Budget Estimates 2014–15

Budget Estimates 2014–15

Report to the Senate


1.1        On 13 May 2014, the Senate referred to the committee for examination and report the following documents in relation to the Industry and Treasury portfolios:

1.2        The committee is required to report to the Senate on its consideration of 2014–15 Budget Estimates on Tuesday 24 June 2014.[2]

Portfolio structures and outcomes

1.3        Following the Machinery of Government changes arising from the Administrative Arrangements Orders dated 18 September 2013, 3 October 2013 and 12 December 2013, the Department of Industry has simplified its outcomes and programmes structure. The Department has one outcome and four programmes. The Outcome is as follows:

Enabling growth and productivity for globally competitive industries through building skills and capability, supporting science and innovation, encouraging investment and improving regulation.[3]

1.4        The four programmes are:

1.5        The complete structure and outcomes for each portfolio are summarised in the appendices as indicated below:

General comments

1.6        The committee conducted hearings over four days:

1.7        In total, the committee met for 39 hours and 10 minutes, excluding breaks.

1.8        The committee received evidence from the following ministers:

1.9        The committee thanks the ministers and officers who attended the hearings for their assistance. Evidence was also provided by:

Questions on notice

1.10      The committee draws the attention of all departments and agencies to the agreed deadline of Friday 25 July 2014 for the receipt of answers to questions taken on notice from this round, in accordance with Standing Order 26.

1.11      As the committee is required to report before responses to questions are due, this report has been prepared without reference to any of these responses. Following finalisation of indices of questions taken on notice during and after the hearings, indices will be available.

1.12      Answers to questions taken on notice are tabled in the Senate. They may be accessed from the committee's website.

1.13      For the 2013–14 Additional Budget Estimates round, answers to questions on notice were due to be provided to the committee by Thursday, 24 April 2014. The committee notes that:

Public interest immunity claims

1.14      On 13 May 2009, the Senate passed an order relating to public interest immunity claims.[4] The order, moved by Senator Cormann, set out the processes to be followed if a witness declines to answer a question. The full text of this order was provided to departments and agencies prior to the hearings and was also incorporated in the Chair's opening statements on all four days of the Budget Estimates hearings.

Record of proceedings

1.15      This report does not attempt to analyse the evidence presented over the four days of hearings. However, it does include a brief list of the issues that were traversed by the committee for the respective portfolios.

1.16      Copies of the Hansard transcripts, documents tabled at the hearings, and additional information received after the hearings (see Appendices 1 and 2 for the list of the documents) are tabled in the Senate and available on the committee's website.

1.17      Page numbers in footnotes following the topics listed below refer to proof Hansard transcripts. Page numbers in the official Hansard transcripts, once they are produced, may differ from the page numbers in the proofs.

Matters raised—Industry portfolio

1.18      On 2 and 3 June 2014, the committee examined the estimates for the:

1.19      Matters examined included the following:

Australian Nuclear Science and Technology Organisation

1.20      During the opening section of its appearance, the Australian Nuclear Science and Technology Organisation's (ANSTO) briefed the committee on its recent achievements. The Chief Executive Officer commented on the importance of single-crystal silicon and the agency's role as lead supplier of neutron transmutation doped silicon (or irradiated silicon) globally:

Single-crystal silicon is the basis of most modern microelectronic systems, and the high-performance end of single-crystal silicon requires irradiation in research reactors. During the course of the last year ANSTO has moved to be the leading supplier of neutron [transmutation] doped silicon globally, supplying nearly one-third of the world market. This allows us to utilise the reactor to serve industries such as the high-speed train, hybrid car, wind turbine and other industries that use microelectronics that are of the highest quality. In addition, [ANSTO is] busy developing a rare earths capability in minerals extraction and processing in the Dubbo area. The Dubbo Zirconia Project is set to provide hundreds of jobs for the people of Dubbo, and the underlying capacity to extract the value from this mineral deposit was developed at ANSTO Minerals.[5]

1.21      In relation to questions on the nuclear medicine project, ANSTO was able to update the committee with the project's progress:

