Reserve Bank wants a Central Bank Digital Currency in Australia 

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A Central Bank Digital Currency goes hand in hand with the idea of a Digital Identity. With all of your information and money stored online, central banks or governments could turn off your access to money and society in the blink of an eye.

The last time I asked the Reserve Bank about a Central Bank Digital Currency, there seemed to be no real plans. Conveniently they are now considering it, just as the feared Digital Identity Bill proposal is being pushed by Government.

Transcript

[Chair] Senator Roberts.

Thank you. Thank you for appearing again. I’m gonna start with a sincere compliment, Mr Debelle. I’ve been impressed with your frankness and your directness and your succinctness. You convey a lot of confidence and I would also like to start by complimenting the Reserve Bank for the answers I received in the last estimates, which after examination were complete and factual. So question one, Chair: the Reserve Bank has now signed on to the International Central Bank Digital Currency Platform, Project Dunbar, and I quote, “aims to develop prototype shared platforms for cross border transactions which will allow financial institutions to transact directly with each other in the digital currencies issued by participating central banks.” Now, as I understand it, Mr Debelle, Australia will be testing this platform, along with Malaysia, Singapore, and South Africa, which suggests we have a digital currency to use, to test the platform. Where is the Reserve Bank on the development process for the Reserve Bank Digital Currency and what’s the timeframe here for testing and implementation?

Hello, pass that one to Ms Bullock, please, Senator, she’s the expert in this space. Well, has carriage of this, at least.

Thank you, Senator. So, the first thing to note is that Project Dunbar is a proof of concept, so I’d distinguish it from a pilot. Pilot is where you actually have actual real money. This isn’t a pilot, it’s actually a proof of concept. So really, what it’s about is going through the technical infrastructure you might need, the legal arrangements you might need, to patent requirements you might need to set this sort of multicurrency approach up. So there is no Central Bank Digital Currency, we don’t have one, the other central banks don’t have one, it’s purely a proof of concept, if you like, It’s a little bit of a desktop exercise with a little bit of experimentation with technical approaches to do it, so there’s no actual Central Bank Digital Currencies involved.

Okay. Thank you. Oh, sorry.

I was just gonna go on to your second question, if that’s all right.

Okay.

So, your second question was about where we are at with Central Bank Digital Currency. So, we’ve had a multiyear process in this. We’ve done some small experiments. We’ve experimented internally with the concept of a wholesale Central Bank Digital Currency. Again, it’s not real, it’s just sort of a mock-up if you like, and we’ve done that internally to see whether or not individual banks could perhaps use it for settlement between them. We’ve also expanded that fairly recently. There was a report in December, Project Atom, which was an experiment again with Commonwealth Bank, National Australia Bank, Perpetual and Consensus and ourselves. And the concept here was, again, a proof of concept. It wasn’t a pilot; a proof of concept to see whether or not a Central Bank Digital Currency, paired with tokenized syndicated loans, would actually make a more efficient way of having syndicated loans transacted through the economy. We released the report on that in December and I think it proved that there were some efficiencies in this area, but –

Excuse me, did you say there were inefficiencies?

Efficiencies.

[Roberts] Efficiencies.

Efficiencies. So, syndicated loans is a very manual process, and quite lengthy, and what the project proved was if you tokenized the syndicated loans, you had a Central Bank Digital Currency to transact amongst the various players in the syndicated loan, that actually that made that a much more efficient process. Whether or not you can do it with normal payment systems as well is another question, but we didn’t test that, so there’s that. We’re also participating, as you mentioned, in Project Dunbar with the Bank for International Settlements Innovation Hub and those three other countries, and we’ve recently formed ourselves a Central Bank Digital Currency Group in the Payments Policy Department, and we’re going to be engaging with the Digital Finance Cooperative Research Centre, which is looking at all sorts of things digital. We’re going to be engaging with them on looking at Central Bank Digital Currencies as well, so that’s a little bit of a potted history of where we’re at with our work on this.

Okay. Thank you. If a new digital currency is to be created out of electronic ledger entries, will existing amounts of cash be converted into digital dollars? The public may be confused about how this is going to work. Can the Reserve Bank please provide a simple overview of what happens after the project gets the green light? Where’s the value coming from? So when we have a cash?

What we’re assessing, Senator, really, is exactly that: their value, given we have a pretty decent payment system as it is, which includes cash, clearly, but also electronic settlement, and you sort of nailed the question, really, which is: is there value in this? Is it worth the investment at this stage or not? Michelle, I don’t know if you wanna add anything to that.

The only thing I’d add, Senator, is that there is no suggestion in which we are getting rid of cash. This concept is not to replace cash and it hasn’t even been decided that we would do it. This would be a decision not for the Reserve Bank, but for, in fact, the Government, and it wouldn’t be replacing cash, so that’s very clear.

When I was talking about the value, I wasn’t talking about the value of the process. Is it gonna be more efficient? Is it worth doing, so I appreciate your answer and that quite clearly, that’s one valid interpretation of my question, but what I was getting at was, if someone’s got so much value in Australian dollars, how will that be converted into digital currency dollars or whatever the currency is? Will they still have that purchasing value?

Sure. So the way that most central banks are looking at this around the world is that the central bank itself won’t be providing people with digital money. It will work like cash does. So at the moment, if you want cash, you go to your ATM or your bank and you withdraw some cash from your bank account. A digital currency, if we had one, would work in a very similar way. You would go into your bank and your bank would have presumably a digital wallet, or you’d have a digital wallet, and you would take some money out of your bank account and you would put it into Central Bank Digital Currency, just like cash. So you can think about it in a very parallel way.

Yes, but if someone’s got $2,000 in cash today in their bank account, will that give them the equivalent purchasing power if there’s a conversion into digital currency?

Yes. Correct. It would be exactly the same as if it was a $100 bill or $100 on your mobile wallet.

Okay. Thank you. Now the BIS is involved. So, one specific case: our foreign exchange reserves are used to settle international transactions. These will now be replaced with the Reserve Bank Digital Dollars, if it goes ahead. Is the process to simply replace the US dollars we have in reserve with US Government-issued crypto dollars or a similar value-basis digital currency?

[Debelle And Bullock] No.

[Bullock] Do you wanna take this?

Straight to the chase: no, Senator, we would still continue to hold $USD reserves in the instruments we currently hold them at, which is primarily US Treasuries.

Okay. That’s pleasing to hear. What are the risks in doing this, for example, if this was handled badly, not necessarily from the Reserve Bank, but for the people you’re dealing with overseas, if the system wasn’t tight? What are the various risks that you can foresee that need to be managed?

This is why I think there’s a lot of water to flow under the bridge before any advanced economies really have launched into this. There are obviously cyber issues. You need to make sure that the system is secure. Overseas consultations demonstrate that people are very concerned about privacy, which is a very valid concern, but by the same token you’re also concerned about a use of digital currency for criminal purposes, so there’s a balance there. Another concern, that is one that most central banks identify, is concerns about the banking system and whether or not there might be a flight of deposits, if you like, to the Central Bank Digital Currency, which would have implications for banks’ balance sheets, potentially make it easy to run on banks, if people were concerned about banks, so there’s a whole lot of financial stability risks and issues associated with it. That’s just a sample of some of the issues that need to be considered if we were going to go in this direction and have some sort of what I would call “retail” Central Bank Digital Currency.

Thank you. Two more questions, Chair. Digital or cryptocurrency is not backed by any asset. It’s literally an exercise in trust that the government can protect the value of someone’s currency. Is this the time now to start talking about getting an asset backing behind this new currency, such as gold?

Senator, just like cash at the moment, it would be a feat currency, which is to say it isn’t backed by anything. And you’re right. It’s all about trust in the institutions of the country, in the government, in the Reserve Bank, so in that sense, it would be just like cash, if we were going down this route, it would be an unbacked currency.

But it’s backed by the government’s capacity to raise revenue from its citizens, basically.

Backed by the government’s capacity to raise revenue, did you say?

