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COMMONWEALTH OF AUSTRALIA

Proof Committee Hansard

SENATE
RURAL AND REGIONAL AFFAIRS AND TRANSPORT
LEGISLATION COMMITTEE

Estimates

(Public)

TUESDAY, 22 MAY 2018

CANBERRA

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[PROOF COPY]
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SENATE

RURAL AND REGIONAL AFFAIRS AND TRANSPORT LEGISLATION COMMITTEE

Tuesday, 22 May 2018

Members in attendance: Senators Abetz, Carol Brown, Chisholm, Colbeck, Ketter, Lines, McCarthy,
McKim, Moore, O'Sullivan, Patrick, Rice, Urquhart, Whish-Wilson.
Tuesday, 22 May 2018 Senate Page 1

INFRASTRUCTURE, REGIONAL DEVELOPMENT AND CITIES PORTFOLIO


In Attendance
Senator Scullion, Minister for Indigenous Affairs
Department of Infrastructure, Regional Development and Cities
Executive
Dr Steven Kennedy PSM, Secretary
Ms Pip Spence, Deputy Secretary
Ms Marie Taylor, Acting Deputy Secretary
Mr Luke Yeaman, Deputy Secretary
Corporate Services Division
Mr Carl Murphy, Chief Operating Officer
Ms Justine Potter, Chief Financial Officer
Infrastructure Investment Division
Ms Jessica Hall, Acting Executive Director
Mr Mitch Pirie, Acting General Manager, Major Infrastructure Projects Office
Mr Phil McClure, Acting General Manager, Infrastructure Investment Policy
Ms Christina Garbin, General Manager, North West Infrastructure Investment
Ms Sarah Leeming, General Manager, South East Infrastructure Investment
Ms Cathryn Geiger, General Manager, Land Transport Market Reform
Infrastructure Australia
Mr Philip Davies, Chief Executive Officer
Ms Anna Chau, Executive Director, Project Advisory
Surface Transport Policy Division
Mr Alex Foulds, Executive Director
Ms Stephanie Werner, General Manager, Land Transport Policy and Safety
Mr Andrew Johnson, General Manager, Maritime and Shipping
Cities Division
Ms Mary Wiley-Smith, Executive Director
Ms Claire Howlett, General Manager, Cities and Smart Technology
Ms Kate Lynch, General Manager, Strategy and Engagement
Mr Oliver Richards, General Manager, Cities Economic Policy and Analysis
Ms Ann Redmond, General Manager, Cities Strategic Policy
Civil Aviation Safety Authority
Mr Shane Carmody, Chief Executive Officer
Mr Graeme Crawford, Group Executive Manager, Aviation
Mr Rob Walker, Executive Manager, Stakeholder Engagement
Ms Tracey Frey, Executive Manager, Corporate Services
Mr Simon Frawley, Chief Financial Officer
Dr Jonathan Aleck, Executive Manager, Legal and Regulatory Affairs
Mr Peter White, Executive Manager, Regulatory Services and Surveillance
Mr Chris Monahan, Executive Manager, National Operations and Standards
Mr Andrew Sparrow, Acting Branch Manager, Air Navigation, Airspace and Aerodromes
Aviation and Airports Division
Mr Brendan McRandle, Executive Director
Mr Jim Wolfe, General Manager, Air Traffic Policy

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Page 2 Senate Tuesday, 22 May 2018

Ms Leonie Horrocks, General Manager, Airports


Mr Stephen Borthwick, General Manager, Aviation Industry Policy
Mr Michael Rush, Remote Aviation Programs, Aviation Industry Policy
Mr Russell McArthur, Acting General Manager, Aviation Environment Branch
Australian Transport Safety Bureau
Mr Greg Hood, Chief Commissioner
Mr Nat Nagy, Executive Director, Transport Safety
Mr Colin McNamara, Chief Operating Officer
Mr Stuart Macleod, Director, Transport Safety
Dr Stuart Godley, Director, Transport Safety
Mr Patrick Hornby, Manager, Legal and Governance
Australian Maritime Safety Authority
Mr Mick Kinley, Chief Executive Officer
Mr Allan Schwartz, General Manager, Operations
Airservices Australia
Mr Jason Harfield, Chief Executive Officer
Mr Paul Logan, Chief Financial Officer
Ms Michelle Bennetts, Executive General Manager, Customer Service Enhancement
Portfolio Coordination and Research
Mr Richard Wood, Acting Executive Director
Dr Gary Dolman, Head of Bureau, Bureau of Infrastructure, Transport and Regional Economics
Ms Naa Opoku, General Manager, Freight and Supply Chain Inquiry
Ms Leanne Kennedy, Acting General Manager, Portfolio Coordination
Mr Roland Pittar, General Manager, Transport Technology Futures
Australian Rail Track Corporation
Mr John Fullerton, Chief Executive Officer
Territories Division
Ms Ruth Wall, Acting Executive Director
Ms Karly Pidgeon, General Manager, Indian Ocean Territories
Mr Steve Dreezer, General Manager, Norfolk Island and Jervis Bay Territory
Western Sydney Unit
Mr Nathan Smyth, Executive Director
Dr Garth Taylor, General Manager, Communications, Environment and Legal
Mr Greg Whalen, General Manager, Financial, Commercial and Operations
Mr Malcolm Southwell, General Manager, Rail and Land Use Planning
Inland Rail and Rail Policy
Mr Philip Smith, Executive Director
Ms Diana Hallam, General Manager, Operations
Ms Kim Forbes, Acting General Manager, Community and Industry Benefits
Mr Andrew Hyles, General Manager, Rail Policy and Planning
National Transport Commission
Dr Steven Kennedy PSM, Secretary
Ms Pip Spence, Deputy Secretary
National Capital Authority
Ms Sally Barnes, Chief Executive

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Tuesday, 22 May 2018 Senate Page 3

Mr Andrew Smith, Executive Director, National Capital Plan, and Chief Planner
Mr Lachlan Wood, Executive Director, National Capital Estate
Infrastructure and Project Financing Agency
Ms Leilani Frew, Chief Executive Officer
Mr Bill Brummitt, Chief Operating Officer
Regional Development and Local Government Division
Ms Donna Wieland, Acting Executive Director
Mr Drue Edwards, Acting General Manager, Regional and Dams Policy
Ms Pip Batten, Acting General Manager, Regional Programs
Ms Maxine Loynd, General Manager, Local Government and RDAs
WSA Co
Mr Graham Millet, Executive General Manager, Airport Infrastructure, and Chief Executive Officer
Mr Paul O'Sullivan, Chairman
Ms Shelley Cole, Chief Financial Officer
Committee met at 09:06
CHAIR (Senator O'Sullivan): I declare open this public hearing of the Senate Rural and Regional Affairs
and Transport Legislation Committee. The Senate has referred to the committee the particulars of proposed
expenditure for 2018-19 and related documents for the Infrastructure, Regional Development and Cities portfolio.
The committee may also examine the annual reports of the departments and agencies appearing before it. The
committee has before it a program listing agencies relating to matters for which senators have given notice, and
the proceedings today will begin with an examination of the Australian Maritime Safety Authority. The
committee has fixed Friday, 6 July 2018 as the date for the return of answers to questions on notice. Senators are
reminded that any written questions on notice should be provided to the committee secretariat by the close of
business Friday 8 June 2018. Under standing order 26 the committee must take all evidence in public session.
This includes answers to questions on notice. I remind all witnesses that in giving evidence to the committee they
are protected by parliamentary privilege. It is unlawful for anyone to threaten or disadvantage a witness on
account of evidence given to a committee, and such action may be treated by the Senate as a contempt. It is also a
contempt to give false or misleading evidence to a committee. The Senate by resolution in 1999 endorsed the
following test of relevance of questions at estimates hearings:
Any questions going to the operations or financial positions of the departments and agencies which are seeking funds in the
estimates are relevant questions for the purpose of estimates hearings.
I remind officers that the Senate has resolved that there are no areas in connection with the expenditure of public
funds where any person has a discretion to withhold details or explanations from the parliament or its committees
unless the parliament has expressly provided otherwise. The Senate has resolved also that an officer of a
department of the Commonwealth shall not be asked to give opinions on matters of policy and shall be given
reasonable opportunity to refer questions asked of the officer to superior officers or to a minister. This resolution
prohibits only questions asking for opinions on matters of policy and does not preclude questions asking for
explanations of policies or factual questions about when and how policies were adopted. I particularly draw the
attention of witnesses to an order of the Senate of 13 May 2009 specifying the process by which a claim of public
interest immunity should be raised.
The extract read as follows—
Public interest immunity claims
That the Senate—
(a) notes that ministers and officers have continued to refuse to provide information to Senate committees without properly
raising claims of public interest immunity as required by past resolutions of the Senate;
(b) reaffirms the principles of past resolutions of the Senate by this order, to provide ministers and officers with guidance
as to the proper process for raising public interest immunity claims and to consolidate those past resolutions of the Senate;
(c) orders that the following operate as an order of continuing effect:
(1) If:
(a) a Senate committee, or a senator in the course of proceedings of a committee, requests information or a document
from a Commonwealth department or agency; and

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Page 4 Senate Tuesday, 22 May 2018

(b) an officer of the department or agency to whom the request is directed believes that it may not be in the public
interest to disclose the information or document to the committee, the officer shall state to the committee the ground on which
the officer believes that it may not be in the public interest to disclose the information or document to the committee, and
specify the harm to the public interest that could result from the disclosure of the information or document.
(2) If, after receiving the officer’s statement under paragraph (1), the committee or the senator requests the officer to
refer the question of the disclosure of the information or document to a responsible minister, the officer shall refer that
question to the minister.
(3) If a minister, on a reference by an officer under paragraph (2), concludes that it would not be in the public interest to
disclose the information or document to the committee, the minister shall provide to the committee a statement of the ground
for that conclusion, specifying the harm to the public interest that could result from the disclosure of the information or
document.
(4) A minister, in a statement under paragraph (3), shall indicate whether the harm to the public interest that could result
from the disclosure of the information or document to the committee could result only from the publication of the information
or document by the committee, or could result, equally or in part, from the disclosure of the information or document to the
committee as in camera evidence.
(5) If, after considering a statement by a minister provided under paragraph (3), the committee concludes that the
statement does not sufficiently justify the withholding of the information or document from the committee, the committee
shall report the matter to the Senate.
(6) A decision by a committee not to report a matter to the Senate under paragraph (5) does not prevent a senator from
raising the matter in the Senate in accordance with other procedures of the Senate.
(7) A statement that information or a document is not published, or is confidential, or consists of advice to, or internal
deliberations of, government, in the absence of specification of the harm to the public interest that could result from the
disclosure of the information or document, is not a statement that meets the requirements of paragraph (1) or (4).
(8) If a minister concludes that a statement under paragraph (3) should more appropriately be made by the head of an
agency, by reason of the independence of that agency from ministerial direction or control, the minister shall inform the
committee of that conclusion and the reason for that conclusion, and shall refer the matter to the head of the agency, who shall
then be required to provide a statement in accordance with paragraph (3).
(d) requires the Procedure Committee to review the operation of this order and report to the Senate by 20 August 2009.
(13 May 2009 J.1941)
(Extract, Senate Standing Orders)
Witnesses are specifically reminded that a statement that information or a document is confidential or consists of
advice to government is not a statement that meets the requirements of the 2009 order; witnesses are instead
required to provide some specific indication of the harm to the public interest that could result from the disclosure
of the information or the document.
Australian Maritime Safety Authority
[09:12]
CHAIR: I now welcome Senator the Hon Nigel Scullion, Minister for Indigenous Affairs, representing the
Minister for Infrastructure and Transport; Dr Steven Kennedy, secretary of the Department of Infrastructure,
Regional Development and Cities, and officers of the department; and Mr Mick Kinley, chief executive officer of
the Australian Maritime Safety Authority. Do any of you want to make a brief opening statement?
Senator Scullion: No, but thank you for the courtesy.
Mr Kinley: No.
Senator ABETZ: Welcome, minister and officials. My questions relate to the national system for domestic
commercial vessel safety. I understand that, once implemented, there will be a three-year review. Is that correct?
Mr Kinley: That is correct.
Senator ABETZ: This could see the levy increase or decrease, and could also see the redistribution of the
burden between classes of vessels. Basically, everything is potentially on the table with this three-yearly review.
Mr Kinley: It will be about the level of activity for the national system, how costs are recovered and how that
is appropriately shared amongst the industry. That's correct.
Senator ABETZ: Do you know the number of vessels you're dealing with in each category?
Mr Kinley: We have a dataset at the moment, which we've received from the states and territories. We've
cleaned that dataset up over the last few years, but we expect we will get better information as we get more
experience with the industry.
Senator ABETZ: Better information—in other words, a more accurate number of vessels in each category?

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Mr Kinley: Yes.
Senator ABETZ: At this stage you cannot be confident in the correct number of vessels you're dealing with.
Mr Kinley: We think the confidence level is around 90 per cent, and the other numbers will be on the
margins.
Senator ABETZ: Can you confirm to me that you've given up on the idea of including kayaks in this?
Mr Kinley: Unpowered hire-and-drive vessels are excluded under the current scheme, yes.
Senator ABETZ: Currently—with a three-yearly review, is it possible that they might be included?
Mr Kinley: I'm not aware that's in the terms of reference of the review at this stage, but I should probably also
refer to my colleagues at the department.
Senator ABETZ: As I understand the situation, the unpowered vessels were completely disregarded initially,
then all of a sudden it was determined that they might be included and there was a very short window of
opportunity, less than a week, for them to make a submission. I understand that it has now been dropped. It has
been on and off, so the three-yearly review could mean it's on again.
Ms Spence: The unpowered vessels have been excluded from the levy. There's no intention to include them.
Senator ABETZ: Would the three-yearly review exclude their inclusion? There has been a bit of on-off.
Ms Spence: As I said, they've been excluded.
Senator ABETZ: They were excluded, then they were included; now they're excluded. We've been told the
three-yearly review will put everything on the table. I want to know whether there's that possibility, so this sector
can guard itself against the suggestion that they might be included, for which they were given very short notice.
Ms Spence: I can't say anything more than that they have been excluded from the levy. There's no—
Senator ABETZ: They've heard this before, then they were told that they were included and they had to put in
a submission within seven days, one of those days being Anzac Day. They need a bit more comfort than that. Can
government make be a policy decision in this area that they will be excluded?
Dr Kennedy: There is a clear policy decision by government to exclude these vessels.
Senator ABETZ: How will the cost recovery be determined? Are we going to charge on an hourly basis?
Mr Kinley: There are two components of the cost recovery. On the services that can be directly attributed to a
client there is a charge on a fee-for-service basis. That includes certificates of competency, certificates of
operation and certificates of survey.
Senator ABETZ: Will that be done on an hourly basis?
Mr Kinley: Those costs have been modelled on the average cost to deliver those services.
Senator ABETZ: So it's a flat fee?
Mr Kinley: It's a flat fee, yes.
Senator ABETZ: For those particular services?
Mr Kinley: There are some services which would be charged an hourly rate.
Senator ABETZ: What rate would that be?
Mr Kinley: I would have to take that one on notice. I don't have that off the top of my head. Other parts of the
system cannot be directly attributed to a particular user. Things like compliance, enforcement, standards
development, regulations development and those issues are charged under a levy across the whole industry.
Senator ABETZ: Do you have a full cost of the delivery of the national standard? Do you have a budget?
Mr Kinley: We have worked through a cost—and the Department of Finance has checked those figures—
from what we know about the industry right now, about how we will plan and deliver services and the levels of
activity we think will be required. The review will be a good opportunity for us. We will then have much better
experience with the industry and much more confidence about the levels of cost and activity we need to expend.
Senator ABETZ: In the first year of operation do you anticipate a surplus or a loss?
Mr Kinley: I believe in the first year there is a very small surplus in that particular funding line.
Senator ABETZ: How is that achieved?
Mr Kinley: Basically we're budgeting for the staff we've employed around the country. We now have better
information around such things—

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Senator ABETZ: No, sorry; the profit. Will that be because you think you'll be charging a bit too much on
levies or that the hourly rate is a bit too high or the general levy is too high?
Mr Kinley: I think it's come about in things like rents for properties, as we've got better ideas about rents—
we've opened new offices around the country, for example—and those sorts of areas.
Senator ABETZ: Have you split your budget on the issues that you just raised in a previous answer, on
enforcement, compliance, education, administration? Do you have a split-up of that as yet?
Mr Kinley: Yes, we do.
Senator ABETZ: Would you be able to provide that to us on notice?
Mr Kinley: Yes, I can give that to you on notice. Those figures were, I think, made available on our first
round of consultation with industry as well.
Senator ABETZ: And they remain?
Mr Kinley: Yes.
Senator ABETZ: All right. If you can provide them on notice, I'd be obliged. In the consultations, did you
indicate to stakeholders that, in some areas, there would be increased costs and, in some areas, there would be
decreased costs?
Mr Kinley: If you're talking about costs under the previous regime, run by the states, under the system that
was being delivered by the states and territories we had levels of cost recovery around the country, depending on
the jurisdiction, varying between down around nine per cent and up to closer to, in the case of Tasmania, 100 per
cent, according to their figures. But nationally, by the figures that we received from the states, there was a
recovery of about $12½ million, for a system that—again, from the figures we had from the states—was costing
them around $40 million to deliver. We are planning to run the system for around $21 million for levy recovery
nationally, with another $4 million fee for service. In those states where they were having very low levels of cost
recovery, down around the nine per cent level, there is no other way to construct a national system, with a level of
cost recovery. Some of those costs will increase.
Senator ABETZ: So those comments, which I think you didn't deny may have been made, were more in the
context of the various states as opposed to, let's say, the cost of a levy or the hourly rate of service?
Mr Kinley: Yes.
Senator ABETZ: I understand that, and that, if I might say, is a fair enough explanation. Can you confirm
that, in my home state of Tasmania, MAST was fully compliant with your requirements after 1 July 2013, when
regulations came into being?
Mr Kinley: My understanding is that Tasmania was a state that had applied the national standards for
commercial vessels across the state, in full compliance—if that's the question.
Senator ABETZ: And, from your perspective, they applied those requirements to your satisfaction?
Mr Kinley: Yes.
Senator ABETZ: Do you accept that MAST is a full cost-recovery model?
Mr Kinley: From the figures that were presented to us, I understand that's the way they work, yes.
Senator ABETZ: The Tasmanian fishers then pose the question, and it's not only rhetorically: why, with a so-
called more efficient national scheme, will Tasmanian fishers have to pay substantially more for a lesser service?
Mr Kinley: That's a very loaded statement. A lesser service is, I guess, a different service model to what's
being proposed. How much MAST also cost recovered on things such as standards, development and the other
things which we're looking at with the national system now—regulations, development and those things—I'm not
confident about. I also can't comment on how the cost modelling works between the different sectors of their
industry.
Senator ABETZ: The Tasmanian sector tells me that, under the Marine Safety (Domestic Commercial
Vessel) Levy Collection Bill as tabled, it initially had a four working day consultation period for comments to the
bill, which was later extended to a six working day consultation period. Given other work priorities, TSIC was
unable to make a representation in such a short time frame. Did you receive that concern?
Mr Kinley: I can't specifically comment on levy bill consultation period. However, the levy bill—
Senator ABETZ: But were you part of the general consultation with the fishing sector about this bill?
Mr Kinley: We've been consulting with the fishing sector since we first went out on the first round of cost-
recovery consultation in 2016. TSIC actually sit on our fishing advisory committee, so they were very well aware

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Tuesday, 22 May 2018 Senate Page 7

of what was happening with the consultations. The levy bill itself is a shell. It is a bill which will allow
regulations to be made that would actually set the level of the levy. I think TSIC made their views quite clear in
consultation time allowed for the bill as well.
Senator ABETZ: So you are aware of their concerns?
Mr Kinley: Yes.
Senator ABETZ: Then, if I may, as you don't accept responsibility for the bill, can I then move to the
department and ask whether the TSIC observation that they initially had a four working day consultation period
for comments to the bill, which was later extended to six days; is that correct?
Ms Spence: Yes, it is correct. As Mr Kinley said, the details in the bill were really procedural matters around
setting up the levy. The information around the actual charges in the proposed levy had already been out in the
public domain, but we certainly acknowledge the fact that it was a very limited time frame for consultation.
Senator ABETZ: Who thought of a four-day limit in the splendid isolation of Canberra, when fishermen
might actually be out on their boats and the people who are on these committees actually have to earn a living and
might not be able to be onshore to meet and discuss this? How would anything have been different if 21 days, for
example, would have been allowed?
Ms Spence: It was tying in to when the legislation was intended to be introduced. There were some delays in
when the legislation was actually introduced, and any comments that were received after the end of the
consultation period were taken into account. Most of the issues that were raised were in relation to the levy itself,
rather than the mechanics of the legislative framework for the levy.
Senator ABETZ: Still, if at the outset 21 days, for example, would have been allowed for consultation, we
would still be where we are today without all the upset occasioned to the fishing sector. That's the correct
analysis, isn't it?
Ms Spence: It was unfortunate it was a limited time frame for consultation. But, as I said, any comments that
have been received subsequent to the closure date—
Senator ABETZ: Have we learnt a lesson from that? That is, that people who were actually earning a living
might require more than four days' notice to respond to a bill.
Ms Spence: Yes.
Senator ABETZ: Great, thank you. Now, will the service provided to the fishermen be an online portal and
telephone service?
Mr Kinley: We have various service channels. Our preferred approach will certainly be to get people to be
able to do things themselves online. That will not start out as a portal but will certainly be a system where people
will be able to have smart forms to make their applications for certificates and things online. They will also have
access to a contact centre, which will operate from 8 am to 5 pm across the country—that's 8 am to 8 pm on east
coast time—for people to be able to help them to answer the initial queries and to help them fill in those forms
and that as necessary. We will also have counters in our offices and there's one—
Senator ABETZ: So there will be real humans to talk to?
Mr Kinley: There is an office in Hobart and one in Davenport.
Senator ABETZ: So that will be maintained?
Mr Kinley: Yes.
Senator ABETZ: That has been, if might say, one of the strengths of MAST: fishermen have been able to
travel to the office to resolve the issue there and then. They could interact with an official and then get on to the
boat.
Mr Kinley: We'll actually have an office in the north of Tasmania as well.
Senator ABETZ: Whereabouts in the north?
Mr Kinley: Davenport.
Senator ABETZ: That's in the seat of Braddon. Brett Whiteley will be delighted of that, because we hope he
will return as the member for Braddon. I'll leave my questions at that, having excited the interest of the Labor
Party.
Senator McCARTHY: Can you list for us the names of the 13 fatalities, what state they occurred in and what
sector of the maritime industry they occurred in?
Mr Kinley: I can't do that right now, but I can give you that information on notice.

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Page 8 Senate Tuesday, 22 May 2018

Senator McCARTHY: Is there anything you can give us now?


