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

I was thinking that the minister might stand to answer the question that I asked when we finished up yesterday, which was about consultations in relation to the location of the RIC in Orange.

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

The decision about the location of the Regional Investment Corporation was a decision made by government.

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

You are saying that there were no consultations outside government?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Without going through the answer that I gave to a previous question, the decision about the specifics of the office accommodation are obviously a matter for the RIC board; the decision to locate the RIC in Orange was a decision of government. The decision of government was based on a number of criteria, which I talked about in the answer to a question yesterday: the importance of Orange as an agricultural hub which is well serviced by transport links, particularly from Canberra and Sydney; the opportunities for growth in that area; and the fact that it also meets the existing strong commitment by this government to establish hubs in rural and regional areas of Australia.

In addition to that, obviously we had discussions with other operations in Orange to assure ourselves that this was a suitable place for this corporation to go. Departmental officers, I understand, have met with stakeholders in Orange to discuss the establishment of the RIC in that city, that regional location. The meetings were held with a number of organisations, including the New South Wales Department of Primary Industries, the New South Wales Rural Assistance Authority, the Regional Development Australia Central West division, Paraway Pastoral Company, the Rural Financial Counselling Service New South Wales Central Region, Orange City Council, Orange Business Chamber and the New South Wales Farmers Orange branch.

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

Yesterday, Minister, you stated that you were not aware of any discussions the minister or his department is having about outsourcing functions of the RIC. At the public hearing of the Select Committee on Regional Development and Decentralisation in Bendigo on 9 October 2017, Ms Gartmann, the managing director and CEO of the Bendigo Rural Bank, gave evidence in response to the following questions:

… can you let us know if there's been any consultation with rural finance about the Regional Investment Corporation? Has anyone reached out to you about what's worked and what hasn't worked? Going forward, are you concerned at all about this federal organisation coming in and taking core business?

Ms Gartmann replied:

There certainly has been a large amount and a continuing number of engagements between the Commonwealth agencies and Rural Finance Corporation/Bendigo Bank representatives to discuss what is currently being executed in Victoria in partnership with the Victorian government and to explore areas to strengthen and improve the delivery of the government concessional lending and drought-and-disaster support. That continues to take place. Certainly we're always open to supporting a national approach and collaborating and partnering in whatever model is finalised going forward as of July next year.

As was outlined by Marnie, the balancing act is having some efficiency by coordination from a central, national point as opposed to the current delivery by the states and territories. It is the efficiency gained by having one system as opposed to multiple and balancing that out with an entity that is then further removed from the customer base that it is there to support and serve by having a national entity as opposed to those based in states and across the regions. That balance is yet to be worked out. We've still got a number of months to go before that is supposed to be up and running on 1 July, and we will certainly continue to share the experiences of Rural Finance Corporation with the relevant individuals and agencies to try to create a model that will serve and support all the farmers.

Ms Gartmann went on to say:

The offset accounts. They have traditionally not been available to agricultural businesses. But it is a common practice in residential lending. Legislative changes last year at a federal level were passed and that allowed the farm management deposit offset account to be created, which allows farmers to offset funds held in a farm management deposit account against eligible variable rate term lending, thereby reducing their farm lending costs. Rural Bank is the only bank in market offering that at the moment. But those sorts of legislative changes can demonstrate that it leads to positive business and funding changes for an industry, when done and supported by the private sector.

During a break, Ms Gartmann said that Bendigo Bank/Rural Finance was hoping to be able to tender for RIC work, which would be a front, but Bendigo Bank would continue to do the work. Ms Gartmann said they were in discussions with the department about a tender process.

Now that we know there have been discussions about outsourcing functions of the RIC, can the minister provide detail to the Senate about any other discussions? Is the minister aware that the department is having discussions with agencies that are currently delivering concessional loans? Has any work been undertaken regarding the cost these possible arrangements may incur? Will the RIC be regulated in a similar fashion to other financial banking institutions with regard to receivers, evaluators, lenders and who can provide advice to farm businesses seeking a loan?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Thank you, Senator Brown. I will do my very best to answer the myriad of questions that you asked in that one long question. As I said to you yesterday, I wasn't aware of the consultations, but overnight I took it upon myself to avail myself of information relating to the consultation process that has been undertaken to date, particularly in relation to the areas that you were talking about: outsourcing and rural financial counselling services.

I can advise you that, in the period from 9 July to 10 August this year, the department engaged with a number of representatives of the banking sector and current concessional loan delivery agencies to gain a greater understanding of the market as well as the risks and opportunities in the service delivery area. As part of this process, they also met with a number of agencies that relate to the delivery of these financial assets to the community. They included the ANZ, Rural Bank, Rural Finance, Rabobank, Efic, the Commonwealth Bank, the National Bank, the Australian Bankers' Association, the New South Wales Rural Assistance Authority, the Department of State Growth in Tasmania, the Queensland Rural and Industry Development Authority, the Department of Primary Industries and Regions in South Australia and the Department of Primary Industries and Regional Development in Western Australia.

In relation to the determination about the specifics of the operation, you asked about outsourcing and the opportunity for existing providers to be able to work as service providers and service delivery providers for the Regional Investment Corporation. Whilst some preliminary discussions have occurred around the broader issues of the delivery of the services of the RIC, the government believes it is appropriate that the details of that are a matter for the RIC board, once it is established, and so the detailed answers to the questions that you have asked are not available at this stage. However, I think it is reasonable to say that the RIC board will be given a level of scope to be able to make sure that they are delivering the services to the farming community of Australia in the most efficient and effective way. If they determine that that is using service providers that are currently in the marketplace, and I am sure they will, then that is obviously a matter of which they are able to avail themselves.

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

Thank you, Minister, and thank you also for coming in and clearing up your response to my question about outsourcing yesterday. In that response, are you saying that any outsourcing is a matter for the RIC board?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Yes, I am.

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

So it is solely a matter for the board. Can I ask then: why have these discussions, to which Ms Scartland in particular has referred been occurring, and why have they been undertaken by the department?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

At the moment, the department is doing a level of preparatory work so that when the board is appointed they have as much information available as possible on which to base their decisions. Of course, the board is entirely entitled to go and seek its own information, or additional information, so I suppose you could just refer to it as somewhat of an incoming brief—so that they have information before them. Obviously, anything that the board may choose to do has to be within the terms of the operating mandate.

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

Thank you. So—as I asked yesterday—we will possibly see, as Ms Scartland has indicated, that their wish would be that the RIC would be a front and that the Bendigo Bank—if they were successful in any tender—would be running the work of the RIC. She has indicated—just because you look confused, Minister—that they were hoping to be able to tender for RIC work and the RIC would be a front but the Bendigo Bank would continue to do to the work.

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

No, I'm not confused. First of all, referring to the RIC as a front, I think, is probably a very misleading way to be describing it. Certainly, the opportunity exists for service providers to be able to provide services to the RIC, like any other outsourcing of service delivery that were to occur within a statutory organisation.

However, as I stated before, the decisions about the operation, particularly about outsourcing and the operation and delivery of the assets of the RIC, are a matter for the incoming RIC board. So, apart from being able to say to you, Senator Brown, that the opportunity exists for outsourcing to occur, it would be entirely inappropriate for me to be giving direction to the RIC board about what they should or should not be outsourcing. Suffice to say, powers and opportunities exist for the RIC to do that under the terms of its operating mandate. I'm not sure I can give you any more information than that.

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

You just mentioned the operating mandate. Is that available?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

The operating mandate is currently being developed. It will be an instrument that will require tabling post the establishment of the organisation. Obviously, the passage of the bill needs to proceed for the finalisation of the mandate, and at that time it will be tabled.

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

On the issue of the operating mandate, we have grave concerns with this bill because of the power that it gives the minister without parliamentary oversight and, in fact, without cabinet oversight. You have just stated that the operating mandate is in preparation, but is it correct that that operating mandate isn't a disallowable instrument?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Yes, that is correct.

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

So, essentially, you are setting up the Regional Investment Corporation with an operating mandate that has got no parliamentary oversight. It is giving a huge amount of power to the minister to determine exactly what the responsibilities of the RIC will be and the parliament won't be able to actually have any input into that—is that correct?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Obviously, the operating mandate is the key vehicle where the government will set out its expectations for the corporation. Whilst the express exemption exists for directions from ministers to corporate Commonwealth entities, the bill provides that the operating mandate is a legislative instrument and must be tabled in the parliament. This gives the parliament a level of oversight. Given the nature and the significance of the potential directions, that is fair and reasonable. It is not proposed for it to be a disallowable instrument. We believe that this is appropriate as it deals with matters over which the executive should retain control. As I said to Senator Brown yesterday when we were discussing the structure of this proposed organisation, the set-up of the RIC is almost a direct replica of the way the Clean Energy Finance Corporation was set up and currently operates in this space. Quite clearly, the mandate of the CEFC is required to be tabled in the parliament, but it is not a disallowable instrument.

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

I'm not sure, Minister, whether you actually did answer my question about whether the RIC will be regulated in a similar fashion as other financial banking institutes with regard to receivers, evaluators and lenders, and who can provide advice to farm businesses seeking a loan.

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

First of all, the RIC is not a bank. The RIC doesn't take deposits, so the regulation of the RIC will be appropriate for its structure.

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

Can I ask the minister to give us some more information as to what she believes is appropriate?

We've been asked to pass this legislation—legislation that Labor, the opposition, believes does not have sufficient transparency or parliamentary oversight. So we're here in this committee stage to try to get some answers to allow some of that transparency, not only for the senators and the parliament but for those in the community who are very interested in this piece of legislation. So far we haven't really been able to get any answers to be able to alleviate any concerns that the opposition may have. So I ask the minister whether she can elaborate on her answer.

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Thank you, Senator Brown. I did go to this point to some degree yesterday when I was explaining that this entity is required to comply. With its governance and regulation arrangements in relation to the PGPA, it is required to meet those regulations. But, in relation to its lending capacity and the regulations around lending, because we're lending to the states, we obviously have to meet all the regulations that would be expected of loans, particularly things like debt mediation et cetera. They would have to comply with the regulations of the respective states in which the loans are occurring, as well. There is a series of statutory requirements and regulations that exist as they would exist with any other statutory organisation of a similar type. But, equally, the actions in terms of loans for drought and debt financing would be subject to the regulations as they exist in the states.

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

Minister, you stated that, with the operating mandate, you feel it is appropriate that it has executive oversight. Can you confirm whether it is compulsory for the operating mandate to be considered by cabinet or whether it is, potentially, just the minister who has complete say over what is in the operating mandate?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

The RIC has two ministers. It has the Minister for Agriculture and Water Resources and the Minister for Finance. So, obviously, both ministers would be required to sign off on the operating mandate. As to whether the matter goes to cabinet, it is a decision of government.

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

So it is not required to go to cabinet? Essentially, it just needs to be signed off by those two ministers. So it is concentrating the powers as to what is in the operating mandate in the hands of those two ministers?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Whilst the internal operations of government and the decisions of government aren't necessarily something to be discussed here, there is no legislative requirement for it to be signed off by cabinet—no.

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

You have indicated that the RIC will have to operate in accordance with state law in terms of their operations.

