Report to the Senate
Introduction
1.1
On 11 May 2010, the Senate
referred to the committee for examination and report the following documents:
- Particulars of certain proposed budget expenditure in respect of
the year ending 30 June 2011 relating to the Defence portfolio and the
Foreign Affairs and Trade portfolio, and
- Particulars of proposed budget expenditure in respect of the year
ending 30 June 2011.
1.2
The committee has considered the
proposed budget expenditure for the year ending 30 June 2011. It has
received evidence from the Minister for Defence representing the following
ministers: the Minister for Veterans' Affairs; the Minister for Foreign Affairs
and the Minister for Trade and officers of the departments and agencies
concerned.
1.3
The committee met in public
session on 31 May and 1, 2, and 3 June 2010. Further written explanations
provided by departments and agencies will be presented separately in volumes of
additional information. This information will also be placed on the committee’s
internet site (www.aph.gov.au/senate_fadt).
Questions on notice
1.4
The committee resolved, under
Standing Order 26, that written answers and additional information should be
submitted to the committee by close of business on Friday, 30 July 2010.
Late return of answers to questions on notice
1.5
During the hearings the committee commented
on the late return of answers to questions on notice from the additional round.
In particular, the committee questioned the Department of Veterans' Affairs and
the Department of Foreign Affairs as to why their answers were not received by
the due date of 1 April 2010.[1]
1.6
The committee received the last of
the additional estimates answers from both departments, just before, and
during, the budget estimates hearings.
1.7
DVA's most recent performance
shows that of the 51 answers, 50 were received on Friday 28 May and one on Monday
1 June; the very day that DVA were to appear before the committee and 8 weeks
past the due date of return.
1.8
The Secretary apologised for the
tardiness and asked the committee to have a look at the department's record. He
explained that the department's workload had caused the delay in providing
answers to the questions. It should be noted, however, the DVA has a recent
history of delay.
1.9
In the last three financial years
of estimates, across eight rounds, DVA has been late with answers on seven
occasions, with delays ranging from 14 days to several months. The average time
delay was approximately 5 weeks.
1.10
The committee also raised the
matter of late return of answers to question on notice with the Department of
Foreign Affairs and Trade. It was noted that not one answer was received by the
due date of 1 April and two answers were 62 days late. This late lodgement of
answers is not new. To make this point about the late responses, the committee
produced the following statistics for previous rounds of estimates:
- Supplementary
2009–10 12 days late
- Budget
2009–10 13 days late
- Additional
2008–09 8 days late
- Supplementary
2008–09 50 days late
- Budget
2008–09 35 days late.
The Secretary apologised for the
delays, stating that the department would deliver in time this current round.
The committee notes that both secretaries have undertaken to provide the
questions to the budget round within the timeframe set down by the committee.
Reason for prompt return of answers
1.11
It should be noted that after the
conclusion of the estimates hearings, the committee allows approximately seven
weeks for departments and agencies to return their answers. This time frame is
intended to provide sufficient time for departments to prepare and lodge their
answers and for committee members to then consider these responses in time for
the following round of estimates hearings. Committee members are unable to give
answers due consideration if they are received just before the commencement of
the next round.
1.12
The committee understands the work
that goes into preparing the answers to questions on notice and is particularly
appreciative of the departments and agencies that endeavour to meet the date
set for the return of answers.
Defence portfolio
Department of Defence
1.13
The committee acknowledged the attendance
of Air Chief Marshal Angus Houston AC, AFC, Chief of the Defence Force (CDF), Dr
Ian Watt AO, Secretary of the Department of Defence, and officers of the
Defence organisation.[2]
Secretary's opening statement
1.14
Dr Ian Watt made a statement to
the committee, which focused on the 2010-11 Defence budget. Other topics
covered included the strategic reform program, Defence workforce numbers,
Defence payroll remediation task force, and, the ANAO report on the lightweight
torpedoes project, JP 2070.[3]
1.15
Dr Watt stated that in the 2009-10
budget, the government implemented a new funding model for Defence, which
resulted in an additional $146 billion over the 21-year period to 2029-30:
This model funds the cost of delivering Force 2030, provided
those funds are managed efficiently and effectively, and the Strategic Reform
Program cost reductions and reinvestments are achieved...In the 2010-11 budget,
the government's commitment to Defence's new funding model and the funds needed
to deliver Force 2030 has been maintained.[4]
1.16
With regard to the Defence payroll
processes and the attention it sometimes attracts, Dr Watt stated:
Since February 2010, the Vice Chief of the Defence Force and
the Deputy Secretary of Defence Support have been co-chairing the Defence
Payroll Remediation Task Force, which was established by the government to
improve the management of the ADF pay and allowances system, particularly for
troops deployed. The CDF and I issued a joint directive on 15 February this
year to give the task force executive authority within the department...With a
salary and allowance structure as complex as this, errors arise from time to
time; it would be unexpected and unlikely if they did not.
