Can we afford $220 billion Submarines right now? Department of Defence at Senate Estimates

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CANCEL THE $220 BILLION SUBS CONTRACT

It is currently estimated that the Future Attack Submarines the government wants to buy will cost $220 billion including construction and ongoing service. We aren’t expecting to see the first one in the water until 2032 and the final one sometime in the 2040s.

They are outrageously expensive, will be obsolete by the time they hit the water and aren’t even nuclear powered. Don’t just take my word for it, almost every expert adviser and person outside the government has said they must be cancelled.

Transcript

[Chair]

As the call.

[Malcolm Roberts]

Thank you Chair, thank you all for being here today. My first, the questions are about the Attack Submarines Contract. Given that some estimates of the final cost to Australia for this Attack Submarine fleet of 12 subs may run to more than $200 billion over the life of the subs. For example, the Managing SEA 1000 document is Australia’s Attack Class Submarines, February, 2020. Why is this considered good value for money in the face of wide criticism from reputable experts on the government appointed Naval Shipbuilding Advisory Board, which included admirals and others. The board advised the government to consider terminating the contract with Builders Naval Group.

[Greg Sammut]

Greg Sammut, General Manager Submarines. Senator, the board didn’t recommend terminating the contract with Naval Group. They recommended that we make sure that we are managing our risks properly as we continue our work to get into contract with Naval Group and talked about the best alternative to a negotiated outcome when they made their recommendations. What actually occurred was, we reached a negotiated outcome with Naval Group. We entered into contract with them and as the auditor general concluded, we have established within the strategic partnering agreement. A fit for purpose strategic framework for meeting the government’s objectives for the future submarine programme.

[Malcolm Roberts]

Thank you. You raise the word risks and that report raised risks, that committee meeting. If the last sub will be delivered in the 2040s and the first delivery estimated to be in 2032, ’33, won’t these subs be obsolete by the time they’re ready for the water.

[Greg Sammut]

No Senator, they won’t be obsolete by the time they enter the water we’re designing these boats now to meet Navy’s capability requirements. Those requirements contemplate a submarine that has to operate within the timeframes of delivery. We’re also designing this submarine to have appropriate margins, such that through life new technologies as they sufficiently mature can be incorporated into the submarines to keep them regionally superior throughout their service life.

[Malcolm Roberts]

When the contract was first being considered, is it true that only eight submarines were to be built?

[Greg Sammut]

Not when the contract was being first considered I’ve said previously in Senate estimates that the competitive evaluation process that was initiated in February of 2015, which was established to pick an international partner used an assumption of eight submarines. But as we’ve also said previously to this committee, after the decision was made to commence the committee evaluation process there was a defence White Paper in which the government announced its policy to acquire 12 submarines.

[Malcolm Roberts]

What was the reason for the change? From eight to 12

[Greg Sammut]

There was a policy decision in the White Paper of 2016 to acquire 12 submarines that followed a process that was underway at that time, called a full structural review that accompanied the defence White Paper of 2016. And through that process, when options were considered for the structure of the defence force, 12 was the number that was decided by government.

[Malcolm Roberts]

The original cost quoted of around 25 billion was that for eight or 12?

[Greg Sammut]

I’m not sure what original cost you’re referring to, Senator.

[Malcolm Roberts]

I’m told that the original cost of the programme was expected to be around 25 billion.

[Greg Sammut]

I’m not sure where that information ever came from, Senator.

[Malcolm Roberts]

It was widely known that in the early stage of this project that the cost was estimated to be around 55 from memory for 12

[Greg Sammut]

I’m not aware of what you’re referring to, Senator.

[Malcolm Roberts]

What was the original cost of the programme? The very first cost when the contract was set.

[Greg Sammut]

When the contract was set, $50 billion constant, which today in outturn dollars is $88.5 billion that has not changed.

[Malcolm Roberts]

So the $200 billion that some people are estimating, reliable people.

[Greg Sammut]

I think people are endeavouring to estimate not only the acquisition costs but the through life sustainment costs, which will run out to an excessive 2080. And cost that also include I might add, not just material sustainment of the boats but expected costs of crewing, operations and fuel.

And infrastructure.

Infrastructures included in acquisition costs as well, Senator, yes.

[Malcolm Roberts]

How will these subs be cutting edge when they use technology from the 20th century?

[Greg Sammut]

What technology are you referring to, Senator?

[Malcolm Roberts]

This technology of the subs comes from the 20th century.

[Greg Sammut]

Well, Senator, I’ll assume you’re referring to the battery technology that we’re using.

[Malcolm Roberts]

I am, ’cause the next question is will these subs be using lead acid or lithium composite battery bank? That’s one of the things, but the technology generally comes from the last century.

[Greg Sammut]

We are using proven technology in these submarines to meet the capability requirements of Navy. And I think that’s what we must understand in the first instance. We’re not making compromises to meeting capability requirements, by simply choosing technologies. We are also being very mindful of the risks that attend the use of new technologies in something as complex as a submarine. So if we were to take the battery as an example, yes, the first batch of submarines will be delivered or at least the first future submarine will be delivered with a lead acid battery. We need make that decision now because if we don’t make that now the boat’s design will not be completed. And if the boat’s design isn’t completed in sufficient time we won’t be able to commence building and deliver the boat by the early 2030s. What’s important to understand is that in choosing the battery technology that we’ve chosen we are still meeting Navy’s capability of requirements when it comes to parameters such as dive endurance, range and so forth. We will continue as we are currently doing now to look at new battery technologies. Indeed we have an established and funded science and technology programme that is looking into a number of battery chemistries, including lithium ion but there are other promising technologies out there such as nickel zinc. When these are sufficiently mature, And we agree that they can be safely incorporated into the submarine to meet the Seaworthiness requirements of Navy which go to the safety of our crews at sea as well as meeting those capability requirements or indeed expanding the capability of the boat because of what advantages that new technology might bring. We will have the option to incorporate that. Because as I said earlier, we are building a submarine with margins to be able to incorporate new technology into the future.