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

State regulations.

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

Do the states have to sign off on the operating mandate?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

No, Senator Brown, they don't.

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

In terms of other things that the minister has the power to determine, can I just clarify that it is also going to be up to the minister, and not any further than that, in terms of being able to change the classes of loans that the RIC would be issuing?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Correct in the sense that the ministers—not the minister; the ministers—are responsible for the directions in relation to that particular decision that you were referring to.

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

So you could actually have the RIC decide on a completely new class of loan and that would be purely on the ability of the ministers to decide that that was the case, without cabinet oversight or even parliamentary oversight?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

We're probably getting to a level of detail regarding the operation of cabinet. Obviously ministers have to operate within the conditions that are placed on them by the cabinet. However, in relation to the rolling out of a new type of loan or a new type of facility, obviously the states would have a say, because we can't roll out a facility in their state without their consent.

There are a number of checks and balances that occur through this process. Whilst you make it sound like the minister just makes a decision, there is a series of processes that are already in place around the governance, operation and accountability of the organisation through which this is being undertaken—the processes that currently exist in relation to the operation of ministers, their requirements and obligations under the cabinet process and through the relationship that the federal government has with state governments through existing arrangements and through the requirement of the government to comply with the regulations and requirements of the states in which these activities are occurring.

Cory Bernardi (SA, Australian Conservatives) Share this | Link to this | Hansard source

Minister, I raised in my speech in the second reading debate concerns raised by the Productivity Commission about the constitutionality of the government directly lending money to small enterprises like farmers. Have you had constitutional advice about the status of those concerns? If so, what was the result of that advice?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Senator Bernardi, I am advised that advice was taken in relation to the constitutionality and the authority of loans; however, that advice is not available.

Cory Bernardi (SA, Australian Conservatives) Share this | Link to this | Hansard source

So, in effect, Minister, we just take your word for it or the government's word for it. Is the government prepared to make that advice available, given that it is a significant doubt that has been raised, not just by me but also by a quasi-government body?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Senator Bernardi, as you would be aware, it is not usual practice for the government to release its legal advice. So, at this stage, the only answer I can give is that I am not aware that we are intending to release that advice.

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

Minister, going back to my previous question about the new classes of loans that you said that the states would have to be involved in, can you clarify the process of that state involvement and what that consultation process would be, please?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Currently we are required to work with the states. Under current arrangements, for any new class of loan that is required to be rolled out, a formal process of consultation with the states is required to occur. One of the underlying reasons for the establishment of this particular organisation and the purposing of it to roll out these loans and any new loans is so that we can have a more streamlined, effective and efficient way of getting the loans. Into the future, it would be through discussions between the ministers and the board, because the ministers are required to consult with the RIC board before any direction is given on, in this instance, a new class of loan. However, in the future, once that direction has been given, following that consultation with the board, the capacity to roll out those loans will not require a formal mechanism. However, obviously, we will continue to consult with the states about the delivery of any assistance to their jurisdictions.

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

Just clarifying: with the consultation with the states, you're saying that there's a formal process and then there's consultation with the board, but, after that, the ministers have the final power to determine that a new class of loan would be rolled out? Essentially, the power to make that determination rests entirely with the ministers?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

I'm not quite sure what the difference in your question is, but my advice is that there is no formal mechanism that requires us to consult with the states. However, I would say that I presided over the last ag minister's ministerial council and I've been at all ag minister ministerial councils since this particular organisation has been on the table as a proposed method by which to roll out future loans to the states. It has the overwhelming support of the states in its current proposed structure, so the states are quite happy with the way this is progressing. I'm not quite sure what you're actually asking outside of that.

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

I'm clarifying. There is no formal mechanism of consultation with the states, so, essentially, we have to trust the government that it's going to be doing it appropriately. There is the requirement, however, of the minister to consult with the board, but I just want to clarify that, at the end of the day, the power to decide that a new class of loan or a particular type of loan is going to be rolled out in a particular area rests solely with the ministers.

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Yes, it rests solely with the ministers, subject to the requirements of the ministers to consult with the board prior to giving the direction in relation to, in this instance, the issuing of a new class of loan.

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

Yes, and, again, that decision does not have any parliamentary oversight; it rests solely with the ministers. I've clarified that. Does the same process occur for water infrastructure loans and farm business loans?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Just to let you know, the process through which the water infrastructure loans are administered is a different process. As you might be aware, the process that currently exists, which would continue, requires the state governments to be the ones that actually put forward the proposals in the first place. So it's a completely different process. Obviously, once we've received the applications from the states and they go through a process of evaluation in exactly the same way as they currently go through a process of arm's-length, independent evaluation, the recommendation would go back to the RIC in terms of the funding. At that point, obviously, the RIC board would make the determination in relation to the allocation or otherwise of funding to a particular project. The projects start with the states, so the RIC does not get to preside over the decision-making of the project unless it's already come from the state government.

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

Just to clarify: that's for the water infrastructure loans. So the intention is that those water infrastructure loans will still come from the states, they'll go through the process, they'll go to the board and then the ministers have their final say. What's the process, however, for the farm business loans?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

In relation to the farm business loans, I am advised that they will be administered by the RIC under the conditions that are set out in the operating mandate.

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

If there was to be an entirely new class of farm business loans, the ministers would have the discretion to determine that there was an entirely new class of farm business loans and then the RIC would be able to roll out those loans?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

In effect, yes.

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

So, if there was a particular industry in a particular marginal seat that the ministers decided that they wanted to particularly support with a new class of farm business loans, it would be entirely at the power of the ministers to do that. There would not necessarily be cabinet oversight, let alone parliamentary oversight.

Cory Bernardi (SA, Australian Conservatives) Share this | Link to this | Hansard source

The committee is considering the Regional Investment Corporation Bill.

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Thank you very much for your assistance, Mr Temporary Chair Bernardi. Information on directions issued by ministers is required to be contained in the annual report, and the usual parliamentary scrutiny obviously applies to these or any new ones, with estimates being the obvious vehicle through which the Senate has the opportunity to scrutinise any decisions of this nature.

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

I want to go back to the water infrastructure loans. I understand from what you've advised that the responsible ministers can direct the RIC to enter into agreements with the states. Is that correct?

The TEMPORARY CHAIR: Have you concluded, Senator Brown?

Yes.

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

As I was explaining to Senator Rice, the initial application for assistance in relation to the water infrastructure fund must come from the states. It comes from the states, and the minister provides direction to the RIC in relation to the—

The TEMPORARY CHAIR: Minister?

Correct, and then the direction from the minister to the board, but bearing in mind it came from the state in the first place.

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

So exactly what Senator Rice has been saying is that this could create a situation, a real and serious situation, with the risk of political spending without the rigorous oversight or analysis. I understand you say they'll be tabled, but nothing that's going to be tabled, as I understand it, under this bill is disallowable?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

The usual government processes are required and will be enforceable on the operation of this instrumentality in the same way as they would be enforceable on any other instrumentality, particularly in relation to the water infrastructure loans. The role of the RIC is to, obviously, assess and provide the expert advice to the responsible ministers on the projects that are being considered. The final decision on the water infrastructure loans is ultimately made by the government and then, on direction from the ministers, the corporation will enter into the administrative approvals process that is required to enter into the agreements for the loans with the states and territories.

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

I just want to make sure that I understood you correctly. It will be a matter for the government: the government will ultimately be making the decision whether to grant a loan rather than the RIC?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Yes, in the sense that, ultimately, the final decision rests there, but there is a process that is defined that has to occur prior to that decision being made. Obviously that requires, first of all, that the project has come forward with the authority, consent and request of the state or territory in which the piece of infrastructure is to be constructed. The corporation then has to go through a rigorous process of assessment and make that recommendation. That process is obviously transparent, in the sense that we know what the process is. Then, after recommendation, the ministers have the final decision in relation to those loans. It's also worth noting, Senator Brown, that that is the current process. There will be a greater level of transparency and an arms-length operation in assessment of these loans under the new facility than there currently is.

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

Minister, in terms of the advice that the minister receives, is there anything in this bill, or anything attached to this bill, that requires the minister to actually take that advice? From past performance, Mr Joyce doesn't seem too partial to be taking advice that departs from his view of the world.

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Senator Brown, as I said, there is no greater level of capacity to be able to make decisions without due process under this organisation than there is under any other organisation. There is an established process under which these projects have to be assessed. I hark back to my point that the minister can only make a determination on a project that has been put forward by a state or territory government. So, within the operating mandate of the corporation and within the advice, there are a whole heap of things that the minister is required to do before making a determination in relation to a project. But you are quite right: this is a matter for government and cabinet, and the government has the ultimate power in this to make a determination in relation to a project that has been recommended.

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

Minister, you state that the government has the power, but, again, it is the two ministers who have the power. It doesn't even have to go through the rest of cabinet. It doesn't have parliamentary oversight. You also said that it's set out in the operating mandate, but the operating mandate can be changed by the two ministers without parliamentary oversight. These are our concerns about the governance of this project and resting far too much power in those ministers.

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Senator Rice, obviously, unfortunately, I can't ask you a question, but I wonder why we seem to think that the governance arrangements, the scrutiny, the oversight, the notification processes and everything that sits around the Clean Energy Finance Corporation are at an appropriate level to enable that operation to work—and consider the kind of money that's associated with the Clean Energy Finance Corporation—yet for some reason you have a concern that exactly the same operational requirements for this particular organisation are somewhat lacking. Obviously, as I said, I can't ask you a question, but I draw to the attention of the house that they are exactly the same operating requirements. The operating mandate of the CEFC is not a disallowable instrument. I just draw the parliament's attention to that.

Cory Bernardi (SA, Australian Conservatives) Share this | Link to this | Hansard source

For the benefit of the chamber, I advise the minister that she is fully welcome to ask a question of another senator. She is entitled to ask a question of another senator in this debate. It is not a one-way flow of traffic.

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

Thank you for that clarification, Mr Temporary Chair. Are there any projects currently in the pipeline that may come through the RIC in terms of the discussions that have been had with states and territories? Are there any projects that are at the early stages of being put forward?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

In relation to the water infrastructure facility, obviously, the projects that were approved under the last round are a matter of public knowledge, so you'd be well aware of those. In relation to the loan facilities and products, they are currently in discussion with the states. But, obviously, because the corporation has not yet been established, there have been no decisions in relation to that. I do know, though, from discussions with the states in relation to the transition between the existing situation and the new operation of the RIC, should it be passed, that there are already very detailed discussions in place about how you can seamlessly transition across so that the farmer—or anybody who is in need of the products currently available under the existing situation would be made available under the RIC—aren't inconvenienced in any way.

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

I would like to, again, clarify the questions around the operating mandate. You said that the states and territories do not have to sign off on an operating mandate, but are they being consulted? Also, which other stakeholders are being consulted in terms of the operating mandate?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

The states are being widely consulted on the products that will be made available as opposed to specifically being consulted on the operating mandate. But, obviously, part of that consultation and the feedback they'll get from that will form part of the basis of the decision the government makes on the operating mandate.

