Chapter 2Key Issues
2.1This chapter outlines the key issues considered by the Senate Economics Legislation Committee (the committee) at its 2023–24 Budget Estimates hearings with the Treasury and Industry, Science and Resources Portfolio’s (Industry Portfolio).
Treasury Portfolio, 30 May 2023
Department of the Treasury
2.2The Secretary of the Department of the Treasury (Treasury), Dr Steven Kennedy PSM, gave an opening statement that highlighted a growth in the Australian economy driven by post-pandemic rebound and consumer spending, high inflation and increasing interest rate rises impacting household budgets, and strong employment growth.
Macroeconomic Group, Corporate Group and Foreign Investment Division
2.3Topics examined by the committee included:
Fiscal stance of the budget (pp. 9–12).
Tax Practitioners Board (TPB) findings related to PriceWaterhouseCooper (PwC) (pp. 12–16, 20–23, 52–53).
Inflation impact and budget response (pp. 16–20).
Governance of tax architecture—PwC (pp. 23–25).
Core inflation versus headline inflation (pp. 25–27).
Downturn risks and stagflation risks (pp. 27–28).
Future power prices post government intervention (pp. 28–30, 34–36, 62–65).
Mandatory code and interaction with power investment (pp. 30–31).
Foreign ownership of homes in Australia (pp. 31–34).
Inflationary expectations (pp. 36–38).
Temporary skill migration threshold in the context of inflationary expectations (pp. 38–39).
Reliability of inflation forecasts and the role of profits in inflation (pp. 39–40, 42–44).
Appointments made by the former Assistant Treasurer (pp. 40–41).
Treasury stakeholder engagement strategy—confidentiality conducting targeted consultations (pp. 41–42).
Election donations to political parties and award of consultancy contracts (pp. 44–45).
Population policy and the net zero taskforce (p. 45).
Revenue upgrades in the Budget (p. 46).
Freedom of Information (FOI) requests and Treasury’s compliance (pp. 46–48, 82–84).
‘Review’ of the Productivity Commission (pp. 49–50).
Big Australia policy (pp. 50–52).
Treasury’s public consultation process regarding franking credits and the availability of public submissions (pp. 54–55).
Markets Group
2.4Topics examined by the committee included:
Compensation Scheme of Last Resort (CSLR) and loss recovery activities (pp. 55–57).
- PwC and any advice given in relation to the CSLR (p. 57).
Treasury investment roundtable agenda (pp. 57–60).
Consumer Data Right (CDR) (pp. 60–61).
Unpaid Superannuation (p. 61).
Quality of Advice Review (pp. 65–66, 69–70).
Financial Accountability Regime (FAR) bills package, Faith-based Superannuation, Super payments to unions policy (pp. 66–67).
Competition in the economy—rollout of the CDR (pp. 67–69).
Corporate Law regulation and enforcement in Australia (pp. 70–71).
Targeted superannuation concessions (pp. 72–73).
Super policy cap—gender assessment (pp. 73–74).
Fiscal Group, including the White Paper Taskforce
2.5Topics examined by the committee included:
Population policy modelling and infrastructure planning (pp. 74–76).
National Disability Insurance Scheme (NDIS) improvements and growth expenditure targets (pp. 76–81).
Infrastructure Pipeline cabinet deliberations (p. 81).
Determination of the 2023-24 GST Revenue Sharing Relativities (pp. 84–86).
Off Budget funds—Housing Australia Future Fund (HAFF), Re-wiring the Nation, National Reconstruction Fund (NRF) (pp. 86–88).
Net Overseas Migration (NOM) population impacts rent and inflation costs (pp. 89–90).
Not-for-Profit (NFP) Price capping for coal and gas (pp. 90–93).
Funding to address vaping health impacts (pp. 93–94).
Jobs and Skills Summit and White paper Taskforce (pp. 94–95).
Intergenerational Report delivery timeframe (pp. 95–96).
