Janet Rice (Victoria, Australian Greens) Share this | Link to this | Hansard source

On behalf of Senator Whish-Wilson, the Chair of the Senate Select Committee into the Scrutiny of Government Budget Measures, I present the third and fourth interim reports of the Senate Select Committee into the Scrutiny of Government Budget Measures, together with the documents presented to the committee.

Ordered that the reports be printed.

I move:

That the Senate take note of the reports.

I want to speak in particular to the third report of this select committee, which was into the cuts to CSIRO science programs, and in particular the cuts to CSIRO climate science. The Senate committee heard extensive evidence from CSIRO management, from expert scientists from around the world, and from some former CSIRO scientists about these proposed cuts to CSIRO science.

I want to put this report into context, because we are talking about climate science at a time when the world is facing a climate emergency and when dealing with our changing climate is one of the most important things that we can be doing as a nation. It is in this context that we see the proposal to cut 350 scientists from CSIRO, including 100 of the 140 climate scientists in CSIRO. This is what makes this issue so significant and so worthy of attention by the Senate.

Our committee heard evidence of, to begin with, the appalling process that was gone through with this proposal to cut 100 of those 140 climate science jobs. We heard about the lack of consultation internally and externally, the lack of involvement by the CSIRO board in the process, and the lack of understanding by the CSIRO management of what in fact they were cutting. Internally, these cuts were supposed to have taken place after a strategic review—a so-called deep dive process. But many submitters to our inquiry told us, in fact, how shallow that process was and how it did not cut to the core of what was being lost and what should be retained.

We heard about the lack of consultation externally and that the key stakeholders that were directly impacted by this decision by CSIRO to cut these 100 climate science jobs were not informed of this process until the day before it was publicly announced. The Bureau of Meteorology heard the day before that programs that they did jointly with CSIRO were going to be directly impacted. The Australian Antarctic Division and other key stakeholders that work closely with the CSIRO were not informed of this major proposal to cut the capacity of climate science.

We also heard, very seriously—and this cuts to the heart of the problems with this process—that the CSIRO board were not actively involved in this process at all; that, when they had the early proposal put to them, it did not go into the extent of the cuts that were being considered; and, in fact, that the chair of the board was not informed of the extent of the cuts that were being proposed until days before these cuts were announced. The appalling process was a real indictment of the problems with the way that these cuts were undertaken.

It was not just cuts. What was being proposed was the dismantling, essentially, of Australia's capacity to do climate science, and that climate science is world renowned. It is not surprising that, when these cuts were first announced, there was outcry from across the world, that it made the front page of The New York Times and that there were letters from thousands of scientists internationally, shocked and dismayed about the impact that this was going to have on both Australia's capacity to do climate science and the global capacity to do climate science.

Of course, once we started investigating it, the backpedalling began. At the time we began the inquiry, the figure of 100 scientists whose jobs were going to be cut dropped back to 70. I think it is one of the good outcomes of this inquiry process, and I think it is only because of this inquiry process that they have now settled on only cutting 40 of those 140 positions. But that is still 40 too many. Almost 30 per cent of CSIRO's climate science capacity is still being proposed to be cut—again, at a time when we need this capacity. So that was the process.

The other evidence that the committee heard was how the whole concept of cutting our climate science capacity was totally the wrong thing to do. It was very evident to the committee that the contention by the CEO of CSIRO, Dr Larry Marshal, as to why these cuts were occurring was that climate change was proven to be real and so the CSIRO could move to adaptation and mitigation. It was very clear, with the evidence put to the committee, that this was simplistic and naive. We learnt that climate measurement data is not static and that robust data around the rate of climate change is critical to the development of successful and cost-effective adaptation and mitigation strategies. You cannot adapt and mitigate to climate change without knowing what you are adapting to and mitigating. We heard so much evidence of why the critical science that CSIRO did was so important. The measurement and monitoring of our science were so critical, and needed to be maintained and enhanced if we were to adapt effectively to climate change and to mitigate against it.

Evidence from Professor Tony Haymet, the former chief of CSIRO Oceans and Atmosphere Division, said:

…there is no use setting up a group to help us adapt to climate change if we do not know whether we have 20 years or 50 years. How long do we have before all of our ports have to raise their infrastructure a metre? How long do we have before we have to recraft all the sewers on the east coast of Australia because their outlets are too low and they are going to get flooded at an average high tide?

