Senate Foreign Affairs, Defence and Trade
Report to the Senate
1. On 10 May 2005, the Senate referred to the Committee for examination and report, the
- Particulars of proposed budget expenditure for
the service of the year ending 30 June 2006; and
- Particulars of certain proposed budget
expenditure for the service of the year ending 30 June 2006 relating to
the Defence portfolio and the Foreign Affairs and Trade portfolio.
2. The Committee has
considered the proposed budget expenditure for the year ending 30 June 2006,
and has received evidence from the Minister for Defence, Minister representing
the Minister for Veterans’ Affairs, the Minister for Foreign Affairs and the
Minister for Trade, and officers of the departments and agencies concerned.
3. The Committee met in public session
on 30 and 31 May, and 1 and 2 June 2005. Further written
explanations provided by departments and agencies will be presented separately
in volumes of additional information. This information will also be placed on
the Committee’s internet site (www.aph.gov.au/senate_fadt).
Questions on notice
4. The Committee has
resolved, under Standing Order 26, that written answers and additional
information should be submitted by close of business on Thursday, 21 July 2005.
to this round of estimates the Committee was asked to provide statistics on the
number of outstanding questions on notice. Due to an oversight, two agencies
incorrectly had outstanding questions attributed to them. The correction has
been made and a process is now in place to ensure a more methodical transfer of
6. The hearings are summarised in dot point in the respective
Department of Defence
7. The Committee
acknowledges the presence at the hearings, of Mr Ric Smith, AO, Secretary of the
Department of Defence, and General Peter Cosgrove, AC, MC, Chief of Defence
8. At the beginning of proceedings, General Cosgrove gave a comprehensive
operational overview on ADF operations overseas and in Australia. These included its three
major operations overseas—operations Catalyst
in Iraq, Anode in the Solomons and Spire
9. Matters raised by the
Portfolio overview and major corporate issues:
- Absorbed and offset budget measures by Defence: Australian Service
Medal (30 May, pp. 7–14, 109), capability and technology demonstrator program;
defence health services; joint combined training centre implementation;
'providing for Australia's security', Defence Capability Plan (30 May, pp. 14–21).
- Administrative savings program: reduction in the civilian work force (30 May, pp. 22–27).
- Savings measures: reduced administrative overheads and efficiency
dividend; Defence purchasing card and Defence travel card; late fees (30 May, pp. 27–29, 108–109).
- DMO. Stocktake program: ANAO involvement at defence sites; final error
rate and its value; discrepancy count; remediation program; major assets; financial
statements (30 May, pp. 29–38).
- Remediation plan: financial statements project board; Defence Materiel
Organisation; consultation with ANAO; audit clearance (30 May, pp. 38–47). Chief finance officer; financial
management training for senior staff (30
May, pp. 46–48).
- Other remediation activities;
record keeping errors, consultant collaboration in Defence stock–take (30 May, pp. 49–53). Supply customer accounts;
explosive ordnance; missing weapons and ordnance (30 May, pp. 54–56).
- Military and civilian leave records and record keeping; leave taking
policy and practices; executive remuneration
package (30 May, pp. 57–59; 31 May,
- Land, building and infrastructure valuation (30 May, pp. 59–60).
- Correspondence to US Embassy, related in part to Mr Barton, in evidence
before the references committee in February 2005; correspondence: a complaint
by a ranking military officer about 'ghost detainees'. Definition, and,
practice of, 'ghost detainees' or 'ghost prisoners' (30 May, pp. 109–114). Obligations of an officer under the Geneva Convention to report violations (30 May, pp. 114–116). Reporting the incident and
subsequent action from superiors; disciplinary action taken against the officer (30 May, pp. 116–117).
- Current practices on taking detainees (30 May, pp. 117–118).
- Defence Capability Projects (DCP): update on additional and deleted
projects (30 May, pp. 124–129).
- White paper (31 May,
- Increase in funding to Defence over ten years (31 May, p. 51).
Defence Materiel Organisation
- Project JP 2077—logistics information systems; The Get Well program;
tri–service management of a logistics information system; expenditure and
compliance (31 May, pp. 16–21).
