2.1
This chapter outlines the key issues considered by the Senate Economics Legislation Committee (the committee) at its 2020‑2021 Budget estimates hearings with the Treasury Portfolio and Industry, Science, Energy and Resources Portfolio (Industry Portfolio).
Treasury Portfolio, 26 October 2020
Department of the Treasury
Corporate Group, Macroeconomic Group
2.2
The Secretary of the Department of the Treasury, Dr Steven Kennedy, made an opening statement, 'draw[ing] on the Budget to describe the evolution of the economy to date and [Treasury's] forecasts,…policy responses and the ongoing challenges facing the economy'.
2.3
Topics examined by the committee included:
Resignation of Australian Securities and Investments Commission's (ASIC) Chair, Mr James Shipton, and Deputy Chairman, Mr Daniel Crennan, due to ASIC covering personal tax services and relocation expenses respectively, and the timeline of events (pp. 6, 16–19)
Labour force and related matters including the unemployment rate, urban and regional job markets, job forecasts coming out of the Budget, impact of personal income tax cuts and COVID-19 response measures―JobMaker, JobKeeper, JobSeeker―and modelling (pp. 8, 6–16, 23–24, 35–37)
Impact of the Budget on women (pp. 16, 34–35, 40–41)
Dr Steven Kennedy being the Secretary for the Department of Infrastructure, Transport, Cities and Regional Development when the Leppington Triangle was purchased and the signing off of inaccurate financials for 2018-19 according to Australian National Audit Office's (ANAO) report (pp. 20–21)
Cost of Victoria's second lockdown (pp. 21–23)
Economic recovery advertising campaign and contract with Resolve Strategic (pp. 29–34, 43)
Assumptions for COVID-19 vaccination (pp. 41–43)
Foreign Investment Division
2.4
Topics examined by the committee included:
Sale of CuDeco's assets (pp. 43–44)
Foreign Investment Review Board's workforce, work arrangements during the pandemic and productivity levels, including for the Department of Treasury more broadly (pp. 44–45)
Tracking foreign ownership (p. 46)
Fiscal Group
2.5
Topics examined by the committee included:
Conducting gender assessments on the COVID-19 response measures (pp. 46–48, 55–60)
JobMaker Hiring Credit, particularly eligibility, modelling on take-up and legislative design (pp. 49–51, 55–60)
Number of people expected to be on the extension period of JobKeeper and the number of people moving from JobKeeper to JobSeeker (pp. 61–64)
Gendered nature of the Budget (p. 52)
Thinking about the 3Ps―Participation, Population and Productivity―in macroeconomic forecasts (pp. 64–65)
HomeBuilder Scheme including the online dashboard, cap, people affected by bushfires, feedback and data (pp. 68–76)
Climate risks and Australia's economy (pp. 77–78)
Risk of financial abuse due to the early access to super scheme (pp. 80–81)
Impact of the pandemic on the Department of the Treasury's workforce, particularly the location of staff and productivity (p. 82)
Small amount credit contracts, consumer leases and payday loans―targeting people in financial hardship, the impact of winding back COVID-19 response measures and reforms (pp. 83–86)
Superannuation reforms in the Budget―Your Future, Your Super
(pp. 86–88, 100–102, 107–109)
Product safety laws (pp. 88–90)
Corporations Act―review of the safe harbour principle and insolvency reforms (pp. 90–92, 99–100)
Scheme to improve visibility of superannuation in family law proceedings (pp. 92–94)
Changes to the responsible lending obligations and recommendations, particularly recommendation number one regarding 'unsuitability' from Hayne's Banking Commission (pp. 94–99, 103–105, 106–107)
Australian Stock Exchange (ASX) clearing and settlement facility CHESS
Importance of financial stability for economic growth (pp. 105–106)
Productivity Commission
2.6
Topics examined by the committee included:
Childcare subsidy system (pp. 109–110)
Provision of data to support the development of Your Future, Your Super (pp. 110–111)
Risks to youth unemployment including the regional and metropolitan split (pp. 112)
Infrastructure and Project Financing Agency (IPFA)
2.7
Ms Leilani Frew, Chief Executive Officer (CEO), made an opening statement updating the committee on the activities of the IPFA.
