senator SINGH: Can you provide the committee with details around these methods? On notice, obviously

Ms Thompson: On notice?

Senator SINGH: Yes.

Ms Thompson: Yes, we would be very happy to do that.

Senator SINGH: There are 33, so we would be here all day. You have outlined the methods, but I would

actually like to have some detail into each of those, if you could provide that to the committee.

Ms Thompson: Yes, certainly.

Senator SINGH: Thank you. We know that the work has begun on developing the safeguards mechanisms for

the ERF and also that the introduction date has now been moved, I understand, from 2015 to 2016. Can you

update us on the safeguard mechanisms in particular, including the time frames for various stages, whether there

will be any call for public submissions and the like.

Dr Kennedy: Yes, Senator. The full precise consultation process the government will make clear as it unfolds.

But we would expect in the first instance a consultation paper to come out where we flesh out those aspects of the

safeguard mechanism that are yet to be decided. We begin that discussion in the usual process—and again it will

be a matter for government. To give you some guidance, the usual process would be following a consultation

paper and submissions around that. The government would take a proposed position back to the community after

that consultation process and, in the light of that those proposed positions, then move to legislate. I would note

that some aspects—I can invite a colleague to take you to some of the detail if you are interested—of the

safeguard mechanism were settled. The government made decisions which were legislated in the legislation that

went through with the amended CFI, so not all aspects of the safeguard mechanism are being considered in this

next phase of consultation. If you are interested in understanding which aspects have been settled, I probably

should ask my colleague to do that for you.

Senator SINGH: Yes. Also, I would like to know who is being consulted. Who are you consulting?

Dr Kennedy: As I said, the consultation paper has not been released.

Senator SINGH: I thought you just said there were some discussions?

Dr Kennedy: Sorry, some discussions?

Senator SINGH: I thought I heard you say some discussions had taken place. I just wondered who you were

consulting.

Dr Kennedy: Yes. I will take a step back. The government has gone through a green paper and a white paper

process in which it has had considerable feedback around the safeguard mechanism. The government then felt

well placed to take decisions on those parts of the safeguard mechanism which are already legislated or at least

the frameworks put in place. In relation to the full implementation, you are right: the government took a decision

to delay its implementation to 1 July 2016. The consultation process I described in broad terms. I should reinforce

that that is a matter the government, but that would be the usual consultation process. Without pre-empting its

final decisions, but to get information on the government developing proposed positions, it would normally

consult broadly on a paper, invite submissions, and once that consultation was undertaken it would look to put

proposed positions. That is the normal way things are done with all forms of government. They would be cabinet

decisions, and you would go to the next phase.

ACTING CHAIR: Given all of that, and the delay now till 2016, when will the mechanism be legislated?



Dr Kennedy: I will ask my colleague, James White, to talk to you about what aspects of the safeguard

mechanism have already been legislated, because, as I said, some have.

ACTING CHAIR: Some have, yes.

Dr Kennedy: The rest of the implementation of the safeguard mechanism is able to be done not through

primary legislation but through regulations. We legislated that framework for the safeguard mechanism—the

coverage and capacity. Of course, that is subject to parliamentary oversight in the usual way in making

regulations. But perhaps I will ask—

ACTING CHAIR: Is that the intention: to have the remaining components of the mechanism done through

regulation?

Dr Kennedy: Yes. The government has been clear in settling that initial legislation that put in place the

framework for the entire scheme. The detailed will be settled in consultation with the broader community. Of

course, these are all matters for government, but I can advise you that implementation can be achieved through

regulation. Perhaps I will ask Mr White to tell you what aspects of the safeguard mechanism were settled in the

legislation.

Mr White: To go to Dr Kennedy's initial comments, the government did make some decisions on the

safeguard mechanism in the ERF white paper last year. Those decisions principally related to the coverage and

baseline-setting for existing facilities. One of those was that the safeguard mechanism would apply to facilities

reporting under the National Greenhouse and Energy Reporting system that had scope 1, or direct emissions of

100,000 tonnes of CO2 equivalent each year or more. It also established that the baselines for those facilities

would be set using historical data that had already been reported; specifically, for existing facilities their

emissions baselines would be set at the high point of the historical record from 2009-10 to 2013-14.

The government also committed in the white paper to consult further with the community on the treatment of

new entrants at this practice on the flexible compliance or emissions management arrangements that would apply

under the safeguard mechanism and on the specific application of the mechanism to the electricity sector.

When the CFI amendment act was passed, included in the passage of the amendment act were empowering

provisions to create the safeguard mechanism. As Dr Kennedy has said, those empowering provisions included

provisions to implement certain aspects of the safeguard mechanism, principally through legislative rules called

the safeguard rules, and also through a regulation under the National Greenhouse and Energy Reporting Act.

So the safeguard mechanism will be established in the NGER Act, not under the Carbon Farming Act, because

it is essentially a separate mechanism. It is currently sitting as uncommenced amendments that begin on 1 July

2016, but the CFI amendment act includes a provision that requires the Minister for the Environment to take all

reasonable steps to have the safeguard rules and regulations relating to thresholds, baselines and penalties made

by 1 October 2015.

ACTING CHAIR: Thank you, Mr White. I will stop you there as we have limited time and you have given a

very full answer. Is the government intending to respond to the Warburton review?

Mr Archer: The answer is yes. The environment minister and the industry minister did release a media

statement last year—I think it might have been in November—in which they outlined some principles the

government would take forward in any reforms on the renewable energy target. That followed the release of the

Warburton review. The government has since then been in discussions with the opposition and minor parties in

relation to a reform package in order to ascertain what might be achievable in terms of securing passage through

parliament. Those discussions are ongoing.

ACTING CHAIR: Is the government going to respond to the Warburton review? Your answer was yes but

then you talked about principles and—

Mr Archer: That is the process through which—

ACTING CHAIR: You are saying the government will not respond to the Warburton review until it has

completed its discussions and negotiations with the opposition?

Mr Archer: That is the process that is in place at the present time.

Senator WATERS: The government has repeatedly claimed that the repeal of the carbon price would save

Australian households $550 per year. Can the department provide a breakdown of how much households have

actually saved since the repeal of the carbon price?

Mr Archer: I do have some information on that. First of all, figures released by the Australian Bureau of

Statistics show that electricity prices decreased by 5.1 percent in the period immediately following the carbon tax

repeal. That is not specifically attributing the change to the repeal of the carbon tax, but that was the decline in



electricity prices as observed by the ABS. The Australian Competition and Consumer Commission has also

produced an estimate of the average decrease in household electricity prices attributed to the repeal of the carbon

tax. That was in a range—between 4.5 percent and 10.6 percent—because the impact varies state by state.

Senator WATERS: Do you have those in dollar figures?

Mr Archer: No, unfortunately at the moment I only have the ACCC figures as a percentage change.

Senator WATERS: Is there someone else in the room who has the dollar figures?

Dr de Brouwer: We will take that on notice.

Senator WATERS: It is pretty widely known to be about $140. Is there anything you have in front of you that

can corroborate that figure?

Mr Archer: It does not look like it, unfortunately.

Senator WATERS: Thank you for taking that on notice. Can you table the figures you have provided to the

minister for his announcements about the change in electricity bills per network distribution area? Do you have

that to hand?

Mr Archer: I do not believe I have that to hand. I would have to take that on notice.

Senator WATERS: Thank you. Can you make sure, in the provision of that, that you separate the fixed

service charge from the other aspects?

Mr Archer: Yes, we will do that.

Senator WATERS: Moving on to the modelling on which Direct Action is based, how much of the five per

cent pollution reduction target that the government is committed to is expected to be achieved by the Direct

Action policy?

Dr de Brouwer: We have discussed this a few times. There are a number of factors in play. One is where the

actual emissions profile will go to 2020. I think next month we will be releasing our projections. The government

will release its projections on the emissions profile. The second depends on how many factors within the

Emissions Reduction Fund are tied down. While the crediting and purchasing component is now tied down

through legislation, the safeguards component is still to be determined. Until that is determined, we are really not

in a position to say how these factors will deliver the five per cent reduction, except to say that the government

has repeated that it has the instruments to be able to deliver that five per cent. But on the different components

and how they go together, until the characteristics and features of the system are determined that is something that

is hard to isolate.

Senator WATERS: When you say the government has the instruments at hand to deliver the five per cent, do

you mean above and beyond the Direct Action Plan?

Dr de Brouwer: Direct Action includes the Emissions Reduction Fund and a range of other instruments. The

Emissions Reduction Fund is the core tool or instrument for Direct Action, but there are other elements of Direct

Action such as renewables and other components of—

Senator WATERS: Are you separating out, for example, the renewable energy target, energy efficiency and

manufacturing slowdown from Direct Action when you say that the government has the instruments to hand? Are

you anticipating that Direct Action is the relevant—

Dr de Brouwer: All of those will go to determining what the emissions outcome is. Some of those policy

elements, particularly the safeguard element, are yet to be determined. Until that is determined and we know

exactly what that is—and that process is underway and we are having consultation around it—and those

regulations are passed, we cannot say exactly what that contribution is.

Senator WATERS: You cannot say how you are going to meet the five per cent reduction?

Dr de Brouwer: Except to say that the instruments and the tool kit are there to do that.

Senator WATERS: But they are not yet written.

Dr de Brouwer: That is part of the determination of those instruments. Every Senate estimates we have had a

conversation—

Senator WATERS: But we are still waiting for an answer. I think that is probably why we keep asking!

Dr de Brouwer: Different factors are being locked down. The key difference is that the legislation for the

crediting and purchasing is now in place. That is about to start.

Senator WATERS: Given that the government does frequently insist that it will reach its five per cent target

by 2020 and claims that it is confident it will do so, what evidence is there on which to base that confidence?



Dr de Brouwer: The government's position has been that whenever Australia has made commitments along

these lines we meet them—for example, with the first Kyoto protocol period that commitment was met; in fact, it

was more than met—and that Australia's practice is that we do not enter into agreements that we are not prepared

to deliver. So when the government says it is going to deliver that five per cent reduction on 2000 levels by 2020

and given that that has been our past practice—in fact, that is something that Australia has regularly delivered

on—

Senator WATERS: So there is no evidence base per se because you still have not locked down the

parameters for how you will meet the five per cent but you are confident based on past practice that it will be

met?

Dr de Brouwer: That is actually the standard practice for every country. No country can predict with certainty

that it is going to meet it because—

Senator WATERS: So you can have confidence without certainty; is that what you are saying?

Dr de Brouwer: There is no absolute certainty. The government has committed to deliver it and it has an

instrument that can be calibrated to meet that commitment. That is the standard thing for every country.

Senator WATERS: I would suggest that the confidence should not be so bold if that is in fact the situation.

But they are not your words; they are the government's words. Thank you for your response. Question on notice

response 1075 talked about modelling. In that response the department effectively seemed to be implying that it

would not reveal modelling for fear that someone could reverse engineer it and work out the average auction

price. Can I clarify that that is your approach—that you will not be releasing the modelling?

Dr de Brouwer: There were specific expenditure numbers in the 2014-15 budget allocated across the forward

estimates for the purchasing component of the Emissions Reduction Fund. The concern was that if you broke

down that component and said what the quantum was in each of those periods you would be implicitly revealing

the projected price. We were not going to reveal our estimated calculations around possible prices over the

forward estimates ahead of an auction.

Senator WATERS: Would you release them after the auction?

Dr de Brouwer: I think that is a matter for government.

Dr Kennedy: I will add that government conditioning its own future expectations of prices remains an

ongoing issue, but the Clean Energy Regulator will publish after auctions, from memory, the weighted average

price that was settled at the auction. One feature of these auctions is that they are pay-as-you-bid auctions. There

is not a single price that everyone receives in these auctions. To use a very simple example, if there were two

people bidding, one with $5 and one with $10, both would be acceptable to the auction because of how the

auction works. Then the person who bid $5 would get five and the person who bid $10 would get 10. They do not

settle at a single price. This is a way of extracting as much abatement as possible in the amount of money being

given to the auction— paying just what you have to. It is one of the reasons we have been quite cautious around

any conditioning of the market about what we expect prices to be. That market will see what price was settled at

an auction, but we will remain cautious. As the secretary said, it is a matter for government but it is about

conditioning the market about what we expect future prices to be.

Senator WATERS: I am just concerned that you release the modelling after the auction so we can compare

the modelling with the actual outcome.

Dr de Brouwer: These things are typically our budget forecasts. The issue in the future will be that the CEO

will be releasing the prices at each auction. But what is implied in the forward estimates is our expected set of

prices. The issue still comes up about how much of our future expectation of prices we should release to the

public, because that could affect the auction itself.

Senator WATERS: I understand that, thank you. I want to go back to the methodologies which Senator Singh

was asking about. I believe one of those is about capturing methane at mine sites. I presume that is a coalmine

waste gas methodology that you referred to as one of the seven new legislative instruments under the ERF. Which

companies have been pushing for this new methodology or have been working with the department to create it?

Ms Thompson: The process for developing the methods at present is that the department works in

collaboration with technical and other experts through technical working groups. A number of experts, technical

experts and business representatives, participate in those groups. My colleague Ms Tilley may have details as to

who was on that technical working group with her, if that would assist.

Senator WATERS: Thank you, yes. That would be great.



Ms Tilley: Unfortunately I do not have the specific names in front of me, but we can provide those on notice. I

will just flag, though, that this method supports waste coalmine gas capture and destruction at operating

underground coalmines. Those exist entirely in Queensland and New South Wales, so the membership of the

technical working group were predominantly members of coalmines in those states.

Senator WATERS: Beside the industry reps, who else formed the working groups?

Ms Tilley: We had members of state governments who were interested in this issue also participating. There is

also the issue that we have a wider reference group. It is a wider group of interested stakeholders who do not

physically participate in the meetings but are kept up to date through minutes and papers that are circulated. They

are able to comment on those.

Senator WATERS: Thank you. If you could just get back to me with all the names and relevant affiliations of

the people on the working group as opposed to—and the reference group too, if that is easily obtainable. Have

you had any companies yet make any expression of interest or indicate that they intend to participate in the

auction in that particular coalmine waste methodology?

Ms Tilley: The Clean Energy Regulator will actually register projects so they have closer information on what

projects are physically coming forward and registered. Anecdotally, there is some interest, particularly from

companies that specialise in the equipment that is used to capture and combust waste coalmine gas, in bringing

forward projects.

Senator WATERS: But no actual miners themselves?

Ms Tilley: Not to my knowledge, no.

Senator WATERS: Do you have a process in place around the development of baselines?

Ms Thompson: Sometimes in the ERF there are different sorts of baselines that can be in play. With respect

to the waste coalmine method that Ms Tilley is talking about, there is a baseline above which abatement or the

Australian carbon credit units are assessed as being generated. Is that the sort of baseline that you have in mind?

Senator WATERS: Yes, what is the process for setting that for the waste gas?

Ms Thompson: That is something Ms Tilley can—

Ms Tilley: What the method typically allows is new projects which have not previously captured or

combusted the waste coalmine gas, operating underground coalmines. Their baseline is effectively zero because

they have not done that previously. What the method does allow for is expansion beyond nameplate capacity of

an existing system at a site. What that means is if an operating underground coalmine has a waste coalmine gas

capture facility or set of pipes and flares and that sort of thing, we would look at what the full capacity of that

system is—not what it ran at, not what the average performance was but what the full capacity of that system

was—and then only credit beyond that.

Senator WATERS: Of interest, how many actually have those systems?

Ms Tilley: I am sorry?

Senator WATERS: Are there any that actually do have those systems in place?

Ms Tilley: Yes, there are.

Senator WATERS: Is that a common thing?

Ms Tilley: My brief recollection is that of the 42 operating underground coalmines in Australia, around half

had some system in place to either flare or combust and generate electricity from that waste coalmine gas.

Senator WATERS: For those that did not have any of that technological facility already, how would you set

their baseline?

Ms Tilley: As I said, because they have not done it, their baseline is zero. What they combust beyond that is

credited. In the case of Queensland, because there is a regulation in Queensland which requires operating

underground coalmines to destroy their waste coalmine gas where it is technically feasible to do so, in practice

what that means is flaring. New flaring projects in Queensland would not be eligible under the ERF.

Senator WATERS: I am just going onto the auctions, and if I need to ask this to the CER, I will. Given that

there has been quite a level of disinterest from the big banks in the ERF auctions because it is reported as being

perceived as short-term and risky policy, and combining that with the high-transaction costs for the bid

preparations, what level of interest is the department expecting in the auctions?

Mr Kennedy: We will not comment on your assessment of—

Senator Birmingham: I am not sure where that information is coming from.



Senator WATERS: Business Spectator from last year reported the four banks saying, 'Not interested.'

Mr Kennedy: Business Spectator needs to speak to its own analysis. I can make some remarks about where

we expect the initial interest in particular to be in the auction. Ms Munro may follow this up later. Of course, there

are a number of CFI projects transitioning across to the ERF arrangements, many with seven-year crediting

periods in front of them. This will be an opportunity for them to secure value for those emissions reductions that

they would get credited under these arrangements. There is actually considerable interest around those—

Senator WATERS: Sure, that is because CFI has been around quite—

Mr Kennedy: projects. We have had quite a bit of interest. Perhaps the best way to do this is by giving you—I

do not have in front of me but through question on notice—the people who have been part of our technical

working groups, but quite a bit of interest across all our technical working groups for developing methods. We

would expect projects to come forward out of that process.

At least in the early auction—I think it has been well reported—we expect a lot of the interest, because we are

just developing the new methods now, to come from those existing CFI projects. I think we are confident that the

methods we are developing keep transaction costs as low as possible, which is why we have the technical working

group. I expect that as contracts are being signed—these are seven-year contracts for abatement, with the price

fixed in the contract—the interest will continue to develop.

Senator WATERS: There were some media reports saying that the response to the ERF auctions were

subdued. I am interested—you can perhaps take it on notice—in how many firms have submitted statements of

interest in bidding. Likewise, as a second part to that first question, what are you doing to mitigate most of them

coming from the landfill industry?

Can I quickly move, with my final question, to the New South Wales major projects offsets policy which, on

its face, appears to allow double dipping in terms of biodiversity offsets and carbon credits. Is there anybody who

is looking at that double dipping in the process of the accreditation of that policy under the proposed approval

bail-out?

Ms Thompson: I understand that this is an issue that has been raised with colleagues in the broader

department, who are also looking at this policy and that broader set of issues. It has been raised with us. We have

indicated that we are very interested in working through those issues with our colleagues in the New South Wales

government to ensure that the integrity of the Emissions Reduction Fund is maintained in that regard.

I think it is probably worth mentioning that the issue that Ms Tilley was talking about earlier, with respect to

the waste coalmine gas, is a similar type of issue in as much as it turns around this regulatory additionality test

which is endeavouring to ensure that projects are not required under either Commonwealth or other jurisdictions'

legislation.

Senator WATERS: Perhaps you could take this on notice. I had thought that there was a legislative

precluding of offsets being counted for ERF purposes. If that is not the case can you let me know, and whether

there are any plans to make that the case.

Ms Thompson: Yes.

Senator LINES: I just want to kick off with a question about the Conference of the Parties meeting in Paris in

December. Is that this group?

Dr de Brouwer: If it is the international side of the negotiations it is really a matter for the Department of

Foreign Affairs and Trade. The foreign minister is the lead for Australia's international position on climate

change.

Senator LINES: Let me see if you can answer some of the questions. Can you outline the process and the

timing for the PM&C task force, who are developing the government's commitment for the Conference of Parties

meeting in Paris in December?

Dr de Brouwer: Your question is best addressed to PM&C, given that that is where the taskforce is. The

taskforce has been set up with officers from the environment department, the Department of Foreign Affairs and

the Department of Industry and Science. I think the government said that the intention is that they intend to make

Australia's position public by mid-2015. And the taskforce will be working to that timetable, with all the normal

processes of government that that entails—which is the normal cabinet deliberation of these sorts of policy issues.

Senator LINES: Will there be a paper for consultation?

Dr de Brouwer: I think that is really a matter for them to talk about. I think the exact arrangements around

consultation are better left to the taskforce in PM&C to talk through.



Senator LINES: Can you shed any light on the consultation process?

Senator Birmingham: I think PM&C is appearing just up the corridor, if you like. They are convening the

taskforce. As Dr de Brouwer has indicated, in terms of international negotiations the foreign minister is the lead

minister and the taskforce is therefore adopting a whole-of-government approach so that it can work closely with

Foreign Affairs, Environment, Prime Minister and Cabinet, Industry and Science, and Treasury—all parties you

would expect to be involved. So we are not really in a position to go through the detail of the task force here,

because it is not Dr de Brouwer's task force or this department's task force.

Senator LINES: I was more interested in the public consultation, which it seemed that Dr de Brouwer knew

something about. Are you able to advice who will be consulted?

Mr de Brouwer: I think it that is a matter for the minister, it is a matter for government to announce if and

how they want to proceed with that dimension. It is not for officials to talk about at this stage.

Senator LINES: The consultation is not for officials.

Mr de Brouwer: There is nothing announced.

Senator SINGH: Have you been providing advice to the task force and PM&C in regard to the consultation

process?

Mr de Brouwer: This is a deliberative process of government, and I would not be talking about the advice

that we provide to government on that or the content of that advice.

Senator SINGH: I did not ask about the content. I just asked if you had been providing advice.

Mr de Brouwer: Yes, we do. We provide advice about those things.

Senator LINES: But you cannot tell me anything about what public consultation there will be. That is really

the essence of my question.

Mr de Brouwer: It is a government decision, and I am not in a position—

Senator LINES: About consultation?

Mr de Brouwer: Yes. They will talk about the process by which those decision will be made, and that is a

matter for the government to talk about.

Senator LINES: Even if I asked the question in PM&C about consultation, will I get the same answer?

Mr de Brouwer: I do not want to pre-empt my colleagues.

Senator Birmingham: I do not know, but it is out that corridor and two doors on your right!

Senator LINES: Can you update us on the clear air policy development?

Mr de Brouwer: That is really a matter for Environment Quality Division. It depends on what you are talking

about, Senator. Do you mean the Direct Action or the greenhouse gas abatement, or particulate matter air quality

issues, which are separate?

Senator LINES: So where are air quality issues?

Senator Birmingham: They are in 1.6.

Mr de Brouwer: That is right.

Senator LINES: You think you have passed them. Are you able to update the committee on the progress of

implementing the government's significantly reduced Solar Towns program?

Ms McGrath: We are currently delivering the Solar Towns program. We are currently negotiating the

preselected sites that were contained in the election commitment, and we have just run a Solar Towns competitive

funding round in the Surf Coast Shire in Victoria, which closed on Friday afternoon.

Senator LINES: What is the next step?

Ms McGrath: The next step is that we will run a range of other competitive rounds in another five regions

over the next two years.

Senator SINGH: On a budget of how much?

Ms McGrath: The overall budget is $2.1 million.

Senator SINGH: What was it prior to that reduction by this government? What was the prior budget of the

Solar Towns program?

Ms McGrath: The Solar Towns program was an election commitment of the current government.



Senator SINGH: Yes, but the Solar Towns program was in existence during the last government as well.

What was the budget prior to this government's introduction of its Solar Towns program?

Mr Archer: That was, as you say, a program of the former government. We actually do not have those figures

with us here today.

Senator SINGH: I think it was about $50 million, wasn't it?

Mr Archer: I could not tell you off the top of my head.

Senator SINGH: I know what it is.

Senator Birmingham: It was not the same program, as Ms McGrath rightly has indicated. The Solar Towns

program that the department is working on was an election commitment of this government that is being

delivered. There may have been previous programs of the government that you were a member of, but that is not

what this program is.

Senator LINES: You are saying it is $2.1 million?

Ms McGrath: Yes.

Senator LINES: How far is that money expected to stretch?

Ms McGrath: The $2.1 million will be delivered over three years. This financial year there is $500,000. Next

financial year there is $1.35 million. In 2016-17 there is $250,000. The program will cover seven regions and

each of those regions will be allocated up to $300,000.

Senator LINES: The regions that you are talking about that are coming up have got $300,000 each?

Ms McGrath: Yes.

Senator LINES: In the current round that you described, how may projects have you got?

Ms McGrath: Through the program, grants of between $2,500 and $20,000 are available to community

organisations. The number of grants offered through the program will depend on the size that community

organisations put in applications for.

Senator LINES: What would you imagine someone putting in a grant of $2,500 would do?

Ms McGrath: Through the program, community groups are allowed to put in applications to install a solar

panel, a heat pump or solar water heating. The type of application would depend on the amount of money

requested.

Senator LINES: There is quite a bit of difference in an application of $2,500 and an application of $20,000

from the same community. How will that assessment be made?

Ms McGrath: There are a number of eligibility criteria in the guidelines. The assessment process has the

primary criterion of the amount of emissions reduced per dollar of funding received.

Senator LINES: What does a $20,000 project look like?

Ms Campbell: The difference in price I expect would depend on the scale of the system. You may just put

one or two solar panels on for the lower end, or you may put a more complex, greater number of panels. It will

depend on each applicant deciding what suits their needs.

Senator LINES: The latest National Greenhouse Gas Inventory showed Australia's carbon emissions fell

during the last financial period. Can you please outline some reasons for that reduction in carbon emissions?

Mr Sturgiss: The national inventory reports emission reductions by different IPCC classifications. This

reflects different emission processes that are at play. For example, there are emissions reported against fossil fuel

combustion in various sectors across the industry. In the last 12 months to the end of the June quarter 2014,

emissions fell in the electricity sector and emissions increased in the stationary energy sector and also in the

fugitive emissions sector. They were the principal sectoral elements behind the total national inventory outcome.

Senator SINGH: But it showed that, excluding the land sector, there was a fall of 1.4 per cent. Senator Lines

asked what that was attributed to.

Mr Sturgiss: The national inventory reports what emissions were. It does not attempt to describe what the

different causes of the changes in emissions are. We do not attempt to describe drivers of emissions changes from

either policies or economic—

Senator SINGH: Perhaps the department can answer the question.

Dr de Brouwer: Normally, to answer that you would try to isolate particular factors and do modelling on

what is driving emissions. At this stage, we have not done that modelling on the drivers of emissions.



Senator LINES: The minister was quoted as saying the reduction in carbon pollution came at a cost of around

$5,000 per tonne, so if you have not done any modelling how is that figure arrived at?

Senator Birmingham: That is a fairly simple equation—the arrant net decrease of 2.9 million tonnes for the

two-year existence of the carbon tax compared with a total tax take of $15.4 billion. If you divide $15.4 billion by

2.9 million, you will come up with a price of $5,310 per tonne of abatement.

Senator LINES: Was that a minister's figure, or did that figure come from the department?

Senator Birmingham: It is a mathematical equation.

Senator LINES: Where did it come from?

Senator Birmingham: You could probably do it on a calculator if you wanted to.

Senator LINES: Thank you, Senator Birmingham, but who arrived at that figure? Did the department arrive

at the figure?

Senator Birmingham: Senator, I am not trying to be difficult here. You are asking questions based on the

inventory that Mr Sturgiss has outlined. That presents some factual information about the level of emissions. As

Mr Sturgiss has rightly said, that simply outlines the level of emissions; it does not go to reasons behind or

otherwise. The minister, of course, in his statement was drawing upon the reality of the information from Mr

Sturgiss about the level of emissions and the published budget figures of the $15.4 billion take of the carbon tax

that your government had introduced and your party wants to reintroduce. From that it is a very simple

mathematical equation, showing that the cost of abatement under your carbon tax was coming in at more than

$5,000 per tonne.

Senator LINES: If that figure was not provided by the department, presumably no programs or initiatives

were included.

Senator Birmingham: I am not sure what your question is there.

