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.

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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.

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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

Questioning the Fair Work Ombudsman (FWO) – Worker’s entitlements

,

For over 12 months I have been trying to find solutions to an unfair industrial relations system that has caused serious issues in the mining sector in the Hunter Valley and Queensland. There is a systemic issue of ‘full-time casuals’ who are being paid 40% less than their full-time counterparts and not receiving casual loadings or entitlements.

Additionally, these casuals are hired by labour-hire firms who have classed them as ‘office workers’ rather than ‘production workers’ and when injured are not covered by injury or workers compensation. During Senate Estimates this week I questioned the Fair Work Commission on why they allowed this unfair Enterprise Agreement in the Hunter Valley:

  • FWC said that there had been no proposal to change the Black Coal Mining Award by the parties, yet we know there was in 2017 when “the Fair Work Commission rejected the application by a major employers group to extend the casual employment provisions in the Black Coal award to Production and Engineering Employees” CFMEU News 6/7/2017.
  • Commission has no governance to ensure that workers actually agree with an enterprise agreement before the Commission rubber stamps it.
  • The FWC is part of the problem not part of the solution.

Transcript

Senator ROBERTS: Thank you, Chair, and thank you all for attending. Ms Parker, could you tell me briefly your role, please. What’s the core of your role?

Ms Parker: I’m an independent statutory appointment, and I’m responsible for implementing the functions under the Fair Work Act. That includes: providing education, assistance, advice and guidance to employers, employees, outworkers, outwork industries and organisations; promoting and monitoring compliance with workplace laws; inquiring into and investigating breaches of the Fair Work Act; taking appropriate enforcement action; and performing the agency’s statutory functions efficiently, effectively, economically and ethically. The Fair Work Ombudsman—as in myself—inspectors and staff constitute a statutory office established by the Fair Work Act 2009.

Senator ROBERTS: Thank you very much. We’re very concerned about so-called casuals—I say ‘so-called’  in reference to the fact they’re not really casuals; they’re permanents. I’m referring to employees in the Hunter Valley in particular, but there are some aspects that translate into Queensland. This so-called casual coalminer issue has dragged on for years. What are you doing to fix this problem?

Ms Parker: We’re well aware of the issues, and, as you know, you and I have written to each other a couple of times. We take the matter really seriously; I can assure you of that. Where it’s about long service leave, I think we’ve mentioned before that there is a Coal Mining Industry (Long Service Leave) Funding Corporation, and we don’t have anything to do with that. Long service leave is not our purview. We do provide basic information around that, and we refer specific inquiries to that corporation if they’re about long service leave. The Fair Work Commission, who you spoke with earlier, has jurisdiction to resolve long service leave disputes under the Coal Mining Industry (Long Service Leave) Administration Act. The Fair Work Commission can assist with disputes under the act as well, when a modern award provides for a procedure to deal with disputes.

We don’t have power of that kind. We can provide general information about the long service leave scheme in the black coal industry. We’re aware of a number of class actions that are being pursued around issues in the coalmining industry. We’re obviously watching those, but they are before the court, so I won’t be able to comment on those, as you probably can understand, or about the circumstances of any individual who has sought our assistance in regard to the matter that’s before the court.

Senator ROBERTS: You did broaden it by mentioning coal LSL, so I might as well put the whole scope in there. I know you can only access or reference or work on some of those. These are in relation to miners in the Hunter Valley: loss of workers compensation; no accident pay; safety issues; nonreporting of injuries; pay rates; leave; loss of leave entitlements; long service leave, which you already mentioned—some of these are beyond your purview—security; threats; intimidation; and bullying. As I said, they’re not all your responsibility, but I’m particularly concerned about the definition of ‘casual mineworker’ and the award. As you know, your website has said and, in a letter to Simon Turner, one of your advisers said that there is no classification of ‘casual’ in the black-coalmining industry award. Specifically on pay and leave, there are no leave provisions in the enterprise agreement. These people are working full-time production roles, but casuals can’t work in production; they’re working extended rosters with no leave; and they’re being underpaid relative to their peers in full-time employment. They also have been neglected by the unions. Sorry, I’ll make that very clear and specific: the Hunter Valley division of the CFMMEU, not the whole CFMMEU. These people had no-one to turn to. They turned to you. They’ve written to you, as I said, and one lady said, ‘There is no classification of ‘casual’.’ How can they do a BOOT when there’s nothing to compare against?

Ms Parker: Senator, we’re talking about the enterprise agreement that was negotiated with the unions and employers and approved by the Fair Work Commission.

Senator ROBERTS: Yes, it was rubber stamped by the Fair Work Commission.

Ms Parker: It does include casuals, as you said, in some categories. The fact that the award doesn’t have casuals does not preclude the enterprise agreement having casuals. I think Mr Hehir said in his evidence that it is the Fair Work Commission’s role to make sure that the enterprise agreement is fair once it’s agreed.

Senator ROBERTS: How then can BHP’s Operations Services recent application for an enterprise agreement be knocked back, and yet the Chandler MacLeod 2015 enterprise agreement be passed even though the BHP OS pay rates are higher than the Chandler MacLeod pay rates?

Ms Parker: It’s a matter you’ll have to ask the commission, I’m sorry.

Senator ROBERTS: I did.

Ms Parker: They are an independent tribunal and they will have had witnesses in front of them, people providing evidence to them, before they made that decision.

Senator ROBERTS: I asked the Fair Work Commission about anybody applying to vary the black- coalmining industry award about casuals, and they said they’re not aware of any. But I notice on one of your websites and also from the CFMMEU in Queensland, that the Fair Work Commission rejected an application to vary the black-coalmining industry award 2010 to enable the engagement of casuals across all classifications of the award. That was an application from a large employer group. The CFMMEU opposed that, and it was defeated. So how would the Fair Work Commission not be aware of that?

Mr Hehir: If I recall Ms O’Neill’s evidence, it was she didn’t believe there had but that she would take it on notice and check. I think that’s where she went to.

Senator ROBERTS: It’s pretty stunning, Mr Hehir, that this issue’s been going on six years and we’ve made such a big fuss about it in the last 12 months and she wouldn’t be aware of it. Anyway that’s for her, as you said. Recently I asked you, Ms Parker, how many casual black-coalminers from the Hunter Valley have referred complaints or matters relating to their pay and entitlements to your office since 2014. Your response was ‘none’. Since that time you’ve been forced to admit that Mr Simon Turner did lodge complaints during this time period. Can you advise if there were more cases? In all instances please advise the outcomes of their complaints.

Ms Parker: We do apologise that we advised ‘none’. We were certainly not trying to hide that. It’s in terms of our search facility. You have to be very precise. This is black coal, and it’s a specific area of black coal. So I apologise. We did correct the record. We’ve had one that we’re aware of, and we’re pretty confident that that’s all we have. As I said, the system searches are maybe not as surgical as we would like. But we’re very much aware of one.

Senator ROBERTS: I take it that the Attorney-General’s Department now, and the preceding minister who looks after industrial relations, are responsible for changing the regulations or the legislation. Who is responsible for advising them of the need to do so? Because casualisation and the abuse of casuals has really been an issue for quite some time, yet now it has landed employer groups and many hundreds of thousands of workers in problems.

Ms Parker: In terms of our role as the Ombudsman, we enforce and apply the law as it stands. As you say, we are not responsible for the policy or legislation.

Senator ROBERTS: No, I didn’t imply that you were responsible for the legislation, but I would have thought that you could have been advising the Attorney-General or his predecessor of the need to resolve this problem, which has been going on now for at least six years.

Ms Parker: We certainly have regular conversations with the Department, Mr Hehir, about a whole range of matters.

Senator ROBERTS: About this issue? When did you start talking about this issue?

Ms Parker: I haven’t discussed this particular issue. We’ve talked about the WorkPack v Rossato issue, how we interpret casuals, and what advice we provide to the public on casual employees. We are aware that the government’s review of the IR system and the working groups are looking at this area of casual employment. We are monitoring that, and we will provide advice and data. We’re happy to share with the committee what we do with the casuals issue and what advice we provide. But in relation to the legislation, that is a matter for the government.

Senator ROBERTS: It’s my understanding that the Fair Work Ombudsman told Mr Turner to ‘go and get a lawyer’ in order to resolve this and that you have denied the existence of casual coal production workers. You are, I hope, aware of the significant damage that this stance of yours has caused both employees and employers, who now have been taking advantage of this and have racked up a huge liability.

Ms Parker: I don’t believe that we would advise anybody to go get a lawyer. We provide advice to people about all the various areas of assistance that are available to them. Where we are unable to help them, as in we do not see that they are eligible for payment based on the definition in the legislation as it stands, we will advise that they may be able to go to small claims or they may be able to take a court case. In fact, as I mentioned earlier, there is a class action being pursued at the moment on this particular issue.

Senator ROBERTS: Have you done anything to actually help Mr Turner and casual employees like him? Why has it taken so long and it’s still not resolved? These people are in limbo, they’re living out of garages, they’ve been traumatised—why?