Mr Kinley: Just off the top of my head, we were talking the financial year 2016-17 there. In the calendar year
2017, there were nine fatalities. There were six in Queensland, one in the Northern Territory, one in New South
Wales and I think there was a snorkelling incident as well as in New South Wales. In 2016, there were seven in
Queensland, one in Western Australia and one hire-and-drive vessel in Queensland as well.
Senator McCARTHY: That's eight in Queensland, was it?
Mr Kinley: In Queensland there were seven in the fishing sector and one in the hire-and-drive sector. In the
class 1 tourist sector, I think there were four which were related to diving and snorkelling activities.
Senator McCARTHY: You said one in WA. Would that have been—
Mr Kinley: That was fishing as well. That was in 2016.
Senator McCARTHY: That was seven in Queensland and one in WA in fishing but one also in Queensland
in the hire-and-drive sector.
Mr Kinley: Yes.
Senator McCARTHY: That was 2016. Can I just take you back to the 2016-17. There were nine fatalities
there, and six in Queensland. What sector in Queensland were the six in?
Mr Kinley: That was in fishing.
Senator McCARTHY: All in fishing?
Mr Kinley: Yes.
Senator McCARTHY: What about the one in the Northern Territory?
Mr Kinley: That was on a commercial vessel. It was a tug work boat, so a class 2.
Senator McCARTHY: For the one in New South Wales, what sector was that in?
Mr Kinley: That was class 2 as well.
Senator McCARTHY: Where was the incident in the Northern Territory?
Mr Kinley: That was the Bradshaw fatality, where the gentleman fell from the wharf and was found in the
water.
Senator McCARTHY: Bradshaw facility?
Mr Kinley: No, the gentleman involved was Mr Bradshaw.
Senator McCARTHY: I beg your pardon. What was the location? Was it in Darwin?
Mr Kinley: It was alongside a wharf in Darwin.
Senator McCARTHY: Does the AMSA see the deaths as reflecting as safety crisis in the domestic
commercial vessel, DCV, sector?
Mr Kinley: What we certainly see in the sector are issues with trying to—and we know we've got work ahead
of us in working with the industry to develop a safety culture. We know that we've got more work to do across all
of the sectors in that regard. We've also been working with the fishing sector about safety in that sector. We've
had a number of trawlers go down in Queensland over the last couple of years. While there have not been
coronials carried out into all of those incidents, from what we can see stability looks to be a fundamental issue on
some of the older vessels, so we are working with industry to try to educate them more around stability and how
they can be better placed to calculate and have better knowledge about stability on those vessels. We are also
working with industry in a range of other areas. But we certainly agree that the safety performance needs to be
improved. Importantly, I also need to make it clear that AMSA is not the work health and safety regulator for
these vessels. That responsibility resides with the state and territory work health and safety authorities. We have
been very active working with the authorities to get memorandums of understanding in place so we can work
together with, again, to try and address the safety issues across the industry.
Senator McCARTHY: How many MOUs have you achieved with the state and territory jurisdictions?
Mr Kinley: I think we're only missing one state at the moment.
Senator McCARTHY: Which state is that?
Mr Kinley: We've got minor modifications with New South Wales and Victoria, just to finish those off.
Queensland hasn't signed yet. Tasmania, South Australia, Western Australia and the Northern Territory are all in
place.
Senator McCARTHY: Is there any reason why Queensland hasn't signed?

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Tuesday, 22 May 2018 Senate Page 9

Mr Kinley: Not that I'm aware of.


Senator McCARTHY: So that's an ongoing process?
Mr Kinley: That's an ongoing process.
Senator McCARTHY: Can I just clarify something. You gave me the dates of 2016-17 as nine fatalities and
then you said 2016. What's the differentiation there?
Mr Kinley: Sorry. If you said 13, I think you were quoting from our annual report from 2016-17—
Senator McCARTHY: Yes. Thank you.
Mr Kinley: The numbers I have here are calendar years.
Senator McCARTHY: Okay. I will go to the 13 DCV deaths in 2016-17. Were the deaths published
anywhere?
Mr Kinley: We certainly have those numbers in our annual report, as you see there. We don't publish more
statistics than that at the moment. What we are working at, at the moment, is how we can better present the
findings that come from coroners around the country. This is one of the things that the national system is allowing
us to do for the first time. We are looking at the learnings from the coronial inquests into fatalities such as Mr
Bradshaw and Mr Donoghue in the Northern Territory and the Returner coronial in Western Australia, and we are
looking at how we can bring those lessons right around the country in the national system. We're just working on
how we can put those findings relevant to our activities on our website and our responses to those things at the
moment.
Senator McCARTHY: What action has AMSA taken to analyse the circumstances and causes of these
deaths?
Mr Kinley: I just need to make it clear that we are not a no-blame investigator. We investigate for compliance
and we have a function under the National Law Act to look at how we can help improve the safety culture. So,
when we do have an incident, we look into that incident to see what the cause was and whether there is any
compliance action we should be taking immediately. We also then look at how the causes of those incidents may
be relevant to wider lessons around the country and how we can improve the standards and the safety of the fleet.
For example, in the loss of the Returner, which was a trawler in Western Australia, one of the recommendations
we made to the coroner was that we should be looking at float-free 406 megahertz EPIRBs, the emergency
position beacons, for the wider fleet. Under the current arrangements, trawlers, for example, don't have beacons
that float free should they be lost. What seems to be happening is they're clipped to the side of the wheelhouse
console. They're not grabbed hold of and activated in time if the vessel goes down suddenly. So we're working at
the moment on the standards—and how we roll that out around the fleet around country—that float-free EPIRB
should be required.
Senator McCARTHY: That's one of the actions. That's the one in WA?
Mr Kinley: That's one example.
Senator McCARTHY: Have you got other examples?
Mr Kinley: Following the Donoghue tragedy, we've again been working with the industry and with work
health and safety authorities, looking at electrical safety across the fleet and done education around the country.
So, again, we're rolling out those lessons around the country, as I said, about stability with trawlers. We've been
doing more education and produced stability information that's easy to understand and available for the people
who are operating vessels so they can better understand the implications of doing things such as modifying their
vessel, moving tanks around or putting weights up high on a vessel and how that can adversely affect the stability
of a vessel and their safety.
Senator McCARTHY: Why has AMSA chosen to delete 'a decreasing number of fatalities' as a performance
indicator for the DCV sector for 2017-18?
Mr Kinley: Those non-financial performance metrics are something we're still developing. In our current
corporate plan that we're drafting right now, and which is just about ready to go to our minister, we actually have
reintroduced, from my recollection, 'fatalities towards zero' as the target.
Senator McCARTHY: So you say you've done it because it's a non-financial performing metric?
Mr Kinley: Well, we—
Senator McCARTHY: The removal of that is a—
Mr Kinley: We have an obligation under the PGPA Act to have non-financial performance targets. AMSA
has always had key performance indicators or whatever. We've been struggling to work out the best way to

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articulate that target. The way it will be worded in our corporate plan—which we hope to have tabled later this
year—is 'fatalities trending towards zero'; that's where we want to get to. So we've certainly not taken our eye off
that ball and said, 'We're not going to look at that number,' and 'That's not important'. We're just looking at how
we're going to report that.
Senator McCARTHY: For how long had 'a decreasing number of fatalities' been a performance indicator?
Mr Kinley: I think we only had it in there for one year.
Senator McCARTHY: For one year?
Mr Kinley: Yes. And, again, with the national system, trying to get that national dataset is something that
we're really—we're going to have to grow a lot of that data from scratch. We don't have a good dataset on
incidents and those sorts of things. It's one thing we're very keen on—with the national system—to get much
better reporting across the industry.
Senator McCARTHY: Is AMSA undertaking any prosecutions in relation to the 13 deaths?
Mr Kinley: I know we are undertaking prosecutions but I would have to take that one on notice. I'm not sure
that any of the prosecutions we have underway are related or if we have briefs of evidence in preparation. The
process is that we have an investigation. If we form the view there should be a prosecution, we'll form a brief of
evidence. That goes to the DPP, and the DPP will decide whether there's a prosecution. I know we have various
prosecutions and things in train but I would need to take that on notice.
Senator McCARTHY: You're not sure if any of those would be around the 13 deaths?
Mr Kinley: Around any of those particular incidents—no.
Senator McCARTHY: Yes—if you could take that on notice. How many prosecutions did AMSA undertake
under the DCV national law in 2016-17?
Mr Kinley: Unless I have that in my statistics, I'll have to take it on notice. There are different enforcement
actions we take. We commenced six prosecutions in 2016-17 and completed five.
Senator McCARTHY: Could you repeat that?
Mr Kinley: Six prosecutions commenced in 2016-17, and five were completed.
Senator McCARTHY: What happened to the sixth one? Is that still ongoing?
Mr Kinley: Yes.
Senator McCARTHY: What were they in relation to? Are you able to say?
Mr Kinley: I'd have to take that on notice to see whether any of those are related to any of the fatalities.
Senator McCARTHY: Okay, that was 2016-17. What about this financial year?
Mr Kinley: Again, I would have to take on notice how many we have in the pipeline right now. Apart from
prosecutions, there are also breach notices that we issue, there are directions notices that we and our delegates
issue and there are prohibition notices. There are a lot of other compliance mechanisms that we use there.
CHAIR: In terms of your prosecutions, there may have been a death, but the prosecution might not be related
directly to the fatality?
Mr Kinley: Yes.
CHAIR: It could be about some other feature?
Mr Kinley: It could be another incident altogether.
CHAIR: Sure. With deaths, I don't imagine it would be in your remit to prepare a brief of evidence, for
example, to prosecute a misdemeanour or a crime, other than to cooperate with whoever the prevailing authorities
are.
Mr Kinley: No, we do briefs of evidence for prosecutions under—
CHAIR: I appreciate that, but you wouldn't do a brief of evidence for a prosecution for manslaughter or
murder.
Mr Kinley: No.
CHAIR: It would be another agency that would do that—
Mr Kinley: Yes.
CHAIR: and you'd be the cooperating agency.

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Mr Kinley: Yes. The police will do that, and the police will also do the preparation of reports for the coroner,
and we will assist the police as well by providing information.
CHAIR: Just so I understand, what prosecutorial role, if any, would you have that relates to a death, other
than perhaps where there were a breach that we might loosely regard as a workplace health and safety issue?
Mr Kinley: If, for example, there were a fatality that came about because the operator of the vessel breached
their obligations to provide a safe vessel, then under the national law we could do a brief of evidence that would
prosecute them for failing to meet their duties under that law.
CHAIR: So it would be a negligence type thing around workplace health and safety.
Mr Kinley: Yes, vessel safety.
CHAIR: Thank you. I was just listening intently.
Senator Scullion: Chair, it would be useful to have a couple of pieces of information, I think—first of all,
around the fatalities, so we understand the scope of a fatality. For example, if somebody fell off a wharf, if they
were coming down to say g'day to a fisherman and fell off the wharf and hit the boat in the water, that is an
entirely different circumstance from a crew member not operating effectively and safely and getting crushed
between the boat and the wharf. We talk about snorkelling fatalities. I don't really think they have much to do
with AMSA, unless they're dangling their leg off and are STCW certified crew or something. So it might be
useful to get a list of the fatalities—perhaps over the last decade?
Mr Kinley: Back to 2013, when the national system started.
Senator Scullion: It just would be useful to have a list of all the fatalities that they consider fatalities. But it
might also be useful to have a look at the numbers of people who are now certified crews and the number of
vessels we have, because these things aren't static. The industry grows, and we have more boats and more people.
It'll just be useful, I think, to have those.
The second element that I think might be useful for the committee to know is that AMSA will pursue you if
you're operating your vessel and your vessel is two weeks out of survey, because it's a very important issue
around insurance, qualifications and a whole range of those things that may not be at all associated with a fatality.
So they have another role in a compliance mechanism. As the ship's master or something I would have to keep my
qualification, make sure the vessel was kept within survey and do a whole range of things that are not necessarily
about fatalities. So it might be useful, rather than to perhaps swamp all of that sort of stuff, to just have some raw
numbers about those issues that they pursued that were not to do with fatalities and the issues that they pursued
around the issues of the fatalities that Senator McCarthy is dealing with, if that might be of assistance.
Senator McCARTHY: So, Mr Kinley, you're able to get the last 10 years in terms of what the minister's just
suggested?
Mr Schwartz: 2013.
Mr Kinley: I suggest we go back to 1 July 2013, which is when the national law came into effect.
CHAIR: Just listening to the minister, when you present that, is there any way to separate the 'I fell off the
wharf' cases from 'I was involved in a commercial engagement where the cause of my death was as a result of
negligence or things that might be improved' cases? Do you have a sense of what that number that you've been
talking about to the senator would look like if we were to take out all the snorkellers and the people who fell off
jetties? Out of those numbers, what's the kernel that makes you say, 'This is up our alley; we need to look at and
fix this'?
Mr Kinley: It would be in the order of 10 a year—less than—
CHAIR: Out of 27?
Mr Kinley: Yes.
Senator McCARTHY: How does the number of fatalities in the DCV sector compare to the number of
fatalities on vessels regulated under the Navigation Act?
Mr Kinley: It would be considerably less than under the Navigation Act. There are also a lot less regulated
Australian vessels under the Navigation Act.
Senator McCARTHY: When you say 'considerably less', what are we looking at there?
Mr Kinley: I'm trying to think whether there have been any.
Mr Schwartz: If we were to talk about regulated Australian vessels under the Navigation Act, I would suggest
that you could count on one hand the number of fatalities over that period of time, but we'd have to confirm that.

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But if you're talking under the Navigation Act in totality, then, potentially, that's where we start talking about
deaths of foreign seafarers on ships that are coming to Australia and deaths of people on passenger ships, for
example. Yes, we could get those sorts of numbers, but it would be less than the 10 or 11 a year that we're talking
about in the domestic sector.
Senator McCARTHY: We are looking at the comparison between the DCV sector and the Navigation Act. If
you're able to provide that information, that would be good.
Senator Scullion: It's probably useful to note, Senator, although it's not the only definition, that the principles
are: one is a ship, a very large vessel, so it's not usually characterised by everybody being killed because you run
out of oxygen because it turns over. In the fishing industry in places like Queensland, quite a number of people
are killed in the workplace because the boat gets destroyed in a wave or something like that. So the Navigation
Act usually is for much larger vessels or other sorts of vessels. That may well be part of the explanation about
why that's the case. Is that reasonable?
Mr Kinley: That's certainly part of the story, Minister.
CHAIR: It seems like you've had some fishing experience, Minister, somewhere along the way. Thank you,
Mr Kinley, and thank you to your crew. We know there's a lot of effort in preparing for estimates, and we send
you away with a lot of chores, but we do appreciate your attendance. We wish you all the very best for your return
journey. Just when they thought they'd escaped, can we have the Infrastructure Investment Division back at the
table?
Welcome back. We hope we haven't disrupted your week too severely. So this is in continuation, and Senator
McCarthy has the call.
Senator McCARTHY: Thank you, Chair. At budget time last year, the government said it had allocated $8
billion to infrastructure programs and projects in 2017-18; however, the latest budget papers reveal they're
actually on track to spend $7.2 billion, an underspend of about $800 billion. My question is: what went wrong?
CHAIR: Did you say 800 billion?
Senator McCARTHY: Million—sorry!
Mr Yeaman: From memory, we answered this question for Senator Sterle in some detail last night.
Senator McCARTHY: Great; that might have been after I left.
Mr Yeaman: I'm happy to repeat—
CHAIR: There's no real need to repeat things.
Senator McCARTHY: I shall just check where we're at.
CHAIR: You told me you were finished.
Senator McCARTHY: What about the Monaro Highway upgrade?
Mr Yeaman: We haven't discussed that; I'm happy to discuss that.
Senator McCARTHY: So $100 million in federal funding was allocated in the 2018 budget to upgrading the
Monaro Highway?
Mr Yeaman: That is correct.
Senator McCARTHY: So how was this amount arrived at, and what upgrades will be delivered?
Mr Yeaman: In broad terms, the amount was set, as with all the other projects, through our own analysis and
through discussions with the state government. I'll ask Ms Leeming to add to that.
Ms Leeming: We have been on a steering committee with the ACT government for the last year looking at
two corridors, an east-west corridor and a north-south corridor. Obviously the Monaro Highway and the Barton
Highway are part of the north-south corridor. There is already some funding on the Barton Highway. There are a
number of priority projects on the Monaro Highway that are unfunded. We have already met with the ACT to talk
about some of their priorities. They have welcomed the funding.
Senator McCARTHY: Will this provision be allocated to and matched by the ACT?
Ms Leeming: That's our expectation. We have informed the ACT that because it's an urban area, our
expectation is that funding will be matched fifty-fifty. That's the nature of those conversations.
Senator McCARTHY: So your expectation is that it will be matched?
Ms Leeming: That's correct.
Senator McCARTHY: Okay. When will that be decided?

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Ms Leeming: It's already provisioned for in our budget, and the ACT's budget is in June. We will hopefully
see a matching contribution from the ACT in its June budget.
Mr Yeaman: We've had discussions with ACT government officials since the announcement. They've been
very welcoming and supportive of the funding, so we don't see an issue there.
Senator McCARTHY: What ratio will the ACT be required to pay?
Ms Leeming: We've requested fifty-fifty.
Senator McCARTHY: Given the Commonwealth part-funded the Pialligo duplication—$1.5 million each
from the federal and the ACT governments—why didn't this upgrade receive any construction funding this year?
Ms Leeming: We are still planning for the Pialligo Avenue duplication; there is $2 million of planning money
on that project. We are waiting for a project proposal report from the ACT government to progress that planning
project.
Senator McCARTHY: Has there been any BCR assessment?
Ms Leeming: It's too early for that. That would be quite a significant project, the duplication of Pialligo
Avenue.
Senator McCARTHY: I note that $100 million was allocated in the 2018 budget to the Barton Highway
upgrade. Have you determined what proportion of that will be spent on components in New South Wales and in
the ACT?
Ms Leeming: We expect the majority of the funding will be spent on the New South Wales side of the border.
The duplication has already been done on the ACT side of the border, but we've been talking to both jurisdictions
about the use of that funding. There may well be projects in the ACT that deserve funding when we look at it
from a whole-of-corridor perspective.
Senator McCARTHY: I note that consideration has been given to the fact that CSIRO is planning to
redevelop its old research station along the Barton Highway into multiple suburbs, so this will put significant
strain on the Barton. I also note that the Chief Minister has indicated that a flyover from the William Slim Drive
roundabout would be needed to cater for that many people. When can the ACT expect to receive funding for that
project?
Ms Leeming: We've had no funding request for that project.
Senator McCARTHY: How much funding has the Commonwealth government contributed to the ACT's
light rail project through the asset recycling scheme?
Ms Leeming: That would be a question for the Treasury portfolio. That project does not sit within our
responsibilities.
Senator McCARTHY: Are you talking about the light rail project—
Ms Leeming: That's correct.
Senator McCARTHY: or the asset recycling scheme?
Ms Leeming: The Asset Recycling Initiative is a Treasury initiative, so those questions need to be directed to
Treasury.
Senator McCARTHY: That question does, but what resources are the department planning to allocate to
develop a government response to the territory's committee inquiry into the ACT's light rail stage 2?
Ms Leeming: I believe that's a question for our Territories Division. I think they are considering the response.
Is that right, Secretary?
Mr Yeaman: Senator, in the same way we deal with other inquiries, we would look at that as it comes before
us and devote the necessary resources.
Senator McCARTHY: Is there a standard time period the department aims to prepare responses for
committee reports?
Mr Yeaman: Sorry, could you repeat that?
Senator McCARTHY: Is there a standard time period for the department to prepare responses for committee
reports—particularly in relation to this?
Mr Yeaman: There are often deadlines set for responding to committee reports. I don't have those in my head
at this time, but we would meet the deadlines that are put before us and obviously endeavour to do it as quickly as
possible.

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Dr Kennedy: Senator, I could help answer your earlier question. The information I've been provided on
Canberra Metro stage 1 is that the total project cost is $707 million. The Australian government's contribution
through the Asset Recycling Initiative was $67.1 million. That's all I've got in front of me. Further questions about
asset recycling should go to Treasury.
Senator McCARTHY: Thank you for that, Dr Kennedy. Given the clear congestion and productivity benefits
of light rail, can you confirm the territory will not be charged licence fees for building valuable infrastructure on
or alongside Commonwealth roads and land and past many Commonwealth Public Service agencies?
Dr Kennedy: This might be one that we need to get the NCA—the National Capital Authority—in for, to take
questions of detail around those sorts of things. I'm happy to take these questions on notice. I note they're not
scheduled to appear this time.
Senator McCARTHY: By all means, take the questions on notice and we'll see how we go.
Dr Kennedy: I'll take them on behalf of the NCA. We'll work together with them to provide answers for the
committee.
Senator McCARTHY: Have you been asked by government to conduct or have you, of your own volition,
conducted any assessment of stage 2 of the ACT's light rail project?
Dr Kennedy: The department is aware of stage 2 of the light rail project, and it is aware of conversations
going on between the NCA and the ACT government, but as far as I'm aware, and I don't have the relevant
officials here, those conversations are between those two parties. However, I'll report back to you on notice on the
full extent of those conversations.
Senator McCARTHY: Thank you. I'll go to the Urban Congestion Fund. What is the assessment process for
applications under the Urban Congestion Fund?
Ms Hall: At the moment we anticipate that the selection criteria will be similar to what we're doing with
Roads of Strategic Importance, where we will sit down and we will work out with jurisdictions key priorities
based on the information that we published about it being around pinch points and issues around congestion in
cities and access to ports and airports. On that basis we will identify the priority projects and put that
recommendation to government.
Senator McCARTHY: Are there any publicly available guidelines?
Ms Hall: Not at this stage.
Senator McCARTHY: Will there be?
Ms Hall: I anticipate that there will be some information provided on what the objectives and the criteria will
be.
Senator McCARTHY: When will that be?
Ms Hall: I'm anticipating that it will be this calendar year.
Senator McCARTHY: Will per capita weightings form part of this?
Ms Hall: I haven't given consideration to that, and neither has my team. That's something that we might look
at.
Senator McCARTHY: Is it up to state and territory governments to put forward proposals?
Ms Hall: At this stage we anticipate that we'll actually be working with jurisdictions. Obviously they do a lot
of planning and assessment and identification through their own transport modelling, so in a lot of cases they
already know where their pinch points are. As I said yesterday, we've undertaken quite a lot of transport
modelling ourselves, especially around the urban centres. And we work with Infrastructure Australia and have a
look at the infrastructure priority list to identify where some of those pinch points are. So, I anticipate that it will
be a joint process.
Senator McCARTHY: All right. We might just go to the Roads of Strategic Importance program. What is the
assessment process for applications under this program? You mentioned it briefly earlier.
Ms Hall: What we anticipate doing is similar to what we've done with the Midland Highway and also with the
Beef Roads projects in northern Australia. We will sit down and do some analysis with the jurisdictions, using
analysis through the CSIRO TraNSIT model in particular, to identify key corridors and areas where productivity
is going to be inhibited, either through agriculture or through mining, and then identify that particular corridor and
then allocate money along those corridors, similar to what we've done with the Midland, where we allocated $400
million of Australian government funding. And then we will identify the priorities along that corridor and work
until we've actually used up the entire funding for that corridor.

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Tuesday, 22 May 2018 Senate Page 15

Senator McCARTHY: Again, are there any publicly available guidelines?