[Malcolm Roberts]

Thank you, how easily, these questions reflect concerns of our constituents. And they’re very concerned when we look at the government debt right now and what has happened last year, they’re very concerned at the amount of money that’s going towards these subs. And they’re very concerned about the value in particular. How easy will the submarines be located by potential enemies when they’re so large and powered by obsolete diesel engines that apparently are easily heard? I’m not a submariner, but that’s what I understand.

[Greg Sammut]

One of my first response would be that diesel engines aren’t obsolete. Diesel electric submarines throughout the world use diesel engines to generate electricity, to charge batteries, to run the submarine. Again back to the capability requirements of Navy to which we are designing this submarine, it contemplates the threats and the scenarios in which the submarines will be operating. And those requirements have been established to enable the submarine to operate in the environments in which it operates remaining undetected to achieve its mission.

[Malcolm Roberts]

Given the exponential rate of increase or improvement in technology throughout life. Is there any regular or systemic review of the original assumptions?

[Greg Sammut]

We always continue to look at new technologies and what they might bring, not only to the future submarine but the existing submarine capability we have today. And that’s a good example perhaps to use that for your constituents, to understand how we continuously look at the ability to upgrade existing platforms that were produced some time ago. And if you look at any Naval vessel, it generally has a long life. And you’re right Senator, of course technology does evolve over the life of ships or submarines which are typically in service for at least 30 years in many cases. Over that timeframe we have to have the ability in Australia to be able to not only maintain the systems as they’re delivered, but to update them to deal with obsolescence that might emerge as well as upgrade them to take advantage of those new technologies so that we can maintain a capability edge or regional superiority. We do that today with the Collins class, we’re upgrading the Sonar suite in the Collins class, we’re upgrading the communication systems in the Collins class. We continue to manage any obsolescence that may arise in the Collins class because it was designed back in the 1980s. And we have to make sure that it continues to perform well. Life of type extension for the Collins class looks at these very issues where we will look at updating the diesel engines in the boat as well as the main motor and power control and distribution systems in the first instance. So what I’m saying to you is that we don’t design a vessel, deliver it and expect that that’s the way it will remain throughout its service life. It will be updated. It will be upgraded to ensure that it remains a potent and viable capability for the defence of our nation.

[Malcolm Roberts]

Thank you. And you mentioned the Collins class. So let’s go to that. Given the difficulties that have been reported about like for locating enough submariners to man the current Collins class submarines, what’s planned to identify and train enough submariners to man the Attack Class submarines, should they actually be built

[Greg Sammut]

I’ll hand that question to Chief of Navy whose his area of responsibility that falls under

[Vice Admiral Michael Noonan]

Good afternoon Senator, Vice Admiral Michael Noonan, Chief of Navy, with respect to the workforce for our submarine force, we have a growth plan which will allow us to achieve the required manpower to man 12 submarines as the Attack Class come to service.

[Malcolm Roberts]

Can you tell us any particulars about that that would give us confidence without divulging anything secret?

[Vice Admiral Michael Noonan]

The submarine force has been enduring record growth over the last five years. I currently have over 800 submariners in the trained force which is an increase of almost 50% of where we were 10 years ago. And we have a separation rate from our submarine force at the moment, which is the lowest of any other trade within the Navy. I need to achieve a growth of approximately 50 submariners a year to achieve our target for the introduction of the cones. And we are well on track.

[Malcolm Roberts]

So could you just tell me the expansion, how much it expanded? Was it 50% since when?

[Vice Admiral Michael Noonan]

50% in the last 10 years.

[Malcolm Roberts]

10 years. Could we man all of the Collins class submarines 10 years ago?

[Vice Admiral Michael Noonan]

No, we could not.

[Malcolm Roberts]

My final three questions Chair. They’re brief ones, they’re to the minister because they’re matters of policy or opinion. Given minister that the prime minister has just said that the submarine contract will go ahead is this to win votes because of Australian-built content?

[Minister]

Absolutely not, Senator Roberts, as you know and as I think Mr. Sammut has indicated and has been discussed in this committee for some time both during my previous tenure and since. The Australian government and the Australian Defence Organisation, both the ADF and the Defence Organisation itself regard submarines as a vital element of our defence strategy essential to protecting those interests. And we will continue to stand behind the commitment that we have made the partnership that we are invested in and engaging in. We have, as you have noted in passing a very strong policy approach about maximising the Australian industry content, about building submarines here in Australia with Australian steel, with Australian workers. But that aside, Senator, we regard this as a vital element of our strategic approach.

[Malcolm Roberts]

Has the government given… I’ll leave that question. Can Australia afford this in the light of the COVID 19 restrictions from state and federal governments, that recovery will now take enormous effort from our country? Can we still afford it?

[Chair]

How many last questions do you have, Senator Roberts?

[Malcolm Roberts]

One.

[Minister]

Senator, my response to you would be how can we not afford to do it? We must do it in the interests of the factors I put forward to you in response to your previous question and in the context of a COVID-19 recovery, the the impact of the work that we are doing in defence industry and particularly in Naval ship building is absolutely vital in the Australian economy. So I would absolutely respond to you in the affirmative to say we can afford it and we will afford it.

[Malcolm Roberts]

So given the risks with technology increasing and improving so much outside the area, as well as inside the area, given that and the cost, and the changing circumstances in Australia isn’t it time to face reality and cancel these particular submarines?

[Minister]

Senator, I don’t agree. And I think Mr. Sammut has done an excellent job of setting out the reasons why including at a highly technical level.

[Malcolm Roberts]

Thank you. Thank you, Chair.

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Why didn’t Fair Work raise the alarm on casuals? Fair Work Ombudsman at Senate Estimates

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In Senate Estimates today, I continued to pursue the case to support casual coal production workers. I showed the FWO that the hunter valley CFMEU bosses sold out casual mine workers and left them significantly underpaid and unsupported. This union ignored casuals and trapped them in the “permanent casual trap”

The FWO made us all aware that the Fair Work Commission has known about the problem with the lack of a definition for casuals that left them fall through cracks in the IR and WH&S systems. Yet they have done nothing. We stood up for small business and successfully put up and amendment to enable a simpler system for casual conversion for small business.