2.8
Topics examined by the committee included:
Projects that IPFA provided advice on in the last financial year 2019-20 and the scope of that advice (p. 113)
Knowledge-sharing events (pp. 113–114)
Workforce, differentiation between contracts and contracted services (p. 114)
Tier 1 and Tier 2 contracts (pp. 114–115)
Inspector-General of Taxation and Taxation Ombudsman (IGTO)
2.9
The IGTO, Ms Karen Payne, tabled an opening statement outlining what her team has been doing since March 2020 and included data on complaints received about COVID-19 support measures.
2.10
Topics examined by the committee included:
Statistics on complaints and the trends (pp. 116–117)
Committee's inquiry into the performance of the IGTO, recommendations from that inquiry and when a government response will be received (pp. 117–118)
Performance measure 1.7 (pp. 118–119)
Treasury Portfolio, 27 October 2020
Department of the Treasury
Revenue Group, Australian Taxation Office
2.11
Topics examined by the committee included:
Design of the early access to your super scheme in terms of its impact on women and the potential for financial abuse (pp. 3–7)
Statement 5: Revenue (pp. 12–14), particularly the immediate expensing initiative (pp. 7–9, 11–12) and loss carry-back facility (pp. 19–22, 25–27)
Progressing the tax treaty network (pp. 9–11)
JobKeeper eligibility and the red flag system for fraud reporting
AUSTRAC and Westpac money laundering case and settlement (pp. 16–17)
Operation Atlantis (pp. 18–19)
Tax avoidance and unlawful tax evasion (pp. 23–24)
Facebook advertising charges going overseas and escaping Australia's tax system (pp. 24–25)
Tax Determination 2019/D11 (pp. 25–26)
Research and development tax incentive measure (p. 28)
Australian Charities and Not-for-Profits Commission
2.12
Topics examined by the committee included:
Acting on breaches and disclosing information (p. 32–33)
Auditing and checks on annual information statements and financial reports (p. 33)
Preventing the misuse of the registered charities tick (pp. 33–34)
Charities having a political purpose (pp. 34–36)
Power to stop a charity that is removed from the register and later seeks re‑registration (p. 37)
Reserve Bank of Australia (RBA)
2.13
Topics examined by the committee included:
ASX CHESS replacement project (pp. 37–38)
Printing of banknotes to keep up with additional demand (p. 38)
Withdrawal of the Cash Ban Bill (p. 38)
Involvement in the committee's inquiry into the Banking Amendment (Deposits) Bill 2020 (i.e. 'Bail-in Bill') (p. 39)
Climate risk on the Australian economy (p. 41)
Auditing of RBA accounts and Australia's gold holdings (p. 41)
Management of monetary policy (p. 42)
Government's revised fiscal strategy settings (p. 43)
Employment data, wages and economic recovery (pp. 43–44)
Update on perspective of Victorian/COVID-19 restrictions and border closures (pp. 45–46)
Review of retail payments (pp. 46–47)
ASIC
2.14
The Acting Chair of ASIC, Ms Karen Chester, made an opening statement to clarify evidence provided by her at a hearing of the House of Representatives Economics Committee on Friday 23 October 2020. Ms Chester also updated the committee on ASIC's enforcement program, as it relates to the litigation flowing from the Hayne Royal Commission.
2.15
Topics examined by the committee included:
Resignation of Chair, Mr James Shipton, and Deputy Chairman, Mr Daniel Crennan, due to ASIC covering personal tax services and relocation expenses respectively (pp. 47–59, 69–70, 73–75)
Work in relation to establishing a standardised climate risk reporting framework (p. 60)
Banking Code Compliance (pp. 60–62)
Responsible lending obligations including the not unsuitable test and regulation of lenders (pp. 62–63)
Timeshare industry―RG 160 review process and Timeshare report 642 (pp. 63–66)
Issue of Chair relocation expenses (pp. 66–67)
Virtual annual general meetings (pp. 67–68, 75–76)
Capital raising changes during the pandemic―impact to existing shareholders and dilution of shares (pp. 68–69)
Enforcement litigation action and litigation (pp. 70–70)
Update on work regarding disclosure of use of reserves (p. 71)
Accelerated non-renounceable issue (pp. 71–73)
Related party disclosure, exemptions, multinationals making payments offshore and relief order form 284 (p. 73)
Banking Code of Practice (p. 76)
Unmet advice needs project (p. 76)
Fee disclosure statements affecting Victorians (p. 77)
Australian Prudential Regulation Authority (APRA)
2.16
The Chair of APRA, Mr Wayne Byres, made an opening statement about APRA's priorities, including reassessment, an outline of its response measures to the pandemic and into the future.