Ms Parker: We provide assistance to everyone who contacts us. I’d rather not discuss Mr Turner. We don’t talk about specific requests for assistance. We haven’t asked Mr Turner if he minds us talking about him in Senate estimates.

Senator ROBERTS: Mr Turner has assured me that I can inquire about him. He is very distraught about the lack of support he’s received from anyone, including the union; the employer; the mine owner, BHP; state and federal bureaucracies and agencies; Labor MPs; Liberal ministers—he’s at a loss.

Ms Parker: All I can say there is that we have provided—our website says that only staff employees can be casuals under the award. And the webpage references schedule B of the award. It sets out classifications for staff employees et cetera. We’ve provided the factual information that we have on the actual award. Some people were not satisfied with that answer, so the only option we have is to refer them to those other sources of help, including their ability to go to court if they wish to. We’re not a court or a tribunal.

Senator ROBERTS: So there’s a problem here. Obviously within the legislation there’s a problem, and some people are taking advantage of that. You’ve just said, tough, that’s the way the legislation is. You haven’t referred it to anyone who can change the legislation or investigate changing it or advise changing it? These people are still out in the cold.

Ms Parker: The government’s aware of the issues around casuals, and as you know—

Senator ROBERTS: So how long have they been aware of the issue around casuals? Mr Turner has been writing to people in the government since 2014.

Mr Hehir: Sorry to interrupt. I think we’ve talked broadly around the government’s intent to legislate for a definition of a casual and to legislate for casual conversion rights. I accept that the casual conversion rights may not work at this point in time for the individual you are referring to. The issue that perhaps would be worthwhile us meeting with you separately on is how the enterprise agreement definition has actually impacted on the other issues that you raise. What I’m not clear about is how an enterprise agreement arrangement would impact on somebody’s right to workers compensation. So perhaps we could meet with you separately to try and tease out how this all flows to end up where the actual problems are arising. On the face of it, there’s nothing, to my knowledge, that would mean that somebody who has an enterprise agreement isn’t entitled to workers compensation. I’d need to get into more detail to actually understand what’s occurring to cause that break.

Senator ROBERTS: Ms Parker raised Coal LSL, and when she did, I said let’s go to the full scope of how these people are being abused, exploited and neglected. You’ve now raised workers’ compensation as well. That’s not the main issue. The main issue here is the complexity of the issues, and nobody is fixing it: not the state government, not the federal government. No federal or state agency, no politician is fixing this thing. These people are continuing to face this after six years of neglect and exploitation. I asked Ms Parker a simple question: how long has the government known about it? She said, we know the government knows. I want to know how long they’ve known about it. Was it last year, the year before, 2014?

Ms Parker: I was talking about casuals in general. I apologise if I confused you.

Senator ROBERTS: It’s not hard to be confused on this issue, I can tell you, because there are several people who know one thing very clearly: they are not being protected by employers, unions, agencies federal and state, politicians, governments, ministers at all. These people have been left out in the cold. We now know there is no legal pay rate for a casual mine worker. So someone made it up then; otherwise you wouldn’t be able to do a boot test.

Mr Hehir: Senator, that’s not the responsibility of Ms Parker.

Senator ROBERTS: With respect, Mr Hehir, you said it wasn’t the Attorney-General’s responsibility, and I took it that you implied his predecessor. It wasn’t their responsibility. You said look at the Fair Work Commission. The Fair Work Commission told me it’s not their responsibility; look at the Fair Work Ombudsman. We’re getting running round in circles. This is a magic circle.

Mr Hehir: My understanding of the evidence provided by Ms O’Neill was that in assessing the enterprise agreement that you referred to the relevant commissioner, under the legislation, would be required to assess whether that award was better off overall compared—

Senator ROBERTS: I get that, but how can you refer to a rate when there is no rate? I offered her the opportunity of giving her the full-time roster that these people were employed on as casuals. Could you cost that?

Mr Hehir: It’s a very complex process that the Fair Work Commission undertake to make sure that people are better off overall. I think Ms O’Neill’s evidence was that they’ve changed their practices to try and insert more rigour into that.

Senator ROBERTS: But that indicates that there was a problem before the change last year. So what is going to be done to look after the people who were affected by the ‘unrigorous’ system?

Mr Hehir: As I said, you’ve raised a number of issues and circumstances around this particular individual and, you say, others which—

Senator ROBERTS: Hundreds of others.

Mr Hehir: As I said, it would be useful if we could meet to go through the relevant issues. As I said, some of the things that you imply arise from the enterprise agreement definition. I’m not clear how they would cause that. So I’d need to work through that and understand the interaction with the New South Wales workers’ compensation laws. There is a separate worker occurring around the long service leave. But certainly I’m not aware of a circumstance in which the arrangements under an enterprise agreement would impact on workers’ compensation, so I’d need to have a look at that.

In terms of the actual decision, I think Ms O’Neill was clear: if someone didn’t think that decision was appropriate or that enterprise agreement was correctly decided in terms of passing the BOOT, they were able to appeal it. I think Ms O’Neill identified that that particular enterprise agreement has nominally expired and that the other option there is for someone to apply for the agreement to be terminated. They are the technical processes that need to be followed. As I said, there seems to be a complex web of interactions here. It would be useful if we could meet with you to go through those.

Senator ROBERTS: I’m happy to meet privately with you and go through them, but we’ve had several meetings and nothing has happened. What’s my main concern, Mr Hehir?

Mr Hehir: Senator, your main concern seems to be that the individual is stuck in limbo—

Senator ROBERTS: And hundreds of others like him.

Mr Hehir: and that he cannot find a straightforward answer from the Commonwealth government or the state governments.

Senator ROBERTS: He’s wanting more than an answer. He and I are wanting a solution. I’ve got three aims for this, and I’ve said this from the start. This goes back to May last year, and I first raised it around about July  last year and then in Senate estimates and so on. My first aim is to make sure that Simon Turner and other people like him get their fair entitlements—morally fair as well as lawfully fair—and I want him to get some compensation for the trauma he has suffered for the last six years. The second aim is to make sure these practices are stopped right across the coal industry. The third aim is to bring some justice to the perpetrators of this, who in my opinion are BHP, Chandler Macleod and the Hunter Valley division of the CFMMEU. That’s what I want. Is there any way you can help us in achieving some of those three aims?

Mr Hehir: We can certainly look at what the legal entitlements. In terms of the moral entitlements, I’m not sure exactly what you mean by that. The legal entitlements we can certainly examine.

Senator ROBERTS: If you go beyond the nitpicky words of the law and you look to the intent of the law,  he’s been diddled by some mistakes, some ways of interpreting the law wrongly. Everyone knows that a minor who works in a black coal mine is entitled to workers’ compensation under coal miners’ insurance. There was nothing for him. I’m not going to ask your salary, but he’s existing on $20,000 a year—a fraction of what he used to have.

Mr Hehir: As I said, I’m not aware of what impact his enterprise agreement status would have on his workers’ compensation. I’ve offered to meet with you to go through the details to try and understand how that flows.

Senator ROBERTS: I’ll happily agree to that. But my second concern is that this has been going on unresolved for 16 months now, and I don’t see any sign of it being resolved. These people are still being left in limbo. They’ve just been discarded. My concerns now have become: What are the federal government agencies doing, and is the government at all interested in doing this? How can we possibly support changes to legislation when they’re not even enforcing the current legislation or leaving people out in the cold and there doesn’t seem to be any intent or desire to fix it?

Mr Hehir: That’s certainly not my understanding of the Attorney’s view. As I said, I’m happy to meet to go through the detail. I know that there’s work underway in relation to long-service leave, which was the issue that I recall you—

Senator ROBERTS: After first being denied that there was an issue and then admitting it—that’s a pleasant sign. It took us months to get that.

Mr Hehir: As I said, there is work underway to try and resolve the long-service leave issue. In relation to the actual approach around the enterprise agreement, as I said, I’m happy to have a look at the interaction with other matters. But the enterprise agreement was a document that was accepted by the Fair Work Commission once the employees had voted on it.

Senator ROBERTS: After what we now see—an admission that it’s been tightened up and made rigorous, which implies to me that, before, it wasn’t. So there’s been no investigation of that from what it seems.

Mr Hehir: Ms O’Neill, I think, was at pains to point out that she wasn’t making the statement that the previous process had caused any issues with that particular agreement.

Senator ROBERTS: But there were changes to make it more rigorous, implying that it wasn’t as rigorous before. What I’m seeing is that the Fair Work Ombudsman is not taking responsibility for suggesting changes to a problem or solutions or even identifying the need to investigate a problem to the Attorney-General, and I’m also seeing that it’s not the Fair Work Ombudsman’s responsibility to come up with a solution. So how does the Attorney-General possibly identify this? This just sits there, and Simon Turner keeps sleeping in a garage.

Mr Hehir: As I said, the responsibility for the actual awards and the approval of the agreements is the responsibility of the Fair Work Commission. Ms O’Neill has outlined what she believes are the alternatives there and taken some questions on notice. In relation to the issue around whether Mr Turner was a genuine casual or whether he was should have been classified as an ongoing employee, the Attorney has identified that he intends to introduce legislation in this calendar year to deal with the definition of a ‘casual’ to make it clearer for both employers and employees of what their actual status is and to also provide greater clarity and certainty around the

right to convert. So, in terms of the future, that particular aspect is certainly being looked at. As I said, I’d need to have a look at the interactions with the other jurisdictions.

