2.1
This chapter outlines the key issues considered by the Senate Economics Legislation Committee (the committee) at its 2020-21 Additional estimates hearings with the Treasury Portfolio and Industry, Science, Energy and Resources Portfolio (Industry Portfolio).
Treasury Portfolio, 24 March and 25 March 2021
Department of the Treasury
Corporate Group, Macroeconomic Group
2.2
The Secretary of the Department of the Treasury, Dr Steven Kennedy PSM, made an opening statement, highlighting the benefits of the fiscal packages implemented by the government since March 2020. Dr Kennedy also focused on the positive recovery of Australia’s economy since the beginning of the COVID-19 pandemic.
2.3
Topics examined by the committee included:
Labour force related matters including excess capacity in the market, unemployment after the conclusion of the JobKeeper and JobSeeker stimulus package, the effectiveness of NAIRU’s modelling, business viability and profitable business receiving stimulus packages during COVID-19 (pp. 7–16, 21–22, 25–27, 30–32)
Australia’s economic recovery post COVID-19 and the comparison to the global economic recovery (pp. 8, 16)
Foreign investment policy, including the change in policy by the Foreign Investment Review board (FIRB), FIRB’s Equity and Security Strategy post COVID-19, Australia’s foreign investment reliance and the Western Sydney Airport purchase (pp. 17, 32–36)
Wealth inequality and concentration in Australia (pp. 17–20, 28–30)
The non-progression of the planned Early Access Super Scheme for women who have been victims of domestic violence (pp. 21–22)
Australia’s housing market affordability (pp. 27–31)
The Reserve Bank of Australia’s accommodative monetary policy
Fiscal Group
2.4
Topics examined by the committee included:
The JobMaker Hiring Credit including number of positions, type of business taken up and expenditure to date (pp. 37–43)
Cost benefit discount rates, focused on Infrastructure Australia and regional infrastructure projects (pp. 43–46)
JobKeeper outcomes including the effect on companies’ dividends and profits, breakdown of age, gender and business size, its role on confidence and the recovery of payments from companies who experienced profits during the pandemic. (pp. 46–50, 59–61)
A review of the JobKeeper, JobSeeker and JobMaker Schemes (pp. 50–52)
Government’s preparations to respond to the Aged Care Royal Commission (pp. 52–54)
Women’s budget impact statement and gender pay gap (pp. 54–55)
Involvement of the Fiscal Group in the costings for the Respect@Work report (pp. 55–57)
A report released by the UN Environment Programme that analysed pandemic recovery spending, with a focus on Australia’s recovery spending proportion on green initiatives (pp. 57–58)
Current consideration of changes to the Homebuilder scheme (pp. 61–62)
Revenue Group
Australian Taxation Office (ATO)
2.5
Topics examined by the committee included:
Rulings on water rights not being taxable Australian property (p. 62)
JobKeeper payments being returned to the government and the activities of the Serious Financial Crime Taskforce in relation to JobKeeper payments (pp. 63–67)
Early Access Super Scheme final numbers and the gender split of applicants (pp. 67–69)
Independent contractors and related tax issues, including the gig economy (pp. 70–71)
Tax avoidance in Australia with a focus on Australian oil and gas operations (pp. 71–74)
Australia’s tax treaty network in response to a question on notice
Small Business Ombudsman’s recommendations relating to the operation of the ATO, specifically recommendation 21—disputed debt (pp. 81–82)
The JobMaker Hiring Credit Scheme and the breakdown of allocation across industry and state (pp. 82–83)
Greensill Capital’s administration, GFG Alliance and what the ATO is doing to support the region of Whyalla (p. 83)
The Foreign Account Tax Compliance Act (FACTA) and its requirement to report the earnings of US citizens in Australia (pp. 84–85)
Agreed statement of facts by the Federal Court in regards to Westpac’s failure to properly report nearly 20 million transactions to AUSTRAC (p. 86)
Australian Charities and Not-for-profits Commission
2.6
Topics examined by the committee included:
Arrangements between Commissioner Dr Gary Johns and the Hon. Michael Sukkar MP in relation to travel between Brisbane and Melbourne (pp. 74–76)
Limited tender with Evolve Communities for cultural training and changing the acknowledgement of country (pp. 76–78)
Charity setup requirements (pp. 78–80)
Markets Group
2.7
Topics examined by the committee included:
The Early Release Super Scheme—Demand of the scheme, submissions received, the consultation process and the reasoning around the decision not to proceed (pp. 86–92, 94–96)
The implementation of prudential regulation to stop discriminatory action by banks to block business lending (pp. 92–94)