- Seasprite helicopters: delivery to the services; weapons software
development (31 May, pp. 21–22).
- Aerospace industry sector plan (31
May, p. 27).
- FFG upgrade; ADI; ANAO report and recommendation (31 May, pp. 35–41).
- ASPI report on use of civilian contractors to support ADF operations (31 May, pp. 41–42).
Capital Facilities projects
- Randwick disposal and rationalisation interim works (30 May, p. 61; 31 May, p. 57).
- Former HMAS Platypus site remediation; Lavarack Barracks redevelopment;
capital facilities program (30 May, pp. 21–22).
Outcome 1—Command of operations
- Illegal fishing
vessels entering Australian waters; rules of engagement for Navy and Customs;
various types of operations; operational risks to Australian vessels and
personnel (30 May, pp. 118–122; 31
May, p. 4). Number, type and
location of arrests (30 May,
- UNOTIL in East Timor (31 May,
- 2005–2006 exercise program: cancelled programs (30 May, pp. 4–5; 31 May, pp. 43).
Outcome 2—Navy capability
- Armidale patrol boats: unit price; purpose of the vessels (31 May, pp. 27–28).
Outcome 3—Army capability
- Army vehicle replacement project: Project Overlander (31 May, pp. 23–24).
- MRH 90 helicopters: contracts and implementation phase (31 May, pp. 24–27).
- Increased funding for additional troop numbers; aspirational and actual
programs to integrate various fighting systems (31 May, pp. 46–47).
- Combat readiness capability; deployment to Solomon Islands and East
Timor. (31 May, pp. 47–48, 52).
- Company structure for battalions (31
May, p. 49).
- Availability of troops and resources during times of peak demand;
contingency planning; current personnel and structures (31 May, pp. 49–50).
- Capital acquisitions for Army capability now and in future (31 May, pp. 50–51).
- Tank urban survival kits (TUSK); new costs and delivery of new tanks (31 May, p. 51).
- Status of the investigation into the incident at Lavarack Barracks in
November 2004, when soldiers dressed as members of the Ku Klux Klan (31 May, pp. 70–71).
- Report of Australian SAS soldiers allegedly killing Afghani civilians (31 May, pp. 94–96).
Outcome 4—Air Force capability
- P3C Orion maritime aircraft patrols and their interaction with patrol
boats. North West Shelf surveillance; refuelling aircraft, maintenance costs (31 May, pp. 29–31).
- Air combat capability: F111s, FA18s and the joint strike fighter;
upgrade and renewal program; memorandum of understanding (31 May, pp. 42–46).
Outcome 5—Strategic policy
- Defence Cooperation Program: repairs to Solomon Islands patrol boats (31 May, p. 35).
- Flood review recommendations on Australia's intelligence agencies as
they affect the Defence agencies (31 May,
- Request for ADF police and military services investigation manuals
relating to standing orders, policy and procedures (31 May, p. 69).
(including legal services)
- Electricity rationing at Lavarack Barracks; energy conservation
strategy (31 May, pp. 52–53).
- Properties to be disposed of within three years (31 May, p. 54).
- Darwin waterfront development project (31 May, pp. 54–55).
- Special forces training facility at Holsworthy; Sydney Harbour
foreshore (31 May, pp. 55–56).
- Business processing centres and account processing centre in regional
Australia for 2005 (31 May, pp. 84–85).
- Introduction of a bill for the statutory establishment of the DMP and
the IGADF (31 May, pp. 69–70).
- Case relating to two officers from HMAS
Stirling Naval base; allegations; medical board of inquiry finding; fine;
payment by Defence of a proportion of board's legal costs (31 May, pp. 71–74). Foundation for delegate to
authorise payment of costs. Delegations in general: policy and procedures; scrutiny of the process (31 May,
pp. 75–80, 85–88).
- Report on recruitment and retention in the ADF; meeting operational
requirements; recruitment packages; officer retention rates; separation rates (31 May, pp. 4–8, 11–12). Critical trades shortages;
recruitment and retention strategies (30
May, pp. 8–11); survey of satisfaction; task force on recruitment and retention (30 May pp. 12–14).