Senator ROBERTS: I’m concerned that the application that the government has submitted to be part of their Rossato case—I don’t know the technical legal term—was accompanied by some pretty inflammatory rhetoric. All I see in the Rossato case is a decision that says: ‘You tried to have these people passed off as casuals. They’re really permanents.’ So I think we need to have a lot more openness, candour and honesty from the government on Rossato.

Mr Hehir: As I said earlier, the government’s primary interest in Rossato is clarifying whether any claim for the National Employment Standards made by someone who believes they were never or are no longer a casual is able to be set off by the loading. That’s where our interest is, and that’s where the focus is.

Senator ROBERTS: In my opinion, the Rossato decision makes that clear. But that’s up to you, of course.

CHAIR: Senator Roberts, how long do you think you’ve got?

Senator ROBERTS: Probably another two questions.

CHAIR: That’s okay. Then I’ll go to Labor.

Senator ROBERTS: I have some questions for you as a participant in this process, Ms Parker: Is  the industrial law in this country at the moment too complex? Is it impossible to cover everything, impossible to enforce and impossible to understand? How can an everyday worker who doesn’t want to become a lawyer possibly understand what’s going on? He relies on other people to interpret for him or her.

Ms Parker: For the bulk of the workforce, who are on awards or agreements, it’s relatively simple. They don’t have to read the whole award. They don’t have to read the whole agreement. They obviously need to understand what they should be getting paid and what their entitlements are. We provide a lot of assistance to people who phone us and ask us. If they have concerns then we help them. We have a pay and conditions tool that they can look at to work out what they should be paid. There’s a lot of information out there to assist workers, and we do that to the best of our ability. There is some complexity in the system but, for an individual worker looking at their own individual entitlements, it should not be that complicated. Obviously, if you look at the whole Fair Work Act and see how large it is, you’ll say it’s really complicated, but most people don’t need to look at the whole Fair Work Act; they only need to look at a small component of it.

Senator ROBERTS: Mr Turner impresses me as being very intelligent, very capable and very astute, as does Stuart Bonds, who’s tried to help him with this issue for 16, 17 or 18 months now, and they just can’t get through it. I don’t think it’s a matter of the complexity by itself; it’s a matter of the complexity of all the hangers-on they’re trying to drag with them and trying to shake some sense into. There’s something in this mess that’s causing these people to be discarded and exploited. First of all, a company like Chandler Macleod can exploit them. The Hunter Valley division of the CFMMEU enables that, and BHP gets away scot-free and avoids its corporate and moral responsibilities. These people are tossed on the scrap heap. So there’s something wrong with this system. The whole system has broken down.

Ms Parker: This is clearly a complex case. It’s clearly a complex award and a complex enterprise agreement. Our role is to try to make it as simple as we can, but we can’t change what the agreement actually says. It was negotiated; it was approved. It therefore is in play. What the Fair Work Ombudsman—

Senator ROBERTS: So, after six years with the Fair Work Commission, the Fair Work Ombudsman and the Attorney-General’s predecessors, they’re still here. I think we’ve done this enough for now. You know where I stand.

/by

Questioning Coal LSL – Worker’s Entitlements

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During Senate Estimates earlier in the year, I was able to get Coal LSL to admit that there were discrepancies in hours worked reported by employers and to start an audit. Since this questioning, many other workers have come forward with issues and questions they wanted asked in Senate Estimates. Accountability and transparency seems to be lacking and workers are in the dark as to best manage their long service leave entitlements.

Transcript

Senator ROBERTS: Thank you, Chair. Thank you both for appearing today. Could you tell me, firstly, what has Coal LSL done since last estimates to address the errors and wrongs identified in employer data and when  will people be compensated, and what is the total value of the errors to date?

Ms Perks: I’ll start with—

CHAIR: We’ve lost you, I think, again. Hello? Can we hear you? Can you speak again?

Ms Perks: Yes. We’re getting a delay.

CHAIR: You’re getting a delay; a delay on your voice? So there’s an echo? We might pull the plugs out. We will suspend briefly again, so can you log off and log on again, please? Thank you.

Ms Perks: We will.

CHAIR: Thank you. Senator Roberts.

Senator ROBERTS: Thank you, Chair. What has Coal LSL done since last Senate estimates to address the errors and wrongs identified in the employer data and when will people be compensated, and what is the total value of the errors to date?

Ms Perks: Thank you, Senator. The six individuals who were identified back in October who were employed by the Programmed TESA Group have had their records adjusted and it has resulted in a change of 55 hours of entitlement for the total six out of the eight that were identified. Since October, Programmed Tessa, who was the employer—

CHAIR: I think what happened there is that there was more feedback.

Ms Perks: We’re getting the question coming back, circling.

CHAIR: Okay. So the question is on repeat. That would be  amusing.  It’s  a  very  important  question, Senator Roberts. We will suspend again briefly and we’ll do it through Chorus Call. Someone from the secretariat will be in touch to advise you how to do that. We will get you on the phone but not via videoconference.

Ms Perks: Okay.

CHAIR: For the third time, Senator Roberts is going to ask his question. Senator Roberts.

Senator ROBERTS: Thank you, Chair. What has Coal LSL done since last Senate estimates to address the errors and wrongs identified in employer data and when will people be compensated, and what is the total value  of the errors to date?

Ms Perks: Since the last Senate estimates in March the focus of the organisation has been on getting visibility of the issues that were identified. The six individuals who were addressed in the October Senate estimates have had their records updated, which resulted in a change of 55 hours of entitlement for the six in total. Regarding the other two individuals of the eight, it hasn’t resulted in a change in their record on that review. Now, in saying that, what has commenced outside of those six individuals has been a commitment by Coal LSL to commence an audit of the employer data for any employers who have casual employees within the Coal LSL scheme. That audit has commenced and is in train. We don’t have visibility yet of what the outcome of the audit will be or any changes to individuals’ records as a result of that audit.

Senator ROBERTS: Thank you. The second question: why doesn’t a casual get the same Coal LSL payout as a permanent employee when they both work the same hours and roster on the same site in the same role? If this is because of the act, why hasn’t Coal LSL referred the matter to the government and why hasn’t the government fixed this?

Ms Perks: If a casual employee works a 35-hour week, which is a full-time equivalent, they will accrue the same long service leave entitlement as a full-timer. Our records for the employee are held in hours, and if the employee does work for 35 hours during the week their records will be at that full-time equivalent maximum entitlement.

Senator ROBERTS: Thank you. Are casuals made aware that they can waive the Coal LSL scheme and have the contribution paid direct to them? As you will appreciate, this would benefit a lot of casuals that may not stay for the eight-year qualifying period.

Ms Perks: I can’t talk to whether casuals, in particular, have visibility of that. It was an enhancement in our legislation back in 2010 to include waiver agreements as an option for all employees in the scheme. I can take that question on notice. From memory, we have as minimal as four waiver agreements, but I will verify that number and confirm that.

Senator ROBERTS: Sorry, what was that last sentence you said?

Ms Perks: From memory, I think we have four waiver agreements in place out of 426,000 records, but I will take that question on notice and verify that.

Senator ROBERTS:   Why,  if a  casual does take  the Coal LSL waiver option,  do  casuals only get paid   two per cent when the Coal LSL payout is based upon 2.7 per cent?

Ms Perks: All employees, irrespective of their employment status, would be paid based on certain criteria in the legislation which my colleague Mr Kembrey will talk to. The two per cent that you’re talking about is our payroll levy and is not correlated with an employee’s long service leave entitlement. That percentage is in relation

to the payroll levy that employers are required to pay. It is a tax that’s imposed, and that levy of two per cent has been in place since 2018. Prior to that it was 2.7 per cent, but it was reduced in 2017 to that lower level. It’s a rate that’s applicable to all employers who are registered in the fund.

Senator ROBERTS: Could you please provide details of the number of casual employees who have contributions made to the scheme for them and detail how they may have been paid out? How many have left the industry and how much money does this represent for those employees who have not returned to the industry in, say, over three years? In other words they haven’t been paid out and they’ve left the industry.

Ms Perks: I could talk to the amount of casuals who are active in the industry today. According to our  records, in round figures it’s 9,000. I will need to take your other questions on notice. They are quite detailed questions that will need to be responded to.

Senator ROBERTS: Yes, that’s fine; take them on notice. They are very important to us. Can you explain in detail why the amounts contributed by employers to Coal LSL for eligible employees, both permanent and casual, are different to the amounts paid out for those employees? Could you please explain the reasons for the discrepancy in detail, the break-up of what funds go where and the total value that this represents annually?

Ms Perks: There are two important components of the fund. The payroll levy is a tax that’s collected on behalf of the government. That is received monthly by employers. It is remitted to the commonwealth and appropriated back. Separate from that is the records that we hold for all employees in the fund, and that entitlement is accrued in hours. The payment that’s made to the employee will be reliant on their employment agreement. Our legislation does specify the minimum that should be paid. Mr Kembrey might be able to refer us to the section in the legislation that talks about minimum payments that are required on termination or in-service leave. But it is a different part of the legislation to the payroll levy collection act, which talks about levies that are received for the fund.