Senator LINES: I have asked the question twice now.

Senator Birmingham: What do you mean by programs or initiatives?

Senator LINES: If you let me finish. I have asked if the department provided that figure and you have given

me a longwinded answer that did not actually answer my question.

Senator Birmingham: I gave you a simple answer beforehand, which was that it was a mathematical

occasion.

Senator LINES: Yes. So, if it is such a simple mathematical equation, did if come from department? This is

the question that I have asked.

Senator Birmingham: Senator, I am sure that even you could do it.

Senator LINES: I have asked if the department provided that figure.

Senator Birmingham: I do not think it matters who provided the figure. The figure is based in fact.

Senator LINES: I am asking the questions, so I would like an answer as to whether—

Senator Birmingham: The figure is based on fact. The minister provided the figure.

Senator LINES: The minister provided the figure.

Senator Birmingham: Whether other people did the same calculation—hundreds or thousands of Australians

could have undertaken the same calculation. This is all publically available information.

Senator LINES: We have now—

Senator Birmingham: There could be people sitting at home digging out Mr Sturgiss's report and comparing

it against the budget papers and coming up with the same figure.

Senator LINES: You have now said that the minister provided the figure. It did not include—

Senator Birmingham: Minister Hunt is a very clever man. I am sure he did.

Senator LINES: It did not include programs or initiatives.

Senator Birmingham: What do you mean by, 'Did it include programs or initiatives?'

Senator LINES: I have simply asked the questions.

Senator Birmingham: The $15.4 billion figure is the tax take from the carbon tax. It does not include any

other programs or initiatives, if that is what you mean. That is the entire cost over a two-year period of the

whopping great carbon tax that your government imposed, $15.4 billion.



Senator LINES: So, it is your propaganda then—

Senator Birmingham: No, it is in the budget papers.

Senator LINES: because you are not giving me any details.

Senator Birmingham: It is in the budget papers.

Senator SINODINOS: This is mathematics.

Senator Birmingham: It is $15.4 billion.

Senator SINGH: Can I just be clear: there is no-one in the department that can answer the question as to

why—

Senator LINES: He will not let them.

Senator SINGH: the inventory, which shows a reduction of Australia's greenhouse gas emissions by 1.4 per

cent in the 2012-13 year—there is no-one in the department that can say why those emissions reduced.

Senator Birmingham: That comes to projection modelling and I gather updated projections will be released

soon.

Dr de Brouwer: The inventory is an accounting exercise; it is not an analytic exercise. Analytic exercises are

conducted at different times and depending on what the requirements are for policy at that time. The inventory is

really just an accounting exercise of all those things.

Senator SINGH: The accounting exercise has shown a reduction in Australia's greenhouse gas emissions by

1.4 per cent. Doesn't that show, clearly, that Labor's policies were working in reducing Australia's greenhouse gas

emissions?

Dr de Brouwer: You are asking me for an opinion.

Senator SINGH: I first asked you if you could answer the question as to why there was a reduction in

Australia's greenhouse gas emissions, but the department cannot answer that question, it seems.

Dr de Brouwer: It is like on the economics side with the national accounts; there is an empirical exercise

done to measure what is going on. The inventory is just an accounting exercise to assess the state of affairs with

emissions.

Senator SINGH: So you are going to do some modelling to respond to the inventory; is that correct?

Senator Birmingham: Senator, even if your contention is—

Senator SINGH: Can I just ask that question, Minister?

Senator Birmingham: correct—

CHAIR: Senator, let the minister answer, please.

Senator Birmingham: Even if your contention is correct that the change in the level in emissions was solely

attributable to Labor's carbon tax—even if that contention is correct—then the figures we were just discussing

with Senator Lines demonstrate that it comes at an enormous cost in terms of the cost per tonne of abatement.

There are, of course, a range of other factors that impact on the level of emissions in the economy. Those factors

relate to the extent of economic activity and the types of industries.

Senator SINGH: You are giving your view now, Minister.

Senator Birmingham: Senator—

Senator SINGH: You are giving your view. You are not giving any kind of basis on modelling or any kind of

proof.

Senator Birmingham: I would welcome you to find anyone who disagrees with that statement.

CHAIR: One at a time, please.

Senator SINGH: Well—

Senator Birmingham: I would welcome you to find anyone who disagrees with that statement that there are a

range of factors that impact on the level of emissions across Australia. It is not just about whether or not there is a

carbon tax. Economic conditions have an impact on emission levels as well. I think that is a pretty well accepted

fact.

Senator SINGH: Can I ask—

CHAIR: Thank you very much. I am going to move to Senator Canavan. He has not had any questions at all

in this section. If we need to, we can come back.



Senator SINGH: Can I put on notice this question, Chair?

CHAIR: Either that or we can come back to you, whatever you choose.

Senator SINGH: If I can have an answer as to when this modelling will be done in response to the inventory.

Dr de Brouwer: I will take that on notice.

CHAIR: Thank you. Senator Canavan.

Senator CANAVAN: Thank you, Chair. I also want to follow up on this line of question. The carbon tax—

$15.4 billion. You guys are reducing Australia's greenhouse gas emissions, and I know we have had similar

outcomes for probably more than a decade now in departments. Has anyone ever tallied up how much money we

have spent or how much tax we have raised by things like the carbon tax to reduce Australia's emissions over this

period? It has been a policy issue for 15 years now, I suppose. No-one has assessed how much we have actually

spent as a nation to achieve this outcome—that is, the outcome of your section of the department?

Dr Kennedy: David, do you want to—

Senator CANAVAN: You have got the flick pass there. It might be called a hospital pass.

Dr Kennedy: The short answer is no.

Senator CANAVAN: Okay.

Dr Kennedy: Perhaps David will want to take it further, but there are a series of instruments and policies.

Some have direct fiscal costs, some have a regulatory cost, which would come through as an economic cost, an

opportunity cost of changing things. There have been a range of policies in place. Probably the most

comprehensive assessment of policies for Australia was undertaken by the Productivity Commission a couple of

years ago, which assessed the costs of a range of policies both in Australia and overseas. It would be a very

difficult counterfactual exercise to try and work out what the world would have been without these policies and

what the precise costs—

Senator CANAVAN: No, but the cost to government would be a lot more easily identifiable in the budget.

Dr Kennedy: Costs for programs, yes, could be added up.

Senator CANAVAN: So we have not done that. What about the benefit side? Have we assessed what the

benefits of all these policies have been?

Senator Birmingham: I suspect, in terms of in a single piece of work, the same answer would stand: that the

PC report is the closest thing. But that had different terms of reference to the question you asking. If officials have

something to add, fabulous, but—

Senator CANAVAN: So, in a word, we have not done a cost-benefit analysis of our climate change policies

as a nation?

Dr Kennedy: The one study that looked closely at the cost-benefit type of analysis was the first Garnaut

review. It tried to look at the benefits by the benefits that arise from avoided climate change. This exercise is

about Australia's contribution to emissions reductions globally. It is a matter for government as to what that global

contribution is—and it is not a matter for us; in terms of current policy it is a matter for DFAT. Then, of course,

the key issue is perhaps one you are thinking about: does Australia make that contribution in the most efficient,

cost-effective way—

Senator CANAVAN: I am also interested in the contribution itself. How much have we reduced the

temperature of the globe by? We have spent all this money—that is the ultimate goal, isn't it? It is not just to

reduce emissions, I do not believe. The emissions do not affect our daily lives; the temperature of the globe is

what we are about. That is what we all get told. How much have we reduced the temperature of the globe by?

Dr de Brouwer: We do not have an answer for either of those questions.

Senator CANAVAN: We have spent probably north of $20 billion odd, at least, and we do not know what

impact we have had?

Dr Kennedy: As I was saying, these policies are designed towards a global mitigation goal, and that is

designed around scientific analysis about what increased global emissions would mean for the environment more

broadly and those costs. So the benefit-cost ratio that you are sensibly talking about is: what is the cost to the

globe of higher emissions and what would that ultimately mean for the environment? The international

arrangements have been to say, if you like, that emissions consistent with the two-degree guardrail is a globally

prudent position, and then, as part of the contribution to achieve that aim, Australia governments think about that

as efficiently as possible—



Senator CANAVAN: It is just surprising to me that we require so much analysis of other government

decision making—BCRs and quantitative analysis of those BCRs—despite sometimes their being a little

intangible and hard to measure, but here we have spent billions of taxpayers' dollars and other taxpayers have

contributed billions of dollars to this effort and we have not done an exercise anywhere like that, as we would do

with, say, the East West Link or other projects.

Senator BIRMINGHAM: I guess, in this case, as a government, the change in policy that we have pursued

from the carbon tax to the Emissions Reduction Fund is about trying to pursue policies that meet our global

commitments to emissions reduction activities that, hopefully, will achieve a global outcome within the two-

degree growth scenario of temperature rise but do so through our policies in more of a no-regrets way, where

there are at least other environmental or economic benefits that come from the investments that are undertaken.

As distinct from the carbon tax policy, which simply drove up costs, the policies that we are seeking to pursue,

particularly around the Emissions Reduction Fund, will have the added benefit of reducing costs for some

businesses through energy efficiency activities or improving, we hope, farm production through greater capture of

carbon in soils, or those other benefits that mean that there is, hopefully, a dividend aside from the emissions

reduction activities. Although at the heart of the structure of the program, those activities, of course, are about

contributing to a more uncertain global target where Australia can but do its bit, meet the commitments it makes

globally, participate through the international fora and do its best in doing so to hold other countries to account for

the complementary commitments that they make.

Senator SINODINOS: Following on from some questions before about meeting our 2020 target, our

abatement challenge in the 2013 projections was 421 million tonnes. Is that right? Is that down from 755 million

tonnes, which were assumed in the 2012 projections?

Mr Archer: That is correct.

Senator SINODINOS: Do you have a breakdown of that revision of the abatement challenge, what is driving

that?

Mr Archer: There are a number of factors that led to the downward revision. We revised the outlook for

certain emissions-intensive industries, particularly the steel and non-ferrous metals industries, where we were

expecting lower output than previously. That feeds through to lower industrial electricity demand and lower direct

emissions. There were also some technical changes to the way we cover the land and forestry sectors, both in

terms of accounting for the emissions and for the areas that it covered. A further factor was that the latter figure

takes into account the carryover of units from the first Kyoto commitment period.

Under the first Kyoto commitment period, Australia had a certain commitment to a level of emissions

reductions. Kyoto rules do provide for the ability to carryover units of abatement to the extent that you have

overachieved in that period.

Senator SINODINOS: That would be an offset against our abatement challenge going forward.

Mr Archer: In the next period, correct.

Senator SINODINOS: That is 131 million tonnes.

Mr Archer: That is right.

Senator SINODINOS: You will release some new emission projections and abatement estimates in the

coming weeks; is that right?

Mr Archer: Yes. The secretary did mention that we would expect that to happen next month.

Senator SINODINOS: That will give us a better indication of how we are potentially tracking, in terms of the

abatement challenge.

Mr Archer: Yes. That will provide a more up-to-date view on how we think emissions are tracking and hence

an updated view on where we think the abatement task is at.

Senator SINODINOS: One of the things that has happened is, particularly where state governments have

increased electricity prices quite sharply, in real terms, is that it has had what you would regard as more than a

transitory effect on electricity demand. It has had quite a sharp impact that you expect would be sustained on

things like electricity demand. Is that right?

Mr Archer: Certainly we have seen some quite large increases in electricity prices, in the electricity sector, I

guess, for the last five or six years. It is generally recognised that this will have contributed to less growth or a

decline in electricity demand. The outlook for electricity prices does not appear to be for those same sorts of

increases to flow through in coming years.



Having said that, you might expect some of the behavioural changes—and other adjustments that householders

and businesses made in response to significantly higher prices—would be sustained. It is a very difficult

proposition to attempt to quantify things when it comes to behavioural change, going forward. We will attempt to

do that in our projections, but we typically rely on electricity-sector experts to provide a view on the outlook for

electricity demand.

Senator SINODINOS: Commodity sectors, like coal: what are you forecasting to happen there?

Mr Archer: Our analysis will be forthcoming, but we have seen a downturn in international coal prices. On

the basic principles of supply and demand you would expect that coal production might be less than it would have

been with higher prices.


CHAIR: We will now move on to program 2.2, Adapting to climate change, and welcome officers back.

Senator LINES: Can you talk us through what your program area is currently doing? Is your role now, as

indicated at last estimates, one of ongoing advice to government if and when required?

Dr de Brouwer: I am not really sure if I understand the question.

Senator LINES: We are into 2.2: Adapting to climate change.

Dr de Brouwer: Mr Parker will go through a range of areas we are involved in in climate change adaptation.

Mr Parker: The adaptation side of the department's work is limited in the sense that the Commonwealth plays

a relatively small role in climate adaptation matters. The more direct level of government responsibility here is at

the state level—land use planning and so forth. The Commonwealth gets involved in this at several levels, and I

will ask Mr Archer in a minute to take you into some of the details. There is one element of this where the

Commonwealth is directly involved, and that is to the extent that climate change affects habitat and as a

consequence the outlook for endangered species. That is relevant in terms of Australia's national reserve system.

More directly in the climate change space, we fund a range of research. We provide information and tools to

state governments and other individuals essentially for decision making purposes. So, we tend not to be involved

on the ground in terms of specific projects for adaptation. It is much more facilitating, both domestically and

internationally. We do have international outreach work in this space. And the last element, just to flag, of course,

is that this overlaps in part with the response to disasters and severe weather events. The Commonwealth is

involved in state funding arrangements for those as well, but that is not with this department; that is with the

Attorney-General's Department.

With that as a broad introduction, I will ask Brad, in particular, to talk about the so-called National Climate

Change Adaptation Research Facility, which has a number of elements of the program and which involves a

commitment over the next several years of $9 million.

Senator LINES: Just before you go on to that, you said that you provided some advice on habitat, but don't

we now have this Threatened Species Commissioner?

Mr Parker: Correct.

Senator LINES: Is there an overlap there, or what is the distinction? Is it advice you give, or do you do

research? What are you doing in relation to habitat?

Mr Parker: They would do the prime amount of work.

Senator LINES: Who are 'they'? Sorry.

Mr Parker: The Threatened Species Commissioner and the biodiversity parts of the department. But we will

provide advice to them about the overall climate dimensions.

Senator LINES: In relation to habitat?

Mr Parker: Yes, indeed. Of course, it is not just us that is an active player in this space. The Bureau of

Meteorology and CSIRO have also done some work which you might be familiar with, which has been released

recently.

Senator LINES: When you said you give advice to individuals, who are they?

Mr Parker: Essentially, the general public—not directly, but through the programs. I think Mr Archer can

pick that one up, please.

Senator LINES: Are you also giving ongoing advice to government, or not?

Mr Parker: As part of our normal role, yes.

Senator LINES: What is that advice to government on?



Mr Parker: On how these programs will run, what issues might arise and what role the Commonwealth

would have vis-a-vis the states.

Senator LINES: The programs you have just outlined?

Mr Parker: Yes.

Mr Archer: Just to follow on from Mr Parker, the government has committed $9 million over three years to

the National Climate Change Adaptation Research Facility, or NCCARF, which, in effect, funds a phase 2 work

program under NCCARF. The team in my division has a role to play in managing the relationship with NCCARF,

understanding its work program and managing the financial relationship between the government and NCCARF.

There are probably three key deliverables that one could highlight in relation to phase 2 of NCCARF's work

program. We will be developing an online tool to assist local governments and other relevant organisations in

relation to coastal risk management. It will be pulling together the resultant outcomes from earlier research that it

has conducted into formats which are more readily usable by policy and decision makers. That is the work from

its phase 1 research.

Senator LINES: But that is not you?

Mr Archer: This is NCCARF—that is correct.

Senator LINES: You have a role, you said, in managing relationships?

Mr Archer: That is right, and advising the government in relation to the progress that NCCARF is making

under the agreements that we have in place.

Senator LINES: I am just struggling to understand what you are doing. It sounds like you are kind of a

middle person?

Dr de Brouwer: There has been a lot of discussion over quite a few years around the relative roles of the

private sector and government and, within government, between the Commonwealth, the states and local

government— around both mitigation and adaptation. Regarding adaptation, as Mr Parker said, the instruments—

the laws around land-use and planning—are state instruments. The view is that they have primary responsibility

around adaptation and how to deliver that, and that the role of the Commonwealth is more on information

provision, and so NCCARF is heavily information based. Regarding our support for the bureau and CSIRO on the

regional adaptation or the regional impacts of climate change, in terms of temperature, rainfall, sea rise and those

sorts of things, a lot of that is around information provision and ensuring that that is disseminated on a national

basis.

Senator LINES: But it is not. Is this information you are gathering? It is not your own research; you are

gathering and passing it on? Is that what you are doing?

Dr de Brouwer: That is right. Ensuring that others are doing that research. It is the facilitative role.

Senator LINES: Is your facilitative, oversight, relationships role accepted by the agencies that you deal with?

Mr Clark: Yes.

Senator Birmingham: We are not aware of any complaints.

Senator SINODINOS: This is the restarting of a program that Labor had which it decided not to continue

funding.

Senator LINES: Senator Sinodinos, I am sure you will get your turn.

Senator Birmingham: It is a valid point that Senator Sinodinos makes, but—

Senator SINODINOS: I was trying to help you.

Senator LINES: Let's just all gang up on Senator Lines here.

Senator Birmingham: Senator Lines, I think those running the NCCARF happily accept the department's

facilitation role, because they have been refunded to continue an activity that they were not funded for under your

government to continue. Usually people in receipt of funding they thought they had lost are pretty happy about it.

Senator LINES: Now that the lectures have finished, I will move on to my next question. What are your

current staffing levels?

Senator CANAVAN: [inaudible]

Senator LINES: Is that Senator Sinodinos answering again? Senator Canavan this time.

Senator Birmingham: Senator, could we just clarify: are you meaning for this section of the department or

are you meaning for NCCARF or—



Senator LINES: This section of the department.

Mr Archer: We have an adaptation team in my division. You could group its functions into two: one relates

to domestic adaptation activity, which is what we have been talking about, but it is also responsible for delivering

certain capacity building projects relating to adaptation under what is referred to as PCCSP program—that is

funding that we have received via the Department of Foreign Affairs and Trade, previously through AusAID, to

undertake work within the region. Off the top of my head, that team might be about eight people at present.

Senator LINES: Do we have somebody in the room who can do better than 'off the top of my head'?

Mr Faris: It is a section of eight people.

Senator LINES: What is the FTE?

Mr Archer: It would be a little bit less than eight. I think there are one or two people working part-time hours,

but I would have to take that on notice to give you the precise answer.

Senator LINES: Is that in the domestic area?

Mr Archer: That is the team that I described working on domestic adaptation. Of course, there is other

adaptation related work elsewhere in the department, but, in terms of the issues that we have been discussing, that

is the team that deals with that and the international programs that I referred to.

Dr Kennedy: The former Department of Climate Change and Energy Efficiency grouped a number of areas

together under adaptation. That included the Climate Change Science Program and also the natural resource

management for climate change. Those activities continue, but they are in the science division rather than in the—

Senator LINES: So did people move across?

Mr Faris: Correct.

Senator LINES: What changes have there been due to voluntary redundancies?

Mr Archer: I do not think we have had any voluntary redundancies in the adaptation team, but I would like to

take that on notice.

Senator LINES: Sure. I go on to the work of the National Climate Change Adaptation Research Facility.

Have any milestones been met since last estimates?

Mr Archer: The funding agreement was executed on 16 October. In the roughly four months since then, most

of the focus has been on planning the phase 2 project. In terms of the agreement that we have with NCCARF, the

milestones that have been reached relate to the delivery of a project plan; a monitoring and evaluation work

program; a proposal for hosting arrangements for the Adaptation Research Networks, of which there are four; and

a stakeholder engagement plan. As I said, the focus really has been on commencement of the project, and we will

start to see those plans being executed.

Senator LINES: Have they got dates for start-up?

Mr Archer: I am sure that they do; I do not think that I have those with me.

Senator LINES: I think that you have outlined four areas that your planning focused on, so perhaps you can

take on notice to give us the start dates for those actions.

Mr Archer: Yes, I am happy to do that.

Senator LINES: Thank you. So is it fair to say that the current focus of your work is really the planning in the

way that you have described it?

Mr Archer: That has largely been the focus to this point of time, in terms of the NCCARF work program,

yes. Obviously, we will move from a planning phase into a doing phase—or NCCARF will.

Senator LINES: Yes. You are not sure when, but you will give me dates for that?

Mr Archer: Yes. Certainly, again, we have some milestones established in our funding agreement.

Senator LINES: Can you give those milestones to me as well?

Mr Archer: I think that we will be able to do that, yes.

Senator SINODINOS: Just to briefly follow up on the National Climate Change Adaptation Research

Facility, part of its job is to work with local government around issues to do with what might happen in coastal

zones and that sort of thing, is that right?

Mr Archer: That is correct.

Dr de Brouwer: Yes.



Senator SINODINOS: To date, what has that involved? Is there much happening in that space? I know that

some local councils, for example, have made it clear to people that they perhaps should not be building in certain

areas, or there have been issues with insurance premia in some of those areas.

Mr Archer: The tool that I referred to earlier is an online tool. The intention of it is that it will help local

governments understand and address factors such as sea level rise, storm surges and other coastal hazards. The

idea is that the tool will bring together the best available science as well as provide, potentially, information for

local governments in terms of options for managing coastal risks and also methods for assessing the costs and

benefits of those options. Obviously it will take into account climate projections around the different coastal

zones around the nation. So that, in effect, is what lies ahead under this phase 2 work program.

Senator SINODINOS: Thanks.

CHAIR: Thank you very much, and thank you to officers in relation to program 2.2, Adapting to Climate

Change.

Clean Energy Regulator

[17:04]

CHAIR: I welcome officers from the Clean Energy Regulator. Welcome, Ms Munro. Before we go to

questions, I invite you to make a short opening statement.

Ms Munro: No, I will not take up that opportunity. Thank you.

Senator MADIGAN: Thank you for your attendance. The CER's power to accredit is set out in regulation 4

of the Renewable Energy (Electricity) Regulations 2001, 'Eligibility for accreditation'. It states:

For paragraph 14(2)(b) of the Act … the power station must be operated in accordance with any relevant Commonwealth,

State, Territory or local government planning and approval requirements.

Before the CER can decide whether a power station is eligible, it must first determine what the power station is.

Accordingly, section D of the application for accreditation requires applicants to:

Specify the components of the electricity generation system that you consider to be a single power station.

The applicants on behalf of the Waubra wind farm define the power station as comprising 128 wind turbine

generators, five collector substations—and the list goes on. The Clean Energy Regulator accredited the Waubra

wind farm on 10 March 2009, just after the first turbines started operating but four months before the facility was

constructed and fully operational. How did the Clean Energy Regulator come to form the view that the Waubra

wind farm was eligible for accreditation whilst it was still a construction site and not the complete single power

station described in section D of the application?

Ms Munro: Thank you for that question. Before I proceed to answer it at least in part, I would like to

acknowledge that there is now a Senate committee, which you are on: the Select Committee on Wind Turbines,

which is scheduled to report in June 2015. We are just finalising our submission to that committee, which will go

to, amongst other things, our procedures for accreditation and also for suspension, which you have asked us about

on previous occasions. I look forward to having the opportunity to appear before that committee, and we can

discuss some of those matters there, which I think will be helpful.

I would also note that we have answered in excess of 40 questions on notice regarding these matters, and we

always attempt to answer those questions as fully as we can and in the context of what the law provides for and

our interpretation of that law.

Going to that question of the accreditation process, it is right that the legislation was designed to enable a

power station to be accredited at the point at which it began generating electricity, even though the

commissioning of that is sequential. So the issue that we are observing is whether that power station has met the

local planning requirements, which are essentially to have the appropriate approvals in place, and that is the basis

on which we determine that the power station is being operated in accordance with the requirements at the time. I

would draw a distinction between that and the provisions that are made on which we have powers under certain

circumstances to suspend accreditation.

I am not sure if I can expand any more on that, but I will perhaps just turn to Mr Williamson, who has line

accountability for this, to see if he can enlighten you further on that process by which we determine what the

power station is. Then accreditation happens, as I say, at the point at which it begins generating electricity and it

is metered, which is one of the other requirements. But, as you observe, it is not necessarily fully completed at the

time.

Mr Williamson: As Ms Munro has stated, it is our view of the law that the accreditation decision can be made

around the time of first generation. As you have outlined, Senator, it can sometimes be, for a wind farm, about 12



months from the first commissioning and generation till final commissioning. Our interpretation of regulation 4 is

that, as Ms Munro says, we need to make sure that they have all necessary approvals in place and that it would

appear that those approvals can be complied with. But it is not uncommon for the concerns that have been raised

about wind farms not necessarily to emerge until after full commissioning.

Senator MADIGAN: What I am trying to understand here is that I believe that the application for

accreditation was received by the CER on 14 January 2009 and there was a photo attached showing a substation,

10 turbines and a further five sites at various stages of construction. So you had 10 wind turbines standing up, you

had another five sites at various stages of constructions and you had one substation, but, in the application for

accreditation, it spoke about 128 turbines, five substations and a switching station. You have accredited

something that is roughly 12 per cent built. You have accredited something that is not even one-eighth of the way

there.

Mr Williamson: It is our view that we get one chance to accredit, that they can put forward all the

components that are intended and that the accreditation is intended to happen around the first point of generation.

I certainly understand what you are suggesting, and, as Ms Munro says, I think these matters might be best

explored in the Senate select committee as to whether or not the law could be improved.

Senator MADIGAN: If the power station did not exist at the time it was accredited, how did the CER satisfy

itself it was, not might be, operated in accordance with any relevant Commonwealth, state or territory or local

government planning and approval requirements?

Ms Munro: If I can intervene on this, perhaps Mr Williams can then go to the process. The power station did

exist. The accreditation provides for the accreditation of the whole power station. The way power stations are

designed is that all of those elements, although they are built sequentially and are commissioned sequentially,

combine to create the power station. In particular, those components are metered as well, so there is one power

station that will eventually be fully operational and will generate electricity which is metered at one point. That is

the background to why there is a single point of accreditation. I can only reiterate that we and our predecessor

organisation, the Office of the Renewable Energy Regulator, right from the start of the introduction of the

legislation and the way that it has been operated, allowed that accreditation to happen at the point at which the

power station starts to generate electricity. That is the point where it is actually operating as a power station.

You are absolutely correct: it is not necessarily the full power station—and this is an issue that clearly has also

come up again in the context of Cullerin Range. But, nevertheless, it is operating as a power station. It has all the

consents for that full scope of the power station as defined. All of those components are covered by the

appropriate consents and, therefore, they are in compliance with the requirements to have those consents in order

to, if you like, continue with the construction. That is the point at which accreditation occurs, to enable the power

station to claim renewable energy certificates for the electricity that it is now generating—even though, of course,

it is only from a part of what will ultimately operate. That is a very normal way to proceed, not just for power

stations but for many other major facilities. They are only commercial sequentially over a period of time.

Mr Williamson: I think Ms Munro has outlined that fairly thoroughly. We have a thorough look at all the

approvals. We stay in touch with the states and territories to understand the full suite and we make sure that the

approvals that the company has are for the full scope of the proposed power station that is to be accredited. We

also look at whether there is any available information that suggests that anyone is suggesting that there is any

noncompliance before we make that decision. But you are probably aware that, even if we did wait to the point

you suggested, with these things, in terms of planning conditions, there are not normally compliant statements

issued by the various state and territory regulators anyway.

Senator MADIGAN: The Waubra wind farm's conditionally issued planning permission included the post-

construction approval requirement of noise compliance. Of course, compliance with this approval requirement

could not be determined by the state authority until the 128-turbine power station was complete and operating.