On 8 May an important milestone was marked in the ANSTO nuclear medicine project, which is designed to put in place a facility which will produce molybdenum-99, which is the basis of about 85 per cent of all nuclear medicine procedures locally and internationally. On that day, Minister Macfarlane, the honourable Minister for Industry, was at ANSTO to do the sod-turning ceremony for the start of the construction phase for that facility and for the associated Sunroc waste processing facility. These two projects in aggregate have attracted $168.8 million of funding from the government, and we will be in a position on completion of these projects to supply around 20 per cent of the global requirements for molybdenum-99, which would service approximately 10 million to 11 million patients a year who would get diagnoses from that supply. So we are very excited by this project. We are very excited to be moving into the construction phase. We will be able to supply from the middle and towards the end of 2016.[6]

1.22      Other matters of interest discussed during the hearing included:

Commonwealth Scientific and Industrial Research Organisation

1.23      The main topics canvassed by the committee during the Commonwealth Scientific and Industrial Research Organisation (CSIRO)'s appearance included:

1.24      In response to a question by the committee about CSIRO's funding priorities, the Chief Executive Officer advised:

[CSIRO has] discretion on where [it] allocate[s] funding, but we also need to consider the external revenue market. [CSIRO is] 40 per cent funded by the external market and 60 per cent funded, so both of those factors come into play in our strategic decisions, both our decadal strategic decisions and also decisions that we make over the four years.


[CSIRO sets its] national priorities through [its] national flagship programs, so we are very focused on the national priorities and have been for many decades. [CSIRO continues to] set those national flagships in consultation with leaders at all levels—government, community, industry—[to set its strategic and decadal strategic plans]. So [it is] guided by national priorities.[21]

1.25      In relation to CSIRO's organisational reform to bring its three lines of business together, the Chief Executive Officer advised:

[CSIRO's] key lines of business are, firstly, that we are the pre-eminent manager of national facilities, and we will have that as a separate line; we will also have our flagship program, which is our multidisciplinary program; we will bring our divisions and flagships together to become the most multidisciplinary organisation of our type in the world; and we will also separate our services business, which we do for industry and the community. So, they are the main three lines of business. Secondly, as I mentioned, one of the key elements of what we do is focus on the national priorities, and we will do that through nine flagships, and these nine flagships will encompass the work we have done in our divisions and give us a simpler and much more streamlined positioning.[22]

1.26      In the Chief Executive Officer's assessment, this organisational reform would set CSIRO up for 'growth [...] [in] the decades to come, and it will position [CSIRO] as one of the leaders in R&D in the world'.[23]

Chief Scientist and Office of the Chief Scientist

1.27      During the Chief Scientist's appearance, the committee discussed one of the findings of the Kemp-Norton review of the demand driven funding system, which related to the issue of enrolments in sciences and mathematics. The finding stated: 'rapid increase in science enrolments is leading to employment problems for graduates'.[24]

1.28      In response to the finding, the Chief Scientist made the following comment:

[...] I think that the data that were used to draw that conclusion were extensively from the health science group, and the graduate survey, and that includes some quite focused professional degrees. I would make the assumption, for example, that if you study forensic science you do it because that is what you want to do—and three or four months after graduation you might still be looking for a job in that area. On the other hand, I see a Bachelor of Science degree as a generalist degree that gives the student the content—whether it is physics, chemistry or mathematics—and also an understanding of the processes in science's application in the economy more broadly. I am not pretending that every science graduate can go and walk into a job tomorrow. But I think a survey of students taken just a few months under graduation, and comparing the whole of science with a cluster that is very much driven by a substantial number of highly focused professional degrees, is not all that illuminating.[25]

1.29      Other matters of interest discussed included:

1.30      In relation to a question asked about how the Chief Scientist would lead a science research and development plan, he noted the importance of a whole-of-government approach. The Chief Scientist advised:

What we would do is have a group of people representing all the portfolios that have an interest in science. We would be identifying the four main planks in the platform. Let me start with the vision: you need to actually understand what it is all for, and we are trying very hard to distinguish ends from means. So if the endgame is to build a stronger Australia, what does that actually mean? Of course, innovation will play a part in that because we have to transform our economy. So in the mind's eye we have building a stronger Australia as the endgame. Innovation is a definite means to an end to transform the economy. And then we have the planks that underpin it—education, research and international engagement—and, sitting under that, the various disciplines. So there is no point in taking a position on Australia's position on clean energy, for example, without thinking, again, that we need physicists and mathematicians to be able to deliver on that aspiration. It is a question of how you build that base to deliver on an aspiration. We are trying to write an aspiration that is sensible and then line up all of the elements underneath that to make sure we can deliver on it and make sure they are all taken into account. We have got decisions being made in one portfolio which have an impact on capacity in another portfolio without the two actually being taken into account—the cause and the effect.[30]

1.31      Some of the positive initiatives identified by the Chief Scientist in the budget included: the Future Fellowships; support for infrastructure; funds for operating the research vessel; the additional money to ANSTO for running its OPAL reactor; and the establishment of the Medical Future Fund.[31]

Geoscience Australia

1.32      The main areas of interest canvassed during Geoscience Australia's (Geoscience) appearance before the committee included:

Anti-Dumping Commission

1.33      During its examination of the Commission, the committee canvassed the following matters:

Australian Institute of Marine Science)

1.34      During the Australian Institute of Marine Science's (AIMS) appearance before the committee, it was asked about the divergence of interpretation of its report about the Great Barrier Reef.

1.35      The Chief Executive Officer, Mr Gunn,  provided the following comment:

It is an interesting question. I grabbed a few of the headlines from different newspapers. There is one press release, pretty clear we hope, which had 'Rivers seen as a big risk for the Great Barrier Reef' as a headline. 'AIMS report shows farming run-off hurting the Great Barrier Reef health'—that was not a subject of the paper. 'Barrier Reef research a blessing for the mining industry'; '10 years of satellite data shows land management key to protecting the reef''—that was by far the best headline that we read, because it certainly fitted the paper—and 'GBR health depends on better land management'.[T]his is a cameo of the type of challenge you face when you put research results out into a public space—the media would like to grab a headline, and different advocates on different sides take a different perspective.[47]

1.36      Mr Gunn further noted the agency's educative role in explaining its research:

[AIMS's] position is very much to report science as we see it and then to work with the various advocates or proponents to really deepen their understanding of that matter. So be it the Great Barrier Reef paper that we did two years ago or this one, we are not surprised at the range of interpretations. [AIMS's] task now is to go and work with those different groups to try to explain to them exactly what that paper meant.[48]

1.37      As part of AIMS's adaptation strategies, Mr Gunn advised the committee:

[AIMS will] make sure that we service our key clients be they the Commonwealth, state governments, foundations or industry. I could not countenance us winding back our effort on the offshore oil and gas industries [as they make up a major source of revenue].[49]

1.38      Other related matters covered included:

National Offshore Petroleum Safety and Environment Management Authority

1.39      During National Offshore Petroleum Safety and Environment Management Authority's (NOPSEMA) examination, NOPSEMA was asked about the changes to its processes as result of amendments to the environment regulations in the Offshore Petroleum and Greenhouse Gas Storage Act.

1.40      NOPSEMA's Chief Executive Officer, Ms Cutler, advised the committee:

[...] Following changes to the environment reg[ulation]s under our legislation on 28 February this year [...] an assessment and an acceptance under [NOPSEMA's] legislation will count as also meeting the requirements of the Environment Protection and Biodiversity Conservation Act [EPBC], in effect moving a layer of approvals that was at its heart duplicative. [The] elements that were not duplicative were augmented by the changes to the environment reg[ulation]s under our act. [I]n practical terms, all petroleum activities need to have an environment plan accepted by NOPSEMA before they can proceed—exploration, appraisal and development. In addition, new development proposals require assessment of an offshore project proposal, or OPP, under [NOPSEMA's] legislation as well. That is an early-stage assessment to determine in broad terms whether a development—a longer-term activity—is acceptable from an environmental perspective.[53]