Senator ROBERTS: Thank you. Is Mr Kembrey going to add anything?

Mr Kembrey: The best way to break down the question is that the payment of levy is not necessarily correlated with the accrual of the entitlement. When entitlements are paid, they are paid at the rate that the employee is earning at the time that they take that long service leave.

Senator ROBERTS: Can you please reconcile the difference between employer contributions and employee payouts? Please also advise what happens to, firstly, the funds where an employee leaves the industry prior to qualifying and fails to return to the industry and, secondly, the total amount of these funds where employees have left the industry, how much is dispersed, and to whom, on an annual basis over the last seven years.

Ms Perks: The fund is a pooled fund. It’s important that employees of the fund understand we are very different to a financial institution and super funds. The fund is a pooled fund. The nature of portable long service leave means employees can move in and out of the industry, and they can have a maximum break from the industry of eight years before their qualifying service accrual is impacted. That’s important context. We must hold the funds for that period of a break in service of eight years, in case that employee returns to the industry, so that we can continue to ensure that we have sufficient funds to pay out for future long service leave.

The actuary assesses and protects the fund’s assets and liabilities based on important assumptions. One is investment returns. There is also the probability of employees reaching eight years of qualifying service. In regard to the employees that you’re talking about, the probability of an employee meeting that eight years of qualifying service starts at a base of 50 per cent. Our data tells us that an employee that’s been in the industry for less than one year has a 49 per cent chance of meeting that eight years of qualifying service. We hold the funds as a pooled fund through that duration of a maximum of eight years break period to anticipate that future liability that the  fund may incur. It is a complex calculation that the actuary conducts. It has fundamental assumptions that underpin that assessment of the fund’s assets and liabilities.

Senator ROBERTS: Could you please tell us how much money is involved in people who have gone beyond the eight years and are not in the industry, and won’t ever get a payout? What happens to their money?

Ms Perks: Senator, can you ask that question again, please?

Senator ROBERTS: If someone leaves the industry and a period of eight years lapses, what happens to their money?

Ms Perks: The fund is structured as a pooled fund. Employers pay a tax to the government that is appropriated back to the fund. The actuary assesses assets and liabilities. We hold an entitlement in hours for the employee. We do not hold an asset which is financially attributed to that individual record. I’m being specific but the record doesn’t have a monetary dollar correlated with it at the record level. It is reported in hours. The actuary assesses

based on the hours that we hold, and 55 million hours of entitlements were held at June 2020. The actuary assesses the likelihood of paying liabilities out of the fund based on the entitlements that are held in hours.

Senator ROBERTS: You would still have to account for everything in a dollar sense if it’s a pooled fund, wouldn’t you? Some people are not going to come back after eight years, so what happens to that money? What happens to those hours? Where do they end up?

Ms Perks: If an employee has a break from the industry for eight years or further, their records will cease to accrue. If they return to the industry they would start from zero years of qualifying service again. So it is an eight years break, which is the most generous break that any long service leave provision allows for. The actuary assesses the likelihood of someone returning to the industry. In that assessment the actuary says that the fund needs X dollars to pay out future liabilities. With that they correlate a payroll levy that is appropriate to be imposed on employers in regard to the collection of future levies.

In the situation where we have seen a larger number of employees not returning to the fund, one would assume that could result in the pooled fund increasing and the liabilities would decrease. If our assets are in excess, that could result in us recommending to the minister to reduce that payroll levy further from that two per cent to a lower rate. The assets and liabilities are correlated continuously by the actuary to assess whether the payroll levy that’s imposed on employers is sufficient to meet the liabilities that are projected to be incurred by the fund in the future.

Senator ROBERTS: Are you saying that if someone is out of the industry for more than eight years, if they come back after that, they will go back to zero and start again? If there’s a surplus or an excess of funds in the pooled fund, the minister will have a recommendation to reduce the payroll levy?

Ms Perks: That is it, in a simplified manner, yes. The three correlate, yes.

Senator ROBERTS: In 2019 I drew to your attention discrepancies and outright employer misreporting.  What have you done to fix all employee entitlements? What steps has Coal LSL taken? If this response took the form of, say, a review project, when will the project be completed, how much will the project have cost and will Coal LSL be prosecuting employers who have negligently or wilfully misreported or mispaid Coal LSL contributions?

Ms Perks: The important action that Coal LSL has taken since March is to commence an audit of employers  of casuals; 9,000 casuals are active in the industry to date. That audit program will extend to review those records. That is in train. The outcomes of that audit will be assessed, and certainly they will be reviewed as to whether rectification or penalties would be appropriate if there’s any understanding of deliberate misreporting of hours.

Senator ROBERTS: You have the ability to penalise employers and prosecute them; is that right?

Mr Kembrey: In certain circumstances, that is correct. In terms of the time lines, it will be a rolling time line. We’re in the early stages of this. We’d expect to see some results of the audit in the next month or two, and that rolling out over the next 12 months.

Senator ROBERTS: If Coal LSL is not prosecuting any parties for negligent or wilful misreporting, could  you please advise us of the assessment process that Coal LSL went through, how this assessment process was managed, by whom, and also explain in detail, despite the evidence of misreporting, why no parties were held to account? You won’t be able to do that for another month, at least, but would you be able to do that, please?

Mr Kembrey: Certainly, we can take that on notice.

Senator ROBERTS: Thank you. Could you please report whether any members of the Minerals Council of New South Wales were parties or related entities to those who misreported, and provide a list of same, including the number of instances by entity? You can take that on notice as well, because that won’t be able to be done for at least a month.

Mr Kembrey: Yes, Senator.

Senator ROBERTS: Thank you. I also have concerns, as we’ve spoken about in the past, with regard to the governance of Coal LSL. I’d like some data, please. Could you provide an Excel spreadsheet that includes all employers registered with Coal LSL covering the period 1 July 2012 to 30 June 2020, including the company or business name, their ABN, the authorised officers, active dates, and details of payments or reimbursements made to each registered employer for the subject period?

Mr Kembrey: Senator, that would be an extensive task. Potentially, we could discuss what the information is that you’d like from that, over an eight-year period. When you say ‘authorised officers’, I’m assuming you mean directors?

Senator ROBERTS: Yes, the people you’re dealing with.

Mr Kembrey: Often we’re not dealing directly with directors; we’re dealing with employees of the company. Senator, perhaps we will take this question on notice and we can talk further about how we could present the material that you’re after.

Senator ROBERTS: That would be great; thank you. Could you also please provide details of the process used to calculate payments to entitled employees; that is, how the amounts received, the entitlement and other costs, or inputs and outputs, are calculated? I’d like to understand the process.

Ms Perks: We’ll take that question on notice. We can certainly give more context to the payroll  levy collection, the calculation of the entitlement and the employer reimbursement rules that relate to the outflow.

Senator ROBERTS: Thank you. Can you please provide details of where Coal LSL funds received for workers who leave the coal industry are held at all material times—I know you talked about them being in hours—who has the records, and the details of the process following the cessation of contributions for employers? Could you tell us where the hours or money goes? Could you also please include full details of where these funds are ultimately repatriated and full details of any service fees, costs or commissions paid and who they are paid to?

Ms Perks: We can take that on notice, Senator. I can say there are no commission service fees in regard to payments, but we will take that question on notice.

Senator ROBERTS: Thank you. Could you please provide an Excel spreadsheet of all entities that Coal LSL pays or transfers funds to, including but not limited to company business name, ABN, authorised officers, dates and details of payments or reimbursements made to each entity, including total payments, and an explanation as  to the payment—for example, fees et cetera?

Ms Perks: Is that in relation to the employers in the fund or are you talking more broadly of every transaction that the fund incurs?

Senator ROBERTS: No, just the payments that are made to people who are entitled to have Coal LSL.

Ms Perks: We’ll take that on notice, yes.

Senator ROBERTS: Thank you. I’m led to believe that registered employers have great difficulty in reconciling the payments made to entitled employees by Coal LSL as they don’t seem to correlate to the employer contributions. Could you please detail the reasons for any differences between employer contributions and the total amounts paid to eligible employees and, in this regard, please advise where unallocated, surplus or  remaining funds or hours are allocated and please advise whether this allocation complies with your constitution and governance framework? Have these matters been raised in any internal or external audit over the period 1  July 2012 to 30 June 2020?

Ms Perks: The first part of the question I’m taking as being similar to a previous question; so we’ll answer that in light of the previous question. Coal LSL is audited by the Australian National Audit Office annually. The audit has been completed. There are no findings in the audit and we’ve had no findings in our audit for the last two years. We can give you a copy of that audit report. It is included in our annual report, which is going through the tabling process currently; so that is available for the public’s review.

Mr Kembrey: I note that in that question there were about five questions; so we’ll take a number of those later ones on notice. I think the first point that you raised was in regard to employers struggling to correlate the reimbursement to the payment to employees; is that correct?

