David Feeney (Victoria, Australian Labor Party, Parliamentary Secretary for Defence) Share this | Link to this | Hansard source

I present seven government respon­ses to committee reports as listed 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—

Economics References Committee – Interim report

Impacts of supermarket price decisions on the dairy industry

Pursuant to Senate Standing Order 38(7), I present to you an interim report of the Economics References Committee in relation to the Committee's inquiry into the impacts of supermarket price decisions on the dairy industry.

The matter was referred to the Committee on 10 February 2011 for report by 15 April 2011. To date, the Committee has received 151 subm­issions and has held public hearings in Melbourne (8 March 2011), Sydney (9 March 2011) and Canberra (10 and 29 March 2011). To enable the Committee to consider the significant amount of information received, the Committee sought an extension of its reporting date to 20 April 2011, which the Senate approved on 21 March 2011.

The Committee is aware that the inquiry has generated considerable interest and understands that many parties are awaiting the release of the report. It is also aware, however, of the need to balance timeliness with the quality of the analysis. Many of the issues which are the subject of this inquiry require ongoing scrutiny. There are complex interactions between farmers, processors and retailers; and short-term effects may differ significantly from medium-term effects. In particular, the Committee believes the impact of the reductions in retail milk prices depends crucially on how long they are in place, and the extent to which they are reflected in upcoming contract renegotiations with processors.

Additionally, the Committee, and many individuals and organisations who participated in this inquiry, are aware that the Government has not provided a response to the report of its previous inquiry, Milking it for all it's worth—competition and pricing in the Australian dairy industry. This comprehensive report was tabled on 13 May 2010 and made 16 recommendations.

The Committee also only received Coles' responses to their questions on notice in the afternoon of 19 April 2011. This has meant that the Committee has not had sufficient opportunity to consider this new information.

Consequently, the Committee has decided to present a further interim report before 10 May 2011, which will analyse the evidence that the Committee has received and invite responses and/or further information to be provided. The Committee will then collect and assess further information and examine developments in the dairy industry as they occur to inform its final report, which will be tabled by 1 October 2011.

Recommendation 1

The Committee calls on the Government to table a formal response to the Committee's report Milking it for all it's worth—competition and pricing in the Australian dairy industry by 13 May 2011, which will be a year after it was tabled.

GOVERNMENT RESPONSE TO SENATE STANDING COMMITTEE ON FINANCE ANTI) PUBLIC ADMINISTRATION REPORT

ANNUAL REPORTS (No.1 of 2009)

INTRODUCTION

The Australian Government welcomes the report of the Senate Standing Committee on Finance and Public Administration into the committee's examination of annual reports for portfolios that it has oversight, which were tabled for the period between 1 May 2008 and 31 October 2008.

The Government recognises that the primary purpose of annual reports of departments is accountability, in particular to the Parliament Annual reports serve to inform the Parliament, other stakeholders, educational and research institutions, the media and the general public about the operation and performance of Commonwealth entities.

RESPONSE TO RECOMMENDATION

The Committee made four recommendations.

Recommendation 1

The committee recommends that Ministers ensure that annual reports are tabled in the Parliament as soon as is practicable after receipt of reports from agencies.

Response

The Government notes Recommendation 1.

While it is good practice for Ministers to table annual reports as soon as practicable after receipt of reports from agencies, unless it is otherwise specified in legislation, it remains the Government's policy that all annual reports should be tabled by 31 October.

The requirement for Financial Management and Accountability Act 1997 (FMA Act) agencies to table annual reports by 31 October is specified in the Requirements for Annual Reports for Departments, Executive Agencies and FMA Act Bodies ("the Requirements for Annual Reports"). Agencies need to seek an extension under the Acts Interpretation Act 1901 should that timeframe not be met.

Current legislative arrangements for Common­wealth authorities and Commonwealth companies provide for the tabling of annual reports in Parliament as soon as practicable after the receipt of reports from agencies. Under the existing framework, paragraph 9(2)(a) of the Commonwealth Authorities and Companies Act 1997 (CAC Act) provides that the annual report of a Commonwealth authority must be given to its responsible Minister by the 15th day of the fourth month after the end of the financial year.

Subsection 36(1A) of the CAC Act provides that the annual report of a Commonwealth company must be given to its responsible Minister if the company is required by the Corporations Act 2001 to hold an annual general meeting, 21 days before the next annual general meeting or four months after the end of the financial year, whichever is earlier. In any other case, the Commonwealth company must provide its responsible Minister with its annual report four months after the end of the financial year

Paragraph 9(2)(b) and subsection 36(1A) of the CAC Act also provide that an annual report for a Commonwealth authority and a Commonwealth company respectively, may be given to the responsible Minister at the end of such further period granted by the Minister under subsection 34C(5) of the Acts Interpretation Act 1901.