Revenue, Small Business and Housing Group
Australian Taxation Office (ATO)
2.6Mr Chris Jordan, Commissioner for the Australian Taxation Office (ATO) made an opening statement, highlighting the steps that the ATO have taken to ensure compliance and reduce revenue loss to the Commonwealth.
Australian Charities and Not-for-Profit Commission (ACNC)
2.7Ms Sue Woodward, Commissioner for the Australian Charities and Not-for-Profit Commission (ACNC) tabled an opening statement, which highlighted the work the ACNC have undertaken since February 2023 and support for the announcement of nationally consistent charitable fundraising principles between the Commonwealth, State and Territory governments.
2.8Topics examined by the committee included:
ATO awareness of PwC’s conduct and assistance to the Australian Federal Police (AFP) investigation (pp. 98–104, 109–112, 118–121).
Review by the Attorney-General’s Department (AGD) of the secrecy provisions (pp. 104–105).
Franking credit reform (pp. 105–107).
Victorian Government tax changes (pp. 107–108).
Stage-3 Personal Income Tax Plan Re-costings (pp. 108–109).
Council of Small Business Organisations Australia (COSBOA) Procurement process (pp. 112–115, 132–134).
International unrealised capital gains taxation (pp. 115–116).
Budget Paper 1 Charts 3.11 and 3.14 (p. 116).
Franking Credit—Capital Revenue Raising (pp. 117–118).
Charity preparation for the Voice Referendum (pp. 121–123).
Ninth Australian Charities Report timeline (pp. 123–124).
Expert Advisory Panel—Review of new advisory board members (p. 124).
Investigation of Hillsong (pp. 124–126).
Governance standards six (p. 126).
Transfer Pricing Measure—Shell versus the Department of the Treasury (pp. 126–130).
Small business clearing house for Super—Batch rejections (p. 129).
HECS Debt reduction in real-time (pp. 130–131).
Foreign purchases of property in Australia (pp. 134–136).
Treasury Portfolio, Wednesday, 31 May 2023
Reserve Bank of Australia (RBA)
2.9Topics examined by the committee included:
Wage Growth and Inflation Risks (pp. 4–5).
Productivity drivers (pp. 5–7).
Energy Market Regulation (pp. 14–15).
Audit and Risk Management contract with PwC (pp. 9–10, 13–14).
Budgetary monetary policy (pp. 10–13).
Mortgage pressures (pp. 15–16).
Rent inflation and growth concerns (pp. 16–18).
Interest Rate Rises (pp. 18–19).
Term Funding facilities fuelling banking profits (pp. 19–20).
Geographic distribution of economic spending patterns (p. 20).
Infrastructure investment relating to Productivity Growth (pp. 22–23).
RBA Foreign Currency Reserves (pp. 23–24).
Gold reserves (p. 24).
Budget Paper 1 Inflation predictions (pp. 24–25).
New design $5 dollar note (pp. 25–26).
Australian Prudential Regulation Authority (APRA)
2.10Mr John Lonsdale, Chair of the Australian Prudential Regulation Authority (APRA) made an opening statement outlining the continuing work of APRA in ensuring banks’ lending criteria are met with potential borrowers, upholding regulatory frameworks and that APRA’s future focus will be on insurance availability and affordability, superannuation transparency and reducing cyber risks to consumers.
2.11Topics examined by the committee included:
Prudential stability of Australian banking and financial system (pp. 27–29).
Serviceability of mortgage requirements (p. 29).
Superannuation funds (pp. 29–33).
PWC contracts with APRA (pp. 33–35)
April Choice Heatmaps (p. 35).
Affordability of insurance in rural and regional Queensland (pp. 35–37).
Transparency and accountability, including Ministerial directions (pp. 37–38).
Underwriters of insurance policies for farmers (pp. 38–39).
Exemptions to loan policies (pp. 39–40).
Australian Competition and Consumer Commission (ACCC)
2.12Ms Gina Cass-Gotlieb, Chair of the Australian Competition and Consumer Commission (ACCC) made an opening statement highlighting the ACCC’s current priority of combatting scams, with the recent establishment of the National Anti-Scan Centre.
