Industry, Innovation and Science portfolio
This chapter summarises certain key areas of interest raised during the
committee's consideration of budget estimates for the 2017–18 financial year
for the Industry, Innovation and Science portfolio. This chapter of the report
follows the order of proceedings and is an indicative, not exhaustive, account
of issues examined.
On 31 May and 1 June 2017, the committee heard evidence from Senator the
Hon Arthur Sinodinos AO, Minister for Industry, Innovation and Science, and
Senator the Hon Matthew Canavan, Minister for Resources and Northern Australia,
along with officers from the Department of Industry, Innovation and Science
(the Department) and agencies including:
Australian Nuclear Science and Technology Organisation;
Office of Innovation and Science Australia;
Australian Institute of Marine Science;
Commonwealth Scientific and Industrial Research Organisation;
Office of the Chief Scientist; and
National Offshore Petroleum Safety and Environmental Management
Senators present over the course of the day's hearing included Senator Hume
(Chair), Senator Ketter (Deputy Chair), Senators Bushby, Carr, Chisholm,
Ludlam, Ian Macdonald, McCarthy, Pratt, Rice, Roberts, Waters, Watt, Williams, Xenophon.
Australian Nuclear Science and Technology Organisation
Dr Adi Paterson, Chief Executive Officer of the Australian Nuclear
Science and Technology Organisation (ANSTO), highlighted a number of the
agency's recent achievements. In particular, Dr Paterson talked to the
committee about collaboration between ANSTO and the Sri Lankan presidential
taskforce for the prevention of chronic kidney disease. Together, they have
been undertaking research into chronic kidney disease of unknown aetiology,
which poses a 'major public health concern' in many countries and can be fatal.
Dr Paterson also talked about ANSTO's expertise and landmark research
infrastructure, which includes the Australian Synchrotron and the Australian
Centre for Neutron Scattering.
National Measurement Institute
The committee asked ANSTO about the possibility of the National
Measurement Institute (NMI) moving from within the Department of Industry,
Innovation and Science to being a part of ANSTO.
Ms Glenys Beauchamp, Secretary of the Department, indicated that no
decisions to relocate the NMI had been made but that any potential move would
require consultation with staff and stakeholders. Ms Beauchamp further noted,
however, that ANSTO and the NMI had some 'like issues' in terms of the skills
and capability required.
Dr Paterson added that:
ANSTO is responsible for a scientific standard of
measurement—the becquerel; it is the measure of radioactivity. That is under an
agreement that we have with the Chief Metrologist. ANSTO has for many years
looked after the becquerel for Australia because of the competence that we have
in that area. More broadly, if you oversummarise our scientific capabilities,
we have physics capabilities, we have chemistry capabilities and we have
biology capabilities. It is my understanding from the meetings that I have had
over the years with NMI that there is a good alignment of physics, chemistry
and biology activities, but that has not been studied in any detail by ANSTO.
The committee sought information from ANSTO in relation to the number of
employees holding 457 visas. Dr Paterson noted that there are currently nine
ANSTO staff on 457 visas.
The committee expressed concern that the recently announced changes to Australian
visas might have an impact on ANSTO's ability to secure enough employees with
the required expertise to satisfy ANSTO's requirements.
Senator Sinodinos informed the committee that consultations were in
progress to ensure that there are no 'unintended consequences' arising from the
Commonwealth Scientific and industrial Research Organisation (CSIRO)
The committee discussed a wide range of topics with officers of CSIRO
including in relation to peer review processes, enterprise agreement
negotiations, funding over the forward estimates, the centralisation of CSIRO
staff in capital cities, and Data 61.
The committee sought an update on CSIRO's enterprise agreement (EA)
bargaining process, noting that the previous agreement expired in 2014. Officers
from CSIRO noted that significant progress had been made in negotiations with
staff, moving from only five to 79 agreed clauses. Officers informed the committee
that the proposed agreement had been lodged with the Australian Public Service
Commission (APSC) and that, subject to APSC's approval, the proposed EA would
be released for formal consideration and that a vote would take place
The committee also discussed how the recently announced changes to
Australian visas might impact on staff at CSIRO, pointing to the possibility
that certain expertise may no longer be as readily available.
CSIRO currently employs 198 individuals on 457 visas, who are recruited
due to their specialist knowledge and skill in certain scientific fields.
Office of the Chief Scientist
The committee discussed a number of topics with Dr Alan Finkel AO, Chief
Scientist, including the independent review he has conducted into the Future
Security of the National Electricity Market, the national STEM partnership,
public investment in R&D, and climate change data and policy.
The committee asked Dr Finkel for a progress update on the independent
review he is conducting into the national electricity market. Dr Finkel
informed the committee that the inquiry had attracted approximately 390
submissions, and that as part of its work, the review had modelled various scenarios
for the operation of the electricity system 'over the next three decades'. Dr
Finkel noted that the report was due to be presented to the Council of
Australian Governments (COAG) in June 2017.
The committee pointed out that consultations conducted during the review
had revealed that many organisations felt there was a lack of clear policy in
Dr Finkel responded noting that:
I am certainly agreeing with the statement that the
submissions are indicating that, and there is a lot of reason to agree with the
sentiment there. What we are hearing, loud and clear, is that the lack of
clarity in the future policies around the electricity sector is giving great
concern to investors, and that discourages them from making the necessary
investment that will bring on the new generation for low emissions and
reliability that we require. That is a key consideration in our minds as we are
formulating our recommendations.