… … …

If we have 10 years, we are in big trouble. If we have 50 years, it is a better story … Sure, we can adapt to climate change—as long as we know what we are adapting to and how long we have to do it.

Dr Richard Matear emphasised that he viewed CSIRO's observations and modelling of our oceans and atmosphere as providing an insurance policy for Australia. He said:

We have a huge economy, a trillion-dollar economy, with multitrillion dollars worth of infrastructure, and to think that we cannot invest a little bit into the fundamental research that will help maintain and support that effort and make us a more resilient and more productive nation is ridiculous.

The other thing that very clearly came out through our committee's inquiry was that the CSIRO was moving away from public good research, the importance of maintaining that public good research and the fact that CSIRO, as our premier scientific institution, is the organisation that should continue to be tasked with doing that public good research. But the direction that was being headed in by the current CEO of CSIRO was absolutely shifting away from that emphasis on public good research. The research that was going to continue to be done at CSIRO was increasingly only going to be research that could have short-term economic benefits, not even taking into account what the long-term economic benefits to the country were going to be.

What the committee learnt was that there has been a massive hit to CSIRO's reputation and in fact to Australia's scientific reputation. So much damage has been done by the cuts that have been proposed, it is going to take a long time before people have trust in CSIRO again. It is not just a matter of saying, 'Oh well, we are only cutting 40 now; everybody else can feel okay.' There is a lack of trust now. And even the scientists that are going to be left do not have the trust that their jobs are valued and are necessarily going to be there in the future.

Where to from here? We heard the response in recent weeks of them saying, 'Everything is okay. We are now establishing a climate centre in Hobart which is guaranteeing 40 jobs in climate science.' Only 40, not good enough. From our 140 jobs, only 40 are guaranteed. Establishing a climate science centre in Hobart is a smokescreen. It is a sleight of hand to cover the fact that we are still cutting our essential climate science capability. The recommendations of our committee are quite thorough. We absolutely want a commitment. We are calling upon the government to reverse the cuts, to undertake a thorough review and to delay the implementation of the job cuts until after the election. It is very clear that CSIRO said that with an alternative government that valued climate science they would do things differently. So it is very clear that these cuts should be put on hold until after the election.

Finally, there is the issue of the CEO of CSIRO himself. I really do hope that the minister reads this report and seriously questions the ongoing renewal of his contract, which is currently up for renewal.

Kim Carr (Victoria, Australian Labor Party, Shadow Minister Assisting the Leader for Science) Share this | Link to this | Hansard source

I would like to say a few words about the Select Committee into the Scrutiny of Government Budget Measures, the third interim report into the job cuts recently proposed for the CSIRO. There has been absolutely no doubt that these moves have been contentious. There is no doubt that morale within the CSIRO has hit rock bottom. There is no doubt in my mind or in Labor's mind that this is not just a matter for the CSIRO. The committee has heard extremely concerning evidence about the closed and chaotic decision-making process within CSIRO that has led to this point.

Contrary to the statements that have been made, the committee has had the opportunity to view extensive documentation about the way in which CSIRO has approached the issues concerning these job cuts. We have read CSIRO emails, which suggest 'public good is not good enough' and 'nature papers do not cut it', and even a suggestion that CSIRO should 'eliminate all capability associated with public good and government funded climate research'. I repeat, despite the assertions to the contrary that have now been made, there is no doubt within the CSIRO there has been quite an extensive conversation about how the CSIRO could withdraw from its responsibilities for public good research or minimise its impact or turn the CSIRO into a commercialised consultancy arrangement.

There is no doubt in my mind that the conversation about cultural change within the CSIRO has been aimed at fundamentally shifting the scientific priorities of the CSIRO and using commercial or external revenue as the basis for the allocation of resources rather than the critically important role the CSIRO plays to the national good. One of the questions the committee has been interested in therefore was the extent to which the minister and the board had endorsed these discussions. The evidence on the board's involvement—to put it politely—is inconsistent. However, it is absolutely clear that the board did not sign-off on the job cuts before Dr Marshall sent out his all-staff email on 4 February. It is absolutely clear that the draft all-staff email did not even mention the cuts. It talks about new areas of priority. It makes none of the controversial claims on the state of climate science. And there has been a desperate effort made to retrofit and to obfuscate about the facts in regard to when the board members were taken by surprise when Dr Marshall's email actually appeared.

