Jenny McAllister (NSW, Australian Labor Party, Assistant Minister for Climate Change and Energy) Share this | Hansard source

I present government responses to committee reports as listed at item 17 on today's Order of Business. In accordance with the usual practice, I seek leave to incorporate the documents in Hansard.

Leave granted.

The documents read as follows—

Australian Government response to recommendations from the Senate Education and Employment Legislation Committee:

Australian Research Council Amendment (Review Response) Bill 2023 [Provisions] Report — February 2024

Overview

On 28 March 2024, the Australian Research Council Amendment (Review Response) Bill 2023 (the Bill) received Royal Assent, following debate and agreement on a number of amendments in the Senate.

On 2 April 2024, the Australian Research Council Amendment (Review Response) Act 2024 (the Amendment Act) was registered on the Federal Register of Legislation. The amendments to the Australian Research Council Act 2001 (ARC Act) made by the Amendment Act commenced on 1 July 2024.

On 5 February 2024, the Senate Education and Employment Legislation Committee (the Committee) released its inquiry report on the Bill, including three dissenting recommendations by the Greens.

This submission responds to those dissenting recommendations.

Additional recommendations from Australian Greens Senators in Inquiry Report

Recommendation 1: Remove the Minister's power to veto research funding for reasons related to 'international relations', and narrow the definition of 'designated research program', to reduce the risk of political interference.

Amendments in relation to this recommendation were moved by Senator Mehreen Faruqi (sheet 2394; 2395) and Senator David Pocock (sheet 2423; 2424; 2476) in the Senate and voted on.

Under the amended ARC Act, the Minister will have the power to not approve a grant, or to terminate funding to research grants, for reasons relevant to the security, defence or international relations of Australia. Use of the terms 'security, defence or international relations of Australia' ensures consistency with accepted definitions and references to those terms in other legislation, such as the Security of Critical Infrastructure Act 2018 and the Defence Trade Controls Act 2012. Noting this, the amendments proposed by Senator Faruqi to remove the reference to 'international relations' throughout the Bill (sheet 2394) were not agreed to by the Government when voted on in the Senate.

The Minister will also retain powers to approve funding for nationally significant investments, defined as 'designated research programs'. Their role is nationally significant in supporting research capability and include the Australian Research Council (ARC) Centres of Excellence, the Industrial Transformation Training Centres, and the Industrial Transformation Research Hubs. Noting the importance of these programs, the Government agreed to the amendments to the definition of 'designated research program' moved by Senator Pocock (sheet 2476) but did not agree to the amendments moved by Senator Faruqi (sheet 2395) or the other amendments proposed by Senator Pocock (sheet 2423; 2424).

In relation to the amendments to the definition of designated research programs, Senator Anthony Chisholm responded in the Senate:

'It is important that the Minister be able to specify projects as designated research programs to help build Australia's research capacity, but it is also important that the power be protected as much as possible from potential misuse in the future. The revised definition proposed by Senator Pocock adds to the existing protections requiring that the relevant program be nationally significant and requiring that the minister of the day be satisfied that the program will help build research capability.'

Senate Hansard, Monday 18 March 2024, p104

Recommendation 2: Significantly increase government funding for research and for the ARC, and improve job security for all researchers including those employed through ARC funding.

The Government understands the need for an appropriate approach to research investment. ARC funding was highlighted in the Inquiry Report as well as in debate on the Bill. This included inaccurate suggestions that the creation of a new ARC Board would reduce ARC research funding.

ARC Board costs will be met from existing resourcing within the ARC's current annual departmental budget, which was clearly stated in the Explanatory Memorandum to the Bill. Research grants under the National Competitive Grants Program are funded through administered funding and will not be impacted by Board operational costs.

The amended ARC Act replaces Special Appropriation arrangements for ARC's administered funding with Annual Appropriation arrangements, providing funding visibility for the sector.

Through the amendments to the ARC Act, the Government has also provided flexibility for the ARC to utilise its existing research endowment account for the purposes of funding research grants under the National Competitive Grants Program.

The Government recognises the important role the ARC plays in the broader public interest of supporting career pathways for Australian researchers. This important role has been elevated through the new object of the ARC Act which now makes clear that the ARC will be a national body to 'promote and conduct activities to shape and foster the Australian research landscape and community, including by supporting academic career pathways.'

