Budget estimates 2011–12

Introduction

1.1 On 10 May 2011 the Senate referred the following documents to standing committees for examination and report:

Particulars of proposed expenditure in respect of the year ending on 30 June 2012 [Appropriation Bill (No. 1) 2011–12]; and
Particulars of certain proposed expenditure in respect of the year ending on 30 June 2012 [Appropriation Bill (No. 2) 2011–12].[1]

1.2 Standing committees were required to report to the Senate on 21 June 2011.[2] The Senate granted the Environment and Communications Committee an extension until 23 June 2011.[3]

Hearings

1.3 The committee conducted public hearings with the Climate Change and Energy Efficiency portfolio on 23 May 2011, the Sustainability, Environment, Water, Population and Communities portfolio on 24 and 25 May 2011 and the Broadband, Communications and the Digital Economy portfolio on 25, 26 May and 16 June 2011. The committee's public hearings program is at Appendix 1. Documents tabled during the hearings are listed at Appendix 2.

1.4 Written answers and information provided to the committee in response to questions on notice arising from the hearings are tabled in the Senate and posted on the Committee’s web page.

1.5 Links to the transcripts of these public hearings and to answers and additional information are available on the Internet at:

www.aph.gov.au/Senate/committee/ec_ctte/estimates/bud_1112/index.htm.

Questions on notice – date for response

1.6 In accordance with Standing Order 26(9)(a), the committee agreed that the date for the return of written answers or additional information in response to questions placed on notice during the 23–26 May hearings, be Friday, 8 July 2011.

1.7 In relation to the return of written answers or additional information arising from the hearing held on 16 June, when the Australian Communications and Media Authority and the NBN Co were examined, the date for the return of this material is Friday, 29 July 2011.

1.8 As in previous estimates reports, the committee again expresses its concern about the time taken to receive answers to questions taken on notice.

1.9 The committee notes that it had set Friday, 8 April 2011 as the date for the return of answers to questions taken on notice during the Additional Estimates held in February 2011. However, at that date there was a total of 483 answers outstanding to 574 questions on notice across the three portfolios, as follows:

Broadband, Communications and the Digital Economy portfolio, 365of425;
Climate Change and Energy Efficiency portfolio, 39 of 70; and
Sustainability, Environment, Water, Population and Communities portfolio, 79 of 79.

1.10 Most of these late answers were submitted in the days prior to and during the Budget Estimates hearings and several senators expressed their concerns about their late arrival.[4] All answers from the three portfolios were received by Thursday, 26May2011.

1.11 The committee reiterates its expectation that answers to questions on notice will be provided to the committee by the due date.

Portfolio specific issues

1.12 On the first day of its examination of the 2011–12 Budget Estimates, the committee called and examined officers from the Climate Change and Energy Efficiency (CCEE) portfolios.

1.13 The committee welcomed Senator the Hon Penny Wong, Minister for Finance and Deregulation, representing the Minister for Climate Change and Energy Efficiency, the Hon Greg Combet MP.

1.14 The committee raised a range of matters which are noted below. The page references beside each matter refer to the proof transcript for Monday, 23 May 2011.

Climate Change and Energy Efficiency portfolio

1.15 General questions were asked of the department about:

department staff numbers (p. 3)
work done on a people's assembly on climate change (p. 4)
providers of contact centre services (pp 5–6)
staffing for the proposed climate change regulatory authority (p. 8).

1.16 At the conclusion of general questions, the committee called departmental officers in relation to Program1.1: Reducing Australia's greenhouse gas emissions. Matters raised included:

staff appointments (pp 13–14)
impacts on the Budget of the carbon pricing regime (pp 15–20, 26–30)
reduced estimate of abatement from the renewable energy target (pp20–21)
installations of solar PV systems and solar heat pump hot water systems (pp 21–22)
numbers of firms covered by the Emissions-Intensive Trade-Exposed entities (EITE) program (pp 22–23)
process for calculating greenhouse gas emissions in relation to the coal industry (pp 23–25)
impact of renewable energy programs on power prices (pp 30–32, 48–49)
prices of Renewable Energy Target (RET) certificates (pp 32–34)
proposed carbon prices on coal in other countries (pp 34–37)
need for states and territories to pass legislation to effect a national carbon tax (pp 39–41)
rises in sea levels (pp 41–43)
cost effectiveness of abatement measures (pp 43–46)
impact of the EU's proposed carbon tax on Australia's aviation industry (pp46–47)
modelling on the impact of a carbon tax with different price points (pp 50–55)
voluntary participation in the carbon farming initiative (pp 56–62)
funding for the Climate Change Foundation campaign (pp 62–66)
costs of and participation rates in the Climate Commissions' forums (pp67–68)
membership of the Climate Commission (pp 68–71).

1.17 Officers from the Office of the Renewable Energy Regulator were called and examined in relation to:

number of STCs (small-scale technology certificates) generated and cleared through the clearing house since the start of the new system (pp72–73)
incidents where companies buy certificates at a low price and sell through the clearing house (pp 73–75)
number of inspections undertaken of small-scale solar installations (p.75)
compliance inspection regimes and actions undertaken as a result
(pp 75–76).

1.18 Officers were called and examined in relation to Program 1.2: Improving Australia's Energy Efficiency. Matters raised included:

number of unpaid claims submitted under the home insulation program (pp76–79)
monies recovered from home insulation program installers (pp 89–82,
103–104)
results of the targeted inspections of homes in the home insulation program (pp 83–86)
progress of the National Building Energy Standard-Setting, Assessment and Ratings Framework (pp 86–90)
numbers of calls to the home insulation helpline requesting inspections (pp90–92)
current budget of the Home Insulation Safety Program (pp 92–93)
companies deregistered under the Home Insulation Safety Program (pp 95–95)
roles of PricewaterhouseCoopers and Transfield Services in the inspection program (pp96–100)
results of the inspections undertaken (pp 100–103)
minimum energy performance standards (pp 104–105).

1.19 Officers were called and examined in relation to Program 1.3: Adapting to Climate Change. Matters raised included:

appointment of Professor Flannery to the Climate Commission (p. 106)
release of the paper The critical decade by the Commission (pp 107–108).

1.20 Officers were called and examined in relation to Program 1.4: Helping to shape a global climate change solution. Matters raised included:

grants under the International Climate Change Adaptation Initiative, the Australian Centre for Climate Change Adaptation Program and Influencing International Climate Change (pp 111–115)
estimated expenditure for attendance at the climate change conference in South Africa in November 2011 (pp 115–117).

Sustainability, Environment, Water, Population and Communities (SEWPaC) portfolio

1.21 On the second day of hearings, the committee called and examined officers from the Sustainability, Environment, Water, Population and Communities portfolio.

1.22 The committee welcomed Senator the Hon Stephen Conroy, Minister for Broadband, Communications and the Digital Economy, representing the Minister for Sustainability, Environment, Water, Population and Communities, the Hon Tony Burke MP.

1.23 The committee raised a range of matters which are noted below. The page references beside each matter refer to the proof transcript for Tuesday, 24 May 2011.

1.24 General questions were asked of the department about:

late provision of answers to questions on notice from the Additional Estimates round (pp 4–10)
department staffing levels (p. 10)
impact of the efficiency dividend on the department (p. 11)
staff turnover at the executive level (p. 11)
departmental and ministerial hospitality and entertaining budgets
(pp11–12).

1.25 The committee called agencies and departmental officers in relation to Outcome1: The conservation and protection of Australia's terrestrial and marine biodiversity and ecosystems through supporting research, developing information, supporting natural resource management, and establishing and managing Commonwealth protected areas.

1.26 Questioning of the Sydney Harbour Federation Trust commenced. Matters raised included:

progress of decontamination work on HMAS Platypus (p. 13)
visitor number at Trust sites (p. 13)
activities on Cockatoo Island (pp 14–15)
role of volunteers at Trust sites (pp 15–16).