Yep.

Thank you. Last question. During COVID, there’s been a hell of a lot of money spent on non-productive outcomes. As much as food and rent can be considered non-productive, they’re essential, but they’re non-productive, the outcome of long-term borrowing for short-term gain is inflation. Is spending on productive capacity: roads, railways, bridges, dams and irrigation in this recovery phase, likely to produce a lower inflation outcome across forward estimates than continuing to spend on what can only be described as economic sherbet?

I don’t know, I mean, that’s an an interesting question, Senator. I mean, I’m not sure I would draw that distinction, I think food I would regard as a pretty productive and essential service, an essential thing for people to consume, so, I mean, we build roads for a purpose, not just because, which is to satisfy people wanting to use them, and the same with food and same with shelter, so not quite sure how we can draw such a clean line between what’s productive and unproductive.

Well, perhaps, well food is essential, as I said, perhaps spending on non-productive assets: entertainment, instead of travelling overseas, people are buying new cars, that kind of thing. What I’m talking about is spending on such items that may be essential, but not producing increased wealth, could lead to inflation. That’s the risk. On the other hand, spending on something that increases productive capacity, like a dam with irrigation systems to supply increased food productivity and lower the cost of food, leaves people better off and wealthier overall. That’s what I was getting at: a productive capacity, rather than just consumption.

There is a reasonable amount of dollars investment in infrastructure at the moment, that’s increased quite a bit, both from the Commonwealth and the State Governments, so that sort of spending is absolutely happening. Again, I’m still not quite sure I would draw such a clean distinction. In the end, people consume what they want to consume and I’m not sure it’s up to us too much to tell them what’s good and bad about that, within reason.

Well, that’s a wonderful statement to hear coming into my ears now. I love that, but yeah, sorry?

I said, “I thought you’d like that.”

So what we’ve got, though, is an acknowledgement that there is money being spent on infrastructure. You’ve answered my question. I just personally believe, Chair, that we need to spend more on improving our productive capacity. Thank you very much. Again, Chair, I’d like to put on record that the Reserve Bank always answers quickly, succinctly and factually. So thank you. It’s really appreciated.

[Chair] Dr Debelle, you’ve got a fan there.

[Roberts] Yep. He has.

[Debelle] Thank you.

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Coal LSL – Caught Out

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After an independent report vindicated One Nation and casual coal miner’s accusations of unscrupulous malpractice, the pressure has been on the Coal Long Service Leave Scheme to give workers a fair go and on Government to clean up their agency. Coal LSL initially tried to refuse coming to Senate Estimates and over the course of many more sessions repeatedly denied anything was wrong. We now know that was a lie.

Transcript

Chair.

Okay, thank you. I will go to Senator Roberts.

Thank you chair, and thank you for attending again. And, my first question is going to the to the minister, and I note that the KPMG review of Coal LSL report came out today.

Yes.

I haven’t seen it, but it came out.

Yes, it’s out.

So we’re looking forward to reading that. Thank you very much for arranging that.

Thank you for working so constructively with government on it.

Well, it’s a big concern as you know, for us, the coal miners in Queensland and New South Wales. Now, I note that KPMG was engaged to undertake the review of Coal LSL, in relation to the underpayment and abuse of casual coal miners. KPMG has also conducted the audit of Coal LSL. Doesn’t that create a conflict of interest? And what did you do to manage this conflict? Because the audit could have influenced the review and the review could have influenced the audit.

Look, I don’t regard that as giving rise to a conflict of interest. There was no direct financial interest for KPMG to do anything other than act consistently, with its duties as an independent examiner there.

Senator, I’m aware there was an audit,

and commissioned by the corporations, it’s conducted by PWC.

During procurement processor. When we selected an independent review and a KPMG, we looked at any consultant and at the time with engaged to buy. The corporations may causing a perception of a conflict interest, we have exclude them. So at the time we engaged KPMG and the KPMG wasn’t working with the collective corporations or any other projects, but Miss Pearl Kumar may have given updates on. Are they been engaging KPMG on the consult?

You welcome, thank Senator. Thank you, Senator.

I can confirm that KPMG has not been engaged by Coal LSL to conduct any work. They’ve not been involved in our internal audit programmes. They’re not engaged by the ANAO to do our external audit. So, from, yeah, I think we’re confident to say that any conflict of interest certainly wouldn’t exist with KPMG conducting that work on us.

Now I’m going to leave out my second question because the report may, the review report may address that. So I’ll just go straight to my third. When will Coal LSL fix its broken system that disadvantages coal miners, casual coal miners everywhere? And when would you remove the biassed and conflicted members from the board, so workers get a fair go? I’m talking here specifically about what I see and what we’ve talked about for a long time now. The conflicts of interest with having significant, well 50/50 minerals council in New South Wales and CFMEU from New South Wales involved. When will that be addressed?

Senator Roberts, without wanting to spoil your reading, because you know, spoiler alerts are sometimes needed on these things. One of the recommendations in the report is that there’d be independent directors added to the board and the expectation that that would assist with dealing with the problem you raise.

Okay. Thank you. We’re pleased to hear that. Last question, Chair. The one key resources case where many casual coal miners missed out on their fair pay back pay conditions, seems to have been blatant phoenixing to us. Yet, this rip-off of workers was accepted by your government, the courts, labour and the CFMEU and Hunter Valley. More needs to be done to protect casual coal workers to get equal pay and entitlements and safety. One nation has proposed the equal pay for equal work bill to protect casual coal workers. What are you doing to make sure that this doesn’t happen again people have lost there.

The KPMG report and I’ll paraphrase somewhat here, acknowledges that there has been difficulties and confusion associated with a lack of clarity on what constitutes a black coal worker and also the changing environment and timetables on which people work. It plans out our ways in which that can be dealt with so that we don’t face that problem in future. It also provides some good recommendations for how to resolve those concerns as they have arisen in the past. I’m optimistic that as we implement the government’s response to those recommendations, we will have that in a more satisfactory place for everyone involved.

Because this is affecting tens of thousands of families who are significantly underpaid compared with permanent workers doing the same job. But it’s just one of a suite of issues. This is just, it’s very important to coal miners. And we’ve been relentless in this, and we’re pleased to see what you’re doing, but it’s a one tiny aspect of the bigger picture, which we can.

Look, I share your sincere concern for making sure that this works for everybody. And that’s why I’m really optimistic that what’s come to us through the KPMG report, and all the recommendations to government have been accepted, in, you know one form or another. And I’m really pleased to say that we’ll be working to do what’s necessary to make all of that much more functional for the future.

I look forward to reading the report and thank you chair.

Thank you, Senator Roberts.

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Government approach to Industrial Relations disastrous

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Australians have had their workplaces wrecked by the Government’s COVID mismanagement. Casual Coal miners have also been let down for years. I asked the Attorney General about this and more at Senate Estimates.

Transcript

Thank you, chair. And thank you all for attending today.

Nice to see you again, Mr. Hehir, it’s always a pleasure. I mean that sincerely. Minister, I’ll just read 11 points from my additional comments to the job insecurity inquiry report. These are the things that we see in addition to exploitation of casual coal miners which we’re gonna have a further discussion about tomorrow.

[Michaelia] Yes, you and I, yes we are.

Yes. And which we’ve been trying to make progress for a couple of years now, in addition to the exploitation of casual coal minors, Australians are suffering right now from what I consider to be COVID mismanagement both federal and state, due to capricious lockdowns and mandates. People are uncertain. The second thing is the phasing out of the coal industry and jobs under the part under the policies of all four major parties, the erosion of people’s rights and freedoms, especially workplace rights and freedoms in this context. Increasing energy prices which are decimating manufacturing and hurting agriculture. The killing of manufacturing as a consequence. The lack of much needed tax reform. The lack of much needed economic reform. Increasing debt. Workplace health and safety systems being bypassed. Australia’s productive capacity being destroyed. And this is the one I want to ask questions about, the failure around industrial relations systems and more. There’s a lot that’s hanging over workers heads. And small business in particular.