Senator ROBERTS: Yes, that’s correct.

Mr Kembrey: The matter of what is paid to an employee is a matter that is to be decided between the employer and the employee. Then the employer requests a reimbursement for that payment and we need to see some evidence that the money that they are requesting from the fund was paid to the employee. And with the reimbursement, there needs to be some correlation with the levy payment that they’re paying—in a sense, the salary, the payment or the wages that they’re paying a levy on—so that we can ensure that either they’re not being over-reimbursed or the employee certainly is not receiving the reimbursement in full. That’s where the correlation should be. Without any specifics, it’s difficult for me to talk to it.

Senator ROBERTS: Then we might be in touch with you for more on that. I’ve raised many concerns in regard to the treatment and payment of Mr Simon Turner. I note that you’re aware that Mr Turner was forced to leave the coalmining industry due to workplace injuries at the Mt Arthur coalmine that left him totally and permanently disabled, TPD. I note that, approximately three years after my raising these injustices in Senate estimates, Mr Turner has had his case only partly reviewed  and  that Chandler  Macleod, his  employer,  and  Coal LSL have yet to resolve his termination status as being TPD. When will this status be updated and when will Mr Turner’s outstanding questions be addressed?

Mr Kembrey: As we discussed back in the estimates in March, we have been assisting Mr Turner for a number of years now. And the difficulty with that particular issue you’re raising is that that is a dispute between Chandler Macleod and Mr Turner. We have been trying to mediate that and obtain some factual evidence to support the position put forward by Chandler Macleod. At this point in time the parties are holding their positions and they don’t agree with each other. The last we were advised is that those matters are subject to court proceedings in the Federal Court at present. So there is not anything more we can do to try to resolve that, unfortunately.

Senator ROBERTS: What sorts of records would you turn to for proof?

Mr Kembrey: We would turn to contemporaneous correspondence that evidences the reasons. As you know, this is a dispute about the reason why Mr Turner was terminated by Chandler Macleod back in 2016; so we have requested contemporaneous material that supports the position that Chandler Macleod put forward or justifies that position, and that has been provided. We’re not in a position to make a legal assessment of that, because that is not our role; the Fair Work Commission has the power to do that. But I believe that Fair Work Commission proceedings are on foot and those  proceedings  have  been  transferred  to  the  Federal  Court.  Hopefully,  for Mr Turner, there is some resolution to that matter in the near future.

CHAIR: Senator Roberts, just before your next question, we will be breaking at quarter to four for the afternoon tea break and concluding with these witnesses and I know that Senator O’Neill does have some questions. If the two of you could perhaps have a conversation about timing for the remaining nine minutes that would be fantastic.

Senator ROBERTS: I’ve got four more questions that I’ll put to you on notice, Mr Kembrey and Ms Perks,  but I’ll ask this question: Queensland and Hunter Valley coalminers and coalminers everywhere expect Coal LSL to maintain a high standard of probity. Casual coalminers expect that you will do the right thing by them and give them the freedom of choice to  waive  the Coal LSL contributions for them to  receive  the 2.7  per cent or the  two per cent as additional income. I just want to make that point on the record.

/by

Questioning the Foreign Investment Review Board (FIRB) over CuDeco

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This round of questioning occurred in the October/November Hearings of Budget Estimates, focusing on large concerns I had brought to my attention over the sale of CuDeco. FIRB provides recommendations to the Government in relation to the risk of certain foreign investments.

Transcript

Senator ROBERTS: Thank you for appearing today. My questions are with regard to the sale of assets of the delisted stock exchange minor CuDeco Limited. The receivers have claimed on 12 June 2020 that approval had been recommended by FIRB for this. Would FIRB confirm whether or not it recommended that Copper Resources Australia may purchase CuDeco assets, including its major copper mine, on or shortly before that date of 12 June?

Mr Hamilton: Certainly, we’ve been following media articles in relation to CuDeco, which, as you know, entered voluntary administration in July 2019 and, as you said, was delisted from the ASX in February 2020. As you know, we don’t comment on the specifics of individual cases, but we do understand that ASIC has looked into this matter. Questions about some of the concerns that have been raised in the public around allegations of phoenixing by CuDeco should be directed to ASIC.

Senator ROBERTS: Are you aware that this copper mine is reputedly one of the largest in the world—or the copper reserves, sorry?

Mr Hamilton: Senator, I was not aware of that myself.

Senator ROBERTS: Was FIRB aware that Copper Resources Australia was only incorporated on 20 May 2020?

Mr Hamilton: Senator, again, I’m not aware of these details. But, as I said, we would be limited in what we would wish to talk about in a public forum in relation to these entities.

Senator ROBERTS: I’ll just ask the other questions, because they raise important points, and whatever you can answer, you can answer, and whatever you can’t, tell me. Was FIRB aware that Copper Resources Australia is basically a shell company with no significant assets and lacks the funds to buy the firm, and that it had no mining experience or funds of its own to complete such a purchase?

Ms Kelley: I think that’s the matter that we said ASIC was looking into.

Senator ROBERTS: Was there a recommendation made by FIRB?

Mr Hamilton: Personally I’m not aware of that, but we would not comment on that in any case, as we’ve said.

Senator ROBERTS: Is FIRB aware that a change of beneficial ownership form 484 was submitted on 14 July 2020, shortly after the approval was given, assigning the beneficial ownership to Chinese controlled company Dragon Field International Ltd?

Mr Hamilton: I refer you to my previous answer.

Senator ROBERTS: Was FIRB aware that it has been suggested that collusion of the Chinese directors and their actions brought the company into liquidation through fraudulent conduct intended to make the company fail and make it a cheap buy?

Mr Hamilton: I refer you to my previous answer.

Senator ROBERTS: Is FIRB aware that the bid of $30 million from Copper Resources Australia promises to be paid to only non-Australian creditors when an Australian bid of $60 million—double the price—to purchase was declined by the receiver?

Mr Hamilton: Again I refer you to what I said previously.

Senator ROBERTS: Is FIRB aware that, if this purchase is allowed to proceed, Chinese interests will allegedly acquire more than $100 million of Australian assets for less than $30 million, leaving Australian investors and creditors unpaid, with reportedly the plant valued as scrap metal?

Mr Hamilton: Again I refer you to my previous answer.

Senator ROBERTS: Can you explain how this recommendation—if you made that recommendation—could be in Australia’s best interest?

Ms Kelley: We’ve noted in previous hearings that we’re very happy to discuss these sorts of matters in a private hearing. The legislation has particular constraints on us around sharing protected information, but we have previously discussed particulars of certain matters in private hearings with senators. We’re happy to consider making that offer. There is another committee looking at foreign investment. We’ve appeared before them and we anticipate we will appear before them again.

Senator ROBERTS: Could you tell me when that would be?

Ms Kelley: I’m not sure when the next one is, but I think we are scheduled to appear.

Senator ROBERTS: Can my office get a briefing from you at all? Ms Kelley: We can certainly put that to the Treasurer’s office.

Senator ROBERTS: So you’ll get back to my office?

Ms Kelley: We’ll talk to the Treasurer’s office about that.

Senator ROBERTS: And then get back, thank you.

/by

CSIRO – Senate Estimates

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I am shocked that the CSIRO came so unprepared to Senate Estimates when I gave them my questions in advance. For an organisation who claims to have been studying climate science for 60 years, their responses were truly embarrassing.

I will prepare a more detailed response in the next few days, but to be clear, the government should not be relying on the CSIRO’s climate division for advice on climate science.

Transcript

[Senator Roberts]

Thank you chair, and thank you all for being here today. My questions chair, were sent in advance about two weeks, a little bit under two weeks ago, and deal with past presentations by CSIRO. And so my first question is that, as I said in the letter, number one, do you stand by CSIRO’s implied claim that Marcott and Lecavalier, are the best evidence CSIRO has for showing that the rate of temperature change today is unprecedented in the last 10,000 years.

[Chair – Sen. Paterson]

I’ll just very briefly say this Senator Roberts, ’cause there’s obviously been an exchange of correspondency. You’ve written to CSIRO and I’ve just received a copy of their response to you and Dr.Marshall–

[Senator Roberts]

I haven’t seen CSIRO–

[Chair – Sen. Paterson]

I think it’s just about to be circulated to the committee. Dr. Marshall we are intending for that to be tabled by the committee?

[Dr Marshall]

Yes.

[Chair – Sen. Paterson]

Hopefully? Okay, all right. Well then in that case we’ll circulate copies to committee members for tabling. Sorry, Senator Roberts.

[Senator Roberts]

No, Dr. Marshal was about to answer.

[Dr Marshall]

And Senator, I’ll let Dr. Mayfield answer the detail of your questions.

[Dr Mayfield]

So Dr. Peter Mayfield, Executive Director for Environment, Energy and Resources. So Senator, yes we have prepared a response to the letter that you sent us. I do have copies of that here and electronic copy was provided to the secretary. So, there’s an opportunity to sort of look at our response and data. In regard to Marcott, yes we do stand by the conclusions of that paper.

[Senator Roberts]

Stand by Marcott.

[Dr Mayfield]

Yes.