1.27 The Bureau of Meteorology was called and examined. Matters raised included:

adequacy of warnings from the network of automated weather stations and cooperative rainfall observers (pp 17–19, 32)
cost of and ongoing operating costs of river-level monitoring devices (p.19)
repairs to equipment on Willis Island (p. 20)
reliability of weather predictions (p. 23)
sea level rises (pp 23–24, 26–31)
budget for the environmental information program (pp 24–26)
models used for predicting flash flooding (pp 31– 32).

1.28 The Great Barrier Reef Marine Park Authority was called and examined. Matters raised included:

extent of damage caused to the reef by Cyclone Yasi (pp 34–35)
impact of the efficiency dividend (p. 35)
impact of cyclone season on visitor numbers (p. 36)
penalties and issue of enforcement notices (p. 38)
fishing regulations and any differences between Indigenous and non‑Indigenous fishing activities (p. 38).

1.29 The Director of National Parks was called and examined. Matters raised included:

the National Reserve System program (pp 38–40)
crazy ant program on Christmas Island (pp 40–41)
regional recovery plan for the flying fox population (p. 41)
impact of global warming and climate change on national parks (pp 41–43)
management of significant invasive species (p. 43)
steps to increase revenue base (pp 43–44).

1.30 Officers were called and examined in relation to Program 1.1: Sustainable Management of Natural Resources and the Environment. Matters raised included:

review of the Caring for our Country program (pp 45–49, 51–52)
import of fox scats to Tasmania (p. 49)
the Environmental Stewardship program (pp 49–50, 56, 69–73, 74–75)
Working on Country program, Indigenous rangers activities (pp 52–55,
61–63, 79–80, 81)
National Wildlife Corridor Plan (pp 50–51, 55–56, 65–66)
funding provided to the Friends of Sceale Bay (pp 56–60)
funding for regional Natural Resource Management organisations (pp 60–61)
funding for local environmental initiatives (pp 67–69)
the natural disaster recovery package (pp 76–77)
the Reef Rescue and Coastcare programs (pp 77–79)
management of dugong population (pp 79, 81).

1.31 Officers were called and examined in relation to Program 1.2, Environmental Information and Research. Matters raised included:

number of whales taken in the last Japanese whaling season (pp 81–82)
progress of the International Court of Justice case against Japanese whaling (pp 83–83, 88)
Australia's financial contribution to the IWC (International Whaling Commission) (pp 84, 86–87)
meeting of the IWC in July 2011 (pp84–86)
report on the fishing gear risk assessment process (pp 89–91)
progress of the south-west and north bioregional plans (p 90–91)
grants provided to the World Wildlife Fund (p. 92)
impact of climate change on proposed marine reserves (pp 92–94)
funding for the regional marine planning program (p. 94).

1.32 Officers were called and examined in relation to Outcome 2, Program 2.1: Management of Hazardous Wastes, Substances and Pollutants. Matters raised included:

product stewardship process in relation to the Television and Computer Product Stewardship Scheme (pp 95–97, 98)
diesel fuel standards (pp 97–98).

1.33 Officers were called and examined in relation to Program 2.2: Affordable Housing. Matters raised included:

departmental involvement in developing principles for the imposition of infrastructure charges (pp 100–102)
National Housing Supply Council (pp 102–104)
impact of the Housing Affordability Fund in developing affordable housing (pp 104–106)
National Rental Affordability Scheme (pp 106–110).

1.34 Officers were called and examined in relation to Program 2.3: Sustainable Communities. Matters raised included:

developing sustainability indicators for the Sustainable Population Strategy (pp 110–111)
funding for employment hubs to support local jobs (pp 111–113).

1.35 Officers were called and examined in relation to Outcome 3, Program 3.1: Antarctica: Science, Policy and Presence. Matters raised included:

funding to maintain shipping logistical support and the air link
(pp114–116)
procedures for tourism and visitation to Antarctica (pp 116–117).

1.36 On the third day of hearings, the committee continued its examination of the Sustainability, Environment, Water, Population and Communities portfolio, commencing with Outcome 5.