Doesn't this, too, suggest that the CER accredited Waubra wind farm without appropriate regard to the satisfaction

of regulation 4 in that the power station must be operated in accordance with any relevant Commonwealth, state,

territory or local government planning and approval requirements?

Ms Munro: I can only reiterate what I have already said: our reading of operation approval with the relevant

requirements is that they have the relevant consent at the time in which they construct the power stations—which,

indeed, they had. Specifically with respect to Waubra, it is also the case that, at the time of the accreditation, there

was no suggestion that they were not operating in compliance. I can certainly turn to my General Counsel to,

perhaps, explain the niceties of that interpretation more carefully.



Mr Purvis-Smith: There are two things that we look at in order to do that assessment. As has been explained,

they are: whether the necessary approvals are in place; then we look for any reason which would suggest that they

cannot operate in accordance with those approvals. We cannot crystal ball as to whether they will always comply.

That is an impossible task. But we can look to see whether there is any clear reason why they could not, based on

information we have at that time, meet those approvals.

Senator MADIGAN: The CER's accreditation explanatory notes instruct applicants to provide evidence of all

approvals and conditions of approval, and submit them with their application for accreditation. In addition to

regulation 4, the act reinforces in 13(2)(a) that the application must be made in a form and manner required by the

regulator. Again in 14(2)(b), it reinforces that a power station is eligible for accreditation if the power station

satisfies any prescribed requirements. It is clear that the test for eligibility is to be determined as a matter of

present fact. Where does the legislation give the CER the discretion to disregard any prescribed requirements?

Where is the CER given authority to accredit a power station before its eligibility can be proven or properly

determined?

Ms Munro: I think we find once again that you are placing a construction on the wording of the legislation

that we do not. We certainly would not accept the assertions that you make in that question that we are

disregarding or setting aside the requirements of the law. In fact, quite the contrary, we exist only to administer

the law. Our decisions are reviewable and subject to review in the courts. So we take very seriously the

requirements to apply the law with without fear or favour. I am not sure how well we will be able to answer that

question given that it is based on a premise which we do not actually agree with. However, again, I will turn to

Mr Williamson. I think he feels he can elucidate that.

Mr Williamson: We have, again, contacted the relevant Victorian planning department very recently. They

have still stated that neither they nor their minister have reached a landing on whether Waubra is compliant. The

logical extension of what you are suggesting is: if we waited to make an accreditation decision until there was an

absolute rolled gold view from the state regulator that it was compliant, we still would not have Waubra

accredited today, and we would have, clearly, appeals on foot well before now. I think that kind of illustrates it.

We simply have to make the decision at the time of the accreditation as we believe the act requires, with the best

information. We cannot simply hold it in abeyance for years until there is some emphatic opinion on compliance

from a state regulator.

Senator MADIGAN: Will the CER conduct an audit of all LRET power stations to satisfy itself that no other

accreditations were possibly granted prematurely, and shouldn't any power stations discovered to have been

accredited before completion, and/or without submitting to the CER evidence of all required approvals, be

suspended until eligibility can properly be determined? My point is that, from what you just told me in answer to

the previous question, you said that you still have not got anything from the state government that says it is

compliant. Is that right?

Ms Munro: I think more to the point is that it has not been established that it is not compliant, so I think you

are asking us to apply tests which cannot in fact be applied. As I have discussed with my colleagues, this really

becomes quite an important philosophical point, which is about what can be proved and what cannot. In this case,

clearly we would be able to establish or, more likely, to rely on the relevant regulator having established, that

non-compliance occurred. That is a test that we certainly do apply and consider carefully. We do not necessarily

have to rely on the findings of a court of law; there might be other evidence which established noncompliance that

was sufficiently robust that we could find that on reasonable grounds. However, the test of 'is it continuing

compliant?' is not something that can be applied, I think, in the sense that you would wish.

Going to your question about the audit—again, I think it is based on a foundation with which we do not agree.

But just to go back, each power station is accredited through a process, which Mr Williamson has outlined, and

we do undertake that process at the point at which the power station applies, which is generally at the point at

which it starts to generate electricity—it is then a functioning power station. It is not necessarily fully built, and

there certainly are power stations which were not fully built—and, as I mentioned, Gullen Range is obviously one

which is currently under investigation for that very reason. Nevertheless, we do not infer from that that those

power stations were accredited prematurely, which I think was the thrust of that question. They were accredited

properly, with proper scrutiny that they had the correct approvals at the time, that the power station was operating,

the part of the power station that was built and functioning was operating according to requirements which

include things like metering requirements and so forth. That is all done at the time, and has been done for every

power station that we have accredited. So I do not think there is any value to us reviewing all of those, because we

have been consistent in the way that we have applied those processes.



The later question of whether, having been accredited, circumstances change in the course of further

construction of a power station, is certainly a reasonable question to ask, and is not one that can be addressed

through the accreditation provisions. It could be addressed through the suspension provisions, and we have had

some separate discussions around that. As I say, these are matters which we will air further in the submission that

we are going to make shortly to the Senate inquiry on that matter, so I am certainly happy to resume that

conversation in that setting.

Senator MADIGAN: Mr Williamson, does the CER have a definitive statement from the Victorian minister

for planning for compliance or noncompliance of the Waubra wind farm—yes or no?

Mr Williamson: There is no definitive statement from the Victorian government—

Senator MADIGAN: There is no definitive statement. So, in effect, it is in the demilitarised zone of no-

man's-land—it is neither noncompliant or compliant. Is that what you are telling me? You have got no definitive

statement from the minister?

Mr Williamson: They have still not made a definitive statement, that is correct.

Senator MADIGAN: Six years on. Thank you, Chair.

Senator SINGH: My first question is very quick. It is about the Public Governance and Resources Legislation

Amendment Bill (No. 1) 2015. This legislation removes the CER's body corporate and legal entity status. What

will it mean for your independence?

Ms Munro: In a word, we do not consider that it will in any way affect our independence. And, again, perhaps

General Counsel might want to talk to this a little bit more. As you know, there were two predecessor acts, which

have now been combined into a single public governance act, and the intention of that act was to define the

arrangements in a more streamlined way. We were essentially a non-corporate body before. Also we were under

the FMA and not under the CAC Act. And we continue to be a non-corporate body, which is appropriate to the

nature of our role as a regulator. So, I do not believe there is anything in there that would imply that there is any

change to our independence. Our independence arises from the Clean Energy Regulator Act and from the specific

acts we administer, and all of that remains absolutely intact. Mr Purvis-Smith, do you have anything to add?

Mr Purvis-Smith: That is correct—the amendments to the PGPA—

Senator SINGH: Then what will your structure be? Who will you report to?

Ms Munro: Again, the arrangements under the PGPA basically replicate the arrangements that were in our

act. The Clean Energy Regulator Act does have, if you like, some arrangements that are not unusual but bespoke

governance arrangements that were regarded as being appropriate to a regulatory body of our sort. Essentially I

am the chair and in that role I am the accountable officer, essentially a chief executive officer. Those two roles are

essentially combined in the way that the act operates. So, I am the accountable officer. I report to the minister, so

I am accountable to the minister. And under the provisions of the various acts we administer, the minister may not

direct us in terms of our regulatory decision making, as you would expect. That is why we have the regulatory

independence. But we are, of course, accountable to the minister, the government and of course the parliament for

the resources that we use, and that is, as you would expect, absolutely proper, so that is why we are here, I

believe.

Mr Purvis-Smith: Our independence is largely guaranteed by section 41 of our act, which states that the

minister may give directions of a general nature only.

Senator SINGH: You recently reported that the reverse auction for the ERF has been delayed. Can you

explain why this is the case?

Ms Munro: On Friday 13 February we announced the date that the first auction would be scheduled. It was

not delayed; we simply had not scheduled it. We announced it when we scheduled it. We had indicated last year,

and this was before the amendments to this act had passed the parliament, but in the expectation that they

would—that we would be ready to hold that first auction probably towards the end of the first quarter of this year.

But that was merely an indication; it was not a scheduled announcement.

What has happened since then is that the legislation, the amendments, were enacted on 13 December 2014.

And, importantly since then, one of the major events in the calendar from the point of view of our clients, who

have transitioned from the Carbon Farming Initiative now into the Emissions Reduction Fund, was the final

acquittal under the carbon pricing mechanism, the carbon tax, which was on 2 February. So, it was never our

intention that we would announce the auction date really before 2 February, because we knew that the parties who

might be interested in participating in the auction would be very preoccupied in transacting in anticipation of that

final acquittal, and that is actually very much the case.



The legislation provides for a six-week notice period. So, we could have given people a little bit of breathing

space after that acquittal process and still have held the auction around the end of March, and in fact we were

ready to do so. But what we were hearing was that a six-week notice interval was really too short. And when

participants considered what they would need to do to prepare themselves for the auction, a longer period would

have been better. So, we thought it was prudent to allow essentially two full months—an eight-week notice

period—and that is why we announced a date somewhat later than the market was anticipating. But really, in the

scheme of things, a couple of weeks is, to be honest, not material. And, as I said, we thought it was prudent

primarily to give people adequate opportunity to prepare their bids for that first auction.

Senator SINGH: Can you outline some of the challenges presented to the uptake of the reverse auction by not

establishing a benchmark price?

Ms Munro: Again, perhaps I can go back to the philosophy of the auction and the benchmark price. Our

objective is to purchase as many abatements as we can for the funds available and to purchase the lowest-cost

abatement that is on offer, if you like. We achieved that lowest-cost abatement through a competitive process. The

auction is designed to have competitive tension so that when people put their bid forward they do not know in

detail what prices they are bidding against, and that encourages them to put forward their best price, which is the

lowest price at which it is worth their while to do their project. That is how I have been characterising this for

some months. The benchmark price is established at the other end of the spectrum, which is to put an upper limit

on what we would be willing to pay. And the benchmark price is something that in the normal course of events—

and this would be true of any auction—is determined very close to the actual auction date.

Senator SINGH: So, you are saying you are going to establish a benchmark price closer to the auction date.

Ms Munro: We will, and that is a normal process. But it is not normal for the benchmark price or the reserve

price in a regular auction to be disclosed. The intent that is quite clear in the legislation is that the benchmark

would not normally be disclosed. However, there was some concern that, leading up to this first auction, there

might be quite unrealistic expectations in the market about the sort of level at which we might set the benchmark,

and particularly there might be expectations that the benchmark was going to be set extremely low and that that

would discourage participation. So, the provision was included really as a precaution that would allow the

regulator, at its discretion, to disclose the benchmark for the first auction only. And I have to say, it was never my

expectation that we would be likely to take advantage of that provision. In fact, I thought the market would have

reasonably realistic views, and there is nothing that we have seen in this sort of commentary or the submissions

that people have made to Senate inquiries and various other sources that would suggest that unrealistic views

were being formed. Therefore, we have decided that we ought not disclose the benchmark price, that it would not

be good for competition. And we believe that there is plenty of opportunity for those entities, particularly the ones

that have transitioned from the Carbon Farming Initiative and who have already been receiving units—they know

their costs, they understand how the project operates—to bid. The only thing we ask them to do is bid realistically

based on their own costs. The outcome of the auction is that they are paid as bid. So, they determine their own

price; they determine their own delivery schedule. If they are successful in that competitive process then that is

what they will be paid, provided that they deliver. And that is a very fair process, I believe.

Senator SINGH: I am sure you are aware of recent research from RepuTex, the market analysis company,

which shows that the ERF will need to spend at least twice as much as it has budgeted to reach the five per cent

emissions reduction target. What is your response to that research?

Ms Munro: First of all, RepuTex has a model that it runs. We are not privy to that model, but it is certainly a

model that is built on a great many assumptions, including, I might add, an assumption about the benchmark

price, which is not based on any intelligence from us. They have set their assumptions and they have formed a

view out of that about what prices we will pay and therefore how much abatement we would be able to purchase

from the fund. That is a view that they have formed. We have not undertaken such a forecasting exercise and do

not believe it would be fruitful to do so, because it would be dependent on so many assumptions about how

businesses are going to perform. So, I have no comment on their conclusions. However, I would just return to the

statement I made earlier about what our objective is. Our objective is to purchase the most abatements we can for

the funds that are available, not to attain any particular volume target.

Senator SINGH: That is the government's ambition, not your role. Is that what you are saying?

Ms Munro: That is right. The purpose of the fund is to do that. You had that discussion earlier with the

department about how that fits into the government's policies, but we just focus on the fund as it is established.

Senator SINGH: Has the department done any modelling on reaching its emissions reduction target under the

ERF?



Dr de Brouwer: We had the discussion before. I am happy to go through it again.

Senator SINGH: Yes or no?

Dr de Brouwer: No. But the discussion was that it is too early to say exactly how the different instruments

will come together to achieve the target. Based on past practice, which is past delivery around the Kyoto Protocol

period 1, based on what other countries do in the standards of practice, the government was confident that they

would reach that target.

Senator Birmingham: But, as you would recall, there was also the caution that was outlined before that to

release expectations of the quantum of abatement to be achieved as a result of the ERF sitting alongside the

budget papers, where the budgeted amounts that are available for the ERF sit, would of course then lead to people

being able to extrapolate government estimates of prices.

Senator SINGH: But how did the government come up with a figure of $2.55 billion to put into the ERF to

meet its emissions reductions target, because surely that is what this is all about? How did it come up with that

figure if it has done no modelling on—

Senator Birmingham: And of course the emissions reduction target, as I think we have discussed elsewhere

during the course of the day, is something that is subject to change at times, based on projections of what is

happening with economic activity and other factors, and updates of the outlook will be available relatively soon.

These are the estimates that the government has put, and the government, as we have said before, has confidence

that we will be able to meet the target based on the budget allocations.

Senator SINGH: Are you saying that the emissions reduction target is subject to change—

Senator Birmingham: No, I am saying that the abatement challenge changes with a whole range of different

economic targets or economic variables that occur.

Senator SINGH: But we are talking about the current reduction target.

Senator Birmingham: The five per cent target is static. The abatement challenge to meet the five per cent

target varies.

Senator SINGH: So there may be more funding to meet the emissions reduction target based on the success

or failure of the abatement process?

Senator Birmingham: It may be that the ERF overshoots the target.

Senator SINGH: Are you going to put money on that one, Minister?

Dr de Brouwer: The white paper leaves that one open.

Senator Birmingham: We will see what the projections suggest in the coming weeks, shall we?

Senator SINGH: If I was a betting woman, I would not.

Senator CANAVAN: Presumably, a lot of this is fairly complex, because one of the issues about meeting that

challenge will be economic growth. If economic growth slows and the economy is not firing as much as it would

otherwise be, more people will probably submit applications to abate and the price might fall. Is it a reasonable

assumption that the price of carbon credits in this country will be a function of wider economic activity, as will

the abatement challenge?

Senator Birmingham: I guess many factors will influence, firstly, the decision of businesses to participate in

the ERF auction process and, secondly, the price that they put on the abatement. Just as the abatement could be

impacted by numerous factors, so too could the nature of participation in the ERF auction process. But,

notwithstanding all of those variables, we are confident that it will work and will meet the overall policy

objective.

Senator MILNE: I would like to go to the responsibilities of the Clean Energy Regulator in relation to the

oversight of solar panels under the Renewable Energy Target under the current legislation under the Renewable

Energy (Electricity) Act 2000. Can you tell me what the responsibilities of the regulator are to the community in

relation to oversight of the installation and rollout of the small-scale target?

Ms Munro: Fundamentally, our responsibilities are that the issuance of small technology certificates is

compliant with the requirements of our act, in other words, that if somebody receives the benefit of those

certificates it is because the requirements of the act have been met. Clearly, there are a number of related issues

that people legitimately have concerns about but do not fall directly within our remit. For example, as a consumer,

there are concerns about the quality, the accreditation of those individuals who undertake the work and all of that,

as there would be with any work you have done on your house. Those are not directly part of our remit.

Senator MILNE: But you have to have a statistically significant number of inspections. Is that correct?



Ms Munro: Yes, we do, and that is with respect to safety.

Senator MILNE: I just want to take you there.

Ms Munro: It might be good to step through the various elements that there are.

Senator MILNE: Let me start with safety because you would have seen there have been a number of

allegation in the newspapers that people have had dodgy solar panels, dodgy connections and that there is some

fire risk. I understand it is your responsibility to inspect a statistically significant number of systems and to report

on that, which you do on your website with your report and then your overall report.

Ms Munro: Yes.

Senator MILNE: Could you tell me what the latest report, in January 2015, says about how many you

inspected, how many did not come up to the mark and what happens in relation to those systems?

Ms Munro: I will ask Mr Williamson to respond to that. I might say that some of the reporting tends to run

separate issues together. For example, the questions about the panels are more about the performance of the

panels than the safety of those, and so, I think, a number of different issues tended to be slightly confused in the

way that the press has covered them.

Senator MILNE: Can we start with safety and then go to performance because it is in regard to safety that

there are allegations that people are at risk of fire or something, and it is your job to inspect those panels? They

have to meet a certain standard.

Ms Munro: Indeed.

Senator MILNE: Can you tell us what the regulator's job is, what you have found from your analysis and

what you do if you discover that there has been workmanship that is not up to the mark?

Ms Munro: Mr Williamson, I believe, has chapter and verse of that in front of him.

Mr Williamson: Our obligation is correct. We undertake a statistically significant sample, and the legislation

requires that if our inspectors, who are contracted people, find an unsafe system, they immediately render it safe.

That is the first thing, which is, essentially, to switch it off, and they advise the homeowner accordingly. Then a

report is sent to the relevant state or territory safety regulator. That is what our obligations are. We do, as you

said, also get a professor from ANU—originally at ANU but not now—who helped us set up that original

statistically significant sample to do milestone reviews. We do publish those reports and we also pass those on to

all the state and territory electrical safety regulators, just as we give them the individual inspection reports for

anything that is unsafe.

So far, in the long run since that inspection program has been going, we have carried out 13,105 inspections

and the unsafe rate in that long run has been 3.9 per cent. The vast majority of those unsafe systems have been

related to water ingress into DC isolators, which are, essentially, switches. In our reading of those articles on the

weekend, we did not see any firm or clear allegations on safety with respect to panels. In fact, of those 13,000

inspections, we have not had one fail as unsafe due to the panel itself being unsafe in the view of the inspector.

The main reason for systems to have been found to be unsafe has been water ingress into the DC isolators which

enable a system to be properly isolated in the event that an electrician wants to do work on it.

Senator MILNE: For the ones you have found to be not up to the mark—whether they were poorly installed

or faulty or whatever—you render it safe immediately. What about following up the other people who might have

used the same electrical contractor or the same part or whatever? Is there any kind of analysis of what, generally,

happens then?

Mr Williamson: No. The principal role for electrical safety rests with the state and territories. The legislation

is quite clearly constructed to ensure that we pass the information on to them. It is up to them to make a

judgement about whether or not they are seeing anything systemic that they need to deal with.

Senator MILNE: Has there been any feedback about whether there has been any systemic issue in any of the

states or territories in relation to safety for solar panels and their installation?

Mr Williamson: No, we have not generally had feedback from them. However, I do have a meeting this

Friday with a range of parties, including the state and territory safety regulators, as part of keeping in touch with

them. I can certainly ask the question whether they are seeing any systemic issues. But, while we understand they

appreciate the inspection reports and the overall statistical reports, what they choose to deal with in regulating

electrical safety is a matter for them.

Senator MILNE: So there is no concern about the allegations in the media mixing up the idea that you have

poorer quality panels somehow exposing the community to greater fire risk or safety risk?



Mr Williamson: I believe those articles did not allege safety issues. Rather, they alleged that some panels

may not last for their useable life.

Senator MILNE: That is the next point I want to come to. I just wanted to reassure the community that the

regulator does a statistically significant number of inspections and, if there are problems, they turn off any system

and report it. State and territory governments are then responsible for following up. Has anyone been taken to

court or prosecuted? I understand that is also a power under the act for states. Do you know if there have been any

cases?

Mr Williamson: I would like to take that on notice. I am not aware of any, but we would need to check with

the state and territory regulators to find out if they have taken that course of action.

Senator MILNE: I think we can dismiss at this point that there is any shonkiness in relation to the inspection

regime. Have there been any changes in the regulatory inspection regime since the change of government in

2013?

Mr Williamson: No, the program has been running as originally designed.

Senator MILNE: It has been the same throughout?

Mr Williamson: Correct.

Senator MILNE: I now want to go to the issue of the quality of the panels and the deemed amount of energy

that they are supposedly capturing, and so on, and the period over which they are meant to last. The allegation

was there in today's papers that they fail long before their promised lifespan. Regarding the accreditation and so

on of the panels, what role does the regulator have in overseeing any of the quality compared with the RECs that

they are then able to generate?

Mr Williamson: I go to the last part of the question first. Firstly, there are Australian standards that relate to a

range of electoral components, including panels. There are also international standards with respect to panels. The

state's safety regimes call up those Australian standards, so, regardless of whether or not certificates are received,

the panels need to comply with the relevant Australian and international standards. In addition to that—

Senator MILNE: Just stop there. There are allegations that they do not. So whose fault is that? Who inspects

them? Who accredits? Is it that the importer has to meet the regulations? At what point does somebody determine

whether a particular panel that is coming into the country is accredited and meets the correct quality standards?

Mr Williamson: In terms of the state approach, it is our understanding that the state electoral authorities will

only ask for proof that the panels have been tested to the relevant Australian standards if an issue arises. The—

Senator BIRMINGHAM: Perhaps the officials can add to this. To cut to at least in part to where you are

going, my understanding and advice is that solar PV modules installed in Australia must be certified and approved

to relevant Australian standards. We can outline those standards, if required, that they need to be compliant to. To

be eligible to claim STCs the modules must be listed on the Clean Energy Council's approved modules list—

which modules are compliant to those standards. Modules must be submitted to the Clean Energy Council for

approval. Module testing must be performed by a test laboratory approved to test PV modules to these standards.

A certificate must be issued by a national certifying body associated with that laboratory who are accredited to

certify the PV module testing under the scheme. Officials can add to that process if I have missed anything out or

there are elements to add. I can advise that, based on the media reports, the minister has written to the Clean

Energy Council asking for some certainty from them that the processes, that of course they are involved in, are

robust, and seeking advice from them in addition to the advice that the Clean Energy Regulator and other—

Senator MILNE: That is what I was just trying to establish. Safety is your remit under the act and

accreditation is the Clean Energy Council's remit. Does the government pay the Clean Energy Council to do the

quality assurance and accreditation?

Senator BIRMINGHAM: Those submitting modules, as I understand, pay a cost for the approval. As to

whether there are any other funding arrangements or payment arrangements, I will defer to officials.

Mr Williamson: Those are the only payment arrangements. The only thing that I would add in relation to

what Senator Birmingham has mentioned is that the Australian Solar Council launched its own positive quality

program last May at the Solar 2014 Conference. That goes a step further. In other words, companies supplying

solar panels would go under that scheme subject to regular audits back in the factory, no matter where that factory

might be in the world, and would pull panels off that. That is, I guess, an additional thing that consumers can

think about: whether they want to have the assurance of regular audits.

Senator MILNE: Sure. I understand that the Solar Council does do that and that their quality program would

cover about 30 per cent of the panels in the Australian market. I want to come back to who should be held



responsible if inferior panels are finding their way onto a roof. Then it is the Clean Energy Council that should be

held accountable since it is their job to ensure that the panels meet the Australian standards and it is the Australian

standards upon which you would then recognise the certificates. Is that correct?

Mr Williamson: Not entirely.

Senator MILNE: Explain how it goes, then.

Mr Williamson: The process relies on an international accreditation process and that is the basis of panels

being sent to an accredited laboratory to test the panels. Certainly the CEC approval of panels against that

international standard, based on being sent to a laboratory, cannot assure every panel that is manufactured. It is

essentially a process of a sample of panels going to a laboratory. That is where the Australian Solar Council's

program goes that step further.

Senator MILNE: I understand what the Solar Council does, but that is a voluntary thing for the Solar

Council, and they are doing it for their members and so on. It is an excellent program. But I am coming back to

allegations that are being made that people are having inferior panels put on their roof. That is not a safety issue

but an issue in terms of what they are getting. The certificates are being paid out on the basis of a certain quality

and capacity, and the allegations are that they are failing after 12 months, they are totally dodgy—all kinds of

things about them. I am trying to establish who is responsible for having these on roofs and how are we going to

stop inferior panels being able to get certificates? Who is responsible? Because nobody wants that to happen and

it is happening. Somebody is responsible. You are saying it is not the regulator and that it is the Clean Energy

Council or the international inspectorate. The buck is passing all over the place here. Who is responsible?

Ms Munro: It is never our intention to pass the buck, but you are right: there is a division of responsibilities in

the chain. As I understand it, first of all, we do not validate the certificates unless the panel is on the list of

approved panels. That list is maintained by the Clean Energy Council and in order to be on that panel—I am not

sure whether it is the manufacturer or the importer—they have to demonstrate that the panels have the appropriate

accreditation against the standards. If they are applying an international standard, which is recognised here, then

they would have that certification from the appropriate standards body.

Senator MILNE: The importer or manufacturer would have to provide that to the Clean Energy Council—

Ms Munro: That is right.

Senator MILNE: in order for them to accredit it. In order for you to then accredit the RECs?

Ms Munro: That is correct.

Senator MILNE: Thank you. I want to go to that. Have you had complaints from anyone in the business of

rolling out these solar panels and actually installing them that the panels that they are installing are inferior or

their experience has been that they are inferior? And have you had any complaints about loopholes in the system?

Ms Munro: If I can go to that particular issue and then, again, Mr Williamson might amplify. Again, there

was a gentleman who was quoted in the press. The issue that he raised with us was not a complaint about panel

performance per se. The concern that he raised was that when replacement panels were installed small-scale

technology certificates were being claimed fraudulently. In that court—I think it was made in May last year—it

was explained to him that in fact those claims were within the provisions of the law, that they were not fraudulent,

and that it was possible to claim certificates for replacement panels. We also, according to our court records,

explained that if he felt that arrangement was wrong, that was really a matter of policy and that might be

something that could be referred to the department. Also, given that the RET review was underway, that that

might be a matter that he wanted to raise with the review. That was the nature of that call. It was based on a

misunderstanding, which we corrected, about the specific and narrow issue of the ability to claim certificates for

replacement panels. I gather he was also concerned that the removed panels would reappear on the second-hand

market, but those panels are not eligible for STCs, so we were able to reassure him on that point.

As far as that broader question of panel performance more generally is concerned, I am not aware of any

specific complaints to us. That would be, I think, largely a consumer protection matter, but again Mr Williamson

might have some comments on that in terms of the data that we actually have in terms of panel performance.

CHAIR: Before you answer, Mr Williamson, can I just get an indication of how much longer you might—

Senator MILNE: I just want to finish. I have one more question in relation to this and then we will be—

CHAIR: Okay, thank you.

Senator MILNE: Thank you.

CHAIR: Please, Mr Williamson.



Mr Williamson: Senator, we have looked at the data we have to see whether there is any suggestion that there

might be systemic problems with panel performance. Of all the systems that have been installed—so 1.3 million

since the scheme first began—we looked at the total number of certificates issued in the scheme and the total

number where the word 'replacement' was in there. We know through looking at the data that some of these

replacements are not necessarily replacement for a faulty panel but replacement in upgrading a system.

Senator MILNE: Sure.