Ms Hall: No. We'll be doing those at the same time that we'll be doing the urban congestion ones.
Senator McCARTHY: That's in this calendar year?
Ms Hall: Yes.
Senator McCARTHY: Will per capita weightings form part of this?
Ms Hall: I'm not sure about that one, because this is more in regard to productivity and safety benefits in
particular, so we'd have to have a look at that.
Senator McCARTHY: Is it up to state and territory governments to put forward proposals?
Ms Hall: We'll be working with them through that. Currently we have a process on the Princess Highway, for
example, where we have all jurisdictions together on a steering group where we're bringing all of our own
relevant information together to identify priorities.
Senator McCARTHY: All right. I've got quite a lot of questions, so I might just refer to one of my
colleagues, who's got a few questions, in the interim.
Senator URQUHART: I want to ask some questions about Roads of Strategic Importance. Can you tell me
when the federal funding for that starts in Tasmania?
Ms Hall: At the moment we have funding starting in 2018-19 and going through for the entire 10-year
program.
Senator URQUHART: When in the forward estimates is the funding included for Roads of Strategic
Importance in Tasmania?
Ms Hall: In 2018-19. It starts in 2018-19 and it goes through for allocations every year over the next 10 years.
Senator URQUHART: So, each year?
Ms Hall: Yes.
Senator CAROL BROWN: Is that $100 million over 10 years?
Ms Hall: No.
Senator URQUHART: That was my next question: can you give me the profile of funding?
How much in what years?
Ms Hall: The Tasmanian program has $400 million over the 10 years and, over the forward estimates, it has
$10 million in 2018-19; $20 million in 2019-20; $20 million in 2020-21; and $50 million in 2021-22, which is a
total of $100 million in the forward estimates and the remaining outside the forward estimates.
Senator URQUHART: So that's $100 million. Then the other $300 million—where are they? What years are
you expecting that that will flow?
Mr Yeaman: The funding is then gradually phased out over the rest of the remainder of the 10-year program
in a fairly steady way—I think around $50 million a year. At this stage, as we discussed yesterday in the
committee, those profiles are quite indicative and, as we go through the process of working with the states on
those specific projects and investments that are going to be made under the program, we'll firm up those profiles.
Senator URQUHART: But you don't have the details going over for the other $300 million and the years
allocated?
Mr Yeaman: It's $50 million each year outside of the forward estimates to the end of 10-year period.
Senator URQUHART: When will construction begin on those projects?
Ms Hall: No projects have been allocated underneath the ROSI at the moment. We have to sit down and work
out what projects in the Bass Highway, in particular, the Tasmanian government would like to fund.
Senator URQUHART: So there's no allocation to any projects as yet?
Ms Hall: Not as yet.
Senator URQUHART: Can you tell me how much of the $400 million is for the Bass Highway?
Ms Hall: We're still working through that with the Tasmanian government, but we anticipate a majority of that
will be. But these questions were actually answered last night.
Senator URQUHART: I'm sorry, I wasn't here.
Mr Yeaman: Essentially, it's devoted to the corridor.

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CHAIR: Senator Urquhart, we've been through this. The procedure here is, when these things have been
thoroughly exhausted, you need to go to Hansard. We ask the officials, as that happened—
Senator URQUHART: I'm sorry: I wasn't aware that they'd been asked.
CHAIR: That's alright. Your guys did a terrific job here last night, but the officials are to bring it to your
attention and refer you to Hansard.
Senator URQUHART: So, if all of those questions were answered last night, can you just tell me: was the
question about the upgrade between Wynyard and Marrawah raised last night?
Ms Hall: I'd have to refer to Ms Leeming.
CHAIR: With that uncertainty, you're welcome to go ahead and explore that.
Senator URQUHART: My question is: is the $10 million for the 2018-19 for the Bass Highway and the
Wynyard intersection?
Ms Leeming: That funding hasn't been identified for any particular projects at this stage.
Senator URQUHART: So that's the same as what you answered earlier. Will any new funding go to the
upgrade between Wynyard and Marrawah?
Ms Leeming: We already have some funding for Wynyard intersection upgrades. We've got $2.3 million
upgrading several intersections crossing the Bass Highway near Wynyard. That work is underway. Construction
started in February and it's expected to be completed by March.
Senator URQUHART: So that's the intersection. What about the stretch from Wynyard to Marrawah?
Ms Leeming: I don't believe that we've committed any funding to that, but that will be part of the
considerations with the Tasmanian government as we take this program forward.
Senator URQUHART: So that's part of discussions that you're working with the Tasmanian government—is
that correct?
Ms Leeming: Yes.
Senator McCARTHY: If I can take you to WestConnex. WestConnex will be a new 33-kilometre,
predominantly, underground tolled motorway, and the $17 billion project involves widening and extending the
M4 western motorway. In addition to the $1.5 billion in grant funding, the Abbott-Turnbull government also
made a $2 billion concessional loan available to accelerate stage 2 of the project. How much of that $2 billion
concessional loan has now been taken up and handed over to the New South Wales government?
Ms Hall: I'll hand over to my colleague Mr Pirie.
Mr Pirie: As of 1 May 2018, $1.3 billion had been drawn down from the $2 billion loan facility.
Senator McCARTHY: What's the interest bill thus far on the total amount of the concessional loan that has
been taken up?
Mr Pirie: The total accrued interest, as at 1 May is $36,321,610.
Senator McCARTHY: Has the New South Wales government requested additional grants funding and/or
concessional loans for the WestConnex project and/or any other toll road in Sydney?
Ms Hall: No, it hasn't.
Senator McCARTHY: Has the department had any discussions with Sydney Airport and/or your counterparts
in the New South Wales government about providing federal funding to the Sydney Gateway project—that is the
proposal to build a seamless high-capacity road link between WestConnex and St Peters Interchange and Sydney
Airport and Port Botany?
Ms Hall: We've had conversations with both of those organisations in regard to the access issues around the
airport but not in regard to any additional funding requests.
Senator McCARTHY: I take you to the Princes Highway. On 14 May 2018, Gilmore MP Ann Sudmalis
wrote to Minister McCormack requesting $1.28 billion in unallocated road funding be directed towards upgrading
the Princes Highway between Nowra and Ulladulla. According to that email, she requests:
I would commend to you the urgent need for this funding, or a significant portion of it, to be allocated to the upgrade of the
Princes Highway between Nowra and Ulladulla …
I have discussed the importance of this highway with the Prime Minister, and previous Infrastructure Ministers as it is the
only transport corridor along the south coast of NSW and stressed to him the community support for urgent road
improvements following a number of serious and fatal motor vehicle crashes.

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Has the department received any requests from the New South Wales government for federal funding to upgrade
the Princes Highway between Nowra and Ulladulla?
Ms Leeming: We're aware of the letter. We have a copy of the letter. We have not had the chance to discuss
that in any great detail with the New South Wales government as yet. But, as Ms Hall said, the Roads of Strategic
Importance is a national program and we would need to assess the needs of the Princes Highway against other
priorities.
Senator McCARTHY: When did you receive that request?
Ms Leeming: We received a copy of the letter probably around the same date as the media did. I think it was
the same day that we saw the media article.
Senator McCARTHY: Are you aware of how much federal funding New South Wales is seeking?
Ms Leeming: New South Wales has not requested of us any funding for the Princes Highway at this stage.
The New South Wales government has a number of priority projects itself on the Princes Highway. The
Australian government has around $1 billion committed to the Princes Highway in total, including the new
funding for Nowra. So we already have some pretty serious commitments on the Princes Highway. The Princes
Highway, as you know, stretches from Sydney all the way to Port Augusta. So it's a considerable stretch of road,
with a number of priorities on it.
Senator McCARTHY: I take you to Western Sydney Rail. Is this rail line going to be funded at least in part
as an off-budget equity investment?
Mr Yeaman: The government has committed with New South Wales to jointly fund that on a fifty-fifty basis.
We are certainly exploring any options to pursue any financing and, in particular, value-capture around the new
station precincts with New South Wales. The agreement reached as part of the Western Sydney city deal is, to the
extent there is any value captured through those arrangements, it will be used to offset the capital cost of the
project. So we're exploring those options now with New South Wales through the business case process.
Senator McCARTHY: What are the government's expectations around revenue from value-capture as a
percentage in dollar terms?
Mr Yeaman: I don't have information on that to hand. We're going through the process now of working out
what is available there. We think that a project of this nature which creates new stations will certainly generate
value in the local community for landowners and others within the vicinity of those stations. So there are
opportunities. The states often apply development charges to those regions to attract value-capture opportunities,
but the extent of that is still to be tested in this case.
Senator McCARTHY: When do you expect construction of this line to begin?
Mr Yeaman: The intention is to have the line completed by the time that the Western Sydney Airport opens
in 2026. I believe it's in the next financial year that we would expect construction work to start on the line. But I'll
just check that, Senator, and come back to you.
Senator McCARTHY: Do you want to check that now, or do you mean to come back with it?
Mr Yeaman: I have some colleagues in the other room. The Western Sydney rail is handled by a different
part of the department. Those colleagues in the other room will hopefully come and let me know if it needs to be
updated.
Senator McCARTHY: While you're doing that, I might take you to road maintenance. How much federal
funding was provided in each of the past five years for road maintenance?
Ms Leeming: Senator, that's provided on the basis of a formula over a program to each state. For instance, in
2017-18, New South Wales received an allocation of approximately $103.95 million; Victoria, $60.36 million;
Queensland, $83.8 million; Western Australia, $48.98 million; South Australia, $28.0 million; Tasmania, $6.75
million; Northern Territory, $17 million; and Australian Capital Territory, $1.1 million. That's the sort of quantum
of funding. That is $350 million of National Land Transport Network road maintenance payments per annum.
Senator McCARTHY: How much will be provided annually in each of the years beyond 2019-20?
Ms Leeming: Do you mind if I take that on notice, Senator. There's a bit of detail to be done on that.
Ms Hall: The government made a commitment a couple of years ago to continue with all of the subprograms,
so it will be $350 million per annum ongoing.
Senator McCARTHY: Okay. If I can take you to the Queensland projects: Ipswich Motorway upgrade,
Rocklea to Darra. How much funding is currently in the budget to complete the upgrade of the Rocklea to Darra

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section of the Ipswich Motorway, beyond the work which is now underway on the three-kilometre stretch
between Rocklea and Oxley?
Ms Garbin: There is no new funding in the budget this year for Ipswich Motorway.
Senator McCARTHY: There is no new funding? Is that what you've just said?
Ms Garbin: That's correct, Senator.
Senator McCARTHY: Can I take you to Brisbane Metro. In January 2016, Brisbane Lord Mayor Graham
Quirk announced a $1.54 billion high-frequency rail system, which would run on rubber tyres. Since then, the
Brisbane Metro has been described as (a) a high capacity bus system; (b) not a bus: it runs on tracks just like the
Paris Metro; and (c) a 30-metre electric bus. Given that the government has seen fit to award $300 million for the
development and construction of the Brisbane Metro, can you tell me what type of vehicles will use it—trams,
trains, banana buses?
Ms Garbin: I don't have the exact details, but we understand they're articulated buses that are longer than
normal buses. But I'll have to get the details for you on notice.
Dr Kennedy: I've heard them described as bi-articulated buses.
Senator McCARTHY: Bi-articulated buses. So I could add that as letter 'd'!
Dr Kennedy: Please don't rely on my expertise as to the form of vehicle. Why don't we take it on notice and
get an engineering or technical description of the vehicles.
Senator McCARTHY: So you will come back to me on that. I think it's important because there is $300
million for the development and construction, and if we don't know what type of vehicle—
Mr Yeaman: I think the intention of the government funding is to help solve a transport problem in the City
of Brisbane. That transport problem has been well identified by Infrastructure Australia, our own analysis and the
Queensland government's analysis. The exact form of the bus or the tram, or whatever it turns out to be, that
solves that problem, is something that Queensland will continue to work through in their business case. We may
not have a final decision on that until later in the development project.
Dr Kennedy: Just to be clear, it's not in contest what the vehicle is. What you're talking about are different
descriptions of the same vehicle.
Senator McCARTHY: It changes quite a bit, depending on what day it is.
Ms Hall: It is a bus.
CHAIR: It evolves!
Dr Kennedy: In my simple way of looking at it, not being a technical person, it would look more like a bus to
me, but I have heard other people describe it differently. We're not talking about a range of vehicles being tested.
We're talking about the same vehicle with different people describing it in a different way.
Senator McCARTHY: So it's more the description? People don't know how to describe what kind of vehicle
is going to travel on this $300 million track?
Dr Kennedy: I can't talk for those other people. It looks to me like a bus.
CHAIR: It is Queensland after all! We need to make some allowances.
Dr Kennedy: It's a matter for the Lord Mayor of Brisbane how he chooses to describe it.
Senator CHISHOLM: It seems mind-boggling for someone who lives in Brisbane that you would give this
$300 million without knowing what it actually is that you're funding—whether it's a tram or a bus. Is all you've
seen the flyover that they put out, the glossy PR?
Ms Hall: The Commonwealth does not provide rolling stock. We don't provide funding for rolling stock. We
provide funding for the infrastructure solution, and we are providing funding for the infrastructure upgrade of
those roads, which is actually for a busway.
Senator CHISHOLM: But surely you would want to have an understanding that it's going to work?
Ms Hall: Infrastructure Australia has assessed the business case for Brisbane Metro.
Senator CHISHOLM: But you wouldn't look further beyond that to be confident that these, whatever they
are—trams, trucks, buses—are actually going to be what the residents of Brisbane need?
Ms Hall: Infrastructure Australia has undertaken an assessment of Brisbane Metro. It's put it on its
infrastructure priority list. It's a project that's actually supported by the Brisbane City Council and the Australian
government to deliver infrastructure that is a near-term infrastructure problem for Brisbane.

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CHAIR: We'll have to come back to that.


Mr Yeaman: May I finish the response to Senator McCarthy's question earlier? In terms of the Western
Sydney north-south rail link, the information I've been provided is that the business case is expected to be
completed towards the end of 2019. There is then an environmental impact statement process that needs to go
from there, with procurement kicking off around 2020 and then a construction timeline through to 2026.
Senator McCARTHY: Thank you.
Senator PATRICK: I have some general questions in relation to the way infrastructure funding is allocated. I
have had a dialogue with the minister in the chamber about this, so it's a follow-on from that. Announced in the
budget, or at least allocated in the budget, was $3.4 million for South Australia.
CHAIR: Senator Patrick, it's just been pointed out to me that we're about to be on break. So we might go one
minute early to the break.
Senator PATRICK: South Australia will be the topic when we get back.
Proceedings suspended from 10:29 to 10:46
CHAIR: We now resume this estimates hearing of the Senate Rural and Regional Affairs and Transport
Legislation Committee.
Mr Yeaman: Chair, we have now tabled two documents, at the request of Senator Rice last night, in relation
to the government's infrastructure program. It is the breakdown of the infrastructure program over 10 years.
CHAIR: Have the committee members had an opportunity to look at these? There being no objection, they
will be so tabled. Thank you, Mr Yeaman.
Senator Scullion: On the documents that were tabled, I would just bring to the committee's attention that, in
the top line, payments to support state infrastructure services are $7.1 billion in 2017 and then go down to $4.5
billion in 2021-22. Much has been made of that in a drop. This table has conveniently added the payments to non-
state entities, the untied local grants and, particularly importantly, support for alternative funding and financing.
You can now see in the bottom line that it's $9.4 billion, and it maintains an $8.5 billion averaging to 2021-22 and
does not in fact drop to $4.5 billion. I just thought I'd bring that to the attention of the committee.
CHAIR: I'm sure that'll exercise the minds of some who will perhaps want to have a talk with you about that!
In the meantime, Senator Patrick has the call.
Senator PATRICK: In the budget, it appears as though there was $3.4 billion in funding allocated to
infrastructure projects across South Australia. In the chamber I made the point to the minister that that represents
about three per cent of the $75 billion amount that has been announced by the government as a total. I'd like to get
a general understanding in relation to how the funding is allocated. I'll be up-front: South Australia has 7.1 per
cent of the Australian population. I realise there are some projects that are not related to population; something
like a road from Adelaide to Darwin might have some strategic significance.
CHAIR: Extraordinary defence funding in South Australia would be another.
Senator PATRICK: Yes! I think Queensland has lots and lots of defence funding, through the operation of
the Army up there, but we won't go there, Chair!
CHAIR: I'll swap you!
Senator PATRICK: There's no doubt at least some merit to a claim that infrastructure funding does have
some relationship to population. We wouldn't put an international airport at Coober Pedy, for example, because
there's simply no market. And roads, clearly, have some relationship to population. Will you walk through some
of the considerations that you go through when you allocate funding?
Mr Yeaman: I can lead off and my colleagues may then jump in. Within the $75 million that you referred to
there are a number of different subprograms that are each intended to deliver different aims. There is the
overarching Infrastructure Investment Program, which is the way we fund essentially large infrastructure projects
with the state governments. There is also then, as you would be aware, a series of subprograms, which particularly
involve investing in blackspots across the country and other forms of investment at the local government level. A
lot of those programs have their own formulas for how to distribute funding equally across the states.
In terms of the Infrastructure Investment Program itself, which is the source we use to fund the larger
infrastructure projects across the states, it's really a combination of need. We do quite detailed transport modelling
within the department. It looks at where we see the largest bottlenecks or transport congestion problems within
our cities and regions and where we can get largest benefits in terms of economic productivity. It's a similar
process that Infrastructure Australia goes through when they do their priority lists. We go through that process of

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working out where we see the biggest need across the country, and then government has an eye in deciding which
projects are funded. Government has an eye to, if you like, equity, across the various states as well. It also
depends heavily on the state government at the time and what planning work has been done by them on projects.
Projects have to be developed to a certain stage before we're prepared to look at and invest in those projects. It is
essentially a combination of need from a policy perspective. A certain element of balance across the country, I
think, is the main answer.
Senator PATRICK: I recognise there are commercial considerations and all those sorts of things. How much
of it ties back to, say, the number and quality of submissions that may come from a state government to the
Commonwealth?
Mr Yeaman: That's certainly a factor. Through the government's investment in the long-term pipeline, we are
trying to lead the discussion to some extent and to look ahead to where we see the priorities, and help drive that
work across the state governments. There's no doubt that if a state has done a high-level of active planning in their
jurisdiction then it becomes easier to engage on those projects.
Senator PATRICK: Can you provide me details on how many submissions the South Australian government
made for funding this year?
Mr Yeaman: We are happy to look at that on notice. We don't have it to hand.
Senator PATRICK: And across each of the states, if you would be so kind. You mentioned in your answer
before a formula when talking about blackspots and other needs. Could you table that formula? I presume it's an
operational guide on how to do this.
Ms Hall: A number of the subprograms have a set of criteria, so with maintenance it's actually a formula.
With the Roads to Recovery Program and blackspots it's basically criteria. We can table all that for you.
Senator PATRICK: Working in an open and transparent manner—it's not available on the web somewhere at
all?
Ms Hall: I believe that they are publically available.
Mr Yeaman: I think they are. Most of them are. We will double check that but most of them are. We can
provide the relevant links to those.
Senator PATRICK: Either the links or the documents, if they're not on the web, would be appreciated. I don't
want to crossover on what Senator Storer may have done last night but I want to talk very briefly about the North-
South Corridor—not so much about the details of the project but what's the total allocation to the North-South
Corridor?
Ms Garbin: It's $1.4 billion.
Senator PATRICK: How much has actually been spent to date on the North-South Corridor, of that $1.4
billion?
Ms Garbin: Sorry, $1.4 billion is the new commitment at 2018-19 budget, sorry.
Senator PATRICK: That's a new additional commitment?
Ms Garbin: That's correct.
Senator PATRICK: So what is the total commitment for the north-south corridor?
Ms Garbin: We'll just have to do some adding.
Senator PATRICK: Sure—adding under pressure!
Ms Hall: With regard to the current construction, the Commonwealth allocated—I believe it was nearly $3
billion.
Ms Garbin: Yes. The total allocation at the moment to the north-south corridor, including the $1.4 billion in
this budget, is $2.99 billion.
Senator PATRICK: How much of that original funding has been spent? I presume the $1.7 billion has
already been spent and this new allocation is for future spending?
Ms Hall: Expenditure prior to 30 June 2017 was $731.8 million, and for this financial year we're anticipating
spending another $457.56 million.
Senator PATRICK: So that's allocation in terms of money passed to the government?
Ms Hall: That's correct.

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Senator PATRICK: There's still quite a lot of money left in the kitty for that project. I'm happy for this to be
provided on notice. I presume there'll be allocations in the PBSs for each of the forward years, the four forward
estimate years, but this clearly must go beyond that. Could you lay out the cash flow, the intended cash flow, until
the expiration of the $2.99 billion?
Ms Hall: We can take that on notice for you, and we'll make sure that we include all of the new funding in that
as well.
Senator PATRICK: Maybe you could look at the past funding and then look at what you intend in what years
until it's exhausted. I presume you have those numbers in your system.
Ms Hall: Yes, we can do that.
Senator PATRICK: I might also ask for the Gawler railway as well, if that's possible, for the same thing.
Ms Hall: Yes, absolutely.
Senator PATRICK: Chair, I think I'm done. Thank you very much.
CHAIR: My God! Lovely! Thank you, Senator Patrick. Senator Rice.
Senator RICE: Thank you very much for the answer to my questions from last night—they were tabled
before. I just want to take you through them. You've given me a table that gives funding under various categories
between 2013-14 and 2021-22. That's basically over the period of the Abbott-Turnbull government.
Mr Yeaman: Correct.
Senator RICE: That's a nine-year period, and the proposed $75 billion infrastructure spend under the
government's Stronger Futures plan is over a 10-year period, from 2018-19 to 2027-28.
Mr Yeaman: Correct.
Senator RICE: That 10-year period sort of adds up to $76 billion and the previous nine-year period is much
the same—so about $76 billion over each of those two periods.
Mr Yeaman: Yes.
Senator RICE: I had a quick look at my calculator during the morning tea break. Given we've got a nine-year
period, I did some quick calculations to reduce it to a per year spend. Looking at the grant funding under the
Infrastructure Investment Program, where we've got $50 billion of planned spending from 2013 which is going
down to $48.7 billion, would you agree that the average spend is going from $5.58 billion down to $4.87 billion?
You probably have to do the same calculations as me.
Mr Yeaman: I'm happy to take your calculations.
Senator RICE: Essentially, the average spend per year in those two periods is going down from $5.58 billion
to $4.87 billion.
Mr Yeaman: That's for grant funding alone.
Senator RICE: That's for grant funding alone; that's right. Then, similarly, for the financial assistance grants
we're going from a total of $6.4 billion to $7.6 billion, so for the per year spend my calculation is about the same.
It's $0.7 billion, from the 2013 period, to $0.79 billion—a slight increase.
Then equity investments are going up from $1.26 billion to $1.49 billion.
Mr Yeaman: On an average basis, yes.
Senator RICE: On an average basis; that's right. So that's reflecting, essentially, the government's
increasing—
Mr Yeaman: Particularly Western Sydney Airport and Inland Rail. Construction for both projects is starting
this year, but they're supported by equity investment.
Senator RICE: Going back to the discussion we had last night, with that equity spend they're essentially
projects that need to have a return made on them?
Mr Yeaman: Correct.
Senator RICE: I note the criticism from Infrastructure Partnerships Australia, which was reported in The
Australian this morning, that having an increasing amount of your funding for infrastructure being done by equity
can be an issue.
Mr Yeaman: We're aware of the criticism that's been directed at that point. Our secretary recently spoke to
IPA as well and made a number of points. As we discussed around the Melbourne Airport rail link, certainly the
intention is to support projects in the best way on an individual project basis. There are a number of projects being