2.13Topics examined by the committee included:
ACCC’s scam prevention response and activities (pp. 41–44).
Firm concentration and competition in the supermarket sector (pp. 44–46).
Design of a mandatory code of conduct for the gas market (pp. 46–48, 52–55).
Mechanisms for regulating gas market prices (pp. 48–49).
APRA Australasian Mechanical Copyright Owners Association (AMCOS) bargaining negotiations (pp. 49–50).
Firm concentration and competition in the consulting sector (pp. 50–52).
Tax Practitioners Board (TPB)
2.14In his opening statement, Mr Peter de Cure, Chair of the Tax Practitioners Board (TPB) outlined the TPB’s involvement in the Peter-John Collins case. Mr de Cure stated that the case required the TPB to balance its commitment to transparency with its obligations to preserve the secrecy of taxpayer information. Mr de Cure disclosed that information on the case was provided to the committee through the questions on notice process from the Supplementary Budget Estimates in February 2023.
2.15Topics examined by the committee included:
Misuse of confidential tax information by PwC:
TPB’s investigation powers and processes;
PwC’s conduct and registration as a tax practitioner, including the deregistration of Mr Peter-John Collins as a tax practitioner; and
Operation of sanctions on PwC (pp. 55–70).
Australian Office of Financial Management (AOFM)
2.16Topics examined by the committee included:
Green bond market maturity forecasts (pp. 70–71).
Non-introduction to premium bonds such as evident in the United Kingdom (UK) and New Zealand (NZ) in Australia (pp. 71–72).
New debt issuance levels post 23-24 Budget (pp. 72–73).
Chart 3.1 & 3.2 Budget Paper 1—Underlying cash balance AOFM Co-sourcing (p. 73).
Productivity Commission (PC)
2.17Mr Michael Brennan, Chair of the Productivity Commission, notified the committee of his last appearance at the Senate Estimates hearings. The committee thanked him for his service as Chair of the Productivity Commission over the last five years and wished him all the best in his future role.
2.18Topics examined by the committee included:
Productivity experience in Australia and comparable countries (pp. 74–76).
Five-year Productivity Commission review (pp. 76–77, 81–82).
Council of Federal Financial Relations (pp. 77–79).
Workplace relations and contribution of flexibility to productivity (pp. 79–81).
Strengths of current arrangements including independence (pp. 82–84).
Australian Bureau of Statistics (ABS)
2.19Topics examined by the committee included:
Statistics on birth registrations and revisions (pp. 84–85).
Mortality data and variances between provisional and actual mortality data (pp. 85–86).
Operation of the compulsory health and nutrition survey (pp. 86–88).
Use of terminology ‘non-binary’ in Census (pp. 88–90).
Industry Portfolio, Thursday 1 June 2023
Department of Industry, Science and Resources
2.20The Secretary for the Department of Industry, Science and Resources (DISR), Ms Meghan Quinn PSM, made an opening statement highlighting DISR’s newly implemented measures to diversify and transform Australian industry. Ms Quinn outlined newly created programs from the budget, including Program 1.4—Nuclear-Powered Submarine Program.
Corporate
2.21Topics examined by the committee included:
Board vacancies at DISR and recruitment process (pp. 5–7, 15–17).
Gas policies and interventions (pp. 7–9).
Office of the Chief Scientist staffing and independence (pp. 9–11).
Procurement processes—PwC (pp. 11–12).
FOI requests—AGD’s support for the Freedom of Information Act 1982(FOI Act) (pp. 12–14).
Grants awarded in 2023 (pp. 14–15, 17–20).
Outcome 1, Program 1.1—Growing innovative and competitive businesses, industries and regions
2.22Topics examined by the committee included:
National Reconstruction Fund (NRF) policy outcomes and other areas (pp. 20–22, 40–42, 45–48, 52–54, 55–56).
Australian Academy of Science—reduction in spending on Research and Development (pp. 22–26).
Modern Manufacturing Initiative (MMI)—Consultation and expenditure process (pp. 26–30).