1.41      Other matters examined by the committee included:

1.42      In explaining the difference between an environment plan and an OPP, Ms Cutler commented:

The environment plan covers all petroleum activity. Every petroleum activity has to have an environment plan. For very-long-term projects, and a development project may take five to 10 years to get up and running, and then it may run for another five to 40 years, there is an additional requirement of an Offshore Project Proposal, which typically should be undertaken at the early stage of project planning to tease out and understand the potential effects on the environment. It is an acceptability test. [NOPSEMA] cannot accept it unless there is a case that the impacts are acceptable.[58]

Australian Skills Quality Authority

1.43      Since the Australian Skills Quality Authority's (ASQA) inception on 1 July 2011 and as at 31 March 2014, it has issued 273 written notices to cancel or suspend registration (and made 130 decisions to cancel or suspend registration) and refused to reregister 113 existing registered training organisations (RTOs). These decisions have affected 283 individual RTOs (given an RTO can have multiple decisions made against it).[59]

1.44      As at 31 March 2014, 62.9 per cent of the 283 affected RTOs were listed as 'current' on the national register and 37.1 per cent of the remaining 105 RTOs listed as either 'cancelled' or 'not-current'. There were 94 finalised matters before the Administrative Appeals Tribunal and of these, only two resulted in successful appeals.[60]

1.45      During the ASQA's examination by the committee, officers were questioned about the point at which ASQA can commence an inquiry into a non-compliance issue[61].

1.46      Professor Lavarch advised that ASQA can act on its own initiative. He further noted:

Generally speaking, in the decision to take a particular regulatory action or to commence an investigation we will either rely on complaints—we might get an individual complaint—or we have memorandums of understanding with various government agencies, state regulators and the like—state police forces and the like—and that might mean that we come into possession of information which results in us commencing activity. But we are not bound only to respond to a complaint.

If we were concerned about a particular activity, however we came to it, we are able to take action as we see fit[62].

1.47      Other related matters examined included:

Department of Industry [Cross-portfolio]

1.48      Under examination by the committee, the Department of Industry [cross-portfolio] was questioned about the effect of the budget on the Department of Industry’s capabilities as well as on staffing levels and the continuation, reduction or cessation of various programs.[68]

1.49      In relation to questioning about any staffing reduction in the automotive section, the department advised that despite some staff changes, the staffing level in the automotive section remained the same.[69]

1.50      On the basis of information contained in Budget Paper No. 2, the Secretary advised the department had $845 million savings from closing programs, and other savings in the areas of cooperative research centres and clean technology.[70]

1.51      In providing the committee with the net reduction figure of $279 million, the Secretary noted the need to acknowledge the current department did not exist last year and changes made to the department has made it more difficult to compare like with like. The figure has included new spending initiatives.[71]

Other areas of examination by the committee included:

Department of Industry [Programme 1—Building Skills and Capability]

1.52      During Department of Industry's [Programme 1] examination, the department provided information on the trade support loans, which make up to $20,000 available for apprentice training in an identified area of priority on the national skills list.[76]

1.53      The department confirmed some of the features of the loans included:

1.54      Other related matters canvassed included:

Department of Industry [Programme 2—Supporting Science and Innovation]

1.55      During the Department of Industry's Programme 2 appearance, the department was questioned about investment in the science sector. The Secretary, Ms Beauchamp, advised:

Overall, there is an investment in science and science agencies, per annum, of I think about $8.2 billion. That is made up of competitive grants and research and development, and about $2 billion for government research agencies. Of that, the portfolio itself has over $5 billion worth of investment in science and science agencies. We heard about a lot of that this morning through CSIRO, ANSTO, AIMS, Geoscience Australia, but then of course we have Questacon, the National Measurement Institute, the Australian Astronomical Observatory and a range of other science programs in the portfolio, including cooperative research centres, the SKA project and the like.