Mr Williamson: But the data suggests that about 0.15 per cent of the certificates are attached to the word

'replacement'. So less than 0.15 per cent of all panels installed have claimed certificates for a replacement panel,

so that suggests it is relatively minor. Also, when the scheme was first set up it was done based on a study of solar

radiation in different parts of Australia and the deeming rate of 15 years based on the expected generation in those

postcode data. Last year, I think it was, we were able to get hold of some actual generation data through retailors

and distributors in the Australian Capital Territory and New South Wales, and we were able to get data for

170,000 solar PV systems. When we did an analysis of the actual generation versus what the deeming would

provide for, they were very, very close, and the 170,000 out of 1.3 million is quite a good sample, particularly in

the ACT and New South Wales. That analysis came out that the legislated rating for those 170,000—and that was

systems over the longer term, not just in recent times; this was all solar PV systems over a lengthy period of

time—was 1,382 kilowatt hours per kWp per year, compared to the actual generation that was metered, which

was 1,327. It was within four per cent, which suggests the deeming obviously allows for a very efficient, low-

administrative-cost overhead, and in fact it shows that that little study is actually pretty close to the mark.

Senator MILNE: Thank you. It seems like a beat-up is on our hands in terms of this from what you have been

saying. Finally, what is your attitude toward a mandated positive quality program like the one the Solar Council

have run? They have obviously got certain suppliers that have gone through this higher level of assessment. Do

you have a view about that, or is that a policy question that you would prefer not to respond to?

Ms Munro: That mandating a program really is a policy question, and obviously it fits in the context of the

government's views on regulatory burden and so forth. However, certainly from a consumer protection point of

view, the availability of information about the performance of competing suppliers—particularly in this world of

small businesses—is obviously very desirable. Surveys like the Choice survey that was recently undertaken, and

all of those things, help to inform consumers. As to whether it is necessary or desirable to take that extra step and

mandate it or not, I do not think that is a question on which the regulator could opine.

I did just want to add one thing just for the information of the committee on this, which is to distinguish

between panels which have been certified as meeting a standard and have been properly sold and installed, and

panels which are in fact counterfeit and therefore fraudulently installed, because that has occurred. There is a

matter that we are investigating that goes to that. As with any industry, whether it is the car industry with

replacement of parts and so on, there is always a risk that some things will be sold to the market that are not what

they purport to be. In those areas where we do have powers to investigate and powers of referral, I want to assure

the committee that we are vigilant and do pursue and prosecute such cases where we find them.

Senator MILNE: Do you have any ongoing investigations into suppliers who have engaged, effectively, in

fraud in the manner you have just described?

Ms Munro: I raised that point because we do have an ongoing investigation with respect to, effectively,

counterfeit panels.

Senator MILNE: What should people do to ensure they do not purchase a counterfeit panel?

Ms Munro: The important thing—and this is true for any purchase—is to be confident that you know who

your supplier is and that they are of good standing. You should investigate them as you would anyone, whether it

be a builder or any other service provider. The warranties are also important, so that if you have problems you are

entitled to have the panels replaced.

Senator Birmingham: The government, and Minister Hunt in particular, take allegations that would harm the

reputation of the scheme, consumer confidence in the scheme or public support for the policy that underpins the

scheme, quite seriously. As I flagged before, he has already written to the Clean Energy Council and the Solar

Council, I understand, regarding the allegations—seeking their views on whether there are any changes that

should be made and advice on whether there are any steps they propose to take, with respect to their

administration of their components of the scheme, to rectify these matters. He has asked that they provide a

response within a week so that he is able to give quick consideration to any reforms that might need to be

undertaken and to ensure that he is informed by industry advice, Clean Energy Council advice in particular, as

well as all the information you would expect Ms Munro and the department to provide.



Senator MILNE: Except that the report showed that it is not a safety issue.

Senator BACK: I want to ask some questions about the Redbank project—the operators of the Redbank

power station in the Hunter Valley. I want to take you to the Liable Entities Public Information Database for the

year 2013-14 and ask if you or your officers can confirm that the Redbank project at that point had an outstanding

carbon tax bill of some $36.55 million—made up of $26,759,000 in unpaid provisional units and $9.798 million

of unpaid final units—as at the end of June 2014.

Ms Munro: I can give you precise information on that. For the benefit of the committee, I will provide some

context for this. We have now had the final acquittal of the carbon tax, the carbon-pricing mechanism. That was

completed on 2 February. We have published relevant information on the Liable Entities Public Information

Database, which provides a great deal of transparency on the circumstances. Senator Back, for example, was able

to interrogate that and see exactly what the situation was. Again, we had a very high level of compliance, so there

are at this point in time only two entities in shortfall. One of them is Redbank. The committee should be aware

that Redbank is in receivership and has been for some time. That has curtailed its ability, as an entity, to transact.

I also mention that, in that context, the Clean Energy Regulator is an unsecured creditor, so we are one of many

creditors of that entity.

Going to the numbers, as things currently stand Redbank did not fully acquit its liability for the 2012-13 year, it

has not acquit any of its liability for the 2013-14 year, and therefore its total shortfall is equivalent to something

just short of 1½ million units, which, as we said, is equivalent to a debt to the Clean Energy Regulator of some

$46 million in shortfall charge and, on top of that, they are accruing late payment penalties, which currently stand

something shy of $5 million. That is the situation as it stands.

Senator BACK: So the figure is about $51 million as of now. You were saying that the company went into

receivership. Do you know when that was and when you were informed of that?

Ms Munro: I am not sure if I have that date, but it certainly goes back to—

Senator BACK: Perhaps you could take it on notice.

Ms Munro: We will take on notice as to when we were advised by Redbank that they—

Senator BACK: My advice is they went into receivership on 5 October 2013.

Ms Munro: It certainly was in 2013. I just do not have the date in front of me.

Senator BACK: I understand the company made a profit of some $26 million in the 2011-12 financial year,

but they went into receivership in October 2013. My information is that the power station was closed up by the

receivers in October 2014. Is that your understanding?

Ms Munro: I am not able to comment on the decisions made by the receivers in terms of how they operate

that business.

Senator BACK: Could you confirm that Redbank did receive from the Energy Security Fund some $17.7

million, being a cash payment of some $8.7 million from the Clean Energy Regulator and a further figure of some

$8.8 million in carbon units at a fixed unit price from the Department of the Environment. Is my information

correct?

Ms Munro: Slightly out of kilter, but in the broad it is correct. Under the Energy Security Fund, which was

established to deal with some issues in the generation sector, the arrangement was that for the first year there

would be a cash payment which was against the 2012-13 anticipated liability, and that was $8.8 million in round

terms. That was calculated and paid by the department. The division of responsibility was that the department was

responsible for that cash arrangement and then, under the provisions for the 2013-14 liable year, the Clean Energy

Regulator had the responsibility for that as part of the Industry Assistance Program, and we issued 365,600 units

in September 2013. Again, that is on the public record. You can see that information on our website. You are

correct: that has a cash equivalent of roughly the same amount of money.

Senator BACK: Those funds were passed over in September 2013 and then the business went into

receivership on 5 October 2013, only some days or weeks after that. Am I right that I heard you say that the Clean

Energy Regulator is an unsecured creditor of that figure now totalling $51 million?

Ms Munro: That is correct. That is the understanding that we have. I will just go back. I do not draw any

conclusion about the timing of the receivership relative to the receipt of the units. Units were issued at the time it

was provided for the units that were provided according to the schedule that was legislated. At the time, Redbank

had partially acquitted its liability for 2013. So they had a liability which was some 1.1 million units, and they had

actually surrendered 820,000 units on time. It was only in February 2014, after the issuance of the units and after



they had gone into receivership, that they went into shortfall with respect to that first year. So the timing is a little

bit complicated.

I should correct something that I said with respect to the outstanding debt because what I summarised was the

shortfall charge and the late payment penalties. But, in fact, we had received part payment against that total,

which you said was around $51 million. They have paid $5.7 million against the liability, but that still leaves an

outstanding liability, including the late payment charges, of approximately $45 million.

Senator BACK: When you say they paid the $5.7 million—

Ms Munro: The receivers paid that.

Senator BACK: The receivers have paid $5.7 million.

Ms Munro: So they have made some endeavours to reduce the liability.

Senator BACK: The retailer, I understand, is a company called EnergyAustralia, who would have been

charging the carbon tax to the customers of the generator and collecting those funds as part of the invoices,

including the carbon tax component. That is actually a collection of a tax payable to the federal government, isn't

it, collected, presumably, by the retailer and passed on to the generator, who would have the liability? I am at a

loss to understand how those funds, collected from customers in consideration of a tax payable to the Australian

government, would not, in fact, be due to a highly secured creditor. How could the federal government not be a

secured creditor, in consideration of taxes collected from consumers of the electricity?

Ms Munro: You go to several questions of policy in that question, so I will answer the bits that I can, and,

possibly, Dr Kennedy might want to comment on the rest. First of all, in terms of where the liability is and the

obligation is, the way that the carbon tax worked in the electricity market was that the liable entity was the

generator who actually burns the fuel and has the emissions.

Senator BACK: That is correct.

Ms Munro: So, they are the liable entity. The prices that they receive for their energy in the wholesale market

did increase to essentially allow them to pass that through, but there is not a direct pass loop which places the tax

obligation on the retailer. So the question, really, I think, is more simple. Here is an entity that received revenue

for its generation in the market. It is now in receivership for whatever reasons and therefore, is unable to meet its

obligations not just to the Commonwealth of Australia but also to its many other creditors. You could say that that

sort of relationship is no different from any of the other inputs, for example, if they could not pay their interest

charges to the bank or some other customer bank that is involved in that whole chain. But, to get back to the

question of whether the Commonwealth is a secured creditor, that is a policy matter that I assume is the same for

all taxes. It is not where the Commonwealth stands in the hierarchy.

Senator BACK: Has there been dialogue between you or your office and the receivers, who I understand to

be KordaMentha in terms of some arrangement for the payment in full or in part of those funds owing?

Ms Munro: Again, just to step back for a second, we have a very thoroughly articulated debt management

policy, which really goes in the end to our duty being to maximise recovery, or the reasonable prospects of

recovery, of those debts. I would say that we have been highly successful in those that we have been able to

recover. Most of the unit shortfall charges have been paid. There have been some entities that we have had to

pursue in various ways, and we have not been reticent to do that, but there are a series of steps that we go through.

In the case of this receiver, it is no different from any others. We have discussed their situation with them; we

have pressed them for payment. In this case they have made representations to us about the process that they are

going through, which we have taken into account. That led to that part-payment, which only goes a small way to

satisfying the obligation, but nevertheless we felt that was important to receive that. We are not able to forgive a

debt. We have not stepped back from pursuing it, but naturally we have to pursue that in the context of how that

receivership is proceeding and what the process is that is likely to lead to the outcome where we best recover

those outstanding debts on behalf of the Commonwealth.

Senator BACK: So you can assure the committee that there has been no agreement reached with the receiver-

managers to forgive the balance of that what would be close to $45.6 or $45.7 million?

Ms Munro: Absolutely not. Not only would we not contemplate that; we actually do not have the power. The

only person who can forgive debts is the Minister for Finance, and I do not believe that that process has got

anywhere close.

Senator Birmingham: He is very forgiving in many ways, but not so much in those ways.

Ms Munro: That situation has not arisen as of yet, and we certainly would not be recommending that that was

contemplated at this stage in the process.



Senator BACK: I have a couple of other questions in that same context that I will put on notice. But very

briefly I want to go for one quick moment to the Gullen Range wind farm. I want to take you to some answers

received on 27 November last year to questions on notice asked at last year's supplementary budget estimates. I

refer to answers 201 and 202. In those instances, I will quote the statements made, and perhaps if I am wrong you

can correct me:

The NSW Department of Planning and Environment has not, to date, alleged that this wind farm is breaching or contravening

state law.

I then want to take you to a statement from the New South Wales department of planning's media release of 10

October 2004, about six weeks earlier, in which the department stated:

… the Department shares the local community’s opinion that the new positions of these nine turbines—

at Gullen Range—

are inconsistent with the conditions of consent …

… … …

“As such, the Department is pursuing action on the nine turbines, which are considered to be in breach due to the significant

departure from the approved location.

You may recall this is an installation where a number of turbines were placed in the wrong positions against the

approval from the New South Wales department. My questions to you are: firstly, how many LGCs for that wind

farm has the Clean Energy Regulator validated? Secondly, armed with the knowledge that in fact some six weeks

before you responded to the questions asked in estimates in October last year, the state department had already

publicly stated that the wind farm was not in compliance with its conditions of approval.

Ms Munro: First of all, I would say we do address this matter in our submission to the Senate inquiry into

wind farms, so we hope to be able to have that perhaps more detailed discussion of the Gullen Range case with

you then. The sequence of events, since both that media release and our response to your question and so on, has

moved on. You will be aware, I am sure, of the fact sheet that was released by the New South Wales department

in December 2014, which I think somewhat clarifies their position. Again, they, at the time, were concerned that

certain of those towers might not have been in compliance, and they are still investigating that question. They did

not actually, in their media release, assert that they were not. We discussed the matter with them between that

media release and when we responded to your question.

So I think that everything has moved on somewhat in terms of their compliance and enforcement and, indeed,

in our investigation that is afoot in terms of the status of those later turbines, where there is some question about

whether or not their location is compliant with the conditions in the permit. That is certainly a matter that is being

contested through that New South Wales process. We acknowledge that that has not been determined, but we also

are of the view that we do not have reasonable grounds at the moment, based on how that is proceeding, to

suspend accreditation. Therefore, we have been validating certificates in the meantime. Again, that is a matter that

we perhaps might touch on further through the Senate inquiry. Mr Williamson has the numbers, which I am sure

he will be able to provide to you.

Mr Williamson: Goldwind, for the Gullen Range Wind Farm, has received a total of 210,546 LGCs so far.

Ms Munro has referred you to the recent statement from New South Wales planning. While you are correct that

New South Wales planning has said all along that it believes that some turbines are in the wrong location, that is

not the same as them alleging that there has been a contravention of state law. Throughout our investigation, and

throughout this matter, we have been in touch with them. As Ms Munro refers to, their latest statement is quite

clear that there appears to be genuine dispute, and they are not moving to full notices until the current appeal that

is on foot in the Land and Environment Court is heard.

Senator BACK: I will ask you to take this on notice or answer when you appear before the select committee.

I am now referring to the New South Wales Planning and Assessment Commission's refusal to modify the

existing approval from GRWF, which is dated in October last year. I note that that refusal was made according to

section 75W of the Environmental Planning and Assessment Act in New South Wales, and that they had applied

for a modification to their planning consent retrospectively, accepting that the turbines were built and are

generating in breach of their planning permit. Once constructed in the wrong locations, I put to you that they

could not operate in accordance with their planning permit, and, therefore, that the farm was improperly

accredited by you, and that the Clean Energy Regulator is validating LGCs on behalf the federal government

effectively against its own laws. I will invite you either now or, if time does not permit, on notice to respond.

CHAIR: We really are running out of time, so if you wanted to quickly make reference to the answer and if

you could take the rest on notice that would be very helpful.



Ms Munro: There are a couple of points, because in the course of that long question there were a number of

assertions that were made that were not correct. In particular, it is my understanding that Gullen Range Wind

Farm, in seeking the amendments, has never accepted that it was in breach—these words are important in a legal

term—but it did want to have the conditions rectified. For legal reasons, which I think that we have rehearsed a

number of times, we do not accept that we have been improperly validating certificates or that we are acting in a

way which does not fulfil, to the letter, the law which we are obliged to administer. So I just want to put that on

record for the committee. I am certainly very happy to answer that question more extensively through questions

on notice and, indeed, at the select committee.

Senator CANAVAN: How many large-scale generation certificates were generated—or surrendered or

created, whatever word is appropriate—last year, 2014?

Ms Munro: I should have a summary with that information.

Mr Williamson: The LRET for 2013—because certificates can be created 12 months after the generation—

was a little over 19 million certificates. Liable entities surrendered just on 19 million certificates. The 2014 target

was 16,950,000 and they were required to surrender by 14 January. It looks again as if the surrender has been

very close to target. For generation—noting that in 2014 there is still some time they can be creating—for 2014,

as of 2 February 2015, almost 16 million LGCs have been registered. So for the last couple of years the creation

has been getting pretty close to the target.

Senator CANAVAN: Why has there been a drop of three million? Is that because people have turned things

on for less time or has there been an appreciation in the asset?

Mr Williamson: It is purely because they can create the certificates for up to 12 months after the generation.

There will still be more LGCs created for generation that occurred in 2014. You would expect that, for 2014, the

generation will be—

Senator CANAVAN: It will get very close.

Mr Williamson: Last year I think it was about 16 million, so it is probably going to be about 16 million to 17

million in terms of certificates generated.

Ms Munro: As you rightly identified, Senator, there is both the supply side and the demand side. Demand is

legislated. The legislated demand for 2013 was some 19 million, as Mr Williamson mentioned. For 2014 it was a

lower number. In round terms it was 17 million. That was because the profile had been designed to absorb a

surplus that was accumulating in the market. As the target has gone up, that surplus has shrunk. What Mr

Williamson is saying is that, at least for the 2014 year just completed, it looks as though supply and demand were

more or less in balance.

Senator CANAVAN: So there is no surplus now?

Ms Munro: There is still a surplus that accumulated during the period when the small-scale and large-scale

schemes were combined. At the time the two schemes were split, those surplus units remained in the large-scale

scheme. That is why the profile was set up in the way it was. It was designed to absorb some of that surplus. It has

not absorbed all of it at this point.

Senator CANAVAN: How much surplus is left at the moment?

Mr Williamson: Our estimate, at the end of the acquittal period on 14 February, was that it should be around

25 million. I can take that on notice just to recheck that figure, but that was based on an estimate from a few

months ago of what would be surrendered and what would be created. I think 25 million is in the ballpark.

Senator CANAVAN: That 25 million is an absolute figure. It is not a flow, so to speak; it is a stock.

Ms Munro: It is a stock. That is correct.

Senator CANAVAN: So as the target goes up over the next few years, that will eat into that 25 million figure.

Ms Munro: That is right.

Senator CANAVAN: If the target goes up another, say, another 3,000 in 2016 and another 5,000 in 2017—I

am doing it in gigawatts not megawatts, so three million and five million—that is not going to get to the 25. So

how long is it going to take to get through this surplus?

Mr Williamson: There needs to be a certain amount of liquidity for the market to operate effectively, so you

do not need to get rid of the entire 25 million. We think that, for an efficient market, maybe there should be about

10 million of liquidity. So it could be sometime in 2016 when, based on the current statutory targets, we get to a

point where there is about the right amount of liquidity.



Senator CANAVAN: Is the renewable energy infrastructure we have right now running at full capacity, in

your view, or could it produce more if there was not this surplus? Accounting not for new investment or new

capacity but for existing capacity, could it be sweated more if there was not this surplus?

Ms Munro: There may be operational decisions that could be made to do that, but, generally speaking,

renewable energy, because of the way the market operates, is dispatched first. So you would assume that,

fundamentally, the vast majority of output of those—

Senator CANAVAN: That is not true for hydro, presumably.

Ms Munro: Hydro certainly is a different case in point because the hydro operators manage their storages in

order to manage across a variety of risks. They have contractual obligations; they have to consider what the

climatic conditions are going to be over several years, in fact, to decide how to manage their storages. As has

been well commented upon, of course, they did generate more than they would be able to in, say, the average year

during the period of the carbon pricing mechanism because they could take advantage of higher prices than would

otherwise be available to them. They could not maintain that level of generation perpetually, but it really in the

end depends on rainfall conditions and how they manage their risks and obligations.

CHAIR: I thank Ms Munro and other officers from the Clean Energy Regulator.


Climate Change Authority

CHAIR: I welcome officers from the Climate Change Authority. Mr Fraser, would you like to make a short

opening statement before we commence questions?

Mr Fraser: There is no opening statement.

Senator SINGH: I want to start by asking you a very quick question about the Public Governance and

Resources Legislation Amendment Bill (No. 1) 2015. This legislation removes the CCA's body corporate and

legal entity status. What will that mean for your independence?

Mr Fraser: It does not affect our independence at all, really. It has had some other implications for

governance and administration. I think these issues have largely been sorted out now.

Ms Harris: With the independence of the authority, those core features have not been amended in any way—

so the arrangements for statutory appointees and the explicit requirement in the legislation that the authority

cannot be directed by the minister in relation to the conduct or the content of this reviews. They are really the core

of the independence of the authority, and they remain.

Senator SINGH: What about your structure? Who do you report to? Is that still the same?

Ms Harris: In essence, yes. There was slight confusion at some point about who exactly was the accountable

entity under the new arrangements. For a while there it was the members of the authority. That has now been

changed, at least temporarily, to me as the CEO of the authority. We understand that there will be a legislative

change to make that situation permanent, which basically gets us back to where we were under the old FMA Act

where I am in charge—which is what it says in our legislation—and I am the accountable person for finances and

for Public Service Act administration.

Senator SINGH: That is good. Since we last saw you at the last estimates in October, you have been taken

out of limbo—which is pleasing to see. I understand the government has tasked the CCA with that additional

work since 30 October. I think you have called this a special review involving the three reports—a draft report on

future emissions reduction goals, a draft report on emissions trading schemes by 30 November this year and a

final report recommending the action Australia should take to implement it obligations following the Paris

conference at the end of this year. With respect to the report on future emissions reduction goals, will this report

be taken into consideration by the PM&C task force, who will, obviously, be setting Australia's pitch at the Paris

conference? Are you aware?

Mr Fraser: My understanding is that they will be separate reports. I do not know the terms of reference for

the PM&C coordinator report, for example, but we have quite specific terms of reference for our reports,

including the first one, which you mentioned. We also have very specific writing instruction in terms of our

independence and the things we need to consider in preparing our report. We need to have extensive consultations

and so on. Hopefully, there will be opportunities for our report and our efforts in this direction to be tick-tacked

with the PM&C office report, as well. But they are separate reports, starting with separate terms of reference and,

I think, probably separate writing instructions.

Senator SINGH: At this point in time, you do not know if that opportunity will present itself?



Ms Harris: Ultimately, what the government chooses to do with our advice is not a question that we can

answer, of course. But we are in contact with the PM&C group. We had a member from that task force come and

have a discussion with our authority members at their last meeting. There are channels of communication there,

and we will certainly try to keep each other up-to-date with the work that we are doing.

Senator SINGH: In not knowing whether the PM&C task force will take into consideration this report that

you are doing at this point time, do know why you have been tasked to do this report?

Mr Fraser: Yes. It is part of a three-stage report, as you mentioned. That whole special report was part of the

negotiations that were conducted between the government, on the one hand, and the Palmer United Party, on the

other, and that gave an extension of life to the authority and, at the same time, provided for this special review to

be conducted by the authority.

Senator SINGH: Has the government provided you with any additional funding to do this extra work? I

understand from last estimates that you have been operating with a skeleton staff since being in limbo for the last

18 months.

Mr Fraser: The going is pretty tough, frankly, and budgetary constraints are part of that predicament that we

are in. We have had an up-and-down existence. In our first year we were sort of setting up and our actual spend in

that first year, 2012-2013, was about $5½ million in round figures. In the second year we pretty well established

for much of the year, and staff numbers peaked at the mid-30s. We spent about $6½ million in that second year,

2013-2014. But, towards the end of that year, when it was widely expected that the authority would be wound

down, the size of the establishment ran down very quickly, and we are still operating very much on a shoestring

this financial year. In round terms we might spend about $4½ million for the year.

Senator SINGH: And how many staff?

Mr Fraser: We have got 10 or 11 at the moment.

Senator SINGH: Eleven staff members?

Mr Fraser: Yes, of that order. We are trying to build up the staff because of the special project that we have

been given, and that is where the budgetary constraints come into play.

Senator SINGH: So you have not been given any additional funding to do this special review?

Ms Harris: We are currently in negotiations about what that allocation would be. Because there was an

expectation that we would be abolished, there was no money provided for us in the budget. So we are in

discussions at the moment with the environment department about what our final budget will be.

Mr Fraser: If I could just add to that. We are very small fish and we have averaged a spend in the last three

years of about $5½ million—very small—and no provision has been made for us for next year. We have to

negotiate with the department. We are doing that in good faith, and the department is reciprocating in the same

way. But we are in this rather invidious situation where the department itself has been quite constrained

budgetarily. We are in the situation where, to get a minimum workable, operational sum of money, we have to get

something from the department, and for us to get an extra staff member they effectively have to lose a staff

member. That is not the happiest situation to be trying to build up the staff in and to do the kind of special project

that has been delegated to the authority. So it is a difficult time for us and, no doubt, for the department as well.

Senator SINGH: On top of that, you have recently done your statutory review. On top of that review and this

special review, how does the current workload of the CCA compare to the last financial year?

Mr Fraser: That is probably best explained in terms of staff numbers, and you can see quite a gradual build-

up in the first year, up to a peak of about 35, and subsequently down to the 10 or 11 that we have got. To do those

three parts of the special project, we are going to have to build up that number from its present low level. We are

trying to do that now, and budgetary considerations of course are a part of that process.

Ms Harris: In terms of the sorts of things that we have needed to work on, in February last year we released a

major report, our targets and progress report, and certainly the peak of our staffing was in the thick of getting

work done for that report. That was February; at that point we had already started to tail off numbers, even as we

were finalising that report. We rapidly got our numbers down as we got towards the middle of the year. We put

out three research projects with those limited resources until the end of that financial year, then we had our period

of limbo. Up to the end of the last calendar year, we still had two statutory obligations reviews to do—a review of

the Carbon Farming Initiative and a review of the renewable energy target. We completed those reviews in

December last year. Certainly for the coming period, the special review will be our work. That will be basically

all of our work program. Coming into 2016, unless the legislation is amended, which we have recommended



twice, we will be required to do another review of the Renewable Energy Target, because that legislation

currently requires it to be reviewed every two years.

Senator SINGH: So by the end of 2016—

Ms Harris: By the end of 2016, another what is technically due.

Senator SINGH: Considering you have to complete the special review by the end of the year, before the Paris

conference—is that correct?

Mr Fraser: The first component has to be completed by the end of June. That is our recommendation on

targets post-2020. That is required by the end of June. It is around that time, presumably, that the government will

be on the basis, hopefully, of our report, but the PM&C coordinated report as well will presumably be taking

some soundings and even making decisions. While the deadline is 30 June, we are hoping to beat that by a short

period of time so that it will be out there and available to be taken into account if the government so desires.

Senator SINGH: That is not very far away. The staffing issue, the resources issue, to do the work, really

needs to be resolved fairly quickly to meet that deadline.

Mr Fraser: We are soldiering on with the resources that we have. As Anthea said, we are in negotiations with

our colleagues here to see whether the finance situation can be resolved pretty quickly so that we can get on and

recruit a few more staff to help with not only this targets review but also the second and third parts of the spatial

project.

Senator SINGH: Dr de Brouwer, do you have anything to add on the negotiations for staffing and when that

will be resolved?

Dr de Brouwer: As Mr Fraser said, negotiations on both sides are occurring in good faith. We are very close

to being able to resolve the budget for 2015-16 and for where we would be in that half of 2016-17. The CCA has

enough budget for 2014-15, for this financial year, so it is really an issue of next financial year. The timing is

something we are both working to in a constructive manner. I cannot put a specific date or time on that. I cannot

see why it is not imminent.

Senator SINGH: I go back to the special review. What sort of consultation have you had with government

throughout this special review process?

Mr Fraser: We have had frequent meetings, regular meetings, with the minister. We have reported on targets

previously. Our views about targets and those kinds of things were reported to the minister at that time. That quite

extensive report was submitted to the minister and through the minister to the parliament and the public in

February. It is really an update that we will be seeking to do and to firm up our views for the period beyond 2020

in the upcoming review. It will be fairly modest in terms of volume.