Transcript

[Chair]

Senator O’Neill could you at least let Senator Roberts.

[Malcolm Roberts]

Thank you all for being here today. First question, in correspondence between myself and the Fair Work Ombudsman, I was disappointed to hear your office repeatedly told casual coal miners that you could not or would not help them, even though their abuses were many. This was because you said that casual black coal miners did not exist, and there’s no provision for them in the award. At this point, the Ombudsman became a part of the problem and not a part of the solution. Why did you not report this gap to the minister or an authority that could fix it? And what can you do to ensure that these sort of abuses by your office and other instrumentalities like Coal LSL do not happen again?

[Ms Parker]

So, senator, we are able to provide basic information around black coal long service leave provision. Is that what we’re taking about?

[Malcolm Roberts]

No we’re talking about the-

[Ms Parker]

Now, my apologies. We’re talking about-

[Malcolm Roberts]

This was about why you would not be able to help them, help black coal mine casual,

[Senator Sandra] Yeah. working casuals in the black coal industry.

[Ms Parker]

Okay. So, has anyone got the… All right then we’ll have a look at… So, in terms of casualization there’s a couple of things happening with this, we’ve been monitoring workpac and rosatto I guess what I would say is we have to… our job is to enforce and apply the law as it stands. And I believe Senator that we have done a lot of work in regards to your requests for assistance, your complaints about the enterprise agreement, the award, the conflict as you say, between the two. And I understand what you have been advised is that you know, once an enterprise agreement is in place it doesn’t have to align directly with the award. So, there’s a contradiction between those two things?

[Malcolm Roberts]

Yeah. I guess the heart of my question really goes to, who did you inform? Which ministers did you inform? Which agencies responsible did you inform? Because this was a problem where there’s no classification of casual in the Black Coal Mining Industry Award. Yet the union did a deal with the employer, that vastly decreased pay rates, substantially decreased pay rates, and enabled casuals with no provision for conversion. So, the union basically locked them into casualization forever.

[Ms Parker]

So, Senator the-

[Malcolm Roberts]

So, they were significant problems and I wanna know, what mechanism you either didn’t follow or you need in the future to be given power so, that you can raise these issues with the relevant authorities.

[Ms Parker]

So, senator the relevant authority is the Fair Work Commission, which ratified the enterprise agreement.

[Malcolm Roberts]

That’s true, it did ratify it.

[Ms Parker]

Well, we he had nothing to do with that.

[Malcolm Roberts]

But Mr. Turner and others raised the issue with you that they were locked in by their union which gave them a substandard deal, and the Fair Work Commission approved it. Mr. Turner originally was employed as a casual under the Black Coal Mining Industry Award even though there’s no classification for it. Then he went to what looks to be a dodgy enterprise agreement that the union signed off and the Fair Work Commission signed off.

[Ms Parker]

Quite possibly. So, we regulate agreements and awards that the Fair Work Commission approves, we have no responsibility to alter them or amend them, that’s not our role, not our tribunal.

[Malcolm Roberts]

But if an employee comes to you and says, I’ve got this problem, can you at the moment go to another group, say, look we can’t fix this because it’s sort of locked in by the union and the Fair Work Commission, but this is a problem that needs to be fixed. The casual problem it could have been fixed years ago, should have been fixed.

[Ms Parker]

So, the Fair Work Commission is aware of this issue, yes.

[Malcolm Roberts]

So that’s what you do? You make-

[Ms Parker]

Well, we have no other option because we are there to regulate an agreement that is published, agreed by the Fair Work Commission, or the award.

[Malcolm Roberts]

So, thank you for clarifying. So, if someone was not aware in the Fair Work Commission, you would make them aware? But in this case they were aware.

[Ms Parker]

We do share information with the Fair Work Commission. They are aware of this issue because certainly it’s been running for quite some time.

[Malcolm Roberts]

You’re right it has.

Okay, let’s move on. You may soon be required to prepare, to distribute and to build awareness in regard to the Casual Employment Information Statement, associated with the recent bill that passed, including employment conditions and to educate both business and employees on their rights and obligations. Please detail what you will be doing to ensure integrity and awareness in regard to this information sheet. And also what systems and support will be in place to ensure prompt, clear and informative support for both business and employees?

[Ms Parker]

Certainly. Chief Counsel Financier you can look in it.

[Jeremy O’Sullivan]

Senator, Jeremy O’Sullivan, Chief Counsel Fair Work Ombudsman. You’re quite right. When the bill that’s just passed the parliament, receives Royal Assent, I think there’ll be a new Section 125 capital A that will require the Fair Work Ombudsman to draught and prepare and Gazette a Casual Employee Information Statement. That work is well underway. There’s some consultation requirements because that statement is required to just canvas some of the work of the Fair Work Commission. So, under I think it’s Section 682 sub 2 we’re required to just consult on with the Fair Work Commission on that, that’s occurring now. And so I’m very confident that we will be able to publish that statement as required by the legislation when it comes into force, shortly after it comes into force. We’re also consulting with the department, obviously is it’s novel legislation, and we will be there for appropriate to make sure that the department with the administrative responsibility for the act is comfortable with if you like, giving effect to this new provision.

[Malcolm Roberts]

So, that’ll give you the instructions in a way?

[Jeremy O’Sullivan]

No, that… Sorry, I’m sorry for interrupting I shouldn’t have done that,

[Malcolm Roberts]

No, that’s fine.

[Jeremy O’Sullivan]

But no it’s up to us to form our view on the crick content but obviously we consult with the department. And we are obliged to consult with the Fair Work Commission under the Fair Work Act as it is now.

[Malcolm Roberts]

And then you check with them to make sure the interpretation is correct?

[Jeremy O’Sullivan]

Yeah. Yeah. I mean-

[Malcolm Roberts]

Okay. That’s good.