Many of the board members were new. Four of the current board members, and three who received that email, were appointed either before or after the so-called deep-dive process that was undertaken, which of course followed the release of the 2020 strategy. On the weight of evidence presented to the committee, I contend that the board was not expecting a public announcement of the major cuts to public good research and had not actually signed-off on those cuts. Indeed, it appears that at least one board member replied to the draft email saying, 'I don't think I approve.' But there was no opportunity for further discussion.

This is a failed process. The board should have been fully engaged in the decision—and that was always going to be highly contentious and a major cause of disruption within the organisation. The minister himself should have been fully engaged as well. I believe there is a very strong element of negligence in regard to the minister's role in these matters. Instead, the minister has said nothing except to hide behind the legal fiction of the independence of the CSIRO—because there are limits to independence. The minister sets out a statements of expectation. The minister has the power to direct the board. I certainly acknowledge the responsibility of the board and management to make operational decisions and to prioritise according to available resources. But I also, as minister, had to pay close attention to the decisions that were being made. This is my direct experience in this. In my experience, you work with the board and with the CEO to ensure that the national interest is being served and that they take staff concerns on board and consult properly.

Yesterday, the Senate called on the minister to intervene to stop CSIRO implementing these changes before the election. The Senate's motion has been met with the policy of this government, which is silence. We know that this minister does not care a great deal about science. It follows a pattern of this government—they did not even have a science minister for pretty much the first-half of this parliament. But this is the same minister, I recall, who was willing to hold 1,700 scientists' jobs hostage to his unfair and unnecessary plans on the $100,000 degrees—a plan that has remained central to the government's higher education policies. I believe the minister has the same attitude to the CSIRO. It is a short-sighted attitude. It is not about doing what is best in terms of climate change science. That of course has meant that the anti-climate change scientists dominate Mr Turnbull now—that was the price he had to pay to get the keys to The Lodge. These people have been able to run rampant throughout this government. So it is not an approach that reflects the best interests of this nation's future.

Labor has a very different attitude. We have different priorities. We would not allow the CSIRO to cut these jobs. If I had the privilege to service as science minister in a Shorten Labor government, I would direct the board accordingly. This is not something that I take lightly. In all my time as science minister I never directed the CSIRO board in this way. But in this case the stakes are just too high. CSIRO's globally unique climate science capabilities are world recognised. If they are lost, they will never recover. So I call on the government once again to do the responsible thing and direct CSIRO to cease and desist in implementing these controversial job cuts. To stubbornly proceed in the way the minister seems to be doing despite the manifest evidence of failure in the process and consultations that we have seen during this inquiry is simply wrong. It is not a responsible way to govern.

Carol Brown (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary for Families and Payments) Share this | Link to this | Hansard source

I rise to speak on the tabling of the third interim report by the Senate Select Committee into the scrutiny of government budget measures examining, in particular, Tasmania's energy crisis. But before I move on to that part of the report, I commend Senator Carr on his contribution here today on the issue of the CSIRO cuts. I absolutely support everything he had to say.

The Tasmanian energy crisis is regrettably a common theme in the report that has been tabled today and it shows the lack of transparency displayed by the Tasmanian government since the energy crisis began. Indeed, the first recommendation of the committee is for the Tasmanian government to be fully transparent about what has caused Tasmania's current energy crisis, how it will be resolved and the costs associated with this crisis. I want to quote directly from the report to show that the Tasmanian government—in particular, the Minister for Energy, Mr Groom—has been less than forthcoming with not only Tasmanians but also, I believe, with the committee. In discussing the response to the energy crisis the committee's report said:

The Tasmanian Government's response to the crisis has been insufficiently transparent, particularly in terms of the government's expenditure. Despite speculation in the media that the cost of the crisis is $400 million or more, the responsible minister, the Hon. Matthew Groom MP, was unwilling or unable to provide an up to date figure for the costs associated with the crisis.