Okay.

Would you agree? And I think the solution in many cases is to come back to the basics of employer-employee relationship, the fundamental workplace relationship. So with regard to the coal miners in Queensland and especially the Hunter Valley, we’ve seen workplace safety and health jeopardised, bypassed, people threatened with firing, being fired if they raise safety issues, made a submission to the Grosvenor mining inquiry. The issue of Simon Turner, no worker’s compensation, no accident pay for injury, sacked while being injured, injuries and incidents not being reported, pay rates for casuals being 40% less than people on permanent employed by the mine owner, right next to them doing the same job and the same roster. Coal LSL, which I commend you for the report that’s come down today.

Thank you. And I think they’re coming later on to-

Yeah, we’ll be there.

Yeah, no, that’s what I thought. Yeah, you’ll be asking the questions, yes.

Yes. As we have been in every session for the last two years. The loss of coal miners, basic leave and other entitlements and the threats of dismissal. So these remain outstanding and still to be addressed. And we’ll be talking more about that tomorrow.

Yes.

What I see, minister… I’ll let you finish.

[Michaelia] No, I’m just having a look at something you’ve written, just to make sure I’m all over it. Yep.

My question is basically the exploitation of casuals, is I believe a symptom of a highly complex, needlessly complex industrial relations system that is not serving workers, not serving small business, and not serving some employees, and families and workers are getting jammed in the middle.

[Man] Does the report correctly address?

We see large companies, multinationals in particular, using casuals to bypass industrial relations systems instead of sitting down and negotiating with their workers and with the union we just see a bypassing through casuals. So what I’m asking you is, is there any understanding in your department that the exploitation of casuals is a signal or a symptom of the fractures in the industrial relation system?

Okay, there was a lot of commentary there but what I might do is hand over to Mr. Hehir, who obviously has looked at the job security report, and get him to take that question.

Thank you, Senator, for the question. In terms of the the casuals, it’s probably just worthwhile clarifying. So where casuals are employed by the company themselves they are still subject to the same industrial instruments that the company has either negotiated or the Fair Work Commission has made. So in terms of where the company itself is the employer, there is the negotiation and discussion process that you talked around the company having with its employee, where there’s an EA, should have occurred. So certainly there should be clear processes within any enterprise agreement around how the various employees will be treated and what they’re entitled to. I think in part, you are referring to the combination of casuals and labour hire?

[Roberts] Yep, thank you for picking that up.

So that does make for a more complex situation recognising that labour high would regard as less than 2% of the workforce traditionally, but it is an important mechanism that is used by both host employers for short term work when they need it. And as part of when the need arises. So recognising that it’s an important and valuable part of the economy. It’s clear that when it leads to different rates of pay it does cause some level of confusion. In terms of-

And beyond that it causes some kind of angst as well, and is not very helpful for safety.

I accept that. And I know that there’s been a number of comments within the report itself around that broad issue. It’s certainly something that the department will look at very carefully. It has been raised both within the main body of the report, as well as within your comments, in terms of how does that work? The reality is The Fair Work Act and the framework upon which it sits was designed around an employer being the legal entity that actually employs the person rather than necessarily the location where they work. So that’s the nature. And the Fair Work Act is clear that we have minimum rates of pay. But what we actually wanna see is higher rates of pay than the minimum, being negotiated by employers and employees. So that’s, I think one of the very clear principles within the bargaining provisions within the Fair Work Act, that we actually want to do that. The only mechanism that… and the mechanism is focused on the individual businesses. And in this case where you’ve got two businesses working, or the employees of two businesses working in the one location. I agree that can cause angst and confusion but it’s certainly something that we need to have a look at in response to the work. And that’s something that we’ll provide advice to the government on once we’ve had the opportunity to finalise our analysis of the report. But I having said that, the very important focus within the Fair Work Act is that we do want people to bargain. We do want businesses and employees to get together and to think about how they can increase productivity and then share that productivity in the form of increased profits and in increase wages. So, and the clearest mechanism to do that we feel at this point is on an individual business basis.

Thank you. You gave us a comprehensive understanding of, and I know you’ve got that, of the casual work situation and the abuse of that. And I’m certainly validating that some casuals want casual work, and I’m not just talking about the coal industry here, but even in the coal industry some casuals do want casual work. They prefer to have that option but there has been some abuse of that. And I believe that the complexities of the industrial relations system in this country right now make it as such that some employers, rather than facing up to negotiation they will bypass that and establish a labour hire relationship. Some labour hire companies are good employers, some are not and some rely upon basically cutting wages so that they can make a profit by getting the margin and still leaving the business owner with superior profits. So that’s definitely a strategy that we can see. So my question that I don’t feel was answered was that do you consider that the complexities… And the Act is what, this high? 600 odd pages? the complexities of that Act lead to workers, small businesses in particular, and even some big businesses, not having clear understanding of the employer-employee relationship. And so we dive into all kinds of other arrangements.

Senator, the Fair Work Act is a substantial piece of legislation. It does have a number of parts. But we’ve certainly heard commentary in the past that it’s complex and difficult, and we acknowledge that commentary. At the same time, and we do understand the importance of this as well. There are important workers protection, in terms of the bargaining process and other things in terms of making sure that the bargaining is done fairly. And certainly there is some concern that those procedures inhibit the bargaining but they’re also really important in terms of the principle of making sure that the bargain is fair. So getting that balance right is something that we continue to think about. We as a department, we honestly really engage in the discussion around productivity growth. We think it’s a significant issue for Australia and large parts of the Western world that productivity growth is low. And we would certainly encourage parties to bargain. But the reality is that the Act is based on both providing the opportunity to bargain but also making sure that those bargains are fair. And I think that’s sometimes where we see the complaints about complexity always happy to have a look and say, how can we attain that fairness in a more simplified fashion? And that’s where we-

And Senator Roberts, I mean, you often come with the Fair Work Act and the various iterations of it in terms of just to demonstrate how big it is and how much both employers and employees have to navigate. Because it’s both parties understanding their rights and obligations. And certainly without a doubt, it is a complex Act. And it was one of the reasons, you and I discussed this. It was last year now, I think, the stimulation to the reforms to casual employment providing a definition, to provide clarity, as to what a casual is. Offering the ability to convert to permanent work, clarifying the Rossato decision, the devastating 39 billion impact on the double dipping and what that would’ve done to business. So I do agree with you and we certainly have been able to make some headway in relation to parts of it, but obviously the other parts of the omnibus bill didn’t get the support, but they are, I think, some concrete examples of where you can actually put in place. So for example, an actual definition, give the ability to convert, clean up a court decision and actually give certainty to employers. But I certainly acknowledge that this is something that you raise time and time again.

Yeah, and the fundamental-

Can I just check how long we have to go? I usually like to rotate the call every 15 minutes,

Another 10 minutes.

That’s absolutely fine.

What I’m getting at, minister, is that the fundamental problem is that despite the intentions of everyone involved the Fair Work Act, the previous work choices attempt the marren complexity, lack of understanding the fundamentals. And what’s happening with the Fair Work Act is that the workers and some small businesses and even some large employers are sidelined in favour of the industrial relations club. Lawyers, consultants, HR practitioners, large union bosses, large industry groups and the worker is sidelined. And so do you see any need then for restoring the primacy of the workplace relationship, the employer-employee relationship, and I know that the fair work Act, Mr. Hehir, does have protections in it, but when it’s so complex, the protections get lost. And so making it clear on workers’ rights, entitlements, protections, safety, which I know assist productivity. So instead of these things being bypassed they’re actually entrenched and allowing for flexibility because more and more workers today see alternative structures of work and work times in particular whether it be uni students or small businesses or casual coal miners, they want that.

