Annual reports of agencies
2.1
The Committee selected the annual reports of the following bodies for closer examination:
Agriculture portfolio
Fisheries Research and Development Corporation;
Grains Research and Development Corporation; and
Infrastructure portfolio
Australian Rail Track Corporation.
Fisheries Research and Development Corporation
2.2
The 2019–20 Annual Report of the Fisheries Research and Development Corporation was tabled in the Senate on 19 November 2020. The report provides an overview of the activities and achievements of the agency over the previous year.
Chair's report
2.3
The Chair, Mr John Williams, identified some the agencies key achievements and obstacles faced by the agency, including:
monitoring and assessing the impacts of the COVID-19 pandemic and the bushfire crisis;
a decrease in the gross value of production for commercial wild-catch and aquaculture, although this reduction was not as large as originally estimated;
a continued focus on biosecurity, particularly after the re-emergence of white spot disease in south QLD;
the delivery of the Carp Control Plan to government to aid future decision making; and
the conclusion of the FRDC’s Research, Development and Extension Plan for 2015–20.
Programs and projects
2.4
The agency identifies its national research priorities as:
ensuring that Australian fishing and aquaculture products are sustainable and acknowledged to be so;
improving productivity and profitability of fishing and aquaculture; and
developing new and emerging aquaculture growth opportunities.
2.5
The agency has reported its outputs and performance against these three priorities. Also, reviews of each priority have been made against the aims and targets of the recently concluded Research, Development and Extension Plan 2015–20.
Priority 1: Ensuring that Australian fishing and aquaculture products are sustainable and acknowledged to be so
2.6
The FRDC describes its strategy under this priority as the continued prioritisation of investment in research and development that contributes to the sustainability of fishing and aquaculture. This includes the consideration of endangered and protected species, target species, and the broader marine environment. During the reporting period there was $1.34 million put toward in this priority equating to 4.6 per cent of total research and development investment.
2.7
The agency reports that just one of three targets set out in the Research, Development and Extension Plan 2015–20 were achieved. The sole target achieved was an increase in positive perceptions of the commercial fishing industry as measured through independently commissioned FRDC stakeholder surveys. The number of respondents who believe the community perception of the Australian fishing industry is sustainable is 46 per cent. This represents an increase from the 28 per cent recorded in 2016.
2.8
The first target not achieved related to the number of species in the national Status of Australian Fish Stocks reports. The 2020 report detailed 150 species against a target of 200. In addition, the FRDC delivered a Shark Report Card that assessed 199 stocks for sustainability. Of these, 124 stocks were assessed to be sustainable at current levels of fishing.
2.9
The second target that was unachieved related to the number of species classified as ‘undefined’. The agency targeted a reduction from the 2016 figure of approximately 30 per cent to less than ten per cent. Current levels are reportedly at 13 per cent. The FRDC reports that further work has been undertaken reduce the number of undefined species.
2.10
Projects undertaken by the FRDC to progress this priority during the reporting period include the recovery of Southern Bluefin Tuna from an endangered species to a sustainable fisheries stock, and the introduction of new guidelines for harvest strategy and bycatch policy.
Priority 2: Improving productivity and profitability of fishing and aquaculture
2.11
Through this priority the FRDC aims to invest in research and development to understand the drivers and challenges to productivity in all fishing and aquaculture sectors. They reportedly do this by researching ways of increasing sustainable production and profitability and linking these to business education. During the reporting year $990,000, or 3.4 per cent of the total research and development budget, was expended towards this priority. The agency achieved all four of the targets laid out in the five-year research, development and extension plan.
2.12
Under the five-year plan, this priority focused on improving the productivity and profitability of the seafood industry. The FRDC reports that the gross value of production increased from around $2.5 billion in 2014–15 up to
$3.1 billion in 2018–19. This number reduced to $2.6 billion in 2019–20 due to the COVID–19 pandemic. However, most industries improved their position overall during the period.
Priority 3: Developing new and emerging aquaculture growth opportunities
2.13
Under Priority 3 the FRDC aims to identify research constraints to industry growth – including potential markets, cost of production, survival, and uniformity of growth – and invest in research and development to identify opportunities for further commercial activity. The agency reports that $800,000 was invested into this priority during the reporting period and that the sole target of producing two thousand tonnes more product was achieved.