2.17
Topics examined by the committee included:
Responsible lending laws (pp. 78–79)
Underperformance in cash super investments (p. 79)
Political donations and the superannuation trustee sole purpose test (p. 80)
Superannuation fees (p. 81)
Climate risk reporting (pp. 81–83)
Climate-related insurance premium increases (pp. 83, 86–87)
Banking Amendment (Deposits) Bill Inquiry, provisions of Financial Sector Legislation Amendment (Crisis Resolution Powers and Other Measures) Act 2018, APRA bail-in powers for specific instruments, and APRA resolution powers (pp. 83–84)
Information security incidents in APRA's annual report (pp. 85–86)
Climate change risk vulnerability assessments (pp. 87–88)
Lending practices in financial institutions regarding vulnerability assessments (p. 88)
Westpac and the Puerto Rico based Euro Pacific Bank―fit and proper test (pp. 88–89)
Australian Office of Financial Management (AOFM)
2.18
The AOFM tabled an opening statement on the impact of, and its response to, the pandemic, including constrained issuance capability and the longstanding crisis plan in place. The AOFM also noted the establishment of the Structured Finance Support Fund and adoption of three approaches for keeping public securitisation markets open.
2.19
Topics examined by the committee included:
Contracts and funding for syndications (pp. 90–94)
Legislative ground for ANAO exemption (pp. 94–95)
Australian Competition and Consumer Commission (ACCC) and the Australian Energy Regulator
2.20
Topics examined by the committee included:
Button batteries (pp. 96–98)
Statement of expectations issued by the Minister for Communications (pp. 98–99)
NBN, particularly overbuilding the copper network with an on-demand fibre arrangement (pp. 100)
Digital platforms and FinTech (pp. 101–102)
Grant funding for production of transmission towers locally (p. 103)
Project EnergyConnect (p. 103)
Pricing comments in relation to truck owner-drivers, ACCC letter and criminal cartel behaviour (pp. 104–110)
Financial Adviser Standards and Ethics Authority (FASEA)
2.21
Mr Stephen Glenfield, the CEO of FASEA, tabled an opening statement about upskilling licensed financial advisers in Australia following the passage of the Corporations Amendment (Professional Standards of Financial Advisers) Act 2017―raising education, training and ethical standards.
2.22
Topics examined by the committee included:
Design, pass rate and feedback for financial adviser exam (pp. 110–111)
Continuing professional development recognition and time allocated (pp. 111–112)
Industry Portfolio, 28 October 2020
Department of Industry, Science Energy and Resources
Cross-portfolio / corporate
2.23
The Secretary of the Department of Industry, Science, Energy and Resources, Mr David Fredericks PSM, made an opening statement reflecting on the Department's former Deputy Secretary, Mr Mike Lawson's public service career and wishing him a speedy recovery in his retirement.
2.24
Topics examined by the committee included:
National Innovation Games―funding, ad hoc grant to Council of Small Business Organisations Australia (COSBOA) and members (pp. 6–8, 30)
Go Local First program―new funding, new agreement with COSBOA and ad hoc grant, and research by CT Group (formerly Crosby Textor) (pp. 8–15)
Funding of the Department of Industry, Science Energy and Resources (pp. 15–17)
Grant and tender processes, particularly tenders tagged as 'Management advisory services' and the Entrepreneurs Program (pp. 18–23)
Women in science, technology, engineering and mathematics (STEM), Enterprise Program and the Boosting Female Founders Initiative (pp. 24–29)
Outcome 1 Programs 1.1 and 1.2
Program 1.1: Investing in science, technology and commercialisation.
Program 1.2: Growing innovative and competitive businesses, industries and regions.