[Jeremy O’Sullivan]

Well, in as much as… So, I don’t wanna act like… sound like we’re acting on dictation, we have to form our own view and we’re responsible, and as Ms. Parker is often reminds me, unfortunately, the buck stops with her, so, we just make sure… I just make sure that we give our advice so that we’re comfortable. Now, there is a mechanism under the legislation for us to update or change the Information Statement as required. And of course now, if any matters came to light that we thought it could be improved, and just like we do with our Fair Work Information Statement, we improve. In particularly for readability, ’cause this is not to be a document that could only be-

[Malcolm Roberts]

Just a living document.

[Jeremy O’Sullivan]

Yeah. That’s okay a good point.

[Malcolm Roberts]

Okay. Will you be doing a separate sheet to ensure that small business employers and employees are aware of the requirement that casual employees working in small businesses have a right to apply for conversion?

[Jeremy O’Sullivan]

Indeed. We’re also preparing if you like, complimentary web content to make sure that basically you know, we’re providing a one-stop shop for everything you need to know about this new statement. We’re afraid to ask if I can be of burden, but you know that’s exactly… we’re making sure and striving to make sure that it’s readily accessible and it’s ready to go out as soon as, you know, the legislation receives Royal Assent.

[Malcolm Roberts]

After what I’ve learned in the Hunter in the last two years, what more can the Fair Work Ombudsman do to support casual coal employee… casual employees, especially in regard to both understanding the impact of the recent change and on their right to casual conversion? How much is being invested to ensure that there is a helpline and or accessible information available in regard to casual rights?

[Jeremy O’Sullivan]

It’s an excellent question. I was gonna say that this new legislation provides both an opportunity and a challenge for us to deliver on that. So, the proof will be in the pudding.

[Malcolm Roberts]

And there will be arguments. You anticipate there will be arguments with people in larger businesses denied conversion and then the employee wanting to come back later and saying that the denial was not for sound reasons?

And that will be the jurisdiction of the Fair Work Commission,

[Jeremy O’Sullivan]

Right.

[Malcolm Roberts]

Yeah. But you’ll be in touch with them?

[Ms Parker]

I might just clarify to that a little bit. So, the initial conciliation will be the Fair Work Commission, but any disputes we know would go for the small claims court of the Federal Court.

[Malcolm Roberts]

Thank you.

[Jeremy O’Sullivan]

You’re quite correct mam, thanks.

[Malcolm Roberts]

Will Fair Work Ombudsman inspectors be able to help small businesses with things such as, coaching and support? Because it was small business who did most of the heavy lifting during COVID-19 restrictions imposed by governments around the country. And we want to ensure that they’re not burdened with more red tape and unnecessary administrative costs.

[Ms Parker]

The answers is

Yes. Senator, we’ve put a lot of our resources into supporting small business and we’ll continue to do so. We’re certainly developing material for this but we also have a dedicated small business helpline, and we’ve had 34,000 calls to that this year alone as in the financial year. And we have a small business showcase with a whole range of resources. The small business webpage was visited 50,000 times this year, we’ve got best practise guides and we have… So, we do put a lot of effort into small businesses and we’ll continue to do that. It’s important they understand what their, you know, obligations and rights are.

[Malcolm Roberts]

Well, I think it’s important just to mention chair, just in finishing up, that we’ve had a lot of contact with small business and small business organisations who are relieved that the bill went through last week, but now they need to make sure it’s implemented properly. So.

Thank you.

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Is Australia’s election software hackable? Questioning the AEC at Senate Estimates

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Confidence in our elections is a cornerstone of our democracy and many questions have been raised by events in the United States Presidential election about our own software, which was originally sourced from the same supplier – Scytl.

Last night I asked questions of the AEC regarding the serious issues found in other audits by the Australian National Audit Office and the Australian Signals Directorate, as well as by leading University cryptographers.

The AEC replied that having purchased Scytl software they then chose not to use it, and have developed their own bespoke system. They claim this has been audited and the AEC had every confidence it worked.

One Nation feel bland assurances of this critical issue is not good enough. Today I will ask the Australian Signals Directorate, who are responsible for cyber security, if they have conducted a server-level and code-level audit of that software. If ASD haven’t, then who did the audit and what was the result?

Audits are normally done by the Australian National Audit Office and that agency has not audited the AEC. We need to know that this software is fit for purpose so the public, candidates and media can have complete confidence in our elections.

Transcript

[Chair]

Thank you, Senator O’Sullivan, Senator Roberts.

[Malcolm Roberts]

Thank you Chair, thank you for attending tonight. My questions should be pretty quick I think, in terms of going through them. I’ve got a number of them. Where are pre poll votes kept during the pre polling period and where are they counted?

I might ask the National Elections Manager to step forward.

[Assistant Commissioner]

First Assistant Commissioner, they are kept in a secure location within the polling booth. We have secure facilities that hold those while they’re not counted until after 6:00 PM on election night.

[Malcolm Roberts]

What percentage of pre-post centres have monitored back to base alarms and monitored surveillance cameras covering the location of the stored paper ballots?

[Assistant Commissioner]

I don’t have that on me, I’ll have to take notice.

We’d have to take that on notice.

[Malcolm Roberts]

Do any?

[Assistant Commissioner]

Pardon!

[Malcolm Roberts]

Do any?

[Assistant Commissioner]

I couldn’t answer right off here now.

[Tom Rogers]

There’s a whole range of security measures that are put in place including the involvement of scrutinies in every step of the process, signed documentation with numbered seals that can’t be cut and security guards, were security guards are required and a range of other measures that provide total security for all of those ballots. We treat that very seriously.

[Malcolm Roberts]

So the Senate first preference votes are counted in the polling place and then, to get a rough count. And then transported to the Senate scrutiny centre to be recounted, is that correct?

[Assistant Commissioner]

Correct.

[Tom Rogers]

That’s correct.

[Malcolm Roberts]

Do you compare the polling place count with the machine count?

[Assistant Commissioner]

We do.

[Malcolm Roberts]

Thank you. The 2013, how often or how, what sort of frequency, what sort of sampling?