- Reclassification in PBS of civilian employees across the services and
the DMO (31 May, pp. 33–34).
- Child care services for families of ADF personnel; new contract to
manage child care centres; tendering process (31 May, pp. 61–64).
- Services workforce access program for partners; overview of the
program: cost of program to date and projected cost for the next year;
participation rate; outcomes of program so far; program audit; feedback from
participants; criteria for involvement (31
May, pp. 81–84).
- Air Vice Marshal Criss's departure from the RAAF; Blick inquiry
finding; compensation for detriment arising from defective administration;
mediation; payments under the defective administration scheme; legal costs (31 May, pp. 91–94).
- Health services: Medical services 'two–star' position; review of
military health services; recommendations made by the review (31 May, p. 65).
- Compensation for RAAF and civilian aircraft workers exposed to toxic
substances (31 May, pp. 31–33, 35).
- Beryllium: information service; official responsibility for further contact
on the matter; use of beryllium across the services; OHS awareness of the
hazard; claims lodged (31 May,
- Environmental risks, including depleted uranium at Al Muthanna province
in Iraq; health assessment team; advice to ADF personnel deployed in Iraq;
testing of personnel in assessment team (31
May, pp. 64–65).
- ADF members exposed to radiation at RAAF Base Pearce (31 May, pp. 61, 66).
Department of Veterans’ Affairs
10. The Committee
acknowledges the presence at the hearings of Mr Mark Sullivan, Secretary, and officers of
the Department of Veterans’ Affairs.
11. The Committee
commented on the trend over the last couple of years toward a more 'straightforward
and easy to read' format in the portfolio budget statements. However, it did
request a return to the practice of including in the PBS, information on the
detail of budget measures and savings, which had been removed in recent times.
12. Issues that were discussed included:
- Budget measures: scheduled fee increases for health care providers;
allied health care fee indexation (pp. 64–66). 
- Overpayment to health providers (pp. 66–67).
- Implications of the free trade agreement on the cost of health care to
Australian veterans (pp. 67–68).
- Removal of calcium tablets from RPBS; RPBS prescription threshold per
annum (pp. 68–69).
- Decline in appropriation for income support; future projections for
pension recipients. Client population numbers (pp. 69–71, 105).
- Military Compensation and Rehabilitation Scheme (MCRS): adjustment of liability
provision (pp. 71–73).
- Cost forecasts for veterans' health care (pp. 74–75).
- Cost of legal services to MCRS; case reconsiderations by in–house legal
staff (pp. 76–77). In–house reconsiderations
under the VEA (p. 77).
- Six monthly review of claims processing under the MCRS; feedback from
ESOs on the new MCRS; training of advocates
Review of the permanent impairment guide by Comcare (pp. 78–80). Guidelines for the administration of the MCRS (p. 80).
- Korean health study: release of report (p. 81).
- Compensation for defence personnel involved in the F–111 tank de–sealing/re–sealing;
medical screening programs (pp. 82–83).
- Disability claims made and accepted since the release of the Study of health outcomes in aircraft maintenance
personnel (SHOAMP); number of claimants under various acts (pp. 83–85).
- Repatriation Medical Authority (RMA); types of disabilities and
statements of principles; scientific advisory committee (pp. 85–86).
- Progress of the atomic testing dosimetry report (pp. 86–87).
- Third Vietnam veterans mortality study and cancer incidence study (pp. 87–88).
- Study of the use of Dapsone to treat Vietnam personnel for malaria (p. 88).
- Children's health feasibility study (pp. 88–89).
- Complaint from claimant about an alleged adverse medical review (p. 89).
- Cessation of the Veterans' Affairs Financial Information Service (pp. 89–90).
- Veterans' hospital and health services: projected costs and policies on
service provision; control of costs; cost of gold and white cards (pp. 73–75).
- State health agreements; average annual growth rate for cost of GP and
specialist consultations (p. 75).
- Veterans' employment and training scheme; rehabilitation requirements
under the MRCS (pp. 90–91).
- Austin Hospital: redevelopment to improve appearance of psychiatric
ward; new food arrangements; gender issues (pp. 91–93).