We are certainly going to recommend a blueprint which is a
framework for securely, reliably and affordably running a low-emissions
electricity system into the future.
Dr Finkel further noted the Australian Competition and Consumer
Commission (ACCC) were also undertaking an inquiry into the retail aspect of
the electricity market and suggested that 'the combination of a predictable,
well-designed electricity system for the future will intrinsically lead to
price impacts that are lower than they would otherwise be. It is very hard to
say exactly what prices will be'.
Paris Agreement on climate change
The committee discussed the impact of the possible decision of the
United States to leaves the Paris Agreement on climate change, noting that it
may have an effect on the future of the commitment.
Dr Finkel indicated that if the United States left the agreement, it
would be a 'blow to the accord, but it is not fatal'.
He further noted that:
The other countries have indicated that they are absolutely
committed because of the evidence-based logic of the accord. All people who I
have spoken to are not mixing with the presidents of European countries and
other developed countries—well, of any countries—other than ours as a leader.
Most of them say: 'It is one president for one or two terms. Things will
The committee then asked Dr Finkel more specifically about Australia's
role in the Paris Agreement, noting that Australia produces less 1.3 percent of
global carbon emissions.
Dr Finkel acknowledged this fact, however, pointed out to the committee
that although the reduction of less than 1.3 per cent of the global emissions
would not have an effect on the climate, Australia is a well-respected country
and that it has to show leadership in this field.
Department of Industry, Innovation and Science—Programme 2
Northern Australia Infrastructure
The committee sought information from NAIF in relation to existing
processes for dealing with a conflict of interest of a member of the NAIF
Board. In particular, the committee inquired as to whether any current board
members were being investigated in relation to a potential conflict of
Ms Laurie Walker, the Chief Executive officer of NAIF indicated that she
was not aware of any such investigation and further noted that:
[Board members] understand their duties and obligations,
particularly regarding conflicts of interest under both the PGPA and the NAIF
policy. Various conflicts have been declared by various directors. I have
absolute confidence that those board members have declared conflicts in
compliance with the act and the policy, which require disclosure of material
personal interests. The NAIF does not publicly disclose which directors have
recused themselves, because we are obliged under Privacy Act provisions to
maintain that information as personal information and not disclose it.
Directorships are publicly disclosed. The other reason that we do not disclose
publicly which directors have recused themselves is (1) that it is done as part
of board deliberations, which are commercial in confidence and (2) a conflict
arising could disclose particular projects that are before the board for
deliberation. That would reveal commercial in confidence.
The committee put a further series of questions to Ms Walker regarding
conflict of interest. In this instance, Minister Canavan interceded taking the
questions on notice as they related directly to the NAIF.
The committee also asked NAIF about when any announcement in relation to
project funding might be made. Ms Walker indicated that there were four
projects in the due diligence stage, noting that the first deal should be
closed in the third quarter of 2017.
The committee also asked questions around the NAIF's Indigenous
engagement strategy. Ms Walker noted that NAIF would be publishing its
Indigenous engagement strategy online soon and that this document would outline
the agency's policies relating to employment, participation and procurement.
National Offshore Petroleum Safety and Environmental Management Authority
The committee asked NOPSEMA about an offshore oil and gas well leak that
occurred off the coast of Australia over two months. The spill, which was
reported in an Annual offshore performance report by NOPSEMA in April 2016, is
estimated to have released 175 litres per day over 60 days, totalling 10 500
The committee inquired as to whether any investigation or punitive
action had taken place in response to the incident. Mr Stuart Smith, Chief
Executive Officer of NOPSEMA indicated that no investigation had been commenced
nor any fines issued. He further noted that:
Because the leak itself had no material environmental
impacts. It posed no safety impacts. The company acted in accordance with the
permissioning documents. When they discovered the leak, they stopped it
immediately. They then changed their practices to ensure that it could not be
repeated in future events, and there simply were not grounds for prosecution.
The company, in fact, had done everything it is required to do and, in the
absence of material impacts, it is hard to see what action could be taken
against them if we had sought to pursue an enforcement action.
Mr Smith also commented that this type of leak was not a common
Other topics raised
The committee discussed a wide range of topics during the two days of hearings
with the Industry, Innovation and Science portfolio. The above reporting of
discussions is not complete. Other topics discussed by the committee included:
Dumping of products on the Australian market including tomatoes,
cement, copy paper, aluminium and steel
Impact of 457 visa holder restrictions on ANSTO's workforce
ANSTO––proportion of isotopes produced and used domestically vs
Research and Development tax incentive
AIMS's Great Barrier Reef Long Term Monitoring Program
CSIRO's operating loss in the previous financial year and funding
over the forward estimates
CSIRO's peer review process
Closure of the Hazelwood power plant
De-centralisation of government agencies
Data manipulation by the Goddard Institute for Space Studies
Procurement processes of the Department of Industry, Innovation
Country of origin food labelling
Cooperative Research Centres
Advanced Manufacturing Growth Fund
Progress update of the commerciality review of the North West
Health and Safety incidents within NOPSEMA
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