[Assistant Commissioner]

The whole time. We manage those numbers all the way through to make sure that we’ve got the right… Are you’re talking about the… Well, sorry, there’s two parts to your question there. The first is that we always compare to the first count and we always see what we’ve done throughout the thing. I think what you’re asking there is how much sampling you just said?

[Malcolm Roberts]

Correct.

[Assistant Commissioner]

Right. We do do a portion of sampling throughout to make sure that it’s consistent.

[Malcolm Roberts]

What sort of portion, roughly?

[Assistant Commissioner]

I don’t have that on me. I have to take that on notice.

[Malcolm Roberts]

Okay, thank you. The 2016 Senate machine count was supplemented by a hand count. Did you compare the scanning accuracy with the manual count accuracy?

[Assistant Commissioner]

Great, so-

[Tom Rogers]

I might just start before Ms. White answers. It wasn’t supplemented, It’s actually part of the process, Senator. So it’s not a supplemented issue. What we’ve got is a manual count and a scanning process. The results of those are compared and where there’s no issues then that vote is then included in the count. It’s deliberately set up that way as a check mechanism. It’s not supplemented by. It’s actually one part of the-

[Malcolm Roberts]

Part of the process?

[Assistant Commissioner]

Yeah.

[Assistant Commissioner]

Correct.

[Malcolm Roberts]

Okay. Thank you. The software you use in the Senate scrutiny centre is sourced from Scytl.

[Assistant Commissioner]

No, it is not.

[Malcolm Roberts]

No. Who is it sourced from?

[Assistant Commissioner]

We, it is a bespoke system that we use within the AEC.

[Malcolm Roberts]

Okay thank you. I understand the AEC issued a contract to Scytl Australia to update the software between 2016 and ’19. Is that correct?

[Assistant Commissioner]

No.

[Malcolm Roberts]

There’s a Tender here.

[Assistant Commissioner]

Yeah, there is. So in 2016, when we had the short lead time to put this new scanning solution in, we had a number of tenders go out to see who could replace or upgrade the systems to be able to do the new process. They did try and do that but we ended up going with our internal process.

[Malcolm Roberts]

Okay, so the serious flaws found in the Scytl software in 2016 and in the 2019 New South Wales state audit. So I note that the 2016 audit found that admin passwords were left in during the election period, admin logs were not kept, software changed logs were not kept and the wifi was not disabled on the computers holding the votes.

[Tom Rogers]

I think you’re talking about the New South Wales.

[Assistant Commissioner]

Your New South Wales, that’s what it was.

[Tom Rogers]

I actually don’t wanna dispatch our New South Wales colleagues but I think you’re talking about the New South Wales state election and I-

[Malcolm Roberts]

We’ve got questions about that, yeah.

[Tom Rogers]

I think that’s what you’re referring to there.

[Malcolm Roberts]

So can you assure the committee that none of these errors affected the 2019 election in federally.

[Assistant Commissioner]

Well I can tell you it didn’t, because we didn’t use that software.

[Malcolm Roberts]

At all?

[Assistant Commissioner]

We’ve never used Scytl software for our election.

[Malcolm Roberts]

You’ve used your own bespoke system.

[Assistant Commissioner]

We have.

[Malcolm Roberts]

Okay. Dr. Vanessa Teague associate professor at the ANU college of Engineering and Computer science and Australia’s leading cryptologist was able to hack into the New South Wales Scytl server and change the votes in real time before they were passed through to the AEC server. Can this be done to the system you propose to use in the next federal election?

[Assistant Commissioner]

Nothing is plausible.

[Tom Rogers]

Just for the record, That’s not the AEC server, that was the New South Wales

[Malcolm Roberts]

New South Wales Again?

[Tom Rogers]

commission again. And we have sufficient measures in place that we’re satisfied with all the security measures that we have for the federal event and for the scanning of the Senate vote.

[Malcolm Roberts]

So Dr. Teague is Australia’s leading cryptologist. Would she be welcome to come back and do further audits?

[Tom Rogers]

Frankly, Senator, no. We’ve complied with, we work with a range of partners including the Australian Signals Directorate, the Australian Cyber Security Centre. We’ve had our internal code audited, checked and a range of other issues and not being rude, I’m sure that Dr. Teague is a wonderful person but we’ve had sufficient checks in place to assure ourselves that that system is running smoothly.

[Malcolm Roberts]

Okay. In Senate estimates on the 27th of February, 2018 in response to concerns raised about the audit software I think by Senator Farrell, Mr. Rogers, you made the following comment, quote “To the extent that I can be confident that nothing untoward happened. I’m very confident that nothing untoward happened and I am very confident the processes we’ve put in place.” That doesn’t sound like a resounding guarantee of the cyber integrity. Can you make an unequivocable guarantee of this as the sole assurance of the sovereign integrity of the software?

[Tom Rogers]

What I can tell you, Senator is that no one would sit in this chair and give an unequivocal guarantee about that issue. I would be cheapening the guarantee by giving it. What I’ve done very clearly is said to the extent that we’re aware and our partner agencies are aware, and the security agencies that we work with, we are satisfied with all the measures we have put in place. But no one is going to give you an unequivocal guarantee on that because there are unknown factors at play. But I am very, very, very confident that we’ve got an incredibly robust system in place that’s worked well and continues to work, and we continue to assess it. We continue to work with our partner agencies. We comply with all Commonwealth guidelines, cyber security guidelines. And I think it’s a fantastically secure system. I can’t give any stronger than that. If I said, I give you an unequivocal guarantee I don’t think anyone would give an unequivocal guarantee about anything, there are factors that I’m not aware of.

[Malcolm Roberts]

Well you’ve certainly lifted a burden from my mind with regard to Scytl. In 2016, it took 29 days to transport the completed ballot to the Senate Scrutiny Centre, you allowed apparently 18 days and it took 29. How long did it take in 2019 to get the ballots to the Senate Scrutiny Centre? And what is your projection for 2022?