...The Defence payroll Remediation Task Force is addressing
these issues. Over the coming 12 to 18 months, the task force will concentrate
on the root causes of the problems: poor administration, poor execution of
delegated authority, process and procedural weaknesses and inconsistent record
keeping. To that end, a payroll assurance framework is being developed, which
will ultimately lead to a more robust set of controls, greater visibility and
better accountability. The task force, via the central Defence service contact
centre, has also facilitated increased access for ADF members' families and
dependants to members' pay details to allow them to better monitor and
understand the fortnightly payments that they receive.[5]
Chief of the Defence Force's opening statement
1.17
Air Chief Marshal Houston addressed
the committee about Australia's progress in Afghanistan, giving particular
detail to our military strategy, engineering projects, the mentoring task force
and force protection for Australian troops.[6]
1.18
In terms of general progress in
Afghanistan, Air Chief Marshal Houston commented that he had some pleasing statistics:
You are aware that I think the tide is turning in Afghanistan
and these statistics reinforce that belief. In a recent ISAF nationwide survey
59 percent of Afghans polled believed their country was 'heading in the
right direction'. Across Oruzgan, in the last three years the number of schools
has more than doubled. There are approximately 43,000 children registered in
school, including 4,100 girls, with a further 7,000 students attending
secondary or higher education.
In 2006, there was no provincial hospital, surgeons or
specialists. Presently, these positions are filled and the Tarin Kowt district
hospital has been upgraded to a provincial hospital with a separate women's
ward, a new outpatient clinic, a mortuary and blood bank, and a cholera ward.
The women's hospital currently assesses and treats 200 patients a day. The
number of basic health centres across the province has increase from one to
six, and immunisation for children under the age of one has increased from 37
percent in 2006 to 91 percent in 2009. [7]
1.19
A copy of both statements and
accompanying documentation were provided to the committee at the hearing.
1.20
Other topics examined during the
hearing included:
Portfolio overview and budget summary
- Anticipated ADF scheduled commitment for the deployments in
Afghanistan, Solomon Islands and East Timor. (pp. 13-14, 56).
- Remote locality leave travel entitlements (pp. 14-18).
- East Timor (pp. 13, 18-19, 56).
- Reservists (pp. 19-20, 56, 77-82).
- Integrated approach to Australia’s approach in Afghanistan (pp.
14, 20-23).
- Australia’s contribution to the leadership role in Afghanistan
and the future of national and coalition forces (pp. 23-28).
- Australian Defence Force on patrol in Afghanistan and building
community projects (pp. 28-29, 87. Also 01Jun10, p. 81).
- Defence personnel welfare and communication with families (pp.
29-30).
- Recognition of the service of elite personnel (pp. 30-31).
- Defence budget (pp. 31-41).
- Strategic reform program (SRP) and the white paper (pp. 31-33,
34, 35-38); and submarines (pp. 31-33, 34, 35-38, 57-59); SRP and the Rand
report (pp. 34-35); and the Pappas report (p. 38).
- Force protection for Australian troops (pp. 41-46, 56-57. Also,
01Jun10, pp. 6-7).
- New funding measures (pp. 45-46).
- Capital equipment program (pp. 46-50).
- Consolidated budget for Defence and DMO—DMO special account (pp.
50-53).
- Strategic reform program (SRP) and delivery of ‘Force 2030’ (pp.
53-56, 59-69).
- Civilian personnel travel allowance (pp. 69-71, 80).
- Military and civilian positions (pp. 72-73, 77. Also 01Jun10, p.
103).
- Removal entitlements (pp. 73-77. Also 01Jun10, pp. 80-81).