1.37 The page references beside each matter below refer to the proof transcript for Wednesday, 25 May 2011.

1.38 The committee welcomed Senator the Hon Stephen Conroy, Minister for Broadband, Communications and the Digital Economy, representing the Minister for Sustainability, Environment, Water, Population and Communities, the Hon Tony Burke MP, and officers.

1.39 Officers were called and examined in relation to Outcome 5, Program 5.1: Conservation of Australia's Heritage and Environment. Matters raised included:

guidelines for grants to voluntary environment and heritage organisations (pp 4–10, 17–18)
maintenance of the Kokoda Track (pp 11–11)
cuts to total funding of the heritage division (pp 11–15)
status of the emergency assessment of the Dampier archipelago site (pp 15–16)
baiting program on Macquarie Island (pp 18–20)
progress of the Conservation Management Plan for the Richmond Bridge in Tasmania (p. 20)
update on any possible plans to the return the City of Adelaide to Australia (pp 20–21)
impact of Budget cuts to assessment for the Commonwealth and National Heritage lists (pp 21–22).

1.40 Officers were called and examined in relation to Program 5.2: Environmental Regulation, commencing with the Office of Supervising Scientist. Matters raised included:

effects of the third largest wet season in Ranger mine operations (pp 22–25)
status of the ERA's heap leach EIS document (pp 26–27)
land form trials to demonstrate site rehabilitation strategies (pp 29–30)
rehabilitation of the Nabarlek site (pp 32–34, 37)
the Alligator Rivers Regions Advisory Committee, membership
(pp 34–35).

1.41 Departmental officers were then called in relation to Program 5.2: Environmental Regulation. Matters raised included:

listing of the koala as a threatened species and the role of the Threatened Species Scientific Committee (pp 38–44)
assessment of proposed roadworks and walk trail at the Fitzgerald river National Park, WA (pp 44–46)
impact of wind farms (pp 47–49)
government response to the Hawke report (pp 49–50)
investigations into allegations of illegal dugong hunting and sale of dugong bone carvings and meat (pp 50–51)
role of Commonwealth environmental regulation laws relating to the management of crocodiles (pp 51–52)
flow regulators in the Goolwa channel and tributaries (pp 52–55)
water savings achieved through the Sugarloaf pipeline (pp 55–56)
wildlife trade and conservation measures (pp 56–57)
sites selected under the sustainable regional development plan (p. 54).

1.42 Officers were called and examined in relation to Outcome 4, commencing with the Murray-Darling Basin Authority. Matters raised included:

the proposed basin plan: release of, development processes, Proposed Basin Plan Working Group, Sustainable Diversion Limits (pp 59–86)
funding through the On-Farm Irrigation Efficiency Program (p. 77)
monitoring of coal seam gas extraction projects (p. 82)
hourly rates for consultancies (p. 87)
environmental work and measures projects being considered (pp88, 92).

1.43 Officers were called and examined in relation to Program 4.1: Water Reform. Matters raised included:

spending under the Sustainable Rural Water Use and Infrastructure Program (pp 97–98, 102–105)
funding for the Coorong and Lower Lakes (pp 98–99, 102)
total allocations for the Commonwealth Environmental water Holder holdings (pp 99–100)
funding for the Adelaide desalination plant (pp 100–101, 107)
the Native Fish Strategy (pp 106–107).

1.44 Officers from the National Water Commission were called and examined. Matters raised included:

process for appointing a new CEO (p. 108)
finding in the commission recently released report National performance report on urban water utilities (pp 108–110)
recycled water options (p. 110)
NWC's position statement on coal seam gas (pp 110–112)
hydraulic fracturing, or fracking for coal seam gas projects (p. 112).

Broadband, Communications and the Digital Economy portfolio

1.45 At the conclusion of its examination of the Sustainability, Environment, Water, Population and Communities portfolio, the committee called and examined officers from the Broadband, Communications and the Digital Economy portfolio.

1.46 The committee welcomed Senator the Hon Stephen Conroy, Minister for Broadband, Communications and the Digital Economy.