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supported. In a couple of key cases there's been a decision taken to invest into equity because it has suited those
projects. For Western Sydney Airport, for example, equity is a quite appropriate and sensible way of proceeding
to help bring private sector engagement in the project. It's very much a case of identifying projects and then
working out the best mix of funding and financing. Increasingly, the government has been using equity and has
been able to identify opportunities to use equity, but I think that's different to saying that we're going to fund
projects only through equity and reduce the grants.
Senator RICE: We have other infrastructure programs which are largely programs funded under asset
recycling and other special payments. They have gone down quite considerably—from $460 million per year, on
average, in the 2013 period down to $51 million.
Mr Yeaman: Primarily that's the asset recycling scheme which was active over that period and is now—
Senator RICE: Yes. But, looking at the total spend, even with that increase in equity taking a bigger share of
it, your figures show that it's $72 billion—basically staying at $72 billion—but the per year spend is $8 billion per
year going down to $7.2 billion per year. Do you agree that's the case?
Mr Yeaman: Yes, in broad terms. I would interpret that as remaining fairly constant.
Senator RICE: Well, no, it's a per year spend. It's $8 billion going down to $7.2 billion, so it's a drop over
those two time periods.
Mr Yeaman: Correct.
Senator RICE: So essentially the plan the government was trumpeting, a $75 billion investment in
infrastructure over the forward 10 years, is actually a drop compared to the 2013 period?
Mr Yeaman: I think the investment, as I said, is remaining at a high level over that period of time.
Senator RICE: Do you agree that the average per year spend is a drop from the 2013 period to the 10 years
forward from here?
Mr Yeaman: Taking your calculations on face value, yes.
Senator RICE: So it's a drop from $8 billion to $7.2 billion. It really seems to me that the government has no
ability to claim that over the next 10 years we're going to have record investment in infrastructure. It's actually a
drop compared with what was invested over the previous nine-year period.
Mr Yeaman: I don't think I can answer that.
Senator RICE: It's either a drop or it's not, and your statistics show that it's a drop.
Senator Scullion: Perhaps I can assist with that. I'm looking at the material that is in front of us at the
moment, and forward estimates take us to 2021-22. In 2017-18 the total expenditure is $9.453 billion and
averages between $8.6 billion and $8.4 billion over four years, at around $8.5 billion. I don't think that's in
dispute. So that certainly would be, as I look back over any other year from 2015-16, back to 2012-13, yes, there
was one peak at $11.12 billion. So that's one year over the last, between 2007 and 2017. It has a nine in front of it.
It's still smaller technically, but I'll acknowledge that that is a large sum. But we've indicated that they are record
levels of spending. If you look over the last decade, these levels of spending—certainly over forward estimates—
are significantly higher than the others. Now if you want to make the point that that isn't all government spending,
that isn't the point. I said it's been a record investment, and I think it's fantastic that government is becoming more
innovative with the taxpayers' dollar, making sure that it goes further. And seeking equity partners in these
matters, I think, is clearly the way of the future.
Senator RICE: I want to come to those figures in that other table. I'm looking at the first table at the moment,
which gives the overall funding allocation and the planned funding allocation. The key figure is the per year
spend that's planned over the next 10 years, which the government has trumpeted as being a record $75 billion
planned spend. I just wanted to confirm that in fact, compared with the nine-year period of your government—so
I'm not saying that it's a party political thing—from 2013 to 2021-22 being planned, it is an average of $8 billion
per year. In the proposed next 10 years, it's only an average of $7.2 billion.
Mr Yeaman: I think that is the correct interpretation of the figures you're citing. On the 'record' figures that
have been discussed by government, I'll have to go back and check back some of the statements that have been
made by government around that. I think the government often talk about the record level of investment from
2013-14 forward. So they talk about record investment over time. And the government have moved to essentially
a rolling infrastructure program, and this is really the key feature of the government's infrastructure approach—
moving to a rolling program of investment in the order of $75 billion over ten years, and to maintain that program
over time at that level. Of course, they may choose to increase that over time in the future. But that rolling
program is reflected in that early figure between 2013-14 and 2021-22, and they've now committed to an ongoing

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program of $75 billion beyond the forward estimates. So the statements that I understand the government have
made in relation to the record investment are that they're investing record amounts over a 10-year rolling period,
compared to—
Senator RICE: But that's not the case.
Mr Yeaman: But compared to prior to 2013-14, prior to the life of this government, those levels of
investment.
Senator RICE: I'll go to the time prior to 2013-14 in a minute. But, essentially, that record investment means
that—even if you said that $7.2 billion per year for the next 10 years is much the same as $8 billion—it's
essentially keeping that as a steady level of between $7 billion and $8 billion of investment. It's not increasing.
Meanwhile, the population growth that we're experiencing between 2013 and right out to 2027-28 is massive, and
government revenues are increasing. So, in fact, to have a record level of investment, you'd need to be increasing
your investment to be keeping pace with overall government revenue and with population. Would you agree that
that would be the thing you'd need to do?
Mr Yeaman: Looking at the recent figures which are on the other table that was provided, the levels of
investment that are currently being provided in, for example 2016-17, 2017-18 and so on are historically high of
infrastructure investment. There are constraints that we're seeing in some of the systems, particularly in New
South Wales, which is leading to some pressure on costs around a managed pipeline, essentially, of investment.
So it's very important to stage our infrastructure investments over time whilst maintaining a high level of
infrastructure investment, and I think that that is what is characterised by these figures.
Senator RICE: Yes, I mean, there's investment, but I think the claim that we are having a record level of
investment isn't backed up by your figures here.
Mr Yeaman: As I said, I think as I understand it, the references to a record level of infrastructure spending
relate to the rolling program of $75 billion over 10 years, which I think is reflected in the period between 2013-14
and 2027-28, relative to previous investment prior to that period.
Senator RICE: Meanwhile, as I said, you can't claim that that is 'record' if you're actually having a small
reduction. And with population increasing—we have 25 million here in 2018, and an expected population of 30
million in 2028—the need is for increasing investment over time, not just keeping it steady or having a decrease,
as is indicated in these figures. I know I'm going to run out of time in my 15-minute slot. I want to move on to the
second table. So thank you again for providing the information in terms of investment over from 2007-08. This is
what Minister Scullion was just looking at. In terms of the total, it's very clear there in the bottom line of that table
that we have an increasing amount through equity. Once again, I wanted to look at what that would look like
without equity. My calculation—looking at the four years from 2008-09, and then comparing them to 2018-19—
so a decade ago, in fact, without equity, the funding for infrastructure has dropped from on average, I think $26.3
billion over the four years from 2008-09 down to $24.8 billion from 2018-19?
Mr Yeaman: As I think I've discussed previously—and previously in this committee—we don't see a reason
why you would exclude equity investments. As I say, those equity investments are supporting real infrastructure
projects on the ground. Construction is starting this year on the Western Sydney airport and on inland rail
projects. They are delivering real infrastructure in this country. There has been a shift in a couple of key areas
towards supporting projects through that means, but again, only where it is suitable and appropriate in the case of
the project. So what matters to us is the overall level of infrastructure activity happening across the country in
support of these projects, not the breakdown of how they're being supported.
Senator RICE: No, but it does mean that you are restricting substantial amounts of funding to projects that
have to be making a financial return rather than necessarily what's in the best interests of the community.
Mr Yeaman: That would only be the case if the government took an active decision to say, 'We will only
support projects through equity of a certain amount,' and that's not the case. The government is saying we want to
support these projects and we've decided to support some of them through equity because in the specific
circumstances of those projects, that is the most appropriate way to fund those projects—the most efficient and
effective way to do so.
Senator RICE: And even if you include equity, from 2008, you're going up over the forwards of $28 billion
up to $34 billion, which I would argue—in terms of the population increase from 21.6 million in 2008 to 25
million now and heading to 30 million—is only just keeping pace with what you'd need to be spending to be
increasing the infrastructure spend to cater for an increasing population.
Senator Scullion: Perhaps, again, I can help. Just briefly, I'll try to get some additional figures, because this
goes from 2007-08, because we thought that's where we are now, in 2017, that would be a decade. But if you

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want to go back to 2002-03, that gives you the additional five years with which we can then say that we're now
looking over the period of time from 2013 onwards. And just by my basic calculations, we have significantly
increased infrastructure over the decade from 2002-03 to 2013. But I reiterate what Mr Yeaman has been saying:
this is the way of the future. This is the investment that has been put into infrastructure. Now I'm quite sure that
the funds that have not been taxpayer funds, had they been in here, are used for other things in life like pushbike
paths, parks, health, education and other important elements that the taxpayers want to have invested in. We're
seeing not only in Australia but around the world that equity partnerships are the way of the future. These are the
funds that have been invested in infrastructure.
Senator CAROL BROWN: I want to go back to the Roads of Strategic Importance initiative. I've had a look
and talked to my office, and I'm sure that these questions haven't been asked, but obviously I'll see what the chair
has to say. So of the $400 million that's in the budget for Tasmanian roads, is any of that funding coming from
unspent funds from other Tasmanian road projects?
Ms Hall: No, it isn't.
Mr Yeaman: No, it's new money.
Senator CAROL BROWN: Has the Tasmanian state government expressed any preferences for where this
funding should go?
Ms Hall: We've been in conversations with the Tasmanian government about potential projects, so, yes, we
have. We haven't finalised anything yet though. I think we answered those questions yesterday evening.
Senator CAROL BROWN: I think I saw in the paper last week or thereabouts that Mr Pitt visited Tasmania.
Was he talking to the Tasmanian government about future projects?
Ms Hall: He was down in Tasmania last Thursday.
Senator CAROL BROWN: Was he down there talking about any project?
Ms Hall: I haven't received any feedback about what he actually discussed while he was down there.
Senator CAROL BROWN: Not that you are aware of.
Ms Hall: No.
Senator CAROL BROWN: You just don't know; okay. In your question to Senator Urquhart you talked
about the $10 million that's been allocated for the 2018-19 year, and you talked about the $2.3 million that's been
allocated to the Wynyard intersection. What about the rest of those funds? What else is it funding?
Ms Hall: The $2.3 million is current government funding. It's not the $10 million of new money that's been
allocated. So I think, as we've answered previously, the $10 million that is allocated in 2018-19 under the ROSI
has not been allocated to specific projects. We're still in negotiations with the Tasmanian government.
Senator CAROL BROWN: When do you expect that to happen? That $10 million is due to be spent in the
2018-19 year.
Ms Hall: In the next financial year, that's correct. We anticipate that we will probably be finalising a number
of projects, predominantly on the Bass Highway, within the next financial year.
Senator CAROL BROWN: Those conversations are ongoing and you have no idea about where those
projects will be, but all of it will be along the Bass Highway. Is that right?
Ms Hall: No. I think we've answered those questions already. We anticipate a majority of it will be on the
Bass Highway but the Tasmanian government has identified a number of other priorities that they would like us to
look at as well.
Senator CAROL BROWN: What are they?
Ms Hall: I think we answered—
CHAIR: We've spent a lot of time—if we haven't, I'm happy. I'm just saying—
Ms Hall: I believe we answered those questions yesterday.
Senator CAROL BROWN: This is my last question on this, Chair.
Ms Leeming: We did answer those questions yesterday.
CHAIR: Would you answer for the senator? It's her last question.
Senator CAROL BROWN: On this area, yes.
Ms Leeming: Yesterday I said that the Tasmanian government is also interested in projects on the Illawarra
highway, which connects onto the Bass Highway. They're taking a whole-of-corridor approach to it.

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Senator CAROL BROWN: All right. But do you have figures on those projects?
Ms Leeming: I think the most we can say is this is a budget commitment, so it was only made in May. I think
it's too early to give figures on any projects. There is also the matter that the Tasmanian government will need to
also provide funding for this package, and they haven't done so yet in their budget.
Senator CAROL BROWN: That was my last question on that area.
Senator COLBECK: The $2.4 million project at Wynyard was committed to at the last election. Is that right?
Ms Hall: I believe so, a 2016 election commitment.
Senator COLBECK: So a commitment by Brent Whitley at the last election is being delivered now?
Ms Hall: That is correct.
CHAIR: Senator Brown, again?
Senator CAROL BROWN: I just want to get an update around the Hobart airport roundabout. I think the last
time we spoke we were talking about tenders being let. Has that happened?
Ms Leeming: No. My advice is that the tender award is expected to occur later this year or early next year.
Senator CAROL BROWN: I think last time we met, or the last time we asked this question, it was late 2017
and early 2018.
Ms Leeming: That's right; that's what I said then.
Senator CAROL BROWN: So now it's been pushed out to—
Ms Leeming: It's been pushed out slightly. The advice from the Tasmanian government is that there have
been some geotechnical complexities that they're having to look into. That's in the nature of elevated
embankments around off ramps. They're just having a look at some of those works, so, no, they haven't gone out
to tender. When a project is tendered, it needs to be properly scoped so that there are no surprises. They're just
getting on top of those other challenges around that area.
Senator CAROL BROWN: I understand what they're doing, but the Hobart roundabout has been on the
books for a while now.
Ms Leeming: It has. That's right. It's quite a substantial project, even though it's only $24 million of our
funding—$6 million, state; $30 million total. It is quite a significant project. It involves a grade separated
interchange. It involves the reconstruction of the Tasman Highway. There are some environmental issues in that
area. There are environmental offsets that are required. And some of the alignment is on airport land, and, every
time there's a project on any airport land, that involves an application under the Airports Act. So it's actually,
although small, quite a complex project.
Senator CAROL BROWN: I understand that and I'm sure that the state department that looks after this
project would understand that and would understand what is required in terms of proceeding to actually building
and doing the work. What I'm asking is: why is there such a delay? They would have known about this.
Ms Leeming: All projects have challenges, and the challenge, as I said to you before, was around having a
look, at the early planning stage, around the extra remediation work that's needed for the elevated embankments.
It's very difficult to predict.
Senator CAROL BROWN: So the only time line you can give me at the moment—and it's not in concrete—
is that that work that the state department has to undertake should be completed in time for maybe a tender—
Ms Leeming: Later this year.
Senator CAROL BROWN: in 2018 or early 2019?
Ms Leeming: No. Tenders go out late this year or early next year.
Senator CAROL BROWN: When would we expect construction to start?
Ms Leeming: Potentially in mid- to late 2019. There is still considerable planning work that needs to be done.
There's an environmental assessment that's required, and there are the applications under the Airports Act, which
involves a major development plan. Those are the complexities of building at an airport.
Senator CAROL BROWN: How long is it anticipated to be before completion then, if we're looking to mid-
to late 2019 for a start date?
Ms Leeming: It's approximately a three-year project—that sort of time frame.
Senator CAROL BROWN: So what's that, 2022?
Ms Leeming: That's right.

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Senator CAROL BROWN: Completion date, 2022.


Ms Leeming: With all these projects, dates can change, challenges can arise. State governments just advise us.
It's not something that we can actively manage in terms of the project time frames. They provide them to us, and
we phase our payments according to the progress of the project. But there's a considerable amount of work being
done at the moment by the Department of State Growth in preparing for this project and preparing the design and
tender documentation.
Senator CAROL BROWN: When did the work start? The commitment, I think, was a 2016 commitment.
Ms Leeming: I think they started fairly soon after that, having conversations with the Hobart International
Airport corporation and discussions with us about the scope of the project. It's been a fairly ongoing activity.
Senator CAROL BROWN: So you would be disappointed if we come back to the next estimates and the
tender hasn't been let, if that time of 2018, early 2019 has to be pushed out again?
Ms Leeming: I think disappointed is the wrong word. We take our advice from the state governments about
what the appropriate time frames are for projects. We would support the state government having a full
understanding of the complexities of the project, rather than going out for tender on a project that's not fully
scoped. I think that's probably the answer to that question.
Senator CAROL BROWN: Thank you, but of course it was the state department that gave you the original
information that you gave to the estimates last time, which was that tenders would be sought for the project in late
2017 to early 2018. Is that correct?
Ms Leeming: That's right. We endeavour to provide the committee with the information as we have it. It's not
always information in the public domain, but we share that with you when we have it so that you understand how
the project is progressing, and now you can understand some of the complexities of this project. All we can do is
provide you with an update when you request it.
Senator CAROL BROWN: But there's no guarantee that the tenders will be sought by the new timetable that
you've given of late 2018 to early 2019?
Ms Leeming: We're not in control of the tender process. That's just the latest advice we have from the
Tasmanians.
Senator COLBECK: Can I ask some questions off the back of that, about the 3-year construction period?
Could you on notice get us some more advice on that? That seems like a long time for that construction project.
Like Senator Brown, I've got a sense of what's happening down there. We both know the area relatively well.
That seems like a long time for that project.
Ms Leeming: Perhaps we'll come back to you with some advice.
Senator COLBECK: Another question, which you'll probably have to take on notice as well, is whether the
extension of the runway project that's just been completed at Hobart Airport has had any impact on the land
acquisition or some of the land issues around interaction with the realignment or the reconstruction of the
highway.
Ms Leeming: Will do.
Senator McCARTHY: I might take you back to Queensland, to the $300 million for the development and
construction of the Brisbane Metro. I note that in the options analysis of the Brisbane Metro business case, 23
options were originally short listed. This was then refined to six and finally to four viable options. However, only
three options are detailed. Number one: the Paris-style subway metro; two, buses; and three, bus and train—BAT.
What was the fourth option? Was it a light rail?
Mr Pirie: I'd have to take that one on notice, sorry.
Senator McCARTHY: So you don't know?
Mr Pirie: I don't have that information here with me.
CHAIR: That's different to whether you know.
Mr Yeaman: We don't know.
CHAIR: You don't know? There was a fourth option and you don't have an independent recollection between
you as to what the fourth option was? I mean, I find that—
Mr Yeaman: I don't have it to my mind, Senator.
Mr Pirie: No.

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Senator Scullion: That's why it was the fourth option. That's why it was down there as fourth. Someone can
take that on notice.
Senator McCARTHY: I note that in June 2017 the Queensland government and the Brisbane City Council
released the Connecting Brisbane report, which highlighted the complementary nature of the Cross River Rail and
the Brisbane Metro. Given the complementary nature of Cross River Rail and Brisbane Metro, why is the
government still refusing to provide any funding for Cross River Rail?
Ms Hall: I think that's a decision of the government. At this stage, Infrastructure Australia found that that
project, in its business case, did not provide the information it needed to be able to provide advice to the
Australian government to invest in it. Since then the Queensland government has come out and said that it will
fully fund it.
Senator McCARTHY: Given that $300 million has been awarded for this development and construction,
what are your plans are in terms of Indigenous employment on that?
Ms Hall: Currently we're working on an Indigenous employment and supply use framework, which we
anticipate will be negotiated with the jurisdictions for every infrastructure project going forward.
Senator McCARTHY: What does that mean?
Ms Hall: At the moment we're working out a framework which will look at a target for Indigenous
employment and supplier use and the supply services that are required to support that target to be able to be
reached.
Senator McCARTHY: What is the target?
Ms Hall: At the moment the target will be determined on a case-by-case basis, but we'll be looking at a target
somewhere near the representation of Indigenous people in the working age population in that area.
Senator McCARTHY: So you will have a different target for each infrastructure item?
Ms Hall: It's possible, yes.
Senator McCARTHY: What about the supply side?
Ms Hall: They'll be incorporated together.
Senator McCARTHY: When do you expect to have that framework up?
Ms Hall: We're currently negotiating that framework with a variety of states and territories across the
Commonwealth and with a number of Indigenous groups, including the Prime Minister's Indigenous advisory
group. We're anticipating that that will be implemented probably starting from some time next year, depending on
the negotiations of the national partnership agreement, but we already have Indigenous targets in place for all our
northern Australia projects.
CHAIR: Will that be mandated?
Ms Hall: It will be something they will have to have in place for every project, yes.
CHAIR: So how do you enforce a mandate?
Ms Hall: We're working through that with the jurisdictions at the moment, but we anticipate that there will be
some level of reporting requirements.
CHAIR: I understand that, but that's not the burden of my question. What is your thinking how you'll enforce
a mandate?
Ms Hall: It will be through reporting requirements.
CHAIR: Suppose they have now reported that they haven't met the target. What punitive—
Ms Hall: It will be reporting of the construction company, not necessarily publicly, in regard to whether they
have met their targets. Then it will be consideration about whether that construction company will be able to be
used on other projects going forward if it can't meet those requirements.
CHAIR: So the punitive aspect is that if they don't perform on a particular project they won't be considered as
being prequalified for others.
Ms Hall: That's exactly right.
Senator Scullion: That's correct. But whilst it is in relatively early stages, it's certainly my view that this
should be seen as a standard. If you're building a bridge with half-inch reo, it's a standard. There is a particular
standard for the cement, the road, the gravel. Someone in the market will build it to that standard, and we accept
that as a standard. It's not to be argued about. That's the nature of the bridge. So Indigenous procurement and

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employment will become part of a standard. For people who want to build a bridge, if they can't meet the standard
then we'll find someone who will. It's exactly the same as every other element of the standards.
CHAIR: I don't think there's any dispute about the spirit of this, but how do you deal with, for example,
contestability around supply?
Ms Hall: That's one of the things that we're working through at the moment. Obviously one of the key issues
for us, where appropriate in areas that have high Indigenous populations, is to try to use local employment and
build up the capability over a period of time. In larger city areas we're hoping to be able to provide opportunities
for mobility for Indigenous employees and supplier use to be able to provide for those larger companies.
CHAIR: That was all useful, but it didn't respond to the question I'm asking. I want to see this succeed, and I
imagine all of my colleagues want to see this succeed. How do you deal with the question of contestability of
supply?
Senator Scullion: You can pull me up if my interpretation of contestability is incorrect, Senator, but I take it to
be, is this an Indigenous employer? Is this not an Indigenous employer? Is this an Indigenous supplier or is this
not an Indigenous supplier? We have invested in an organisation called Supply Nation, whose certification of
those two elements is the certification we require to meet the standard. It's quite sophisticated and we've made
significant investments in the process where people apply this. Are you or are you not an Aboriginal person?
That's worked out by them. In terms of a business, whether they're a joint venture, stand alone, sole trader, all of
those are in and are weighted. Principally that is the responsibility of Supply Nation that provides the backup to
those standards.
CHAIR: Again, I want to qualify it by saying I want to see this succeed, but if you've got an order for supply
of something, whatever that happens to be, we normally go to the market, and when all other things are equal
we're probably driven a bit by cost sensitivities. What will happen in that space? We can have prequalified
suppliers of labour or goods or services, but how do you deal with the contestability if they have to compete? For
example, if they end up as number three or four on price, how do we meet this mandated—I don't want to use the
term quota, but how do we meet the mandate?
Mr Yeaman: As Ms Hall said, we're still working through the detail of this. I'm talking in broad terms, and the
final model may look a little different, but at this stage, when we select a project and we ask the state to proceed
with it, they go out to the market and test where the interest is from the private sector to engage on that project.
What we want to see happen is that when they come back to the Commonwealth and say, 'We now have our
project proposal and we have a contractor in mind' we want to say 'What is the contractor suggesting in terms of
the local content and the Aboriginal and Indigenous supply use?' We want to ensure that that reaches a standard,
as the minister said. The onus will be on the private sector supplier who's bidding for the contract. Cost is one
factor, but they'll also have to demonstrate as part of that they can deliver a workforce capability that's going to
help boost Indigenous work outcomes in the region. We will only approve the funding for the project if those
targets and benchmarks are met, essentially. It will be built into the process.
CHAIR: I want to see you get it right, because I fear that if you don't get it right, if we end up with some
quota system, it will be repelled by the market place and it will fail.
Ms Hall: What we're trying to get an understanding of in the first instance is what is actually in the market,
before we end up with what you would call a quota system. I don't think that's what we're looking for. What we're
trying to achieve is to get an understanding of what is happening in the market, how do we ensure that the project
is still delivered, because that's the ultimate aim of the infrastructure investment, what the workforce is to support
that, and what support services are needed to ensure that we can try and get that Indigenous target to be able to be
met on an ongoing basis, and to help the contractors to be able to do that as well.
CHAIR: Just one final thing and then I'll return to Senator McCarthy. As a private contractor, if we're not
careful, if you want to burden them with a mandate, depending on how they might approach and respond to the
mandate, you might make it very inefficient from a cost perspective for them to be able to compete, depending on
the volume of what you're looking for. Say, for example, if the Indigenous labour force that you want, the first
Australians, aren't there to meet the mandate, they have to be imported. Those sorts of things will see the spirit of
this fail if you don't get it right, in my view.
Ms Hall: I think that's right. It will also increase costs as well. We're anticipating that the framework will
probably have some sort of review mechanism built into it, so we can see if we're actually achieving what we set
out to do, and probably undertake, once we've got a level of data, some cost benefit analysis to understand the
market response.
CHAIR: Good luck with it. I think it's a great pathway.