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

My question actually went to other stakeholders as well. I'm assuming from your answer that you are stating that the states and territories are being consulted on the operating mandate, because you just talked about products. Could you clarify that?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Maybe I wasn't clear. The government is consulting a wide range of stakeholders, including state governments, on the products as opposed to specifically consulting them on the operating mandate. The answer to the question specifically is that we are not explicitly consulting on the operating mandate; we are explicitly consulting about the products that will be offered.

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

We got there. That wasn't too hard! So you are not consulting with the states and territories, and, I assume, from your response that means that you are actually not consulting with stakeholders.

Cory Bernardi (SA, Australian Conservatives) Share this | Link to this | Hansard source

Senator Ruston, is there a point of order?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

There is a point of order in terms of the accuracy of the response.

The TEMPORARY CHAIR: That's, indeed, a debating point. You can resume your seat. I'm sure you can respond. Senator Brown, you have the call.

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

I want to clarify whether you're specifically consulting with other stakeholders on the operating mandate. There has been a lot of uncertainty about what will or won't be included in the operating mandate and there has been some disappointment, thus far, as to whether there will be consultation. We are finding it very difficult to even get an answer to that very simple question.

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

First of all, a point of clarification on the opening remarks at the start of that question by Senator Brown. You said that we were not consulting. I quite clearly said that we were consulting. I said we weren't consulting specifically on the operating mandate—just to be very clear about that. The bill sets out what can be included in the operating mandate: the objectives to pursue in administering farm loans and the national water infrastructure facility; the government's expectations in relation to the strategies and policies to be followed by the corporation; the eligibility criteria for those loans; and the management of funding in other matters. These will all be outlined in the operating mandate. As I said, it is currently in the process of development. It will not be finalised until after the passage of the bill. However, after the passage of the bill, it will be tabled in the parliament, but not as a disallowable instrument.

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

Minister, in terms of the ability for the ministers to have discretion: in this case you were wanting to ask me a question about why we are happy with the CEFC. My understanding is that the CEFC, in fact, has much stricter requirements on the types of investment included in the legislation for the CEFC. However, here we have the ability for the RIC to undertake entirely new classes of loans without parliamentary oversight. So I'd ask the question: why is it seen to be appropriate for those entirely new classes of loans to be able to be at the discretion of ministers in this instance, whereas under the CEFC legislation it was actually included? There were quite strict parameters on what types of investment it could make, and these were included in the CEFC legislation.

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Whilst there is a discretion for new product, these are still farm business loans, and the definition of 'farm business loan' is contained in the legislation. There is already a level of definition in the legislation, so I'm not quite sure why you would be suggesting that there isn't.

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

The definition of 'farm business loan' is extremely broad, and, going back to my previous point, the ministers, without parliamentary oversight—without even cabinet oversight—could decide to create a whole new type of farm business loan that is particularly suited to a particular farming type in an area of a marginal seat that happens to be beneficial for those ministers or for that particular party.

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Just to be very clear, a 'farm business loan' means:

… a loan made, or proposed to be made, to a farm business:

(a) engaged solely or mainly in producing commodities for constitutional trade or commerce; or

(b) for the purpose of encouraging or promoting constitutional trade or commerce; …

So it's quite clear that a farm business loan requires the entity for which the loan is being made available to be engaged solely or mainly in the production of commodities for constitutional trade or commerce. That's quite clearly the definition there. But, in regard to your point, the minister is still required to take the expert advice of the corporation in relation to the development of any new products. So there is a level of expert advice that is necessarily provided to the ministers prior to their making any decision.

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

Under section 12, the minister must seek the board's advice. That's what the legislation says. It doesn't say that the minister, for other reasons, could decide that he or she is going to override or modify or make a determination that isn't completely consistent with the board's advice. It is within the ability of the ministers to make that decision.

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Yes, Senator Rice, that's correct.

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

The bill talks about a class of loans, but the term 'class' is actually not defined in the bill. Can you define that for the chamber?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Senator Brown, the level of detail that you're suggesting needs to be included in the bill is probably something that would not normally be included. I'm talking about a class of licence of a loan. The classification of the loan and the eligibility to receive a loan is in the legislation. We're currently out consulting particularly and specifically about the eligibility criteria for those loans. That is one area of consultation that is a very high priority at the moment. We are consulting with not only the farming industry but also the banking sector and the states and territories to make sure that the eligibility criteria of the loan are fit for purpose and will result in the efficient and effective delivery of assistance to our farming community. I'm just wondering why you would think that would need to be included in the bill.

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

There is concern about this particular area because, as you have said, the minister cannot make directives with regard to particular loans under the farm loan program but they can make directions with regard to class of such loans. I don't think that it's unreasonable that you here are able to define for us what 'class' means in this bill. Essentially, with the minister being able to make directives with regard to particular loans, he's absolutely got the power to issue directives that concern arbitrarily tightening defined classes of loan. I don't think it's unreasonable for the chamber to be advised by government what 'class' means in this bill.

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Senator Brown, I suppose the class of loan is the normal definition of what a 'class' would mean. It's a type of loan.

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

I'm not sure that was entirely helpful, because we could see all types of loans being created by the minister in terms of his directions—construction loans? I think it's absolutely important that the government is able to define what it means and the parameters around what the term 'class' means in this bill.

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Obviously, as we've stated before, the loans must be farm business loans. The legislation requires us to meet the criteria of what a farm business loan is before eligibility kicks in. But, just as an example of a class of loan, the dairy recovery loan package would be considered a class of loan. There is debt recovery. That's what a class of loan would be, as defined, under this.

Cory Bernardi (SA, Australian Conservatives) Share this | Link to this | Hansard source

Minister, whilst I was in the chair I had a couple of additional questions to think about with respect to the constitutionality question which I asked you earlier. Are you able to advise who provided the constitutional advice to the government with respect to permissibility or to counter the concerns of the Productivity Commission? And on what date was that advice provided?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Senator Bernardi, I don't have the answer to your question. I'm not sure if one takes it on notice in a committee stage, but I will endeavour to find the answer in the next little while as to whether that information is available. And, if it is available, obviously, I will make it available to the chamber.

Cory Bernardi (SA, Australian Conservatives) Share this | Link to this | Hansard source

I thank the minister for her frankness. I hope you are able to obtain the information, given it is a government body—the Productivity Commission—that has raised concerns about the constitutionality of the approach that the government has taken with this bill. There is really no excuse for not having that information available, given you are responding to concerns that were raised by an organisation that is funded—you may want to turn to your left, Minister; I think someone is trying to assist. Further to that, whilst you gave an assurance that you had received constitutional advice, you were unprepared or unwilling to table that advice in accordance with regular government practice. Can you assure this chamber that the advice received on the date you don't know by the organisation that you don't know was, in fact, validating the approach that the government has taken in light of the Productivity Commission's concerns?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

I have been advised the Australian Government Solicitor was the body who provided the advice in response to the Productivity Commission's issues in relation to the constitutionality of the loans. My understanding is that the particular issue of constitutionality that was raised by the Productivity Commission actually related to the loans program that is currently being administered and not to the new loans and the operation of the RIC.

Cory Bernardi (SA, Australian Conservatives) Share this | Link to this | Hansard source

Yes, indeed, Minister. I am not surprised, because your new approach hadn't been presented when the Productivity Commission was talking about the constitutionality of the government directly funding loans to farms instead of via the states—if I am right, because I think it was some time in 2012 or thereabouts. I just want to make this clear. You have constitutional advice about concerns that you say are not applicable because, when they were raised, they were not relevant to this current thing. It is like torture; a spaghetti jumble—what happened and how and when it came about. I just want to make sure that the government is 100 per cent confident that what they are doing is compliant with the Constitution, even though I am getting mixed messages with respect to this.

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Perhaps as a point of clarification and so I can be absolutely clear that we are speaking of the same words: my understanding is that the comments from the Productivity Commission in relation to the constitutionality of the loans were related to the existing method by which loans are administered by the federal government. You were asking a question about the advice received by government in relation to the constitutionality of the current operation of the loans program. I responded by saying we had received advice from the Australian Government Solicitor in relation to that. In relation to the constitutionality, you asked me a question about whether we had advice about the constitutionality of the proposed new methods by which loans are administered should the RIC be passed.

Cory Bernardi (SA, Australian Conservatives) Share this | Link to this | Hansard source

If it were anyone else, I would suggest you were being tricky. I thought I was clear. I appreciate your willingness to assist here. I raised concerns, in my speech in the second reading debate, about the direct funding of loans to farmers by government. They were based on the report of the Productivity Commission in looking at alternative ways to deal with the issue. Now, yes, they might not be relevant directly to this bill, but this bill does, in effect, provide the Commonwealth with the facility to provide loans directly to farmers. I am concerned—I don't want to conflate the two issues—but it is about the constitutionality of the approach the government is taking. I am not trying to be tricky. I don't think you are trying to be tricky, but I just want a clear answer. You've had advice in respect of this bill from the Government Solicitor, which is what you mentioned before. I would like to know when advice was received that it is entirely within the constitutional purview of the government to proceed with this approach.

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Thank you, Senator Bernardi. I can assure you I'm not being tricky. The loan scheme was designed taking into account a large range of factors, including the Commonwealth's constitutional powers to do this. The legal advice that was taken throughout the process was obviously an iterative approach to receiving advice; it wasn't just one piece of advice received at one point in time. So yes, the government has received legal advice. It received legal advice throughout the whole process in relation to the loan scheme that is being currently designed and the decisions in relation to how that is going to work included the constitutional power for the Commonwealth to be able to undertake and deliver the loans under the proposed method.

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

Minister, going back to the farm loans and the classes of loans, I am just wanting more clarification about what potentially could constitute a class of loans. Do you envisage that a class of loans could be restricted geographically, for example, to a state? Could it be a class of loans to a particular agricultural industry in a particular state?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Possibly, Senator. The underlying reason for this particular package is the ability for governments to be much more responsive to the needs of our farming community. As you would be aware, having a keen interest in the farm sector, farming takes many and varied forms. In that case, we can have localised distress occur because a particular area is impacted by a localised or regionalised event or activity. Equally, a single industry can be impacted across the whole country, which means that there is a little bit of the industry through many jurisdictions. A classic example of that more recently has been the situation that occurred with the crisis in the dairy industry; probably no state felt it more keenly than the state which you represent as a senator. So the ability for the classes of loans to be immediately responsive and reactive to situations that we find our farming communities getting themselves into or being impacted by without much notice is important. So the answer to your question is yes. The loan classes are, in effect, designed so that they can be quickly responsive to situations to assist our farmers as quickly, effectively and efficiently as possible.

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

Can I also clarify, Minister, that for these particular classes of loans there isn't a hardship requirement as to what would make a particular agricultural industry eligible to receive these loans?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Senator Rice, obviously, the criteria of the particular loans will determine the eligibility criteria for access to these particular loans. As I said earlier to Senator Brown, there is quite an extensive consultation going on at the moment in terms of developing the criteria both in the operating mandate in the broader terms of eligibility, which is the consultation that is currently being undertaken, and also in relation to any direction that comes from the minister. Obviously, the criteria under which accessibility of the particular loan would be available would be determined. In terms of the operating mandate, it is an instrument to be tabled in the parliament.