There is a big investment going into science—you would have heard from the chief scientist this morning about the development of a strategy through the Prime Minister's Science Council and the like to make sure the science investment is well targeted, and targeted on outcomes. Certainly, from Minister Macfarlane's point of view, he is wanting to make sure that the science this portfolio is responsible for absolutely delivers productivity benefits for the economy.[88]

1.56      Other topics examined by the committee included:

1.57      The Director of Questacon, Professor Durant, informed the committee the Science for Australia's Future measure is a continuation of the Inspiring Australia Initiative, which received bipartisan support over many years. The Director added:

Included in [the Science for Australia's Future program] are the Prime Minister's prizes for science, which have been running since 2000, and National Science Week, which also has a long history and is Australia's largest festival, with last year over 1,800 events in just about every part of Australia. The new element this year is some funding for the Questacon smart skills program, which is a national initiative to improve technology, learning and skill development in young Australians, helping them develop creativity, problem solving and entrepreneurship skills. Finally, as part of that Questacon component, there is an element to increase access to Questacon resources, focusing on regional areas and other areas of need. So we have a very great opportunity to continue the very good work of the past few years.[96]

1.58      In relation to where changes and/or efficiencies have been made in the department, the Secretary outlined:

In the portfolio, one of the things I would like to see is more partnerships with industry and researchers. We are doing that, and the government has allocated funding to do it, through the Entrepreneurs Infrastructure Fund. But some of the things that do go on in our science agencies probably do need to get more of a profile in terms of success stories. I would like to see more of those things profiled across the portfolio. There is some absolutely fantastic work and great science going on. It is that translation to targeted, value-for-money real outcomes that this portfolio is absolutely focused on.[97]

Department of Industry [Programme 3—Encouraging Investment]

Australian Renewable Energy Agency)

1.59      During Australian Renewable Energy Agency's (ARENA) appearance before the committee, the Chief Executive Officer, Mr Frischknecht, clarified its relationship with the Department of Industry:

[ARENA is its] own independent agency in the sense that [it has its] own act and a commercially oriented independent board, although the board members are appointed by the minister and the secretary is also on board. There are two employees—you are looking at both of them [the Chief Executive Officer and the Chief Financial Officer]—and the remainder of our employees are made available by the department. We are physically housed within a departmentally owned building[98].

1.60        Mr Frischknecht explained the complementary relationship between ARENA and the CEFC:

ARENA is focused on the innovation side of renewable energy, so in the long term, bringing the costs down, and we support the entire breadth of technologies across the development pathway—so desktop research through to near commercial. We do so effectively as an equity investor and we take a substantial amount of risk in the outcome. The Clean Energy Finance Corporation is very much focused on the more mature technologies. They are interested in typically taking a debt interest ...[99]

1.61      Until the repeal legislation passes through both houses of parliament, Mr Frischknecht confirmed that ARENA is operating on a business as usual basis;[100]

1.62      ARENA was also examined on a range of other related matters, including:

1.63      In relation the expected outcomes of these 200 projects, the Chief Executive Officer provided the committee with the following:

We have numerous exciting projects along the breadth of the innovation chain. Let me touch on just one—the AGL one. It is our largest; it is about a $450 million project and 155 megawatts in two solar farms—one at Nyngan and one at Broken Hill. In the long term what we expect these large-scale projects to do is bring down the cost of solar. There are a lot of early-mover disadvantages: for example, the costs of borrowing are higher; the costs of development are higher; the contingency margins for construction are higher. That is simply because nobody has done it before in Australia. All of those costs—which we estimate are at least 30 per cent of the total cost of the project or approximately our subsidy—should go away once we have done a handful of projects. So that is how at the large scale we measure it. We have different success measurements at the low end. There are, of course, some that do not succeed. We expect that either because they cannot find matching funding or because they fail technically, but that it part of the innovation process. One thing we have been able to do is claw back some of that money from the projects that are not heading in the right direction in total saving the government over $½ billion.[106]

1.64        The department's Secretary, Ms Beauchamp, assured the committee existing contracts will not be at risk following the abolition of ARENA:

I will just confirm the government's intention to commit and honour contracts that have been entered into to the value of about $1.2 billion. The government also provided departmental funds to ensure those contracts and milestone payments are managed in accordance with existing arrangements.[107]

1.65      This was also confirmed by the Chief Executive Officer:

...in the event of the repeal legislation being passed, the funding remains unchanged as funding has already been allocated by the budget as an existing project.[108]

Programme 3— Encouraging Investment [Resources and Energy combined]

1.66      During the Department of Industry's [Programme 3 Resources and Energy] examination, the department was questioned on a range of matters, including:

Programme 3— Encouraging Investment [Industry]

1.67      During the Department of Industry's [Programme 3 Industry] examination, the department was questioned on a range of matters, including:

1.68      In relation to the committee's request for information about the primary aim of the Tasmanian Major Projects Approval Agency and the money allocated to realise this aim, the department advised:

Over the next three years funding for 2014–15 is $0.926 million; in 2015–16 it will be $0.904 million and in 2016–17, $0.901 million. In terms of the activities, the aim of the Tasmanian Major Projects Approval Agency is to help inform major project proponents of all the regulations or approvals that they need to do across the Commonwealth. [The department] hope[s] to work with the Office of Coordinator-General to identify the state and local ones. Then the aim is to attempt to map those in terms of when they need to be done, when the milestones need to be achieved, to look at any overlaps and to see what might be the critical path through those, and to try to streamline them if possible.

Certainly, the aim is not to usurp any of the regulations or approvals—they are in place—but it is to try to identify them and make sure that people do not miss the ones that they need to meet. And the aim is to coordinate them, if there are any ways of doing that.[121]

1.69      The Minister representing the Minister for Industry added:

The overall objective of the agency is to facilitate private sector investment in Tasmania, and to create an environment which will aid investment attraction to the state. In particular, it will aim to improve the speed and efficiency of Commonwealth and state regulatory approvals in Tasmania for new projects that require some form of Commonwealth regulatory approval or compliance-reporting processes; ensure that the proponent is aware, up front, of all approval requirements and time lines; and manage all approval processes for projects that intend to invest a minimum aggregated total of $50 million in new gross fixed capital within Tasmania by no later than 2020.[122]

Matters raised—Treasury Portfolio

1.70      On 3, 4 and 5 June 2014, the committee examined the estimates for:

Australian Bureau of Statistics

1.71      The committee examined the Australian Bureau of Statistics on the following main topics:

Australian Prudential Regulation Authority

1.72      During Australian Prudential Regulation Authority's (APRA) examination, the following range of issues were covered:

1.73      The committee wished Dr Laker, the Chairman, well in his retirement. It acknowledged the tremendous service Dr Laker provided to Australia, including his contribution to the committee's hearings, his responses to questions from all sides, and the critical advice he and his organisation have provided to the government of the day during the global financial crisis (GFC).[133]

Commonwealth Grants Commission

1.74      During the Commonwealth Grants Commission's (CGC) appearance before the committee, officers were questioned on the following matters:

Australian Office of Financial Management

1.75      The committee covered the following topics during its examination of the Australian Office of Financial Management (AOFM):

Royal Australian Mint

1.76      The committee welcomed the Royal Australian Mint's (RAM) inaugural appearance before the committee.

1.77      During the RAM's examination, it was questioned on a range of matters, including:

Australian Securities and Investments Commission

1.78      The Australian Securities and Investments Commission (ASIC), in its opening statement, provided the committee with an update on its budget situation, including a reduction of $44 million (12 per cent) from its operating budget and the effect this has on its staffing level, on its workload and shift in work priorities.[148]

1.79      ASIC's Chairman, Mr Medcraft, advised that while ASIC can still perform its statutory functions with reduced funding, and would continue to achieve its strategic priorities, the lower level of resources mean:

[ASIC has] had to adjust [its] risk appetite from focusing on those areas that [it has] assessed as medium risk and higher to those better than medium-high risk. [ASIC] will rely more on intelligence [it gets] from misconduct reports and complaints [it] receive[s]. [It] will limit [its] risk-based approach to focus on those entities or activities which actually have the greatest market impact, but where [it does] find someone has intentionally broken the law [it] will continue to do [its] best to basically enforce the law and make sure that the consequences are severe.