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Tuesday, 22 May 2018 Senate Page 29

Dr Kennedy: Could I add quickly, we do think that one important part of this is having a stable, ongoing work
program to support this supply line, particularly in regional areas. With road transport projects coming and going,
it's very difficult to build capability, maintain it and continue to have that capability roll over to the next project. I
have to say the conversations with Western Australia, the Northern Territory and Queensland are productive
around this issue, and that is sort of the intention around this Roads of Strategic Importance initiative. It's why
we're trying to get a program of works in the way we did in Tasmania. We think it will deliver better outcomes,
but, as Ms Hall said, we will review this as we go along. Anyway, that's one of the ideas of a more sustained
program of works on some of these corridors.
Senator McCARTHY: Ms Hall, who is going to work on developing the framework?
Ms Hall: It's being worked on across the Commonwealth at the moment.
Senator McCARTHY: But in the department—does it come under you?
Ms Hall: Yes, it does.
Senator McCARTHY: And you said that it's a process that will also go through the Prime Minister's
Indigenous Advisory Council. What time line are you working towards?
Ms Hall: We've already circulated a draft of the framework and we're hoping to have a framework considered
some time this year by government.
Senator McCARTHY: I'll take you to the Bruce Highway.
CHAIR: Senator McCarthy, your time is under pressure.
Senator McCARTHY: Is it up?
CHAIR: No, but you might help me find a good point to finish on.
Senator McCARTHY: I note that the budget committed $3.3 billion to the Bruce Highway, of which
approximately $1.42 billion is beyond the forwards and unallocated to specific projects. Have there been any
discussions with the Queensland government about how this money should be spent—on what projects?
Ms Garbin: We've had ongoing discussions with the Queensland officials on what some of the next priorities
might be on the Bruce Highway.
Senator McCARTHY: You have had?
Ms Garbin: Yes.
Senator McCARTHY: When did those discussions occur?
Ms Garbin: They're ongoing. We've had them continually—
Senator McCARTHY: Since when?
Ms Garbin: throughout the current Bruce Highway Upgrade Program as well.
Senator McCARTHY: Is the any potential for at least some of that $1.42 billion of funding to be brought
forward and invested in the highway earlier than currently planned?
Ms Garbin: That's something that we'll need to work through with the Queensland officials once projects
have been identified.
Senator McCARTHY: But in your view is there any potential for that to be brought forward?
Ms Garbin: We can work that through with the Queensland officials.
Senator McCARTHY: If I can take you to Western Australia—
CHAIR: Before you do, is there a suitable time to—
Senator McCARTHY: To interject?
CHAIR: Senator Rice, you have the call.
Senator RICE: Thank you, Chair. I've got a bit more interrogation of the excellent figures that you shared
with me. In particular, looking at the total transport infrastructure investment—excluding the East West Link and
Perth Freight Link contingencies, because I think we don't know whether they're ever going to be built or spent—
we've got $72 billion that's being proposed to be spent over 10 years from 2018-19. From the other table you've
got, we have the amount of money that you're proposing to spend over the forwards, 2018-19 to 2021-22.
According to my calculations, that adds up to $33.9 billion. Just check my figures there.
CHAIR: Where are you drawing your figures from, Senator?
Senator RICE: From these two wonderful sheets. I've had to do some adding up.

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CHAIR: Are these the sheets that were tabled?


Senator RICE: Yes, that's right.
CHAIR: You've got a colour copy?
Senator RICE: That's right. We've got $33.9 billion that's being proposed to be spent over the forwards, so
it's just adding up the totals over the forward estimates. Is that correct?
Mr Yeaman: Again, I'll take your—
Senator RICE: It's eight plus 8.6 plus 8.2 plus 8.5, so it adds up to—
CHAIR: I think the minister pointed out with the calculator that it averages about 8.5, so it's 34.
Senator RICE: Let's round it up to 34. We've got $72 billion that's being proposed to be spent over the 10
years, $34 billion of that proposed over the forwards. That then leaves only $38 billion for the remaining six
years, which means, if you divide that by six, it's only $6.3 billion per year. How can this be framed as being even
just a continuing investment, as maintaining the same level of investment? It's actually a substantial drop in
infrastructure investment over that period of time.
Dr Kennedy: The government is yet to make a number of decisions beyond the forward estimates. I think it
would be unreasonable to make a calculation based on the existing pipeline about what the future infrastructure
spend will be. The point of the pipeline was for the government to begin to lay out and earmark moneys for
projects that will be coming down the track, both for private sector engagement and for planning purposes with
the states. But, as this is a rolling program and as more moneys get added into the program as the government
considers its ongoing investment each year, of course more moneys will be added beyond the forwards estimates.
So, I think it's a hard call to say in six or seven years' time, when we're still a long way away from the government
deciding on particular projects that may be appearing there, that that represents that the government will spend
that money in that year. Whichever government it is, it will have a set of decision-making processes to get there.
The point of this pipeline is to try to position the market so it can see these projects coming down the track.
The other thing I might just add: the chair just mentioned the level of spending across the forward estimates,
including equity—in other words, expenditure on infrastructure. We do have to be careful in this call for more
infrastructure spending in the near term at the moment. There are some signs of costs increasing, particularly in
the east coast market. Certainly, in my engagement with private sector providers there are genuine capacity
constraints. There are a significant number of projects that the states are leading on and we're leading on. I agree
with your assessment of the need to get on and plan and get this infrastructure out and running, but I would just
caution the rush to do it quickly. I think it will be much better for governments to be thinking how to sequence
this infrastructure and to be planning, and this is an attempt to plan out over 10 years and sequence that
expenditure.
Senator RICE: Given that, wouldn't it then be sensible for the government to say that rather than committing
to $75 billion over the next 10 years you're actually going to need to commit considerably more than that if you're
just going to be keeping up the levels of investment made over the next 10 years, let alone the increased
investment we know is required because of our increasing population? You can say that we have a $75 billion
investment, but your figures show that that means we're going to have a drop in investment over the remaining
period out to the end of that 10-year period.
CHAIR: Can I say that I feel like I'm in a parallel universe here. The secretary just went into great detail with
you that that's not the case—that this doesn't represent all the funding. He talked about the constraints in the
marketplace that will increase pressure on the costs. Senator Rice, you need at least to respond fairly to the
officials.
Senator RICE: I'm putting the case that, yes, I recognise those constraints, and that increases the reason why
you need to be planning out and saying, 'There will be this proportion of money that's going to be available out
beyond the forwards, whereas the government is not committing that amount of money.' It's not foreshadowing
that. In this document its foreshadowing that there is going to be a drop in investment in real terms, let alone a
drop in investment per person. The quick calculation I've done, taking into account population growth, is that
we're looking at a 15 per cent drop over the period, compared with the last decade—
CHAIR: You need to turn these into questions. This isn't the John Laws show. You need to probe the
witnesses and find out their responses. We're not here to comment on it.
Dr Kennedy: My only response is that it is a rolling program, which means that the potential for the
government to take decisions that fill in those years as we go out beyond the forwards means there is always an
issue around the profile of that money, of that rolling program. Certainly, planning would suggest that more

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Tuesday, 22 May 2018 Senate Page 31

would tend to come through in that first four, five or six years, and then it would tail off. But a rolling program
allows you to continually fill those years out. Whether the government, or any government, decides on the basis
of need to invest more or less around that rolling program, my comments were earlier about the importance of
having, as best we can, a rolling program that steps these projects out over time.
Mr Yeaman: If I could add two points to that. Historically we've had a shorter time frame than this. So, on
your point about sending a signal, essentially—there is a greater level of infrastructure investment coming down
the track—that's what the pipeline does. As Dr Kennedy said, in the past we've had a much shorter time horizon,
only looking three, four, five years ahead. This is giving greater certainty in terms of the future. The other thing I
wanted to raise is that we are working through the states the COAG process as well, and there has been some
discussion there around the skills needed in the sector—to help address some of the capacity constraints that Dr
Kennedy referred to, working to essentially increase the speed limit on our infrastructure spend over time.
Senator RICE: In terms of what is foreshadowed over that 10-year period, is that all attached to particular
projects?
Dr Kennedy: In the current program, there is a set of projects that have been outlined, and then there are
programs. We've been talking about some of them—
Senator RICE: Like the rail program and the road program. So it's not actually—
Mr Yeaman: There are some ongoing projects.
Senator RICE: So, under the rail program and the roads project, they're not attached to particular projects, are
they? It is going to evolve over time?
Dr Kennedy: They are listed as program streams. But the potential—because this is a rolling program that
rolls out each year for the government to consider how its investment is spread across those years—happens every
year. As it sits down to do that, it can think about its profile, because of the discussion with the state. One of my
colleagues was asked earlier about the potential for projects to come forward on the Bruce Highway, I think.
Sometimes states are coming to us, saying: 'This project probably needs to go back a bit. It's more complicated',
and other jurisdictions are saying, 'We're ready to go a bit earlier', and we do want to be in a position to respond to
that. It is a matter for government, but we do want to be in a position to at least make that recommendation to
government. It's not precluding the decisions that would be made next year for more moneys to come into those
years that you're concerned about. But, as I said, the benefit of a rolling program is that constant review of the
stock of things coming down the track. It does not mean that now the stock set for six years hence is done. Those
decisions are yet to come through as moneys become available in a rolling program.
Senator RICE: And, given that they're programs, and basically it's a bucket of money. Certainly, in the later
years of that 10-year period they're not attached to particular projects, are they?
Dr Kennedy: No. Well, not quite. As my colleagues outlined earlier, in some of the projects we've done our
best to allocate and profile against those projects. But I think they’ve been quite clear and open with the
committee that there are business case processes to be—I'm not going to go to that.
Senator RICE: I know all of that. The point I'm trying to make and that I want to get your response to is,
given they are programs and not attached to particular projects, it is essentially saying, 'Here's a bucket of money
that we're allocating to meet the need'. So my calculations and my response is that, in fact at this stage, the bucket
of money that you are allocating in the second half of that 10-year period is actually less than what is being
allocated now.
CHAIR: Hold on, Senator Rice. No, no. I don't want to see the sun set on this. We're already hours over. Dr
Kennedy has made it absolutely clear to you that this isn't the only funding profile that you should be considering.
There will be additions.
Senator RICE: Yes. But my question is: to keep up with the current level of infrastructure that's required, and
investment infrastructure that's required, there is going to need to be more money put into those buckets for those
programs over that 10-year period.
CHAIR: He's already said there will be.
Dr Kennedy: There will be.
Senator RICE: And, in order to keep up with population growth, it's going to be have to be a substantial
increase just to keep up with the level of average investment over the last decade.
Dr Kennedy: All I can do, Senator, is say—
CHAIR: What you've said before.

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Dr Kennedy: What I've said before.


CHAIR: Senator, point well made.
Senator RICE: Thank you.
CHAIR: Nowhere fresh to go? Thank you. Senator McCarthy.
Senator McCARTHY: I want to talk about Western Australia. I refer to the government's stated policy that,
prior to committing any federal funding to a project worth more than $100 million, a project must first undergo a
cost-benefit analysis by Infrastructure Australia, to ensure the best use of taxpayer moneys. Hasn't the government
breached its own policy by making an advance payment of $513.3 million to WA in 2017-18 out of the National
Rail Program for METRONET projects in the absence of a business case, let alone an IA assessment of those
business cases?
Mr Yeaman: The money that was contributed to Western Australia in 2017-18 is for the METRONET
project. The METRONET project is a project we've been involved in for some time and working on closely with
the Western Australian government. There are a number of stages of the project. Additional funding was provided
in the budget for further stages of that work. I'll try to get the terminology right here—the project schedules that
we've sent to the state government following the budget indicate very clearly that the works on METRONET are
all subject to a business case assessment process by IA, and the government has decided in consultation with the
Western Australia government to provide the funding on the profile it's allocated in the budget.
CHAIR: I just have some housekeeping. Dr Kennedy, you can probably let Western Sydney co go for the
moment, because it doesn't matter how long this takes; we will persist with this until we come to a lunch break. If
we were to finish before schedule, at least WSA will have had a chance to take their lunch perhaps and be back,
because we'll start before schedule. I know they're listening and they might take note of that.
Dr Kennedy: So they will stay and they may be on—
CHAIR: They will be next, as best I can tell you. Senator McCarthy.
Senator McCARTHY: So the government has breached its own policy then?
Mr Yeaman: As I said, the government has taken a decision to make that payment in the 2017-18 financial
year and the projects themselves will be subject to a business case.
Senator McCARTHY: Yes, but isn't its policy about undergoing a cost-benefit analysis by Infrastructure
Australia, and that hasn't been done? Is that the case with the business case?
Mr Yeaman: It hasn't yet been done. It will be done for that project before funding is released—sorry, before
further funding is released for METRONET.
Senator McCARTHY: Let's have a look at the Myalup-Wellington water project. I refer to a media release
issued by Infrastructure Australia on 30 November 2017. After concluding its evaluation of the water project
business case, it stated:
“While we are confident that the project would have net benefits, they would mostly be private benefits accruing to Collie
Water and the agricultural producers,” Mr Davies said.
“Funding this project through a government grant would therefore be inconsistent with the National Water Initiative and
the National Water Initiative Pricing Principles.”
Why did the government reject this advice from IA and provide $140 million in government funding to this
project—grant funding—plus a $50 million concessional loan to this project?
Mr Yeaman: That's a water project. Our regional colleagues from the department, who were here yesterday,
cover regional policy and water policy as well. We don't have the officers here who are able to answer the
question in detail. We are very happy to take it on notice and come back to you, but we don't have the officers
here today.
Senator McCARTHY: Are you able to answer it?
Mr Yeaman: Sorry. It's not an area I've been involved in.
Senator McCARTHY: All right. Please take this on notice as well then: is this further evidence that the
government is simply sidelining Infrastructure Australia in pursuit of its political agenda? Or, Minister, that might
be a question for you.
Senator Scullion: I don't think they can take that on notice. The answer is no.
CHAIR: I'm going to rule that question out of order. They can't answer that.
Senator McCARTHY: But the minister can.

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CHAIR: Then you need to write to the minister and ask him.
Senator Scullion: I just said no. That's the answer.
CHAIR: I know what the answer is; I can answer it for you now.
Senator McCARTHY: I was talking to the minister, Chair. I want to move on to South Australian projects
and the South Road upgrade. What is the breakdown of funding over each of the next four years for the Pym
Street to Regency Road project?
Mr Yeaman: We'll just try to dig that out, Senator.
Ms Garbin: Senator, funding starts for that project in 2019-20 with 10 million; 20 million in 2020-21; 22
million in 2021-22. That comes to 52 million. The rest of them are—125 million is beyond the forward estimates.
Senator McCARTHY: When does the construction schedule start? What is the scheduled completion date?
Ms Garbin: I'll have to confirm that for you, but we understand the construction is likely to start by the end of
2019.
Senator McCARTHY: So you'd need to check the completion date?
Ms Garbin: I'd need to check on both to be sure.
Senator McCARTHY: Did the new South Australian government seek an 80-20 funding split for the project?
Ms Garbin: I'll need to double-check the business case for that project.
Ms Hall: The South Australian government has committed to the funding allocation for this project. We are
just having conversations with them now about the actual profile, though.
Senator McCARTHY: About the actual split of it?
Ms Hall: No, they've agreed to the split. We're just going through it, and that's why Ms Garbin will have to
come back to you on it.
Senator McCARTHY: So it is an 80-20 split?
Ms Garbin: It's 50-50.
Senator McCARTHY: So what is the breakdown of annual funding over each of the next four years for the
$1.2 billion commitment for the remaining stages of the North-South Corridor?
Mr Yeaman: From memory, last night we went through each of the South Australian projects with Senator
Sterle and provided answers on the start dates, end dates, profiles et cetera.
CHAIR: Exhaustively.
Senator McCARTHY: Not on this one, though.
Mr Yeaman: I thought we had, but I could be—
Senator McCARTHY: No, not this one.
Mr Yeaman: Okay.
Ms Garbin: All the funding for that is outside the forward estimates at this stage.
Ms Hall: As I said, we're in conversation with the South Australian government about the profiles at the
moment.
Senator McCARTHY: Is that the same with the construction schedule and the scheduled completion date as
well?
Ms Hall: At this stage, because their future priorities, we haven't identified the projects yet, which is what we
covered last night.
Senator McCARTHY: Let's go to the Gawler line electrification. What is the breakdown of funding over
each year for the next four years for stage 2 of that project?
Ms Garbin: It's $10 million in 2019-20, $10 million in 2020-21, $30 million in 2021-22 and the remaining
funding of $170 million is beyond the forward estimates.
Senator McCARTHY: When is the construction scheduled to start?
Ms Garbin: Construction is scheduled to start in 2018-19.
Senator McCARTHY: And what is the expected completion date?
Ms Garbin: By the end of 2020.

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Senator McCARTHY: Is the government considering bringing forward infrastructure funding for any South
Australian project?
Ms Hall: Yes. We are in consultation with the South Australian government at the moment about what they
anticipate their milestones to be.
Senator McCARTHY: Which projects?
Ms Hall: For the North-South Corridor and, I believe, the Gawler line as well.
Mr Yeaman: Officials have indicated to us that they think there is potential to move more quickly than our
current profile. Obviously we're open to that. We're just working through those details at the moment.
Senator McCARTHY: How much are you looking at and when?
Ms Hall: I'm not sure. I'd have to take that on notice.
Mr Yeaman: We're still in those discussions now.
Senator McCARTHY: Is the same being considered for projects in other states and territories, such as
Victoria and Queensland?
Mr Yeaman: Across all states we've provided our indicative profiles. All states are assessing those, looking at
them and seeing what they can do. We'll be in discussions with them all around each of the projects to firm those
up. South Australia indicated earlier to us that they think that there's potential to move things forward, but we're
still in those conversations with other states as well.
Ms Hall: That happens every year at budget and MYEFO time as we work out the cash flow and the
milestones requirements for any projects.
Senator McCARTHY: What is the per capita share of federal infrastructure funding over the next four years
for South Australia?
Mr Yeaman: We might have to take that on notice just to break that down. It depends on how we define
'infrastructure funding' as well and whether we include, for example, subprograms and ROSI, which we've
discussed through this process. So I think it might be easier to take that on notice.
Senator McCARTHY: Okay. I take you to Victoria.
CHAIR: I just want to acknowledge the delegation from the National Fire Industry Association with us,
observing estimates today. I must say, you've all been very well behaved! Welcome to Parliament House, and we
hope you enjoy your stay.
Senator McCARTHY: I note that Budget Paper No. 2 states:
The Government will provide $7.8 billion for priority regional and urban infrastructure in Victoria …
Can you tell the committee how much of $7.8 billion of grant funding will be available over the forward
estimates—that is, the next four years?
Ms Hall: Senator, for the new projects, it will be in the forward estimates: $708 million.
Senator McCARTHY: Okay, and what proportion of the $6.3 billion in grant funding allocated in 2018-19 is
earmarked for programs and projects in Victoria?
Ms Hall: Sorry, in 2018-19, for new projects?
CHAIR: No, not new projects—for projects in Victoria.
Senator McCARTHY: No, for programs and projects in Victoria.
Ms Hall: I might pass it to Ms Leeming to see if she has that.
Ms Leeming: So the breakdown of the $7.8 billion—
Senator McCARTHY: No, what proportion of the $6.3 billion in grant funding allocated in 2018-19 is
earmarked for programs and projects in Victoria—just a percentage?
Ms Hall: We might have to take that on notice. We can come back to you on it. It's just a matter of having to
work out all of the different components.
Senator McCARTHY: All right.
Mr Yeaman: We'll see if we can construct it in the background, here, Senator.
Senator McCARTHY: I'll just take you to new projects. What role did the Victorian government play in
determining project priorities—that is, did the department discuss with your Victorian counterparts the projects
that were going to receive federal funding prior to the budget being brought down?

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Mr Yeaman: I think as we've talked about through the committee sessions, we have fairly ongoing
discussions with our colleagues in the states. We're very well connected and tapped into the state thinking. So
we've been in discussion about the range of future projects with all states, including Victoria, for a long period of
time. And also we draw on our own analysis and the work of IA as well.
Senator McCARTHY: With Monash rail, is the government funding commitment to the project dependent on
it being heavy rail?
Mr Yeaman: No. We want to go through the process with Victoria investigating all options for that important
transport corridor, but we want to see heavy rail explored alongside light rail.
Senator McCARTHY: With the North East Link in Melbourne, will the government funding commitment be
structured as an equity investment?
Mr Yeaman: The investment has been labelled in the budget as grant funding. It's my understanding that the
nature of that project is well suited to a tolling arrangement, and I think the Victorian government are looking at
that as part of the project, so the remaining component would need to be funded outside of a tolling arrangement.
At the moment it's currently budgeted as a grant funding arrangement.
Senator McCARTHY: Okay. I've just got two questions on Melbourne Airport rail link and then Senator
Chisholm will ask questions on Queensland. Will the government funding commitment to the Melbourne Airport
rail link be structured as an equity investment?
Mr Yeaman: We had a fairly detailed discussion yesterday with Senator Rice on Melbourne Airport rail link,
where we canvassed these issues.
Senator McCARTHY: Yes or no?
Mr Yeaman: It's been provisioned as a grant in the budget, but the government has clearly indicated a desire
to explore other forms of financing for that project.
Senator McCARTHY: Is the government funding commitment to this project dependent on a particular
alignment? Is it open to other options?
Mr Yeaman: We're looking at a range of options for the alignment.
Senator McCARTHY: Thank you. I'll hand over to Senator Chisholm.
Senator CHISHOLM: With respect to the Townsville Eastern Access Rail Corridor, in the 2018-19 budget,
the government allocated $38.8 million to this project, but my understanding from the business case, as produced
by the Queensland government, is that the cost of this project significantly outweighs its potential benefits. Was
the government aware that the business case was done?
Mr Yeaman: Yes. We've been involved in that project and that business case process. The government made
a commitment through the Townsville City Deal for funding to support the Townsville Eastern Access Rail
Corridor, subject to a business case process. That business case process has now been completed by the
Queensland government, and, as you say, it did not support, at this time, that project but made a number of
suggestions, as I understand it. My colleagues have more detail on this. A number of suggestions were made
about ways that the business case, or the project, could be looked at and tested in more depth. The
Commonwealth government is currently in discussions with the Queensland government and considering the next
steps for that project, but, as we discussed in the committee yesterday, the broad commitment to Townsville
through the city deal remains. If that project does not proceed, the government will look for other ways to invest
that funding in Townsville.
Senator CHISHOLM: So that $38.8 million won't necessarily be spent on the eastern access rail corridor; it
could be spent on something else if the confidence isn't there in the business case?
Mr Yeaman: Correct. It's a matter for government to decide how that is distributed ultimately, but they have I
believe made comments along those lines. The funding was a commitment to Townsville as part of the city deal
and will be used for other important projects in Townsville if not for this.
Senator CHISHOLM: Which of the projects committed to by the current government since 2013 have been
funded, at least in part, using value capture?
Ms Hall: I'd probably have to take that on notice in regard to the projects. The Gold Coast light rail is one
project where value capture was used. I'll have to go back, have a look and come back to you on that.
Mr Yeaman: As a general point, we talked earlier today about the Western Sydney north-south rail link,
which is an area where value capture is prospective. Value capture tends to be most prospective in significant
urban rail projects, primarily where there are station precincts and developments around the rail line.