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

But there's nothing in the legislation—which is where we as the parliament have the ability to say this is appropriate or not—that would constrain what could be in those classes of loans. So we could have a class of loan, for example, where suddenly there is money available to the wine industry in South Australia just before a South Australian election, or suddenly there is a class of loans available to the dairy industry in northern Tasmania just before a Tasmanian election or a federal election, or suddenly, just before a New South Wales election, there is a class of loans for plantation forestry in northern New South Wales, and there would be no parliamentary oversight over these types of loans. It is up to the operating mandate, which is not a disallowable instrument. It's up to the ministers to decide in their judgement, and just the ministers, not even going to the cabinet. It's going to be up them, with executive power to decide that there's suddenly government largesse that would be available to a particular industry in a particular state. This is why we have grave concerns about this legislation. It is setting up a slush fund to be able to be used by the government of the day.

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Senator Rice, I will have to agree to disagree with the intonation of your response. The eligibility criteria for loans and financial assistance are matters over which the executive arm of government currently has control, and it's the opinion and belief of government that it should retain control. The potential impact on the budget is quite considerable, and obviously the executive of government has a responsibility for budgetary control. Therefore, we absolutely believe that it's appropriate that this remains in the control of executive government.

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

That doesn't give me any satisfaction at all. We have just found through the High Court case on equal marriage that there is a $295 million line in the budget each year that we understood was for urgent and unforeseen circumstances but that the High Court has now found is basically there as a fund for whatever the government of the day wants to fund. So you have that ability to essentially hand out loans to suit the political purposes of the government without the parliamentary oversight that would be appropriate in such a scheme. We haven't got a problem with having loans schemes. There should be much stricter controls included in the legislation, not leaving so much power in the hands of the ministers.

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Senator Rice, can I say right now that there is no parliamentary oversight of the guidelines for loans under the current arrangements. What we're proposing here is a greater level of transparency and notification in relation to those guidelines. Obviously, the agriculture and finance ministers are required to agree to those guidelines.

I also have a point of clarification on a previous question—I am not sure if it came from you or Senator Brown. Existing loans require a hardship element, and the board will be required to comply with that existing requirement.

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

I want some further clarification. You've indicated that the government is not specifically consulting on the operating mandates with states and territories or stakeholders. Once the operating mandate is developed, will there be consultation at that point?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

As I mentioned earlier, the details which inform the development of the operating mandate are currently the subject of consultation. However, the operating mandate, once it is developed, will not be the subject of further consultation.

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

Minister, can you clarify your previous response to me about the hardship requirements? Can you go through that again and tell me what the requirements are going to be?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Thank you, Senator Rice. The existing loans require a hardship element, and the board will be required to operate under the mandate. My understanding is that that will continue to be required as part of the criteria.

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

As part of what criteria? As set out in the operating mandate?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Correct.

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

But the operating mandate is not a disallowable instrument. So what you're saying is that there is the intention in the operating mandate to include that hardship requirement, but we won't have any ability to make sure that that's the case and it could be changed at the minister's discretion.

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Senator Rice, at the risk of repeating myself for the 14th time, the current situation, which everyone seems to be quite satisfied with, allows the executive of government to undertake and make these decisions in relation to this particular suite of products that are in the marketplace. These products have a very specific role to play, and that is to assist our farming community when situations of hardship affect them—most often not of their own making.

Currently, we have a suite of products. Definitely, after the consultation and discussions that I have had in my role as the assistant minister, and also through my role as someone who's lived in rural and regional Australia for many years, the ability for responsiveness in these loans is something that's been criticised for some time. We have a situation right now where we are providing this assistance to communities across the whole of rural and regional Australia. We're seeking to do so by a mechanism that is now going to enable it to be more streamlined and more responsive, and which is actually going to provide a better service to those people who are affected.

To have a situation as you're proposing, where we have some sort of extraordinarily high level of parliamentary power to be able to come in and make decisions in relation to stuff—decisions that have in the past always been made by the executive arm of government, for the reasons that I stated previously—is, first of all, an extraordinary precedent to set. But think about the farmers who wish to be able to get access—very often with some level of speed. You're suggesting here that it's appropriate for us to have this extraordinarily increased level of intervention by this very parliament. That is something that is quite unprecedented in the level of intervention that you are proposing by suggesting that every single thing has to come here to somehow get ticked off by you.

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

It's not a situation where every single thing has to be ticked off by us. It's just making things like the operating mandate a disallowable instrument so that there is parliamentary oversight on the classes of loans. Just like in the Clean Energy Finance Corporation Act, it will specify in the legislation what the types of loans can be. It is having that high level of parliamentary oversight, as is reflected in the proposed amendments by the Labor Party, which the Greens will be supporting.

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Senator Rice, the operating mandate of the CFC is not a disallowable instrument.

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

I just want to go back to Senator Bernardi's point about the constitutionality and the powers that have been drawn on, because I am concerned about the risks associated with this. I just want to read from the Bills Digest, where it indicates:

Setting aside the reference to the Desertification Convention, the suite of constitutional powers drawn on for the Bill is the same as that which the Department of Agriculture and Water Resources previously advised the ANAO would not provide broad support for a Commonwealth program of direct assistance to farming businesses through the provision of concessional loans.

I would like to know, Minister, whether the government has assessed any risks in terms of the advice that has been provided.

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Senator Brown, as I responded to Senator Bernardi, throughout the whole process, obviously we sought legal advice in relation to the risk associated with this proposal. So I can assure you that the government has ensured that risk is mitigated in all the circumstances. Throughout the process, yes, we have had advice to that effect.

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

My next questions are, again, about the powers of the minister, and in particular the power of the minister to direct the board as to where the corporation is to be located. This level of detail is in the legislation, but the level of detail as to what the money will be able to be directed to is out of the legislation. Why is it considered appropriate to have that level of detail in the legislation where the minister can say to the board, 'This is where your corporation is going to be located,' and yet requirements such as a hardship provision or the fact that you won't be able to target particular regional areas without a hardship provision aren't included in the legislation?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Senator Rice, the reason that the location of the RIC was included in the legislation was to provide a level of immediate certainty to the board so that they could hit the ground running.

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

by leave—I move opposition amendments (1), (3), (4) and (6) on sheet 8225 together:

(1) Clause 11, page 10 (lines 6 to 9), omit the note, substitute:

Note: Part 4 of Chapter 3 (sunsetting) of the Legislation Act 2003 does not apply to the directions (see regulations made for the purposes of paragraph 54(2) (b) of that Act).

[Ministerial directions]

(3) Clause 11, page 10 (after line 31), at the end of the clause, add:

  (4) Section 42 (Disallowance of legislative instruments) of the Legislation Act 2003 applies to a direction made by the responsible Ministers under subsection (1).

Rules

  (5) The rules must prescribe, in relation to loans or financial assistance to be provided by the Corporation, the eligibility criteria for those loans or that assistance.

[Ministerial directions/rules]

(4) Clause 12, page 11 (after line 15), after subclause (3), insert:

  (3A) For the purposes of subsection (3), any terms and conditions to be included in an agreement must be in accordance with the rules.

[ rules]

(6) Clause 12, page 11 (after line 21), at the end of the clause, add:

Ministerial directions—water infrastructure projects

  (6) A direction made by the responsible Ministers under subsection (3) is a notifiable instrument.

  (7) Section 38 (Tabling of legislation instruments) of the Legislation Act 2003 applies to the direction as if the direction were a legislative instrument.

  (8) The Minister must cause a copy of the direction to be published on the internet within 30 days after it is issued by the Minister.

Agreements—water infrastructure projects

  (9) The Corporation must give the Agriculture Minister a copy of an agreement entered into under subsection (3).

  (10) The Minister must cause a copy of the agreement to be tabled in each House of Parliament within 15 sitting days of that House after its receipt by the Minister.

  (11) The Minister must cause a copy of the agreement to be published on the internet within 30 days after its receipt by the Minister.

Rules

  (12) The rules must prescribe, in relation to agreements to be entered into under subsection (3):

(a) the terms and conditions, or the kinds of terms and conditions, that may be included in an agreement; and

(b) the matters the Corporation must consider in specifying terms and conditions to be included in an agreement.

[Ministerial directions/rules]

These amendments seek to strengthen the current bill. The Scrutiny of Bills Committee report found that the current bill lacked the appropriate high-level guidance as to the types of terms and conditions that states and territories will be required to comply with in order to receive payment of financial assistance for water infrastructure projects. Throughout the committee stage thus far, I haven't received any comfort from the minister's responses to the questions that have been asked. Regarding the water and infrastructure projects, this includes a legislative requirement that any directions made by the responsible ministers under subclause 12(3) and any agreements with the states and territories about these grants of financial assistance are tabled in the parliament within 15 sitting days after being made and published on the internet within 30 days after being made.

The scrutiny committee also expressed concerns about the bill exemption from disallowance and sunsetting. Minister Ruston has claimed that the normal parliamentary oversight and scrutiny will exist with regard to the corporation. However, while the bill provides for the operating mandate to be treated as a legislative instrument and will require it to be tabled, it will not be subject to disallowance and sunsetting.

The minister has sought to reassure the Senate chamber that any directions the corporation receives from the responsible ministers will be published in its annual reports. The government is claiming that this requirement will ensure that there will be appropriate transparency of ministerial directions to the corporation. Non-disallowable instruments do not allow for the proper oversight and parliamentary scrutiny of ministerial directions. Labor's amendments seek to strengthen the proper oversight and parliamentary scrutiny for directions made by the minister.

Minister Ruston also questioned whether Labor had concerns about entities similar to the RIC. This would be a fair question if those entities were indeed established under the exact same legislation that the RIC is to be established under.

We know that there are aspects of this bill that are unique in nature, and this is most likely due to the fact that Minister Joyce is the architect of the bill. It is lacking in detail, and we have seen a number of amendments put forward in an attempt to strengthen the bill. Labor urges all senators to support Labor's amendments to ensure that there is proper parliamentary oversight and scrutiny of the corporation.

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

The government will not be supporting the Labor Party's amendments (1), (3), (4) and (6). The reasons for this have been largely canvassed in the previous discussions prior to the moving of these amendments. In effect, the government believe that the operating mandate should not be a disallowable instrument, as it deals with matters over which the executive arm of government should retain control. We believe that the approach in the bill gives the parliament the right level of oversight of the operating mandate, given the nature and significance of that direction to the entity. Firstly, the bill requires and provides for the mandate to be a legislative instrument, which requires it to be tabled. The approach has been taken despite the express exemption that exists for directions of ministers to corporate Commonwealth entities. We have required that to be included. We believe the government is being open and transparent and, in this instance, going beyond the minimum requirements. As I said before, this approach is not unusual, and I have cited the CEFC as an instrumentality in which the operating mandate is not a disallowable instrument.

In relation to amendment (3)—that the terms and conditions of water agreements be prescribed in rules and be disallowable—we believe it is inappropriate, as these, once again, are matters over which the government should have control. We believe it would also reduce the Commonwealth's flexibility when negotiating with the states and territories and could be confusing for the corporation in terms of compliance. We believe the parliament has the appropriate level of visibility of these grants for financial assistance and for water infrastructure projects, and this will be achieved through the tabling of the operating mandate and the contents thereof, as well as through the reporting requirements for corporate Commonwealth entities under the Public Governance, Performance and Accountability Act 2013.