Ms Harris: That is for the first draft report. In terms of the other legs, the terms of reference also ask us to

address the question of whether we should have an emissions trading scheme and, if so, what circumstances

should trigger the introduction of such a scheme. We need to look at what a number of key countries are doing

and we also need to recommend a whole package. It is described in the terms of reference as recommending what

action Australia should take to implement outcomes flowing from the Paris conference. That is a very broad

requirement that could mean: what package of measures should Australia put in place to meet its post-2020

targets?

Senator SINGH: In response to question known as 223, you said that the minister had not ever sought advice

from the CCA. Since providing that answer, has the government sought advice from the CCA in light of the fact

that it has asked you to do this ETS review?

Ms Harris: We should clarify it. Certainly we have got the terms of reference, so much in that respect we

have been formally tasked with providing advice but we have not received any other ad hoc requests for advice.

Mr Fraser: Just to add a footnote to that: the terms of reference for the review is the first sort of formal advice

that has been sought. But I did say we have had regular discussions with the minister on all sorts of subjects and,

the course of that, we have talked about what we are proposing to do at different times and the different projects

that we have in mind to do. We have got reactions from the minister to, for example, something on motor vehicle

emission reductions. It is something that would be a good project for the authority to do, and we are undertaking

that and that was duly done. There can be some grey areas about providing advice and seeking advice and what

comes out of the course of these regular discussions that we have had.

Senator Birmingham: Noting, I am sure, those discussions are informed by the work that the CCA produces

as well—

Senator SINGH: Hear, hear!



Senator BIRMINGHAM: which in and of themselves constitute advice or information at least to the

minister. There is that bureaucratic difference between a minister seeking advice of an agency versus a minister

receiving information from that agency that he chooses to discuss with.

Senator SINGH: Thank you for conducting the REF review. Obviously, it was legislated for you to do it—the

legislated RET review, as opposed to the Warburton review. Can you summarise the effectiveness of the current

RET scheme as you found it in your review.

Mr Fraser: In very broad terms—and Anthea can go into the detail—the RET is related to electricity

generation and emissions flowing from those activities. They generate at least a third of our greenhouse gas

emissions. So it is clearly a pretty important set of measures to tackle that problem. In the light of other things that

have been going on and not going on, the RET is one of the few active instruments that is out there at the present

time to try to address this problem as the carbon price has been abolished and there are some doubts about the

extensiveness and effectiveness of what we presently know about the Emissions Reduction Fund and those kinds

of things. The RET, in our way of thinking, while it is not ideal in some respects, is an effective instrument that is

out there. We have been keen in our recommendations in our latest report to try to see the integrity of those

arrangements kept in place. All along, we have envisaged that at some stage we need a comprehensive suite or

tool kit of measures to address the various features of the emissions problem that we have in this country.

Ms Harris: I will just add to that with some figures. One of the objectives of the renewable energy target is to

reduce greenhouse gas emissions. We did not do new modelling for our review. We did rely on the modelling that

has been done and had been extensively consulted on for the Warburton review. It estimated that the RET would

contribute 58 million tonnes of greenhouse gas reductions between 2015 and 2020 and an accumulative 299

million tonnes over the period 2015 to 2030. So to put those numbers in perspective, 58 megatonnes is about a

third of one year's worth of emissions. As Mr Fraser said, electricity emissions are a very significant part of

Australia's greenhouse gas profile. It is a about third of our national profile. If we look at studies from Australia

and around the world about pathways towards decarbonisation, there is always a very large role that is played by

the electricity sector because it can be a very large emitting sector in its own right but there is also the opportunity

that a lower carbon electricity supply means that you can run more things off that low carbon electricity supply

and take out some other emissions from some other sectors as well.

Senator SINGH: The authority, through the review that you did , did not favour any significant scaling back

of the large-scale renewable energy target. That is correct?

Ms Harris: We did recommend in that report, however, that—we have had a period of uncertainty that has

affected rates of investment and, given the short time frame between now and 2020 and the ramp-up rates

required, some delay of up to three years in achieving that target should be considered to make sure that that

target is now achievable.

Senator SINGH: Do you have any figures on the effect of the uncertainty on the rates of investment in

Australia?

Ms Harris: The main thing is that things have been on hold for a couple of years now, so it has been very

difficult to get anything brand new away. Things have been constructed, but they were already in the pipeline;

they were already over their various hurdles. Things are now pretty much on hold.

Mr Fraser: It was really because of the uncertainty that has created some doubt as to whether the large-scale

RET target could be achieved by 2020 anyhow. We thought it much preferable, in terms of sending signals to the

markets and the community generally, rather than to reduce the target, as such, for 2020 better to keep the target

but extend it out a couple of years, up to three years or whatever. That would, I think, provide a better signal to

the market. As Anthea has said, the market has been rather shaken up, in the last couple of years, because of all

the talk about reducing the RET or even abolishing it. It is very unsettling for investors and their financiers.

Senator SINGH: Yes, it is a real shame.

Senator MILNE: I want to go to this targets and programs review. First of all, have you had a discussion with

the minister about the fate of the Climate Change Authority (Abolition) Bill 2013? I am assuming that you have

been given an undertaking that will not be brought on until you have finished the targets and programs review,

which you have said does not end until 2016.

Mr Fraser: Our assumption is the same as yours, Senator—

Senator MILNE: No, the question was: have you had an assurance from the minister? Have you had any

discussions with the minister about that abolition bill not being brought on?



Senator Birmingham: Senator Milne, it is the government's intention as a result of the agreement struck with

the Palmer United Party that the Climate Change Authority will continue through until 2016.

Senator MILNE: I now come to the targets and programs review. You did your last one in February 2014.

You made your recommendations based on the size of the task, the likely cost of climate change in Australia,

what other countries are doing and the economic factors contributed to that report. Since then, there have been

numerous scientific reports. Can you indicate whether they have suggested that the targets should be weaker or

stronger, given the impacts of the science and the Intergovernmental Panel on Climate Change final report leading

into Lima?

Mr Fraser: In broad terms, we will be teeing off the 2014 report, which is pretty comprehensive. We will be

looking at all the factors you mentioned, starting with the science, what other countries are doing and what is in

Australia's national and longer term economic benefit—all those same considerations. We will be updating the

earlier report, in terms of what the science has come out with since then. If anything, the science has come out

with more conviction and more confidence that their analysis is on the right track.

We will be updating our understanding of what other countries have been doing. Again, there are quite a lot of

things to note and report there that some of the big countries—the US and China—but also some of the smaller

ones are being more ambitious now than they were when we completed that earlier report.

Some of the earlier analysis about doing effective measures to reduce the costs on future generations—there is

a real intergenerational issue here and Australia's longer term economic benefits—I think some of those

arguments that we had in the earlier report can be refined and sharpened up, in the light of what has been

happening in the short time since that report appeared. There is quite a lot out there to draw upon in updating that

earlier report.

Senator MILNE: Thank you, but, as you have indicated, on almost every one of the four parameters that we

have discussed, the evidence that has come out since your February 2014 report suggests that the depth of the

cuts, the urgency et cetera are greater. There is nothing in the recent experience or reports that suggests that your

targets would be watered down.

Mr Fraser: You have put your finger on one thing that has not improved for the better, and that is the outlook

for the 2020 target. We had earlier recommended that Australia should be trying to do more than minus five per

cent in 2020, and we recommended 15 per cent reduction in 2020. We took that as a starting point for making

some projections after 2030 and beyond. It seems very unlikely that we are going to get anything like that target

in 2020. The chances are likely that we will be starting 2020 with less than what we were recommending. That

will mean, as we have argued consistently, and in those earlier reports, that the longer you delay the more costly it

is and the harder the catch up is. Presumably one has to catch up. The science, what other countries are doing and

our own economic interests would strengthen that general case for having to do more to catch up.

Senator MILNE: Could you just remind the committee what your recommendations for 2030 and 2050 were

in the targets and progress review in February 2014?

Mr Fraser: They were projected trajectories as to where Australia might aim to get. We had a range of

reductions.

Ms Harris: For 2030, the targets and progress review recommended a range of between 40 and 60 per cent by

2030. We did not actually recommend a point target for 2050, but we did talk about a long-term budget to 2050 of

10.1 gigatonnes.

Senator MILNE: So, a 40-60 per cent reduction to 2030. If we do not even achieve what you recommended

by 2020, then that is likely to be at the higher end than the lower end, and the trajectory is of course shorter. So

the dislocation is more acute.

Ms Harris: I will not try to pre-empt the authority members. They need to do their process and look through

the evidence.

Senator MILNE: I just want to go to where your work is going relative to what is happening internationally.

It seems like you are on a parallel path, but there is no crossover point. My understanding is that you have to

produce your draft report on future emission reduction goals by 30 June this year. Is that correct?

Mr Fraser: Yes.

Senator MILNE: Can you tell me, though, when Australia is expected to make its intended nationally-

determined contribution in the UNFCCC process?

Mr Fraser: That is a government decision.



Senator MILNE: But from the UNFCCC's point of view, can you tell me what the invitation to developed

countries is?

Mr Fraser: I think there is a range of dates without any firm cut-off date. I might be incorrect there. Some

countries are likely to announce their intentions for the period beyond 2020 by midyear, and others might dribble

out in the month or two after that. But as I understand it there is no formal, rigid cut-off date. Clearly countries

will presumably wish to have their intentions on the table before they sit down in Paris.

Ms Harris: Countries are invited—not required but invited—to put down their commitments in the first

quarter of this year. The government has stated publicly that it intends to announce what its target would be

midyear. It has not been more specific than 'midyear'. But given that stated position of when the post-2020 target

would be announced, that is fed into our planning for the first leg of this big, special review. That is why we hope

to have a paper out for public discussion in mid-April, so that it can perhaps feed into that final discussion.

Senator MILNE: That is interesting. So your draft report will be preceded by a discussion paper released

mid-April?

Mr Fraser: That is the present target, but certainly we want to get something out and have consultations on it

and have it finalised in time to be relevant to government considerations of this matter.

Senator MILNE: In Lima, developed countries were invited to have their intended nationally determined

contributions on the table by 31 March and 30 June at the latest. While 30 June for your draft report is there, that

is not going to fit with what the UNFCCC would like for consideration in Paris. Are you aware of what Australia

put on the table in the meeting in Geneva that was held in February?

Ms Harris: We have had some discussion. Our understanding is that there were no numbers put on the table

from Australia, in terms of targets, but we were grateful to receive a briefing from someone from the Department

of Foreign Affairs and Trade at our last authority meeting to give us a bit of an update about what had happened.

Senator MILNE: What is the update on what Australia told the world in Geneva?

Ms Harris: As far as I am aware, there is still no update on the fact that Australia has said it will announce its

target midyear. I am not aware of any change to that public position.

Senator MILNE: You started out with a board of nine people. I see now on your website you are down to a

chair and four others, one being the chief scientist, in that capacity. Who made the decision not to replace the

other board members?

Senator Birmingham: Obviously, board appointments are matters for government. As everybody here is well

aware, it had been the government's intention that the Climate Change Authority would be abolished. That has

changed. The government is giving appropriate consideration to the board positions and what is required for the

authority to fulfil its renewed mandate through to 2016.

Senator MILNE: I heard Senator Singh's questions previously, in terms of resourcing. Since the board has

now got the remit to do this work through to 2016, clearly the board is one issue. Has there been a dollar figure

given to the authority to supplement that or is it just, as you have suggested, a negotiation between the Climate

Change Authority and the department?

Senator Birmingham: That, I think, is what is being discussed. I am sure the CCA have their idea of what

they might need, and I am sure Dr de Brouwer has his assessment. That is a standard budget process all agencies

go through.

Senator MILNE: Yes, except the Climate Change Authority was set up as an independent authority—

Senator Birmingham: It does not matter how independent an authority it is, they still have to go through the

budget processes. They do not get to set their own budget.

Senator MILNE: Indeed, they do, but they have an abolition bill hanging over their head and that is removed

on the basis of a deal. They are asked to do some extra work and they are not provided with any resources to do it.

Senator Birmingham: The allocation of resources is a matter of negotiation at present.

Senator MILNE: The allocation of resources is a decision of government, of ministers.

Senator Birmingham: As Dr de Brouwer has indicated, the department is very cognisant of the time lines

around the work that the CCA has to do, and they are trying to reach a satisfactory conclusion of those

discussions.

Ms Harris: I would also point out that in terms of the current financial year—I think we discussed this at the

last estimates—there are two sources of funding we are drawing on. Even though we did not actually receive a

budget allocation for this current financial year, because we had been reducing our staff numbers so dramatically,



we ended up with a significant underspend from the previous year. We managed to carry forward $3.4 million

from that financial year.

In addition, the Department of Environment was provided with some funding upon our abolition. When we

were not abolished that sum of money has also been available to us. So, for this current financial year, we do have

funds. All the negotiations are about the next financial year.

Mr Fraser: Senator, you may not have been here, but both the department and I indicated that we are getting

close and we are having constructive decisions on the finance. The real tragedy in all this is that have come down

from 35 people to about 11 now. Those losses have really been a tragic loss of resources in an area that was

taking good shape and capable of making a real contribution to a serious and genuine problem. That resource has

been largely dismantled and dispersed. We are arguing now—and we are getting close to agreeing, I think—for a

number that will enable us to build up resources to some extent. The problem has been in the past and we just

hope that that is a sum cost, really.

Senator MILNE: As a final question on the LRET and your review of the renewable energy target, you

concluded that the current LRET should not be reduced and you do not favour scaling back the 41,000 gigawatt

hours target, and that the RET should go beyond 2020. Is that still your position?

Mr Fraser: Yes.

Senator MILNE: Given that there are 9,000 megawatts too much in the system, according to the minister,

what is your conclusion in regard to keeping the LRET at 41,000 and shutting down some coal fired power

stations instead, to take out the 9,000 megawatts. Would that be consistent with the work that you have done on

what Australia needs to do in terms of the size of the climate task, the cost of climate change in Australia and

economic factors?

Mr Fraser: I think there are lots of issues there. We would not pretend to be on top of all of those. We have

tried to address that overhang of capacity by stretching the target out for a few years. Obviously to the extent that

inefficient, polluting and old coal fired power stations could be wound back that would be so much the better.

Senator MILNE: So you would support the idea that it would be better to shut down the old coal fired power

stations, which are big polluters and also have health impacts, than to wind back renewable energy.

Mr Fraser: As I said, we have tried to extend a deal to provide more time for that inevitable, I think, winding

back of those dirty, inefficient, old coal fired stations. I think there are issues other than time involved in realising

those closures. There are all sorts of related funding arrangements that we are not fully on top of but which would

be worthy of some serious consideration as part of this process which will have to occur over time.

Senator MILNE: Finally, on the mandatory vehicle fuel efficiency standards that your report fairly

comprehensively looked at—you have handed down that report—has the government been in negotiations or

discussions with you, or has it just been handed down and nothing?

Mr Fraser: I think something is happening on that front.

Ms Harris: We are yet to see but it has been handed over. We have been discussing it with all the relevant

people, certainly within the bureaucracy. We have, of course, discussed it with the minister and explained it to

him when it was provided. I am not sure. Ultimately it is a matter for the government what they decide to do.

We did note that in the energy green paper it was mentioned as a possible option. It did get a guernsey as a

possible option so we look forward to seeing the white paper to see whether there is any mention of it there.

Senator MILNE: I saw that you had consulted with Toyota in the course of that. Would you just like to tell

me what they had to say.

Ms Harris: There was one chart in the report that we did that looked at a variety of popular makes of cars and

at the most efficient variant of that type of car that you could buy in the UK versus the efficiency of the most

efficient one of those cars that you could buy here in Australia. There was universally a gap. From memory it was

about a 20 per cent efficiency gap, on average. Toyota has some issues with a couple of the comparisons. They

thought a couple of the comparisons were not fair. They wrote a letter about that. We were very keen to make

sure that that was very transparent. Because it was a research paper, there was not a big opportunity for

submissions and all those sorts of things, so we put it on our website so that everybody can see this and be part of

a conversation about it.

Senator MILNE: I would love to see it adopted, so we will see where that goes. Thank you.

Senator CANAVAN: You mentioned earlier the need to adjust or recalibrate the electricity industry to reduce

emissions. What about nuclear power? Have you considered that?



Ms Harris: To date, it has not been part of any modelling that we do, so it is a question, in this special review,

of looking at all of the actions that Australia could take to meet its post-2020 targets. We also note the South

Australian review that will be going on and it will be nice if we can have further updated information that could

potentially feed into our review. It is something that I hope we get fresh information on to be able to take into

account in this coming review.

Senator CANAVAN: But you are not ruling out the potential for nuclear to help deal with our reduction

targets in the future?

Ms Harris: We are at very early days and certainly our authority to date has had no discussion of ruling

anything in or out at this stage.

Senator CANAVAN: You have not done any analysis yourselves, though, of the potential of nuclear power?

Ms Harris: No, we have not. There was the review—and one of our staff members actually worked on this

review—headed by Ziggy Switkowski several years ago. Because one of my staff members was on that team, we

are well aware of that work. We will see what comes out of the South Australian review and see whether, timing

wise, it works out and we have information from it.

We are also aware, of course, of the recent contract, essentially, that the UK government has entered into for

new nuclear power in that country. It is not cheap. The currency conversion has changed since then, but, on the

day I did it, it was about $176 a megawatt hour guaranteed for a very long time, so it is not cheap.

Senator CANAVAN: It is costly. How does that compare to, say, wind energy?

Ms Harris: Wind is $90.

Senator CANAVAN: Is it more costly as well than our current power prices?

Ms Harris: Yes, definitely.

Senator CANAVAN: What is the cost of abatement for going to wind, for example? Do you have those

figures?

Ms Harris: Yes. This was, again, calculated for the modelling that was done for the Warburton review. For

the LRET, the large-scale scheme, which is basically wind, it came out at $32 a tonne.

Senator CANAVAN: You do not have figures for nuclear power, then?

Ms Harris: No, I do not, I am sorry.

Senator CANAVAN: Are you familiar with a paper by Dr Ross McKitrick that came out late last year

analysing the HadCRUT4 temperature series database?

Ms Harris: It is not springing to mind right now, sorry.

Senator CANAVAN: He produced a paper which did some new analysis of that temperature series and he did

some new tests for heteroskedasticity and autocorrelation and found that there are 19 years of, basically, no

warming in that data series. How do you explain that result? The predictions have been for warming and there

have certainly been more carbon emissions over that timescale. Why haven't we seen warming in these datasets?

Ms Harris: We will probably take it on notice to get you a more detailed response from the scientists who are

members of our authority, but there is some information about this in our targets and progress review that we

released in February last year. It is actually incorrect to say that there has been no warming at all. There has been

some continued warming of atmospheric temperatures. There is also been considerable warming in our oceans

over that period of time. As I am sure you are aware, the long-term climate has a good deal of natural variability.

Actually, in terms of natural variability, we have not been in an El Nino. We have not had lots of solar activity.

We have not had any of the other sorts of—

Senator CANAVAN: We have had El Ninos over that timescale. And I do apologise; I should have said no

statistically significant warming over those timescales. We can obviously debate over what timescale, but clearly

there has been a flattening in the series and it does not seem to me to be well explained by the theory of climate

change.

Ms Harris: We do have some information on page 32 of our Targets and progress report. There is a box on

that particular issue. I am sure, if there is any more information that we can provide, we would certainly be very

happy to. Basically, however, the Climate Change Authority is a policy advisory body. We are not a scientific

advisory body. We do have scientists on our board, but our job is not to provide scientific advice.

Senator CANAVAN: But I presume you do review this material—

Ms Harris: We, of course, take it into account.



Senator CANAVAN: and make recommendations on mitigation policies.

Ms Harris: Yes, certainly.

Senator CANAVAN: Just on the ocean warming, I do not know if you saw that NASA did some work late

last year too. The media release they put out started by saying the cold waters of Earth's deep oceans have not

warmed measurably since 2005. Are you aware of that study as well?

Ms Harris: It is not the deep oceans where the heat has been accumulating. The depths that they are talking

about are very deep, indeed. No-one is expecting those to warm any time soon. It is really about getting beyond

the top layer, which we know has been warning for some time, and going into the next layer down. That is where

the heat seems to be being absorbed.

Senator CANAVAN: I am sure I have not read as much climate change literature as yourself and people in

your team. When these predictions were first being made—10, 15 and even 20 years ago—did the models at the

time say it would be warming in those elements of the ocean? Did the models predict that outcome?

Ms Harris: The models have been getting better and better at being calibrated to explain the past. The hope is

that with a better understanding of physical systems with better computing power and with better calibration so

that we can make the models explain the past, which hopefully increases their predictive ability for the future—

Senator CANAVAN: Obviously back-casting is a lot easier than forecasting.

Ms Harris: That is right. It is putting in the things that we know happened and seeing if it gives you the result

of what actually happened/

Senator CANAVAN: But did the models from 15 to 20 years ago perform well, in your view, in terms of

predicting. They did make predictions, and we have had increases in carbon emissions—as I said, indeed, higher

increases than we predicted at the time. Have they done a good job at predicting?

Ms Harris: My understanding is that, in the broad picture, the basic picture has never changed. Even without

all the sophistication the basic trend was for warming and that the amount of greenhouse gases that have been put

into the atmosphere since the industrial revolution would warm the Earth considerably. That has happened. We

know there are some masking things going on. We have a lot of particulates in the atmosphere that are actually

shielding some of those things. But, basically, the basic story and the evidence has been aligned for some time

now.

Senator CANAVAN: I am not here to make judgements, but you only have to look at these temperature series

to see that they have flatlined, and that was not the prediction of the models 15 to 20 years ago. I do not

understand. Clearly there has been an issue with whatever we predicted 15 years ago. We are now making future

predictions on new computer models which we can say might be better and more you-beaut, with more computing

power, but clearly we have made mistakes in the past. How can we be as confident about the future given that?

Mr Fraser: We have always had mistakes with models—

Senator CANAVAN: I am an economist; I know that.

Mr Fraser: but the modelling has become better. I am not a great modeller. I am not a scientist. But, as I

noted in response to an earlier question, each time the climate scientists—the people who study these things and

review and peer-review all the studies and data that is coming out, quite apart from the modelling work—come

out with a report it has more degrees of confidence about the conclusions that globally temperatures are rising on

land and sea and that the consequences of that are becoming more obvious.

Senator CANAVAN: I do not dispute that. The issue I see here is how sensitive the climate is. It is one thing

to say that more emissions are going to make for a warming atmosphere and higher temperature. It is another to

calibrate that to what sensitivity there is for each additional tonne of carbon in the atmosphere. That is the

important policy question for us sitting here having to decide how much to spend to deal with this issue. Clearly

that sensitivity seems to reduce. My understanding is that the recent IPCC report—correct me if I am wrong—

reduced the sensitivity of the globe to a doubling of carbon emissions. Is that right or wrong?

Ms Harris: First of all, it is not correct to say that there has been no warming. That is simply incorrect.

Senator CANAVAN: I did not say that. I accept that there has been warming and that there continues to be

warming. The issue is how sensitive the globe is to additional—

Ms Harris: As I said, we are not a scientific advisory body. We take the best advice that we can find in

Australia. We look to bodies such as the CSIRO and the Bureau of Meteorology. We also take the advice of the

Australian Academy of Science. We look at advice from academies of science all over the world. We look to

bodies such as NASA and NOAA. We look at the work of the IPCC as well. I am an economist; I am not going to



pretend I can second-guess that very, very large body of evidence. That is some evidence that we take into

account. There are some clearly identified risks, and that is a policy question about what you think you should do

in the face of those risks. In our view, spending some resources as an insurance policy against what are identified

as some very serious risks does seem to be a sensible thing to do, in the authority's view.

Senator SINODINOS: I will not keep you very long. It is good to see you again, Chairman. Regarding the

targets you mentioned to 2030 and then to 2050, if we lived in a carbon price world, what sort of carbon price

would we be talking about to achieve those targets that you enunciated?

Mr Fraser: I do not know, Arthur. This would be something we would say the markets will determine if we

have got good, functioning, informed markets.

Senator SINODINOS: Yes, but we would be capping emissions. So, to that extent, we would be rigging the

market, as it were. We would not be rigging the market, but we would be putting some direction into the markets.

Have you looked at what the carbon price would have to look like?

Mr Fraser: No.

Ms Harris: Yes.

Mr Fraser: We look at different things.

Ms Harris: There was some work done feeding into our targets and progress review that we put out in

February last year. There was a very large modelling exercise undertaken by Treasury in consultation with the

department providing different pieces of information. There were some scenarios there, basically trying to get the

world onto a path that would stabilise greenhouse gas emissions at either 450 parts per million, which equates to

about a fifty-fifty chance of staying under that two degrees of warming, or a 550 pathway, which is about a fifty-

fifty chance of achieving a three degree outcome. I have not got all of the numbers here in front of me, but the

high-price scenario that we talk about in this report—and all of the modelling is, of course, in the public

domain—started out at low-price of $5.49 in 2015. It went in a straight line to $73.44 in 2020, and then from

2021 onward it grew at four per cent per year in real terms thereafter. That was modelled, for the sake of

modelling, as a carbon price, but it could, of course, also be used as a proxy for other policies that essentially have

that same marginal cost.

Senator SINODINOS: This was in a context where the world, as a whole, was moving in the same direction.

Ms Harris: With the high prices there were some iterating in the models. What kind of price path would you

need applied across the world? There was some sort of staging about when different countries were doing what.

So it was a big picture, broad brush thing. It was not trying to model actual, individual policies in different

countries. But, broadly, countries at different stages were eventually all getting on board to impose policies of one

shape or another that had those prices, either explicitly or implicitly.

Senator Birmingham: Was that the high-price scenario or the low-price scenario?

Ms Harris: That was the high-price scenario. It started out low but then it escalated.

Senator SINODINOS: Just so I can look at the source properly, because I have not read it, where was that

again?

Ms Harris: We talk about it in our report. There is a discussion in our February targets and progress review

report, and there is also separate information which you can also find on our website. Treasury also published a

separate report just on the modelling as well.

Senator CANAVAN: Were those figures the Treasury figures?

Ms Harris: Yes. They came out of that Treasury modelling.

Senator CANAVAN: It is all coming back to me. Remind me if I am wrong. What were the technology

assumptions under those? They assume clean coal would become economic in about the 2030s, I thought.

Ms Harris: I would need to go back and check. I am pretty sure there was clean coal in there, there was

nuclear in there—this is for the world. For Australia, there was clean coal. I do not think this particular project

included nuclear for Australia.

Senator CANAVAN: I did not think there was nuclear, but I remember clean coal coming like manna from

heaven in the 2030s and saving everybody.

Ms Harris: Of course, it depends on your assumptions about costs.

Senator CANAVAN: Absolutely. Can you just check for me, perhaps on notice, how much was renewables

in 2050 when that price ended? What share of electricity production was renewables?



Ms Harris: Yes. I think we have a very large proportion by 2050. We might be able to find that.

Senator SINODINOS: That was the set of scenarios where Direct Action mechanisms, including things like

renewable energy targets, were off the table because we had a price mechanism. Is that right?

Senator CANAVAN: No, I thought they were in the baseline.

Ms Harris: I am just trying to remember. I am pretty sure that the Renewable Energy Target on its existing

settings was there. With higher and higher carbon prices, the Renewable Energy Target does not actually have to

do anything—

Senator SINODINOS: I get you.

CHAIR: As there are no more questions, thank you very much for being here.


[20:37]

CHAIR: I now call to the table officers from the department in relation to water reform. Dr Gordon de

Brouwer, just on a point of clarification, I am assuming that departmental officials will answer any questions in

relation to the National Water Commission?

Dr de Brouwer: Yes, Chair.