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Senator CHISHOLM: I'm talking about since 2013 to the current day. Are you aware of any projects where
it has been used, at least in part, to fund?
Mr Yeaman: We'll take that on notice and have a look.
Senator CHISHOLM: No obvious example springs to mind though?
Ms Hall: I mentioned the Gold Coast light rail. That's one that springs to mind.
Senator CHISHOLM: That's not the completed stages though; that would only be future stages. Would that
be correct?
Ms Hall: No, I believe it was actually done through a betterment levy or something along those lines
originally.
Mr Yeaman: Stage 1. There are further stages being considered.
Senator CHISHOLM: Has the government rejected any project because it wasn't in part funded by value
capture?
Mr Yeaman: No.
Senator CHISHOLM: I just want to talk about the electrification of the Frankston to Baxter rail line. My
understanding is that the national partnership agreement specifies $165 million in the 2022-23-onwards forecast;
is that correct?
Mr Hyles: The commitment that the government made in the budget was $225 million for duplication and
electrification of Frankston to Baxter, but the scope of that's still being determined.
Senator CHISHOLM: Was that from 2022-23 onwards?
Mr P Smith: The indicative profile that we've got at the moment—that's where you've got the $165 million
from—over the forward estimates is $10 million indicated for 2019-20, $25 million indicated for 2020-21, $25
indicated for 2021-22, and $165 million after that.
CHAIR: Would there be matched funding arrangements with that or some sort of equity contribution, because
that's not a lot of money to do what you're describing?
Mr Hyles: That's still to be determined.
CHAIR: But there will be. It'll be 50-50, 80-20 or something of that nature.
Mr Hyles: I imagine so.
CHAIR: What split normally falls with rail upgrades like this within a state?
Mr Yeaman: As a broad principle we work on the basis of 50-50 for urban projects and 80-20 for regional
projects. That is the broad starting point.
Senator CHISHOLM: Mr Smith, I'm just trying to get a sense of how it appears in the budget press release
and budget papers. Was the funding you identified from the budget papers?
Mr P Smith: That's the profile over the budget and forward estimates, as well as the total for the entire
project.
Senator CHISHOLM: Did it feature in the minister's budget press release as well?
Mr P Smith: I'll just turn to his release. I believe it was mentioned. Under 'Budget—Infrastructure: Busting
Congestion, Connecting Our Regions, Improving Safety and Creating Jobs' the $225 million to electrify the
Frankston to Baxter line in Melbourne was mentioned.
Senator CHISHOLM: So the profile of funding beyond the forward estimates is the $165 million? Is that
correct?
Mr Hyles: Yes.
Mr P Smith: Yes, that's correct.
Senator CHISHOLM: And that features in the—so where is that located, the $165 million?
Mr P Smith: That's in the program. If you're wanting a detailed breakdown, we'll need to take that on notice.
Senator CHISHOLM: Yes.
Mr Yeaman: We don't, as a matter of course, traditionally publish profiles beyond the forward estimates in
the budget papers themselves on a project-by-project basis. We're providing information to you based on our
internal information.

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There is a document, one of the released budget documents, called Strengthening Australia's cities and
regions—this document here. It has a breakdown which shows in broad terms the high-level expectations on the
projects and when they will be rolled out over time. That gives you an indication, as least, of the broad timing of
some of those projects, including the one you've referred to. But it's not traditionally the case that governments
publish that.
Senator CHISHOLM: Sure. Just for me: there's no document in which the $165 million is identified as
allocated to be spent in 2022-23?
Ms Hall: There will be. As part of—
Senator CHISHOLM: But there isn't at the moment?
Ms Hall: What happens with the national partnership agreement is that schedules are agreed with
jurisdictions. That's the profiles that we're talking about and that we're having negotiations with jurisdictions
about at the moment. That will then allocate those profiles. Those schedules are made public once the states have
agreed to them. They go up onto the Treasury website as part of the national partnership agreement. That will
have all of the profiles, the forward years and the remaining money outside the forward years.
Senator CHISHOLM: Sure—
Mr Yeaman: But you can't point to a page in the budget paper and—
Senator CHISHOLM: That doesn't exist at the moment?
Ms Hall: Yes.
Mr Yeaman: And that's standard practice.
Senator CHISHOLM: So any assertion that the $165 million is budgeted to be spent in 2022-23 would not be
correct?
Mr P Smith: No, the money has been committed.
Ms Hall: Yes.
Mr P Smith: So the profile is, as Ms Hall and Mr Yeaman explained, that the budget only shows or highlights
the forward estimates, but the total commitment of up to $225 million has been committed.
Ms Hall: And the full $225 million is in the budget papers. So the budget papers clearly articulate the
complete commitment to every project that they actually allocated. It's more us working out with the jurisdictions
the profile to make the milestones: when we think planning will happen, when we think business cases will
happen, when we think construction will happen and when we think postcompletion will happen.
Senator CHISHOLM: I just want to confirm that the terms of the National Partnership Agreement are, 'The
Australian government will contribute up to 50 per cent, capped at $225 million.'
Ms Hall: Those are the terms of our funding for that project, currently, yes.
Senator CHISHOLM: Are there any official documents or statements of government policy which say that
the Commonwealth contribution for this project could exceed $225 million?
Ms Hall: I think that if it were found that, for some reason, the project was going to be either less or more than
the amount that the government has currently committed, then that would be a consideration for government—if
it wanted to do something else. But it's not yet.
Senator CHISHOLM: If the project is completed within four years, is it normal practice that over 70 per cent
of the total cost would only be paid the year after completion?
Ms Hall: As we said, we're in negotiations with the jurisdictions at the moment, to work out what those
milestones are, so that we can actually work out the appropriate payment on the delivery of the construction of the
project.'
Senator CHISHOLM: It's normal practice for these major infrastructure projects to have milestone payments
over their course?
Ms Hall: Absolutely.
Mr Yeaman: Correct.
Ms Hall: Absolutely. And it's also quite regular for projects to take a significant period of time to be
delivered. A number of our projects often go over the course of the forward estimates.
Senator CHISHOLM: So, for a four-year project, would it be normal practice that the final payment is made
in year 5 and after completion?

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Ms Hall: There is usually a post-completion review report that is required before the final payment is made.
Senator CHISHOLM: Is it normal that that would constitute over 70 per cent of all payments to the project?
Ms Hall: No, not necessarily.
Senator CHISHOLM: Is that why a major infrastructure project is different to, say, engaging someone to do
a small job?
Ms Hall: As I said, we work out what the payments are based on certain milestones and then we work that out
in consultation with the state. I anticipate that the profiles will be revised for all projects once we actually go out
to tender, once we get business cases and once certain parts of the project have been completed for a whole range
of different reasons.
Senator CHISHOLM: So at the moment the $225 million has been identified as 50 per cent of the
contribution to the total project?
Ms Hall: That's right.
Senator CHISHOLM: What evidence has been used to arrive at that cost estimate?
Mr Hyles: There are obviously, in line with what Mr Yeaman has said previously, a range of documents that
we look at and rely on to determine the funding priorities. In the case of Frankston to Baxter, Public Transport
Victoria have, in a network development plan, identified electrification to Baxter and new stabling and
maintenance facilities. Victoria is undertaking a business case at the moment for duplication and electrification
that the Australian government has committed to. So I think there are a number of examples of different
documents that we look at and network analysis that we undertake to determine those.
Senator CHISHOLM: But the business case hasn't been done, has it?
Mr Hyles: That's correct.
Senator CHISHOLM: So you couldn't have looked at that to determine how much it's going to cost?
Mr Hyles: We've looked at things like, as I said, Public Transport Victoria's network development plan and
those sorts of documents.
Mr Yeaman: So, for all of these projects, many of them are in the early stages. We make our best estimate of
what we think that project will cost based on the available information, including our own analysis inside the
department and working with Infrastructure Australia and state governments in particular. Most of these projects
that are reaching this stage have been subjected to some form of analysis previously within the state governments,
and we're engaged in those discussions with them quite closely. We have a reasonable understanding of what a
project of this kind of broad nature and scope would cost and then we go through firming up the design and the
route, and providing a more detailed cost estimate after that.
Senator CHISHOLM: The business case is currently underway—is that correct?
Mr Hyles: That's correct.
Senator CHISHOLM: And how long do you expect that to take?
Mr Hyles: I think our current estimates are suggesting that it will be completed in early 2019.
Senator CHISHOLM: Is it the case that they're producing an interim report?
Mr Hyles: I'd have to take that on notice. We will certainly be given a draft report that we will comment on
and provide feedback to.
Senator CHISHOLM: Just in general, is it normal for a business case to produce an interim report on a
project like this?
Mr Yeaman: It's quite common. I'm not familiar with the exact specifics of this project, but—
Senator CHISHOLM: No, I'm just asking in general.
Mr Yeaman: It's quite common that we'll do either a draft business case or a preliminary business case.
Business cases are quite iterative processes, where you'll collect information—
Senator CHISHOLM: You wouldn't call it an interim, but you'd get access to a copy before it was—
Mr Yeaman: Often we'd get access to a copy. We might ask some questions of that, and Infrastructure
Australia might say, 'We'd like you to shore up this section a little more and we'd like you to think about this
issue,' and then it gets finalised and tested on the way through.

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Senator CHISHOLM: So the budget papers refer to $4 million for a business case for this project. Is it
correct the government's election commitment was $2 million for the business case and $2 million for a business
case for what they call the Frankston flyer?
Mr Hyles: No: I think it was $3 million and $1 million.
Senator CHISHOLM: So $3 million for the electrification?
Mr Hyles: And duplication.
Senator CHISHOLM: And $1 million for the Frankston flyer?
Mr Hyles: Yes.
Senator CHISHOLM: Is the $1 million still to be allocated to be used?
Mr Hyles: I think that's correct.
Senator CHISHOLM: Is it correct that the aim of this project is to extend the Metro line to Baxter by
electrification or duplication?
Mr Hyles: The project will duplicate and electrify eight kilometres of the Stony Point rail line from Frankston
to Baxter.
Senator CHISHOLM: And once this occurs, then it's intended that services between Frankston and Baxter
will be more frequent than currently is the case?
Mr Hyles: I think that's the case.
Senator CHISHOLM: And once this line has been electrified and duplicated, stapling at Baxter then
becomes a viable option?
Mr Hyles: I believe that's the case.
Senator CHISHOLM: On road pricing, in November 2016 the government announced that a study will be
established, led by an eminent Australian, into the potential benefits and impacts of road user charging. It was
expected to commence in 2017. My understanding is that this study has been delayed.
Mr Yeaman: The government is still considering their final arrangements for that study.
Senator CHISHOLM: Is there any reason that the study has been delayed?
Mr Yeaman: No. The government's still considering the arrangements for the panel. What I would say is that
the government's always indicated that this is a long-term reform that's going to take many years and a lot of
serious work to work through the different aspects of the reform agenda. And there has been a heavy focus on
heavy vehicle road pricing as the first stage of this, and that work is proceeding through a number of trials and
work with the state governments. But the details of the study that you're referring to are still a matter for
government.
Senator CHISHOLM: Can the department advise of when we expect that any eminent Australians will be
appointed?
Mr Yeaman: As I said, government's still considering those issues, so we don't have a particular time line. It's
a matter for government.
Senator CHISHOLM: Does the minister have anything to add to that?
Senator Scullion: Sorry; I was distracted by something else. Would you ask the question again, please?
Senator CHISHOLM: In November 2016 the Australian government announced that a study would be
established, led by an eminent Australian, into the potential benefits and impacts of road user charging. We still
haven't had anyone appointed. I was just wondering when we expect the government to make progress on this.
Senator Scullion: I don't have a specific answer to that, but I'll take that question on notice, specifically about
the prospects for an appointment or how much further we've got along that line.
Senator CHISHOLM: Thanks.
ACTING CHAIR (Senator McCarthy): There are no more questions, and, Mr Yeaman, we're happy with
this output. Thank you very much to the departmental staff, and safe travels back to where you're coming from.
Proceedings suspended from 12:27 to 13:29
WSA Co
CHAIR: Welcome. Do you wish to make an opening statement?
Mr Millet: No, thank you.

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CHAIR: Hopefully, Senator McCarthy will have no questions for you!


Senator McCARTHY: That is correct.
CHAIR: Thank you for your attendance.
Senator McCARTHY: There were other senators—
CHAIR: They know we've reconvened. They know this is on. I'm sorry, but that's just how the cookie
crumbles. Witnesses, we apologise for the disruption to your lives.
Senator Scullion: I'm very disappointed!
Mr Millet: I'm devastated!
CHAIR: I'm sure you are! You should take your disappointment and leave the room as quickly as you can,
before someone comes in who has an interest in you!
Mr Millet: Thank you, senators.
CHAIR: Thank you for your attendance and for your preparation.
National Transport Commission
[13:32]
CHAIR: Welcome. Do either of you wish to make an opening statement?
Mr Retter: No, I don't.
Senator McCARTHY: The NTC is a relatively small organisation, would you say?
Mr Retter: We have approximately 40 staff, yes.
Senator McCARTHY: Is it fair to say that the NTC's main stakeholders are the relevant ministers at the
Transport and Infrastructure Council?
Mr Retter: They are our key government stakeholders, yes.
Senator McCARTHY: I understand your chair resigned late last year?
Mr Retter: That is correct—in early December, if I recall correctly.
Senator McCARTHY: How long had he been chair of the NTC board?
Mr Retter: For approximately four years.
Senator McCARTHY: What is the process for bringing in a new chair?
Mr Retter: If I recall correctly, the chairman is appointed through the federal minister, with the concurrence
of the state and territory ministers, and that process occurs between the states and jurisdictions and the
Commonwealth minister, who would be the Deputy Prime Minister.
Senator McCARTHY: Would it include choosing someone who has previously done favours for the
organisation?
Mr Retter: I'm not sure what you mean by 'favours'?
Senator McCARTHY: Would the process in bringing in a new chair include that?
Mr Retter: Not to my knowledge, no.
Dr Kennedy: We might be able to help. The department would normally provide some advice to the minister
about the appointment of the chair of the NTC, and we would normally look to a person of relevant experience to
support the activities of the NTC, which Mr Retter can run through if you're interested. I suppose it's a standard
board type of process.
Ms Spence: Given the state and territory dimension, we would also be testing with the other jurisdictions any
suggestions they had for nominations of the chair position as well.
Senator McCARTHY: Okay. Would the previous chair, David Anderson, count as someone who had
previously done favours for the organisation before being appointed in 2013?
CHAIR: Senator, it might assist the officials if you were to particularise the information before you that's
burdening you with respect to this line of inquiry.
Senator McCARTHY: Let me go to the next one. We'll get to the crux of it, I guess, Chair. David Anderson
charged the then Department of Infrastructure and Transport $15,000 in 2012 for his expert advice in an
administrative review, the National Transport Commission review. This review kept the NTC around, did it not?

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Mr Retter: The review of the NTC in 2012 was an administrative review which was initiated by the ministers.
It resulted in a range of recommendations which were in the throes of being implemented when I arrived in July
2013. I am not privy to any information other than what is contained in the official review report.
Senator McCARTHY: So you came in in 2013?
Mr Retter: I arrived on 8 July 2013.
Senator McCARTHY: Okay. If the review had been negative, then the NTC could have been reformed. Is
that right—according to the review?
Ms Spence: I think the recommendations were put to ministers. Ministers took decisions to maintain the NTC.
Senator McCARTHY: David Anderson provided $15,000 worth of positive, expert advice on the NTC and
was then the chair of the NTC within a year. Is that unusual?
Senator Scullion: I don't know that it can be characterised as positive advice, Senator.
Senator McCARTHY: What would you characterise it as?
Senator Scullion: It was just advice. I don't see 'positive' indicated anywhere.
Senator McCARTHY: Are there any consultants who have been providing advice on the NTC who could
possibly be chair the next time around?
Dr Kennedy: At the moment, the department hasn't engaged any consultants to provide advice on the NTC.
There was a consultancy run last year—and I don't have the specific details in front of me—at the request of
ministers, to look at all of the bodies that support the Transport Infrastructure Council. Including the NTC, there
are nine bodies. But no individual was involved. I should also be clear, as I answer these questions for you,
Senator, that neither of us was here then—unless you were, Ms Spence?
Ms Spence: I wasn't here.
Dr Kennedy: The activities you're talking about in 2012, I think, predate all of us here at the table. We'll do
our best, but we weren't in place when they were undertaken.
Senator McCARTHY: Thanks, Dr Kennedy. Did David Anderson travel with you for conferences, Mr
Retter?
Mr Retter: During his tenure as chair he would have travelled to the occasional conference, yes.
Senator McCARTHY: What destinations did you go to in Australia?
Mr Retter: They would generally have been to capital cities for various conferences where transport issues
were being discussed. I would have to take the specifics on notice and provide you with a written response.
Senator McCARTHY: Okay. What destinations did you go to around the world?
Mr Retter: I personally do not recall travelling overseas with the chair, but, again, I'll have to check the
specifics of what travel was done, when and by whom, during the period of the chair's tenure.
Senator McCARTHY: Could you also provide what other destinations you have travelled to, where that
travel was paid for by the NTC in the last year?
Dr Kennedy: Is that question—
Mr Retter: Who does that question relate to? To me or to the—
Senator McCARTHY: To the two of you travelling together.
Mr Retter: So just the travel where we were travelling together?
Senator McCARTHY: Yes.
Mr Retter: Okay.
Senator McCARTHY: How many people make up the senior leadership team?
Mr Retter: The senior leadership team is made up of me and three chief officers—the chief planning officer,
the chief operating officer and the chief corporate officer.
Senator McCARTHY: What destinations have the senior leadership team travelled to?
Mr Retter: Some of the leadership team would have attended conferences and visits to jurisdictions
throughout their tenure. They would have also travelled occasionally overseas to attend international conferences
where the work that was being discussed, at those conferences, was in keeping with the reforms that we are
undertaking at the NTC.
Senator McCARTHY: Was Montreal one of those locations?

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Mr Retter: Yes, it was.


Senator McCARTHY: How many people went there?
Mr Retter: Two.
Senator McCARTHY: Did you go?
Mr Retter: I did.
Senator McCARTHY: How much does international travel for the senior leadership team cost per year?
Mr Retter: I'll have to give you the precise number on notice. I haven't got it in front of me.
Senator McCARTHY: Can we get a breakdown of the cost of international travel, accommodation and
relevant incidentals for the senior leadership team in the last financial year?
Mr Retter: Yes.
Senator McCARTHY: Does the NTC engage in much hospitality with the board or external guests?
Mr Retter: From time to time, we invite key stakeholders to talk with the board. That may include dinners,
morning teas or afternoon teas, that sort of thing.
Senator McCARTHY: So hosting lunches.
Mr Retter: Hosting a function either at lunch or dinner.
Senator McCARTHY: How much does the NTC spend on this kind of hospitality?
Mr Retter: Again, I'll take that on notice.
CHAIR: Are your financials published anywhere?
Mr Retter: Yes, they are. They'd be on our website, I would think, after the accounts have been dealt with. I
will provide—
CHAIR: I'm not trying to interfere with whether you should provide it on notice. But, for ready reference, if I
wanted to see what was spent on travel, I could go to your accounts on the website, could I?
Mr Retter: It may not be on the website but I'll check and, certainly, I'll provide the detail that's been
requested.
CHAIR: Do you have an annual report?
Mr Retter: Annual reports will have our audited statement of accounts for each financial year.
CHAIR: Thank you.
Senator McCARTHY: The NTC has been working on projects for automated vehicles. Is that correct?
Mr Retter: That is correct.
Senator McCARTHY: Would you say you're well placed to do that to create national consistency across
states and territories?
Mr Retter: Yes, I would.
Senator McCARTHY: I note from your publications that the term 'national consistency' comes up a fair bit.
To clarify, is this national consistency of regulations?
Mr Retter: Of policy settings and regulation.
Senator McCARTHY: A number of stakeholders note that for automated vehicles international consistency
is also important. Is that still the NTC position?
Mr Retter: Yes, it is. We work closely with counterparts around the world to look at the best approach to put
in place as we all grapple with the issue of moving from vehicles where the human is in control to vehicles where,
at some point in the journey, an automated driving system will take control of the vehicle.
Senator McCARTHY: National consistency of policy and regulations is important, isn't it?
Mr Retter: It is. Indeed, ministers reaffirmed that last Friday at a meeting where we discussed part of the
work program that we have on automated vehicles.
Senator McCARTHY: The Australian road rules the NTC has carriage of are unique to Australia. Is that
right?
Mr Retter: The Australian road rules are for Australia. They are model legislation. What happens is that the
legislation forms the basis of each of the state and territory road transport laws.
Senator McCARTHY: Do they come under or are they modelled on anywhere else?

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Mr Retter: They are based on best practice, a combination of our engagement with the jurisdictions, with
police, with the users of the road, motorists, driving associations and the like. All of the policy settings and the
laws that are contained within our model legislation are, essentially, about improving safety and ensuring that the
communities' best interests are served.
Senator McCARTHY: Where do they originate? Are they based on anything internationally?
Mr Retter: Where it is appropriate, we look at international equivalent legislation. In the case of automated
vehicles, as I say, there is no guiding light at the moment. Each of the countries that we speak to is working
through what is best practice, and we're working with them. In some cases, they are taking what we have
produced to assist them in their policy and legislative work.
Ms Spence: When Mr Retter mentioned the discussion on Friday between ministers, one of the things they
explicitly mentioned was the need to take forward these new harmonised, nationally consistent laws with
international development. Ministers are conscious about the need to keep the two things going in parallel.
Senator McCARTHY: Is the Geneva Convention on Road Traffic something that has influenced the direction
here?
Mr Retter: There are two working parties that may influence the outcome. There is working party 29 and
working party 1. The department advises or sends representatives to those as required and has the ability to
influence the working parties through those who attend from government. The impact of those international laws
is still under some debate around the world by different countries who have differing views on how relevant those
current international laws might be as we move into this new highly technical, automated future. Obviously
Australia has a role to play in both taking and influencing what changes are made to vehicle standards and driving
laws.
Senator McCARTHY: So the working party 29 and working party 21—
Mr Retter: No, working party 1 and working party 29.
Senator McCARTHY: Are you connecting that with the Geneva convention or are you connecting that as a
separate group?
Mr Retter: There are two UN working parties; one relates to the Geneva convention and the other does not.
Working party 29 vehicle standards and internationalising those standards so that we have a common base.
Working party 1 deals with traffic laws and driving laws, et cetera.
Senator McCARTHY: Is Australia a signatory to that convention?
Mr Retter: To the Geneva convention, yes.
Senator McCARTHY: As the organisation with the responsibility for the Australian road rules, which are
based on the Geneva convention, have you been engaging in meetings held by the UN Economic Commission for
Europe on the potential changes to the Geneva convention, run by the working party 1 that you mentioned?
Mr Retter: We have had informal discussions with a number of countries who attend, and we've also spoken
with the department here in Canberra who has responsibility for advice to working party 1.
Senator McCARTHY: So that's yes?
Mr Retter: That's a yes.
Senator McCARTHY: Is this the group that's looking at making changes to the Geneva convention that
would impact the Australian road rules?
Mr Retter: Potentially, depending upon what changes are being made. As I say, they are being debated at
present, as I understand it, with varying positions being taken by some countries who do not wish to change the
convention. There are others which do.
Senator McCARTHY: Do you attend these meetings?
Mr Retter: No, I do not.
Senator McCARTHY: Why is that?
Ms Spence: As Mr Retter indicated, the department has representatives at the UN working groups. We work
closely with the NTC to ensure they're kept advised of issues that are being discussed at those meetings, and our
policy position takes into account advice from the NTC.
Senator McCARTHY: The NTC started working on automated vehicle projects in 2015; is that correct?
Mr Retter: That is correct.
Senator McCARTHY: How many of these meetings have there been since?