2.25
Topics examined by the committee included:
Manufacturing Modernisation Strategy―jobs, the fund, projects and economic analysis underpinning the National Manufacturing Priorities and Manufacturing Collaboration Stream (pp. 30–37, 41–44)
Applications for the research and development tax incentive, meeting the appropriate standards to be taken as a tax concession, common issues and addressing these problems (pp. 38–39)
Legal counsel, litigation disputes and common legal issues (p. 40)
Small and Medium Enterprise (SME) Export Hubs, particularly the first round funding announcements and addresses of recipients (pp. 45–54)
Country-of-origin labelling review, interim arrangements, complementary medicines sector and adding a bar chart (pp. 54–55, 56–60)
Manufacturing strategy in South Australia (pp. 55–56)
Space agency―assisting the launch industry, application form for a launch or facility permit and cost (pp. 60–64)
Personal protective equipment―modelling by McKinsey and manufacturing (pp. 64–67)
Anti-Dumping Commissioner and the selection panel (pp. 67–68)
Funding for Anti-Dumping Commission (pp. 68–69)
Centre for Defence Industry Capability―the review and relocation to the Department of Defence (pp. 69–70), SMEs in supply chain (pp. 71–72), data capabilities and sharing (pp. 72–73), and workforce (pp. 73–74)
Commonwealth Scientific and Industrial Research Organisation (CSIRO)
2.26
Dr Larry Marshall, Chief Executive of the CSIRO, made an opening statement informing the committee of the CSIRO's work on two issues―COVID-19 and bushfires.
2.27
Topics examined by the committee included:
Evidence on climate (pp. 75–79)
When CSIRO first became aware of COVID-19 and the advice it has given (p. 80)
Workforce and working during the pandemic (pp. 80–81, 88)
COVID-19 vaccines―determining the capability of CSL to manufacture the vaccine, prospects and trials (pp. 82–84)
Study on methane leakage from coal seam gas wells (pp. 84–85)
Green hydrogen (pp. 86–87)
Work on bushfire related activities including the Bushfire Earth Observation Taskforce report and NovaSAR satellites (pp. 89–91)
Own source income, partnership investment, and research and development investment (pp. 91–92)
Ensuring that research and development work is complimentary and not duplicating, particularly in regards to agriculture (pp. 92–93)
Office of the Chief Scientist
2.28
Topics examined by the committee included:
COVID-19 response (pp. 94–95)
Australia's STEM workforce (pp. 95–97)
Cutting the cost of STEM degrees at the expense of the humanities (p. 97)
Emission's footprint (p. 97)
The Intergovernmental Panel on Climate Change's Global Warming of
1.5 degree report (pp. 98–99)
Gas and hydrogen (p. 100)
National Hydrogen Strategy (pp. 100–101)
Office of Innovation and Science Australia
2.29
Topics examined by the committee included:
Workforce's skill set (p. 105)
Industry Portfolio, 29 October 2020
Australian Nuclear Science and Technology Organisation (ANSTO)
2.30
Acting CEO, Mr Shaun Jenkinson, made an opening statement firstly acknowledging Dr Adi Paterson and noting his resignation. In addition, Mr Jenkinson commented that whilst the pandemic has challenged the global supply of nuclear medicines, ANSTO maintained nuclear medicine supply for Australian patients and is providing preferential access at the Australian Synchrotron for researchers seeking to understand the virus and develop potential treatments.
2.31
Topics examined by the committee included:
Resignation of CEO Dr Adi Paterson (pp. 5–7)
Study with the Department of Finance and Department of Health on its business model, governance and commercial arrangements (pp. 8–11)
Generate IV Nuclear Reactors, synroc technology and Chinese researchers (pp. 11–12)
Fault at the Lucas Heights nuclear facility and outage at nuclear medicine facility (p. 13)
Exposure to radiation incident in September 2019 (p. 14)
Long-term nuclear medicine supply (pp. 15–16)
Anti-Dumping Commission
2.32
Topics examined by the committee included:
Commissioner's term (p. 17)
Recruitment process for next Commissioner and the risk in a change of leadership (pp. 18–19)
Funding and workload (pp. 20-22)
Productivity Commission, Trade and Assistance Review 2018-19, particularly the claim that anti-dumping measures decrease the well-being of the Australian community (p. 22)
Assessing domestic pricing (pp. 23–24)
Values of the Commission (p. 25)
Australian Institute of Marine Science (AIMS)
2.33
Dr Paul Hardisty, CEO of AIMS, made an opening statement thanking the government for the additional allocation of $36.3 million over the next three years to SeaSim and advising the committee that its eighth instalment of the Index of Marine Industry in collaboration with Deloitte is close to finalisation.