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

The Greens will be supporting these opposition amendments, which attempt to give the required parliamentary oversight that is essential and currently not included in this legislation. This legislation gives far too much power to, and concentrates that power in the hands of, the ministers. The minister talked about using the example of the Clean Energy Finance Corporation legislation. If you read the CEFC legislation, it sets out explicitly—there is clause after clause after clause—the restrictions on what money can be lent and what types of infrastructure are eligible for funding under the CEFC and what is not. That level of detail is completely lacking in this legislation.

So the Labor amendments, if passed, would give that extra level of parliamentary oversight that is necessary. Alternatively, I think you'd have to go back to the drawing board and set out in much greater detail what it's appropriate for these levels of loans to be spent on. The fact that there is nothing regarding hardship requirements included in the legislation and that there is no definition of what a class of farm business loans is means it is open slather for the ministers to be able to make decisions on their own. The powers for them to direct the board are really setting up a very undemocratic and unaccountable institution. These Labor amendments, which we are supportive of, go some way to having a level of parliamentary oversight that is absolutely required.

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

As I've said previously, we believe that the level of control, governance and oversight that is contained in the proposal that is before us is appropriate for the actions and the operations of the instrumentality. We believe there are roles for executive government, there are roles for this parliament and obviously there are roles that will be delegated to the board of the organisation. I particularly reiterate that this entity is required to have the reporting obligations of the corporation exist under the Public Governance, Performance and Accountability Act. These obligations require that a corporate plan be prepared and published on the corporation's website. The corporation must also prepare annual reports to be tabled in parliament by the responsible ministers. The corporation's annual reports must include a statement of performance which sets out the results, measurements and assessment identified in the entity's corporate plan, and the annual reports also need to detail any directions issued by the responsible ministers.

So I would just reiterate that there are a number of existing requirements that are set out by normal government procedure that will apply to this organisation, not the least of which is the PGPA Act. Also, as we've mentioned before, the Senate has appropriate levels of scrutiny in relation to the Senate estimates process, through which you have the capacity to prosecute any of the issues that you are raising.

The CHAIR: The question is that the amendments as moved by Senator Brown on sheet 8225, being amendments (1), (3), (4) and (6), be agreed to.

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

I move opposition amendment (2) on sheet 8225:

(2) Clause 11, page 10 (line 21), paragraph 11(2) (c) to be opposed.

This amendment will remove the ministers' influence on directing the corporation about the eligibility criteria for loans and financial assistance. The independence of the corporation is critical when establishing the eligibility criteria for loans or financial assistance. The lack of detail about what loans and financial assistance will be provided by the corporation is concerning when we know that the current concessional loans take into consideration the viability of the farm enterprise. To ensure that the corporation is able to manage its lending criteria, the responsible ministers should not be able to give directions about eligibility criteria for loans or financial assistance.

Labor strongly urges senators to support the amendment to strengthen the independence of the corporation. Once again, I make reference to Minister Ruston, who compared the RIC to the Clean Energy Finance Corporation. These two corporations are different in their objectives, and the Clean Energy Finance Corporation is independent in its own right, as opposed to the RIC, which is beholden to the ministers of the day.

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

In relation to the proposed amendment (2) from the Labor Party, which would have the eligibility criteria for loans or financial assistance prescribed in rules which are disallowable instruments, the government believes this is an inappropriate mechanism through which to provide for the eligibility criteria for loans. We believe they are matters over which the executive arm of government should retain control as they have the potential to impact on the Commonwealth budget. We, therefore, believe it's appropriate that they are provided for in the bill as directions to the entity rather than as rules. We also believe that it's appropriate that they are not disallowable.

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

The Greens will be supporting the Labor amendments as we have discussed in the previous debate. It is essential that there be more in the legislation that explicitly outlines what can and can't be lent to and does not leave it to the discretion of the minister, who can then direct the board.

The CHAIR: The question is that paragraph 11(2)(c) stand as printed.

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

I now move opposition amendment (5):

(5) Clause 12, page 11 (lines 20 and 21), omit "responsible Ministers may give a written direction to the Corporation about", substitute "rules must provide for".

This amendment removes the minister's being able to direct where the corporation must be located. Instead, the rules must provide for where the corporation is to be located.

Minister Ruston earlier referenced the Clean Energy Finance Corporation and made an implication that there is no difference between how that corporation was established and how the RIC is established. Minister Ruston should familiarise herself with the Clean Energy Finance Corporation Act. It certainly does not have a clause whereby the responsible minister can direct where the corporation is to be located.

To ensure the proper, efficient and effective performance of the corporation, the board should be allowed to make decisions as to where best the corporation will function. Minister Ruston has provided no detailed information about what process was undertaken to determine that Orange is the best location for the corporation and whether any other regional centre was considered before Orange was selected. Concerns have been raised by stakeholders that the location of the RIC has been unilaterally decided without any apparent economic analysis or even a discussion with the agricultural industry stakeholders, and this in turn has highlighted another dimension of the non-commercial nature of the corporation.

The location of the corporation should not be decided by the minister of the day. The location should be decided on the grounds of where it can best do its job, and this decision should be made by the board of the RIC.

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Firstly, can I just put on the record that I'm not entirely sure that I ever said that the CEFC was told where it was to be located.

The Australian government, as I have said time and time again, has a very strong commitment to rural and regional Australia. Our decentralisation policy will certainly be supported by the corporation being located in Orange, New South Wales. Orange is an extraordinarily important agricultural hub, and we believe that this is an appropriate place for the RIC to be located. Meetings have been held with a number of entities, which I have previously put on the public record as part of this debate, which were consulted about the operational arrangements of the organisation, so there certainly has been consultation.

In essence, this is absolutely consistent with our current policy. It's in line with the exemptions under the Legislation (Exemptions and Other Matters) Regulation that a direction is not a legislative instrument and therefore is not disallowable. This approach also provides certainty to the board about where the corporation will be located and will allow it to have focus on having the corporation fully operational by July 2018.

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

The Greens will be supporting this amendment from Labor. The fact that the board is being directed to establish its headquarters in Orange underlines the whole rationale behind so much of this legislation. It is giving power without any assessment process, without any objective process. It gives the minister the power to direct the board, quite inappropriately.

Orange may well be the best place for the headquarters of such a corporation, but we don't know. There is no process that's been undertaken to determine that, just like with the APVMA, the Australian Pesticides and Veterinary Medicines Authority. Suddenly Minister Joyce plucked Armidale out of the air and said, 'It's going to be there,' with no justification. We saw in the cost-benefit analysis that was done that in fact there was a negative benefit in establishing the headquarters of the APVMA in Armidale.

Here we've got a similar situation. It is blatant pork-barrelling. That's all it is. Without parliamentary oversight and without any process, we have a situation of putting far too much power in the hands of the executive. This might be the way the government wants to do business, but it is not good governance. It is not good, transparent, accountable, evidence-based legislation and governing. Supporting this amendment, at least, is one tiny thing that would improve this legislation. The fact that the government is opposing this amendment bells the cat. It shows so much of what the purpose of this legislation is based on.

Cory Bernardi (SA, Australian Conservatives) Share this | Link to this | Hansard source

Surprisingly, I find myself in agreement with Senator Rice. I ask the minister: are you able to confirm that the electorates and regional centres that were talked about are where the National Party is under extreme political threat by the Shooters, Fishers and Farmers Party?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Senator Bernardi, what I can confirm for you today is that Orange is a thriving regional community. It is the hub of much of the agricultural bureaucratic infrastructure for the New South Wales agriculture department. Having the Regional Investment Corporation located in Orange has certainly received wide support from the community. As I responded to Senator Brown, Orange is a regional community and this government supports the development and growth of our regional economies.

Cory Bernardi (SA, Australian Conservatives) Share this | Link to this | Hansard source

I can confirm for you—just in case you were in any doubt—that it is the heart of the Shooters, Fishers and Farmers Party and their supporters, which, of course, is playing into the concerns of the National Party. In this debate in this place, I was reminded very much of an event that happened under a former minister, Ros Kelly, with regard to the awarding of grants, where they were mapped out, effectively, on a whiteboard. Are you able to confirm that a whiteboard and a similar process will be used to determine where these grants should be given in the event of propping up marginal seats?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Senator Bernardi, at the risk of suggesting you're being tricky, I can assure you that all the appropriate processes that are afforded to a government instrumentality will apply to the Regional Investment Corporation and that the appropriate levels of governance, accountability, transparency and notification will occur in line with such acts as the PGPA Act and all of the requirements that will be issued as part of the operating mandate of this organisation.

Cory Bernardi (SA, Australian Conservatives) Share this | Link to this | Hansard source

Thank you, Minister. I'm heartened by your reassurance that all the appropriate probity and accountability of government will be brought to bear in many of these grants. But what you've said flies in stark contrast to what Senator Rice has been saying—which has resonated with me, quite frankly—which is that there is no real, formal approval process. The board can make some suggestions which the minister can ignore and establish new classes of grants and dispense them wherever they like. For example, they could, in the interests of equality, not only give them to Armidale and Orange but they might slot it into Renmark for no particular reason—maybe to support the good work of a senator down there, or something like that. It doesn't seem as if there is any rationale or criteria attached to where these grants can go apart from the whims of the minister at the time.

Now, we may have confidence in the minister—some may not, currently—but no-one knows who is going to be the minister next. To place such discretion in the hands of any one individual without the checks and balances that accrue from the parliament—and I do note that the government has voted against the disallowance of these grants, these potential boondoggles, these potential whiteboard/sports rorts, to coin a term; these could be ag rorts in a future life. These are normal checks and balances that accompany the responsibilities and roles of government.

Further, how does something like this get through the cabinet without these checks and balances? I know you are not in cabinet, Minister. I think you've been given a hospital pass here in some respects, and I'm sorry for that, but, in effect, this doesn't seem even to have gone through the normal cursory examinations and consultation attached to cabinet probity. It just seems as if it's been cooked up on the whim of one or two individuals in order to give them some discretion to prop up political threats, and that really concerns me. I don't think it's the right approach. It overturns the principles of federation. As I said, it overturns some of the concerns raised on the constitutionality by the Productivity Commission. It overturns the expectation of appropriate consultation and examination by the parliament and the ability to say, 'This is absolutely wrong.' It has all the hallmarks of a scheme that is going to be rorted. It may be well intended, but these are serious concerns. Minister, whilst you have assured us of these probities, I still haven't heard an effective response to Senator Rice's concerns that, in effect, this is just a bag of money that is at ministerial discretion to throw out wherever they like.

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

There are a number of points that I'll try and clarify from the comments that you have just made. First of all, to put this on the record: Orange has a series of quite unique characteristics that make it a particularly ideal location in terms of creating a critical mass of infrastructure in relation to agriculture in a regional community. I'm assuming you are not suggesting for a minute that we shouldn't be decentralising and giving support to the regional communities around Australia, including the one in which I live. But, at the moment, Paraway Pastoral, the New South Wales RIA, the New South Wales DPI and NAB Business Banking all have their headquarters in Orange. The creation of a regional centre of excellence in Orange is something that the government believes is a very worthy and worthwhile application of its activities.