A question on notice that related to a list of stakeholders requesting a delay to legislation being implemented based on the recommendations of the Hayne Banking Royal Commission. (pp. 96–97)
A question on notice that related to National Consumer Credit Protection Amendment (NCCPA) (Supporting Economic Recovery) Bill 2020, specifically its alignment to Recommendation 1.1 of the Hayne Banking Royal Commission (pp. 97–100)
Preparations for the implementation of the Treasury Laws Amendment (Your Future, Your Super) Bill 2021 and stapling arrangements—automatic exchange not being available until July 2022, development of the regulations and consultation process and likely cost impacts of changing payroll systems to allow for stapling and implementation (pp. 100–101)
Release of superannuation for house deposits and modelling on the potential impact on the property market (pp. 101–102)
Continuous disclosure changes and the consultation prior to the implementation of the temporary measure rules in May 2020 (pp. 102–103)
Reserve Bank of Australia
2.8
Topics examined by the committee included:
General views on the state of the economy and the current unemployment rate (pp. 104–106)
Factors contributing to the rise in housing prices and the release of superannuation for house deposits (pp. 106–107)
Views following the US stimulus package in terms of inflation and projections (p. 107)
Responsible lending obligations (pp. 107–108)
The storage of Australia’s gold in London vaults (pp. 108–109)
Foreign interference in terms of currency speculation and inflation
(pp. 109–110)
Lowering interest rates and the CPI (p. 110)
Monetary policy in relation to the housing market (pp. 110–113)
The Yield Curve Control Policy (pp. 113–115)
Australian Competition and Consumer Commission
2.9
Topics examined by the committee included:
The Northern Australia Insurance inquiry (pp.115–116)
National Housing Finance and Investment Corporation
2.10
The topic examined by the committee was:
The National Housing Infrastructure Fund (pp. 117–120)
Australian Bureau of Statistics
2.11
Topics examined by the committee included:
Preparations for the 2021 Census (pp. 120–121)
Improvement of data collection (pp. 121–122)
Australian Securities and Investments Commission (ASIC)
2.12
Topics examined by the committee included:
Accelerated non-renounceable issues (pp. 2–4)
Media briefing policy and sending embargo briefs (pp. 5–6)
Continuous disclosure regulations (pp. 6–10)
Coronavirus response and virtual AGMs (pp. 10–11)
Banking Code of Practice – enforceable provisions (pp. 11–12)
Unconscionable conduct definition following decision of the High Court of Australia (p. 12)
Allegations of fake analysis of coal (pp. 12–13)
Role in NCCPA (Supporting Economic Recovery) Bill 2020 (pp. 13–14)
Financial Adviser Standards and Ethics Authority dismantling and role split between ASIC (Financial Services and Credit Panel) and Treasury, plus the impact on Financial Advisers (pp. 14–16)
Insurance and the Cash Settlement Fact Sheet (pp. 16–18)
Greensill Capital (pp. 18–19)
Submission to Corporate tax avoidance inquiry (p. 19)
Australian Prudential and Regulation Authority (APRA)
2.13
The Chair of APRA Mr Wayne Byres, made an opening statement, outlining three important supervision and policy activities: superannuation agenda; cyber security strategy; and implementing the Hayne’s Banking Royal Commission recommendations and twelve enforcement referrals.
2.14
Topics examined by the committee included:
NCCPA (Supporting Economic Recovery) Bill 2020 (pp. 20–21)
Superfund mergers (p. 22)
Your Future Your Super reforms—failing two performance tests, underperformance assessment and impact on investment strategy
Climate Risk Evaluation and Vulnerability Assessment (pp. 23–25)
Climate risk disclosure (pp. 27–28)
Sole purpose test (pp. 28–30)
Industry Portfolio, 25 March 2021
Cross-portfolio / corporate
2.15
The Secretary of the Department of Industry, Science, Energy and Resources, Mr David Fredericks PSM, made some opening remarks recognising the distinguished public service career of soon to be retired Deputy Secretary Elizabeth Kelly and thanked her for her service.
2.16
Topics examined included:
Consultancies (pp. 37–39)
Number of full-time equivalent staff in the Department of Industry, Science, Energy and Resources (pp. 39–40)
Outcome 1 Programs 1.1 and 1.2
Program 1.1: Investing in science, technology and commercialisation
Program 1.2: Growing innovative and competitive businesses, industries and regions
2.17
The newly appointed Head of the Australian Space agency, Mr Enrico Palermo, introduced himself to the committee and outlined his direction which includes an ambitious agenda: ‘engage extensively with the industry; deliver against the Civil Space Strategy; and lead the Australian Space Agency in its third year of operations and beyond’.