[Assistant Commissioner]

So I’d have to take that on notice, and probably ask you to expand a little bit on that because we do a rolling transportational logistics of all our papers every day as they’re counted in our outpost of centres. We continually roll them through to our scanning,

[Tom Rogers]

Count them, all of them, send them off…

[Assistant Commissioner]

So it might take a total of 29 days to do all of those millions of ballot papers but they won’t take 29 days to get there.

[Malcolm Roberts]

So they take from each pre polling centre each day?

[Assistant Commissioner]

And each polling day output and into the output centre. And then they are rolled out and continually scanned through the whole process. If we waited till the 29th day you wouldn’t have a Senate result in time.

[Malcolm Roberts]

What sort of confidence do you have with regard to the integrity of the votes being preserved during that transfer.

[Tom Rogers]

Very high. We’ve got a whole system in place. We, as I said before, we’ve got specially designed boxes. Those boxes are secured by numbered seals that are witnessed at both sites. They’re counted in and out. They’re reconcile when they arrive at the Senate scanning centre-

[Assistant Commissioner]

Scrutineers can also-

[Tom Rogers]

Scrutineers are also involved in the process. It’s a good system, sir.

[Malcolm Roberts]

So you’ve got serial numbers recorded as they leave a pre polling place.

[Assistant Commissioner]

Yes.

[Tom Rogers]

That’s correct.

[Malcolm Roberts]

And when they arrive to the destination.

That’s correct. At the last Senate estimates in response to a question from Senator Farrell again on the AEC budget, Mr. Ryan made the statement that quote, “We are cognizant of the complex cyber environment that we operate in. At the moment we do a 24/7 manual look at security for cyber at election time. Could you please tell me what 24/7 manual look at security for cyber looks like?

[Assistant Commissioner]

Well…

[Malcolm Roberts]

What does it mean?

[Tom Rogers]

Well, I can tell you that. As I mentioned before, Senator, we are compliant with all Commonwealth cybersecurity guidelines. We are always, did it say Mr. Rogers or Mr. Ryan said this, by the way?

[Malcolm Roberts]

Mr. Ryan.

[Tom Rogers]

Mr. Ryan. What it means is that we are fully compliant with Commonwealth guidelines. We monitor our system at 24 hours a day like every other Commonwealth government department does to make sure that it’s safe and secure. And I think that’s what Mr. Ryan was probably indicating. It’s not so much a manual process that we do that in any case. And we’re always monitoring our own system. We’ve got good arrangements in place. We work with other Commonwealth security agencies to make sure our systems are monitored. And we’re very satisfied with the level of security we have on our system.

[Malcolm Roberts]

Okay. Thank you. I understand your software was approved by IBM in 2017 as having a likely error rate below 0.5%. Is that correct? And what was your error rate in 2019?

[Tom Rogers]

I might have to take that one on notice, I think Senator

[Malcolm Roberts]

Okay. Thank you. 16.4 million ballots at 0.5% error rate indicates that up to 80,000 Senate votes nationally were recorded in error. Is that acceptable to the AEC?

[Tom Rogers]

I think I’d wanna look at the statistics of that before I answer Senator, I don’t think we have that here tonight so,

[Malcolm Roberts]

On notice?

[Tom Rogers]

Let me look at that.

[Malcolm Roberts]

Okay. Two more questions, Chair. What audit has been conducted on the software used in the Senate scrutiny centre including comparison of the accuracy of the scanned file against the original paper record and the accuracy of the routine use to allocate preferences?

[Tom Rogers]

I’ll take that on notice.

[Malcolm Roberts]

Thank you. In previous estimates… This is a different line of questioning. In previous estimates, the AEC has indicated that when a federal election follows a state election there is an increase in informal votes as voters vote federally in the manner they voted in the state election. That’s understandable. I note your testimony that the AEC spends extra time and money educating voters in those States. Can I ask if any consideration has been given to allowing the States to specify the voting technique for their own state and federal elections, which would remove this confusion for good? I’m not advocating it I’m just asking about it.

[Tom Rogers]

No.

[Malcolm Roberts]

No consideration? Thank you very much. Thanks Chair.

Thank you very much, Senator Roberts, your economy with your questioning is very much appreciated.

/by

Does Australia Post care about Mum and Dad LPOs?

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Licensed Post Offices (LPOs) provide important services especially in regional towns. Unfortunately, they’ve been overlooked in a number of the changes to the way Australia Post operates.

Transcript

[Malcolm Roberts]

Thank you chair. And thank you all for attending today. Is Australia Post considering selling off its profitable parcel post business? And please advise what discussions, reviews and planning has and will occur in relation to the parcel post business?

Senator, that would be a matter for government. So we’ll have to defer to…

[Lucio Di Bartolomeo]

If I could just respond from the chair’s and board’s perspective. There has been no discussion, no plans, no undertakings to prioritise any aspects of Australia Post business. Certainly in the time that I’ve been there. And while we’re on that time, Can I correct the figure that I gave earlier? I was appointed on the 22nd of November not the 14th of November.

[Woman]

Thank you.

[Lucio Di Bartolomeo]

The 14th was the date that the press release was put out. I apologise for that.

[Malcolm Roberts]

So you can rule out that there’ll be a sale of the parcel post?

[Lucio Di Bartolomeo]

Correct. Correct.

I mean, I…

[Woman]

So can I.

[Malcolm Roberts]

Thank you.

Does Australia Post consider it has a responsibility to provide a possible, a profitable business model for licensees of community post offices?

[Lucio Di Bartolomeo]

We certainly believe we have a responsibility to maintain viable partners in all the business that we undertake. Both at the contractor level and at the LPO level, yes.

[Malcolm Roberts]

So you will look at their services through their eyes.

[Lucio Di Bartolomeo]

Absolutely.

[Malcolm Roberts]

The chair of Australia Post commissioned a review by the Boston Consulting Group to inform the board and the CEO. Why were the most heavily invested stakeholder group, the licensees, not engaged and or included in the sharing of the outcomes, recommendations for that review.