And I think you make an important point in terms of the ability for, in particular employees, to choose the type of work that they want to want to undertake. And that is why you’ll never find the coalition government in any way, demonising casual employment as so often happens. And in particular, in this committee it is a valid form of work that so many choose. And when we can take you through the statistics in relation to casual employment. But also that landmark reform that we did pass in terms of that ability to actually convert should you wish subject to certain conditions. Again, it’s about giving both the employer and the worker, the employee, the choice to do that. Just in terms though of people actually understanding their rights, very important obligations, very important under the Fair Work Act. I think a lot of the work that The Fair Work Ombudsman does and in particular, that investment in its educative role is so important, working with small businesses, because there’s often the small businesses that don’t have that capacity to understand the Fair Work Act. And they’ll be on later on today, if you want to come back and ask them questions in terms of what is the educative role of The Fair Work Ombudsman.

We asked that at the last estimates.

We can get an update then of these estimates. But that’s a really good point because it’s not just about the Fair Work Act itself, as you’ve acknowledged, there are other ways and means, and one of them is ensuring that The Fair Work Ombudsman is able to get out there, talk to employees, talk to employers, and actually educate them on what their rights and responsibilities are.

I know that I’ve had a very positive response and fact agreement that David Newman from the CFMEU, Michael Raba from the CFMEU and from Queensland, from the Business Council, Australia, from Small Business Associations, that they’d be willing to sit down in a process to explore a much simpler and better and more effective industrial relations frame work. So I know an election is coming so I’m not expecting you to make any commitment and this is a touchy area but is there any appetite for that if it’s done properly?

Oh, well, I think when you look at the work that the coalition government has done you look at the omnibus bill that we brought forward. I mean, that was certainly done in a period of over 12 months, I believe. In terms of the consultations amongst different stakeholders. Unfortunately, when we brought it to the floor of the parliament, it wasn’t supported by the Australian Labor Party. But I think our appetite for making things simpler and in particular, as I said, the coalition reforms through casual employment and in particular cleaning up the issue of double dipping and the potential devastating impact of the $39 billion impost on business, I think does show a genuine commitment to working with all stakeholders to improve the system.

And with due respect, I just wanna finish with this point. I think that that casuals conversion was needed and essential. The shame was bogged down in so much misrepresentations by a lot of people, but quite frankly, I think that was tinkering and not reform. It was reform of casuals, but not reform of industrial relations.

[Michaelia] Understood.

Thank you, Senator.

Thank you, chair.

[Michaelia] A lot of .

I’d like to say one thing. As the minister indicated the casual amendments, the bill, that does introduce the national employment standards casual conversion and national employment standards. And does simplify assistance prior to that introduction into the NAS, you got a different conversions in the awards in the enterprise agreement, in the particularly black coal mining industries, there are confusion about whether the peoples are eligible for conversion or not. There are peoples who may not have a conversion, there was a gap. So by introducing it into the Fair Work Act as a national employment standards that provides a universal right to all the employees and in certain ways also simplified the systems.

And I accept that and appreciate what you said, Ms. Yang. The fact that the black coal mine award prevented, excluded casuals yet there was still casuals under various types of enterprise agreements, which were not, I don’t believe they complied with the law, indicates that the industrial relation system is a mess. But that’s why we supported the introduction of casual conversion because it does clarify things for people. But there’s a long, long way to go to fix this mess.

Yes, and the casual conversion does now apply to the people’s covered by the Black Coal Mining Award.

Thank you, Chair.

Thank you, Senator Roberts

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Could perennial wheat be a 40% increase for graziers? Grains Research Development Corporation

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Irrigators are heading north to escape nightmare restrictions in the Murray Darling Basin. Many are coming into the beautiful black soil plains of the Flinders river in North Queensland. At the moment this area is natural pasture covered with deep rooting grasses that support grazing.

While the soil supports broadacre crops, this introduces an erosion risk in the floodplain, and most of the black soil plains are flood plain. Replacing deep rooted grasses with deep rooted grains, to create mixed grain and grazing properties seems to make sense.

In 2008 the CSIRO released a paper which suggested making this change could provide a 40% increase in revenue per hectare. I asked what we were doing to look at these developments which could turn the North into a new foodbowl.

Transcript

I’m going to go to Senator Roberts for questions.

Thank you Chair. And thank you both for being here today. I’d like to commend your work on perennial wheat and preventing soil erosion. It’s something that we’ve only just become aware of and the Chair knows, from her experience in North Queensland, that this is very important to the Flinders area in particular, stopping the soil erosion up there when we convert to crops. I’d like you to talk about, I’ll give the the other senators some background so that it makes sense, I’d like you to talk about deep-rooted, perennial grains, please. A quick background: irrigators are heading North to escape the nightmare restrictions in the Murray-Darling basin. We’ve spoken with some of them in the Gulf. Many are coming into the beautiful black soil plains of the Flinders River in North Queensland. At the moment, this area is largely natural pasture covered with deep-rooting grasses that support grazing. While the soil supports wheat, cotton and other broadacre crops, this introduces an erosion problem in the flood plain, and most of the black soil plains are flood plain, and they get their rain in a short part of the year. Replacing deep-rooted grasses with deep-rooted grains to create mixed grain and grazing properties seems to make sense. In 2008, the CSIRO released a paper which suggested making this change could provide a 40% increase in revenue per hectare, so that would be phenomenal on top of the figures you’ve already stated. So I understand that the Grains Research and Development Corporation are working on perennial wheat. The Woodstock Research Centre near Charters Towers is, I understand, trialling perennial wheat. Can you please provide an update on the progress of perennial grain development as it would apply to Queensland cropping?

Thanks Senator, look, at this stage we obviously have a number of investments, certainly in Northern Australia and in the Northern region of the grains industry. Some of these are very highly adaptable to the new area that you’re talking about. Perennial grains is actually not an area that GRDC has been concentrating at depth in, in recent times. It is something that people are raising with us as being an opportunity to look at in that Northern or the Far Northern zone. And if it obviously falls into the remit of GRDC, which is amongst our 25 leviable crops, which obviously wheat is, we can certainly have a look at it. At this stage, we’re not doing a lot of work, there is some trial work, as you say, going on up there on a run, alternative and different crops. Some of them aren’t in our remit, but we’re certainly happy to look at what those opportunities are. And we’ve got some discrete initiatives up there at the moment to look at what could be possible. And we also have some very good rotations, agronomy solutions and husbandry opportunities with our traditional cropping programmes, bring rotations into the North that might be extremely beneficial, and also mitigate some of those issues that you’ve actually raised around erosion and accessing those unique opportunities in those deeper soils.

So, it looked as though the perennial wheat was first raised about 2011, I think, from the GRDC, and then we saw some more material, just in 2021, from an external body: the rising potential of Australian perennial wheat. And it really does seem amazing, because you increase the fodder for the cattle or the sheep, as well as reducing soil erosion. So the way I took the conclusion, from what you’re saying, is that you’ve done little work on that at the moment, is that right?

That’s right, Senator. I mean, there’s certainly obviously opportunity that we’re happy to look at, but perennial wheat in the North has not been deemed a priority by growers as part of our current RD&E plan, but, as I say, we are doing discrete work and we’re in consultations in the Far North about what could be possible. So, we have investments, as I say, up there and we’re consulting heavily with, particularly, growers on the ground and some of those other stakeholders that work in that region, such as QDAF, to see what other opportunities we could bring to bear and what research needs are required. And we’re at the table for that.

What are the obstacles at the moment to do more work on that?

Well, there’s probably minimal obstacles. We just need to make sure that we actually design whatever research may be required up there to bring to bear some opportunity. We need to make sure that we’re actually gonna meet the agro-ecological zone and also the climatic and soil conditions. I know that your report that you mentioned, that’s recently been done, they’ve identified an opportunity. We’re more than happy to look at that, in consultation with the players up there, and see what might be possible. Perennial grain, particularly in our traditional region, Senator, had not provided either short- or medium-term opportunity. We’ve been able to bring to bear far better outcomes with our husbandry and agronomy outcomes in our traditional grain-growing areas with our new rotations and the technologies that we bring to bear using annual, as opposed to perennials.