[Senator Roberts]

Okay. And what about Lacavalier?

[Dr Mayfield]

Yes, both papers.

[Senator Roberts]

Lacavalier too?

[Dr Mayfield]

We believe our best evidence.

[Senator Roberts]

Okay, thank you, that’s good. Why did… Second question, what did CSIRO rely on before Marcott 2013? Say in the 1980s, when Bob Hawke was the first Prime Minister to raise the issue of anthropogenic climate change, said to be due to carbon dioxide from human activity.

[Dr Mayfield]

So Senator, so the state of the science in the Australian context is being provided by the volume in greenhouse, planning for the future, which is published by CSIRO in 1988. And it’s still available. And it was already very evident in the 1980s that anthropogenic emissions of carbon dioxide were altering the chemistry of the atmosphere.

[Senator Roberts]

Excuse me, the chemistry of the atmosphere, but not the temperature the earth?

[Dr Mayfield]

Chemistry of the atmosphere is at that point in time and temperature record is also changing.

[Senator Roberts]

Okay, thank you. Third question. At what stage did CSIRO start giving significant advice to governments on anthropogenic climate change?

[Dr Mayfield]

So CSIRO has been providing advice to government in relation to greenhouse matters for more than 60 years. So it’s been a long history of us providing advice in this area.

[Senator Roberts]

Thank you. Then I had my fourth question was to Dr. Mayfield. I need Dr. Mayfield to specify one, a slide or slides and specific data to which he refers and on which his answer relies when I asked my previous question, which you’re familiar with, Dr. Mayfield.

[Dr Mayfield]

So Senator we’ve provided the details many, many times to you. You’d appreciate that in each of these papers which have been published by a peer review. The analysis around statistical substance of the various measurements.

[Senator Roberts]

No, no, no, I’m not gonna let you off the hook. That’s a dodging of the question. The question is, to which of the specific slides or specific data in the presentations do you refer to when you stood up last time, at senate estimates and said, “It’s in the presentations.” Which of the slides, I want, specifically contain the statistical analysis that proves that carbon dioxide from human activity has the… Sorry, that there is a change in the climate, in any factor of climate.

[Dr Mayfield]

So, as you’re aware of Senator, there’s a number of papers, multiple ones–

[Senator Roberts]

No, no, no, no. I’m asking you for this specific slide and the specific data to which you refer. I’m not gonna take any more of this vague nonsense. I want this specific slide, specific data.

[Dr Mayfield]

In the slides, you’ll see, there’s a number of different references. Obviously we work with work from Marcott, more recently there’s the work of, it’s coming from… Kaufmann sorry.

[Senator Roberts]

How do you spell that?

[Dr Mayfield]

So it’s K-A-U-F-M-A-N-N.

[Senator Roberts]

Okay.

[Dr Mayfield]

So it’s a paper that’s been produced in 2020, which also undertakes an analysis of a wide range of methodologies, looking at both the–

[Senator Roberts]

2020?

[Dr Mayfield]

Historical record and the current record of temperature change.

[Senator Roberts]

So I asked you on Thursday, the 24th of October, 2019 a year ago, to provide empirical scientific evidence that shows quote, “Statistically significant variation “that proves there has been a process change.” That is variation that is beyond our outside natural inherent cyclical or seasonal variation over the last 350 years. You stood up and said, “It’s in here, “we’ve given it to you.” That is not correct. I wanna know specifically what the data was and is in those presentations that–

[Dr Mayfield]

Senator, we provided you with a number of references. Those are the references that we believe showed that.

[Senator Roberts]

I don’t know where–

[Dr Mayfield]

You don’t agree with us, but that’s what we believe.

[Senator Roberts]

You have never presented, CSIRO’s, never presented any response to that question, because the first time that question was asked was in the Senate estimates last year. CSIRO’s has never addressed that question. Your statement is false, if that’s what you’re implying.

[Dr Mayfield]

That’s incorrect Senator. The data is in the papers that we refer to.

[Senator Roberts]

No, no, no, I said show me—

[Dr Mayfield]

Part of pulling that science together is about undertaking that sort of statistical analysis, So that it show meaningful trend.

[Chair – Sen. Paterson]

So I’ll just briefly intercede here. Senator Roberts, could I ask that you allow the witness an opportunity to finish the answers your questions before you interject or ask a follow up question.

[Senator Roberts]

Chair, he’s not answering the question.

[Chair – Sen. Paterson]

Well, Senator Roberts you may be unsatisfied with the answer that he’s giving, but that doesn’t give you a right to interrupt him. You have to allow witnesses to conclude their answers and then you can ask a follow up question to challenge that answer if you wish.

[Dr Mayfield]

So as I said Senator, those various papers is part of doing peer review process you go through the statistical analysis. You show what is a meaningful trend versus what is not a meaningful trend, due to the uncertainty of those measurements. And we stand by those papers and those measurements and those peer review processes.

[Senator Roberts]

I want on record that never has CSIRO in any of the presentations to me, made any reference, any statement about statistically significant variation in climate. Not at all. I asked it for the first time, this time last year.

[Woman]

You can ask to read the paper to you.

[Senator Roberts]

Yeah, could you specify the paper?

[Woman]

But let’s not…

[Senator Roberts]

Could you specify the papers?

[Dr Mayfield]

I’ve already specified the papers.

[Senator Roberts]

The exact papers? Because you have never referenced them in any way in any of the presentations. So I wanna know the specific papers.

[Dr Mayfield]

So I’m giving you the papers, Senator.

[Senator Roberts]

Which ones?

[Dr Mayfield]

So it’s Marcott, it’s Lecavalier.

[Senator Roberts]

Okay.

[Dr Mayfield]

And more recently Kauffman.

[Senator Roberts]

So let’s go on to the second part, now that you’ve come on that. Specify the statistical analysis techniques that we used.

[Dr Mayfield]

So Senator there’s many techniques that are used, there’s thousands of papers.

[Senator Roberts]

No, the ones that you rely upon to make the statement that there is a statistical significant change. I wanna know the specific ones.

[Dr Mayfield]

Well, that’s part of the peer review process that’s undertaken for each of these papers Senator. So, if you choose to track the authors.

[Senator Roberts]

All right, thank you.

[Dr Mayfield]

They will be able to talk you through this specific work.

[Senator Roberts]

We contacted the author of Lecavalier which you recommended, and he will not divulge his information. That’s what you rely upon? People who do not divulge their information. So let’s go to the third one then. The relevant statistical levels of confidence from the analysis of the climate factor that you’ve identified. So what is the level of confidence in the analysis?

[Dr Mayfield]

So Senator again, I’ve just refer to my previous answers.

[Senator Roberts]

Thank you. Could you specify the time interval of data for which this statistical analysis was applied?

[Dr Mayfield]

Senator, I can’t answer that question. It’s a question that should be directed towards the author of the paper.

[Senator Roberts]

Thank you. Question five.

[Dr Mayfield]

Very much to detail sir.

[Senator Roberts]

Yes, it certainly is.

[Dr Marshall]

Senator Robert, sir might have been remiss last time I think I promised to send you a copy of this and I don’t know if I did or not from my office to you, but if not I bought a copy.

[Senator Roberts]

No, you didn’t.

[Dr Marshall]

And I’ll leave this here with you. It does have a map of the projections for temperature.

[Senator Roberts]

No, I’m after empirical scientific evidence, that’s what I’ve been through all the way along. Not on projections.

[Dr Marshall]

It’s based on data since 1950 and successfully predicted the last 20 years.

[Senator Roberts]

I wanna know statistically significant change Dr. Marshall.

[Dr Marshall]

Well, I think you’ll get it from here and the references here in Senator, but, I’ll leave this to you if I can.

[Senator Roberts]

Thank you, good.

[Dr Marshall]

Hopefully be helpful.

[Senator Roberts]

Now, Dr. Marshall, I also said in my letter that I hope you agree that the only valid analysis for such policies, climate change and supporting of renewable subsidies, is specific empirical scientific evidence with a logic proving causation and quantifying the effect of carbon dioxide from human activity on climate factors, such as atmospheric temperatures. I hope you understand the need to justify such policies on solid scientific evidence, quantifying cause and effect. Such quantified evidence is needed to implement such policies and to monitor the effect of such policies. Without the specific quantified relationship between human carbon dioxide output and climate factors, it is not possible to do cost benefit cases nor track progress. So my question to you, number five was, if you disagree with this reasoning, please provide me with what you see as the alternative basis for policy.

[Dr Marshall]

So Senator we base our work on the measured changes in climate since about 1950. We have, for example, directly intervened by breeding different strains of wheat to prevent the wheat yield from going down, because we don’t want the impact of drought or increased temperatures or the shifts in rainfall to reduce the productivity of Australia’s weed industry. So, we have data since 1950 that shows these effects are happening. We know that the nation has become drier in the South, weather in the North. And we know that the temperature has come up, that’s not projections, they have been measured. But, because we’ve known that, ’cause we predicted that some years ago, some decades ago, we were able to successfully intervene to help the industry navigate those changes without a loss in their profitability. And that’s why we do the modelling Senator, to try and understand how to help industry navigate changes in our investment.