The time taken for a report to be tabled in Parliament, once it is received by the responsible Minister, is determined by subsection 34C(3) of the Acts Interpretation Act 1901. That is, the Minister must table the annual report in both Houses of Parliament within 15 sitting days of receiving the report.

Recommendation 2

The committee recommends that all departments and agencies include a compliance index in future reports.

Response

The Government supports recommendation 2 and has implemented the recommendation for agencies that are subject to the Financial Management and Accountability Act 1997. Those agencies must prepare their annual report in accordance with the requirements set out in the Requirements for Annual Reports. Compliance indexes were listed as a mandatory

requirement when that document was reissued in June 2010.

The inclusion of a compliance index in the annual reports of Commonwealth authorities and wholly-owned Commonwealth companies under the CAC Act is also supported. The Department of Finance and Deregulation will consult departments of State and agencies on the issue of including an index of reporting requirements in future annual reports.

Recommendation 3

The committee recommends that agencies adhere to the Commonwealth Fraud Control Guidelines by including a signed statement by the CEO or agency head certifying that they are satisfied that their agency is in compliance with the guidelines.

Response

The Government notes Recommendation 3.

This proposal is already covered by other arrangements for FMA Act agencies and for Commonwealth authorities or wholly-owned Commonwealth companies that may be subject to the requirements.

The Commonwealth Fraud and Control Guidelines apply to all agencies that are subject to the FMA Act and the reporting requirements of FMA Act agency heads, as specified in the Commonwealth Fraud and Control Guidelines, are noted in the Requirements for Annual Reports. Agencies are responsible for ensuring that they are compliant with those requirements.

Prior to 1 July 2008, where a Commonwealth authority or wholly-owned Commonwealth company received a notification under sections 28 or 43 of the CAC Act, respectively, to apply a policy such as the Commonwealth Fraud Control Guidelines the body must comply with the reporting requirements in the policy. A Commonwealth authority that must comply with the policy must also, in accordance with the Commonwealth Authorities and Companies (Report of Operations) Orders 2008, report instances of non-compliance with the policy in their annual report. Since 1 July 2008, the process for applying Commonwealth policies to Commonwealth authorities or wholly-owned Commonwealth companies has changed and

Commonwealth policies are now applied through general policies orders. To date, no such orders have been issued, however the Department of Finance and Deregulation is in discussion with a number of agencies, including the Attorney-General's Department, to identify Commonwealth policies, such as the Commonwealth Fraud Control Guidelines, to apply to CAC Act bodies a general policy order.

Recommendation 4

The committee recommends that Commonwealth Authorities and Companies Act 1997 bodies consider adhering to the Requirements for Annual Reports issued by the Department of the Prime Minister and Cabinet.

Response

The Government does not support Recommendation 4. There are separate annual reporting requirements for Commonwealth authorities and Commonwealth companies.

Consistent with section 9 of the CAC Act, the annual reporting requirements for Commonwealth authorities are set out in Schedule 1 of the CAC Act, which includes preparing a report in accordance with the Commonwealth Authorities and Companies (Report of Operation Orders) 2008. These were issued by the Finance Minister and commenced on 30 June 2008 and therefore were compulsory for 2008-09 reports, due on 15 October 2009.

In accordance with section 36 of the CAC Act, the annual reporting requirements for Commonwealth companies are set out in two places. First, base requirements are set out in the Corporations Act 2001.

Second, as of 1 July 2008, the Finance Minister may make orders for wholly-owned Commonwealth companies. As explained in the explanatory memorandum to the Commonwealth Authorities and Companies Amendment Bill 2008, this allows for the Finance Minister to require the reporting of matters in addition to those required by the Corporations Act 2001 "that are appropriate to be included in [Commonwealth companies] annual reports with a view to ensuring consistent reporting of public sector governance and accountability obligations".

Orders relating to wholly-owned Common­wealth companies, similar to the Commonwealth Authorities and Companies (Report of Operation Orders) 2008 for Commonwealth authorities, are being prepared for consideration by the Finance Minister.

Senate References Committee on Foreign Affairs, Defence and Trade

Inquiry into matters relating to events on HMAS Success

Report on Parliamentary Privilege – possible interference in the work of the committee

Recommendation 1

In light of the committee's experience and its concerns with sections of the Guidelines dealing with witnesses appearing in their private capacity, the committee recommends that the Senate refer this matter, as it relates to the Guidelines, to the Standing Committee of Privileges for its consideration.