It became very clear during the committee's hearing in Hobart that the Minister for Energy has failed to be transparent and has not informed or updated Tasmanians on this energy crisis. But it is not just Tasmanians who have been ignored. The minister also failed to talk to major industrial power users about the crisis. The committee heard that the minister did not consult or inform major industrial users of energy before the Tasmanian government decided to decommission and sell the Tamar Valley Power Station in August 2015. It was also revealed that the commercial reputation of Tasmanian business has been damaged because they have had to cut their power usage.

As I said at the outset, this report raises very serious concerns about the handling of Tasmania's energy crisis by the Tasmanian government, particularly because of the lack of transparency and accountability on a range of issues, especially the cost of the crisis, which, as I have already mentioned, will cost taxpayers millions of dollars and could cost Tasmania more than $400 million. This report also questions the lack of transparency on several other issues, including the government's decommissioning of the Tamar Valley Power Station, the time line for repairs to the Basslink cable and the costs that Tasmanians will have to bear because of the energy crisis. The minister, in my view, has been very secretive and has kept Tasmanians in the dark. Worse than that, he has been less than convincing in his answers and has maintained a 'cone of silence'. The day after the hearing, my colleague the Tasmanian Leader of the Labor Party, Mr Bryan Green, highlighted inconsistencies between the minister's evidence to the committee and information in documents obtained under right to information. Further to this, the committee found that the Minister for Energy had frustrated the committee by not allowing the relevant energy businesses to appear, despite him not being able to answer some of the senators' questions himself.

In supporting a full independent inquiry into Tasmania's energy crisis, the committee report said:

The importance of a full independent inquiry is further supported by the fact that this committee was barred from questioning relevant organisations, specifically the energy businesses. Minister Groom's appearance before the committee on behalf of the Government and all of the energy businesses frustrated the hearing process which would have been best served by being able to direct questions to the relevant organisations. In the interests of transparency and accountability these organisations must be able to provide evidence to an independent inquiry.

Because the committee was unable to question energy businesses such as Hydro Tasmania and Aurora Energy, we must have a full independent inquiry, and evidence must be given by the energy businesses. As well, the committee expressed grave concerns that Tasmanians will face a hike in power prices because of the energy crisis and the measures that the Tasmanian government have taken. On this budget eve, I know many Tasmanians already struggle to pay their power bills. Any increase will hit them hard. I commend the report and its recommendations to the Senate.

Nick McKim (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I rise to speak briefly about the report into the Tasmanian energy crisis. We have had a bit of rain in the last four or five days down in Tasmania, and the dams were actually 0.2 of a per cent fuller yesterday than they were one week ago, up from 12.8 to 13 per cent. No doubt Minister Groom, the Minister for Energy in Tasmania, is happy with that, but I have some words of warning for him: he is nowhere near out of the woods yet in terms of the energy crisis. He is spending like a drunken sailor, trying to keep his own job, and he is spending taxpayers' money doing it. We are looking at, on his own words, about 220 megawatts of diesel generation that will be in place in Tasmania within just a few short weeks. That is coming at a cost of $44 million in installation and lease costs and $11 million per month, per 100 megawatts, for the diesel generators. In round terms, we are looking at around $25 million a month to run those generators.

Hydro Tasmania's balance sheet, last time I looked, had that government business carrying about $860 million worth of debt. The minister has been clear that Hydro will have to carry the costs of the response to the energy crisis. Hydro is forgoing revenue from the major industrials, who are on power rationing in Tasmania, as we speak. We are losing jobs, as we speak, from the major industrials. They are on power rationing. Hydro Tasmania is losing revenue because of course it is not able to charge for power it is not delivering to the major industrials. What is the cost of that to Hydro Tasmania? The minister claimed not to know, when he was interrogated by the Senate inquiry. So we have got a $44 million establishment cost and about $25 million per month to run the diesel generators. On the minister's own figures, we are somewhere in the region of $100 million already that is on Hydro Tasmania's balance sheet. That is an increase already of 10 per cent in the amount of debt that Hydro Tasmania is carrying. Into the future, as we go forward, we are looking at—if the diesels are operating at full capacity—about $25 million a month. So, for every four months that they are operating at maximum capacity, Hydro will put another $100 million on the debt side of its balance sheet.