[Senator Roberts]

So let me put it bluntly, do you or do you not believe that policy should be based on a quantified specified relationship between cause and effect? In other words, this much carbon dioxide with the amount specified leading to this much temperature change.

[Dr Marshall]

Senator, I think policy should be based on the best science available and it should be data-driven, data-driven. And I’ve just given you the data that drive us to make the interventions,

[Senator Roberts]

No you haven’t given me the data. You’ve talked about having…

[Dr Marshall]

Senator it’s in here.

[Senator Roberts]

And so do you agree on or not that policy should be driven by specified quantified relationship between cause and effect?

[Dr Marshall]

I think policies should be data-driven and it should be monitored and measured and evaluated using data.

[Senator Roberts]

Okay, thank you.

[Dr Mayfield]

So Senator, if I can add to that. So science, peer reviewed science does provide that foundation which policy can be built. In terms of the papers that we’ve talked to you about.

[Senator Roberts]

Marcott and Lecavalier?

[Dr Mayfield]

We note that there’s been at least 265 other papers which have referenced Marcott as part of the peer review process. And to date, no one has come up with an argument that says that paper is not valid. So the peer review process is at play there and has basically reinforce that that paper is correct.

[Senator Roberts]

We’ll come back to that but Marcott himself, said that the 20th century temperatures on which you are relying are not robust. Marcott himself. So much for–

[Dr Mayfield]

I disagree with your statement.

[Senator Roberts]

So let’s move on to question six. Australia has already done much to destroy its energy grid, yet, as an overseer of taxpayers’ funds, taxpayers’ resources. I need to know whether this has shown up in atmospheric carbon dioxide levels. And if so, how has it shown up and to what extent? Please provide empirical scientific evidence on the effect of carbon dioxide levels and temperatures from Australia’s cuts to human carbon dioxide output. In other words all the pain we’re going through economically where is it showing up in the global carbon dioxide levels?

[Dr Marshall]

So Senator, as I think you and I have discussed before, Australia is barely 1%, 1.2, 1.3% of the world’s emissions. Therefore, any direct changes we make in this country are unlikely to have any impact on the global levels of carbon dioxide.

[Senator Roberts]

So are we not gonna have any impact on the temperature then?

[Dr Marshall]

Well, 1.3% impact. Senator, however, our science can have an impact. For example, future feed which has solved what seemingly was an impossible problem and reduce the emission from–

[Senator Roberts]

I wanna know the effects of Australia’s carbon dioxide. Because people are paying an extra $1,300 per household Dr. Marshall. On your salary, that’s trivial, but on someone on the median income of 49,000 that is painful, extremely painful. Dan McDonald, a farmer in Queensland and many farmers have lost the rights to use their property because of policies enacted by this government and previous governments. On $800,000, that’s easy for you to wade through but these people are suffering.

[Dr Marshall]

Senator. I’m not sure I understand your question here. Are you saying that there’s some connection between things that CSIRO has done and these people suffering

[Senator Roberts]

Your advice.

[Dr Marshall]

Is a concern if that’s the case

[Senator Roberts]

Your advice has been cited by many ministers, both labor and liberal national for the painful impositions of policies on our country. And people are paying for that through the hip pocket and through the loss of the rights to use their property that they own and have paid for. Your so-called support, according to ministers is the reason for that. And I’m not getting evidence of quantified impact of our carbon dioxide. And you’ve just said, you can’t see any evidence in the carbon dioxide levels in the atmosphere because of Australia’s carbon dioxide cuts.

[Dr Marshall]

Senator I’ve just said that Australia has a relatively small direct impact on the carbon dioxide levels because–

[Senator Roberts]

Can you show me the evidence that says we are reducing carbon dioxide levels in the atmosphere?

[Dr Marshall]

The evidence that Australia is reducing.

[Senator Roberts]

Australia’s impacts on energy, on agriculture are resulting in a reduced temperature, reduced levels of carbon dioxide.

[Dr Marshall]

So the reduction in emissions has been reported by the department of the environment. So that would be a question for them senator.

[Senator Roberts]

You’ve just answered my question. Thank you very much.

[Dr Mayfield]

If I could add to that as well. So global CO2 levels are measured through the global carbon project which works from data from their resilience.

[Senator Roberts]

In part they’re measured, in part they’re residual. So my last question have global attempts. So we forget about Australia’s little minuscule contribution. Have global attempts to cut human production of carbon dioxide shown up in atmospheric carbon dioxide levels. And if so, and to what extent.

[Dr Mayfield]

So again, Senator the global carbon project measures or captures various–

[Senator Roberts]

Didn’t answer my question Dr. Mayfield

[Dr Mayfield]

Various divisions that are made around the globe.

[Chair]

Give him some time.

[Dr Mayfield]

And that is the numbers that are being captured, when they show that emissions are increasing.

[Senator Roberts]

Chair, when someone’s asked a question and they say something but don’t answer the question that is not answering questions

[Chair]

Order Senate Roberts. In that case, Dr. Mayfield would have been five to 10 seconds into his answer. So it’s pretty early to form a strong view about what he was giving you. And Senator Roberts, I don’t seek to dictate how you ask your questions or what questions you ask, but only that you show courtesy to officials so they can answer your questions to the best of their abilities.

[Senator Roberts]

With respect chair, I deserve the respect of being answered properly when I’m asking questions on behalf of my constituents who had gone through a lot of pain.

[Chair]

Senator Roberts if you’re not satisfied with the answers that you receive, please ask another followup question, but don’t interrupt officials in the middle of their answers.

[Senator Roberts]

I’ll ask it again. Have global attempts to cut human production of carbon dioxide shown up in atmospheric carbon dioxide levels. And if so, how, and to what extent?

[Dr Mayfield]

So Senator in terms of the emissions being made whether there’s attempts to cut them or whether that’s how they are naturally, they are captured through the global carbon project. That’s the accounting process that’s worked to do that. And that shows that emissions overall are still increasing.

[Senator Roberts]

How- emissions are still increasing? We’d just been through–

[Dr Mayfield]

Globally.

[Senator Roberts]

COVID depression and we’d just been through a 2009. We had lower use of carbon dioxide then in 2008 in the recession that was global except for Australia. And in both cases, the levels of carbon dioxide in the atmosphere have continued to rise, despite human production falling dramatically especially in the last nine months. And yet you’re telling me, you can see it. They’re going up. Dr. Mayfield. So I’ll ask again for the third time, then I’ll leave it. Have global attempts to cut human production of carbon dioxide, particularly in the recession that was in 2009 when global production of carbon dioxide from human activity decreased and have decreased considerably in the last seven months, shown up in atmospheric carbon dioxide levels in the atmosphere? And if so, how, and to what extent? Please answer how they show up and to what extent.

[Dr Mayfield]

So Senator the measure is the CO2 signal that’s in the atmosphere. It’s a well-mixed system so it’s represented well across the globe. If you wanna refer to periods like 2009 which is at the end of the global financial crisis, there were slight changes in the rate of climb of these measurements. So you can see inflexions like that. I don’t have the details on the specific numbers on how that changed, but there are inflexion points. But in terms of the longer term trend, it’s still on the up.

[Senator Roberts]

Could you please send me the inflexion points? I wanna see the data please. Because from what I’ve seen at global atmospheric carbon dioxide levels, they’ve continued to rise relentlessly despite no inflexion whatsoever. So I would like to see the inflexion points. I’d like to see how much and I’d like to see when. Is that clear? How much and when? Is that clear Dr. Mayfield?

[Dr Mayfield]

So what we’ll provide you with is the Cape Grim record which is a continuous record of CO2 content in the atmosphere.

[Senator Roberts]

That’s CO2 Cape Grim, could you give me the global?

[Dr Mayfield]

So as I said, CO2 is a gas that mixes well across the globe. There is minor variations but overall there’s a very good indication of the time series of the CO2 measurement.

[Senator Roberts]

Could you show me the global levels? I wanna know how much it’s changed and when.

[Dr Mayfield]

As I said before Senator, that work is for the Global Carbon Project. They report annually. We will provide you with some of that work as well as the Cape Grim measurements.

[Senator Roberts]

Thank you, thank you chair.

[Chair]

Thank you Senator Roberts.

/by

Questioning Reserve Bank of Australia (RBA) – Cash Ban and Bail-In

,

One Nation has led the fight in the Senate against the Cash Ban bill, which makes any cash transaction over $10,000 illegal. Our efforts stopped the bill from passing, but the Government has not formally withdrawn the bill. At this estimates we started a campaign to have the bill removed from Senate business permanently. Our first questions asked the Reserve Bank if they still thought the cash ban was a good idea.

We didn’t get the answer we wanted, it seems the Reserve Bank is still trying to force people into the banking system and take away their right to decide what to do with their own money. Cash Ban Explanation – https://youtu.be/93EigYTWe5s

Then we asked about our bill coming up later next month to prevent banks using money deposited with them to pay their own expenses in a bank emergency.

What was obvious to Senator Roberts is that the Reserve Bank had no idea they had made a submission on our bail-in bill. The Reserve Bank was not on the list of submissions. Where did their submission come from? Could the Government have written it, not the Reserve Bank? The Reserve Bank is an independent regulator, it would be a scandal if the Government is writing their policy for them. One Nation will pursue this matter further.

