Joe Ludwig (Queensland, Australian Labor Party, Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

(—) (): I wish to answer a question asked by Senator Colbeck at additional estimates, question 179. I seek leave to incorporate the answer in Hansard.

The answer read as follows—

Rural and Regional Affairs and Transport Committee

ANSWERS TO QUESTIONS ON NOTICE

Additional Estimates February 2013

Agriculture, Fisheries and Forestry

Question: 179

Division/Agency: Finance and Business Support Division

Topic: IER

Proof Hansard page: Written

Senator COLBECK asked:

Figures provided at Additional Estimates indicated the IER has dropped from approximately $24 million to $10 million this financial year, and that the target figure is actually $18 million.

Specifically what has this money been spent on?

Has industry been advised of the erosion of the reserve?

Has industry approved the use of this money?

What efficiencies is the division implementing to redress the ongoing use of the IER?

What is the IER expected to be by the end of the current financial year?

When will decisions be made on how to return the IER to the target of $18 million?

Answer:

1. At Additional Estimates the opening balance of the reserve on 1 July 2012 was $14.3 m. The import clearance deficit for 2012-13 was forecast to be $24.7 m. This would put the reserve into a $10.4 m deficit position.

Departmental budgets have been updated since Additional Estimates and the forecast operating deficit has reduced from $24.7 m to $10.9 m. As a result, the reserve balance is forecast at a $3.4 m surplus.

The range of the reserve agreed in the Cost Recovery Impact Statement (CRIS) is between 2 per cent and 10 per cent of annual expenditure. This equates to approximately $4 m to $19 m.

Attachment A provides a breakdown of expenditure for the 2012-13 year to date.

2. Yes. Industry is provided financial information as part of the Import Industry Finance Working Group.

Please provide an estimation of hours spent on QoN response for each officer involved.

3. The industry reserve is a mechanism to smooth out operational results of cargo operations over years. The Department of Agriculture, Fisheries and Forestry (DAFF) does not seek industry agreement to draw on the reserves each time a deficit is incurred. Industry is informed of the forecast, actual expenditure and the underlying activities on a regular basis.

4. From 2007-08 until now, the following efficiencies have been implemented:

a. Reduction of intervention of containers departing the wharf gate from 100 per cent external inspection to 30 per cent inspection.

b. Paperless processing of non-commercial air cargo documentation.

c. Reclassification of postcodes previously classified as rural (rural assurance postcode review).

d. Reduction of intervention on Air Cargo containers from 20 per cent intervention to surveillance only.

e. Reduction of intervention on letter class documents from 20 per cent intervention to surveillance only.

f. Introduction of a nationally consistent approach to monitoring imported goods at quarantine approved premises, airports, wharves and port precincts.

g. Redirection of resources away from low risk activities and toward high risk cargo.

h. Conducted targeted campaigns on imported commodities to verify the documentary assessment

i. Implementation of processes to reduce intervention on high risk cargo based on good compliance (Sea Container Hygiene System, Q-Ruler and e-cert)

j. Import conditions have been refined to reduce intervention on low risk cargo.

The industry reserve is a mechanism to smooth out operational results of cargo operations over time. DAFF does not plan to cease using the reserve for this purpose.

5. The IER is forecast to be' $3.4 m in surplus at the end of 2012-13.

6. The range of the reserve agreed in the Cost Recovery Impact Statement (CRIS) is between 2 per cent and 10 per cent of annual expenditure. This equates to approximately $4 m to $19 m. The current 2012-13 forecast closing balance of the reserve is $3.4 m. The operating result and IER are monitored throughout the year.

Please provide an estimation of hours spent on QoN response for each officer involved.