- Gold card veterans in Tasmania and access to specialists for treatment;
types of treatment required; funding for additional specialists (pp. 93–94).
- Availability of grant money for Ballarat prisoner of war memorial (p. 94).
- Funding for the commemoration program: notional plan for 2006 (pp. 95–96).
- Electoral grants commemoration projects: timing of information sent and
processing of applications (pp. 96–99,
- War graves: commemoration care and maintenance; special projects (pp. 99–100).
- Estimated budget expenditure for Commonwealth War Graves for 2005–2006 (pp. 100–101).
- Gallipoli: responsibility for various aspects of organising Anzac services
and related events (p. 101).
- Thai–Burma monument at Hellfire Pass: issues about upgrading language
accessibility at the monument; focus of commemoration; Christian cross at the
memorial (pp. 102–103).
- Papua New Guinea: remains of Australian soldiers allegedly on display
as tourist attraction (pp. 103–104).
- Government response to a Senate Committee's report on the
administrative review of veterans' and military compensation and income support
- Anzac Field: naming of a football field in Subiaco, WA; naming of Anzac
Bridge in Sydney (pp. 107–108).
- Unscheduled absences by staff; types of leave taken; absence management
policy; certified agreements (pp. 62–64).
- Review of service delivery framework; strategy for managing dwindling
workload and human resources (pp. 104–105).
- Claim processing; further amalgamation with Defence service
distribution network in various states; changing way of doing business (pp. 104–106).
- Information technology: upgrade desk top
operating systems. Review of operating systems and developing applications
processing (pp. 106–107).
Foreign Affairs and Trade portfolio
Department of Foreign Affairs and
13. The Committee
acknowledges the presence at the hearings, of Dr Geoff Raby, Deputy Secretary, and
officers of the Department of Foreign Affairs and Trade.
14. Matters raised by the Committee included:
- Staffing levels in the department; staffing trends over the past
decade; how staffing levels are set; attrition rates of staff; the efficiency
dividend (1 June, pp. 3–7).
- Language proficiencies; identification of languages for priority
training; language designated/language desirable positions at overseas missions
(1 June, pp. 7–10).
- Cost of the
investigation into a possible breach of the APS code of conduct by Mr Trent
Smith; the Lackey leak; other officers under suspension, with, and without,
remuneration; on–going inquiries into leaks; DFAT officers charged with breach
of APS code of conduct (1 June,
- Issues relating to Australians serving sentences in prisons overseas
were discussed under portfolio overview but fall within output 2.1.1 Consular
Services. For more detail see below (1 June,
Output 1.1.1 and
- Representations made to Japan about Japan's
whaling program since the meeting of the International Whaling Commission (IWC)
in 2004 (1 June,
pp. 39–43, 53).
- Whether legal advice has been sought by DFAT in relation to taking
Japan to the International Court of Justice; action taken by the department to
ensure that the scientific research quota is not increased at this year's IWC
meeting (1 June,
Senator Campbell's visit to the Pacific and Europe to encourage
countries to vote for conservation; the basis of IWC membership; verbatim record
of the 52nd annual meeting of the IWC in Adelaide in 2000 which
publicly canvassed Australian initiatives in relation to the International
Court of Justice; Professor Gillan Triggs' involvement with DFAT; voting
processes at the IWC (1 June,
Verbatim transcript of the 2000 International Whaling Commission
meeting in Adelaide; intervention dealing with action on North Pacific minke
whale; Dr Trigg's article; International Court of Justice (2 June, pp. 3–8).
Proposed ASEAN Treaty of Amity and
(1 June, pp. 43–45).
Security situation in Afghanistan;
preparations for general elections in Afghanistan; visits by Australian
diplomatic officials to Afghanistan; representations to the provisional
government of Afghanistan about the explosion in drug production; requests from
the provisional government for military assistance; consideration of diplomatic
representation in Kabul (1 June,
Possible outbreak of bird flu in the region (1 June, p. 48).
mainstream Islam in the region; Australia–Malaysia Institute; Australia–Indonesia
Institute (1 June,
pp. 49, 50).