2.14
The reported aim of this priority in the Research, Development and Extension Plan 2015–20 was to deliver sufficient research and development for the commercialisation of at least two new aquaculture growth opportunities with potential for profitable business operations. The agency reportedly achieved this through the growth in production and value of sectors including Atlantic salmon and barramundi. Additionally, progress has been made on a program to increase production and domestic consumption of yellowtail kingfish. Production was estimated at approximately 1200 tonnes in 2016, and is expected to reach 5000 tonnes by 2022.
2.15
The corporation also made note of the challenges faced by disease outbreaks. Two significant outbreaks occurred during the five-year plan: white spot virus in prawns and pacific oyster mortality syndrome. The agency reports that both of these sectors are now recovering and expanding.
Staffing information
2.16
The FRDC reportedly employed 20 people across their operations. Six of these staff members are ongoing. The majority of employees are located in the ACT while six are situated across the NT, SA, and NSW.
Financial information
2.17
The FRDC reported a comprehensive loss of $1.29 million in 2019–20 against a budgeted loss of $6.44 million. The discrepancy has been attributed to decreased staff expenses due to unexpected exits and delayed recruitment, reduced supplier expenses due to changed travel arrangements, and delayed project expenses due to the COVID-19 pandemic.
2.18
Key financial details include:
total expenses—$34.44 million;
total own-source income—$10.94 million;
revenue from the Australian government — $22.08 million; and
total equity—$27.14 million.
Committee comments
2.19
The committee considers the FRDC report to be compliant with reporting requirements.
Grains Research and Development Corporation
2.20
The 2019–20 Annual Report of the Grains Research and Development Corporation presented information on the operations and performance of the agency. The report was tabled in the Senate on 11 November 2020.
Chair's report
2.21
The Chair, Mr John Woods, highlighted several activities undertaken by the Corporation, and outlined some of the challenges met in meeting its objectives. These included:
the establishment of Grains Australia Ltd to enhance outcomes to growers and the broader supply chain;
investment with the CSIRO to identify the greenhouse gas emissions of Australian grain production and ways to reduce emissions while maintaining profitability;
collaboration across research and development corporations.
Challenges
in conjunction with the NSW Department of Primary Industries, further investment was required in chickpea breeding programs and infrastructure;
the use of significant cash reserves was required to continue research and development investment during a seasonally challenging period;
the impact of the COVID-19 pandemic on the agency and research partners.
Purpose and objectives
2.22
The GRDC reports its purpose as being:
To invest in research, development and extension to create enduring profitability for Australian grain growers.
2.23
The agency measures its achievements against the following five objectives:
improve yield and yield stability;
maintain and improve price;
reduce post-farmgate costs; and
manage risk to maximise profit and minimise losses.
2.24
The following section examines key activities against each of these five objectives.
Objective 1: Improve yield and yield stability
2.25
This objective is to close the gap between actual and potential yields while also delivering enduring profitability to grain growers. The GRDC aims to do this by investing in projects aimed at extending the yield potential and yield stability of Australian grain crops. Projects can either improve the genetic yield potential of grains or limit the impact of yield constraints like frost, heat, or hostile soils. During the reporting period the GRDC invested $75.5 million in 238 new and ongoing projects aimed at achieving this objective.
2.26
Key activities to meet this objective include:
ongoing investment in the Australian Research Council Research Hub for Wheat in a Hot and Dry Climate;
the introduction of heat tolerant genes into wheat crops vulnerable to extreme high temperatures and periods of heat shock;
investment in tools to support breeders in developing frost sensitivity in wheat, including the identification of markers for chilling tolerance;
the National Paddock Survey initiative; and
the use of cover cropping to manage moisture retention, particularly during drought.
Objective 2: Maintain and improve price
2.27
The GRDC reports that maintaining current market positions will depend on maintaining the quality of Australian grain. This is supported in part by the effective management of trade and market access issues as they arise. The agency expects traceability and food safety issues to remain key concerns for customers in the short to medium term. To pursue this objective the agency has invested $11.6 million into 55 projects.
2.28
These projects include:
continued investment in the Australian Grains Export Innovation Centre;
methods to overcome the lack of acid soil tolerance in chickpeas. Currently, the opportunity for the crop to be expanded into areas with low pH and aluminium toxicity is limited without further research; and
investigating diversity in germplasm to optimise profitability from April-sown oats. This project aims to test a range of oats under controlled environment conditions for adaptation and suitability to Western Australian growing conditions. To date, 360 oat lines have been sown in replicated hill plots.
Objective 3: Optimise input costs
2.29
The GRDC reports that Australia has relatively high costs of production in terms of average input costs per tonne when compared internationally. According to the GRDC, the challenge for the industry is to identify the opportunities to match costs with production at a regional scale while also identifying larger opportunities on a national scale. To this end the agency has invested $65.3 million in 196 projects during the 2019–20 financial year.