- Use of Army vehicles for Anzac Day parades (p. 82).
-
Defence pay arrangements and the international campaign allowance
overpayments (pp. 82-87, 117).
- Joint Logistics Command at Victoria Barracks—non-deployable
contractors (pp. 87-91, 103, 104. Also 01Jun10, p. 64-65).
- Acquisition and cross-service agreement (ACSA) with Japan (pp.
91-92).
- Proposed new military court of Australia (pp. 92-95, 103, 117;
and 01Jun10, p. 6).
- VIP, No 34 Squadron (pp. 95-104, 117. Also 01Jun10, pp. 6, 41).
- Death of Mrs da Costa in East Timor (pp. 104-106, 117. Also
01Jun10, pp. 82-83).
- Activities of operational analysts in East Timor (pp. 106. Also
01Jun10, pp. 5-6).
- HMAS Success and the commission of inquiry (pp. 107, 117).
- Health studies—ADF personnel and the SIEV36 (p. 109).
- Mental health funding (pp. 110-113).
- Freedom of information activities (pp. 113-117. Also 01Jun10, p.
82).
Defence Materiel Organisation (heard 01Jun10)
- Ammunition pouches, intellectual property rights and controlled
exports (pp. 7-9, 51).
- Contracts to manufacture equipment and ADF combat equipment (pp.
9-13).
- Defence Export Control Office (DECO), intellectual property and
export controlled products (pp. 13-17, 51).
- Contracts for manufacture of uniform fabrics (pp. 15-27; 49, 51,
80).
- Priority industry capabilities (pp. 21-22, 25).
- Harding review recommendations (pp. 27-31).
- Restructuring of Clothing SPO in Victoria (pp. 32, 51).
-
Issued and non-issued equipment: webbing and ammunition pouches,
boots and parade shoes, backpacks and protective equipment, combat fleece
jackets, backpack frames and related health issues, helmets (pp. 33-50, 57-64,
65-68, 79).
- Modular load carriage tender process (pp. 52-57, 68-77). Reports
relating to the process (pp. 57).
- Report of defects (RODUM) (pp. 67, 78-79).
- Capability projects update (pp. 83-85).
-
Echidna program (p. 85).
- Collins submarines (pp. 85-86).
- Land 121 phase 4 (pp. 86-87).
- Cyber Security Operations Centre (pp. 87-88).
Defence Housing Australia (heard 01Jun10)
1.21
The committee acknowledged the attendance
of Mr Peter Howman, Chief Operating Officer and Mr Robert Groom, Chief
Financial Officer, from Defence Housing Australia (DHA).
1.22
Matters raised by the committee
included:
- Housing stock numbers in Darwin (pp. 88-89).
- Housing in Townsville (pp. 90-91).
- Housing in Cairns, Adelaide and Western Australia (pp. 91-92).
- Housing in Victoria (pp. 92-93, 95).
- Construction costs in each state (pp. 93-94).
Department of Veterans' Affairs (heard 01Jun10)
1.23
The committee acknowledged the attendance
of Mr Ian Campbell PSM, Secretary, and officers of the Department of Veterans'
Affairs (DVA).
1.24
Matters raised by the committee during
the hearing included:
Portfolio overview/Corporate and general matters
- Possible freeze on public service positions and the effect on DVA
service delivery (pp. 95-96).
- The questions-on-notice process and timeliness (pp. 96-97).
- Dunt review—single claim form trial; claims relating to chronic
mental conditions (pp. 97-98).
- Board members on the Veteran’s Review Board (pp. 98).
- Dunt review—primary application process and supporting
documentation (pp. 98-99).
- DVA staff and various DVA administered acts (pp. 99-100).
- Expected decline in the number of claims (pp. 100-101).
-
Expected claims under the deseal/reseal scheme (pp. 101-102,
107-108). Use of statutory declarations in applications for tier classification
(pp.108-111).
- Claims assisted by ex-services organisation (ESOs) (pp. 102-103).
- Widow/widower entitlements legislation as part of the Harmer
review (pp. 103-105).
-
British Nuclear test Program—lump sum compensation to veterans
(pp. 105-106).
- Removal of war widow status and de facto relationships (pp.
106-107).
-
Building excellence in support of training (BEST) (p. 107).
- Veterans’ children education scheme (p. 111).