Senator Birmingham: We have the acting CEO of the National Water Commission, Mr McLoughlin, here.

CHAIR: Sorry, Mr McLoughlin. You can answer the questions. We now proceed with program 4.1, water

reform, the National Water Commission. Senator Heffernan, did you want to seek clarification from the

department about where you would like to ask your questions?

Senator HEFFERNAN: I would like to ask some questions about Shenhua and the interpretation of the

change from looking at the EPBC Act to current arrangements. Given that I chaired the original inquiry into this

and given that Mr Joe Clayton, who gave up—and I understand there was some criticism of Australia by Shenhua

in the press in recent times about: are we in the businesses of being in the business? We are in the business of

protecting the future—and do not roll your eyes, Senator Birmingham—

Senator Birmingham: No, I am just trying to follow the—

Senator HEFFERNAN: About the water. Could you explain to me the connectivity between the Namoi

aquifer and the Great Artesian Basin?

Mr Slatyer: The short answer is no, not tonight. I can provide you—

Senator HEFFERNAN: As you know, Mr Slatyer, having been in a closer relationship on other issues with

you, I actually have a pretty good understanding of this. My pretty good understanding of this is that not even the

CSIRO, the Chief Scientist or anyone else can give us the answer, so I do not expect you blokes to really give the

answer. But, given the water report that has come out of Shenhua's proposition to mine the ridge country—you

will recall that, having chaired the committee, I got an undertaking from BHP in writing that they would not mine

under the floodplain at Gunnedah—and that Shenhua are going to go to the bridge of the floodplain and are going

to mine the recharge area, I would like an explanation of what all this means. I am concerned that we are not

taking a sensible proposition to the people of Australia on the risk.

Senator Birmingham: I think we can at least give you some information about processes. You would be well

aware, I know, that—

Senator HEFFERNAN: I am sick of processes and bureaucratic bullshit!

Senator Birmingham: The independent expert scientific committee—you have asked a question about the

science of connectivity—has, I understand, been doing some work on that very question for the very aquifer you

are talking about. I do not think we are going to be able to give you the scientific answer tonight, but we can—

Senator HEFFERNAN: Thank you very much, but—

Senator Birmingham: Senator Milne has put on the record what she needs to put on the record here rather

than—

Senator HEFFERNAN: Can I also note that the Chief Scientist and Engineer in New South Wales has been

widely misinterpreted in her summations on some of the coal seam gas water problems too.

Senator Birmingham: That is maybe for Ms Milnes to deal with.

Senator HEFFERNAN: Have a crack at it.



Ms Milnes: I only caught parts of your question. I think the points to make are that the independent expert

scientific committee provided advice on the Shenhua or Watermark coal project in May 2013. Some of the key

issues the committee pointed to were around the groundwater modelling—issues of cumulative impacts and issues

of salinity. That advice was provided to the Commonwealth. You would probably be aware that that project has

subsequently been approved by the New South Wales government.

Senator HEFFERNAN: There has been a curious use of dates to overcome one piece of legislation with

another piece of legislation. Do you understand what I am talking about—the difference in the timing of the

separation of the EPBC to the new regime?

Ms Milnes: With respect to the independent experts on the water trigger? The issue is now with the

department and the minister for consideration of the project.

Senator HEFFERNAN: It is what you call passing the buck. I want to go to the science. Can you tell me,

given that this is close to a tick-off—

Dr de Brouwer: In the next section, under environmental regulation, the people who are providing advice to

the minister on this will be here and can engage on that.

Senator HEFFERNAN: Can you explain to me—you may not be able to and I might have to come back; my

problem is I am chairing another committee—the proportion of the sustainable recharge of the Namoi aquifer that

is going to be intercepted by the mine?

Ms Milnes: The committee's advice did not go to the specifics of that.

Senator HEFFERNAN: That is why it is bullshit. We need to know that. We are going to give a tick-off to

something we do not understand. As I have said about some of the coal seam mining approvals in Queensland, we

are giving someone approval to go to the moon without knowing how to get them back. We are not adopting the

precautionary principle in this; we are being bludgeoned. As Joe Clayton, who resigned as the boss of Shenhua

there, said, these guys do not understand our culture. Our farmers want a fair bloody go. I asked Joe, in his office

with his Chinese gentlemen beside him, 'Why did you pay $320 million for the exploration licence?' He said,

'Because they had the money and they thought that would make the point and buy the bloody decision.' That is not

the way it ought to be. We want to protect the long-term interests of the farming capacity. I want to know, in clear

detail, what is the impact of disassemblement of part of the recharge on the Namoi aquifer. Then, when that is

done, I would like to know why the science has not been done on the connectivity, which is unique, between the

Namoi aquifer and the Great Artesian Basin. So go for your life. Until you can answer that, there should not be an

approval for the mine.

Senator Siewert interjecting—

Senator HEFFERNAN: I fought this fight for many years. I might not have a green triangle and smoke pot

and black my armpits, but I am concerned.

Senator Birmingham: There is no doubt that you have a consistent position on this. We will take on notice

the question you have just asked. As I said before, we do not have the actual scientific panel here at estimates

tonight, and you have asked a very scientific question. We will do the best we can—

Senator HEFFERNAN: The sad part is I know the answer, they do not know the answer.

Senator Birmingham: If that is the answer then that will be what is provided, but we will get you what we

can.

Senator HEFFERNAN: Why did we change the modus operandi of the approval?

Senator Birmingham: If you want to ask about the approval, as Dr de Brouwer said, we can do that when we

have the officials at the table who handle EPBC approvals.

Senator HEFFERNAN: Mr de Brouwer, are you the boss boy?

Dr de Brouwer: Yes.

Senator HEFFERNAN: So why did we change the modus operandi—to make it easier to approve it?

Dr de Brouwer: When you say we changed the modus operandi, what do you mean? There are lots of

things—

Senator HEFFERNAN: The water trigger—

Senator Birmingham: Are you talking about the timing of when the water trigger takes effect?

Senator HEFFERNAN: Yes—the timing was very cunning. Was it political convenience?



Senator Birmingham: Personally, as you would recall, we were not in government then. Secondly, it is not

unusual when changes are made to laws, be they regulatory approvals laws, be they tax laws or whatever they are,

for them not to capture activities that are already under assessment, not to change the rules for people who have

already embarked on something. That is a generic statement from me. In terms of how it is being applied in

relation to the case you are talking about, I would rather let the officials responsible for that answer the question.

Senator HEFFERNAN: But, as you would know, it scares the bejesus out of me that there are people such as

ministers in various portfolios that have no idea about the issues. Sad to say, the present water minister has just

been for a tour around New South Wales telling everyone he knows nothing about it but he says he will learn. I

think that is a sad indictment. Farmers—I declare an interest; I am a bloody farmer—are scared shitless by the

lack of knowledge and the bureaucratic briefs that come to overcome the political dilemma that ministers find

themselves in. This is a classic example where the science has nowhere near caught up to the decision. So go for

your life—I am interested to hear the explanation. It looks like it is on track, or within however many days. Can

you explain to me the process of the approval and how far away from approval we are?

Senator Birmingham: I am in the hands of the committee. If the officials are here I am quite happy to bring

them forward.

Senator WATERS: Can I intercede—I too have questions about the Shenhua approval that I was intending to

ask in 1.5, because they do relate to the EPBC process. I think some of Bill's questions are in that too. However, I

also have some questions about IESC advice across a range of projects. I had thought that that would belong in

1.5 but can I seek some advice as to whether I should ask about the contents of the IESC advice on three

particular projects now or in 1.5.

Ms Milnes: It will go here, under the Water outcome.

Senator WATERS: Alright—when it is my turn I will ask those questions.

CHAIR: What would we prefer in relation to Senator Heffernan's question? Are there officials in the room

that are able to provide additional information or are we seeking to have Senator Heffernan come back at 1.5?

Dr de Brouwer: The officials are here, so it is up to the committee.

CHAIR: We can move to 1.5 now. We are on Water—Senator Heffernan is talking about water, too. Are you

happy to come back for 1.5, Senator Heffernan?

Senator HEFFERNAN: If I can get back. I am chairing. I will come back.

CHAIR: Come back at 9.30. Before I hand over, I have some questions about the South Australian River

Murray Sustainability Program.

Mr Slatyer: I will just ask my colleague, John Robertson, the assistant secretary responsible for that particular

project, to come forward.

CHAIR: Mr Robertson, of the $120 million that has been allocated to this program, are you aware of how

much has been spent to date?

Mr Robertson: The broader program itself actually has a total of $265 million, but you are correct: $120

million is in this portfolio.

CHAIR: Yes, in your portfolio.

Mr Robertson: In this portfolio, I think so far the Commonwealth has paid out to South Australia about $39

million, in accordance with the milestones that are in the national partnership agreement. The funding is over a

number of years, and, so far, South Australia have contracted the first round of funding with 99 grant recipients,

and we are working our way through our end of the process.

CHAIR: Do you know what that $39 million has been spent on, or allocated to?

Mr Robertson: The $39 million is actually the combined total for the two elements that are funded through

this department: the irrigation efficiency and the South Australian government water purchase. So the activities

across our funding would have been for a range of irrigation efficiency upgrades, as well as the water that has

been supplied. Fourteen gigalitres of water has transferred to the Commonwealth from South Australia so far.

CHAIR: So the water returned for that $39 million is 14 gigalitres?

Mr Robertson: That is the stage where it is at. It is not something where you do a direct dollar-for-litre

comparison, because the water return is staged over the time, and usually the funding lags a little bit behind the

water transfers.

CHAIR: But the total would be 14—



Mr Robertson: So far, and 36 gigalitres in total will come for the $120 million in this portfolio.

CHAIR: In terms of the guidelines for the eligibility for this particular water, has there been much change

since the program was first announced?

Mr Robertson: I think it was subsequent to when the program was first announced that the guidelines were

agreed on with South Australia, so it would be fair to say that in that first period there was some evolution from

draft guidelines from South Australia. It is a program that is funded under the broader federal financial relations

arrangements, so it is one of those things where the Commonwealth has views but South Australia is delivering

the program, so they are ultimately responsible for the detail. We need to make sure that the public interest is

being protected through our work, but the finer details are really the responsibility of the South Australian

government.

CHAIR: So the money is allocated to the South Australian government. They obviously seek for people to

provide projects that meet the criteria, and then it is the South Australian government that makes the decision as

to which projects are successful and which ones are not successful?

Mr Robertson: Indeed.

CHAIR: So all you are concerned about is to make sure that the appropriate governance and accountability

procedures are in place for the eligibility?

Mr Robertson: Predominantly that, but we also are involved in checking. The Commonwealth supports a

range of program activities, including things like the On-Farm Irrigation Efficiency Program, so there is

effectively a check that is done before South Australia contracts with the recipients to make sure that they have

not received funding for similar works, either through the PIIPSA program or through the On-Farm Irrigation

Efficiency Program.

CHAIR: In terms of individuals or organisations that would be eligible to apply for these projects, is there any

requirement that they not be affiliated with the government or any government agency in any way, or are they

entirely private sector projects?

Mr Robertson: The intention is that it was funding for irrigators. If there were irrigation companies that had

some sort of government ownership, perhaps they might be eligible to apply, but I think the clear intent was for

improved efficiency on irrigation activities, and to my knowledge they are non-government bodies. In South

Australia, as you would be aware, there are the privately run irrigation trusts, whereas in some other places there

has been Commonwealth funding for things to upgrade public networks, like the GMW Connections Project in

Victoria. In New South Wales, the similar network providers are private bodies and there are funding programs

that support them, so the projects are really tailored for what is relevant in the different jurisdictions.

CHAIR: There is $39 million on this first round. Do we have any idea of what the quantum of the potential

applications was?

Mr Robertson: Just for clarity, $39 million is what has been paid so far.

CHAIR: Yes.

Mr Robertson: And that is in accordance with the milestones for the overall program. I do not recall the

figure because, as I say, it is the South Australians who receive it. You know that at the start there is $120 million,

which was the Commonwealth support through this portfolio for the whole of the program. I understand that in

the second round there was over $200 million worth of applications for probably $70 million to $80 million worth

of funding.

CHAIR: Are you the same person I need to talk to about the Lake Albert scoping study?

Senator XENOPHON: Chair—I have asked a question.

CHAIR: Sorry, I did not realise you were back, Senator Xenophon.

Senator XENOPHON: Mr Robertson, further to Senator Ruston's line of questioning, concerns have been

raised by me of some local growers and business owners I have met with in the Riverland recently. I should point

out that Senator Ruston is always meeting with local growers because she has the benefit of living there. The

complaint that has been made to me from several quarters is about the limited time frame for applications and the

complexity of making applications. For instance, I have had constituents who are articulate, who are highly

literate, who have told me they have spent some 10 days completing the application. Other locals have told me

they believe the only way to be granted funding is to hire a professional consultant to complete the application,

which is a costly exercise. Some of them actually charge a commission—a success fee—so it is $2,000 or $3,000

up-front and, in some cases, a success fee. Are you aware of those concerns about the complexity and costs

involved in making an application and the time it consumes? What role does the Commonwealth have in trying to



simplify that process or does it have an oversight role with respect to the state government's administration of the

scheme?

Mr Robertson: As I noted earlier, it is the state government that is responsible for delivery of the program. In

the early stages of the process, when the initial guidelines were being developed, we did have some discussions

with the South Australian officials to share some of the experience we had from different programs. I understand

that with the second round they have simplified some of the arrangements just in terms of trying to make it easier.

We had made some suggestions about the process, many of which were adopted by South Australia but,

ultimately, it is their decision as to how they run the processes.

Senator XENOPHON: You say that ultimately it is the state government's decision, but it is ultimately

Commonwealth funding, isn't it?

Mr Robertson: The Commonwealth is funding outcomes and, in some cases, outputs—that is what is funded.

This is a common thread through a lot of the reforms that started under COAG, where the Commonwealth was

paying for particular outcomes but the process was the responsibility of the states.

Senator XENOPHON: So if I were to have, say, a meeting with you and through the minister's office on

these particular issues giving you specific instances of where locals have said that they are not happy about the

processes, are you saying that the Commonwealth would be completely hands-off? Perhaps I could put this to the

minister. If you were convinced that there was an unnecessary level of bureaucracy involved or unnecessarily

onerous applications that did not seem to be fair overall, would the Commonwealth have a role to say: 'It is our

money. Can this be done in a better way?'

Senator Birmingham: I recall in a life not too far in the past that there were some concerns about SARMS

expressed to me—

Senator XENOPHON: Is this your life in opposition?

Senator Birmingham: No, this was my life up until 23 December last year.

Senator XENOPHON: Okay. It is a milestone date for you, isn't it?

Senator Birmingham: Its proximity to Christmas makes it a relatively easy date to remember. There were

some concerns expressed to me about elements of SARMS. I do not know that it was the bureaucracy in the

application process, but there were some concerns about the way the South Australian government was handling

it. I think I wrote to Minister Bignell about those concerns, if my recollection is correct.

So I think it is absolutely safe to say that, under any umbrella Commonwealth program that a state government

administers, if there are concerns expressed by the users of that program at the ground level that it is too complex,

too burdensome, has too much regulation or red tape or whatever, then I would expect that Mr Baldwin, Mr Hunt

or any other minister would want to take that up with the state. And if you or Senator Ruston have got some

examples then I am happy to say 'feed them through' and we will try to take them up with Mr Bignell in SA.

Senator XENOPHON: Minister, would you be concerned that it appears that some growers who do not feel

confident enough in filling out this application are actually seeking professional consultants? Some people almost

get a success-fee in the thousands of dollars. Should a scheme be that complex, where some growers just cannot

cope with the paperwork, even articulate growers?

Senator Birmingham: Well, it should not be that complex that it prohibits people from completing it

themselves—

Senator XENOPHON: Well, it does.

Senator Birmingham: and I would be concerned it that were the case. That is not to say, Senator Xenophon,

that, in terms of the prioritisation of what people spend their time doing, they do not pay somebody to undertake

such applications. That is a common case. I am sure growers are also smart enough to fill out their BAS

statements themselves, if they put the time into it, but they probably quite often get an accountant or a tax agent to

do it.

Senator XENOPHON: I think it goes beyond that. Finally in respect to this, do you consider it appropriate

that the grants can be assessed by a board of locals? I am not saying that is a bad thing in itself. Some applicants

have said to me that they feel uncomfortable that people in their community could be looking at their books in

terms of their financial circumstances.

CHAIR: The assessment process—I am not sure about a board of locals.

Mr Robertson: The assessment process is largely run by the South Australian Department of Primary

Industries and Regions, as I understand it. I think they have had an advisory committee, including some people



assisting with some of the technical elements. Given the size of the committee and the range of people, perhaps

there might have been some circumstances where people with particular professional or industry or technical

backgrounds may have been involved in those processes, but normally there would be safeguards around

confidentiality and things there. I am not aware of the particular concerns; they have not been relayed to me—

Senator XENOPHON: I will write to the department to perhaps get a more detailed briefing and take it from

there and discuss it.

CHAIR: Just as a matter of mathematics, you said it was $39 million and there was 14 GL or thereabouts

return for that $39 million, which works out at about $2,785 a megalitre. If you work on that basis for the

remainder of the funds, given that you said we are getting 36 GL back, that means that the amount that you will

be paying for the remaining water is nearly $3,700 per megalitre. Is there any incentive in the system, or from

your requirements—and obviously the receipt of water in return for the funds allocated for the South Australian

government, in its processes—to try and get the best value that they can for the money that they are spending?

Mr Robertson: The process is driven that way, and you raised the issue about the scale of applications

compared to the level of available funding, so there is a competitive element to the grants. Part of the assessment

process that I just referred to with Senator Xenophon really relates to making sure that they are getting the best

possible programs for the funding that is available, and the most meritorious projects are being funded. So, in the

normal scheme of things, that would mean that, yes, the South Australian government is then getting better value

for the taxpayers and for the funding that is being provided.

CHAIR: We have already seen a spike in the price of water in the domestic market in South Australia.

Obviously people have seen the opportunity to trade through South Australian Water. So the least amount of

impact that can be created by this, obviously, the better.

I turn to the Lake Albert scoping study. Mr Papps, how much did the federal government put towards the

scoping study for Lake Albert?

Mr Papps: The Australian government contributed up to $668,606 to the scoping study.

CHAIR: Did the South Australian government contribute anything apart from, probably, some labour?

Mr Papps: I believe so, but I do not have the figures on me.

CHAIR: Key findings, as I understand them, were a number of options that address the improvement in the

water quality in Lake Albert. Am I correct in suggesting that the study indicated that lake cycling was the

preferred option?

Mr Papps: You are right. The study looked at four options and tested them against criteria, those criteria

being effectiveness, project feasibility, community support and acceptable delivery period. It was the assessment

of the scoping study that two of the options considered met all four criteria. One of those was lake level cycling.

The two options that did not meet it were removing the Narrung bend and returning natural flows to the southern

end the Coorong.

CHAIR: As you would probably be aware, there has been quite amount of support and agitation towards

accelerating the improvement of the water quality in Lake Albert by means that are likely to generate a speedier

response than lake cycling. In terms of us, as the federal government, being satisfied that we got good value for

our money in this particular study, do you think that the scoping study really did analyse the options and consider

all those options, and do you think that the fact that this particular scoping study has to a large extent disregarded

the interconnector is a fair and reasonable process?

Mr Papps: I think our commentary around the scoping study, as a Commonwealth agency, has been limited to

ensuring that the terms of the contractual arrangement that led to the commissioning of the scoping study, the

delivery of it and whether it did what it said it would do were adequately met. We really have confined our

commentary to that sort of review of it, rather than the matters of substance. It is up to the South Australian

government to decide which, if any, of those four options it intends to proceed with, and then, essentially, to

prepare a business case for the Commonwealth government's further consideration. At that point we would form a

view on the substance of the option being considered. There would, of course, in a number of those options, also

be a necessity for an approvals process, because there would be a potential to impact on the environment. There

would be a separate process to be gone through as well. It is likely that there would be a separate process under

Commonwealth legislation and state legislation.

At this stage, as you know, the South Australian minister for water has stated that the South Australian

government's preferred position is to proceed with the lake level cycling option, but we have not received any

formal advice from the South Australian government to that end yet.



CHAIR: Would the tangible outcomes that are likely to be delivered from the various options be something

that we, as a federal government, would be concerned about? The reason I say that is that it strikes me that there

do not seem to be any benchmarks or targets that we have put in place in terms of what is actually the measure of

quality in Lake Albert that we are seeking to achieve, and also the corresponding issue that we have with the

Coorong, obviously being a Ramsar site. What are the tangible measures or outcome that we are seeking in our

watering plan to be able to achieve the environmental outcomes that we are seeking, and how do we integrate

those outcomes into what appears to be somewhat isolated as 'We do not want to build the interconnector; we just

want to use lake cycling' in isolation?

Mr Papps: It is a very comprehensive question and I can give you a broad response—and to the extent that I

am not able to satisfy your need for detail I will take the remainder of the question on notice. You are quite right.

What would you assess this against? What are the outcomes you are trying to see? You absolutely need that to

make any judgement about a specific proposal.

In the case of the Coorong, Lower Lakes and Murray Mouth there are some targets. There are, for example,

salinity targets in lakes Alexandrina and Albert. I know you are going to ask me those targets and I do not have

them off the top of my head, but they are aimed, broadly speaking, at getting these salinity levels back to both

historical levels, which are much lower than they are at the moment, and to levels that make the water suitable for

extraction and utilisation—for example, in watering domestic stock.

There are specific targets relating to the Coorong, Lower Lakes and Murray Mouth that relate to the ecology of

those systems. Those targets are found, in part, in the basin-wide environmental watering strategy, which has been

developed by the Murray-Darling Basin Authority and recently released. Again, I do not have them off the top of

my head but I can certainly provide you with the specific detail within that strategy. Because much of the site is a

rich, listed Ramsar site it has what is known as an ecological character description. This is something that is

common to all of Australia's Ramsar sites. At the time of the listing there is a documentation of the key ecological

characteristics of that site. It is essentially an attempt to document, in a very scientific way, the values of the site

that have led to its listing as a wetland of international significance.

The Ramsar Convention requires the signatory countries—in this case, jointly, Australia is the signatory and

South Australia is the managing authority—to manage those Ramsar sites in an attempt to ensure there are no

unacceptable changes to the ecological character. The ecological character descriptions of these areas are quite

complex. I do not have them in my head. They go to things like salinity, but they also go to ecological

characteristics. It is the assemblage of fauna and flora.

In the Coorong, for example, it goes to the presence of a species of aquatic plant called Rupia. You are

probably familiar with this, as a South Australian. It is one of the drivers of the food chain in the Coorong. There

is a very detailed list of ecological characteristics that guide the management. Whether you are assessing

something like lake cycling or an interconnector from the lake to the Coorong or, indeed, any of the other projects

that impact on the Coorong, Lower Lakes and Murray Mouth, you have to take account of all of those required

outcomes.

CHAIR: I suppose the question was really more targeted at what influence we have as a federal government

on the outcomes that are delivered, generally, in that area. One of the concerns that is constantly raised with me,

when I am down there—and I am sure other South Australian members and senators have the same thing—is this

belief that the South Australian government already had a predetermined idea of the outcome they wanted from

this particular study.

Rightly or wrongly, it is an accusation. I am not saying whether I agree with it. The South Australian

government made a major investment in pipeline infrastructure down there, and it does not serve their best

interests to have the water quality and [inaudible] such that the irrigators down there can start pumping out of it

again for stock, domestic and irrigation purposes. At the moment, they are getting $3.45 per kilolitre for the water

that these people are having to pay to pump out of it.

We have provided the lion's share of the money. I wonder whether the outcomes being delivered are genuine

outcomes trying to deliver the social, economic and environmental outcomes we are seeking from the Murray-

Darling Basin Plan and what you are seeking to achieve, by the water you hold, when you use it for environment

purposes.

Mr Papps: I see the point. That in effect is a slightly different question from the one about the outcomes that I

answered previously. There is a limited extent of influence that the Commonwealth has. The most direct influence

that we have, from my perspective, is in terms of the decisions I make about the use of Commonwealth

environmental water within the Coorong, Lower Lakes and Murray Mouth. And it is true to say that that is a



complicated and complex arrangement. It involves both myself as the Commonwealth Environmental Water

Holder; the South Australian Department of Environment, Water and Natural Resources, or DEWNR; and also

the Murray-Darling Basin Authority, which has a formal role in the management of the lakes and the Murray

Mouth. I think probably I would say that the joint management of that, particularly under the new arrangements,

where there are significant amounts now of Commonwealth environmental water available to deliver on the

outcomes I spoke about previously, means that we are attempting to move the management arrangements to a

more sophisticated level. That is, we are talking to our colleagues both in the MDBA and in the South Australian

department about the development of an agreed and joint long-term management plan for that area where the sorts

of things you are talking about can be aired in a very transparent way and hopefully get some broad agreement

about the management strategies and the management parameters.

I cannot really comment on the observations around the state government's motivations. I simply do not know,

and it is not wise for public officials to speculate. I do know—and I should have said, and you know this,

obviously—that there were two options that met those four criteria: the lake cycling and the interconnector. And

the public statements by the South Australian government in terms of favouring the lake cycling were I think at

least publicly based on cost and time. But I really am not in a position to provide you with any detailed response

as to the South Australian—

CHAIR: Yes—the cost and time versus the amount of water that was going to be required for the decrease in

the level of salinity and the water quality in the lakes. You have explained that, and we look forward to seeing the

outcome of this and hopefully get a good outcome for the people of Lake Albert, who have been having a pretty

tough time of it for a very long time.

Senator SINGH: I want to ask a bit about the review of the Water Act. Can you give us an idea of when the

full government response will be released?

Mr Slatyer: That is a matter for the government to determine. The report was tabled some weeks ago, and the

government said, in tabling the report, that it would issue a response I think in the next several months. The

response at that time did indicate agreement to two recommendations in the report, which were recommendations

that called for some further reviews to be done, and those reviews are now underway.

Senator Birmingham: The intention was always to take a period of time before responding to the review so

as to enable some feedback from a wide range of stakeholders—irrigators, environmental groups and everybody

else. Now of course that has come with some changes in responsibility. Mr Baldwin has been travelling and I

suspect continues to travel widely throughout the basin, and I am sure as part of his discussions he is getting

feedback on the recommendations from the review of the Water Act. My personal view is that the panel did a

very good job. It presented a good document with some thoughtful suggestions. But Mr Baldwin and Minister

Hunt will of course put recommendations through government. I would not anticipate that it is a very long

process, but it probably still has a couple of months or so to go.

Senator SINGH: What has been the reaction from stakeholders in response to the government's acceptance of

those two recommendations, 11 and 18?

Senator Birmingham: I must say I have not really heard much reaction to those two at all. I see Mr Slatyer

has the report sitting there, which would remind me of what those two recommendations are. One is the dereg

recommendation for trying to get a significant reduction in the reporting requirements and so on. Of course that is

broadly welcomed, and people want to see action on that. And that was just a case of it being for the Water Act

review team that was starting to get down to the tin tacks of how you streamline reporting requirements for them

to start to get into that level of detail, which is why they structured a recommendation in that way.

The other one is in relation to the ACCC reviewing the water charge rules. Again, I have not heard any

complaint about that work being undertaken. I am not aware, although Mr Slatyer may be, of whether that has

commenced or not. Obviously there has been an exchange of letters to some extent, and beyond that, the extent to

which over the break the ACCC has got it going I do not know.

Mr Slatyer: That work is commencing now. I should clarify that the department has not gone out and

solicited public feedback on the report, so we have not gone out and gathered up comments, as your question

might have presumed. There have been a small number of public statements by representative bodies, which are

on the record.