Partnership for Reconstruction and Development (1 June, pp. 49–50).
about the plight of political prisoners, the re–detention of Aung San Suu Kyi
and the security situation in Burma (Myanmar); the progress of the national
convention in Burma; current status of our human rights engagement in Burma (1 June, pp. 50–51).
Also output 1.1.8: Location and security of Australian Embassy in
Jakarta; assistance program to families of those killed in the bomb attack on
the Australian Embassy in Jakarta (1 June, pp. 51–52, 58).
DFAT in the issue of the invitation to Prince Charles to the opening of the
Commonwealth Games (1 June,
in Morocco between the military and protestors over the occupied territories in
the Western Sahara; Australian support for a referendum to allow a decision on
self–determination by the people of the Western Sahara (1 June, p. 54).
of an Australian diplomatic mission in Libya; developments in Australia's
relationship with Libya since the restoration of diplomatic ties; Australian
companies with commercial links; number of Australians in Libya; consular
coverage (1 June,
pp. 54–55, 71–72).
Memorandum of understanding with Nauru (1 June, pp. 55–57).
Progress on greater pooling of regional resources in the Pacific region
Whether Australia sent an official delegation to Iraq to observe the
elections held in late January (1 June, pp. 58–59).
Senator Lightfoot's visit to Iraq; departmental travel advisory on
Iraq; travel on official and private passports; departmental guidelines in
relation to travelling overseas with firearms; other parliamentary travel to
Iraq; Minister for Foreign Affairs objecting to Mr Rudd's plan to visit Iraq (1 June, pp. 60–67).
department has engaged the services of Dr John Gee as a consultant; DFAT
contact with Dr Gee; concerns about the direction of the Iraq Survey Group;
meeting between Minister for Foreign Affairs and Dr Gee; Dr Gee's resignation;
when the department became aware of Dr Gee's intention to resign (1 June, pp. 67–71, 76–77). DFAT response
to the release of the Iraq Survey Group's final report (1 June,
Papua New Guinea in relation to the Enhanced Cooperation Program (1 June, pp. 73–74).
Security problem at Brisbane airport during a visit by Sir
Michael Somare; briefing on airport security practices and procedures for
visiting dignitaries (1 June,
Output 1.1.5 and Output 1.1.6 (evidence heard on 2 June 2005)
Australia's trade performance from 2000–2001 to the present time (2 June, pp. 65–66).
Export growth forecast; impact of the drought; major resource items—iron
and coal; factors impacting on Australia's export performance; services
performance (2 June, pp. 66–69).
WTO: status of the Doha negotiations; ministerial meeting in Hong Kong
and other meetings; long term settlement of the round and APEC (2 June, pp. 70–71, 74). Cairns group activity (2 June, pp. 71–73). New services offer; Bogor
goals (2 June, pp. 73–75).
Free trade agreements: ASEAN, China, Malaysia and the United Arab
Emirates; United States–Australia FTA; departmental resources and staffing of
the Asia Trade Task Force (2 June, pp. 75–81).
US–FTA: screen producers association of Australia (2 June, p. 82).
Vietnam's WTO accession negotiations with Australia (2 June, pp. 82–84).
United Nations: panel report; Human Rights Commission and Security Council (2 June, pp. 8–9).
International Criminal Court: correspondence from US regarding proposed
article 98(2) (2 June, pp. 9–10).
Possible underground nuclear testing in North Korea; protection of nuclear
material, particularly in the Soviet Union
(2 June, pp. 11–12).
International projection of Australian policies and capabilities on
counter–terrorism; definition of 'terrorism'; threat to Australia (2 June, pp. 12–13).
Output 1.2 and 1.3
Assessment of a threat to Australian Embassy in Cambodia; assessment of
the threat of Jemaah Islamiah; upgraded security for the embassy (2 June, pp. 14–15).
Return to Israel of a diplomat (2 June,
issues in output 2.1 Consular Services,
were discussed under portfolio overview.
The number of Australians serving sentences in prisons overseas;
consular assistance provided to convicted prisoners; intervention in legal
cases; access to legal representation; scheme for applying for financial
assistance from the Attorney–General's department to fund legal representation
(1 June, pp. 16–18, 22, 33).