The question has to be asked: what is the level of debt in Hydro Tasmania that this minister and the Treasurer, the other shareholder minister, are prepared to sit by and watch? Where is the cut-off? Is it around $1 billion? Hydro have actually carried over $1 billion of debt in the past. They have managed, over the last 10 or 12 years, to pay that down, notwithstanding successive governments applying a special dividends policy and obtaining money from Hydro Tasmania to fund schools and hospitals in Tasmania. I ask here tonight—rhetorically, I know: where does the line lie; where have the shareholder ministers drawn the line in terms of Hydro Tasmania's debt?

One thing that you can be sure of: the Tasmanian taxpayers and the Tasmanian electricity consumers will be paying through their pockets for this response to the energy crisis.

How did we get here? Yes, as the minister said, there was a drawing down of the dams under a previous Labor-Green government in Tasmania, but it is worth pointing out that at the change of government in Tasmania—when the Liberals assumed office in 2014—the dams were above 30 per cent—that is, three zero per cent. When they were handed over they were above 30 per cent. What has happened in the interim is that this minister mothballed the Tamar Valley Power Station, which is a gas-fired electricity generator in Tasmania. They continued on the occasional day and on occasional moments in the National Electricity Market to draw down the dams and export power south to north over the Basslink cable. So, yes, there are legitimate questions to be asked about the long-term, but in the last two years we still have seen electricity exported south to north over the Basslink.

Interestingly, until the Tamar Valley Power Station was fired back up during the turn of the year between 2015 and 2016—so December-January just gone—we had a lengthy period of time where Hydro Tasmania were barely operating that facility at all, thereby having the dams draw down at a faster rate than they otherwise would have been had the Tamar Valley Power Station been operating. You have got to ask yourself why that is the case. I would submit very strongly that the Tasmanian government's dividends policy and last year's state budget made it clear that in the fourth year Hydro Tasmania would have to pay a $75 million dividend to the Tasmanian government. That dividends policy placed pressure on the Hydro board to raise cash. They have got a take-or-pay contract for the gas that is associated with the Tamar Valley Power Station. Instead of burning that gas and keeping the dams higher than they otherwise would have been, Hydro were selling that gas on the mainland spot market. I have no doubt that that is what happened. In fact, I put that to Minister Groom during the committee, and Minister Groom said this:

I certainly understand why you have asked that question. I understand why there is interest in it.

My word, there is interest in it, Minister Groom! Tasmanians want to know why you mothballed the Tamar Valley Power Station. They want know why you allowed, and, in fact, placed pressure on, Hydro Tasmania to raise cash, and why you allowed Hydro Tasmania to sell that gas onto the mainland spot markets. We have had no leadership on energy conservation from the minister on domestic consumption or small- to medium-sized business consumption, we have had a shocking lack of engagement with major industrials—which the committee has heard evidence about—and we have had no leadership on encouraging rooftop solar panels on homes and small businesses in Tasmania.

Because I want to give my colleague Senator Wong an opportunity, I am going to end my contribution with this thought and this message to Minister Matthew Groom of Tasmania: in five or 10 years' time the energy supply sector right around Australia is going to look very, very different than it does today. The advent of electricity storage technology that can be embedded at a local and small scale in Australia, through improvements in battery technology and in cost and efficiency of solar panels, is going to transform the way the energy supply sector works. We better all wake up to it, because it is coming to homes and small businesses near us.

Anne Urquhart (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

I also rise to speak on the third interim report of the Senate Select Committee into the Scrutiny of Government Budget Measures. I rise today to strongly commend the budget measures committee report of the inquiry into Tasmania's energy crisis. I agree wholeheartedly with the contribution from Senator Brown just a moment ago. The clear message that came through in this inquiry was that in the midst of the most serious energy crisis our state has faced, the state Liberal government has been asleep at the wheel. Not only that, but they have hidden information, they have failed to keep industry informed and they have sacked staff and decommissioned the Tamar Valley Power Station—a vital energy security pillar. In addition, they gagged Hydro Tasmania's executives from appearing at the inquiry in an attempt to avoid scrutiny. The minister himself gave testimony to the inquiry which blatantly contradicted documents released under freedom of information.