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Mr Retter: Which meetings are you referring to?


Senator McCARTHY: The NTC starting working on automated vehicles in 2015, so how many meetings
have they had since?
Mr Retter: How many meetings have NTC had since?
Senator McCARTHY: In relation to that discussion.
Mr Retter: In relation to automated vehicles, there have been numerous meetings in Australia, with industry
and with government, and overseas with various governments working on the same issues. There have been
numerous meetings at various places and at various times throughout that process.
Senator McCARTHY: Does the NTC have any views on the road legislation in this space?
Mr Retter: Absolutely, yes.
Senator McCARTHY: If you and your stakeholders think international consistency is important, don't you
think it seems relevant to be at these meetings?
Mr Retter: I am comfortable that the department's representatives who attend working party 29 and, where
required, working party 1 will keep me abreast of the developments that occur at those meetings and inform me of
the outcomes. That's an input to what we do here in Australia.
Senator McCARTHY: Have you ever had another country raise your lack of attendance as an issue?
Mr Retter: I can't recall being asked directly by anyone, no.
Senator Scullion: I think it's important to note that the National Transport Commission is not the Australian
representative in an international forum. They are obviously a body that is here to provide advice on national
transport issues to the Australian government, but they are not representing the Australian government in a way
that other authorities may be.
Senator McCARTHY: Thank you, Minister. Do any of the current automated vehicle projects touch on the
Australian road rules?
Mr Retter: Yes, they do. In fact, just recently we provided high-level policy advice to ministers in terms of
what changes may be required to our current Australian road rules. There is also the fact that, in establishing
unique laws for circumstances where an automated vehicle will be in control of a vehicle, we plan to establish a
unique, dedicated and separate piece of legislation—if you like, a complementary set of road rules for automated
vehicles. That work will commence, given that ministers agree to it continuing, on Friday. It will run for about 12
months. We will work closely with both industry and all governments around Australia to ensure that when we go
back to ministers, and it's planned that we'll do that in May of next year, we have some detailed policy settings. If
they agree to those, then we'll commence work to draft the new legislation.
Senator McCARTHY: So this project could change the Australian road rules?
Mr Retter: Yes. I suspect that whilst we'll establish the unique automated vehicle road rules, for want of a
better word, we will also have some consequential amendments to the existing Australian road rules that will need
to be implemented.
Senator McCARTHY: If that does happen, they could become inconsistent with the Geneva convention,
couldn't they?
Mr Retter: I think it's too early to say. Indeed, I would think that would be one of the considerations that
would need to be taken into account as we progress these matters to ministers.
Senator McCARTHY: What would be some of the outcomes of Australia not being consistent with the
Geneva convention that you'd want to be careful of?
Mr Retter: With respect, I think that's a hypothetical question. I'd need to give it some thought before I gave
you an answer. My intention is that, on the advice of government representatives overseas, we would—wherever
possible—be consistent with whatever the Australian government position is in relation to working party 1,
working party 29 and the relevant conventions.
Ms Spence: As I mentioned, ministers have explicitly asked the NTC, in taking its work forward, to be
cognisant of international developments.
CHAIR: Does Senator Moore have any questions?
Senator MOORE: No, that's it.
Senator McCARTHY: I've got about six questions left.
Senator RICE: Mine are for the next agency as well.

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CHAIR: All right, then Senator McCarthy has the call.


Senator McCARTHY: My understanding is that if Australia is not consistent with the Geneva convention,
we could lose the mutual recognition of drivers' licenses that Australians currently have when we travel overseas;
would that be correct?
Mr Retter: Without further analysis, that may be the case. I would need to double-check that before I give
you a formal response. Again, I will make the point that I think it's a hypothetical question at this stage. We have
at least 12 months, if not longer, before we will be putting firm legislation in front of ministers. Obviously, the
question of Australia's position on any changes internationally will be one of the factors we consider.
CHAIR: The Geneva convention that the senator's referring to, does that cover aviation as well?
Ms Spence: That would be the Chicago convention, I think.
CHAIR: The Chicago amendment to the Geneva convention?
Ms Spence: Yes.
CHAIR: I was going to make the point that we've only been a signatory with the conventions for five or six
seven years.
Ms Spence: We've been a signatory to the Chicago convention for far longer than that. If I can take that on
notice, I will.
CHAIR: You should take it on notice. I've spent 20 years investigating catastrophic air crashes all around the
world. My memory is that we signed up after the Qantas QF52 incident in Western Australia. Take it on board
because, if it is the same, it wouldn't affect it. We've all had our licences recognised for 20 or 30 years, which
would proceed that. Sorry, Senator McCarthy.
Senator McCARTHY: That's fine, Chair. Mr Retter, has anyone from another country ever raised this as an
issue with you in relation to the drivers licences?
Mr Retter: No, they haven't.
Senator McCARTHY: Did you tell the federal minister about this issue?
Mr Retter: No, I haven't.
Senator McCARTHY: Or state and territory ministers?
Mr Retter: No. I would suspect that, if it is an issue that will need to be discussed by ministers, it will occur
over the next 12 months and culminate in them making decisions about what the policy settings will be for
automated vehicles in Australia.
Senator Scullion: Senator, as you may be aware, there is not only a mutual obligation process of an
independent country; you can often travel internationally on an international drivers licence, under which the
mutual obligation processes don't apply.
Senator McCARTHY: Mr Retter, that would be the reason why you haven't mentioned this issue to the
minister or to state and territory ministers?
Mr Retter: I don't think we're far enough down the policy development path for specific questions such as the
ones you're asking to have been considered. I suspect that, over the next 12 months, they will be and that we'll be
in close contact with the department in terms of what is Australia's position on these matters.
Senator McCARTHY: Thank you, Chair.
CHAIR: I don't think there are any further questions for you, Mr Retter. Thank you for your time and effort in
preparation for estimates. Thank you for your attendance. We wish you safe travel back to your destination.
Mr Retter: Thank you, Senator.
[13:57]
CHAIR: We'll now hear from the Portfolio Coordination and Research division.
Senator Scullion: Just for completeness, Mr Chair, I'm not sure if we mentioned it earlier, but the consultation
process in terms of the chair of the National Transport Commission is in fact the decision of cabinet. So, all of
that consultation goes to cabinet to make a decision. I wouldn't like the committee to be left with a view that this
is something that the department would be making its mind up on.
CHAIR: Thank you for that. Senator McCarthy, you have 12 minutes left.
Senator McCARTHY: We'll put our questions in writing for this division.
CHAIR: Senator Moore, you don't have any questions?

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Senator MOORE: Just a couple, Chair. Thank you. I've not come to this committee before so—
CHAIR: You're in for a treat.
Senator MOORE: I know I'm in for a treat.
CHAIR: For most of the time!
Senator MOORE: I can feel that, to say nothing of the other people on the committee. I want to talk about the
sustainable development goals. I want to see from your department what role you're playing. It would be my
understanding that you're responsible for a few of the goals and also with distant links to a number of the others.
Ms Spence: We have been working very closely with the Department of Foreign Affairs and Trade and a
member of the IDC that's been established to make sure that progress is made on those goals. We're responsible
for, I think, two goals—infrastructure and cities. But I might turn to my colleague Mr Wood.
Mr R Wood: The department has a leading role with two of the 17 Sustainable Development Goals: firstly the
infrastructure side of No. 9, 'build resilient infrastructure, promote inclusive and sustainable industrialisation and
foster innovation'; and secondly No. 11, which is in relation to sustainable cities. Both of those are broadly
consistent with some of the department's key outcomes: outcome 1, 'improved infrastructure'; and outcome 3,
'strengthening the sustainability, capacity and diversity of our cities,' amongst other things.
Senator MOORE: Do you have engagement with some of the others, though not in a leading role?
Mr R Wood: That's correct. We're contributing to a whole-of-government process which is coordinated
predominantly by the Department of Foreign Affairs and Trade. They take the lead, and most questions related to
the Sustainable Development Goals are probably best directed at DFAT in the first instance.
Senator MOORE: I question DFAT regularly on this topic, and I also question PM&C, because my
understanding is that DFAT is taking primary responsibility and looking at our foreign affairs responsibility,
PM&C is taking the lead domestically—
Mr R Wood: That's correct.
Senator MOORE: and a number of departments, such as your own, have primary responsibility for some of
the key goals. I want to find out exactly what your department is doing for the goals. I have to admit that I had
great trouble finding a mention of them at all on your website. Google was my first port of call, and I couldn't find
them, but that could be my poor performance on the website. What does taking primary responsibility mean to the
department in this sense? Are you a member of all three committees that have been set up by DFAT and PM&C?
Ms Spence: We're mainly participating in the IDC. I'd have to take on notice exactly who is turning up to
what meetings. If the material isn't on the website, it will be shortly, as we have been working with key
stakeholders, including our colleagues in the states and territories, to give as meaningful a picture as possible as to
where we're up to in terms of the goals.
Senator MOORE: When did your department begin activity on the 2020 SDG agenda?
Ms Spence: People have changed positions here, so we need to take on notice when we first were engaged.
Senator MOORE: You might want to take these all on notice, but if someone wants to jump in with some
information, that would be great. I would like to know when the department was first engaged, what systems the
department has put in place to communicate the SDG agenda to your staff and the various groups that work with
you, and what consultative programs have gone on to engage people across the world. I'm particularly interested
in the work with local government. I've seen some local government areas doing amazing work and taking
leadership roles—the City of Melbourne and the City of Adelaide are examples, but some regional areas as
well—but other places have no idea what I'm talking about when I mention it. I find that worrying, and I am
interested to see if the local government part of your department has any role at all.
Ms Spence: We have been working very closely with the Australian Local Government Association to
support that kind of outreach to local governments, so we can expand upon what we've done with ALGA.
Senator MOORE: If you can get any information on that as well, that would be great. My understanding in
talking with Environment is that through their IDC process they have worked out that they're going to be linking
their activities with their SDG agenda in their next annual report and corporate plan. It's probably a little easier for
Environment because they have been working in this area for a long time, but has there been any consideration by
your department of including the SDG agenda as a framework in those various publications such as your
corporate plan and annual report?
Ms Spence: We haven't been discussing that yet. I am aware that Environment is doing that, so we will be
looking very closely at what Environment is doing and seeing how it would work in our context.

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Senator MOORE: Can you give me any idea of what resources in the department work on these issues?
Ms Spence: I think it would be easier to take that on notice.
Senator MOORE: Have your ministers been engaged in any discussion with the department on this issue?
Ms Spence: We've advised the Deputy Prime Minister of the work that we're doing in this area, and I'm not
too sure if we've advised Minister Fletcher as well, given his interest, but we can take it on notice
Senator MOORE: I'm trying to find stuff across the board on these issues. At any time in the
information papers developed by the department for ministers, particularly the Deputy Prime Minister, to
use in their speeches has there been a focus on linking activity to the SDG agenda? I've had a quick squiz and
I can't find anything.
Ms Spence: I'm not aware of anything we've done previously, but when the VNR goes out, that will give us a
point in time to refer back to.
Senator MOORE: Good. Is there anything anyone would like to tell me, rather than my just talking at you?
Ms Spence: No, but we will take on notice and give you comprehensive advice.
CHAIR: We'll have to leave Senator Moore with a positive impression of the committee.
Senator MOORE: I can assure you, Chair, this is not unusual.
Senator Scullion: Perhaps I can facilitate. This is probably the right place to ask for a comprehensive brief as
a question on notice. As you indicate, this is across portfolios. I know skipping between Senate committees is
how to keep yourself fit in opposition, but I undertake to provide an answer on notice that deals with a cross-
governmental approach to the Sustainable Development Goals and the plan for each responsible department.
Senator MOORE: That'd be fabulous. Minister—and this is totally inappropriate, Chair, so close your ears—
can you give some thought to that in your own ministry. Senator McCarthy and I have spoken about things like
the Closing the Gap program, where there is no mention of the SDGs, so I throw that at you to make a note of.
Senator Scullion: The Closing the Gap program is unlikely under my leadership to provide Sustainable
Development Goals as well. It's tough enough as it is. Obviously that's my view, but I'm there to be convinced.
Senator MOORE: You could put it within the framework. Five of the goals relate directly to closing the gap.
Ms Spence: If it assists, Mr Wood can run through what we are doing on the indicators.
Mr R Wood: As you may be aware, there are 232 indicators for the Sustainable Development Goals.
Senator MOORE: But you don't have to do all of them.
Mr R Wood: We have responsibility for two of those. The first of those is 9.1.2:
Passenger and freight volumes, by mode of transport
That's a fairly standard dataset. We expect to publish data in relation to that in future. The second is 11.a.1:
Proportion of population living in cities that implement urban and regional development plans integrating population
projections and resource needs, by size of city.
That's not a specifically collected dataset. Internationally there's no standard or benchmark for collecting that
information, so that will remain a work in process as we see if it can be responded to directly or in another way.
Senator MOORE: Do you work with stats on that? Stats has been all over this, and they're international
experts on data.
Mr R Wood: We have our Bureau of Infrastructure, Transport and Regional Economics. Mr Dolman over
there is the head of that unit. BITRE, known as the bureau, have extensive working relationships with the Bureau
of Statistics and other data organisations, but they're leaders in the field in their own right.
Senator MOORE: The data has been a high-profile issue area across all this discussion around the SDGs. Are
you a member of a data group which is looking at collection of data and available data?
Dr Dolman: I'm not part of a data group per se that's looking particularly at the Sustainable Development
Goals; however, as Richard just said, we are contributing to that passenger and freight data.
Senator MOORE: In the whole economic focus you'd be experts in that area?
Dr Dolman: That's correct.
Senator MOORE: Do you have links with your counterparts overseas in the international areas that also work
in this space?
Dr Dolman: Yes, we do have a number of links relating to various data initiatives. We're doing some work,
for instance, on a transport and aviation satellite account, which is looking at the economic contribution of the

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transport industry and how you measure that—that's work with the United Nations, Canada, the US and the UK—
and with ICAO, the international aviation organisation, looking at the contribution of the aviation industry. We're
heading a working group that's working up the methodology for that. As part of that work we have close links
with the Australian Bureau of Statistics and with our state government statistics agencies as well.
Senator MOORE: Would you mind, on notice again but not doing a huge exercise, seeing if any of those
groups are talking the language of the SDGs, because what I am being told is that in other countries, and
particularly in some of the organisations, they have now changed a lot of their programming and their strategic
documents to have an SDG framework, and they're talking about that. It interests me whether that would happen.
Senator Gallacher has told me that in the international road safety meetings he attends it's all framed within an
SDG framework.
Dr Dolman: Sure, I would be happy to take that on notice. Road safety is another area where we collaborate
internationally, and with our state governments, to collate data. We'll provide that.
Senator RICE: I would like to ask some questions about the report of the Inquiry into National Freight and
Supply Chain Priorities. I was pleased to see the release of the report on Friday. I've had a chance to skim through
it. I want to start off by asking how this report is now going to feed into the strategy. What are the expected
processes and time lines for the development of the strategy going to be?
Ms Spence: The priorities report is a key input into the strategy. We'll now be working with other
Commonwealth agencies, and the states and territories, to make sure it's a national thing, and also to make sure
we continue to engage closely with stakeholders in terms of actually building up the strategy to come forward to
the Transport and Infrastructure Council in early 2019.
Senator RICE: What will come to the Transport and Infrastructure Council in early 2019?
Ms Spence: A strategy for them to sign off on.
Senator RICE: The plan is that you're developing the strategy over the next six to nine months?
Ms Spence: Yes.
Dr Kennedy: Just quickly, it was proposed to come back in six months to—
Ms Spence: It was 2018—
Dr Kennedy: Was it? Okay. Sorry. We had proposed to come back with a strategy, I think in six months. One
of the panel members presented the report to the ministers last Friday and one of the recommendations she made
was to take a little longer. She was concerned that if we were back in six months that wouldn't allow appropriate
consultation with all stakeholders et cetera. We had been trying to just maintain our momentum, but we felt, and I
think the ministers felt particularly, that she made a very cogent argument. We have now proposed, and the
minister has agreed, that we would take the 12 months. What industry is seeking from us is engagement. They've
very much enjoyed the inquiry—being able to engage and get involved in the inquiry. In a sense, they were
concerned that we would go off and develop a strategy and come back without engaging with a wide range of
stakeholders. We accept that good advice, so we've done a bit of a reset there and it will take a little longer than
we anticipated.
Senator RICE: So, 12 months is likely to be the revised timetable. Are you going to take up the
recommendation of establishing, was it an independent expert panel, to develop the strategy?
Ms Spence: We're certainly looking at how best to engage with industry. The final decision on whether you
have an expert panel during the development period versus the implementation period is something we're still
working through, but there's a strong commitment from all jurisdictions to make sure we do work very closely
with industry and other stakeholders as we get to work through what the strategy will actually look like.
Senator RICE: In particular, will there be consideration of having community stakeholders on that expert
group, as well? I understand from—
Ms Spence: Community issues were identified as one of the priorities—that we need to understand how to
make sure you've got the right interaction between community groups and making the most of the freight and
supply chain. One of the challenges is always how you get who the community groups would be. For example,
only one community group actually put a submission into the priorities report, but a number of submissions raised
community issues. The short answer is, yes, we'd like to. We're still working through how we will do that.
Senator RICE: Interest in being involved usually doesn't equate with capacity in terms of community
organisations.
Ms Spence: Yes.

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Dr Kennedy: It came up in a conversation again with ministers on Friday. Many of these last-mile issues are
local government issues and they are issues of real concern and interest to communities.
Senator RICE: Absolutely. Living in a very affected community myself, I know the City of Maribyrnong has
a huge interest in the urban impacts of freight.
Dr Kennedy: There was a bit of conversation around how to strengthen that part of engaging the strategy,
because it is appropriate—and these aren't matters the Commonwealth pulls levers on, but it is certainly interested
in how planning, zoning and consultative arrangements apply for residents approximate to terminals or freight
routes or all those matters, or even as far as regulations around deliveries, such as when they can take place, and
noise issues. It is a complex web of issues and we appreciate that in this next stage community engagement, the
land use issues, have to be front and centre in developing the strategy.
Senator RICE: That's good to hear. I want to move on to how the strategies will incorporate the central issue
of reducing carbon pollution from freight transport. When I asked about this at last estimates it was indicated that
the strategy wasn't going to be the place where this was considered. Is that still considered to be the case?
Ms Spence: Yes. Nothing has changed since last time. It is obviously an issue we look at through things we're
doing on international aviation. We talked about vehicle emissions yesterday. The Freight and Supply Chain
Strategy dominant force isn't reducing emissions, but environmental sustainability will be an issue that we would
be taking into account in developing the final strategy. We'd like to see that as one of the pillars, but it's one of a
number of pillars that we'd actually be looking at.
Mr R Wood: If I could add to that. The way we're looking to take forward the development of the strategy at
this stage is based on five pillars, which are productivity, safety, environmental sustainability, which potentially
includes that, of course, security and community. So I think a lot of the issues you've raised are things that will be
considered in the strategy in one form or another, noting that there are other—
Senator RICE: That is refreshing to hear, and a shift from my questioning at the last estimates, where it was
indicated that sustainability in fact wasn't there as part of the strategy.
Mr R Wood: It's certainly there but the freight strategy is one mechanism and there are others mechanisms
that are more specifically targeted to those particular issues.
Senator RICE: In general, would you agree that reducing our carbon pollution from transport is an important
thing that we need to be doing?
Ms Spence: As we have indicated, there are a number of areas where we're looking at that issue.
Senator RICE: But, in general, to be reducing our carbon emissions from transport is an important goal?
Dr Kennedy: It's an important part of the overall contribution to the government's climate change policy
objectives. There is no doubt about that.
Senator RICE: Particularly given that emissions from transport are the fastest growing sector, I think, and it
is now up to 20 per cent of emissions, and I understand that freight emissions are in fact a full five per cent of our
emissions. Is that what you understand the figures to be currently?
Dr Kennedy: I think you may be more across this. I don't have them to hand. But there are substantial
complementary opportunities in a freight strategy around issues that come from congestion, or efficiency more
broadly, that are definitely supportive of emissions reductions objectives. But, as Ms Spence has said, there are
also policy instruments, such as the fuel efficiency standards that we talked about earlier, which directly target
those. But this is a consideration and it will be a consideration of the environmental sustainability pillar of the
strategy.
Senator RICE: Okay. I note in the paper that vehicle emissions were hardly mentioned. I did a search even
for 'fuel', 'carbon' or 'emissions' and there were essentially zero mentions. But there is a little picture, a graphic, on
page 30 that identifies climate change as both a high-impact and a high-uncertainty driving force. So it is
basically taken to mean that it's a driving force both in relation to the economics and the policy settings for
vehicles' technology, and that adapting to climate change is going to be highly disruptive.
Ms Spence: It's probably worth noting that the expert panel who undertook the inquiry were really tasked to
focus on productivity issues and, as Mr Wood has mentioned, while productivity is one of the elements—a critical
element—for the strategy, there will be other issues that we will be reflecting in the strategy.
Senator RICE: So the strategy will include things like what's going to be required to, say, transition the
vehicle fleet to electric vehicles or hydrogen fuel cell vehicles and the types of infrastructure that is going to be
required for that?