2.34
Topics examined by the committee included:
Great Barrier Reef―coral cover, standardised measures (p. 26)
Views on an Office for scientific review and evidence misrepresented stemming from the Senate Rural and Regional Affairs and Transport Reference Committee inquiry into the identification of leading practices in ensuring evidence-based regulation of farm practices that impact water quality outcomes in the Great Barrier Reef (pp. 27–28)
Reef Restoration and Adaptation Program―regulatory and social licence issues (pp. 28–29)
Expiry in March 2021 of moratorium into seabed mining activities in Northern Territory coast waters (pp. 29–30)
Membership of gas lobby group Australian Petroleum Production and Explorers Association (pp. 30–31)
North West Shoals to Shore Research Program (p. 31)
Great Reef Census compared to Australian Research Council Centre of Excellence for Coral Reef Studies and its surveys (pp. 31–32)
Cancelled debate with Dr Peter Ridd that was not agreed (pp. 32–34)
Geoscience Australia
2.35
Topics examined by the committee included:
Detecting baseline levels in cultivated land (p. 34)
Implementing the cyber security improvement program (p. 35)
Benefits of Exploring for the Future program phase one (pp. 38–39) and the expansion with phase two (p. 36)
Input in the Critical Minerals Strategy (pp. 36–37)
Department of Industry, Science Energy and Resources
Outcome 1 – Programs 1.3 and 1.4
Program 1.3: Supporting a strong resources sector
Program 1.4: Growing a stronger Northern Australian Economy
2.36
Topics examined by the committee included:
Measuring goals of the National Resources Statement, status of the global offshore resources strategy, new export markets and breakthroughs
Problem that the Resource Data Strategy was resolving (p. 43)
Update on the Australian Domestic Gas Security Mechanism and the gas reservation policy, particularly jobs, business investment and impact (pp. 44, 54–58)
Update on the decommissioning review (pp. 44–45)
Northern Endeavour Taskforce―number of staff, cost, contract with Upstream Production Solutions to look after the vessel in lighthouse mode, Woodside Energy's involvement on a potential decommissioning project, state of the vessel, and long term options (pp. 45–49)
Projections for fossil fuel exports (pp. 49–50)
Countries meeting zero emissions targets in the future and effects on exports (pp. 51–52)
Speculation that China may not purchase Australian coal and its potential impact (p. 52)
International relationships on critical minerals, particularly US-Australia task group progressing the joint agreement on critical minerals (pp. 53–54)
Modelling of the impact of high gas prices on jobs and investment in the manufacturing sector (p. 56)
Interest-free loan to Rio Tinto Aluminium (p. 58)
National Radioactive Waste Management Facility, implementation of legislation, consultation with the local community and Minister's visit (pp. 59–61)
Status and ownership of the titles held by Timor Oil and Gas and the change of company control (pp. 61–63)
Employment benefits associated with the gas-led recovery and how this package contributes to the recovery from the recession (pp. 63–65)
Critical Minerals Facilitation Office―improvement of state approval processes (p. 68) and offtake agreements (p. 69)
Compliance of the strategic basin plans with Australia's obligations under the Paris Agreement and emissions reductions commitments (pp. 71–72)
Northern Australia Infrastructure Facility (NAIF)
2.37
Mr Chris Wade, CEO of NAIF, tabled an opening statement which covered NAIF's investment decisions and projects.
Funding projects (pp. 66–68)
Funding of gas pipelines and location (p. 72)
Accounting for climate risks and risks of stranded assets in decisions (p. 72)
State veto power and NAIF lending (pp. 72–73)
Changes to the public benefit test (p. 73)
Public benefit and carbon footprint considerations for projects (p. 73)
National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA)
2.38
Topics examined by the committee included:
Northern Endeavour―NOPSEMA's role (pp. 69–70)
Australian Defence Force World War II ammunition dump and chemical warfare dump (pp. 73–74)
Senator Slade Brockman
Chair