-
Processing times under SRCA and MRCA schemes (p. 111).
-
White card and gold card entitlements (pp. 111-112).
- Veterans health week (p. 112).
-
Centenary of Gallipoli activities (pp. 113-115).
- Creation of a commission on the Centenary of Anzac (p. 113).
- Possibility of the discovery of remains of WWI Australian solders
(pp. 115-116).
Australian War Memorial
1.25
The committee acknowledged the
attendance of Ms Nola Anderson, Acting Director, and officers of the Australian
War Memorial (AWM). Matters raised by the committee included:
- Final volume of the history of the Vietnam war (p. 116).
- Gallipoli Victoria Cross medals tour (pp. 116-117).
- Staffing at the AWM (p. 117).
- Corporate and private funding (p. 117).
Foreign Affairs and Trade portfolio
Department of Foreign Affairs and Trade
1.26
The committee acknowledged the
attendance at the hearings of Mr Dennis Richardson, Secretary, and officers of
the Department of Foreign Affairs and Trade.[8]
1.27
The committee questioned the
Secretary about an additional $212 million over the next four years, and a
projected increase in staff. Mr Richardson explained:
Essentially in the areas where we have additional funding we
have received $73 million over four years or $101 million over six years for
improving passports integrity, in other words, enhancing the passport system.
We have received $85 million over two years for the enhanced civilian
engagement in Afghanistan and $52 million over two years to accommodate the
transitional security arrangements for the Australian Embassy in Baghdad moving
from ADF provided security to our own security contractors. We have received
$14 million over four years for a continuation of the Smartraveller
information program. There are a couple of other very minor matters, but they
are the four major contributors to that overall increase in funding.[9]
1.28
The committee acknowledged that
these allocations are for important specific purposes, but sought information on
funding in relation to program 1.1, where the activity of policy-making and representation
is undertaken.
1.29
In particular, the committee noted
that program 1.1 deliverables 'are essentially maintaining an existing level of
activity', but there are also in these deliverables 'a large numbers of
references to activities which suggest a dynamic and expanding agenda'. It cited
a number of examples: promoting non-proliferation and disarmament, an advanced
role in the Asia-Pacific, further deepening our relationship with New Zealand,
and, expanding activity in areas such as the Gulf, the Middle East and Latin
America.[10]
1.30
The Secretary responded that in a
number of those areas there are some specific increases in funding. He also
stated that:
In other areas where you are doing more, you can sometimes do
more without it costing any more, you can enhance a relationship without
spending more money on that relationship by the level of attention that you
devote to it and the like. You mentioned Latin America. You will be aware it
has been previously announced that this year we will be opening a mission in
Lima; that has already been funded and factored in. But, in some of these areas
where we are talking about enhanced engagement and doing more, sometimes it is
the level at which we are doing it that we are referring to, and not all of
these matters cost money. You can also move your priorities around.
Organisations do that all the time.[11]
1.31
Other matters raised by the
committee during the hearings included:
-
Timeliness of answers to questions on notice from the previous
round (p. 5).
- Budget funding increase for the department—use of the additional
resources and areas where there is no additional funding (pp. 5-10).
- Future funding pressures (p. 10).
- Consular services and consular staff numbers (pp. 10-11).
Consular services in South Africa during the World Cup (pp. 11-12).
- Passport demand and the new passport security system (pp. 12-14).
- Security arrangements for the Commonwealth Games (pp. 14-16).
- Answers to questions on notice from the previous round of
estimates about staffing matters (pp. 16-18).
- Staffing: DFAT staff waiting on security clearances (pp. 18-19);
departures from the department (p. 19); new staffing allocations (pp. 19-20).
- Smartraveller program (pp. 20-21).
-
Terrorism white paper (pp. 21-22).
- National Security Committee (pp. 22-25).
Outcome 1
North Asia
- China, the Uygur activists, and Tibet (pp. 26-28).
- The trial of Mr Stern Hu (pp. 27, 35-44).
- The visit to Australia by the Dalai Lama (pp. 27, 28-34).
- Australia-China human rights dialogue (pp. 34-35, 47). Sentencing
of Chinese dissident, Mr Sun Xiaodi and his daughter (pp. 47, 48). Tibetan
filmmaker, Mr Dhondup Wangchen (pp. 47-48).