There were a number of reasons why Orange was identified as being an entirely suitable location for the RIC to go to. It's also worth pointing out that all the way through here we have interspersed the word 'loans' with the word 'grants'. I'd like to put on the record and make sure it is very clear that we are referring to loans and not grants.

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

I would just like to follow on from Senator Bernardi's contribution because the minister in her response made it no clearer to the chamber what the process was that was undertaken to determine Orange as the location for the RIC. There was no indication of whether there were any other locations—and there are many locations around Australia that have vibrant farming communities. Unless the minister can tell us now what the process was and what, if any, other locations were considered, the only thing that we in this chamber can safely assume is that this is about pork-barrelling by Mr Joyce and a political fix for the National Party. That is the only conclusion that we can come to, because the minister has failed to tell this chamber exactly what the process was.

We've seen this all before under Mr Joyce. We saw it with the siting of the APVMA in Armidale, and that has not gone well. We've seen expert people leave that organisation. We have seen the backlog of work that hasn't been able to be undertaken because of the concern and uncertainty that Mr Joyce has caused. So it is vital in this committee stage that the minister tells this chamber quite clearly what process was undertaken to select Orange as the location for the commission.

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

There are two things here. One is that I think we need to be very careful that you don't make a quantum leap of faith to suggest that the decision of the government to pursue its decentralisation targets and policy to move a number of agencies out of capital cities and into regional communities, where they're closer to the people that they represent, has been the cause of what has been a long-term systemic underperformance of the APVMA. I think we just need to be very careful that you don't accuse something of being the cause of something that it actually wasn't.

However, I don't know how many times I have to reiterate every single indicator as to why Orange would be a very suitable place for the location of this important agricultural institution. Yesterday afternoon, I think, I made the point that it is a decision of government. The government has exercised its right in making that decision, but in doing so it has provided, ad nauseam, a number of different reasons why it believes Orange is an extraordinarily suitable place for this organisation. As a rural and regional member of this parliament, I can assure you that I could go and speak to every one of my colleagues and they would all have somewhere in their electorates where they would like to have a government agency located. However, in doing so, everybody still has to demonstrate that it is a suitable place and an appropriate place and that there are strong reasons for the location of any government instrumentality in any area, rural or metropolitan. Quite clearly, Orange has a whole heap of factors and a whole heap of attributes that are attractive for the location of this instrumentality. I can go through them all again with you, but, in the interests of time, I will allow you to re-read Hansard to be informed of them.

Cory Bernardi (SA, Australian Conservatives) Share this | Link to this | Hansard source

Thank you, Minister. I find this very interesting and very enlightening because, essentially, you've said that there are a number of criteria from which the government has chosen this location, and you've put that on the record. Surely, Orange was not the only candidate. So my question, which builds upon Senator Brown's question, is: how many local council areas were approached about their interest in having the RIC housed within their regions? How many different centres were considered in the shortlist by government? On what criteria, specifically, that weren't demonstrable in other candidates was Orange chosen as the final location?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

There were no other locations in Australia where currently a state department of agriculture and primary industries is located in a regional area. In the case of New South Wales, the New South Wales Department of Primary Industries and the New South Wales Rural Assistance Authority are located already in Orange. The existence of infrastructure in the area makes Orange quite unique.

I can run through all the other reasons why Orange is particularly unique for this particular instrumentality, such as its proximity to both Canberra and Sydney, making it very easy to access, and the existence of a broad range of other organisations that are already there to create a centre of excellence and critical mass in the area. And, as you would know, from your previous experience of belonging to the same party that I do, we quite clearly as a government are trying to establish centres of excellence in our regional areas, so that we can create the economic activity that drives our regional economies because, at the risk of sounding parochially regional, it is our regional communities that drive the economy of this country.

Cory Bernardi (SA, Australian Conservatives) Share this | Link to this | Hansard source

Minister, I appreciate the answer, but, in the absence of further information, are you confirming that no council areas were approached about their willingness to have or provide for or welcome the RIC? If that's incorrect, and some were approached, and other areas were considered, how many were considered in that shortlist and approached? Is the government willing to detail which ones, exactly, were?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

At the time of the announcement of the intention of the government to establish the Regional Investment Corporation, Minister Joyce put on the public record that there were a number of other locations that were considered, those being—though not exclusively—Albury Wodonga, Bathurst, Bendigo, Lithgow, Toowoomba and Wagga Wagga; they were also considered as locations for the RIC. However, Orange, on assessment, met a greater number of the criteria to establish a centre of excellence for agriculture for this particular organisation.

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

So, Minister, what you have just shown in that last answer is that there were some other possible locations and that there was an assessment process. Can you outline what that assessment process was, please?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Senator Rice, I advised you that other locations were considered, and the assessment process that was undertaken was obviously a process of the department in making recommendations. It was a matter for the government, and obviously Minister Joyce settled on the recommendation of Orange as being an eminently suitable location for the RIC.

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

Can I get some more clarification. So there was an assessment process, but it wasn't a process that the department undertook?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Senator Rice, as I've said before, it was a decision of government. I've just outlined that there were a number of other locations that were considered; however, the government made the decision that Orange was the most suitable location.

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

So it was a political decision? It wasn't an objective process that the department undertook that ended up going through some criteria and saying, 'Yes, after considering all of these criteria—on objective, transparent criteria—Orange came out on top.' It was a political decision made by the minister to establish this corporation in Orange because it suited his political purposes, because it is where the shooters and fishers are threatening to hold the seat which the Nationals lost to the shooters and fishers. It is pure, blatant pork-barrelling. You have not outlined that there was any process at all that was objective, that was transparent or that came through the department. It was a political decision by Minister Joyce, who has got form in making these types of political decisions.

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

At the risk of repeating myself, I've given you a series of criteria, and the attributes of the city of Orange as to which it was considered to be the most suitable. Those criteria obviously have been considered by government as meeting the objectives and the requirements of the location of this organisation better than a number of other locations that were considered, as I've pointed out, not exclusively but including the locations that I read out in response to the question that I received from Senator Bernardi. I can go through all of the reasons why Orange was considered to be the preferred location and why it was chosen as the location for the Regional Investment Corporation. However, as I say, in the interests of time, I won't waste the chamber's time.

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

You are still saying an assessment process was done. It wasn't done by the department; it was done by the government. Can I confirm how Minister Joyce's assessment, his office's assessment, was done by the government. Is it available? Can you outline how each of the other locations that were on the shortlist, such as Bathurst and Albury-Wodonga, compared with Orange. What was the assessment process that was undertaken? Can details of that assessment process be tabled so that there is some transparency and so that we can see, on the basis of these criteria, that Orange came out on top, because unless you can do that everything points to this just being a pure and simple pork-barrelling slush fund exercise of getting a government department in Orange to suit the National Party in these circumstances.

Cory Bernardi (SA, Australian Conservatives) Share this | Link to this | Hansard source

I, too, am interested in why the minister didn't consider Toowoomba, Albury-Wodonga and a whole range of other centres that were considered not as good as Orange.

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

I suppose the one underlying factor that differentiates Orange from the other places that were identified in the list I just gave is that the New South Wales department of agriculture is already located in Orange, and, given the other departments and institutions that are located in Orange, it was considered that there was already a significant hub of existing activity that the RIC would be able to support in creating the centre of excellence in Orange.

It is probably also worth pointing out that a number of the other locations that were considered have had agencies of the Department of Agriculture and Water Resources relocated there as part of the government's overall decentralisation program, including the Rural Industries Research and Development Corporation, the Fisheries Research and Development Corporation and the Grains Research and Development Corporation. There have been a number of agencies that have been moved to some of the other locations that were highlighted by Minister Joyce in announcing this particular proposal, so our overall policy of decentralisation is supporting a number of regional communities.

Sam Dastyari (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I want to follow on from those questions, and, while I tried to follow this as closely as I could yesterday, my apologies if I am covering ground that has been covered; let me know and I will refer back to the Hansard. You mentioned a moment ago that there were certain other areas that had been considered. Were they approached? Did they know they were being considered? I don't understand why the decision was made. I accept that it's within the government's power to make this decision, but why wasn't there any kind of open tender process? You're saying that you had set criteria against which you came to the decision you did, but why not let those communities and those areas put forward their own pitches for this kind of proposal? I am wondering why that was not how the decision was made.

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

At the risk of continuing to repeat myself, the Deputy Prime Minister has, on a number of occasions, said that he stands by the government's decision, which in this case was his decision, in relation to the location of the Regional Investment Corporation in Orange.

Sam Dastyari (NSW, Australian Labor Party) Share this | Link to this | Hansard source

That wasn't the question.

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Let me finish. As I just said, it is a decision of government. The government has made that decision in the interests of being able to ensure that this organisation is able to get up and running as quickly as possible. The reality is that it is a decision of government. The government has made that decision. I have tried to provide you with as much information as I have available to me as to why this particular location was determined to be the most suitable regional location for the Regional Investment Corporation, and I really don't have a great deal more that I can add in response to your question.

Sam Dastyari (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I assume that with Senate estimates next week there will be a chance to go through this in a bit more detail. How does the coordination with the state government work on a matter like this? Was there coordination with the state government? Were there discussions with the state government? One of the reasons you gave for Orange being the location that was chosen was that the government felt that Orange was superior to the other locations. The key reason you gave was that the state department of agriculture is already based there. How did the coordination work? Were they contacted and was there discussion with them before the announcement was made?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

I can't be explicit as to the timing of the discussions that would have occurred. Obviously, there could well have been discussions between the state minister and the federal minister about the suitability of the location and the relevance of the New South Wales government agencies that already exist and are established in Orange. But I can say that, as part of the stakeholder engagement program, there was formal consultation with the Department of Primary Industries; the NSW Rural Assistance Authority; Regional Development Australia, particularly the central west arm of that; Paraway Pastoral Company; the Rural Financial Counselling Service of New South Wales; the Orange City Council; Orange business chamber; and New South Wales Farmers.

Sam Dastyari (NSW, Australian Labor Party) Share this | Link to this | Hansard source

It appears you're reading from a document which you've prepared, which is understandable, because it's fairly detailed, and you are representing the minister. Is that a document that is publicly available or is that consultation process something that can be tabled?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Senator, they are just my notes, which I wrote down, because we were dealing with a number of organisations—in this instance six particular organisations were consulted. These are just my working notes.

Sam Dastyari (NSW, Australian Labor Party) Share this | Link to this | Hansard source

There are some people from the minister's office beside you who may have more detailed information. There must be a timeline of when the consultations took place in the process of coming to this decision. Is that information available?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

I can certainly advise that there was a formal consultation that occurred with the particular agencies that I just outlined in Orange on 6 and 7 June this year.

Sam Dastyari (NSW, Australian Labor Party) Share this | Link to this | Hansard source

On 6 and 7 June. What was the date of the announcement?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

The initial announcement was made on 16 May 2017.