So, what I interpreted, Mr Woods, from your opening response to that second question is that you’re careful to not develop something that people are not interested in. Is that right?

We prefer not to have an unroadworthy vehicle before we start, Senator.

Okay. And Henry Ford said, when someone said, “Why are you building cars? There are no roads.” He said, “The roads will come.” And they did. So, it seems very exciting. And your main obstacle at the moment is the lack of market reception, or customer reception, is that it?

That is correct, Senator. There’s not a lot of acceptance or engagement or excitement with regards to perennials, in the grower spectrum, so I think there’s some work to be done.

Okay. That will do me. Thank you very much. I’d like to contact your agency if we could. Can we do that?

Very happy to, Senator. Thank you.

[Roberts] Thank you, Mr Metcalf. Thank you Mr Woods.

[Chair] Mr Woods, thank you.

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Government opening the door to China’s bullying in Antarctica

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Australia claims a very large part of Antarctica as our territory. Despite this, China is muscling in, refusing to sign treaties and building 5 research bases in the Australian Antarctic territory. To add to the worries, Australian Government has back-flipped on its plans to build a strategically important, all-weather runway at Davis research base.

This opens the door for China to do it instead, further eroding our claim to Antarctic territory.

The decision came from the minister for environment which begs the question, have we let China take a strategic win because we were a little bit worried about the penguin’s feelings?

Transcript

I think the last stretch.

Thank you, Chair. Thank you for being here tonight. Minister Sussan Ley recently made a decision to not proceed with the building of an all-weather runway at Davis research base in Antarctica. What level of consultation did the Minister have with the Department of Defence and what advice was received prior to making such a decision, which many see as retrograde?

Senator, I can probably assist with that. That was a decision taken by the Government. There was extensive consultation with a range of departments and indeed I and Mr. Ellis personally, were in discussions with the Secretary and the CDF and others on that matter before it was considered by Government.

I understand Defence were pushing it.

I think the view taken by the Government was that the combination of the very significant environmental impact, the proceeding with the airstrip, would do together with the very sizable cost, ultimately meant that proceeding with a project that would not provide results for another 15 or 20 years was not viable. However, there are a whole range of other ways that we are very confident we’ll be able to ensure continuing and indeed expanded presence in Antarctica.

Was the Minister aware of the likelihood of China then building the strategically important runway, thereby enhancing its claim for a portion of the Australian Antarctic territory when the Australian Antarctic territory is renegotiated, or even sooner, because China is not a party to the Treaty?

A full range of geopolitical and other considerations were available to government in taking the decision, Senator.

Is the Minister aware that China has already built five research bases within the Australian Antarctic territory to enhance its future claim?

The answer is yes, we certainly are aware. I’ll let Mr. Ellis answer as to the number, but certainly we’re aware that China, and indeed a number of other countries, have established bases in the area claimed by Australia.

Does this mean that environmental issues, such as the comfort of penguins can be used to negotiate, to negate issues of national security to the detriment of all Australians? You mentioned that, you mentioned the 15 year time span for the return, I’ve just come from the Australian Rail Trade Corporation and they’re talking about a 30 year timeframe.

Some of these projects do involve a long period of time, Senator. But the answer is that we are very confident that the right decision was made, taking into account all of the factors and, as I’ve said, indicating that Australia’s is continuing presence. Our scientific research, our expeditionary exploration are second to none and we’ll continue over the decades ahead.

So is this yet another example of the short-term strategy visions that have dogged Australian antarctic policy, antarctic policy making us a pushover for the Chinese Communist Party?

I wouldn’t agree with the premise of any of that Senator, Australia very significantly ensures that we are a strong player in the international system that focuses on Antarctica, on CCAMLR and Australia, through investments, such as the Nuyina, which we’ve just been talking about at 1.8 billion dollar investment together with all of the other activities that Mr. Ellis and our hundreds of staff, both in Hobart and in Antarctica undertake, we believe that we are very much ensuring Australia’s interests are protected and advanced.

Perhaps a question to Senator Hume. The Chinese Communist Party just rolls over weak leaders. They see in Australia a country that is handed over its sovereignty to many UN agreements, destroying our energy, for example, our property rights, UN policies gutting our culture. These get no respect from the CCP and I think it makes us targets. So, was this the best decision to make at a time of heightened concern about the expansion as policies and aggression of the CCP? Especially as what they’re doing to us in trade.

I don’t necessarily agree with the premise of your question, Senator Roberts, but what I will say is that Australia in no way will be ceding any of our territory. The decision that was made was always gonna be contingent on a final investment decision next year and careful consideration of the environmental impact, economic investment and broader national interests. Australia feels that it’s particularly important that all nations place the Antarctic environment at the absolute centre of their decision making, and respect to the Treaty system. And the government is now considering further investments in our scientific research and environmental programmes in Antarctica. That include to continue to create jobs and investment for Tasmania, as the international gateway to East Antarctica.

Thank you, Chair.

[Attendant] Thank you very much.

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Government delays moving Defence data from CHINESE-OWNED company

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Sensitive Defence information is still being held at data centers owned by Global Switch, a Chinese-owned multinational company, despite promises to have all government data migrated out by 2020. Regardless of the complexity of the move or data being “less sensitive”, this is an unacceptable situation. The Chinese Communist Party must be laughing at our Government.

Transcript

Okay, thank you. Getting onto storage of defence data, including critical secure data. In February, 2021, the Australian federal government renewed its contract with the firm Global Switch, despite serious security concerns. The company has hosted Australia’s sensitive and high security data for some time. Elegant Jubilee, a Chinese consortium, bought 49% of the parent British company Alders Gate Investments, causing an ownership change for Global Switch in 2016. Then treasurer Scott Morrison said in 2017 that the defence data would be shifted back to a government owned hub for security reasons. After he became prime minister, he later decided to extend their contracts with Global Switch. Does the firm Global Switch still host Australia’s sensitive and high security defence data?

Senator, Jeff Goedecke, First Assistant Secretary ICT Service Delivery and Reform. The Global Switch facility, which is completely controlled by the commonwealth, does hold some of the less sensitive data. There are as indicated in the release by secretary Moriarty in February last year, there are plans in place to migrate that data from Global Switch by 2025. This is in accordance with the whole of government hosting strategy.

So why was it decided to continue this arrangement, hosted ultimately with, with Chinese ownership?

It’s, it’s, it’s not Chinese ownership. As I said, the Commonwealth owns, has complete control of the facility, both from a physical perspective and from a, and a, a protection from a logical sense, from an ICT perspective and security perspective. The amount of equipment and data, and the complexity and interdependencies, necessitate a longer term to remove these things. There’s a, a great deal of reliance on defence business continuity, that requires a staged approach to remove this stuff. It basically, the complexity and size of the footprint, the payload inside the data centre, means it was impossible to, to move that over a very short period of time.

So when was the decision last made to, to leave it there, and eventually you take it off by 2025?

So, just bear with me, Senator

And Senator, Greg Moriarty, Secretary of the Department. All of, all of the highly sensitive information is, is long gone. So what, so-

What sort of information is there?

Well, this-

So we, so what happened was the government approved, back 2018 for defence to be funded to move what was sensitive data from the data centre out. That occurred by June, 2020. So that was all removed. Because of the size of the footprint of the remaining data, which is less sensitive data, again, still protected from a government perspective and government controlled. There was a, there is a process in place now where we are, have an evolution to move that data out. And that ties in with the additional lease, which expires in 2025.

So what is that less sensitive data?

It, it’s for a range, range of things. It could be administrative related. It could be some sort of logistic, but we wouldn’t normally discuss exactly what type of data we hold in what locations.

So there’s no risk whatsoever of the Chinese accessing it, ’cause they’re pretty good hackers.

There, there is no risk.

What, what, why can you be sure of that?