Some examples of the changes in [its] consumer cluster are the deposit takers, credit and insurance team. There will be reduced proactive surveillance. As a result, they will focus on activity by entities that have the greatest market impact at the expense of smaller entities that have a smaller customer basis. In [ASIC's] markets cluster [it] will be doing less proactive surveillance of debenture issuers and fewer document reviews, for example prospectuses. In [its] registry businesses there will be reduced levels of service to [its] registry customers and fewer process improvements such as online services.[149]

1.80      Other related matters covered during the committee's examination included:

1.81      In relation to Commonwealth financial planning, the committee sought further information from ASIC in relation to why the new licence conditions imposed on CBA could not cover the following:

Australian Competition and Consumer Commission

1.82      During the Australian Competition and Consumer Commission's (ACCC) appearance, the committee also examined the following matters:

National Competition Council

1.83      During the National Competition Council's (NCC) appearance before the committee, the NCC was questioned on the following matters:

Productivity Commission

1.84      During the Productivity Commission (PC) examination, the matters raised included:

Treasury [Fiscal Group] and the Clean Energy Finance Corporation

Clean Energy Finance Corporation (CEFC)

1.85      The Chief Executive Officer of the Clean Energy Finance Corporation (CEFC), Mr Yates, in response to the committee's question about CEFC board's obligations and duties when dealing with potential investors during the election period, provided the following summary of CEFC's legal obligations:

[The CEFC is] an institution which is obviously created through an act of parliament. That act requires us to follow statutory obligations that are imposed on me, a statutory officer, and on our board pursuant to the act. Until such time as the act is revoked we must continue to comply with those statutory obligations.[174]

1.86      Other main topics dealt with during the examination of the CEFC included:

1.87      With regard to the types of projects the CEFC has in its portfolio, Mr Yates advised:

Wind is probably around 26 per cent of our portfolio at most. Most of our activity happens to be in energy efficiency. Under the act, 50 per cent of it needs to be in renewable energy, so we are restricted in that, but a lot of our activity happens to be in energy efficiency areas and productivity areas. So that means over half of our activity really stems from continuing the work that has been done in this sector through organisations like Low Carbon Australia, for example. We have been building up aggregation vehicles. We are working with smaller manufacturers. Of the transactions we are doing, I am thinking about Nightingale apples and refrigeration for apple farms. We have been doing biogas facilities in meatworks. Our mandate is, in essence, to ensure that the private sector, be it big or small, can access capital to become more productive. By becoming more productive, they reduce their energy consumption and, by reducing their energy consumption, they reduce their carbon emissions. So our activities are very broad. It is all over Australia and it is very broad from large to small companies and it is also all the way through to councils. We have invested with five to six councils, I think, and in nearly all our transactions we also have a corresponding proportion of debt coming from the private sector. The private sector tends to match off on what we have done.[180]

Fiscal Group

1.88      The main topics covered during the examination of the Fiscal Group included:

Treasury [Macroeconomic Group and Corporate Strategy and Services Group ]

1.89      Dr Gruen, Executive Director, Macroeconomic Group (Domestic), provided the committee with a summary of the national accounts, which were released in the morning by the ABS.

1.90      Highlighting some of the information released, Dr Gruen noted:

1.91      Topics covered during the committee's examination of the Treasury included:

1.92      At the broad picture level, Dr Gruen explained why growth has been strong:

[T]he huge increase we have seen in the capital stock in the mining sector—by our estimates we have had a quadrupling of the capital stock in the mining sector—is beginning to bear fruit, and we are seeing very large increases in mining exports. [This is reflected in the fall in investment but increased income flowing from mining exports].[191]

1.93      Other related matters covered included:

Treasury [Revenue Group] with the Australian Taxation Office, Australian Valuation Office and Australian Charities and Not-for-profit Commission

Treasury [Revenue Group]

1.94      During the examination of the Treasury [Revenue Group], the committee examined the following matters:

Australian Taxation Office (ATO)

1.95      During the Australian Taxation Office's (ATO) appearance before the committee, a range of matters were canvassed, including:

Australian Valuation Office

1.96      During the Australian Valuation Office's (AVO) appearance before the committee, officers were questioned on the following matters:

1.97      The committee noted Ms Quigley's departure from the organisation and acknowledged her contribution and her assistance over the years.[221]

Australian Charities and Not-for-profit Commission

1.98      The main topics covered during the committee's examination of the Australian Charities and Not-for-profit Commission (ACNC) included:

Treasury [Markets Group]

1.99      The committee examined the Treasury [Markets Group] on the following main topics:

Senator David Bushby

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