Joe Ludwig (Queensland, Australian Labor Party, Manager of Opposition Business in the Senate) Share this | Link to this | Hansard source

My question is to Senator Ellison, the Minister for Justice and Customs. It concerns the new Customs computer system and the independent audit report handed down last Friday. Can the minister confirm that he authorised the IT project to proceed without a fixed budget? Can the minister also confirm that he oversaw the estimated cost of the project escalating from $30 million to over $205 million worth of taxpayers’ funds? When did the minister first become aware of the major problems experienced with this project? What action did he personally take to protect taxpayers’ interests? What responsibility does he, as the relevant portfolio minister, now take for this botched project and the massive cost to taxpayers?

Chris Ellison (WA, Liberal Party, Minister for Justice and Customs) Share this | Link to this | Hansard source

Senator Ludwig needs to have a close look at the Booz Allen Hamilton report, because what it says is that this new system offers substantial benefits over the system it replaces. In fact, it said that the legacy system it replaced had reached the end of its life and that something new was needed. The report states that the ICS is among the better examples of Customs systems available among the developed nations.

I totally reject that this has not been a worthwhile exercise. What we saw was the development of a complex program which we acknowledged throughout would be complex in its changeover. I can say that, in the course of the development of this, we saw the events of 9-11, which threw the scrutiny of it onto security issues. When I was in the United States recently, they expressed great interest in this, because they are going down the same integrated cargo system path. In fact, the United Kingdom is looking at it as well. What the report went on to say is that this provides a foundation which can provide a leading edge for Customs in this country. What Senator Ludwig should take note of is that, from 10 October through to 8 June, we have processed just under seven million messages in the exports area and that for imports we have processed over 13½ million messages. What the report demonstrated was that—

Joe Ludwig (Queensland, Australian Labor Party, Manager of Opposition Business in the Senate) Share this | Link to this | Hansard source

It demonstrated that it was slow.

Chris Ellison (WA, Liberal Party, Minister for Justice and Customs) Share this | Link to this | Hansard source

the exports program went through without a hitch. In relation to air cargo, there were no significant issues. It was in relation to the sea cargo area that we had the issues to address in that changeover—

Joe Ludwig (Queensland, Australian Labor Party, Manager of Opposition Business in the Senate) Share this | Link to this | Hansard source

It was a big one.

Chris Ellison (WA, Liberal Party, Minister for Justice and Customs) Share this | Link to this | Hansard source

and one of the major issues it pointed to was the fact that in the shipping industry you have different terminology and different methods of reporting. Air cargo has one unified language, if you like, in relation to the description of air cargo. That does not apply to sea cargo—

Joe Ludwig (Queensland, Australian Labor Party, Manager of Opposition Business in the Senate) Share this | Link to this | Hansard source

Where are your efficiency gains and cost gains?

Chris Ellison (WA, Liberal Party, Minister for Justice and Customs) Share this | Link to this | Hansard source

and, of course, that is where we have developed, with the industry action group, two phases of adaptation to deal with the ocean bills of lading, which they have raised with us. Last Friday, the CEO, Michael Carmody, met with industry groups. He had a very positive meeting with them and they were universal in their agreement that this is a program on which we could build world’s best practice and that we should look forwards and not backwards.

Joe Ludwig (Queensland, Australian Labor Party, Manager of Opposition Business in the Senate) Share this | Link to this | Hansard source

Mr President, I rise on a point of order. I actually asked the minister: can the minister confirm that he authorised the IT project to proceed without a fixed budget? The minister has not come to answer that yet, and I see that he has not got very long to do that. Could the President draw him to the question? Could the President also draw him to the question: when did the minister first become aware of the major problems experienced in this project?

Paul Calvert (President) Share this | Link to this | Hansard source

The minister has well over a minute left to answer his question, and I think his answering of the question would be a lot easier without the constant interjections from you, Senator.

Chris Ellison (WA, Liberal Party, Minister for Justice and Customs) Share this | Link to this | Hansard source

As a result of my own initiative, I established a roundtable working group, which met no less than eight times over a period in excess of 18 months, and I dealt closely with industry. There was a decision made to proceed with the cut-over. At that roundtable we had representatives from software developers, shipping, air cargo, customs brokers and freight forwarders—the whole range of industry that interacted with us. It was always acknowledged that this was a complex task. In fact, since Federation, this is the greatest change that the Australian Customs Service has seen in the way we deal with the modern facilitation of imports and exports. This system is a platform for us to build world’s best practice for this country and we are intent on achieving that goal. We have always been working and will continue to work with industry to do so. That is exactly what Michael Carmody, the CEO, is doing.

Joe Ludwig (Queensland, Australian Labor Party, Manager of Opposition Business in the Senate) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. Was the minister advised of the problems with the system when he authorised its introduction? Can the minister confirm that, as a result of the decision to implement a half-ready system, the government is now facing compensation claims of up to $9 million? Has the minister approved the payments of any of these compensation claims? And will taxpayers once again be asked to foot the bills for these claims, on top of the $205 million already spent on this bungled project?

Chris Ellison (WA, Liberal Party, Minister for Justice and Customs) Share this | Link to this | Hansard source

I made it clear from the start that, if there were any storage costs occasioned by the transition that could be demonstrated, under existing policy Customs would meet them. The vast majority of the claims that have been made have related to storage costs. There have been claims registered with Customs. We are looking at them closely and the CEO is working with the industry on that. Can I say that in relation to the changeover we had overwhelming support from industry for this new system and were overwhelming urged for this to occur when it did, in October last year. You have to remember that the existing system could not endure for much longer and to leave it longer would have brought in other factors that could have had much more detrimental effects.

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

Mr President, I ask that further questions be placed on the Notice Paper.