Amendments moved by Senator Mehreen Faruqi (sheet 2468; 2398) in the Senate resulted in a number of enhancements to reporting on the nature of the employment of researchers for research projects in the ARC Act. For example, in relation to funding agreements the ARC Act requires that an organisation in receipt of a grant:

' … gives the CEO a report, after the end of the final period to which the grant relates, detailing the nature of the employment of researchers employed by the organisation for the purposes of the research project concerned.'

Additionally, the ARC's Annual Report must:

' … include information, in respect of each organisation receiving financial assistance under a funding agreement which ended or was terminated in that period, about the nature of the employment of researchers employed by the organisation for the purposes of a research project mentioned in the funding agreement.'

The Government supported these amendments—to help support job security of our researchers—without imposing an impossible mandate for the ARC when it is not the direct employer of those researchers. In relation to the amendments, Senator Anthony Chisholm responded:

'We see our research community flourish, and part of that is improving the attractiveness of academic research roles. The reporting requirements in Senator Faruqi's amendment will help underline that, so it is something the government will support.'

Senate Hansard, Monday 18 March 2024, p101

Recommendation 3: Ensure governance of research funding is democratic and representative.

The amended ARC Act establishes an ARC Board as the accountable authority of the ARC from 1 July 2024. This was recommended by the independent Review of the Australian Research Council Act 2001 to strengthen the independence and integrity of the ARC.

On 26 June 2024, the Hon Jason Clare MP announced the appointment of the new ARC Board:

The selection of the appointments was open and merit based, consistent with best practice, and meets the ARC Act requirements regarding the appointment of an Aboriginal or Torres Strait Islander person, and a regional, rural, and remote representative.

As a decision-making body, the Board will approve research grants under the National Competitive Grants Program, with appropriately qualified members who have substantial experience or expertise in one or more fields of research, or in the management of research.

The Board will also be supported by two key advisory committees to provide guidance and advice about ARC priorities and strategies—the ARC Advisory Committee with expertise across research, industry and governance; and a new ARC Indigenous Forum.

Peer review through the ARC's College of Experts will be the driving principle in grant approvals aimed at expanding our nation's knowledge base. Peer review is the accepted world standard for achieving quality in research grant outcomes.

To further strengthen the integrity of the ARC grant allocation process, under the amended ARC Act, funding rules will be disallowable legislative instruments, and open to the scrutiny of Parliament as a regular element of managing the ARC's funding.

These measures will ensure governance of research is fair and representative, based on democratic scrutiny and the decisions and advice of trusted experts.

Australian Government response to the Senate Select Committee on the Perth Mint and Commonwealth regulatory compliance report:

The Perth Mint: Final report

Introduction

On 21 June 2024, the Senate Select Committee on the Perth Mint and Commonwealth regulatory compliance (the Committee) published a report on the corporate and regulatory compliance of Gold Corporation and its trading entity, The Pe1ih Mint, with Australia's anti- money laundering and counter terrorism financing (AML/CTF) regime, as well as related Commonwealth legislation. The Committee was established by the Senate on 22 June 2023, and focussed on the events that led to the Australian Transaction Rep01is and Analysis Centre (AUSTRAC) ordering the appointment of an external auditor to Gold Corporation, the regulatory compliance of Gold Corporation with Commonwealth legislation, and other matters concerning the corporate and statutory governance of Gold Corporation.

The report makes recommendations directed at Gold Corporation, which is a Western Australian government trading enterprise, the Western Australian Government, the Western Australian Parliament and the Australian Government. Where recommendations are directed at Gold Corporation or the Western Australian Government, the Government has noted these as the Commonwealth does not have responsibility for any response to these recommendations.

The Australian Government thanks the Committee and acknowledges the concerns raised in the dissenting report. The Australian Government's response to the Committee's recommendations is detailed below.

Recommendation 1

The committee recommends that the Board of Gold Corporation (trading as The Perth Mint) publicly acknowledge that the failure to comply with the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 is the responsibility of the Board and, in particular, members of the Audit and Risk Management Committee.

Government Respons e

The Government notes this recommendation.

Recommendation 2

The committee recommends that Gold Corporation publish a clear statement identifying the governance failures that ultimately led to breaches of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006, and that the public statement specifically reference:

Anti- Money Laundering and Counter-Terrorism Financing Act 2006;

Anti-Money Laundering and Counter- Terrorism Financing Act 2006.