1.47 Officers from Australia Post were called and examined. Matters raised included:

ongoing concerns with the Rockhampton mail centre (pp 114–116)
delivery of mail within shopping malls (p. 117)
fees for the handling of carded articles (pp 117–118)
availability of certain Express Post items (p. 118)
membership of the Stamp Advisory Committee and its decision-making processes (pp 119–120)
review of the post office franchise model (p. 120)
harassment or bullying complaints by licensees (p. 123)
update of the Future Ready program (p. 123)
workplace injuries; the use of facility nominated doctors (p. 124)
maintenance of motorbikes in WA (pp 124–125).

1.48 Officers from the Special Broadcasting Service were called and examined. MrShaun Brown, Managing Director, made an opening statement after which questioning commenced. Matters raised included:

use of the online service (p. 126)
impact of the introduction of commercial multichannels on SBS services and revenue (pp 126–128)
audience numbers (p. 128)
access to SBS services across the country (pp 129–130)
review of the antisiphoning regime (pp 130–131)
use of the High Definition channel (p. 131).

1.49 On the fourth day of hearings, the committee continued its examination of the Broadband, Communications and the Digital Economy portfolio.

1.50 The committee welcomed Senator the Hon Stephen Conroy, Minister for Broadband, Communications and the Digital Economy.

1.51 The committee raised a range of matters which are noted below. The page references beside each matter refer to the proof transcript for Thursday, 26 May 2011.

1.52 Questioning commenced of the Australian Broadcasting Corporation. Matters raised included:

tender process for the Australia Network contract (pp 3–6)
funding of the international bureaus and management of the travel budget (p. 6)
guidelines for ABC presenters undertaking outside work (pp 7–10)
flood damage to new premises in Brisbane (p. 11)
abolition of the Independent Complaints Review Panel (pp 14–15)
selection of participants for Q&A audiences (p. 15)
cost of the Right to Know Campaign (p. 16)
TV transmission into regional New South Wales, specifically Albury (pp16–17)
programs commissioned as a result of increased funding for drama production (pp 18–19)
journalist training at a cadet level (pp 19–20)
amount of first-run Indigenous content (pp 20–21)
quality control at ABC News 24 (p. 21).

1.53 General questions were asked of the department after the Acting Secretary made a brief opening statement. Matters raised included:

the Household Assistance Scheme (HAS) which provides assistance to households to convert to digital TV (pp 22–26, 46)
procedures followed in appointing a CEO or CFO to NBN Co, including due diligence and background and previous employment checks
(pp27–34).

1.54 Officers from the department were called and examined in relation to Program1.3: Broadcasting and Digital Television. Matters raised included:

update on the anti-siphoning list review (p. 34)
review on the switchover to digital services and the HAS in the Mildura-Sunraysia area (pp 34–36, 38)
update on switchover and numbers of eligible HAS households in Queensland (pp 37–38)
amount of payments to Centrelink for its role in the switchover program (pp39–41)
extent of the viewer access satellite television (VAST) service (pp 44–45, 50–51)
eligibility for HAS (pp 46–50)
consultations with state housing authority about the switchover program (p.52).

1.55 Officers from the department were called and examined in relation to Program1.2: Digital Economy and Postal Services. Matters raised included:

internet filtering grants program (pp 53–56)
ISP filters and protecting children on the internet (pp 58–59, 61)
role of regional National Broadband Network coordinators (p. 62)
purpose of the Digital Business Online website (p. 64)
update on the convergence review (pp 64–65).

1.56 Officers from the department were called and examined in relation to Program1.1: Broadband and Communications Infrastructure. Matters raised included:

amount paid to Egon Zehnder in relation to appointments to NBN Co (p.65)
matters surrounding the appointment of the NBN Co CEO, including awareness of issues raised about Alcatel-Lucent (pp 65–70)
indemnity provided to NBN Co directors in relation to the financial heads of agreement with Telstra (pp 72–74)
funding of NBN Co (pp 75–77)
freedom of information requests, use of adviser and legal advisers
(pp77–80)
Regional Backbone Blackspots Program in South Australia (pp 83–85)
provision of interim satellite services (pp 85–88)
consultants engaged to help with NBN public relations (p. 89).