Sam Dastyari (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I know I'm a migrant and English is my second language and all of those things, but I would be correct in saying that, from a very, very quick kind of analysis, the announcement was made three weeks prior to the consultation process. That is obviously a matter of fact. The decision was made on 16 May and consultation was 6 and 7 June. What exactly were they consulting about if the decision had already been made?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

We have been through this before. One of the key questions was around the criteria, particularly in relation to the loans facilities that are to be offered by this organisation, should this bill pass this place today. A lot of the consultation around the June and July period of this year—with myriad stakeholders, not just the ones that I have just discussed, who were particularly pertinent to the city of Orange—was about the criteria for those loans. It was also following the decision of government that we would be locating the RIC in Orange, should it be established. The consultation in Orange was particularly in relation to the operational arrangements and the program settings around the operation of the RIC.

Sam Dastyari (NSW, Australian Labor Party) Share this | Link to this | Hansard source

If the decision was made on 16 May, do you have with you the date when the first announcement was made that this agency was going to be moved or developed in a regional area? When was the initial announcement made that something was going to happen, prior to the announcement of Orange? Is it correct to say that the announcement of the decision, which is a decision of government, and no-one is disputing that you are able to make that decision, that it was going the go to Orange was made on 16 May? I assume there was an announcement at some point before that, without naming the location, something was going to happen. When was that?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

The announcement in relation to the proposed establishment of the Regional Investment Corporation was actually an election commitment by government. However, the specific announcement of the mechanism to proceed for the establishment was announced by the Prime Minister and the Deputy Prime Minister on 9 May. Subsequently, some week later, the Deputy Prime Minister announced that the decision of government to have the corporation located at Orange had been made.

Sam Dastyari (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Minister, you mention the half-a-dozen or so—I think it was slightly more—different locations that were broadly under consideration. I think you mentioned Wagga and Toowoomba and others as well. Was that consideration done prior to 9 May, or was that done between 9 May and 16 May?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

I am going to have to say, Senator Dastyari, that I can't give you an exact date in relation to the decision-making process in relation to the other towns that I put forward. Certainly, the Deputy Prime Minister publicly stated that these other towns and cities had been considered, in his announcement of Orange being the preferred location. I'm not going to answer a question if I don't have the answer.

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

You talked about the consultation process that was undertaken in Orange after it had been selected as the place for the headquarters. Was there any consultation done in any of the other cities that were considered—Bathurst, Albury Wodonga, Wagga and the other ones that were considered?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

As I responded to the question from Senator Dastyari, the consultation that was undertaken with these organisations in Orange was in relation to the loans criteria, which we discussed a little earlier in the day, and also in relation to the operational arrangements that would sit around the establishment and the operation of the RIC in Orange. Obviously, these discussions in relation to the operation of the organisation within Orange took place after the decision was made that Orange was the location that the government had chosen for the RIC to be established in.

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

But was there any equivalent consultation, even about the loans schemes, undertaken in the other cities, and were the other cities given any opportunity to put forward their case to the minister as to why they should be considered the location for the headquarters of the RIC?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

To be clear: we're talking about two separate issues here. Earlier today—I don't know whether you were in the chamber—we listed a number of organisations, industry participants and stakeholders that were consulted in relation to the criteria of the loans and the general operations of the RIC, but most particularly about the criteria that sat around the loans, which you were so interested in a little while ago. There were about 55 different stakeholders that were formally consulted as part of that process, including instruments of government in the other states around Australia, as well as industry and communities and governments—and banks, obviously, as well, given that it was a loan facility. Quite separately, that consultation occurred in relation to the loans facility.

That's a different question than the question in relation to the location of Orange. As I said to Senator Dastyari, as I said to Senator Brown, as I've said to you and as I've said to Senator Bernardi, it was a decision of government.

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

The reason I want to clarify this is that you indicated to Senator Dastyari before that there was in fact some level of consultation about Orange, but you've now clarified that there was never a level of consultation in terms of the location where the RIC was going to be established. Can I clarify then also that, for those other potential locations for the headquarters of the RIC, there was never any opportunity for those to put forward their case as to why they should be considered the potential locations for the RIC to be established?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

At the risk of sounding like a cracked record, the location of the RIC in Orange was a decision of government. I have given you all of the background as to why the RIC was chosen. The government and the minister stand by the decision that Orange is the most suitable and the best place for the location. I have provided information to you and to others in the chamber in relation to other locations that were considered by government as possibly being locations for the RIC. The decision of government was that Orange was the preferred location.

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

Thank you for that response, Minister. About those other locations that the minister indicated were considered, did those towns self-nominate? How were those towns determined to be a possible site for the location of the RIC?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

As I said, it was a matter for government and the government obviously—

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

It's just a simple question.

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

I know. I'm allowed to answer it just the way I want. It's a matter for government and government has made its decision.

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

But the question, Minister, wanted a simple yes or no answer. How were those other sites put on that short list? Were they nominated? Did they even know they were on that short list? Was there any opportunity for any location to provide advice to the minister as to why they felt they were the most appropriate site, or was the process just one of the minister plucking Orange out because he felt that it was the most appropriate location?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Senator Rice, no, there was no submission process. However, if you look at the names of the towns I read out, they quite clearly are prominent regional towns in Australia. That was why they would have been identified by government as potential locations for such an organisation as the RIC. However, the decision of government was that Orange was the most suitable.

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

Is it the case, then, that the minister was sitting around a table, having a look at various locations, and just made the decision all by himself? Is that what happened? Is that what your process was?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

At the time the decision was made I was not in the near vicinity of the Deputy Prime Minister. I think, when you consider all of the reasons Orange is a suitable location, you would have to acknowledge that it is. The deliberations of government as to why Orange was chosen, I think, are self-evident in the characteristics of this particular town.

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

What we're attempting to tease out here—which is proving to be quite difficult—is what the process was prior to the selection of Orange and prior to the subsequent consultation that was had with various organisations in Orange. We want to know how those other locations were chosen as possible locations. Were organisations or local councils in those areas contacted about providing information as to why their town would be a good site for the RIC? We are trying to understand what the process is. In the absence of a response that satisfies what really is a very simple question, we have to assume that this decision of locating the RIC in Orange is a decision that Minister Joyce made himself. We have no idea as to what informed his decision.

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Senator Brown, I have said that it was a decision of government. I have given you a series of towns and locations that were considered by the ministers as potentially being appropriate. I have advised you that the decision of government was that Orange was considered to be the most suitable. I'm not sure what further information I can provide you, apart from saying that it is entirely within the authority of the government to make the decision, and it's made it.

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

I do feel for you, Minister, because it's very clear that you have not got any information to give us, because there was clearly a very inadequate process, if you can call it a process at all. There was no submission process. It sounds like the towns that were apparently on this short list didn't even know that they were on the short list. And why were those towns on the short list whereas other towns that equally could have been on the short list, like Launceston and Cairns, were not? So you aren't able to share any more information with us, but it just goes to the point that there was clearly no objective, transparent process for the selection of the short list. It sounds to me like the minister was riffing off names and saying, 'Yes, we could think of these six cities that possibly could have been sites, and we are choosing Orange.' I have nothing against Orange. It's a lovely place, and there are some criteria as to why it could be appropriate for it to be there, but the point is process. The point is having an appropriate, objective, transparent, accountable, evidence based process that you aren't able to share with us because it's quite clear that it doesn't exist.

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

That is a statement of your opinion.

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

You can always enlighten us as to whether the contribution by Senator Rice is correct or not, but I would like to ask: did the decision on the location of the RIC to Orange go to cabinet?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

I'm not in cabinet. The department, obviously, equally isn't in cabinet. We are not aware that the decision went to cabinet.

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

I find that an extraordinary statement, because surely the department would know. They would be preparing the paperwork. They would know whether this was an issue that went to cabinet.

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Senator Brown, I have just said the department is not aware that the matter went to cabinet. I am not aware whether the matter went to cabinet. I'm not saying it didn't go to cabinet; I'm just saying that we are not aware that it did.

Sam Dastyari (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Just to touch on a point you made earlier, Minister, you outlined the consultation that took place on 6 and 7 June. You also outlined that 16 May was when the decision was made about Orange. Was there consultation also before 16 May—not just consideration but consultation—with the agencies and groups that you referred to for the 6 and 7 June meetings?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Not that I'm aware of.

Sam Dastyari (NSW, Australian Labor Party) Share this | Link to this | Hansard source

If you're not aware of any consultation—I specifically asked about Orange—with the other six or seven that you mentioned, which I believe were also in the minister's statement or release when he made the announcement on 16 May, are you aware of any consultation with any of them beforehand?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

No, I'm not.

Sam Dastyari (NSW, Australian Labor Party) Share this | Link to this | Hansard source

So the only consultation we're aware of that you can confirm is consultation that took place three weeks after the decision had been made?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

There were a series of consultations that have taken place in relation to this particular instrumentality, particularly in relation to the criteria for the loans package. So, to be absolutely accurate, there was consultation that has been taking place over the period of the development of this proposal to form the Regional Investment Corporation. In specific reference to the establishment and the location of the RIC in Orange, I can advise that, to the best of my knowledge, there was no consultation taken prior to the announcement.

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

Across the table the minister did indicate that, to the best of the department's knowledge, the decision on the location did not go to cabinet. Can you confirm that, please?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Yes, I can confirm that.

The CHAIR: The question is that the motion, as moved by Senator Brown, that amendment (5) on sheet 8225 be agreed to.

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

by leave—I move government amendments (1) and (2) on sheet EF114 together:

(1) Clause 12, page 11 (after line 15), after subclause (3), insert:

  (3A) In giving a direction under subsection (3), the responsible Ministers must exercise their powers consistently with the Water Act 2007.

  (3B) Before giving a direction under subsection (3) in relation to a water infrastructure project that is wholly or partly within the Murray-Darling Basin (as defined by the Water Act 2007), the responsible Ministers must seek the Murray-Darling Basin Authority's advice as to whether in giving the direction, the Ministers would be exercising the Ministers' powers consistently with the Basin Plan (as defined by the Water Act 2007).

(2) Clause 12, page 11 (after line 18), after subclause (4), insert:

  (4A) If:

(a) the responsible Ministers give a direction under subsection (3) to the Corporation to enter into an agreement; and

(b) the direction is one in relation to which the responsible Ministers received advice from the Murray-Darling Basin Authority under subsection (3B);

then:

(c) the Board must notify the responsible Ministers when the agreement has been entered into; and

(d) the responsible Ministers must publish the advice on the internet within 30 business days of receiving the notice under paragraph (c).

The government amendments to the Regional Investment Corporation Bill 2017 relate to directions that the responsible ministers are able to give to the corporation under clause 12(3) directions to enter into grants of financial assistance for water infrastructure projects. That directions power is an important part of the government's arrangements of the National Water Infrastructure Loan Facility and provides the mechanism for government to communicate its decisions on projects that have been approved for a loan. The amendment makes it clear that, in giving a direction under clause 12(3), the responsible ministers need to exercise their powers consistently with the Water Act 2007. They will also have to seek the advice of the Murray-Darling Basin Authority before issuing a direction under clause 12(3). This requirement ensures that the responsible ministers receive advice on the consistency of the projects with the Basin Plan from the independent body that is best placed to make the assessment. The government is committed to working with states and territories to build the water infrastructure needed for agricultural industries to expand and increase their productivity, and the National Water Infrastructure Loan Facility is a critical part of that commitment.