- Australian government visits to Taiwan (p. 45).
- Google’s withdrawal from mainland China (p. 45).
- Autonomous Regional People’s Congress (pp. 46-47).
-
Ms Giddens in Yemen (p. 48).
- Sinking of South Korean Navy vessel (pp. 48-50).
South East Asia
- Update on the situation in Bangkok, Thailand, and the currency of
travel advice (pp. 50-53, 63).
- Burma and the proposed election (pp. 53-57).
- Indonesia and the Sri Lankan asylum seekers from the vessel, Jaya
Lestari (pp. 57-60, 63).
- Australian-Indonesian memorandum of understanding on people
smuggling (pp. 60-63).
Americas
- Australian Prime minister’s proposed visit to summit on
non-proliferation (pp. 65-66).
- Australian relations with Latin America (pp. 63-65).
Africa
- Australia’s relations with Africa (pp. 67-69).
- Australia’s aid contribution to Africa (pp. 69-71).
- United Nations Security Council votes in Africa (pp. 69-71).
- Australia Africa Mining Industry Group and mining interests (pp.
71-72).
- Mr Brennan and his release from Somalia (pp. 72-73).
Europe
- Appointment of Mr Ritchie as Australian Ambassador to Italy (pp. 81-85).
South and West Asia, the Middle East
- Update on the blockade of Gaza and the flotilla in international
waters (pp. 76-79).
- Israeli use of Australian passports and the relevant protocols
(pp. 79-81, 85-87).
- Ejection of an Israeli official from Australia (pp. 85-87,
89-91).
- Afghanistan and funding of the upgrade of the embassy (p. 87).
Security arrangements in Kabul for DFAT personnel (pp. 88-89).
- Detention of Mr Langdon in Afghanistan (pp. 91-92).
- Australia’s Ambassador to the Holy See and the new chancery
project (pp. 74-75).
International organisations, legal and environment
- Australian initiation of proceedings in the international court
of justice in relation to Japanese whaling (pp. 93-105).
-
Asia-Pacific community (pp. 105-107).
-
Australian government statement on the NPT conference (p. 108).
-
Future of the ICND (pp. 108-109).
-
Australian government’s policy on uranium sales to India or other
NPT signatories (p. 109).
-
ASNO and discussions with its international counterparts (pp.
109-110).
-
Renewal of the Australia-US nuclear safeguard agreement (pp.
110-111).
-
Sanctions against North Korea (p. 111).
National security, nuclear disarmament and
non-proliferation
-
Australian government statement on the NPT conference (p. 108).
-
Future of the ICND (pp. 108-109).
-
Australian government’s policy on uranium sales to India or other
NPT signatories (pp. 109).
-
ASNO and discussions with its international counterparts (pp.
109-110).
-
Renewal of the Australia-US nuclear safeguard agreement (pp.
110-111).
-
Sanctions against North Korea (p. 111).
Bilateral, regional and multi–lateral trade negotiations
Trade development/policy
coordination (heard 03Jun10)
-
Status of the New Zealand WTO challenge to Australia’s biosecurity arrangements for apples (pp. 76-77).
-
ACTA treaty negotiations and the TRIPS agreement (pp. 77-78).
-
Update on the progress on free trade agreements with South Korea,
China, Japan and India (pp. 79-82).
Outcome 2
Consular and passport services (heard 03Jun10)
-
Passport demand and the new passport security system (pp. 12-14).
Outcome 3
Overseas property
-
ANAO report on DFAT’s property management (pp. 112-114).
Australian Centre for International Agricultural Research
(ACIAR) (heard 03Jun10)
1.32
The committee acknowledged the
attendance of ACIAR officials, Dr Nick Austin, Chief Executive Officer and Dr
Simon Ahearn, Principal Adviser, Strategy and Policy. The matters raised by the
committee during the hearing included:
-
Research collaborations in Papua New Guinea and the Torres Strait
(pp. 5-6).
-
Challenges working in PNG, and partnerships in the community (p.
6).
-
Scholarships for further study to PNG nationals (pp. 6-7).
-
Aquaculture and smallholder livelihoods (p. 7).
-
Land settlement activities (pp. 7-8).
-
Implications of climate change on food security (p. 8).