[Lucio Di Bartolomeo]

Senator, if I could just correct one point. The Australia Post board did not engage BCG. This was an independent investigation by our shareholders, shareholder ministers and we supported the investigation. But we did not engage nor ultimately conclude any position on that review.

[Malcolm Roberts]

From whom do I request to get a copy? Because it’s been out since I guess… Sorry.

[Woman]

We’ve already taken public interest immunity on that report, Senator Roberts. The cabinet’s explicitly considered the executive summary of their BCG report. The full report though, as a usual practise, was also available to cabinet and I consider by a number of ministers. But the report’s expected to be given further cabinet consideration in the context of ensuring that Australia Post has a sustainable future.

[Malcolm Roberts]

Could you please advise the status and next steps being taken by Australia Post with licenced post offices, LPOs, to progress payment reforms.

[Lucio Di Bartolomeo]

Senator, thank you very much for the question. I may just defer to Ms. Sheffield, who heads up our community and consumer area and ask her to come to the desk. And outline we are about to kick off on the payment review process . So, Ms. Sheffield.

[Nicole Sheffield]

Thank you Mr. Boys. Thank you, Senator. Nicole Sheffield executive general manager, community and consumer. Thank you Senator for that question. We work very closely with our licensees, our licensee partners and associations. The payment reform itself, we have had one consultation with LPOG. And we have a first consultation with POAAL, the other group later this week. Once we understand the principles and agree what are the areas that we will be looking at, then we we’ll make for some recommendations. And start working that including, as per the first lot of payment reform, looking at those payments per outlet. Because when you have so many outlets, 2,580, there are a lot of impacts. So when you make any changes to payments there’s going to be some impacts that we want to make sure that we understand across the entire network. So that requires a lot of modelling, a lot of consultation. As you know, the first payment reform was very successful and introduced $50 million worth of extra payments in the last two years to licensees. And that was all about ensuring that they were paid for parcels and for scanning. The second lot of payment reform is going to focus on community representation, and the very important role that they play in that. But also looking at our identity services and financial services. I feel very confident that before the end of this financial year we should have some really good parameters to move forward.

[Malcolm Roberts]

So it has a budget. Thank you for that. And it’ll save me, giving my preamble for the next question. Has a budget allocation been made for phase two reform implementation, which we understand is expected to begin shortly. And what is the budget allocation for phase two? When do you anticipate it will be commenced and then implemented?

[Nicole Sheffield]

So budgets at the moment have not been concluded for next financial year. So we’re in the process of discussing within the organisation, all of that. But I can tell you confidently Senator, there will be budget allocation. We’ve been discussing this and just like anything we will put aside the required amounts. And that’s part of the reason we’ve started the discussion so early this year to make sure that we allocate the appropriate amount.

[Malcolm Roberts]

And that would come with extensive consultation with the LPOs?

[Nicole Sheffield]

Absolutely.

[Malcolm Roberts]

Okay. In order to achieve sustainability for LPOs, does the significant change in volume between letters and parcel post require a review of the financial relationship between licence, with licenced post offices. Especially if, yeah, that’s all I need to say.

[Nicole Sheffield]

Yeah. Look, we’re always ensuring the viability of our licenced post office partners. We know how important they are for us to deliver our community service obligation. But actually they’re, you know, the face to our community to regional and rural Australia. Their viability is critical. And just as we’ve seen, COVID has created an e-commerce boom that none of us expected. We hoped, but none of us expected that it’s changed the financial model completely for our post offices. Because all of a sudden their revenue drivers are significantly more coming from parcels than we’ve ever seen. And so it really is constantly working with them looking at what products, services they are offering to their communities. What arrangements that we have, what opportunities we can have to introduce new products and services that will drive transactions and foot traffic for them. And I think it’s something that we’ll just constantly need to be looking at and working with them to look at what we can do to grow.

/by

Questioning the Bureau of Meteorology at Senate Estimates

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I’m down in Canberra at Senate Estimates this week. Over many years now I have consistently grilled the Bureau of Meteorology at Estimates over their methodology in ‘homogenising’ or changing raw temperature data. These changes include adjustments to make the recorded temperatures colder in earlier years and warmer in more recent years, making the supposed warming trend seem worse.

Transcript

Thanks Senator Green, Senator Roberts.

[Malcolm Roberts]

Thank you Chair. Thank you all for attending today. You got my questions in writing, Dr. Johnson?

[Johnson]

I did Sir.

[Malcolm Roberts]

The first question was please confirm whether you agree that any data adjustments need to be rigorous, independently replicable, and accurately supported with metadata.

[Johnson]

Senator, I might just ask my colleague Dr. Stone to take those questions. Thank you.

[Malcolm Roberts]

Sure.

[Dr Stone]

Yeah, thanks Senator.

[Malcolm Roberts]

Nice to see you again.

[Dr Stone]

Yeah, likewise The Bureau does agree that homogenization adjustments need to be rigorous and homogenization needs to be independently replicable using agreed peer reviewed methods, but it doesn’t actually need, it’s not a requirement that it’s supported by metadata as you’ve suggested. The purpose of the homogenization is to adjust for discontinuities where they’re detected, as I was describing earlier, in comparison with nearest neighbours. Metadata such as documentary evidence of a site move tells you that you might like to check for discontinuity, but it doesn’t tell you to make the adjustments themselves. So adjustment occurs only where a discontinuity in observations crosses what I referred to earlier as a threshold of significance. So it’s possible for homogenization to occur without metadata. And it’s also possible that metadata can describe a situation where there has been a change in observation practise, but homogenization isn’t required because that change doesn’t result in a discontinuity in observation. So it’s actually the discontinuity in observation that’s critical in the determinant of whether or not a homogenization occurs and the scale and direction of the change.

[Malcolm Roberts]

Okay, thank you. Moving on to some we’ve got data on many more which are similar, but the Townsville Weather Station according to the BOM’s metadata said it’s had one move. Whereas in fact, it’s had eight. The Rockhampton Weather Station has had according to BOM, one move. Whereas in fact, it’s had four. The Cairns Weather Station has had according to BOM. two moves the fact that it’s moved six times and the Chaliver Weather Station, BOM says it’s moved twice and it’s at four moves. Why did BOM and the various peer reviewers fail to detect and discuss these inaccuracies?