Response:

Agreed.

The Senate referred the Government Guidelines for Official Witnesses before Parliamentary Committees and Related Matters to the Senate Standing Committee of Privileges for inquiry on 21 March 2011. The Government is willing to engage with the Privileges Committee in this activity.

Recommendation 2

All legal officers in Defence Legal and senior officers in the Ministerial and Executive Support Branch undertake a study of the principles governing the operations of Parliament and of the accountability of government departments and agencies to Parliament. Further, that in future such a course of study be mandatory for newcomers to these branches.

Response:

Agreed in principle.

The Government respects the basis for this recommendation and agrees that officers in Defence's Ministerial and Executive Support Branch and legal officers in the Defence Legal Division who support the department's involvement with the parliament should have a very sound grasp of the operations and responsibility of the parliament.

Indeed, the committee may be interested to note that for a number of years Defence has allocated significant resources to develop and conduct a range of tailored in-house training courses for personnel. A number of these courses are focused on educating staff on the specific issues raised in this recommendation. There is consistently high demand for these courses and 1,677 Defence personnel in 2009 received the benefit of this training.

Additionally, in 2007 Defence introduced the mandatory Working with Government course for all Senior Executive Service officers and military equivalents which comprehensively educates the organisation's senior leadership group on their responsibilities in working with Government, as well as their public accountability obligations.

However, the Government does not consider mandating officials from the two specific areas of Defence highlighted in this recommendation to attend such courses to be necessary. Since only a relatively small proportion of officials in these areas are engaged directly in supporting the organisation's interaction with the parliament, mandating such training for all staff would not be an appropriate allocation of resources. But, opportunities will be examined to enhance the training and awareness on parliamentary processes and accountability, and the mechanisms to achieve this across all levels in these areas (both for public servants and military personnel).

The Government recognises that there is also a range of externally provided courses that address the issues identified in this recommendation, including the Senate's own comprehensive education and training program. The Government encourages departments and agencies to consider these types of courses and provide opportunities for staff to attend if they meet their training needs.

Australian Government response

Senate Rural and Regional Affairs and Transport References Committee

Report into the Import Risk Analysis (IRA) for the importation of Cavendish bananas from the Philippines

Introduction

The Senate Rural and Regional Affairs and Transport References Committee (the Committee) announced its intention to hold an inquiry into the import risk analysis (IRA) for the importation of Cavendish bananas from the Philippines on 27 November 2008.

Australia's Director of Animal and Plant Quarantine made a policy determination in March 2009 in relation to the importation of bananas from the Philippines based on Biosecurity Australia's final IRA report conducted in accordance with the process contained in the 2003 IRA handbook.

The Committee held In-Camera hearings in Canberra 11–12 March 2009 with a range of witnesses including officers from the Department of Agriculture, Fisheries and Forestry, and a supplementary hearing, solely with Department officers, on 2 April 2009.

Responses to Recommendations

Recommendation 1 - ACCEPTED IN PRINCIPLE

4.21 The IRA handbook should be reviewed to clarify the level of detail to be provided in relation to recommending parameters or conditions for import in a final Import Risk Analysis report.

The Government accepts this recommendation in principle. The Government has agreed in principle to significant reforms of Australia's biosecurity system as detailed in 'The Independent Review of Australia's Quarantine and Biosecurity Arrangements' (the Beale Review). As part of this process, the Government is considering reviewing all the information contained in the IRA Handbook including the level of detail that should be provided in final IRA documents.

The IRA Handbook outlines the process that Biosecurity Australia follows to undertake an IRA. The IRA Handbook sets out an administrative process for the conduct of import risk analyses.

Recommendation 2 NOT ACCEPTED

4.24 The committee therefore recommends that the Senate order that, prior to the approval of any import permits for bananas from the Philippines into Australia, the Australian Quarantine and Inspection Service (AQIS), in consultation with Biosecurity Australia, shall provide the Senate Rural and Regional Affairs and Transport Committee with a report on:

AND

Recommendation 3 NOT ACCEPTED

4.25 The committee recommends that in the event of an import request by the Philippines government or a Philippines import proponent, a formal and structured process be established by the Director of Animal and Plant Quarantine to provide Australian banana growers with meaningful consultation in relation to the assessment of the efficacy of the possible risk management measures and, consequently, the determination of the risk management measures.

The Government does not accept Recommendations 2 and 3 as the information contained in any potential operational plan is government-to-government communication and is considered confidential and the release of such information without the consent of the other party may have an adverse impact on Australia's broad bilateral relationship with the Philippines.