1.57 On 16 June 2011 the committee resumed its examination of the Broadband, Communications and the Digital Economy portfolio, calling and examining the Australian Communications and Media Authority and the NBN Co.

1.58 The committee welcomed Senator the Hon Stephen Conroy, Minister for Broadband, Communications and the Digital Economy.

1.59 The committee raised a range of matters which are noted below. The page references beside each matter refer to the proof transcript for Thursday, 16 June 2011.

1.60 Officers from the Australian Communications and Media Authority (ACMA) were called and examined. Matters raised included:

progress of the provision of digital radio to regional and rural Australia (p.2)
spectrum available for mobile broadband services (p. 3)
future use of the 1800 megahertz frequency currently held by state rail authorities (p. 4)
status of the convergence review (pp 4–6)
resources allocated to managing digital switchover issues (pp 6–8)
broadcasting complaints handling mechanisms (pp 8–10)
monitoring of free-to-air electronic program guides (pp 10–11)
financial information collected from licensees to undertake the broadcasting licensing fee process (pp 11–15)
release of ACMA's draft report Reconnecting the customer: including review procedures, outcomes and recommendations (pp 16–19)
cybersafety campaign It's Your Life and You're in Control (pp 19–20).

1.61 The NBN Co was then called and examined. After the Chief Executive Officer, MrMike Quigley made an opening statement, questioning commenced. Matters raised included:

preparation of the CEO's opening statement (pp 27–30, 40–45)
details surrounding Mr Quigley's article in The Australian on 5 May
(pp30–31)
timing of negotiations of the Telstra agreement (pp 31–33)
issues surrounding investigations of incidents at Alcatel-Lucent (pp 33–38, 45–54, 59–61).

1.62 During examination on this issue, the Chair raised concerns about the scope of questioning of its CEO in relation to his involvement with matters concerning his previous employer Alcatel-Lucent. In relation to estimates hearings, the Senate has determined the following test of relevance:

Any questions going to the operations or financial positions of the departments and agencies which seek funds in the estimates are relevant questions for the purpose of estimates hearings.[5]

1.63 On this matter the Chair stated that "...we are getting to a stage where I think we are starting to try Mr Quigley in a de facto way here. I am getting to a stage where I think this stuff is not relevant".[6] The Chair continued:

I understand that the whole approach in estimates is about the operations or financial positions of the departments or agencies. We are straying way of that. This [line of questioning] is not about the operations of NBN Co...[7]

1.64 Questioning resumed. Matters then raised also included:

roll out of the NBN; fibre to the node versus fibre to the home (pp 38–40, 64–66)
research opportunities following on from the establishment by IBM of a global research and development centre at the University of Melbourne (pp54–55)
NBN rollout in Armidale, NSW (pp 56–58, 61)
costs of the NBN rollout for the first release sites (pp 61–62)
indemnities for NBN Co directors in respect of the Telstra agreement (pp62–63)
current status of Tas NBN Co (p. 67).

Acknowledgements

1.65 During the course of the hearings, the committee noted that this was the final appearance at estimates hearings for three senior officers who have appeared before it over several years, namely, Ms Lyn Maddock, Director of the Australian Antarctic Division; Mr Rob Freeman, Chief Executive Officer of the Murray Darling Basin Authority, and Mr Shaun Brown, Managing Director of SBS.

1.66 The Chair and committee members thanked each of the officers for the invaluable assistance they have provided to the committee and wished them each well in their future endeavours.

1.67 On behalf of the committee, the Chair thanked Senator the Hon Judith Troeth and Senator Dana Wortley for their contributions to the committee as it was their last estimates hearing.

1.68 The committee thanks Senator the Hon Penny Wong, Minister for Finance and Deregulation; Senator the Hon Don Farrell, Parliamentary Secretary for Sustainability and Urban Water, and Senator the Hon Stephen Conroy, Minister for Broadband, Communications and the Digital Economy, along with officers from the three portfolio departments and agencies, for their assistance during this Budget estimates process. The committee also thanks Hansard, Broadcasting and the committee secretariat.

Senator Doug Cameron
Chair

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