2.30
Projects to support this objective include:
the hydrogen to ammonia research and development project to develop technology for ammonia production with the only inputs being water, air and electricity from renewable sources of energy;
a study highlighting that weeds have evolved adaptations to evade the effects of certain weed control strategies. This means that for growers to maintain the effectiveness of weed management techniques they will need to adapt their control tactics;
the Australian Herbicide Resistance Initiative resulting in the development and delivery to market of the 'Weed Chipper', a targeted tillage system developed for weed control; and
experiments conducted in western Victoria to evaluate yield loss and management of disease in pulse crops. The experiments showed that yield losses of up to 70 per cent could be reduced to three per cent with a combination of variety selection and fungicide application.
Objective 4: Reduce post-farmgate costs
2.31
The GRDC reports that they will continue to support research and development into variables that drive supply chain costs. They will reportedly consider investments with the capacity to improve current freight dynamics, as well as developing packages that assist growers in minimising post-farmgate costs. Funding of $800,000 has been invested in eight projects towards this objective.
2.32
Activities under this objective include the technical assessment of the use of silo bags in the supply chain to determine if the quality of grain was affected by short- to medium-term storage; and, the Grain Storage Extension Project to provide information and training to growers to improve on-farm grain storage.
Objective 5: Manage risk to maximise profit and minimise losses
2.33
The agency reports that overly conservative risk management can limit profit in above-average production years. On the other hand, aggressive approaches can expose the grower to issues that negatively impact profit and future operations. Grower attitude to risk is a key determinant of the speed and scale of the uptake of new technology, making risk an important part of the profit equation. To support risk management strategies the GRDC has reportedly invested $1.3 million in 11 projects during the reporting period.
2.34
Key activities during the period include:
the use of seasonal forecast information and tools to manage risk and increase profitability in the southern region including video summaries, webinars, and advisor training workshops;
air inversion modelling to manage spray drift; and
the partnership with six other research and development corporations, the Bureau of Meteorology, three universities, and three state departments to co-invest in forecasting activities. This project reportedly delivered several improvements including technical improvements in the Bureau of Meteorology’s seasonal climate forecasting system, and the development of new extreme temperature forecast products.
Staffing information
2.35
The GRDC reported 82 employees during the 2019-20 financial year. The majority of these are located in the ACT with representation also in WA, QLD and SA. The agency reports a nearly even gender split with 40 of the 82 employees identifying as female.
Financial information
2.36
Total income during the period was reported as $173.2 million. This is
18 per cent lower than the forecasted income of $210.7 million. The reduction in income is primarily attributed to difficult growing conditions over the previous two years. As a result, levies were their lowest since 2010 and
26 per cent lower than forecasted.
2.37
Total expenditure was $5 million below the forecasted amount of $12 million. Reductions in expenditure were made in an effort to offset the reduction in income. These were made mainly through lower travel and accommodation costs.
Committee comment
2.38
The Committee considers the report to be compliant with requirements.
Wine Australia
2.39
The 2019–20 Annual Report of Wine Australia details the agencies activities during the reporting period. The report was presented to the Senate on
30 November 2020.
Chief Executive Officer's report
2.40
The Chief Executive Officer, Mr Andreas Clark, highlighted a number of notable achievements and challenges over the reporting period, including:
Australian wine exports reaching an average value of $3.89 per litre, the highest value since 2004–05;
increases in exports in the first two quarters were offset by decreases in the second half of the year due to the COVID-19 pandemic. There were year-on-year declines of seven per cent and four per cent respectively in the third and fourth quarters;
the execution of the largest-ever USA trade and consumer engagement program by the agency, the Far from Ordinary campaign;
the development of 17 new technologies for the wine sector through the Australian Government’s Rural R&D for Profit program; and
the release of Climate Atlas to model potential impacts of climate change for each of Australia’s wine regions in ten year increments until 2100.
Role and performance measurement
2.41
Wine Australia reports that its role is to:
coordinate or fund grape and wine research and development, and facilitate the dissemination, adoption and commercialisation of the results;
control the export of grape products from Australia; and
promote the sale and consumption of grape products, both in Australia and overseas.
2.42
The agency lists nine key performance indicators against which they measure and report activities and outcomes. Of these nine indicators, positive outcomes were achieved in eight. The only indicator not fulfilled related to the number of risk-based audits undertaken to reinforce a culture of compliance and protect the reputation of Australian wine. The agency reports that 150 were undertaken against a target of 250 and that the shortfall was due to travel restrictions as a consequence of the COVID-19 pandemic.