Space program waste management (pp. 30–31).
NRF—Modelling on inflation and productivity (pp. 31–35).
Entrepreneurs Program and the Industry Growth Program (pp. 35–37).
Ai Group reviews on Budget (p. 37).
New Industry Growth Program—Progress and Timeliness (pp. 37–39).
Powering Australia—Expression of Interest (EOI) process (pp. 42–45).
Space industry funding allocation (p. 48).
Moon to Mars program (pp. 48–51).
Major Projects Facilitation Agency—Projects under assessment (pp. 51–52).
Australian Building Code (pp. 54–55).
Commonwealth Scientific and Industrial Research Organisation (CSIRO)
2.23Dr Larry Marshall also notified the committee that this would be his last Senate Estimates hearing as Chief Executive Officer (CEO) of the CSIRO. The committee thanked Dr Marshall for his service and wished him all the best in his future endeavours.
2.24Topics examined by the committee included:
External funding for the CSIRO (pp. 57–59, 67).
Use of chemicals in hydraulic fracturing (pp. 59–60).
GenCost Report (pp. 60–62).
Carbon sequestration and carbon credits (pp. 62–64).
Deep Sea Mining management plan and contracting (pp. 64–67, 70–72, 74–76).
Gas Industry Social and Environmental Research Alliance (GISERA) (pp. 67–68).
Gene Dive technology for pest control (pp. 72–74).
Overpayments to Deputy Chair of Board (pp. 68–72, 76–77).
Department of Industry, Science and Resources
Outcome 1: Program 1.3 Supporting a strong resources sector
2.25Topics examined by the committee included:
Offshore Carbon Capture and Storage (CSS) (pp. 77–80).
Gas acreage release process timeline (pp. 80–83).
Net-Zero pathway planning (pp. 83–85).
Strategic Basin Plans (pp. 85–86).
Beetaloo Basin Drilling Program (pp. 86–88, 89, 95–96, 97–98).
Contracts between DISR and PwC (pp. 88–89).
Informed consent on mining projects by First Nations People (pp. 89–92).
Critical Minerals Development Program Grant announcement (pp. 98–99).
East Coast Gas Supply Issues (pp. 92–95).
Gas well trials (pp. 96–97).
AET191 Empire Energies accelerated investment (p. 99).
National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA)
2.26Topics examined by the committee included:
Consultation preparation for environment plan—updates (pp. 100–12)
Environmental Plan assessment—updates (pp. 102–103)
Management and oversight of carbon capture utilisation and storage—division of responsibility (pp. 103–104, 109–110)
Woodside Pluto platform turnaround—work scope (pp. 104–107, 110–111)
Australian Securities and Investments Commission’s Memorandum of Understanding (ASIC MOU) with NOPSEMA (pp. 107–109)
Department of Industry, Science and Resources
Outcome 1: Program 1.4 Nuclear Powered Submarine Program
2.27By request, representatives from the DISR’s Nuclear Powered Submarine Program, the Australian Radioactive Waste Agency (ARWA), and the Australian Nuclear Science and Technology Organisation (ANSTO) appeared together for the final component of the committee’s hearing. The DISR Secretary, Ms Quinn, was present to provide a detailed explanation of the new program for the committee’s benefit.
Australian Radioactive Waste Agency (ARWA)
Australian Nuclear Science and Technology Organisation (ANSTO)
2.28Topics examined by the committee included:
ANSTO’s role in Program 1.4 Nuclear Powered Submarine Program (pp. 111–113).
DISR plan to manage future radioactive waste (pp. 113–114, 117–124).
Napandee purchase—site works and legal cases (pp. 114–115, 119).
Australia, United Kingdom and the United States of America (AUKUS) contractual work undertaken by PwC (pp. 115, 125–126).
High level waste for small modular reactors (pp. 124–125).
International Atomic Energy Agency (IAEA) Deputy meeting with ANSTO (p. 125).
Senator Jess Walsh
Chair
Labor Senator for Victoria