The Government also notes that considerable consultation occurred with all stakeholders on all aspects of the IRA, including the Australian banana industry, as part of the formal, broad-ranging stakeholder consultation process undertaken during the independent, science based, IRA process. The independent IRA process also includes an independent review mechanism of how stakeholder comments have been addressed and an independent appeal process. Information provided by industry and by other relevant stakeholders through this process forms part of the material that is available to AQIS in developing the potential operational plan.

Australia's Minister for Agriculture established a policy framework in relation to the release of detailed operational plans in relation to the importation of material into Australia. The policy framework includes that negotiation of operational plans remains confidential, as they are government-to-government communications for the entire negotiation period and until the document is finalised in order to protect the interests of both parties and encourage open communication. Operational import plans are the property of the exporting country. Therefore, the agreement of the exporting country will need to be obtained before any information contained in the operational import plans is disclosed. This process is designed to respect the integrity of government-to-government communications and relationships, and to provide consistent treatment for trading partners. Furthermore, Australia is obliged to protect the confidentiality of information relating to the production and handling of an imported product under Annex C (1) (d) of the WTO SPS Agreement, as well as protect commercial-in-confidence information which may be included in an operational import plan.

In addition, maintaining government-to-government confidentially during the entire period of the negotiation of operational import plans is important for demonstrating to trading partners that Australia's quarantine process is based on sound science and free from industry or political influence.

Recommendation 4 ACCEPTED IN PRINCIPLE

4.26 The committee recommends that, in the event of the issue of an import permit, representatives of the Australian banana industry are promptly notified of that fact, excluding information which is commercial-in-confidence.

The Government accepts this recommendation in principle, taking into consideration the principles of both the privacy and freedom of information legislation.

The Department of Agriculture, Fisheries and Forestry undertakes to advise the Australian banana industry if an import permit were issued for the importation of mature hard green banana fruit from the Philippines taking into account the commercial confidentiality rights of the permit holder.

Recommendation 5 ACCEPTED IN PRINCIPLE

4.27 The committee recommends that the Senate order Biosecurity Australia and AQIS to undertake a review of the import requirements for bananas from the Philippines after the first year of trade and to provide a report of this review to the Senate Rural and Regional Affairs and Transport Committee.

The Government accepts this recommendation in principle, noting that this IRA report and all other IRA reports include a review mechanism. A review of the import requirements will be undertaken if commercial trade occurs for at least twelve months. The review would form the basis of a report for the Committee.

Following significant trade AQIS and Biosecurity Australia routinely undertake reviews of import requirements to ensure that agreed procedures and protocols are meeting Australia's requirements and achieving Australia's appropriate level of protection.

JOINT STANDING COMMITTEE ON TREATIES

REPORT 107: REVIEW INTO TREATIES TABLED ON 20 AUGUST (2) AND 15 SEPTEMBER 2009

GOVERNMENT RESPONSE

IMF Voice and Participation Amendment

Recommendation 5

The Committee recommends that the Australian Government use the good will it has gained by agreeing to the IMF Voice and Participation Amendment prior to the G20 meeting to progress improvements in the balance of voting power and the confidence and legitimacy of the IMF ' s decision making process.

Response:

The Government accepts this recommendation. The Government is a strong advocate of reform of IMF quotas and governance and notes that G20 Leaders agreed in September 2009 that the further modernisation of the IMF ' s governance, including the balance of voting power, is a core element in the effort to improve the IMF ' s credibility, legitimacy and effectiveness. The Government played an active role, including by co-chairing the relevant G20 Working Group, in the agreement on the third stage of IMF governance reform reached by G20 Finance Ministers and the IMF Board of Governors in late 2010. This agreement includes a doubling of IMF quotas and further shifts in voting power to dynamic emerging market and developing countries, and from over- to under-represented countries, both of almost 6 per cent. It also includes a more representative IMF Executive Board with advanced European countries agreeing to reduce their representation in favour of emerging market and developing countries.

Dissenting report: Recommendation 5

The Coalition is concerned that by agreeing to the IMF Voice and Participation Amendment the Government may act against the best interest of Australia by reducing our voting influence and that of other larger nations.

Australia's voting share is set to decline from 1.47 per cent of the votes to 1.31 per cent of the votes. Far from marginal, this decline in voting share of 0.16 per cent of votes signs away 11 percent of our current vote share.

While we support a greater engagement of developing nations within the IMF we are not convinced that this proposal will improve the quality of governance of the IMF.