It’s, it’s based on the, the the facility itself has physical controls in place. That’s everything from, from it being a fully manned facility, it has all of the CCTV capabilities. It has, you know, alarms, it’s fully accredited. And in fact, the facility is accredited to look after more sensitive data. That hasn’t changed. So there’s a higher level of security than would normally be afforded that level of data, which is an important factor as well. In addition to that, we have ICT securities. So cybersecurity controls where we, we monitor that we have a, the defence security operations centre monitors cyber activity. And that includes that within the footprint as well. Gateway, secure gateways also assure the information. So from a defence perspective there aren’t risks related to that, Senator.

Has it been tested at all? ‘Cause the Chinese, some Chinese are very good hackers. I’m sure you know that.

Absolutely. So there are, defence has no indications at all that there’s been any compromise at all related to data held in that facility.

So it’s not a case then of the, the Fox looking after the hen house?

Not at all.

Okay.

No, but, and, and just to make sure that, I mean, that, that is why the government has, has directed defence to move all of the data by a particular point in time. Senator, we believe that the mitigation strategy that we have in place is very robust for the, for that level in, in fact, as Mr. Goedecke said, it’s, it’s much more significant wraparound than what normal data of that level would be. But we are moving out. We are, we are gonna remove absolutely any risk by, by removing ourselves from that, from that data centre. And the government has, has agreed the timeline.

Thank you. And thank you, too.

Additional Information

https://www.itnews.com.au/news/defence-delays-global-switch-data-centre-exit-by-up-to-five-years-560042

https://www.afr.com/companies/telecommunications/federal-bodies-struggle-to-exit-chinese-owned-data-centre-20200304-p546p5

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How is the Digital Transformation Agency going to handle the Digital Identity Bill?

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The Digital Transformation Agency (DTA) is meant to be the Government’s shining beacon of making things better with technology.

Instead, they have a long list of failures, from paying google to harvest government data, to abandoning cloud storage projects and dumping possibly sensitive source code into the public domain.

You have to ask, if the DTA is meant to be the Government’s leading technology agency but has such a dismal record, what hope do they have of implementing the infamous Digital Identity Bill?

Transcript

[Fechner] I’m happy. No opening statement. Thank you.

All good. Thank you. Senator Roberts, you have the call until 11:00 PM.

[Roberts] Thank you, Chair.

And then I’ll cut you off.

The Digital Transformation Agency has concluded an enterprise deal with Google in respect of Google Analytics 360. The Digital Transformation Agency charges Australian government agency websites for their Google data, which I assume is a cost-recovery exercise. How much are you paying Google for this service? Either 2021 actual or 2022 projected, please.

Thank you for the question, Senator. So the Google Analytics service is actually put in place to ensure that we actually have good information on the utilisation and feedback of government services, so it provides for the continuous improvement of our government activities. I will need to –

[Roberts] So what does it cost?

So we have our Head of Procurement here, Michelle Tuck. Can we take that number to find out what the actual costs are for Google Analytics?

[Tuck] Take it on notice?

Take it on notice.

[Roberts] Thank you. Google can obviously see all the data that you can see. After all, they just sell it back to you. On a normal private website, Google would be able to see identifying information for the website, visitor or entity, being IP address, device identification, sign-in If they are logged into Chrome, etc. Google would then store that data in the data file they already maintain for that entity. Google’s data file does not include names, but it does include locality, age, gender, employment, purchases, interests, travel, search and web history, and much, much more. Are Google adding data about private citizens who use a government website to Google’s own data records?

Senator, I’m happy to seek advice on that, but the actions of Google and those particular activities would be a subject to Google and any prevailing laws.

So, it’s quite easy for them to harvest the data because nothing precludes them from doing so?

Senator, there are aspects of data, so the DTA generally refers to the digital components of these. There are some specific data areas and they’re subject to PM&C, so potentially that question could be referred to PM&C.

Are we able to get them on notice from you?

If it’s an issue for PM&C, Senator, I’d say it would have to go on notice for them.

Thank you. Now let’s change topics to the Federal Government’s style guide. This will interest the chair. Recently the Senate rejected the use of gendered language and sent the style guide back for review. Who instructed the Digital Transformation Agency to de-gender language in the style guide?

Senator, the style guides have actually moved to be the responsibility of the Australian Public Service Commission. You need to refer those questions about the use of the style guide to them.

Thank you. So I’d have to ask them for a hard copy of it?

They’re responsible for the management of the style guides.

Okay. So let’s turn to cloud.gov.au. This was an attempt, as I understand it, to create a single standard for cloud storage of data, including websites across the whole of federal government. Did I get that right?

That was the original intention.

Okay. Original. Okay. This project was shut in 2021. And the source code for this web standard was put into GitHub, which as I understand it is a repository for code, freely accessible, where anyone can download it. Could a hacker learn anything about what could be in use in federal government websites and data servers, based on the information that they can freely obtain and contained in the GitHub files?

So Senator, the purpose of cloud.gov.au was to produce a safe and secure, and freely available to government entities, access to cloud services environments. As that capability has progressed, it was clear that the market was able to provide those services and the intent behind the security has been largely replaced with other components that we have, such as the hosting certification framework, which accredits cloud service providers to make sure that the controls that are in place for those services sit with government, so we have protections about where that data is stored, how does is transit and who has access to it. So cloud.gov.au became redundant from that purpose.

Yeah, I understand that, but apparently the source code for the web standard was put into GitHub where anybody can access it.

Senator, it’s my understanding right now that the services that are used, or used in that function, are all being decommissioned or moved onto alternative platforms.

[Roberts] But they’re already there on GitHub, which anyone can access.

Senator, GitHub is a repository for code services. It’s not necessarily the code service itself. It’s separate. It is actually the description of the language, and if it’s going into those GitHub repositories and it’s open source, meaning it’s freely available, it really is in public domain. Much of GitHub is actually contributed to by other parties other than government and it becomes a community of development services.

So why was this project cancelled?

Simply because of the transition to highly available public cloud services, the high security associated with those things, and the addition of additional controls, such as the hosting certification framework that added specific controls to make sure that government was clear where government data was stored, how it was actually moved, and where that data was being managed by others, including third parties, that it was safe and secure in those locations.

How much did this undelivered project cost across the project life or the arc, I think you call it, from January, 2018 to September, 2021?

Senator, I can take that on notice. So I commenced on October 13th, so it’s a bit before my time for those specifics.

Okay. So, okay, you and I are both scared of the wrath of the Chairman, so we’ll move on. This is not the only terminal outcome of one of Digital Transformation Agency’s programmes. May I reference the whole-of-government platform’s programme, which was retired. Once again, the source code for the six different projects under this programme was put into GitHub for anyone to download, but you’ve explained that. So my question is the same as before. No, you’ve explained that, that doesn’t matter. What was the cost of the whole-of-government platforms programme across its project arc, or life?

Senator, can I take that on notice again?

[Chair] Last question.

[Roberts] We’re getting there, Chair. [Chair] Last Question.

Okay. myGov is a joint venture between Services Australia and the Digital Transformation Agency. The app is proving problematic at best with a rating of 2.4 out of 5, which is on this graph here, so being less than half, that’s a fail by my understanding. We can see a pattern emerging here. Any attempt to modernise and standardise federal government data formats, storage and handling runs into apparently turf wars and gets terminated. Now we have the Digital Identity, and I’m leading into the question, Chair, now we have the Digital Identity, another of the Digital Transformation Agency’s projects, which will be part of life for every Australian. And in many ways it will enable control of many Australians in their lives. So a rating of 2.4 won’t cut it. How long will it take the Digital Transformation Agency to put in place the framework necessary for the Digital Identity to function at 5, not 2.4? How much will that cost, and what are your chances of success?

Senator, I think I’d like to seek a clarification on that. myGov does not currently have an app that’s in the public domain. They’re currently in a private beta for it. There is no myGov app that’s currently available.

Okay. So come to the question, then, there’s a history of failures going on in this area, digital transformation, how long will it take the Digital Transformation Agency to put in place the framework necessary for the Digital Identity to function at a rating of 5 out of 5? How much will that cost, and what are your chances of success?