Government Response

The Government notes this recommendation.

Recommendation 3

The committee recommends that Gold Corporation table before the Western Australian Parliament the 2020 Internal Audit Report dated August 2020.

Government Response

The Government notes this recommendation.

Recommendation 4

The committee recommends that Gold Corporation table before the Western Australian Parliament a report every two months on its compliance with the Enforceable Undertaking, and that this reporting continues until one month after the Australian Transaction Reports and Analysis Centre formally releases Gold Corporation from the Enforceable Undertaking.

Government Response

The Government notes this recommendation.

Recommendation 5

The committee recommends the Parliament of Western Australia initiate its own inquiry into matters related to the decision by the Australian Transaction Reports and Analysis Centre to impose an Enforceable Undertaking over Gold Corporation, post 30 April 2025.

Government Response

The Government notes this recommendation.

Recommendation 6

The committee recommends the Western Australian Government detail to the Western Australian Parliament the extent of the potential financial liability to the Western Australian taxpayer if Gold Corporation fails to meet its obligations under the Enforceable Undertaking.

Government Response

The Government notes this recommendation.

Recommendation 7

The committee recommends that the Australian Transaction Reports and Analysis Centre (AUSTRAC) provide a private briefing every two months to the Senators of this committee on the progress being made by Gold Corporation to implement the recommendations of the Enforceable Undertaking.

Should concerns be identified through these briefings, the committee to report to individual Senators who do not have statutory recommends a further public examination be conducted through a referral to the Senate Legal and Constitutional References Committee for extended inquiry and report on matters related to the corporate and regulatory compliance of Gold Corporation with Commonwealth legislation, with particular reference to:

Anti-Money Laundering and Counter-Terrorism Financing Act 2006

Anti-Money Laundering and Counter-Terrorism Financing Act 2006;

Government Response

The Government does not agree to this recommendation.

The Government notes there are existing mechanisms for the Parliament to obtain updates from AUSTRAC. Further, as the Select Committee concluded its inquiry on 21 June 2024, it would not be appropriate for AUSTRAC to report to individual Senators who do not have statutory responsibility for the agency.

AUSTRAC, as an independent statutory authority, inquiry and report on matters related to the corporate and regulatory manages transparency in a way that maintains due process and operational integrity, especially while undertaking an ongoing investigation.

When AUSTRAC enters enforceable undertakings, it publishes advice of the commencement and terms of those undertakings. AUSTRAC only redacts sensitive material it considers may compromise the reporting entities' AML/CTF systems and controls.

AUSTRAC also announces on its website when it is satisfied that the requirements of the enforceable undertaking have been met. If the terms of the undertaking are not ultimately met, AUSTRAC will publicise what action it decides to take.

Progress of AUSTRAC's various undertakings can be monitored at htms://www.austrac.gov.au/lists-enforcement-actions-taken.

Response

The Government notes this recommendation.

Recommendation 8

The committee recommends that the Australian National Audit Office (ANAO) conducts an inquiry into the adequacy of the Australian Transaction Reports and Analysis Centre's oversight of anti-money laundering and counter-terrorism financing compliance by medium to high- risk entities.

Government Response

The Government notes this recommendation.

As an independent officer of the Parliament, the ANAO will provide a response to this recommendation directly to the Select Committee on the Perth Mint and Commonwealth regulatory compliance

Recommendation 9

The committee recommends any continuance of the Senate's inquiry into matters related to the corporate and regulatory compliance of Gold Corporation and its trading entity The Perth Mint, through the Senate Legal and Constitutional Affairs References Committee, hears evidence from the following witnesses:

Government Response

The Government does not agree to this recommendation, noting the Select Committee concluded its inquiry on 21 June 2024.

Recommendation 10

The committee recommends that, consistent with the Enforceable Undertaking's acknowledgement that the Australian Transaction Reports and Analysis Centre (AUSTRAC) may from 'time to time publicly refer to this Enforceable Undertaking', AUSTRAC issues a statement (or statements) of progress that detail:

Government Response

The Government notes this recommendation.

Consistent with the terms of the enforceable undertaking, AUSTRAC, as an independent statutory authority, may provide information where it will not adversely affect AUSTRAC's ongoing investigations. Decisions to provide information on enforceable undertakings are a matter for AUSTRAC.