Response to Dissenting report:

As noted in the National Interest Analysis provided to the Committee, IMF quota and voice reform — including the increase in basic votes provided for in the IMF Voice and Participation Amendment — results in a decline in Australia's relative voting share in the IMF. This reflects an increase in relative voting share provided to under-represented emerging market economies, including in our region, and the increase in basic votes benefitting small and low-income members. However, the 2010 agreement will moderate the decline in Australia's voting share, resulting in a share of 1.33 per cent of total votes compared with 1.31 per cent following the 2008 Voice and Participation Amendment.

Reform in this area has had bipartisan support in Australia. The first stage of reform was agreed by IMF Governors in September 2006 while the second stage was developed in 2007 and early 2008, and agreed by IMF Governors in April 2008.

The Government considers that the Amendment and related quota reforms are an important mechanism for enhancing the legitimacy of the IMF as an international financial institution with near-universal membership. A strong and effective IMF advances Australia's interests by supporting stability in the global economy.

IMF Investment Authority Amendment

Recommendation 6

The Committee recommends that, consistent with the IMF's goals of international economic stability and fostering growth and economic development, the Australian Government advocate that the IMF not invest in:

Response:

The Government notes that the IMF will adopt rules and regulations (for example, imposing restrictions on types of investments and setting risk tolerance levels) regarding investments of currencies held in its investment account. The IMF Executive Board is expected to consider rules and regulations in the first half of 2011.

The Government expects that the IMF would not involve itself in 'high risk' investments and the Government accepts this part of the Committee's recommendation.

The Government notes that, while the nature of the IMF's operations suggests that explicit

decisions to invest in arms or military equip­ment or environmentally damaging industries are highly unlikely, inadvertent investment may occur through the IMF's proposed use of a passive investment approach, involving the close tracking of widely used benchmark indices. Restrictions on such investments may need to await the further development of investment methodologies and market practice.

The Government will seek comments on the issue from IMF staff in the context of the forthcoming IMF work on rules and regulations governing IMF investments.

Dissenting report: Recommendation 6

The Coalition is concerned that recommendation 6 does not provide sufficient definition as to what constitutes 'high risk', 'arms or military equipment' or 'environmentally damaging'. Without clear definitions of these terms it is possible that legitimate investments could be thwarted by an overly wide or indiscriminate reading of these terms.

If the Australian Government were to advocate for the proscriptions outlined in recommendation 6 we risk creating an overly prescriptive regime for the IMF to operate within and may unnecessarily impede the IMF's ability to respond in the best interests of all countries concerned.

Response to Dissenting report:

The Government notes the concerns expressed in the Dissenting report – Coalition Members and Senators.

As has been the Australian Government's position on other IMF policy discussions in the past, the Government will approach upcoming discussions on the IMF's investment policies with a view to ensuring that the IMF's ability to respond in the best interests of its members is not impeded.

World Bank Voice and Participation Amendment

Recommendation 7

The Committee recommends that the Australian Government support the proposal of the Development Committee of the World Bank to increase the quota of votes allocated to developing countries to at least 47 per cent.

Response:

The Government accepts this recommendation. At the April 2010 World Bank Spring Meetings, the Development Committee endorsed a package of reforms which included greater voice for developing and transition countries within the World Bank. The reforms will increase the voting power of developing and transition countries in the International Bank for Reconstruction and Development (IBRD) by 3.13 per cent, bringing their voting power to 47.19 per cent. This agreement includes a capital increase of US$86.2 billion. For the next shareholding review in 2015, the Development Committee agreed to develop a dynamic formula that reflects countries' evolving economic weight and the World Bank's development mission, moving over time towards equitable voting power and protecting the voting power of the smallest poor countries.

The Government actively worked towards the achievement of these voice reforms.

Dissenting report: Recommendation 7

The Coalition is concerned that by agreeing to the World Bank Voice and Participation Amendment the Government may act against the best interest of Australia by reducing our voting influence and that of other larger economies.

Australia's voting share is set to decline from 1.53 per cent of the vote to 1.49 per cent of the votes. This decline in vote share of 0.04 per cent of the vote signs away over 2.6 per cent of our current vote share.

Australian influence in the World Bank would be further diluted if Recommendation 7 is supported and eventuates as a later World Bank Amendment.

While we support a greater engagement of developing economies within the World Bank we are not convinced that this proposal will improve the quality of governance of the World Bank.

Response to Dissenting report:

The World Bank Voice and Participation Amendment will result in a marginal decline in Australia ' s voting share. As noted in the National Interest Analysis, the decline in Australia ' s relative voting share is not expected to significantly alter the dynamic within our World Bank constituency or our influence within the Bank.

Once the further reforms endorsed by the Development Committee in April 2010 have been implemented, Australia will hold 1.33 per cent of voting power