AusAID (heard 03Jun10)
1.33
The committee acknowledged the
attendance of Mr Peter Baxter, Director General, and officers representing
AusAID. The matters of most significance raised by the committee during the
hearing included:
-
Agenda for the 41st Pacific Islands Forum in August,
2010 (pp. 8-9).
-
China and aid to the Pacific region (p. 9).
-
Australia’s participants in the forum (p. 10).
-
AusAID contracts and the tendering process (pp. 10-11).
-
Contracts over $500,000 (p. 11).
-
Former AusAID staff members who have won contracts (p. 11).
-
Mr Peter Kelly and road works in Vanuatu (pp. 11-13, 35-36).
-
Cost-effectiveness of the technical assistance in the aid program
and an ANAO report (pp. 13-14).
-
Highest average monthly salary of a technical adviser and
salaries of advisers in general (pp. 14-15, 35-36).
-
Number of technical advisers employed by AusAID (pp. 15-16).
-
Review of technical advisers (pp. 39-42).
-
International funding for climate mitigation and adaptation
initiatives (pp. 16-17).
-
Australia’s climate change budget and its commitment to reducing
emissions from deforestation and degradation (REDD) (p. 17).
-
Revision in the methodology used to calculate GNI (pp. 17-18).
-
Aid budget money allocated to managing irregular migration flows
in Indonesia (p. 18).
-
Health expenditure (pp. 18-19).
-
‘Call to Action’ pilot program and Millennium Development Goals (MDGs)
(pp. 19-20).
-
Recipients of grants from the ‘Call to Action’ program (pp.
20-30).
-
Accountability mechanisms for use of the ‘Call to Action’ grant
money (pp. 23, 25-26, 33).
-
ACTU Organising, Education and Campaign Centre (pp. 22-24,
29-30).
-
Addressing gender equality in the aid program, (pp. 30-31).
-
Progress to meet specific targets within the MDGs by 2015 (pp.
31-32).
-
Allocation of funding for family planning and womens’ health in
the out years (pp. 32-33).
-
Fraud prevention program and any current investigation of
suspected fraud (pp. 33-34, 55).
-
PNG-Australia targeted training facility (PATTAF) (p. 35).
-
Independent assessments and evaluations of programs (pp. 36-37,
39).
-
New family planning activities by non-government organisations
(pp. 37-39).
-
Tides Advocacy Fund (pp. 42, 55-57).
-
Framework in relation to government departments applying to
AusAID for the delivery of programs overseas: the Development Effectiveness
Steering Committee (pp. 42-43).
-
Global Fund to Fight AIDS, Tuberculosis and Malaria (p. 43).
-
Swine flu vaccinations in Pacific Island countries (p. 44).
-
Projected increase in the Australian aid budget to Burma and
where it will be spent (pp. 44-45).
-
Australia-Indonesia Partnership for Reconstruction (pp. 45-46).
-
Update on AusAID staff working in Afghanistan (pp. 47-50, 57).
-
Aid budget for Afghanistan and planned activities (pp. 51-52).
-
Australia Africa Mining Industry Group and mining interests
(02Jun10, pp. 71-72. Also, 03Jun10, pp. 52-53).
-
Humanitarian aid program in Africa (pp. 54-55).
Austrade (heard 03Jun10)
1.34
The committee acknowledged the
attendance of Mr Peter Grey, Chief Executive Officer, and officers representing
Austrade.
1.35
Matters raised by the committee at
the hearing included:
-
Austrade’s relationship with Securency and Note Printing
Australia (pp. 58-66).
-
Government response to the Mortimer review: EMDG, Brand Australia
and the TradeStart program (p. 66).
-
TradeStart program (pp. 66-70).
-
Brand Australia (p. 70).
-
EMDG (pp. 70-74).
-
Austrade customers who have invested in Australia (pp. 74-75).
-
Staff who have recent foreign direct investment attraction
experience (pp. 75-76).
Acknowledgements
1.36
For their assistance during its
hearings, the committee thanks Senator the Hon John Faulkner, Senator the Hon
Ursula Stephens and Senator the Hon Stephen Conroy. The committee also
acknowledges the attendance and cooperation of the many departmental and agency
officers and the services of various parliamentary staff involved in the
estimates process.
![Mark Bishop](c01_1.jpg)
Senator Mark Bishop
Chair
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