We are also committed to meeting our water management obligations, and this amendment makes that clear and should provide confidence to the senators in supporting this bill. In moving this amendment, I acknowledge in particular the interest of senators from my home state of South Australia in making sure that we are absolutely explicit that there is no impact on the delivery of the Murray-Darling Basin Plan and in particular water policy by this organisation. I thank Senator Xenophon for his work with me and the department on ensuring that we have the very clearest of conditions included in the bill to make sure that the Murray-Darling Basin Plan is delivered in full and on time and that the Water Act and water policy are not compromised in any way.

Nick Xenophon (SA, Nick Xenophon Team) Share this | Link to this | Hansard source

I indicate that, obviously, we support this amendment. This is an important amendment in the context of ensuring that there is no ambiguity in how the Regional Investment Corporation will operate in the context of water policy and that the Water Act will not in any way be affected by this and, in particular, the Murray-Darling Basin Plan and sustainable diversion limits. The amendment is self-evident. Senator Ruston has alluded to productive discussions that I've had with her and the Deputy Prime Minister in respect of this. I believe this is a belts-and-braces approach, to put it colloquially, to ensure there is no ambiguity in terms of the impact of any water projects funded under the Regional Investment Corporation legislation. It will provide strong guarantees in directions in terms of the Murray-Darling Basin, that it must be transparent and that responsible ministers within the basin receive advice. That includes the Minister for Water and the River Murray in South Australia, the Hon. Ian Hunter, who has a strong interest in these issues as well. I have spoken to the honourable Mr Hunter in the last 36 hours about the need for this.

I may ask one question of the minister just so that it's on the record. It's something I have discussed with departmental officers. Does this amendment give rights of judicial review to those who have standing to ensure that it is complied with? In other words, we're not just saying that this must be complied with; can it actually be enforced through a judicial review process?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

To clarify the point that you've just raised: under the Water Act and sections 34 and 35 of the Murray-Darling Basin Plan 2012, it is not lawful for the Commonwealth or a state to construct water infrastructure, whether it is funded by the RIC or by any other mechanism, that would alter the level of take above the relevant SDL in that basin. There are well-established avenues of redress for people or entities, including the state and territories, who are or who believe themselves to be adversely affected by any administrative decisions, including the Administrative Decisions (Judicial Review) Act, so there is nothing in the act that detracts in any way from the longstanding protections of the administrative law that the public may seek judicial review of decisions by the courts.

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

Labor will be supporting the government's amendments because they do provide additional confidence that water proposals which will be put forward by the responsible ministers to the RIC within the Murray-Darling Basin will need to comply with the basin plan. The amendments will also require the RIC board to consult with the basin authority. I'm not surprised that Senator Xenophon talked about ambiguity in this area, because that ambiguity and that concern follows some of the statements made by the Deputy Prime Minister in response to allegations that water is being taken out of the basin: essentially, that there was nothing to see here.

This is another example of why this corporation is different from other, similar entities. The influence of the responsible ministers means that the corporation lacks the proper independence and transparency required for the corporation to work effectively and efficiently. But we, as I have said, will be supporting the government's amendments.

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

The Greens will also be supporting these government amendments. We note in the contributions by the minister and by Senator Xenophon phrases like, 'It's going to ensure that there's no ambiguity,' and, 'It's a belt-and-braces approach, giving certainty and confidence.' Minister, is there actually anything in these amendments that does change things other than as they would already have been underneath the Water Act? What difference will it make to water projects—compared to the Water Act—if this legislation, and this amendment in particular, is passed?

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

In essence, the answer is nothing, but what we are seeking to do by this is be explicit in the bill so that there can be no doubt whatsoever that the Regional Investment Corporation cannot override the requirements of the Water Act or, specifically in doing so, the full implementation of the Murray-Darling Basin Plan.

Nick Xenophon (SA, Nick Xenophon Team) Share this | Link to this | Hansard source

I may take some slight issue with what the minister has said—not a big issue; don't panic, it's okay! I just wanted to say that Senator Rice's question is a very important question. My understanding, from a point of view of statutory interpretation is that where you have two competing acts there sometimes may be some ambiguity. Having this particular amendment removes that ambiguity. I think it's fair to say that what Senator Ruston said is absolutely right—the intent is that the Water Act is at all times adhered to, particularly when it comes to sustainable diversion limits and the like. But, if there could potentially, as a question of law, sometimes be a conflict between the two acts which could be the subject of legal argument, this amendment would remove that issue of legal argument. You've got some esteemed lawyers from the department behind you who know more about administrative law than I ever will—apart from being a plaintiff or defendant in administrative law cases. I suggest to Senator Rice that this amendment is doing some good work. It's not just a symbolic amendment; it actually ensures that there cannot be an argument down the track to say that the Regional Investment Corporation Act takes precedence over the Water Act, which could be a potential argument. That's my jurisprudential lesson for the day. Maybe the lawyers there will disagree with me; I'll try and dig up some case law if they do, so just give me a moment.

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

And I probably wasn't exactly accurate in my response to you, Senator Rice. The requirement for the Murray-Darling Basin Authority to prejudge an action by the RIC in relation to water infrastructure as having complied with the Water Act is an additional requirement that does not currently exist. So I should correct myself and say, yes, there is an additional level of protection that is added by the requirement to predetermine the compliance with the act.

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

To clarify, it depends on your definition of 'symbolic', then, as to it giving that extra certainty, but, essentially, other than that additional requirement of compliance, all of the measures that are in this amendment are just repeating things that are in the Water Act.

Nick Xenophon (SA, Nick Xenophon Team) Share this | Link to this | Hansard source

My office sought advice from environmental lawyers about this amendment, and it does do useful things around the rights and enforcement of the Water Act. There may well be environmental lawyers who Senator Rice deals with as well, but I think it is a belt-and-braces approach in a meaningful way.

Linda Reynolds (WA, Liberal Party) Share this | Link to this | Hansard source

The question is that amendments (1) and (2) on sheet EF114 be agreed to.

Question agreed to.

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

I move opposition amendment (7) on sheet 8225:

(7) Page 23 (after line 10), after clause 41, insert:

41A Disclosure of interests

(1) The CEO must give written notice to the Board of any disclosure made by the CEO under section 29 of the Public Governance, Performance and Accountability Act 2013 (which deals with the duty to disclose interests).

(2) Subsection (1) applies in addition to any rules made for the purposes of section 29 of the Public Governance, Performance and Accountability Act 2013.

(3) For the purposes of this Act and the Public Governance, Performance and Accountability Act 2013, the CEO is taken not to have complied with section 29 of that Act if the CEO does not comply with subsection (1) of this section.

The government moved its own amendments in the House to address concerns raised in the Rural and Regional Affairs and Transport Legislation Committee report on this bill. The Pastoralists and Graziers Association of WA argued that a board membership of three was too small, arguing that the size of the board and its composition should be similar to that found in private financial organisations in order to cover the range of qualifications.

In addition to the board size amendments, we have seen the government moving further amendments which clearly show the lack of proper consultation in the development of the current bill, and we urge all senators to support our amendments requiring the CEO to disclose any personal or acquired conflicts of interest. This amendment will strengthen the independence and transparency of the corporation.

Minister Ruston earlier made reference to the Clean Energy Finance Corporation, claiming that the RIC is established under the same legislative scrutiny as the Clean Energy Finance Corporation. If this is true, the government should have undertaken this amendment on their own to ensure that the CEO discloses any personal interest that she or he may have or acquire which would be in conflict with the proper performance of the CEO's duties.

Disclosing any conflicts of interest by the CEO is about transparency to ensure that decisions made by the CEO are made without personal influence or indeed external influence. Ensuring that the CEO discloses any conflicts of interest will reduce the risk of any potential for corruption and/or misconduct. For the minister's information, that is a part of the Clean Energy Finance Corporation. We hope that the government will consider this amendment, see that this is an amendment worthy of support and support the amendment before us now.

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

Thank you, Senator Brown. Firstly, the reason that we are not supporting this particular amendment is that we believe that it's actually counter to the normal operation of disclosure-of-interests requirements under the Public Governance, Performance and Accountability Act and associated rule. It would also remove the responsibility otherwise appropriately allocated to the board.

As you would be aware, the PGPA Act requires officials of Commonwealth entities to disclose any material personal interests that relate to the affairs of the entity, and it also requires and provides for rules to prescribe how and when those interests are to be disclosed. The PGPA Rule provides for the board, as the accountable authority of the entity, to instruct how officials of the corporation, including the CEO, are to disclose the interests.

There were a couple of comments that you made. You made the comment about three not being a sufficient number of people on the board. You'll note from the legislation that it says 'up to five'. It doesn't say three. It's also worth pointing out that the establishment of the CEFC actually preceded the PGPA Act, so it would not have been relevant to make the correlation between the two.

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

The Greens will be supporting this amendment from the Labor Party and think that having the level of disclosure is an important extra element to be adding to this. Again, given the issues that we've been discussing this morning about how much power is vested in the minister, having elements of transparency and accountability by the board, and particularly with a potentially small board, is really critical. I note the minister saying that the board can be up to five. You may as well say that the board could be up to 11. If you can have a board of only three, that's the minimum. If you've got a board of only three and you don't necessarily have to have the high levels of disclosure that would be required by this amendment, you have serious potential issues of accountability.

The whole way this legislation has been drafted leads us to have really serious concerns about the accountability at the ministerial level and then at the board level. As to the sorts of processes that have occurred—or the lack of process, as we have previously discussed—on significant issues, as to where the corporation is going to be located: it is very clear there was a lack of process. And this goes to the heart of the problems with this whole corporation in the way it is being set up: the lack of transparency, accountability and good governance process in its establishment.

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

I won't take up too much time, but I rise to support Senator Rice's contribution. We are talking about a corporation that is administering $4 billion. As to suggesting that a minimum of three on the board is sufficient—it isn't. Throughout this bill, we have seen that the good governance isn't there and the level of transparency that we would normally expect to see under similar legislation is not there. We've just had the discussion about the process undertaken around the location of the RIC. Well, there was actually no consultation, and I think it's fair to say that at least we now understand that there is no location. But this is a regional corporation that is administering $4 billion, and this government is suggesting that just having a minimum of three board members is sufficient. As to this amendment that we have before us now, all it's asking is that there be a disclosure of conflict of interest. I understand, and I take on board, what the minister said in response to my first contribution on this amendment. But, given the lack of governance and the lack of transparency, and the fact that it has been very difficult to find any information around this bill coming from the minister or the government, I really believe that, if what the minister says is correct, there should be no issue with the government supporting this amendment.

Anne Ruston (SA, Liberal Party, Assistant Minister for Agriculture and Water Resources) Share this | Link to this | Hansard source

The government won't be supporting this amendment because, despite what you have outlined in terms of saying that there's a lower level of accountability in relation to this, we believe that the PGPA Act provides the same level and is the appropriate place under which this should be administered.

The CHAIR: The question is that amendment (7) on sheet 8225 be agreed to.

Sue Lines (WA, Deputy-President) Share this | Link to this | Hansard source

Order! It being 12.45, the Senate will now move to senators' statements.