Senator SINGH: Will this review lead to any significant changes to water programs across the board?

Mr Slatyer: The recommendations are not aimed directly at the programs administered by the department.

The recommendations are more about the practical operation of the Water Act and aiming at improving its

operation and making it more efficient to implement. There was one recommendation concerning the operations



for the Environmental Water Holder which might affect some of the activities of the holder. But as a general

comment the amendments to the act that are proposed in the report would not directly affect the department's

administration of the programs.

Senator SINGH: I want to move now to the current status of the National Water Commission. What is the

current status of the National Water Commission?—considering the government's failure to abolish the National

Water Commission on 1 January, which I think is what it was intending to do.

Senator Birmingham: I seem to recall that you were engaging in a lengthy filibuster late last year that got in

the way of any such plans.

Senator SINGH: I do not think you can blame the opposition for the government abolishing the National

Water Commission.

Senator Birmingham: There were an awful lot of speakers who had an awful lot to say about turtles and

dugongs all of a sudden, from memory.

Mr Slatyer: The commission continues to exist. It has an acting chief executive officer, who is Richard

McLoughlin, who is sitting here. If you have questions about the activities of the commission, then it would be

appropriate to direct them to Mr McLoughlin. The department is providing the one staff member of the

commission, who is Mr McLoughlin.

Senator SINGH: Okay, well I had better ask the one staff member of the Water Commission, Mr

McLoughlin!

Senator Birmingham: Mr McLoughlin does a great job answering the phones, as well!

Mr Slatyer: He is also providing Mr McLoughlin with suitable office accommodation as part of his duties.

Senator SINGH: What commission duties, other than answering the phone, as the minister has outlined that

you do, are you currently doing, Mr McLoughlin.

Mr McLoughlin: The National Water Commission Act provides that there must be a CEO. As the act is still

in force, I was appointed on 1 January this year to maintain an administrative function and undertake the

administrative obligations of the commission. In reality that has meant that there were some closure things that

remained to be done. The offices of the National Water Commission were closed on 31 December. And, as you

might expect, there are overdue invoices for various shut-down functions that continued to arrive through January

and February. In terms of maintaining the National Water Commission website, I am certainly responsible for

ensuring that that happens so that all the publications of the commission are still available publicly, as well as

disposal of assets and in particular the operations and maintaining communication with the national water

commissioners, who are all still appointed. So, it is a range of administrative functions and obligations, at very

low level, until the outcome of the bill has been determined by the parliament.

Senator SINGH: So, there are no other staff now in the National Water Commission; you are the only staff

member.

Mr McLoughlin: That is correct.

Senator SINGH: As of—

Mr McLoughlin: 1 January.

Senator SINGH: What happened with the other staff?

Senator Birmingham: Obviously officials can talk through the detail of that, but, as you are well aware, it

was the government's budget decision that the commission would cease at the end of December. Of course, plans

had to be put in place to give effect to that budget decision. Notwithstanding the delays in getting the legislation

through, those plans had been in train for a long period of time, and staff were not exactly able to be sitting there

wondering what their fate could be post 31 December. I will let Mr McLoughlin or Mr Slatyer talk through the

processes that were worked through with individual staff in terms of handling their transition.

Senator SINGH: Yes, that is what I asked them to do.

Senator Birmingham: In an orderly sense it was always going to be the case that—

Senator SINGH: Thank you, Minister, for the preamble. That was the question that I was asking.

Senator Birmingham: Well, you have actually asked the question before, at other estimates, but I am sure Mr

McLoughlin can update you on the remaining few who were there from when we last met.



Mr McLoughlin: As of 1 July 2014 there were 40 staff. Between 1 July and 31 December, 20 had transferred

to other APS agencies, 18 took voluntary redundancies and two retired from the APS. So, as of 31 December

there were no staff left at the commission.

Senator SINGH: Do you have a budget allocation?

Mr McLoughlin: There was an appropriation provided for 2014-15, yes. And it was for the six months, to 31

December, at the time, given that the budget provided only six months funding, on the basis that the budget

papers provided for the closure of the commission at the end of 2014. There is some unexpended appropriation

that remains available, and we are using that to meet minor costs as we go.

Senator SINGH: Like your position?

Mr McLoughlin: Well, I am not being paid for that particular role.

Senator Birmingham: Mr McLoughlin has a substantive normal role in the department—for which he is

remunerated, I am pleased to say! But anybody out there who would like to volunteer in the Australian Public

Service—

Senator SINGH: Put up your hand for this role!

Senator Birmingham: We can start a new scheme, I am sure!

Mr McLoughlin: But there are fees payable to the commissioners, and they are continuing.

Senator SINGH: And that is in the current, 2014-15, budget, even though that budget was only for six

months?

Mr McLoughlin: That is correct, yes. There are some unspent appropriations, so we are using that. About

$1.9 million of unspent appropriations was left at the end of December, and that is certainly sufficient to maintain

these administrative obligations as we go through.

Senator SINGH: I have some questions, and I will seek guidance from you, Chair, Minister and Dr de

Brouwer, relating to the water impacts in relation to coal seam gas mining. Do I ask them here?

Senator Birmingham: Yes. Did you miss Senator Heffernan's appearance before?

Senator SINGH: I did remove myself slightly, for the moment, just to give him a bit more space! Obviously

the controversy around coal seam gas is not abating. Can you outline for us in some detail the plans the

department has to resolve the scientific challenges and multiple opinions over coal seam gas mining in relation to

obviously the water impacts? I am also interested in the fugitive emissions, but water particularly for this section.

Ms Milnes: There are probably three areas that were focused on, and they are all around ensuring that the best

available science is brought to bear on the issues. Our brief in the Office of Water Science does focus on the water

related impacts, but the first measure really goes to the role of the Independent Expert Scientific Committee and

the support the department provides for that to provide advice to the Australian government regulator—the

Commonwealth environment minister—but also state governments on particular development proposals. One of

those is the Watermark or Shenhua project Senator Heffernan referred to before.

The second measure or action that is in place is a program of bioregional assessments. These are regional-scale

assessments, which go to the issues of providing baseline information but also cumulative impact assessments.

These are being done for around 13 regions across Australia—really, the east coast of Australia.

Senator SINGH: Is this the Independent Expert Scientific Committee?

Ms Milnes: No, that work is being managed by the Office of Water Science. The Independent Expert

Scientific Committee has a role to provide advice on the bioregional assessments, but the work itself is being

largely carried out by the CSIRO, the Bureau of Meteorology and Geoscience Australia and there are others

involved. It does also involve the state governments and draws on work being done by the natural resource

management agencies in the relevant areas. It is being done in areas where there is quite a bit of coal development

or CSG development pressure. That is our second action: the bioregional assessments. The third area of focus for

us is around research on key issues or key topics. That will go to issues like aquifer connectivity or bore integrity.

That gives you a general picture.

Senator SINGH: In essence, how do you intend to settle the science? There is still a lot of scientific research

and the like going on.

Ms Milnes: Those three actions all feed into each other. The work of the independent scientific committee

makes sure that the science is really brought to the attention of the regulators who are the decision makers. But in

giving that advice, it identifies areas for research or priority. That might dictate the kinds of areas we focus on to



do our research. The work being done in the bioregional assessments feeds into the advice being provided by the

committee as well, so they are all reinforcing one another.

Senator SINGH: You have touched on some of the work of the Independent Expert Scientific Committee. Is

there any other work that committee is doing, in relation to coal seam gas?

Ms Milnes: The committee's functions include providing advice on those development proposals, but they

also involve identifying priorities for research. That would inform the research being conducted by the Office of

Water Science. The areas they identified as priorities go to hydrology, ecology, chemicals and cumulative

impacts, and the committee would provide advice not just on priorities but also on the research projects as they

are done. There are about 17 research projects that have now been published and there have also been some fact

sheets published by the committee. The committee also has a role in providing advice on the bioregional

assessments.

One of the early products for the bioregional assessments was a methodology that outlined how they would be

done. It is quite a challenging task. The methodology itself is quite leading edge. The committee has a role in that.

As I said, the work is being undertaken by the Commonwealth scientific agencies, largely. The products from the

bioregional assessments are published as we go. Each bioregional assessment has about 13 to 15 products and, as

they are completed, that information is published so that it is available for regulators and the Independent Expert

Scientific Committee to draw on.

Senator SINGH: There is no fundamental scientific determination about coal seam gas. I asked you before

about how you intend to settle the science. You have proponents saying that there is no impact and you have

advocates saying there are major impacts. How do we get a firm answer on reality here?

Senator Birmingham: I think the idea that we will somehow bring those disputing parties together and settle

the science is fanciful. Ultimately, what the IESC seeks to do is bring together a panel of experts, and those

experts are attempting to provide informed advice to both the Commonwealth minister through EPBC

assessments and as a result of the IGA to state ministers for the assessment purposes they undertake. Ultimately,

all of these types of activities, whether assessing impact on groundwater supplies in these instances or

undertaking other assessments about impacts on biodiversity or impacts on reefs or whatever else, are risk

assessments. They are all risk assessments. They are all a case of making assessments based on risk of the best

knowledge and information available at the time. That is exactly what the IESC is seeking to do by providing

probably the best level of knowledge and information that governments have ever sought to source and secure

around particular activities themselves in this space.

Senator SINGH: Thank you, Minister. I kind of understand what you were trying to say, but my question

was: why can't we have surety about coal-seam gas based on science? If we can have 97 per cent of scientists

decide clearly on climate change, why can't we expect that same kind of surety on coal-seam gas?

Senator Birmingham: The officials can feel free to contribute what they want. That is a very difficult

question for people to answer. I am sure others would pose that question on a whole range of topics—why can't

we have certainty?

Senator SINGH: No, it is a very important question.

Senator Birmingham: What I said before is—and, absolutely, the officials can add—governments, state and

federal, as a result of the reforms around the IESC are seeking to make decisions based on the best available

science and knowledge that can be presented to us. That is all any government can really do.

Dr Wright: I want to add this to what has been said: the science can inform the analysis of a particular

bioregion and a particular proposal, but, in each case, the risk will be different because there is different geology,

different hydrology, different ecology and different matters of national environmental significance that may be at

risk. The science can guide, but each situation will have to be assessed separately, with different modelling

undertaken for water movement. The science can provide a guide, but the assessment will always be on a project-

by-project basis. Hence, the need for the assessment of cumulative impacts. The first project may be okay, but, if

you add others to it, there needs to be a fresh assessment of cumulative impacts.

Senator Birmingham: This same statement can be made in relation to other fields: there will be some who

will never accept the science in this space. Whatever it points to, there will be some who will never—

Senator SINGH: You have to do the science. The science needs to be done.

Senator Birmingham: There will be some who never accept it.

Senator SINGH: I could not imagine there being a project without risk—whatever that kind of risk might

look like and be. I acknowledge that it could always be different based on the environment that the project may be



undertaken in. But the science has to be done to determine that, and that is what we are seeking surety on,

basically.

Senator Birmingham: Millions of dollars are being invested in—

Dr Wright: That is what is being undertaken through the bioregional assessments and the research projects. It

is a very substantive work program, as my colleague has said. Each piece of work is being released as it is

completed. But it is a new area of endeavour. We cannot rely totally on overseas scientific work because, again,

the geology and the nature of the operations can be quite different, so it has to be undertaken in our Australian

situation.

Ms Milnes: What you will see in the advice provided by the Independent Expert Scientific Committee, as

well, is it will point to areas where it would be good to examine more or provide more information, so that the

decision makers are better able to assess the impacts at a site-specific level.

Senator SINGH: So watch this space.

Mr Parker: I was also going to add that, as a result of that inquiry, the regulator—which you will come to in

the next session—can propose conditions for the approval which can go to mitigate some of the risks. For

example, and they can give you the details of this, in one recent approvals process it involved the company setting

aside funds to cap and run bore drains for the Great Artesian Basin works. It effectively provide an offset to some

of the water impacts.

Senator RHIANNON: Did somebody from the National Water Commission join a delegation of water

managers from Australia to India in January of this year?

Mr McLoughlin: Yes. That was me.

Senator RHIANNON: That is wonderful. I understand that the official DFAT documents gave considerable

coverage of the National Water Commission and its role in the water management success story in Australia. Is

that how you would describe it?

Mr McLoughlin: There were three events in January in India. I attended all three. The broad focus was on

Australian expertise in water management, particularly on basin-scale water management. Our real expertise

there—literally on a world scale, in terms of significance—is the Murray-Darling Basin Plan. There were three

events in Australian Business Week in India. It had a very strong focus on water skills and management and the

commercial capacity of Australian companies to contribute to Indian development in the water space.

Senator SINGH: It was National Water Week actually, wasn't it?

Mr McLoughlin: Yes. There was a trade display from Australian companies and universities, which I also

attended. The particular reason that I was there was actually standing in for Mr Parker as the joint chair of the

joint working group under the MOU on water corporation in India. That was a very successful meeting over one

day, in which—along with colleagues from MDBA, CSIRO and others—we proposed a substantial programme of

work, an action plan as it was called, to assist Indian agencies with how they might approach the cleaning up of

the Ganga basin in the Ganges River.

Senator RHIANNON: Were you representing Mr Parker or were you representing the National Water

Commission? I understood that the DFAT documents really did promote the National Water Commission. They

were really selling it as a positive body. Which was it?

Mr McLoughlin: I was essentially wearing the two hats that I wear as acting CEO of the National Water

Commission and, more particularly, as assistant secretary in the water provision of the department. My view is

that the DFAT documents did not particularly promote the National Water Commission; it was promoting

Australian expertise in water management. As effectively the co-chair of the joint working group meeting for the

period that I was there—in particular, a lot of the water activities discussed were associated with the MOU that

was renewed with India in October last year—the fact that I wore that hat of the National Water Commission's

acting CEO was just an additional string to the bow.

Senator RHIANNON: It just seems surprising considering that everybody knew that, as of May last year, the

government's plan for the National Water Commission was for it to go. But then here is something on the world

stage, quite literally, showing that—

Senator Birmingham: Maybe they did not get the memo on that.

Senator RHIANNON: Or you failed in the Senate. Is that the new interpretation?

Senator SINGH: It sounds like false advertising.



Senator RHIANNON: Could you see why it surprised people? We knew since May that it was supposed to

be all over. That was the government's plan and here we have you down as representing the National Water

Commission. However that is pitched, low level or high level, you are there in January 2015 when it is supposed

to be all over on 31 December.

Senator Birmingham: I think Mr McLoughlin was scheduled to be there in his substantive capacity. It just

happened that in the time in between that decision being made and his attendance he acquired an additional part-

time role.

Mr McLoughlin: That is correct. The travel approvals take some time. As Senator Birmingham advised, the

travel approval was provided late in 2014, while my NWC role took place from 1 January. A lot of what we

talked about in India was about the National Water Initiative and the policy principles that arise. That is an area

within the department that I have a role in, as well as my role in the National Water Commission.

Senator RHIANNON: That is excellent. That was my next question. What is the government's position on the

National Water Initiative? Does the government plan to revise and expand the NWI for these future challenges:

population growth, climate change, urban to rural trading of water and stormwater management? I am just

interested in where you are going with this.

Mr McLoughlin: That question would have to go to the government.

Senator Birmingham: The government continues to support and believe that the NWI provides sound

principles in terms of the good, sustainable and appropriate economic utilisation of water in Australia. We stand

by it. There are no proposals at present to rewrite or expand the NWI. It certainly is the government's intention

that the NWI continues to stand as the benchmark for water management in Australia, which is why the

legislation to abolish the National Water Commission seeks to embed a continued audit of the states against

compliance with NWI as a task that the Productivity Commission would be tasked undertaken in future.

Senator RHIANNON: You are confident that the Productivity Commission has the required culture, expertise

and funding to do all this?

Senator Birmingham: I am 110 per cent sure.

Senator RHIANNON: Excellent. It is good to get it on the record. With the Productivity Commission, how

will it focused its efforts on including the triple bottom line in the reviews of the National Water Initiative, given

its expertise—as we know and we have debated many times—is not with regard to the environment?

Senator Birmingham: As we have discussed here before in relation to this very matter, the PC has

traditionally had a commissioner who comes from an environmental background. The PC has done reviews on

water matters before. Even during the life of the National Water Commission, the PC has looked at matters such

as urban water management. The PC has also looked at other environmental matters. We were discussing earlier

today the Productivity Commission's work in relation to carbon abatement activities. I think one of the officials

around the table at the time described it as being one of the more comprehensive analyses of what is happening

around the world in terms of different carbon abatement activities. I think to suggest that the Productivity

Commission does not have the skills to undertake reviews that require consideration of an environmental element

is quite incorrect.

In addition to that, it is important to note that there are requirements placed within the proposed amendments to

the Water Act that will ensure that the PC has to consult appropriately and have due regard to these matters. As I

said before, I am quite confident that they can balance the sustainability arguments versus the optimisation of the

economic utility of water arguments.

Senator RHIANNON: You have just mentioned community consultation there with regard to the PC. Can

you outline the form that the community consultation will take and provide some details?

Senator Birmingham: If we could get the bill into the committee stage in the Senate, I could happily outline

it there.

Senator RHIANNON: Maybe you could help your case now.

Senator Birmingham: What I will say is that my recollection of the bill, the amendments that are before it

and so on—I do not have it in front of me at present—is that we are highly likely to end up with legislation that is

more prescriptive about how consultation is undertaken in relation to the review of the National Water Initiative

than necessarily the current undertakings of the National Water Commission are.

Senator RHIANNON: But isn’t it the case that it only has to occur every three years?

Senator Birmingham: That is why it is called a triannual review, as it currently is.



Senator RHIANNON: Yes, precisely. But you are trying to make out that there is wonderful community

consultation. When you get down to the detail, it is once every three years.

Senator Birmingham: So why do we need a stand-alone statutory authority to undertake a once in every three

years review?

Senator RHIANNON: No, you are the one who is answering the questions. I am asking you about

community consultation. It is your opportunity to set it out. The best that you have got is it is once in every three

years.

Senator Birmingham: There should be community consultation on the once in every three years review of

compliance against the National Water Initiative. That is absolutely the case. Whether it is done by the National

Water Commission or the Productivity Commission, it is still only a once in every three years review. That is why

it is called a triannual review. It happens once every three years. Whoever is doing it should go out and consult.

But we do not need to have a stand-alone statutory body with a standing board there to undertake a once in every

three years exercise.

Senator RHIANNON: This question is with regard to a project to reduce evaporation. I understand that there

is such a project at the Hume Dam and it is being considered as a supply measure. I just trying to understand why

that is the case.

Mr Slatyer: There is a proposal under development concerning the operation of Hume Dam. It would qualify

as a supply measure if the project was able to deliver equivalent environmental outcomes but with the use of less

water than would otherwise be the case. Whether or not that project can in fact do that and the extent of the

potential offset benefit is currently being evaluated.

Senator RHIANNON: What I am trying to understand is why you are defining it as a supply measure rather

than as a water-recovery project. Is it in terms of the quantity of water? What is the change over?

Mr Slatyer: A conventional water-recovery project, if it is an infrastructure project, would create either an

evaporation saving or an efficiency saving on or off farm, which allows you to free up some water that can then

be passed to the environmental water holder and dedicated for the environment. That is a conventional water-

recovery project. A supply measure project is one that, through the design of structures and through various clever

engineering and so forth, allows you to direct water towards your environmental sites in a smarter way and

therefore get the same environmental outcome but with the use of less water. Typically, for example, to get water

into a river runner or a flood plain, you could either use masses of water to achieve that result with some kind of

over-the-bank flow into the river runner or you could achieve the same environmental result in that river runner

by installing some kind of regulating structure that would allow you channel water into the environment. That is

an example of the type of supply measure that is contemplated by the Basin Plan.

The Hume Dam one would be in the nature of a rule change, which allows the water to be controlled in a

different way. Again, whether or not it achieves an equivalent environmental result with less water and the extent

of that benefit is still to be tested. It is the responsibility of the MDBA to evaluate the effect of these projects at

the moment. That project is being developed for submission in the form of the business case to the MDBA.

CHAIR: We are just going to have a break for ten minutes. We will then return with this portfolio.


CHAIR: I welcome the officers from water reform.

Senator WATERS: I will start with the National Assessment of Chemicals Associated with Coal Seam Gas

Extraction in Australia, which I will just refer to as the national assessment from here on in. When are we going

to see the results of that? I thought that they were due to be finished last year. Can you update me on that?

Dr Wright: The advice provided by NICNAS was that that project was expected to be completed by the end

of 2014. It has proven to be quite a complex project with a number of areas where methodologies needed to be

developed before we could take the next step, so our expectation is that it is not that far away. It will be delivered

in 2015. It may well be delivered by the middle of the year, but there has been some delay.

Senator WATERS: May well be by the middle of the year?

Dr Wright: Yes. I could well be wrong; it needs to go through a number of processes, including peer review,

and, of course, it needs to be agreed by government for release.

Senator WATERS: Given the increasing complexity, was there any additional funding allocated to complete

that national assessment?

Dr Wright: No.



Senator WATERS: Can you tell me why the impact of coal seam gas on underground water resources was

not included in the original scope of that project?

Dr Wright: That is because the initial work that needed to be done was in the areas where the major risks

were seen, so the water on the surface and close to the surface where you could have major spills of chemicals

and major chemical release. Also, a lot of the conceptual modelling that needed to be undertaken had to be done

first for the surface and top layer of groundwater before you could do deeper water modelling. It is going to be

done after this project but it is not part of the original project.

Senator WATERS: So it will be done in a future project, but the assessment of chemicals associated with

coal seam gas, many of which are blasted down through hydraulic fracking, is not going to be included?

Dr Wright: It is a key component of the bioregional assessments, so they will need to undertake analysis of

what happens to deeper water as part of that. It will be undertaken in the bioregional assessments, not as part of

the chemicals project that is being headed up by NICNAS.

Senator WATERS: When you do the bioregional assessments—I understand they are underway and I have

some more questions about them—will the impacts of chemicals then be considered as part of that study?

Dr Wright: Could you repeat the questions please?

Senator WATERS: You are saying that you are not looking at the impact of chemicals on aquifers because

you are looking at aquifers in a different study—the bioregional planning. When you look at those bioregional

plans, and when you prepare them, will you then consider the impact of chemicals from CSG on underground

water?

Ms Milnes: What we are looking at at the moment is the methodology of how we might take the work from

the chemicals assessment project and extend it into the deep ground water in the context of the bioregional

assessments. So that is an issue—

Senator WATERS: Sorry, so you are not looking at something in the first study, but you are going to use that

failure to look at something to determine whether and how to look at it in the second study.

Ms Milnes: As my colleague indicated, our focus in the chemical assessment is first on the areas where the

literature and other evidence pointed to the biggest risks, so that goes to the surface, where you have the prospect

of large spills in high-volume undiluted chemicals, and also exposure to workers. That is the focus of that work,

but we are looking at how what we have learned from that work might inform further work in the deep

groundwater in the context of the bioregional assessments.

Senator WATERS: When you say that might inform future work, will you look at the impact of fracking

chemicals on aquifers in the bioregional assessments?

Ms Milnes: We are considering how we might do that now.

Senator WATERS: So you will, but you are just working out how.

Ms Milnes: Yes, working out how.

Senator HEFFERNAN: I agree with you, but the policy seems to me to be a 'make good after the event'

policy. It is too late after the contamination has occurred.

Ms Milnes: As I said, the focus of the work is where the risks—

Senator HEFFERNAN: Which is the point I am making.

Ms Milnes: are deemed to be the largest.

Senator HEFFERNAN: But the point I am making is that it is too late when it happens.

Senator Birmingham: Senator, your question is obviously a policy question, and so—

Senator HEFFERNAN: No, it is more serious than that.

CHAIR: Let Senator Birmingham finish please.

Senator HEFFERNAN: I better go away, because this is really bad stuff.

Senator WATERS: We will get there. Can I come back to the usage of chemicals as part of my first tranche

of questions? Are either the existing national assessment or future bioregional plans going to consider the impact

of mobilising underground contaminants—the BTEX and carcinogens in the geology—from fracking?

Ms Milnes: That is an issue that is out of scope for the chemicals assessment, but some of the work being

done in the chemicals assessment may inform future work or the need for future work.



Senator WATERS: When you say 'may inform', is that a 'yes' that you will do that work in the future, or are

you not sure yet?

Ms Milnes: The assessment is not yet final, so it is difficult at this point to be conclusive about what comes

next.

Senator WATERS: Okay, so you are not planning on doing that future work right now—

Ms Milnes: Not right now.

Senator WATERS: But, as a result of the study, an issue which is out of scope of the study may well

somehow be decided to have future work done on it.

Ms Milnes: It may inform that, yes.

Senator HEFFERNAN: Did you know that contamination is potentially underway? Is that true?

Ms Milnes: Given the details of what they have currently—

Senator Birmingham: Senator Heffernan, Ms Milnes is attempting to answer questions—

Senator HEFFERNAN: It is a scientific bluff.

Senator Birmingham: Take argument with the policy all you want—

Senator HEFFERNAN: It is not policy; it is fact.

Senator Birmingham: Ms Milnes is responsible for bodies of research that are being conducted. You may not

like the fact that all approvals are not on ice until every bit of research under the sun is completed, but Ms Milnes

is simply trying to answer questions about her research.

Senator HEFFERNAN: I understand that, but I am aware that there is no legal responsibility in the system

for what could happen. There is no legal responsibility, and, if there is, you tell me right now. Once they seal

bloody well, the legal responsibility ends. Explain to me if it is any different. It is a stake through the heart, mate.

The answer is that there is no legal responsibility in this mining regime once the well is sealed. What we are

talking about here is researching after the damage is done.

Senator WATERS: I was intending on getting to those issues as well, so I might continue. Given that we

have had approvals rolled out over the last five years for enormous coal seam gas projects, and given that, of

course, now other unconventional gas projects are starting to roll as well, has your section, has IESC or has

anyone that you are associated with in the water division ever advised the minister about our lack of knowledge

about potential contamination?

Ms Milnes: The Independent Expert Scientific Committee's advice on development proposals would point out

some of these issues, and it has done on some occasions with respect to hydraulic fracking. That information

would be provided to regulators and taken into account in their decision making.

Senator WATERS: So IESC has at times said, 'Hey, we don't have enough info about fracking

contamination,' and yet you have a study about fracking chemicals that is now not considering their impact on

aquifers. In the past IESC identified that knowledge gap, and we are still not having that knowledge gap

addressed right now. How is the system helping us to get better information?

Ms Milnes: There are examples where the Independent Expert Scientific Committee has provided advice on

projects that have included hydraulic fracturing, and where they have pointed to the need for the proponent to do

further work on their risk assessment and pointed to management and monitoring outcomes, for example, that

regulators should consider.

Senator HEFFERNAN: There is no obligation on anyone in the process to take any notice of the Independent

Expert Scientific Committee. Do you agree that there is no obligation to take—

Ms Milnes: Perhaps if I pass over to my colleagues in EACD—

Senator Birmingham: No, I do not agree, but I will let Mr Knudson add to that.

Senator HEFFERNAN: You cannot force it.

Senator RUSTON: Senator Heffernan, can you let the witnesses answer the question please.

Senator HEFFERNAN: This is really annoying.

Senator RUSTON: Be that as it may, do them the courtesy of allowing them to answer.

Mr Knudson: Senator Heffernan, I am happy to provide additional information on this. You are talking about

the specific risks to water courses posed by coal seam gas projects. What we do—



Senator HEFFERNAN: I am talking about contamination through the geological fault lines through the

repressurisation of one aquifer against another.