2.43
Wine Australia structured their performance reporting against two priorities. These priorities will be examined in the following section.
Priority 1: Increasing demand and premium paid for all Australian wine
2.44
Wine Australia guides their activities and achievements under this priority through three strategies:
promoting Australian fine wine;
protecting the reputation of Australian wine; and
building Australian wine and vine excellence.
2.45
The primary project reported under this priority was the Far From Ordinary campaign in the USA. The campaign was the largest single campaign in Wine Australia’s history. Investments in digital engagement were made to partner with Bon Appetite, while investment also continued with the Wine Spectator and Wine Enthusiast outlets. The campaign included a six-city roadshow that culminated in the 'Decanted' influencer event at Lake Tahoe in October 2019. The agency also undertook other promotional activities in China, the UK, Europe, and Japan among others.
2.46
Australian Wine Discovered (AWD) launched in January 2019 and was promoted through social media from February to June 2020. AWD provides educational material that serves a range of users including importers, wineries, retailers, and consumers.
2.47
Wine Australia reports that the Wine Australia Licensing and Approval System was introduced in June 2020. The system manages and provides greater flexibility with regards to licensing, product approvals, shipping applications, and other export-related tasks. During the reporting period, the agency issued 18,269 product approvals, approved 51,548 shipments, and supported 3,488 export licence holders.
Priority 2: Increasing competitiveness
2.48
Wine Australia guides their activities and achievements under the increasing competitiveness priority through six strategies:
improving resource management and sustainability;
improving vineyard performance;
improving winery performance;
business intelligence and measurement.
2.49
In order to improve sustainability, the agency reports that they continued to provide the sector with information to manage both short-term and long-term climate challenges, and to better manage endemic pests and diseases. Four Export Reports were also delivered, with the final two heavily focused on the impacts of the COVID-19 pandemic on Australia’s export market.
2.50
Wine Australia reportedly worked to improve vineyard performance through a number of research and technological projects. Development continued on new grapevine rootstocks and field testing continued on vines bred for their resistance to mildews. The agency also explored several ways to improve yield estimation, and developed the prototype for a vine nutrition smart phone app.
2.51
A particular concern of the agency is the increasingly complex trading environment due to tensions in international trade. Wine Australia reported that, in an effort to mitigate any negative effects on the industry, they continued to pursue a strategy of engagement with international partners to mutually recognise international wine production and labelling requirements. This included engagement with the Federation International du Vin et Spirit, the international trade body representing the wine and spirits sector; the World Wine Trade Group, which is coordinating wine sector approaches to the World Health Organisation; and the International Wine Technical Summit, at which papers were presented on best practice in wine regulation.
Priorities 1 and 2: Extension and adoption
2.52
Wine Australia also reported on the ways in which they achieve extension and adoption of measures under the two priorities. The agency reports that they use a range of delivery networks, programs, and partnerships with wine sector organisations to publicise research and development outcomes and encourage the adoption of new technologies.
2.53
During the reporting period the agency reportedly undertook the following measures to enhance extension and adoption:
an independent review of Wine Australia's approach to extension and adoption. With stakeholder input, a national extension and adoption strategy was developed to help guide future planning;
expanded the role of the AGW Research Advisory Committee to provide advice guiding extension priorities;
continued developing and updating tools and resources to aid changes in practice; and
maintained and supported ongoing partnerships with 11 regional clusters to ensure extension and practical trials meet regional priorities.
Staffing information
2.54
Wine Australia reported a total of 94 staff at the conclusion of the reporting period, down from 99 the previous year. Over two-thirds of employees are female and 69 employees are employed full-time. Staff members are based in various locations both domestic and internationally including the USA, UK, Canada and China.
Financial information
2.55
Wine Australia reported a total comprehensive loss during the reporting period of $376,758. This was made up of:
expenses totalling $67,612,512, primarily on research and development contracts and employee benefits;
own-source revenue totalling $27,374,160; and
Australian government matching contributions and other grants from government adding up to $39,861,594.
2.56
Additionally, the agency also reported equity totalling $20.97 million at the conclusion of the reporting period.
Committee comment
2.57
The Committee considers the Wine Australia report to be compliant with reporting requirements.
Australian Rail Track Corporation
2.58
The 2019–20 Annual Report of the Australian Rail Track Corporation was tabled in the Senate on 11 December 2020. The report details the activities of the corporation over the previous year.