Government intervention to seek a pardon or clemency; Scanlon case in
the Maldives (1 June, pp. 18,
DFAT's role in the development of prisoner exchange agreements; status
of prisoner exchange agreement with Indonesia (1 June, pp. 18–19).
Whether the government has offered the assistance of
two QCs for Schappelle Corby's appeal (1 June,
Talaal Adree case in Kuwait (1 June, pp. 22–26).
The effectiveness of the department's anti–drug
trafficking message for overseas travellers (1 June,
pp. 27, 34).
for Australians travelling to Indonesia (1 June,
Deportation of Ms
Alvarez Solon (1 June, pp. 28–38,
Preparation of travel advisories; evidence taken as the basis for
content of a travel advisory; correspondence from justice minister to Minister
for Foreign Affairs; investigation into alleged sexual assault on children in
Bali; funding to Child Wise organisation; Hints
for Australian travellers booklet (2 June,
pp. 17–23, 29–30).
Customs report detailing security problems at Sydney airport (2 June, pp. 23–24).
Australian official passports lost or stolen; ordinary passports lost
or stolen; tracking lost passports and replacement procedures; passport fraud;
biometrics project; passport cancellation because of security risk (2 June, pp. 24–29).
AusAID (evidence heard on 2 June 2005)
raised by the Committee included:
The aid white paper; consultation in the drafting of the paper; seminars
and discussion paper; cost of the white paper process (pp. 30–32, 36).
OECD Development Assistance Committee (DAC) peer review; AusAID's
forward strategies for country and regional programs (p. 32). Poverty reduction: implementation, monitoring and
evaluation; increase and decline in aid expenditure for various programs;
commitment to maintain or increase ODA (pp. 32–34).
Health and education in Melanesia; funding of aid programs in
the health and education and infrastructure sectors (p. 34).
Varying emphasis in aid for rural development, infrastructure and governance (p. 35).
Millennium development goals; Australia's report on goal 8 (pp. 36–37).
Contributions to aid programs by other government departments and other
organisations (p. 36).
'Harmonisation' processes in Asia and the Pacific region; collaboration
between Australia, New Zealand and the Cook Islands (pp. 38–39).
Enhanced Cooperation Program (ECP) with Papua New Guinea; aid component
Global fund contribution; Australia's level of participation; AusAID's
relationship with the global fund; Australia's role in the constituency group; steering
committee meeting (pp. 41–43).
AusAID special representative on AIDS; budget on overseas development
assistance to be spent on sexual and reproductive health (p. 43).
Australia–Indonesia Partnership for Reconstruction and Development;
women's reproductive health issues and; violence against women and children; church
involvement in delivery of HIV/AIDS support services; UNFPA (pp. 43–45).
East Timor: maternal mortality and malnutrition rates; audit on health
services in Timor Leste (p. 45).
Tsunami relief: management of expenditure; coordination of ongoing
support (pp. 45–46).
Austrade (evidence heard on 2
raised by the Committee included:
Export Market Development Grant Scheme (EMDG): processing of
applications where expenditure was incurred in 2003–04; allocation of funds for
the program; average payment under the scheme (pp. 47–50).
Review of EMDG under legislation; cost of, and report on, the review; annual
budget target to double Australian exporting community; number of new and continuing
Austrade clients in various years; scheme eligibility criteria; EMDG
administration costs (pp. 51–57).
Australia's export performance: rise in export values; Reserve Bank
statement; options to improve Australia's trade performance; pressure on
Austrade budgeting and staffing arrangements; survey on exporter confidence;
the Gregory effect (pp. 57–61).
Elaborately transformed manufactures (ETMs); EMDG grants classified as
ETMs; report to the Manufacturing Industry Consultative Council by Centre for
Strategic Economic Studies; ETM export to China (pp. 62–63).
Austrade international resources in China; proposed China free trade
agreement (p. 64).
17. The Committee
expresses its appreciation of the assistance given during its hearings by
Senator the Hon Robert Hill, Minister for Defence. The
Committee also acknowledges the attendance and cooperation of departmental and
agency officers and the services of various parliamentary staff involved in the