So Senator, just again, to clarify, the App Store ratings generally rate the particular functions in there. So the Digital Identity is a framework and it allows multiple providers to go through. Part of that framework allows for the government to have a digital identity, and that’s the myGov ID as it currently stands. There is an app associated with that, and that app is simply about ensuring that people can enrol a Digital Identity for the government. Its actual main purpose is to provide access to safe, secure services through government via that identity in place of providing other digital credentials. So, yes, part of the aspect, but also the stepping up of credentials as well, that sits in that space, Senator.

[Roberts] Thank you, Chair.

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ASIO confirms anti-mandate protesters not violent extremists

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The mainstream media tries to falsely paint anti-mandate protesters as extremists. Its the Australian Security Intelligence Organisation’s job to monitor people who are actually violent extremists. They told me what we already know. Protest and political dissent against mandates is completely lawful and it is only a small fringe element who take advantage of the whole group to push violence. The overwhelming majority of anti-mandate protesters are law-abiding peaceful people.

Transcript

Thank you very much Senator Keneally. Senator Roberts.

Thank you, Chair. And thank you all for appearing today. Recent public statements from you indicate ongoing issues of interference by foreign nationals in Australia, including attempts to influence the electoral process. Is this considered to be an ongoing threat from that identified foreign power?

As I said, in my threat assessment centre there are multiple countries. So this threat is real. It happens at all levels of government, local, state and federal. And that threat continues. In fact, espionage and foreign interference is now supplanted terrorism as our country’s principle security concern. And that’s not to take away from the terrorism threat.

Are the identified risks. Well, you just told us they’re serious, very serious.

They are.

Right throughout all levels. From your public, changing the topic slightly. From your public statements, why are so many everyday Australians opposed to mandated COVID-19 vaccinations? They’re opposed to the mandating, not to the vaccinations necessarily. Why are they being monitored?

Well, that’s not my remit. That’s nothing to do with me in terms of whether people are opposed to mandates or want to get vaccinated. That’s not a violent extremism problem that doesn’t fit within my head security. So we don’t monitor or follow those people. If those people also happen to be violent extremists promoting communal violence or politically motivated violence then they would get my full attention. But if they’re not in that category as I said in my speech last week,

“The vast majority of these protestors we’re seeing at the moment are not violent and they’re not violent extremists.”

Mike Burgess, Director General of Security Australian Security Intelligence Organisation, Senate Estimates 14 February 2022

That’s very pleasing to hear that confirms pretty much exactly what the AFP commissioner said just an hour or so ago. But the press has perhaps taken a slant on that. So thank you for clarifying that. And having been at the protests on Saturday, people are just excellent. Why would you consider? Okay. You’ve eliminated that. You said in your recent security annual threat assessment that you do not have a problem with people holding opinions. And would only intervene when these opinions involve promoting violence. You’ve just confirmed that again. What evidence links everyday Australians exercising their right to peaceful protests to being considered domestic terror extremists? I take it that’s a media exaggeration.

Well no, in terms of protest protests, its lawful public dissent is totally appropriate and right for people to do, but actually if people are preparing for or advocating acts of violence then they do fall into my agency’s remit and we will watch them carefully to understand what they’re up to and with our police partners work to stop them from harming Australians.

Yeah. There is a small element just about every group who takes advantage of the group.

There certainly is.

Thank you. No, I don’t need to answer… ask the seventh question. Everything’s covered. Thank you, Chair.

Thank you very much, Senator Roberts.

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Who profits from Inland Rail’s half billion dollar property purchases?

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The Australian Rail Track Corporation is projected to spend $494 million dollars on acquiring property for the proposed Inland Rail route. Despite rumors of certain people buying land on the route prior to the purchases, the government refuses to release who they are acquiring the properties from with nearly half a billion dollars of taxpayer money.

Transcript

Happens when you don’t think it through. Thank you, Senator Roberts over to you.

Thank you, Chair. And thank you all for appearing tonight. What is the current budget for property purchases for the Inland Rail project?

It’s $494 million.

494 million, thank you. In the last estimates, I asked Infrastructure Australia a simple question. Who owns the land being purchased by Inland Rail? And I received this response on notice. Quote, the full cost of the property acquired for the Inland Rail project will not be known until all 13 sections of the project are completed. The cost will eventually come out. That’s the end of the quote. Cost will eventually come out, but apparently ownership will not. Firstly, when is Inland Rail scheduled for completion?

Current schedule of completion in late 2026.

[Malcolm] 20.

2026.

2026, thank you. My office is aware of reports as to who bought land prior to the announcement of the Inland Rail alignment, which we of course pay no heed to. So is it the position of the Minister that the public will never be told who owned the land the Australian taxpayers just spent 494, or will spend $494 million buying, and that we’ll have to wait until 2026 or later to find out how much we paid for it?

Yeah, I think per that previous answer, it would not be our intent to disclose the information about individual landowners.

So the taxpayers are paying for something but won’t receive any any accountability for it until another four years, if it’s finished on time? So we can’t find out as representatives of the taxpayers. Okay, let’s move on. In 2010, the ARTC stated Inland Rail would not be cost effective if completed in 2021, but may provide a positive net value by 2035 against a projected cost of $9 billion if rail freight demand increased. In the 2015 business case briefing paper two, the ARTC found $16 billion in GDP increase over the first 50 years. The project tonight I understand we were told is now stated to have a total cost of $14.5 billion, with solid third party, independent assessments, at over $20 billion, some well over $20 billion. When was the last time the cost benefit of Inland Rail was calculated in terms of net present value? And specifically, what was the total financial benefit to the taxpayers over the payback period? And what is the payback period, and what project cost did you do the sums on?

Do you want to give business case?

Do you want me to take?

Yeah.

Yeah, okay. So since back in 2020 when the increased equity was provided, there was an update to the economic benefits. So there was a revised assessment that came out with a net $18 billion economic benefit over that same period, 50 years, that you mentioned. And in that sort of same timeframe, the Commonwealth Government also did some further studies that looked at some of the economic benefits that would be capitalised, not just from that $18 billion which is really associated with efficiency improvements in the supply chain, but then a further $13.3 billion that was found to be catalysed by the stimulation of further regional economic industry and development. So that was probably the the latest updates in that regard that were undertaken.

And perhaps I can just add the comment that we haven’t seen the full business case. Much of it has been redacted from memory. And the assumptions, in particular, just slight changes in the assumptions can dramatically affect the business case and all the claimed economic benefits. And we’re kept in the dark about some of the assumptions. So I’ll go on to the next question. The Inland Rail business case relies on a series of calculations about transit times, intermodal delays, train speed, track wear, projected freight volumes and revenue, route reliability, amongst many others. By way of example, the share of freight Inland Rail will attract supposedly on the Melbourne to Brisbane route will go from 26% currently to 62% by 2050. And that’s one of the massive assumptions. And these assumptions, models, and calculations are said to be commercially sensitive. So, as I’ve said a minute ago, they’ve not been made public and will not be made public. Is that a correct statement?

It’s exclusive.

Look Senator, the business case for Inland Rail was produced in 2015, which was the last one. Simon, do you want to make?

Yeah, it was certainly public. And I’m not sure exactly what assumption you’re looking at, Senator. It’s not-

Well, I’ll read them again. The transit times, intermodal delays, train speed, track wear, projected freight volumes and revenue, route reliability, amongst other things. And some of the reports that were submitted or made by some of the big four accounting firms or management consulting firms, they’re not available. And we understand that two reports contradict each other.

So Senator, the information that you went through is available. We can certainly, we could talk through it tonight or we could certainly come back to you outside of the session with that information.

We’d appreciate you coming back, that would be great.

Yeah, absolutely. I’m only aware of one. Sorry, I’m aware of one macroeconomic report to do with the assumptions around the GDP and also the market share figures, which was undertaken by the PWC Deloitte. EY undertook a more specific reasonable analysis. We’re not aware that they contradict. They were looking at quite different elements of the benefit streams of the programme.