[Dr Stone]

Sorry, I missed the last part.

[Malcolm Roberts]

Why did the Bureau of Meteorology and the various peer reviewers fail to detect and discuss these inaccuracies in the metadata?

[Dr Stone]

Yeah, no, thank you. They’re not inaccuracies in metadata. So the metadata that either exists or it doesn’t, and in the cases you’ve described, there is instances where a shift in the med station has occurred and there’s not metadata that describes that. So it’s not actually in an inaccuracy in the metadata. And third of what I was saying too earlier, whether or not there’s metadata doesn’t impact on the integrity of their marginalisation process because it’s actually looking for that discontinuity in observations that determines whether or not there is a marginalisation that occurs.

[Malcolm Roberts]

That surely if there’s data about the movement of stations and that data is inaccurate, then the metadata is wrong.

[Dr Stone]

Now, in this case that the metadata is not present. It would be wrong if it said that there was a shift and there wasn’t one. What you’re describing is where a change hasn’t been recorded. So there’s not metadata that relates to it.

[Malcolm Roberts]

Right.

[Dr Stone]

There’s a difference.

[Malcolm Roberts]

So the BOM’s claim that has moved once in Townsville where the station moved once is not accurate because there’s no metadata on them?

[Dr Stone]

Sorry, we don’t claim it’s been moved once but we have metadata that shows that it was moved once.

Yeah. So we wouldn’t claim that there have I haven’t been shifted. We don’t have that data.

[Malcolm Roberts]

So you’ve got metadata for only one move. Whereas in fact, we know it’s been eight moves.

[Dr Stone]

We have metadata for Townsville. I’m sorry, I can’t tell you how many of those that we have metadata for but the principle remains the same. There are instances in the historical record where there’ve been changes made and they weren’t recorded at the time.

[Malcolm Roberts]

So what are the consequences of these areas specifically in terms of recording weather, data such as temperature?

[Dr Stone]

Yeah. I know there is. I just want to be clear about that. So the presence or absence of metadata, doesn’t imply an error.

[Malcolm Roberts]

If the station’s been moved and it hasn’t been noted in the metadata, then it’s not even recognised.

[Dr Stone]

Correct. But if we’re talking about the impact of that on the homogenization process, it doesn’t result in an error because the homogenization only occurs where there’s a statistical discontinuity in the data detected. So you can have moves that don’t result in homogenization being triggered, whether or not there’s metadata and vice versa. So it doesn’t be, I can be crystal clear. It doesn’t result in inaccuracies in the estimation of climate trends. If there’s metadata or not.

[Malcolm Roberts]

Has or not. Has BOM done any analysis to quantify the effects of the station moves especially the ones that it didn’t know about?

[Dr Stone]

No, absolutely. So, as I say, the process of homogenization actually looks back through the records for a given station, looks for discontinuity and measurements compared with nearest neighbours. So it steps through. And does that, so a high proportion of the homogenization changes that are made aren’t triggered by metadata they’re triggered by, as I mentioned, a discontinuity in the observations. And that’s determined by comparing with a large number of nearest neighbours, which we can do with temperature because temperature is reasonably conservative across geographic space. And it’s why, for example, you can’t really homogenize for rainfall because it’s much more spatially viable.

[Chair]

So do you have anymore questions Senator Roberts.

[Malcolm Roberts]

Yes. I’ve got a couple of more questions, Chair. You said you’ve been able to analyse these past records. Could you please provide for each of the four sites that I’ve mentioned that’s Townsville, Rockhampton, Cairns, and Charleville the quantified analysis that Bureau of Meteorology has done and document the independent peer review process used just on notice, please.

[Dr Stone]

That’s all on the website. Yep, no problem.

[Malcolm Roberts]

Thank you. Last pair of questions, Chair. What are the specific quantified consequences of BOM’s inaccuracies on CSIROs use of BOM data? I’m particularly interested because CSIRO has admitted to me that it does no due diligence of its own on temperature data that it merely accepts from the Bureau of Meteorology.

[Dr Stone]

Yeah. Thanks for the question. As I described, the presence or absence of metadata doesn’t result in inaccuracies in the homogenization process. So inaccuracies have not been passed on to CSIRO or any other user because of concerns about metadata. It’s fundamentally a statistical process.

[Malcolm Roberts]

What are the consequences on the government policy and the general assumption that Australia temperatures are increasing?

[Dr Stone]

Yeah. As I said, so if the question is about the accuracy or otherwise of the estimates, presence or absence of metadata isn’t material. And, you know, I can confirm the global trend for warming is around 1.1 degrees Celsius since the pre-industrial period.

[Malcolm Roberts]

And when you say pre-industrial, what year?

[Dr Stone]

1850.

[Malcolm Roberts]

Thank you.

[Dr Stone]

And–

[Malcolm Roberts]

It’s just at the end of the little ice age.

[Dr Stone]

What I’m seeking to do is describe the difference between the global trend, the homogenized trend and the raw observation trends. So the global trend is around 1.1, the unadjusted trend is 0.95 Degrees Celsius plus or minus 0.24 over the same period. And the homogenized trend is 1.44 plus or minus .24 So neither the raw nor the homogenized trend differ from the, significantly from the estimate of the global trend.

[Malcolm Roberts]

Okay, thank you. Are you aware just by coincidence that CSIRO has admitted to me that today’s temperatures are not unprecedented? And then after it admitted that it said that what is unprecedented is the, they claimed is the rate of recent rates of temperature rise. Yet the papers they gave us, not one of them shows that. And two of the papers show that past temperature rise, rate of past temperature rise has been warmer than the recent temperature rise which ended about 1995.

[Dr Stone]

Yeah. Thank you. I haven’t seen the CSRO papers or–

[Malcolm Roberts]

We’ll have to have a chat.

Thank you.

/by