Chairman and Chief Executive Officer's message
2.59
In a joint message, the Chairman, the Hon Warren Truss AC, and the Chief Executive Officer, Mr Mark Campbell, highlighted a number of the ARTC's achievements and challenges over the reporting period including:
made progress on the Inland Rail project, particularly the Parkes to Narromine section;
progressed development of the Advanced Train Management System; and
integrated the ARTC Network Control Optimisation initiative along the Hunter Valley network
Challenges
the train derailment near Wallan in Victoria;
impacts of the bushfire crisis on the rail network and infrastructure;
navigated changing travel arrangements and challenges as a result of the COVID-19 pandemic.
Performance
2.60
The ARTC provided updates on three key networks including the Hunter Valley network, the Interstate network, and the Inland Rail.
Hunter Valley network
2.61
The ARTC reports that the Hunter Valley network linking mines to the Port of Newcastle remains an integral part of the broader rail network. During the reporting period the agency managed approximately 250 trains per day on the network, half of which were coal trains.
2.62
The ARTC reports that upgrades have been made to the network as part of the Fixing Country Rail Program. These upgrades include Narromine Yard signalling works, Merrygoen and Mount Murray loop extensions, and the Port Waratah Yard reconfiguration. Additionally, the upgrade of the New England Highway rail bridge at Gowrie Gates was reported as being completed on time and within budget. The corporation is also looking forward to works on three replacement rail bridges in Muswellbrook in 2022.
2.63
Other reported key results in this network include:
safety celebrations for 1000 days lost time injury free and one year medically treated injury free;
179 million total coal tonnes transported on the network including
164 million to the Port of Newcastle for export; and
$130.2 million of capital investment in the network during the reporting period.
Interstate network
2.64
The Interstate network is responsible for the management of 6,000km of track across NSW, QLD, VIC, SA and WA. The network is made up of more than
500 staff and 24 provisioning centres and depots.
2.65
The ARTC reports that the critical importance of safety measures and upgrades has been reinforced following the train derailment at Wallan, VIC in February 2020. The agency reports that they continue to develop a range of safety initiatives including contactless sign-on, electronic track access protection, network control centre rostering reviews, and the Wayside Enhancement Project to upgrade monitoring systems for the health of rolling stock.
2.66
The ARTC reportedly invested heavily in upgrades to the network during the period. Key projects include:
work on the $235 million project along the North East Rail Line between Melbourne and Albury ahead of scheduled completion by mid-2021;
the completion of all major works on the Adelaide-Tarcoola Rail Upgrade Acceleration Project;
completion of Stage 1 works on the Goulburn to Sydney Re-rail Project; and
the Port Botany Rail Duplication and Cabramatta Loop Projects following a $400 million commitment from the Commonwealth government to meet predicted freight demand on the Southern Sydney Freight Line.
Inland Rail
2.67
The ARTC reports that the Inland Rail project progressed significantly in
2019-20. Construction continued along the Parkes to Narromine section in NSW and extensive planning for further construction work was carried out across other sections in QLD, NSW and VIC.
2.68
The agency reported progress along the following projects:
laying over 85km of track along the Parkes to Narromine section, replacing existing sleepers and track, realigning the track to minimise tight curves, and raising the level of the rail formation;
referred Stage 1 of the Tottenham to Albury project to the Victorian government;
working with landowners and the local community to progress design and planning works along the Illabo to Stockinbingal and Narromine to Narrabri sections;
full construction commencing along the Narrabri to North Star section in early 2021 following the announcement of the successful tender;
planning and environmental investigations progressed for the Kagaru to Acacia Ridge and Bromelton section; and
intergovernmental agreements were signed for the NSW/QLD Border to Gowrie, Gowrie to Helidon, Helidon to Calvert, and Calvert to Kagaru portions of the track.
Staffing information
2.69
The ARTC reported a total of 1,810 employees across the agency as at
30 June 2020. This represents an increase from the 1,557 employees at the end of the previous reporting period. Most of the additional staff are located in QLD with employees also in various areas across NSW, SA, VIC and WA. Of these employees, 1,295 identify as male and 515 identify as female.
Financial information
2.70
The ARTC reported a net loss of $860.31 million during the reporting period. Details include:
total revenue and other income of $852.28 million;
expenses, excluding finance costs, of $1.61 billion; and
total equity of $2.82 billion.
Committee comments
2.71
The Committee considers the ARTC report to be compliant with reporting requirements.
Senator Susan McDonald
Chair