Well, perhaps we could show you what we mean by that with the reports and with some documents, and you could at the same time as you can come back with your assessment. And we’re happy to arrange that with our office.

[Simon] And we’d been more than happy to do that, Senator.

Thank you very much. Minister, why is this project proceeding when the taxpayers are most likely to lose tens of billions of dollars if the taxpayers are not benefiting qui bono? So who is?

Well, I think based on the answers you’ve received and some of those things that’ll be taken on notice and subject to further conversations between you and the officers from ARTC, I think some of the assumptions underlying your questions may still be in contention. But obviously, the principle is that it’s a project worth backing and the government remains willing to do that for the good of the country. But obviously, further detail required to satisfy the questions you’ve asked so far. And hopefully the officers will give you the answers you’re after.

Okay, Chair, I’d just like to ask two questions, following up on what you asked. Thank you. The preferred alignment from the ARTC 2010 Melbourne-Brisbane alignment study became the final alignment in the 2015 programme business case. Is there any significant change between those two alignments? Because on a map they look the same.

The short answer is yes, that there were some minor adjustments. Off the top of my head, I’m probably couldn’t navigate through all of those. But the Inland Rail, route history document, does detail those and gives a lot of further detail. We can come back with some more if you need.

That’s on the website.

Yeah, that’s on the Inland Rail, the ARTC website, yep.

Okay, thank you. Last question to you. And this may be touching on something that Senator Van asked about. In the last estimates, I asked Major Transport and Infrastructure Projects about Inland Rail environmental impact assessments. And Ms. Hall, the First Assistant Secretary replied, the route has actually been set. This is a quote. The route has actually been set. The purpose of the environmental assessment processes are to give confidence to the communities that the environment is protected. So environmental impact assessments are still underway, and yet the route is set. Is it a statement of fact that the final Inland Rail route was decided before the environmental assessment of that route had even been started? So are you backfilling the project? Backfilling the EIS’s?

Senator, I think you’re referring to me. The route has been set. The purpose, as we’ve just discussed before, Minister, Mr. Helena has said is that an EIS process is designed to give assurance to the community, give assurance to the regulatory requirements. A coordinator general, for example, in regards to Queensland will set the conditions by which that piece of infrastructure needs to be built. So that is the purpose of an EIS process.

[Malcolm] Okay, thank you. Thank you, Chair.

Thank you very much.

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Bureau of Meteorology: Report doesn’t link humans and climate change

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Whenever I ask politicians to prove climate change is real and caused by humans they always point to the Bureau of Meteorology report, State of the Climate. But the report only publishes temperatures and observations, it doesn’t link any changes with carbon dioxide created by humans.

BOM admits in this questioning that the report itself simply confirms that the climate is variable without attributing a cause for it. If this is the case, why do politicians and so-called experts keep claiming this report proves carbon dioxide from humans is a danger and must be cut?

Transcript

[Metcalf] Senator Roberts.

Thank you, Mr. Metcalf and Dr Johnson and Dr Stone for being here tonight with us. My questions are fairly simple and they go to one of your documents that you’ve produced jointly with the CSIRO, namely, the State of the Climate reports that come out every two years. What is the purpose of these reports?

As I say, Senator, that report comes out every two years. It’s something we’ve been doing with CSIRO for many years now. The genesis behind both agencies for coming together to produce the report is to provide an authoritative summation of the state of Australia’s climate from arguably the two most trusted sources of scientific knowledge on our climate, so the purpose is really to provide the most up-to-date and trusted reporting of the various parameters that contribute to Australia’s climate.

Thank you. The reports confirm that climate varies naturally, or at least that’s my conclusion. Is my conclusion valid?

I think there’s a lot of variability in the world’s climate Senator.

Thank you, yet the document seems to be written, Dr Johnson, in a way that subtly and implicitly reinforces the notion that carbon dioxide from human activity affects climate and needs to be cut. Now I see no empirical scientific data within a logical scientific framework proving cause and effect within the State Of The Climate reports. What are you doing to stop people drawing that misleading conclusion from your report?

Well, Senator,

I think it’s important for the record to note that none of the State of the Climate reports in any way whatsoever make statements with respect to global emissions.

Dr Johnson, Bureau of Meteorology at Senate Estimates 16 February 2022

They merely report on the state of various climate and ocean parameters over time. So, if you look at the reports, and I know you get a copy of them, they chart a trajectory around a range of parameters: temperature, rainfall, so on and so forth, sea level, ocean temperatures, and so on, over time, and they show, quite clearly, that on all of those parameters, or most of those parameters, the trend is increasing, so whether it’s temperature or sea level rise or air temperature, ocean temperature, and so on and so forth, it does show for a number of parameters that there’s quite a degree of variability across geography, for example, around tropical cyclones, rainfall and so on, so it merely reports what we’re observing, Senator. And I think it’s very well established now, and I think this is the view of the Bureau, or at least they strongly agree with us, that the cause for that increase in temperatures is absolutely, or predominantly, due to the activities of human beings. I think that’s well established, Senator, and it’s not for argument.

So there’s nothing in the report, I’m sorry I cut you off.

[Dr Johnson] No, no, I was finished.

Okay. Thank you. So there’s nothing in the State of the Climate reports that proves that, but you rely on other documents and other work to prove that connection between human activity?

[Dr Johnson] Clarify, prove what?

Proof that carbon dioxide from human activity is a danger and needs to be cut. So that is not the purpose of the State of the Climate reports?

Well, no, it isn’t the purpose, but the State of the Climate reports clearly show the trajectory of CO2 in the atmosphere for many, many years, well over a hundred years, I think it’s a very well established fact, Senator, that the predominant cause, not the only cause, but the predominant cause, of that warming trend is human activity.

Well, yeah, I’m not asking about that, you have that view, but I’m asking whether the State of the Climate reports actually show that: scientifically prove that carbon dioxide from human activity affects climate and needs to be cut?

Well, I’ve got the report in front of me. I don’t believe there’s a section in there that, well, that’s right, it’s not the purpose of the report.

[Roberts] Thank you.

The purpose of the report is to report on observations that we are taking on or around a range of parameters in Australia’s climate. That’s all it does.

Thank you very much for clarifying that. That’s fine. When I asked for empirical scientific evidence proving, proving, that carbon dioxide from human activity poses a danger and needs to be cut. ill-informed MPs refer solely to these documents on occasions, as do some ill-informed media journalists and citizens. Is it the intention of the Bureau of Meteorology and CSIRO for the document to do that implicitly, even though that’s, Dr Stone just said, that’s not the purpose of the document?

I’m just wondering whether you can clarify what your question is, Senator. I think we’ve made it really clear what the purpose of the document is: it’s to provide a synthesis of our observations of Australia’s climate and oceans. How others choose to interpret it’s up to them, but the report is very clear, it lays it out very clearly and has done it pretty much in the same way for the best part of a decade.

I accept that. You’ve repeated that three times now. Thank you for that clarity. I’d like to know about the intention behind the wording, because so many people misleadingly come to the conclusion that the State of the Climate reports prove that carbon dioxide from human activity affects climate. Is the wording deliberately misleading or is that just their lack of scientific understanding?

Well, I can’t speak on behalf of others. I can only speak on behalf of us, which is the wording is, I think, crystal clear and great effort has gone into making sure the wording is clear. It’s simple to understand in its reporting of the observations that we’re making. It does nothing more and nothing less than that.

[Roberts] I agree with you and –

How others choose to interpret it, Senator, is for them, but I think you read the report, it makes it very clear what we’re reporting on, and I think right up the very front of the report, if I’m correct, it makes it very clear what the report isn’t.

[Roberts] Can I just ask?

Did you want more?

No, no, no, that’s fine, actually. I don’t need to ask that question. Thank you very much, Dr. Johnson, much appreciated.

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