Transcript

Senator ROBERTS: Thank you for attending today. I’ve seen reports that the Reserve Bank has printed an extra $12 billion in banknotes this year to keep up with demand. Do you have the accurate figure, please?

Dr Debelle: I do. I can provide you with an accurate figure. Yes, we have printed extra bank notes because there has been additional demand. Between 16 March and 6 August we printed 220 million banknotes worth $12.5 and they were issued into circulation. I don’t have the most up-to-date information to hand, but I can provide that.

Senator ROBERTS: If you could, that would be appreciated.

Dr Debelle: I don’t have it completely to hand. I may have it before we finish this line of questioning.

Senator ROBERTS: That’s impressive. The Reserve Bank’s written answer to my question on notice from the February estimates—it’s reference AET93—included this response—I’m slightly paraphrasing: ‘While cash is used less frequently in Australia, it is still widely held for precautionary purposes and some members of the community really very heavily on cash for their daily lives. Cash remains an important payment method for older households, those with disabilities and those living in rural and remote areas where electronic banking may not function reliably.’ Do you consider that people are voting with their feet and withdrawing cash to get ahead of the cash ban bill?

Dr Debelle: What we have seen is increased demand for banknotes, as you just highlighted in your previous question. I think that is mostly as a store of value. What we’ve seen is around 50s and 100s in particular; actually mostly 50s. I think it is primarily as a store of value, particularly in a world where interest rates are as low as they are.

Senator ROBERTS: So people have an alternative in cash. People need that alternative. Does the Reserve Bank support withdrawal of the widely criticised cash ban bill and instead support the development of a bill that actually addresses money laundering and tax compliance? In other words, is it time to kill the cash ban bill?

Dr Debelle: We’re part of the Black Economy Taskforce and we’re comfortable with the recommendations of that.

Senator ROBERTS: Item 1.27 of the Economics Legislation Committee’s report on the bail-in bill includes this statement:

The Reserve Bank of Australia … indicated the information provided by the Treasury to the committee’s inquiry was consistent with their views.

Is this correct?

Dr Debelle: I have no reason to suspect otherwise.

Senator ROBERTS: How did the RBA communicate with the committee? Because my office saw no submission.

Dr Debelle: I will have to take that on notice. I did not have direct involvement with this. Michelle, I don’t know if you can answer this?

Ms Bullock: I didn’t have. I know we had someone on the Black Economy Taskforce but I’m not aware of this particular bill.

Senator ROBERTS: Could you also send me the full comments that you made to the committee.

Dr Debelle: Sorry, the committee on the bail-in bill?

Senator ROBERTS: Yes, please. Your views to the committee include this statement: ‘The Financial Sector Legislation Amendment (Crisis Resolution Powers and Other Measures) Act 2018 did not include a statutory power for APRA to write down or convert the interests of depositors as unsecured creditors of a failing ADI.’ Is this correct?

Dr Debelle: Yes. Michelle, I think you can confirm that.

Ms Bullock: Yes, our view is that it does not include those sort of provisions.

Senator ROBERTS: The G20 Financial Stability Board’s Key attributes of effective resolution regimes for financial institutions, adopted by Australia in October 2011, states: ‘Powers to carry out bail-in should enable authorities to convert into equity’—meaning shares of the bank in this case—’all or parts of unsecured creditor claims.’ And elsewhere it says that means deposits. We have a clear obligation, then, under this agreement, to provide a bank bail-in mechanism. If the 2018 act did not do that, where else is that provision?

Dr Debelle: We have depositor preference, as you may be aware, and a deposit guarantee—sorry, we have a deposit guarantee scheme, which guarantees bank deposits.

Senator ROBERTS: I understand the timing of that doesn’t quite back up what you’re saying. Let me look at that more closely. New Zealand responded to the Financial Stability Board’s instruction to pass bail-in laws with their open bank resolution system. The New Zealand Reserve Bank explains this is a follows: ‘If a bank fails, it is placed under statutory management and closed. If losses cannot be covered by shareholder funds, then a proportion of depositors’ funds are set aside and frozen for the purpose, then the bank reopens.’ That could not be clearer. New Zealand has a bail-in law. The UK and Canada have the same bail-in laws. I ask you again, if the crisis resolution act did not establish bail-in laws, where are ours?

Dr Debelle: As I just said, we have a depositor protection scheme in Australia. Michelle, do you want to add anything to that?

Ms Bullock: No, only that our understanding of the bail-in laws, and I think APRA’s understanding of the bail-in laws, is that they apply to certain hybrid instruments which may be bailed in, not depositors. Depositors have depositor preference and also the Financial Claims Scheme. My understanding, and I think it’s the common understanding, is that bail-in does not apply to deposits in Australia.

Senator ROBERTS: I put it to you that it is our obligation under the G20 agreement to conduct a bail-in if a bank fails, that the 2018 act was specifically written to allow a bank bail-in, and that the wording chosen in the 2018 act was deliberately obtuse to hide that fact.

Dr Debelle: I’d like to confirm that we have depositor protection. You can take this issue up with APRA when they come later on, but that’s the state of play in Australia.Senator ROBERTS: Thank you. I have some more questions to put on notice.

/by

Questioning Australian Prudential Regulation Authority – Debanking

,

De-banking is the process of banks closing accounts for businesses or individuals. All the big banks are now de-banking clients and claiming that this is for Anti Money Laundering reasons, but it is just not true. At our Senate Estimates questions, APRA agreed they had authority in this area and also agreed they were doing nothing about this scandal.

The companies being de-banked are bullion dealers, bitcoin exchanges and cash handling companies working to keep ATMs in clubs and pubs full and so on. All of the companies that have been de-banked that my office has looked at are legitimate, long-established companies that are following the law.

The only explanation for de-banking is this – banks are shutting down their competitors. This is an abuse of their market power that will prevent competition in banking and reduce freedoms Australians enjoy as to the choice of what to do with their own money. This is bank greed and the supposed-regulator the Australian Prudential Regulation Authority are facilitating this by looking the other way.

The Cash Ban Bill produced by Treasury works with the banks by de-banking their rival businesses and then preventing those businesses to move over to cash payments. This effectively puts these banking rivals out of business.

Transcript

Senator ROBERTS: Moving onto the practice known as debanking, is the regulation of debanking practised by the banks your responsibility?

Mr Byres: I don’t know that I can talk about a regulation for debanking. The concern is that various customers no longer get banking services. It’s certainly not a primary issue for APRA. We understand the issue exists. In many cases, it relates to banks being able to comply with anti-money-laundering and counterterrorist-financing regulations.

Senator ROBERTS: That’s where I’d go. Commander Security is an Australian cash security company. It transits cash, and a large part of that is refilling third-party ATMs. So it’s a competitor to the banking cartel. Commander Security is fully AUSTRAC compliant and operates its accounts lawfully. On 14 October 2020, it received a notice from Westpac cancelling Commander Security’s banking accounts effective from 26 October. It has been refused accounts at other banks. Where is the protection of interests of depositors in this process?

Mr Byres: The depositors of the banks themselves are protected. I’m not aware of the specific case that you’re referring to. We’re happy to look at that.

Senator ROBERTS: Let’s look at another one then. Melbourne Gold Exchange sell bullion to retail investors. It is also AUSTRAC compliant and operates legally. It was debanked by Westpac, then the Commonwealth, then the NAB and now cannot get an account anywhere. Would you categorise bullion as a rival store of wealth to  cash in the bank?

Mr Byres: No, I wouldn’t actually. I think cash in the bank has a very stable value and bullion does not. But that’s a discussion about investment rather than safety.

Senator ROBERTS: Bullion’s not stable? Okay. The point of this question is simple: banks are debanking businesses that they have decided are an unacceptable risk. When my office looks at these businesses, they are bullion dealers, non-bank companies providing rival services to the banks, like Commander Security, and bitcoin exchanges. APRA appear to be turning a blind eye to Australian banks debanking their rivals. Can you explain that?

Mr Byres: I don’t think we’re turning a blind eye to it. We understand the issues there, but banks are making decisions based on their risk profile as to whether they want to take on the risk associated with some of these customers. Clearly what we have seen in recent times is that the penalties for getting it wrong are significant. That’s not to condone the banks but to simply make the point that they’re taking it very seriously.

Senator ROBERTS: When the Melbourne bullion company was debanked, Westpac debanked not only the accounts but also the private accounts of the owners and the private accounts of their employees. APRA is responsible for protecting the financial interests of depositors. Does APRA consider this acceptable behaviour?

Mr Byres: Just to be clear, our obligation to depositors is not a consumer protection obligation, it’s making sure that people get 100c in their dollar—

Senator ROBERTS: I think you’re also responsible for making sure that there’s adequate competition.

Mr Byres: We have to be mindful for competition, but we don’t have a mandate to promote or establish competition. We have to deliver safety and soundness having regard to a range of other factors: competition, efficiency, ability and competitive neutrality. But we’re not primarily a competition regulator.

/by