2.18
Topics examined included:
Whyalla Steelworks—Greensill, steel making (pp. 40–42, 51–54)
Female Entrepreneurs Program (pp. 42–43)
Modern Manufacturing Strategy/Initiative/Program (pp. 35–37, 43–46,
Manufacturing jobs created (pp. 46–51)
Legal services direction, model litigant guidelines and Innovation and Science Australia (pp. 54–56)
Background of new Agency Head (pp. 59–60)
100 day plan—how to take the agency forward in the future (pp. 60–62)
Launches—permits, education, supporting providers, first launch program (pp. 62–67)
Australian Building Codes Board
Flammable cladding (pp. 67–68)
Certification (pp. 68–71)
Office of Innovation and Science Australia
2.19
Topics examined included:
Overall view on innovation in Australia (pp. 71–72)
Roadmap comment and feedback from board members (pp. 73–74)
Commonwealth Scientific and Industrial Research Organisation (CSIRO)
2.20
Dr Larry Marshall, Chief Executive of the CSIRO, made an opening statement informing the committee that the CSIRO’s endeavours in the last twelve months have required research and research translation to respond to the challenges of the bushfires and COVID-19.
2.21
Topics examined included:
Gladstone Power Station (pp. 74–77)
Lithium battery recycling (p. 77)
Portfolio investment review (pp. 77–81)
GenCost 2020-21 report (pp. 81–82)
Modelling data and literature (pp. 82–85)
Office of the Chief Scientist
2.22
In her first appearance before the committee as the Chief Scientist, Dr Cathy Foley gave an opening statement informing the committee of her background and that she aims to ‘ensure that the benefits of that [discovery] research are fully realised, and realised for the benefits of the country’.
2.23
Topics examined included:
Developing advanced manufacturing (p. 86)
Neuroscience research, university funding and effects of COVID-19
Quality assurance of data (pp. 88–90)
Quantum computing (pp. 90–91)
Office of Scientific Integrity and Quality Assurance (p. 91)
Australian Institute of Marine Science (AIMS)
2.24
Dr Paul Hardisty, Chief Executive Officer (CEO) of AIMS, made an opening statement noting that AIMS is celebrating its 50th anniversary next year and outlined changes in Australia’s marine science landscape in the last fifty years.
2.25
Topics examined included:
National Sea Simulator (p. 92)
Reef rectification work—COVID-19 stimulus and additional AIMS funding (pp. 93–94)
Australian Nuclear Science and Technology Organisation (ANSTO)
2.26
Topics examined included:
ANSTO safety incidents (pp. 94–95)
Government funding reductions (p. 95)
Geoscience Australia
2.27
Topics examined included:
Key priorities including Positioning Australia program (pp. 96–97)
Exploring for the future program (pp. 97, 98)
Queensland resources sector (pp. 97, 98, 101)
Groundwater (pp. 97, 98, 102)
Enhanced oil recovery using carbon capture and storage (p. 99)
Identified mineral resources report (p. 99)
Canada-US-Australia agreement on critical minerals (pp. 99–100)
Geoscience Australia tie (p. 102)
Resources data strategy (p. 102)
Outcome 1 – Programs 1.3 and 1.4
Program 1.3: Supporting a strong resources sector
Program 1.4: Growing a stronger Northern Australian economy
2.28
Topics examined included:
Extractive Industries Transparency Initiative (pp. 102–103)
Strategic Resources Advisory Group (pp. 103–104)
EPP 41, EPP42 - Bite tenements (pp. 104–105)
EPP 39, EPP 40 – Equinor (p. 105)
Timor Sea Oil and Gas titles (p. 105)
Assessment of bids (pp. 105–106)
Field recovery reports (p. 106)
Walker review (pp. 106–107)
ExxonMobil decommissioning (p. 107)
Northern Endeavour (pp. 107, 108–112)
Decommissioning (pp. 109–112)
Title transfer assessments (p. 107)
Greater Sunrise (pp. 107–108 and 112–113)
Iron Ore Levy (pp. 113–114)
Coal exports and energy content of Australian coal exports (pp. 114–118)
Northern Australia Infrastructure Facility (NAIF)
2.29
Mr Chris Wade, CEO of NAIF, tabled an opening statement which covered NAIF's investment decisions, contractual closes, projects, economic benefit, job growth, Indigenous engagement, reforms and revenue and cost management.
2.30
Topics examined included:
NAIF Staffing (pp. 118–120)
NAIF Projects – investment decision stage (p. 120)
Funds released by NAIF (pp. 120–121)
NAIF First Nations projects (p. 121)
Resignations and redundancies (pp. 122–124)
NAIF legislative changes (pp. 125–126)
National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA)
2.31
Topics examined included:
Northern Endeavour (pp. 126–129)
Compliance action—Nganhurra riser turret mooring (p. 129)
Lloyds class certificates (pp. 130–131)
Senator Slade Brockman
Chair