Mr Knudson: Understood. In terms of the assessments that we have undertaken on individual coal seam gas

projects which already have their approvals in place, those approvals require the development of water monitoring

and management plans. We can walk through what each of those plans required at each stage—three stages, for

some of the projects—which dealt with an exhaustive process of water monitoring to make sure that we

understood what was happening with respect to the water resources. The approval process also required

ecotoxicology analysis to be done of the fracturing chemicals so that we knew what was being proposed to be

injected into the wells. That, combined with the monitoring system, is where we have the robust analysis to

ensure that, in terms of impacts on water, they are seen as being acceptable in terms of a level of risk.

Senator HEFFERNAN: With great respect, that is bureaucratic claptrap. If it all turns to custard, old mate‚

no-one is legally liable. Can you explain to me anything different?

Mr Knudson: If there has been a material breach of a condition of an approval, then the proponent is liable

under the EPBC Act.

Senator WATERS: So given that there are these huge knowledge gaps, and that you have said that you have

issued the approval and then as a condition of the approval you require the proponent to answer the question—

even though they already have their approval—how is that consistent with the precautionary principle?

Mr Knudson: The way that the approval conditions work—and we would be happy to walk through specific

cases or provide those on notice—would be that in advance of certain actions being undertaken by the proponent

there are various stages of requirements that have to be met before those actions can be taken. The way that we

specifically designed the stage 1 and 2 approvals on the water monitoring and management plans was that, before

a consequential impact could happen, there had to be certain actions taken to ensure that the level of risk would be

appropriate.

Mr Gaddes: You may recall, Senator Heffernan, that we have discussed this with the committee before, and I

have tabled the requirements of the stage 1 and stage 2 water quality management plans.

Senator HEFFERNAN: As you all remember, the science was not in, the cumulative impact was not

considered and Anna Bligh owned up to that. She did not even read her own—

CHAIR: Senator Heffernan, I think you could perhaps show a little more respect for the senator and the

witnesses, please.

Mr Gaddes: The stage 1 water plans primarily deal with early warning indicators. They deal with the inability

to draw down certain aquifers until we have an idea from the companies about the amount that they can draw

down before it can be a problem for the EPBC listed springs. You may recall that most of the projects in

Queensland are linked and the requirements of the conditions are linked to the EPBC listed springs. There are

seven or so of those.

The second stage of the plans deal with a lot of the groundwater impacts. It deals with the requirements and the

need for baseline data and groundwater draw-down threshold values. One of the points that you made was about

the exceedence response plan and what would happen if the companies detected an exceedence. The plans have to

deal with all the things they would do if they had an early warning indicator or a groundwater indicator that

indicated that they had gone past the threshold values for ecotox to mitigate and repair any damage caused by

that.

Senator HEFFERNAN: Please explain to me where the science points out the geological—

Senator WATERS: You are in trouble, Bill.

Senator HEFFERNAN: No, I am not.

Senator WATERS: With me.

Senator HEFFERNAN: Yes, with you—not with the argument. On the geological fault lines and that

contamination, not the well contamination or the fracking materials—some of the fracking materials are a lot

safer these days—please explain to me how for the Walloon coal measure and the Springbok you make good that?

Mr Gaddes: So you are talking about—

Senator HEFFERNAN: Who makes good?

Mr Gaddes: Are you talking about aquifer interconnectivity? Is that the issue you are talking about?

Senator HEFFERNAN: Yes, because the science is not in on that.

CHAIR: Senator Heffernan, can you let the witness answer the question, please.



Senator HEFFERNAN: He knows where I am going.

CHAIR: Indeed, but do him the courtesy.

Mr Gaddes: Another one of the conditions requires the companies to go through and do a schedule of aquifer

connectivity studies, monitoring the relevant aquifers. Some of the work the companies are doing in combination

with the groundwater impact area of the Queensland government are pump tests, attempting to figure out where

the interconnectivity issues occur.

Senator HEFFERNAN: They have issued three licences, 40,000 wells and 750,000 tonnes, which they have

now reduced to 350,000 tonnes of salt a year, and we have not got the science in.

Senator WATERS: It is your government, mate. Get them to stop approving everything. I likewise had a

follow-up question for you, Mr Gaddes. Given that the stage 1 conditions require monitoring and, if companies

notice draw-down, they then have to fix it, my issue is: how do you know you can fix it once you have started to

make connections between aquifers and coal seams? We have no confidence based on the science that still needs

to get finished that you can actually fix that, given the pressure involved. Secondly, that monitoring is being done

by the proponents themselves. How can the community have any confidence that that modelling and that

monitoring is accurate and independent?

Mr Gaddes: The monitoring data goes in to the Office of Groundwater Impact Assessment, OGIA, which is a

Queensland statutory authority. They collect the data from the companies and they run the models. So there is

independence there.

Senator WATERS: The data is collected by the proponents, though.

Mr Gaddes: Not all the data is collected by proponents. They use a range of different methods. They use

some of the wells that are already in place which are the Queensland government's. There are a range of different

methods that are used throughout the process, so there is some independence there.

Senator WATERS: Can you take on notice for me, given the time, what proportion of data collection

prescribed by those water monitoring and management plans is done by the proponents and what proportion is

done by people other than the proponents.

Mr Gaddes: Yes.

Senator WATERS: That would be instructive. I might just move on. I had some questions about IESC's

advice on particular projects. We will see if I am able to get through them. Let's start off with Santos. Can you

walk me through the key findings of the IESC advice on the proposed Santos coal seam gas expansion in

Queensland.

Ms Milnes: The key issues that the committee identified go to: reduce water supply to groundwater dependent

ecosystems; cumulative impacts of the Surat and Bowen Basin activities; hydrological and ecological

consequences of surface water discharge; and potential changes to the groundwater and surface water quality.

That advice, Senator, is available on the website in full.

Senator WATERS: Thank you. I have read it. I am just interested in the gravity of those conclusions. That

sounds like a pretty dangerous proposition to me.

Ms Milnes: I guess the key point is that they are key potential impacts. They do not necessarily talk about

conclusions. So they are key potential impacts and there is advice provided in response to each of the questions by

the regulator.

Senator WATERS: That still does not reassure me. The whole point of doing an impact assessment is to

identify potential impacts. When the identification of those impacts goes to reduced water supply; cumulative

impacts on two different basins; hydrological impacts on surface water; and changes to groundwater quality, how

on earth are we approving these projects? Perhaps that is a question for the minister.

Senator Birmingham: Senator Waters, I think you are, if not verballing the summary Ms Milnes gave, going

very close to it, in that—

Senator WATERS: No, I think you will find that it was an accurate summary.

Senator Birmingham: she has summarised the topics of the potential impacts that are discussed in a very

detailed scientific report.

Senator WATERS: It is not that detailed; it is only 12 pages long.

Senator Birmingham: You are of course welcome to take the contents of it and use it as you wish, Senator.

But I would just caution against taking a statement where essentially Ms Milnes has given what you might



describe as the subject listing of subjects covered in the report of what the impacts are that are discussed within it

and then saying that that means that they all automatically lead to some horrific consequences.

Senator WATERS: I think you will find that Ms Milnes probably agrees that was an accurate summary of

what the IESC advice said.

CHAIR: I have done the right thing by you; do the right thing by—

Senator WATERS: I might suggest that you have a read of it, because it is pretty scary stuff.

CHAIR: Senator Waters, could you let the minister finish, please. You are cutting across him.

Senator WATERS: No, he had finished.

CHAIR: Only after you cut across him.

Senator Birmingham: I have now.

Senator WATERS: I think the minister is suggesting that I am verballing the 12-page IESC advice. In fact, it

is as scary as it sounds, Minister.

Senator Birmingham: No. I was suggesting that you were verballing Ms Milnes. You are welcome to use the

report as you wish.

Senator WATERS: I suggest that I was not and I think Ms Milnes was confident in her summary of the

advice, which clearly she and I have both read. I suggest the decision makers might like to have a read of that as

well. Can I ask whether or not the identified gaps in the IESC report will be required to be fixed before the

minister makes a decision on whether to approve this expansion? Anyone?

Ms Milnes: Going back to your earlier point, the advice the committee provides goes to the regulators for

their consideration now. And it is for them to then determine how they pick up the points that are raised—

Senator WATERS: That is what I am asking. Are they intending to fill the gaps identified? So over to my

colleagues.

Mr Knudson: To try to answer both sets of questions, every time we have received IESC advice it has been

taken into account by the decision maker and that will be the case for this project as well.

Senator WATERS: Will you be requiring further studies to be done by the proponent to address the

knowledge gaps IESC identified?

Mr Knudson: As we do for every project, Senator, we will be assessing the risks associated with the project

and determining what information is required to ensure that an informed decision is made.

Senator WATERS: So you are not too sure yet whether you will ask them to do the studies IESC suggests

they do?

Mr Knudson: It will be determined through the process of our assessment.

Senator HEFFERNAN: You have reduced salt [indistinct] from 700,000 tonnes to 350,000 tonnes per

annum?

Mr Knudson: Senator, I am not in a position where I want to get into that level of specificity on this project.

Senator HEFFERNAN: But if you are going to get—

Mr Knudson: It is not at that stage.

CHAIR: Can I move quickly to the Galilee water project.

Senator HEFFERNAN: Answer the question. What do you do with 350,000 tonnes if it is reduced back to—

CHAIR: Senator Heffernan, you can have your turn in a second. Could we just let Senator Waters finish and

then we will come to you. Thank you.

Can I turn now to the Galilee water project, which is that huge project in the Burdekin, proposed to suck out

700 million litres of water from rivers in the Cape to feed Galilee Basin coalmines? Has that been referred to

IESC yet for their advice?

Ms Milnes: I am not sure, Senator. I am just struggling with the name of the project. There are a number of

projects that the—

CHAIR: It is called Galilee water project.

Ms Milnes: That is not listed here as one of the projects that the committee has considered. They sometimes

have a range of names, though.

Senator WATERS: Can I just check? Mr Knudson, has it not been referred to IESC yet?



Mr Knudson: It has been referred to the department, but it has not been referred yet for advice from the IESC.

Senator WATERS: It has not gone to IESC yet. It imagine that it will, though. Are you anticipating that it

will?

Mr Knudson: If it is deemed to have a significant impact on a water resource. But, actually, this is a dam, is it

not? So it is not within scope for the IESC. It has got to be a coal or a coal seam gas project.

Senator WATERS: That is true, even though it is feeding a coal mining project.

Mr Knudson: But it is not a coal or a coal seam gas project.

Senator WATERS: Presumably, it is because of reef impacts. Therefore, it still will not go to IESC, will it?

That is interesting. Moving to Shenhua, given that the IESC on that particular project was issued in, from

memory, May 2013, which was both prior to the water trigger taking effect and prior to some changes to the

project parameters, will the relevant decision makers be asking IESC to reconsider that project?

Mr Knudson: On that particular project there was a request for IESC advice prior to the water trigger being

introduced into parliament. That request was withdrawn from the committee. The minister at the time wrote and

requested that it be withdrawn. We then reissued a request for advice, noting that the water trigger was before

parliament for its consideration and that that be taken into account by the IESC in providing advice on that

project. That was done.

Senator WATERS: That was still done back in May 2013, though. Given the effluxion of time and the

change to the project parameters, will IESC now be required to go back and reconsider a changed project?

Mr Knudson: Again, as we do on every project, we will take a look at the IESC advice. We will take a look at

what sorts of gaps in our information we have and deem what sorts of actions we need to take to make sure that

there is an informed decision taken.

Senator WATERS: It is getting pretty late in the process, though. Approval is due in a matter of weeks. I

would have thought that you would have made that judgement about whether further IESC advice is needed

already.

Mr Knudson: Again, my colleague Ms Stagg will provide additional detail on the time frames around this.

But, at this point, we have just received the state assessment. We are now in the process of doing our own

assessment of that. That will then lead to a determination, at which point we often are in a position where we have

to stop the clock and ask for additional information. That may be the case on this project, but we have not yet

reached that determination.

Senator WATERS: For some reason I had 17 March in my head as the approval deadline. Can I just confirm

that that is the correct date?

Mr Knudson: It is 13 March.

Senator WATERS: It is 13 March, subject to a potential stop-the-clock provision to possibly seek further

information from IESC.

Mr Knudson: Or from anyone.

Mr de Brouwer: It should be clear that we are not pre-empting particular decisions yet.

Mr Knudson: Not at all.

Mr de Brouwer: You are talking about things that could be in decisions or different decisions that could be

made. We are not pre-empting any of that. The proper process is underway, and those things will be taken into

account, but we cannot pre-empt anything.

Senator WATERS: When you are three weeks out from an approval decision deadline, how likely is it that

you are going to ask the IESC to reconsider an almost two-year-old water advice?

Senator Birmingham: I think that would be pre-empting the decisions that are to be made.

Senator WATERS: Surely you would have done that by now if you were going to do it. You are saying you

have not yet made that judgement whether to do it or not.

Mr Knudson: On some projects, you would be aware that the time frames under which the Commonwealth

makes its decisions are fairly tight. They are seated in legislation. Sometimes we find ourselves near the end of

that assessment process and determine that, on balance, we do not have enough information and therefore seek

that. But that is determined on a case-by-case basis.

Senator WATERS: I am conscious that you can use those stop-the-clock provisions to seek further

information from the proponent. Can you use those same provisions to seek further information from IESC?



Mr Knudson: I would assume so.

Senator WATERS: So it is genuinely on the table. IESC may yet be asked to reconsider that.

Mr Knudson: We can stop the clock to seek information from a range of areas. Sometimes we will stop the

clock to await the outcomes of a judicial process or a state consideration that is relevant, for example.

Senator WATERS: I want to go back to the progress of the bioregional plans that IESC was undertaking. In

response to some earlier questions you said that it is actually not IESC that is doing those bioregional plans

anymore. It is a combinations of—and I think I jotted it down correctly—the Office of Water Science, the Bureau

of Meteorology and CSIRO. Since when was IESC not doing its own bioregional assessments? I thought that,

under the National Partnership agreement of 2½ years ago, it was IESC itself that would do that work. When did

that get farmed off to other agencies?

Ms Milnes: Perhaps I could clarify that. I think the bioregional assessments are being managed by the Office

of Water Science and the work is being undertaken by CSIRO, the Bureau of Meteorology and Geoscience

Australia. That has always been the case, and the role of the Independent Expert Scientific Committee, as set out

in the legislation, is to provide advice on the bioregional assessments—not necessarily to do them or undertake

them, but to provide advice on that. We expect the Independent Expert Scientific Committee will be one of the

key users of the bioregional assessments.

Senator WATERS: Was there a change between the National Partnership agreement and the legislation that

changed the nature of that involvement of IESC?

Ms Milnes: Not that I am aware of.

Senator WATERS: I have one final question in relation to the National Water Commission. I am aware that

they used to prepare some very useful fact sheets, including on the water impacts of coal seam gas. Given the

diminished capacity of the commission—although, thank goodness, it does still exist—which agency would now

be filling the role that NWC used to in looking at the overall impacts of coal seam gas?

Mr McLoughlin: I believe it is the department that take on that role.

Senator WATERS: Is there any particular resources that have been dedicated to that task, or is that something

that existing staff have had to take on without additional capacity?

Senator Birmingham: I think, as far as there are resources, it is the resources that are in the IESC that the

department services and supports, because, ultimately, the work you have been just asking about is work that is

made public. You have just quoted from and waved around one of the IESC reports. These are the authoritative

views on the matters you are asking about, not necessarily a fact sheet that the NWC or somebody else might put

out.

Senator WATERS: The different purpose was that IESC obviously advises on specific projects and feeds into

the bioregional plans.

Senator Birmingham: It does more than that.

Senator WATERS: But NWC effectively did the overarching survey of the field—what do we know; what

do we not know—and you said that the department is now doing that work. But then, Minister, you said that,

no, IESC is doing that work. So I am confused. Is there anybody doing that work and, if so, who?

Senator Birmingham: IESC is serviced out of the department, essentially.

Senator WATERS: Sure, but are they doing that work now, because that was not my understanding of their

work scope?

Mr Parker: The Office of Water Science has already released, I understand, a number of research papers that

go precisely to that question where they have commissioned a state of the world piece of research on what is

known and what is not known, and that work is published. Gayle, you can correct me if I am wrong.

Dr Wright: That is correct. A number of the research pieces that have been released, and, indeed, the

chemicals assessment that we spoke about earlier, do include a review of literature and state of knowledge

internationally as well as domestically.

Senator WATERS: I have one final question on that. Do they determine their own research scope or do they

respond to the minister's request for particular research projects?

Ms Milnes: For the Office of Water Science, its focus is on the water related impacts of coal seam gas. The

Independent Expert Scientific Committee provides advice to the minister on research priorities, and the priorities

that the Office of Water Science is implementing reflect those recommended by the IESC.

Senator WATERS: So it is driven by the minister via the IESC.



Senator CANAVAN: I just wanted to ask a question about the Great Artesian Basin Sustainability Initiative.

Could you give us an update on the government's announcement. I am sorry, Senator Heffernan, did you want to

go?

CHAIR: I thought you wanted to go to the regulator.

Senator CANAVAN: Which is next.

Senator HEFFERNAN: I have got a follow-up question. What I would like you to do, if you could, is table

for us the difference in the scope for the IESC—which is now invalid under the national partnership agreement;

the advice was given earlier—which you say you are going to revisit. Could you table to the committee the terms-

of-reference changes in looking at it under the water trigger?

Ms Milnes: Perhaps if I could clarify, there has been no change to the terms of reference to the independent

expert scientific committee. It would have provided its advice on the water related impacts of coal seam gas and

coalmining to—

Senator HEFFERNAN: I am actually referring to Shenhua.

Ms Milnes: Yes, so providing that, when the committee provided that advice—

Senator HEFFERNAN: Which is no longer valid under the old arrangement. It has to be reset under the

water trigger arrangement. The advice is no longer valid under the national partnerships agreement—right?

Ms Milnes: The advice the committee gave is valid in terms of the legislation for the committee.

Senator HEFFERNAN: But it was valid under the national sharing agreement. It has to be rejigged under the

water trigger—agreed?

Ms Milnes: The committee's advice—

Senator HEFFERNAN: It is true.

Ms Milnes: and the terms of which it provides it would be guided by its legislation, and that remains

unchanged between when it provided its advice and now and would take into account the full range of potential

water impacts with respect to CSG.

Senator HEFFERNAN: I am trying to look at the terms of reference. In the case of Shenhua, under the water

trigger arrangements and validating the scientific advice—which we all know no-one has to take any notice of if

they do not want to, legally; sensibly they would—what is the consideration given to the connectivity between the

Great Artesian Basin and the Namoi aquifer?

Ms Stagg: As part of our assessment in providing advice to the minister on this project, we will absolutely be

looking at connectivity and the groundwater impacts.

Senator HEFFERNAN: With great respect, Ma'am Stagg, there is no science available to understand it at this

point. Are you going to discover the science?

Ms Stagg: We are still working through the information provided by the proponent—

Senator HEFFERNAN: For the last 30 years, the CSIRO and the various scientific numeraries in all

governments have not been able to work that out. Are you saying that, before we give the approval for this mine,

you are going to have worked that out?

Ms Stagg: We are still working through the information.

Senator HEFFERNAN: So could you give this committee a commitment that the approval for the Shenhua

mine—even though the Chinese people who are complaining to the lobbyists that have just come back from

China that they have got all this money to bribe people, that they cannot get rid of the bribery money in Australia

because they do not understand our culture, which is one of the reasons why Joe Clayton told them to stick it—

will you give us an assurance that this mine approval will not go ahead until you have sorted that out?

Ms Stagg: The decision on this approval will have to meet statutory requirements of the EPBC Act, so we

are—

Senator HEFFERNAN: Why I am trying to get the terms of reference for the scientific committee is to

understand whether it is just going to be a political bullshit operation or not—which I am certain it probably will

be, given the pressure on to get the approval done. Can you also explain to me: will you take into consideration

the intervention into the recharge of the Namoi aquifer without the connectivity to the Great Artesian Basin in

sustaining the sustainability of that aquifer for the local use?

Ms Stagg: We are certainly looking at the range of impacts to water.



Senator HEFFERNAN: No, no. That is a bureaucratic answer. Do you understand what the issue is with the

sustainability of the local aquifer? Which is the local aquifer?

Ms Stagg: The Namoi.

Senator HEFFERNAN: There is a granite aquifer there as well.

Ms Stag: Yes.

Senator HEFFERNAN: An enclosed granite aquifer. There is a passaged aquifer—as I understand it from the

science—to the Namoi. You know—the irrigators' aquifer.

Mr Knudson: If I can just, hopefully, clarify: we are very happy to provide you with the requests that went to

the IESC for advice on this project and also the response from the IESC which gets to some of these issues.

Senator HEFFERNAN: Thank you for that. I am very grateful for that. But you already have advice from the

IESC—

Mr Knudson: That is correct.

Senator HEFFERNAN: based on the national partnerships agreement. You say the new arrangement, based

on the water trigger, will not be much different, so, if you could provide that information to us, we would know

without having to ask you.

Mr Knudson: And we are very happy to provide that.

Senator HEFFERNAN: All right. So you provide that. In that, how do they summarise the sustainability

interception on the local aquifer by the mining?

Mr Knudson: I would have to take that specific question on notice.

Senator HEFFERNAN: You have no bloody idea. That is the answer. I will bet you one thousand pounds to

one peanut it is not in the local advice, either. I will leave it at that, because this is a balls up.

Senator CANAVAN: I have questions about the Great Artesian Basin Sustainability Initiative. The

government last year made a commitment to reintroduce funding for that initiative. Have agreements with state

governments been made yet?

Mr Slatyer: At this stage we are still working with state agencies to settle those arrangements. Indications are

that we should be able to reach agreement with New South Wales and Queensland fairly soon. The Queensland

process has been delayed due to the election caretaker process they have been going through. But we have $6

million appropriated for that program in this financial year. We are making every effort to settle project

agreements with the states that will allow that money to start flowing.

Senator CANAVAN: Do you have an indication of when you expect to get agreement?

Mr Slatyer: All I can say is that we are doing everything we can to reach agreement with the states as early as

possible.

Senator CANAVAN: Once agreement is reached, how long until projects—

Mr Slatyer: It will take some months to settle the specific recipient farms and things like that. That will take a

little time. It will be in the context of those agreements with the states whether there are any early starts we can

make to get that money flowing in the current year.

Senator CANAVAN: What will the process be? Will state governments propose projects to you, the

Commonwealth, or do individuals or individual groups need to do that?

Mr Slatyer: They would be working with the individuals—

Senator CANAVAN: The state governments would work with individual groups to bring forward projects to

be funded?

Mr Slatyer: Yes.

Senator CANAVAN: Do you have a decision-making role at the Commonwealth level, or is it—

Mr Slatyer: It is a grant to the state.

Senator CANAVAN: So the primary decision-maker is the state government in this case?

Mr Slatyer: The project agreement will set out the terms and conditions that are acceptable to the

Commonwealth for those grants.

Senator CANAVAN: Will it work on part funding from the proponents, like the former GABSI scheme?

Mr Slatyer: Yes, that would be part of the arrangement. All to be determined in the project agreements that

are under negotiation.



Senator CANAVAN: I understand the strategic review is being done at the moment for the long-term

management of the Great Artesian Basin?

Mr Slatyer: Yes.

Senator CANAVAN: Can you tell us a little bit about that review process?

Mr Slatyer: That process is only just beginning. We will be working with the Great Artesian Basin

governments to work through that review.

Senator CANAVAN: How long do you think it is going to take?

Mr Slatyer: I will ask Mr McLoughlin to answer your questions about that review process.

Mr McLoughlin: The strategic review of GABSI rounds 1, 2 and 3, as Mr Slatyer said, is getting underway,

but it is in the early stages. It is just a review of the previous three programs—the expenditure and the outcomes.

We have to complete that in the next couple of months and then start work on the new strategic management plan,

which will theoretically, depending on consultation with Basin jurisdictions, run for the next 10 to 15 years. The

GABSI round 4 funding will take us through into the new phases of that.

Senator CANAVAN: Is the strategic plan going to govern the use of water across the Great Artesian Basin in

some sense?

Mr McLoughlin: It is a strategic plan. It is not a statutory document. It does not bind the states. It will

hopefully be a joint commitment by Basin jurisdictions to long-term GAB management.

Senator CANAVAN: Do you think it will set usage levels or extraction rates? Is that the intention?

Mr McLoughlin: All of that is in the future in terms of the discussions with the Basin jurisdictions. From the

Commonwealth perspective we will push for National Water Initiative principles to apply to water management

in the Great Artesian Basin. The extent to which Basin jurisdictions are prepared to go with that, compared to

where they have come from over the past 130 years or so of GAB management, is yet to be determined.

Senator CANAVAN: I have a question about water recovery in the Condamine-Balonne region. I was

looking at figures before showing that something like 50-odd gigalitres have been recovered in the catchment so

far, but something like only three gigalitres through infrastructure. Why haven't we been more successful in

recovering water through the means that do not impact on agricultural production?

Mr Slatyer: The figures you have cited are correct. Only been 3.8 gigalitres of water has been recovered

through infrastructure programs in the Condamine-Balonne. We are working with the Queensland agencies

concerned. These are programs administered by the Queensland government—

Senator CANAVAN: Healthy Headwaters, effectively—

Mr Slatyer: to see what we can do to increase uptake of that program.

Senator CANAVAN: At the moment you are wanting to, or have an objective of, increasing water recovery?

Mr Slatyer: Of course. The water recovery strategy sets out the government's intention to priorities

infrastructure as the preferred means of water recovery, including in that catchment.

Senator CANAVAN: Do you have a target in the Condamine-Balonne as to how much you would like to get

from infrastructure relative to buy-back?

Mr Slatyer: There is still $78 million of available funding under the Healthy Headwaters program. That will

in effect define the immediate water recovery target.

Senator CANAVAN: I do not want to get too much into the details. We can do that later. Are there any plans

to recover water from the Upper Condamine, above St George?

Mr Slatyer: That is a more complicated question that goes to the utility of that water for gap-bridging

purposes and for benefit for the environment. That, too, is a matter that is under current discussion with the

Queensland authorities.

Senator CANAVAN: I am not sure if you are aware of it, but I remember quite vividly the MDBA at the time

assuring the people of St George and Dirranbandi that some portion of water would be acquired from the Upper

Condamine, to reduce the impact on their local area. They are a little bit perturbed at that moment that it has not

happened. You are still saying that it is not a guarantee. You cannot give a guarantee that some of that 100 gigs—

Mr Slatyer: The government has not ruled that in or out at this stage. That is to be worked through.

Senator CANAVAN: And when will the shared reduction amount be decided upon?

Mr Slatyer: This is one of the factors that goes to our water recovery process there. The water recovery

strategy describes the shared reduction amount as maybe being affected by the northern basin review, which is



currently being undertaken by the Murray-Darling Basin Authority. So the government has decided it will take

a—I forget the precise word—measured approach to water recovery towards that shared reduction amount until

the outcome of the northern Basin review is known. That is to avoid any risk of over-recovering in that—

Senator CANAVAN: Is it your view at this stage that there is sufficient connectivity between Condamine and

the Lower Darling to allocate some of that shared reduction to the Condamine-Balonne?

Mr Slatyer: I do not have a view on that. That is a good question—

Senator CANAVAN: Is that being considered as part of this review?

Mr Slatyer: I am not prepared to venture an opinion on the technical questions.

CHAIR: Thank you all for your evidence today. Given the number of areas we did not get to, you will be

coming back at some stage. We will have to work out a time for us to complete these estimates.

Senator Birmingham: Just to be fair, the water sections have finished.

CHAIR: Yes indeed. We have completed the water section. We conclude the evening at the conclusion of 4.1.

Committee adjourned at 22:54

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