As Senator Brown mentioned, the repercussions of this mismanagement could be felt for years to come. The crisis has compromised the reputation of Tasmanian businesses, and the bill to the taxpayers could potentially exceed $400 million. There is no doubt that there are very serious questions that are yet to be answered. I absolutely support the committee's recommendations for an independent inquiry into the circumstances surrounding the crisis.

But today I want to focus specifically on recommendation 4 of the report, which calls for the Tasmanian government to support projects that would increase renewable energy generation in the state. You would imagine that, given the recent Tasmanian experience, any government would be pulling out all the stops to future-proof our energy supply. You would want to hope the state Liberals would be doing absolutely everything they could to fast-track renewable projects and lock in extra capacity in our energy network, but you would be wrong. In fact, the Tasmanian Liberals already have a ready approved renewables project that they could get up and running with very little difficulty. It is a project that energy minister, Mr Groom, has said for months that he supports, and it is a project that he has done absolutely nothing to progress, even though it is well within his power to do so.

The project is the Granville Harbour wind farm on Tasmania's west coast. The wind farm truly is a golden opportunity. It will generate around 350 gigawatt hours of clean energy and, in doing so, abate more than 130,000 tonnes of carbon emissions. This is equivalent to taking more than 30,000 cars off the road—an impressive outcome indeed. Not only that but the project will also create 200 much-needed west coast jobs in the construction phase, and, of course, help to protect the stability of Tasmania's energy supply into the future.

Intensive environmental, heritage, engineering and survey work has already been done, and all the necessary approvals are in place. Westcoast Wind director, Alex Simpson, has already said that if work started soon we could see more renewable power hitting the grids by the end of next year. Sadly, there is one important thing that is standing in the way of this vital energy project: a sustainable power purchase agreement with Hydro Tasmania or Aurora. Without this agreement investors will simply not sign up. The onus to get this project over the line rests solely on the shoulders of Minister Matthew Groom.

As energy minister, he could direct that Hydro Tasmania and Aurora must deliver a sustainable power purchase agreement. That is exactly what he needs to do and the state government now has a very clear choice. It can put Tasmania in a situation where we continue to import dirty coal from Victoria and rely on generators if another crisis occurs or keep money and jobs in the state with a long-term sustainable power purchase agreement for clean, green Tasmanian energy. Today, I call on Mr Groom to act in the best interests of our environment, our economy and the west coast community. While Mr Groom's stated support for the Granville Harbour wind farm project may make him sleep better at night, it means absolutely nothing without strong action to get the project over the line. Right now, Mr Groom needs to step-up and broker a sustainable power purchase agreement as a matter of urgency.

Lisa Singh (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary to the Shadow Attorney General) Share this | Link to this | Hansard source

As the deputy chair of this committee, I would also like to concur with Senator Urquhart and some of the other contributions that have been made on this inquiry's findings. It is clear from the evidence that we heard that there is indeed an energy crisis in Tasmania and that we do not have a Tasmanian government fit enough to deal with it. The committee has put forward some very good recommendations and No. 2, recommending an independent inquiry to look into Tasmania's energy crisis—the bungled energy situation that Tasmania finds itself in based on the way in which the state minister has bungled the entire process—needs to be adhered to. Very good recommendations have been put forward and the committee did due diligence.

I would like to draw attention to an article raised by John Martinkus, a journalist in The Saturday Paper, last weekend which went into great detail about the crazy situation in which the Tasmanian government finds itself, in not being able to deal with this issue and not being able to show leadership on this issue. Whilst the Prime Minister might come to Tasmania and say, 'Yes, we'll have a feasibility study into a second Bass link'—and I do not say that that is a bad idea—it is completely separate issue to the current energy crisis facing Tasmania.

If we cannot get our only Bass link cable fixed in a timely manner and if the minister of the day cannot be honest and decent in telling the Tasmanian people what is going on in relation to our energy needs—and will not even let energy supplier Hydro Tasmania, a state government-owned energy business, to appear before our committee—then what faith can the Tasmanian people have?

I thank committee members for their participation in this inquiry. I ask the government to heed the five key recommendations that have been put forward. Let us hope that sooner rather than later this whole fiasco in Tasmania of us having to use diesel energy—with the effect that that is having on our clean energy brand—comes to an end, and we can have a repaired Bass link and some leadership and some investment in our renewable energy industries.

Question agreed to.