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Ms Spence: I don't know if the strategy would go to that level of detail, but it would be looking at what
actions governments would need to take to address environmental sustainability issues. So, again, there are a
number of areas where we will be looking at the sorts of issues you raised. I don't know if the National Freight
and Supply Chain Strategy would be the best vehicle for looking at those issues you've just flagged.
Dr Kennedy: Perhaps this could help. The potential transport scenarios under the emissions reductions
objectives that arise out of reducing emissions are a very important part of the context of how the strategy has to
look, because we have to do our best to try to understand how the fleet may change, and all the issues we were
speaking about earlier around automated vehicles, trucks, ships—the whole piece. So the point we're trying to
make is: the strategy itself is not necessarily going to develop in detail recommendations on the policy objectives,
but it is understanding, when those policy objectives happen on those sides of things, what they would mean for a
freight strategy.
Senator RICE: I would have thought the integrated strategy, addressing the need to be reducing emissions,
integrated with other things—do you see that that will be considered with the environmental sustainability part of
the pillar? So will that need to reduce emissions be integrated into the strategy?
Dr Kennedy: Certainly, yes. 'Integrated' is a more articulate way of putting what I was trying to say.
Senator RICE: There's a recommendation in the report about road pricing. Essentially it says, 'implement a
market solution to road-user charging for all heavy and light vehicles, with pricing linked to the level of road
infrastructure investment required'. What is the department's view of this recommendation? Does the department
see it as important to pursue road pricing reform?
Dr Kennedy: Well, the decision to pursue road pricing reform is obviously one of government's, but certainly
the department stays abreast of and advises around the potential for pricing assets, roads, in a number of ways.
We talked yesterday about electric vehicles and the potential for fuel excise revenue to fall in the future. So
they're all issues that we advise around. The strategy itself will have to go to some of those issues that are coming
out in the recommendations that you just noted.
Senator RICE: More broadly on road pricing, where is the government currently at with the inquiry into road
pricing that was going to be announced imminently at last estimates in February?
Ms Spence: I think witnesses earlier on today in the Infrastructure Investment Division gave an update on
where that element of the road market reform work was up to. I think Ms Geiger provided an update.
Senator RICE: I'll look that up. You aren't able to share with me now what the expected timetable is. The
expectation from February estimates when I asked the question was that the independent expert was going to head
up the inquiry within weeks.
Dr Kennedy: We don't have a further update here now. The official—
Senator RICE: I will look up—
Dr Kennedy: Ms Geiger was the woman you talked to about the cycling.
Ms Spence: I think just before lunch.
Senator RICE: Finally, I'd like to get your response to recommendation 1.11 of the inquiry where it said:
Require business cases developed for infrastructure funding submissions to include a comprehensive analysis of alternative
options including low build/no-build alternatives, which may include investment in technology or operational efficiencies (for
example, investing in new rolling stock instead of duplication of underlying rail track).
I'm interested in your response to that recommendation and whether you feel that that then should influence the
existing process of project assessment, particularly by Infrastructure Australia.
Ms Spence: As you'd appreciate, there are 50-odd recommended priorities that are included in the report.
We're in the process of working through those priorities, both with the Commonwealth and the jurisdictions, in
terms of a response to the individual recommendations.
Dr Kennedy: Just as a standard practice—and certainly I've talked about this with the head of IA—in any
infrastructure assessment process, you do want to have one of your questions looking at alternative ways of
achieving the same outcome. In rail, for example—and I don't pretend to be an expert on this—the introduction of
technologies that effectively allow train sets to run more closely together and run more efficiently is one way of
squeezing a lot more out of an existing system rather than duplicating or building more rail. In a number of
jurisdictions, Queensland and New South Wales, some of these technologies are being introduced. I haven't got
the formal thing you're seeking from IA on that, but it might be worth asking Mr Davies about it.
Senator RICE: If I get a chance to talk to him today.

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Dr Kennedy: As I said, he'd be happy to chat to you outside of this, but that is one of the considerations in
business case assessments that they do.
Dr Dolman: It's also worth mentioning that we have transport assessment guidelines which are agreed with all
the states and Infrastructure Australia on how business cases should be constructed. They specifically talk about
the need to do strategic assessments before you go to a solution. It is a requirement under those guidelines now to
look at alternative ways of delivering an outcome, including no-build options.
Senator COLBECK: I was looking at your website and the services that you provide, or the projects that
BITRE do. I have here some of the stats, so I do recognise the value in them. In the context of modelling, do you
have any people who could provide the committee with some advice around aviation fare setting principles?
Dr Dolman: We monitor aviation fares and publish three indices each month that look at business class fares,
economy fares and best discount fares, and show how they fluctuate over time. We have done some internal
modelling work for our aviation and airports division looking at the drivers of airfares.
Senator COLBECK: You could become our second-best friends. Are there any specific trends coming
through in that work?
Dr Dolman: Yes. We've also published some work on very long-term trends. The very long-term trend is for a
reduction in airfares—particularly international airfares dropped very substantially with the introduction of larger
planes late last century. Since then, they've continued to drop but more slowly. There's a whole range of trends,
depending on the scale you're looking at.
Senator COLBECK: Looking back, more particularly on a domestic basis, there would be seasonal trends
that you could pick up across high-frequency routes and also regional routes?
Dr Dolman: There's very clearly seasonal trends, largely relating to demand. The obvious ones are the
Christmas period, Easter holiday et cetera. Fares tend to increase during those periods. But there is a very clear
seasonal pattern in the airfare data.
Senator COLBECK: You could give us some information around what you see as the drivers, particularly for
the seasonal patterns?
Dr Dolman: Yes. It might be best if I took that on notice and gave you a more considered answer. Broadly, it
relates to demand and there are other trends. There's capacity. Where an airline's providing a plane, they want to
fill it. If you've got two airlines, there's competition and available capacity. Fuel is the other big one that
fluctuates to drive some of those big trends. The patterns that you see are largely driven by changes in demand,
seasonally.
Ms Spence: I'm not sure that it's helpful to point out, but the department has made a submission to the current
inquiry looking at regional airfares and issues. In terms of the more specific issues around regional airfares, the
data from BITRE does suggest that the cost per kilometre of travel on regional routes is more expensive compared
to other routes of comparable distance, particularly on routes serving the mining industry. The other thing to note
is that, over time, the cost of regional airfares does not appear to have increased relative to the cost of fares
connecting to other major cities. We'd be happy to send through—
CHAIR: Has not increased relative to—
Ms Spence: Relative to the cost of fares connecting to major cities.
CHAIR: What does that statement mean?
Ms Spence: It means that the—
Dr Dolman: The trends in regional airfares aren't different to the national trends.
Ms Spence: The gaps remain the same.
Dr Kennedy: Regional airfares are more expensive and there's a relative gap. Let me put it this way: that gap
has stayed roughly the same, but they are more expensive.
CHAIR: Where you've seen a downward pressure on pricing, I imagine it's only where there is volume and
competition.
Dr Kennedy: Yes.
CHAIR: There would be some other tinkering at the edges. Fuel might go up and down, and there are all sorts
of charges. This inquiry is now specifically looking at routes where there's a regulated monopoly, a subsidised
route or a route where I'm not sure that the competition has been as competitive as it ought to be: two carriers in
one line, both of whom, in one instance, have subsidised their responsibilities to a third airline. I'm sorry. I hope
you don't mind, because this is really critical to us—

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Senator COLBECK: I've poked the bear. I'm happy now.


CHAIR: There's massive expectation out there about our inquiry to date—that we're going to be able to do
something about any and all of these things, with the focus being on the level of service and the frequency of
service. For some, those two things are more important to them than the cost of service. We've got anecdotal
evidence, for example—and I'm going to put this to you because we want help—where an identical aircraft that
comes in with 100 per cent occupancy on charter charges $230 per seat. The following day, the exact same
aircraft on exactly the same route, with the same crew, the same flight time, the same challenges and the same
fuel, charges on average $800-plus per seat when that carrier has provided that as a subcontract for two of the
major carriers.
I don't want to start impinging on the corporate reputation of carriers out here in the open, because we're yet to
hear their explanation. What we desperately need is to come to understand the algorithms behind the dynamic-
pricing systems. That's what we need to understand. I think that between us, we're smart enough to determine the
data that we want from the participating airlines and to interpret it, but we can't do that without understanding
how the dynamic-pricing systems work. If you can't help us, we're looking, perhaps, to engage someone who is an
expert in the field to bring us up to speed.
Senator COLBECK: So the question is, can you help us with that?
CHAIR: Yes, the question is: can you help us with that?
Dr Dolman: I think we can go part way there. We don't have the detail and understanding of the dynamic-
pricing allocations—
CHAIR: No.
Dr Dolman: But I guess we can understand some of those underpinning issues. As you said, competition is an
important part of that, but there are limits. You can't scale a lot of these operations, which I think makes a big
difference in terms of the efficiencies. You can run a large aircraft over long distances much more cheaply than
you can a smaller aircraft.
CHAIR: I appreciate all that.
Dr Dolman: There's a whole range of things around scale.
CHAIR: But let me say this: when it is either a regulated route or, more significantly, where it is a route that
is subsidised by the state government, one would assume that in putting in place the arrangements to subsidise it
the intent of the effort is to give these people much more reasonable costs around air travel than they would
otherwise have if it were not subsidised. Either it's not being subsidised sufficiently or, even within the framework
of a subsidised route, a carrier seems to have the capacity to charge more-ish. There is the lovely old saying,
'When you get to the Kynuna roadhouse and you want a can of Coke, it's six bucks.' It doesn't matter that you can
get it at Woolies for a dollar. It just doesn't matter. It's six bucks, you want a can of Coke and you just dig deep in
your pocket. And this is what's confronting tens of thousands, it would seem, of our Australians with aviation in
the bush. Perhaps we can take this offline.
Dr Kennedy: Perhaps—
Senator COLBECK: Our people will be in touch with your people!
CHAIR: Yes, that's right.
Dr Kennedy: What I was thinking while I was listening to you—and we'll come and engage with you
offline—was that just to get this started you really need some clear advice on what Gary's data can help you with
and what it can't—
CHAIR: Correct.
Dr Kennedy: If you want to understand internal private pricing mechanisms, which we might be able to imply
from some data or we may not—we may have to go to get people who flew previously with those companies to
explain how it worked, for example—
CHAIR: Yes.
Dr Kennedy: I think that a useful thing we might be able to do for the committee is to check that we've
captured everything you need and then try to allocate where you can get that from, where we can help and where
we think you need to go somewhere else. Then at least you know, 'This is how we're going to build an evidence
base here to solve this problem.'
CHAIR: That's exactly what we need.
Dr Kennedy: What if we try to set that up and we'll bring that to you for a chat?

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CHAIR: Exactly what we need.


Dr Kennedy: I don't think that we, potentially will be able to deliver—
Dr Dolman: There will be gaps there—
Dr Kennedy: But if we can identify those, we can help you find the—
Senator COLBECK: But you also have the industry knowledge to point us where to go to fill in some of
those gaps.
Dr Kennedy: Exactly.
CHAIR: Or even help us with the language. Obviously, we're going to make demands on carriers, right? We
don't expect it will be an easy path. They'll be squealing with commercial-in-confidence and all sorts of things; we
anticipate that. But we need help around the architecture of our request. There's no point in us pulling data that we
can't interpret, or it might not tell us what we want to know. Can we make arrangements for the good Dr Jane to
be in touch with you, doctor-on-doctor, to do that on Monday? There is a show in that!
Dr Kennedy: Yes, happy to.
CHAIR: We really appreciate that. We know what all the problems are, we don't need to spend two minutes
on the problems. We've now met dozens of witnesses and heard some tragic stories. A young man's family
couldn't afford to put them all on a plane to go across to a sporting event where he'd been selected. There was a
car accident, and they were killed in the car. We've got a pocketful of those stories. In Winton, it was nearly
$12,000 for the family collectively to come home for a funeral, whereas, if you and I were in Brisbane and a
relative died in Cairns, it would be $2,000 or $3,000 for all of us. There are really tragic stories of people with a
recurrent need to go for chemotherapy who are paying through the nose once a month or, in some cases, once
every fortnight. As a result they've had to turn their entire life upside down—sell the home, leave the community
of their birth, leave their jobs to go and live somewhere they don't want to be. It's exercised us, and we take it very
seriously, so we thank you, Doctor and Doctor. We'll make sure we get some help.
Senator COLBECK: My work is done.
CHAIR: You've stirred me up. You should dash for the door before another senator comes in. We really
appreciate your time and wish you safe travel back to your destination. We know what effort goes into estimates.
Australian Transport Safety Bureau
[14:42]
CHAIR: Welcome to the Australian Transport Safety Bureau. We've received correspondence in response to
our request about the notifications of differences to ICAO Standards and Recommended Practices from the
department. With the concurrence of my colleagues, we will table it and recommend it be published. There may
be colleagues who have some questions for you on it.
Mr Hood, I want to open with a compliment. I recently spent quite a bit of time with all those old-timers with
the magnificent old flying machines, the antiques and that. They've got the highest regard for your department,
reputation wise.
Mr Kefford: Thanks, Senator.
CHAIR: It wasn't shared by all departments in aviation, but yours was one. I just wanted to give you that
feedback. I want to ask about the drones issue, because we're starting to get towards the sharp end of work. Were
you involved at all with CASA? Did you guys make any submissions or engage with CASA on the question of
their review?
Senator Scullion: Now they're at the table, I understand that Mr Hood may wish to make a brief contribution
before we go to questions.
CHAIR: My apologies. Mr Hood, please, you have the floor.
Mr Hood: Thank you. It's great to be back. I don't have a formal opening statement, but as you spoke of old-
timers I would like to acknowledge Dr Rob Lee AO, who passed away on 27 April 2018. Dr Lee provided over
40 years of service to Australian civil and military aviation agencies, most notably in the critical areas of human
factors and system safety. It's very appropriate that Dr Lee, who will always be remembered for his personal
warmth, good humour, positive manner and diplomacy, was a pioneer in ensuring that human factors became a
key part of international aviation safety investigations.
The work that Dr Lee oversaw during his leadership at the Bureau of Air Safety Investigation, our predecessor
agency, and, subsequently, the Australian Transport Safety Bureau has helped to improve aviation safety both in
Australia and around the world. Indeed, he worked with Professor James Reason on developing the model for

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systemic safety. The travelling public today is safer thanks to Dr Lee's tireless work. May he rest in peace. The
ATSB recognises his significant contribution and thanks you for the opportunity to make this statement.
CHAIR: On behalf of our committee, I attach to your remarks and, through you and directly to his family,
extend our condolences. Perhaps the minister might want to reflect, on behalf of the government, on a
contribution, in that order?
Senator Scullion: Certainly. Beyond the committee, we the government would like to associate ourselves
with the remarks of the chief commissioner. Individuals like Dr Lee often go unnoted in the significant
contribution that they've made and, in this case, to Australian air safety. We would again note and associate
ourselves with those remarks.
CHAIR: They're a great treasure. They contribute to keeping people alive but they'll never know who they
were, including the people.
Mr Hood: With respect to your drones question, we're doing our best to maintain the independence of our
agency. The only input we made to CASA, in relation to the drones, was to suggest that the identification of
drones would be very useful in the purpose of our air safety investigation were there to be a collision.
CHAIR: Is there technology involved on a commercial scale that would allow that to occur without,
necessarily, having a number painted on the side?
Mr Hood: We did respond. The question was on notice. I have that somewhere, if I could get back to you on
that one.
CHAIR: Yes.
Mr Hood: There are various means, and it depend on the complexity of the size and scale of the drone.
CHAIR: We often make fun of The Jetsons but I, in the Middle East, witnessed a drone reverse out of a shed
and dispatch on a mission across Iraq. I think it was 13 hours before it came back. It was controlled by some
person in Arizona. Do you anticipate capacity for drones on a commercial—I'm not talking about passenger
carrying but more of a freight-carrying arrangement. These are things you must turn your mind to as a safety
authority. Do you anticipate that happening within—
Mr Hood: It already has, to a limited degree. The Defence Force operated the Heron drone out of
Rockhampton three years ago. It's a matter of integration. The Heron operator was located at Rockhampton
aerodrome. It was towed onto the runway. It departed. It flew for some 10 to 12 hours around Shoalwater Bay and
then returned safely to land at Rockhampton. It did that for a protracted period of about six weeks, I think,
associated with a military exercise. That was an early proving trial, if you like, for Defence but you could
extrapolate that to civil operations. With appropriate controls in place, it's our view that they can be integrated
safely. In terms of the development of the regulations along that space and the air-space management, you'd need
to refer that to CASA and Airservices Australia.
CHAIR: It'll be challenging times.
Senator CHISHOLM: I'm interested in MH370 and wonder if you've had any involvement in the
investigation in recent months?
Mr Hood: I know Senator Patrick has some questions also. With the chair's indulgence, I thought it would be
useful—I've only got seven paragraphs or so—to perhaps summarise where we are to date.
CHAIR: I think that would be useful. Are you okay with that, Senator Chisholm?
Senator CHISHOLM: Yes.
Mr Hood: I could perhaps read that as an opening statement to MH370. Then I'll call Peter Foley.
CHAIR: Would you mind, at the end of that, if we made a copy of it for senators who were interested?
Mr Hood: It would be my pleasure to table the paragraphs, if that's helpful.
CHAIR: All right. We'll wait until you refer to it.
Mr Hood: Sure. Then it's my intention to call Peter Foley—who's been the director in the search for MH370
for the last four years or so—to the table to answer specific questions.
CHAIR: That's four years of your life you won't get back, I suspect.
Mr Hood: On behalf of the ATSB, I'd like to express my deepest sympathies to the families of the passengers
and crew on board MH370. The ATSB deeply regrets that we have not been able to locate the aircraft or the 239
souls on board that remain missing. In saying this, the ATSB acknowledges the extraordinary efforts of hundreds

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Tuesday, 22 May 2018 Senate Page 55

of dedicated professionals from many organisations in Australia and from around the world who have contributed
unsparingly to the search.
The ATSB-led underwater search, with contributions from some of the best expertise available, included
expertise from representatives of the Search Strategy Working Group established at the very beginning of the
search. Representatives came from Inmarsat, Thales, Boeing, the Air Accidents Investigation Branch of the UK,
the National Transportation Safety Board of the United States, Australia's Defence Science and Technology
Group, and the Malaysian department of civil aviation. Other major contributions came from Geoscience
Australia and the Commonwealth Scientific and Industrial Research Organisation—CSIRO—particularly with
respect to drift modelling.
The best possible methods and expertise were used to analyse the limited data available at different stages of
the search. This was done to narrow down a potential wide area for the location of aircraft of 1.12 million square
kilometres along an arc in the Indian Ocean. For the initial search this was narrowed to 60,000 square kilometres
in an effort to use the best available resources. With a commitment of additional resources from the Malaysian,
Chinese and Australian governments, the area was later expanded to 120,000 square kilometres. The overall
resourcing was in the order of $198 million. Australia's contribution was $63 million; funds of $115 million were
provided by Malaysia and $20 million by China.
The ATSB and the Search Strategy Working Group were best placed to try and identify a search area based on
the available evidence at the time. At the ATSB, we exercise great care not to engage in conjecture or speculation.
At each stage, at each opportunity for a review, the totality of every available piece of information was
considered. Importantly, the ATSB and the Search Strategy Working Group were open and transparent about the
work we undertook. Sixteen reports were published publicly, which I have here, and I have copies to table of the
final search report published in October 2017. All the reports are publicly available for download from the
ATSB's website.
Following the completion of the 120,000 square kilometres, the search was suspended more than a year ago
now, on 17 January 2017. A final report into the search was published on 3 October 2017, which completed the
ATSB's formal involvement. Mr Peter Foley, the Australian government's director for the search, was seconded to
the Joint Agency Coordination Centre, or the JACC, in the department for MH370. The JACC is now the agency
responsible, providing advice and public information in relation to Australia's engagement. Mr Foley remains
available as the search director to answer any specific questions.
CHAIR: Thank you, Mr Hood; we appreciate that. We might just get a copy of that.
Mr Hornby: I have copies of that final report, if you'd like me to table that?
CHAIR: Yes. Can we present them to the senators for their consideration to be tabled? I imagine we don't
even need to peruse them. You're okay with tabling those reports?
Senator McCARTHY: Yes.
CHAIR: They'll be so tabled. We appreciate that. I'd imagine the invitation is that, because Mr Foley's been in
charge, you direct your questions there.
Senator CHISHOLM: Following the completion of the report, is that basically the final involvement? Or has
there been subsequent involvement or ongoing interest in this issue?
Mr Foley: I think you might be referring to our ongoing involvement in the investigation, which we still have
an accredited representative on. This is a Malaysian annexe 13 investigation. With regard to the search, we've had
an ongoing involvement, assisting Ocean Infinity where we can and of course coordinating communications with
family members amongst other things.
Senator CHISHOLM: Is there any relevant information that you'd be able to pass on from your engagement
with Ocean Infinity?
Mr Foley: They haven't found it, very sadly. Like Mr Hood, I'd firstly just like to put on record that I offer my
condolences to family members. Throughout the course of the last four years, with members of my team and
members of the JACC, I've met with family members both here in Australia and in Malaysia many times. Our
interactions with those folks were really what motivated us to bust a gut for four years to find that aircraft. It's
highly regrettable that we didn't. We took account of every single piece of evidence and all the information that
we could glean in order to help us locate that aircraft. This final report that you see before you is a summary of
where we looked, why we looked where we looked and what sort of information analysis we did to support that
definition of the search area. Ocean Infinity are still working. They're still going. We still hope that they're going

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to be successful in the coming weeks in locating the aircraft. But, if they're not, that will be a great sadness for all
of us.
CHAIR: Is your optimism recent? Is something happening that you've put some stock in?
Mr Foley: No. We remain in hope, like we have done whenever there's been an active search. I can recall well
when the ATSB led the Australian coordinated search. There wasn't a single day that went by that I didn't think
we had a chance of finding it. I think everyone in my team was of a similar mind.
CHAIR: I think you've answered my question. There's not some initiative about to be launched that you
think—
Mr Foley: There is a current search running at the moment. There's a private company that is conducting a
search in the southern Indian Ocean at the moment. They're actually being coordinated by the Malaysian
government. It's a Malaysian initiative, but they're a private company that are searching currently.
Senator CHISHOLM: In recent media reports the investigators have been heavily criticised for sticking to
the ghost flight theory. Do you have any response to that?
Mr Foley: Firstly, I'd like to recharacterise it as not a ghost flight and not a death dive. This is a
construction— and quite an ugly one—by a journalist. Early in the search, we had very little information on
which to reconstruct the last six hours of that flight. It consisted of the metadata associated with periodic satellite
communications. Also, we knew about the aircraft performance and, indeed, what fuel it had on board. So we had
a fair idea of what the range was. Boeing did the work on fuel calculations and worked out where it could fly or
how far it could fly. The metadata associated with the satellite communications told us a series of ranges from a
reasonably geostationary satellite that sits over the Indian Ocean where the aircraft had to be at a certain time. But
it was just a range ring, so we didn't know where it was on very, very long arcs, up to 2,000 or 3,000 kilometres,
in the Indian Ocean. The other key piece of the metadata was something that told us about the relative motion
between the aircraft and the satellite. We call that burst frequency offset. The timing offset or the time for the
signal to travel from the aircraft to the ground earth station gave us the range the aircraft was from that satellite.
We had those very scant pieces of information on which to start the search and to narrow it down to the most
likely place in that 1.12 million square kilometres that we had as where it could feasibly be. As the search
progressed, we had debris come ashore. Firstly it told us we were searching the right ocean. There was
speculation that the aircraft might have wound up in Kazakhstan, for goodness sake. We saw the flaperon come
ashore on Reunion Island in July 2015. We saw Blaine Gibson's efforts lead to the discovery of many pieces of
debris around the shores of Africa. Critically, we also found a piece of flap in Tanzania, which was key for us
because we could actually analyse that piece of debris and attempt to ascertain whether either the flaps were
deployed, which would mean there was likely to have been a controlled ditching at the end of flight, or indeed
they weren't deployed. Our analysts took that section of flap, analysed it and found that it was not deployed when
it separated from the aircraft. For us this was very important, because up to that time, while we considered every
possible scenario, for the first time we had something that, if you like, eliminated the potential for the aircraft to
be controlled by an individual and be in a state where it was being controlled, ditched or likely to be.
Not long after that the Defence Science and Technology Group looked at that last transmission from the
aircraft, which was a bit different because it was unscheduled: it occurred about eight minutes after the previous
one and it was in a place where the aircraft could most feasibly have exhausted its fuel. It was also unusual
because it was the aircraft's satellite data unit logging back on after a period of power outage, and it was also
incomplete, if you like. Most of the transmissions that you see are a series. They're not a single transmission from
the aircraft to the ground earth station and back; it's actually 10 or 20 different signals that occur at different times
to set up different components in the communications system. This one, particularly when an aircraft's logging
onto the SATCOM network, has a whole series of things that occur. In this case it was only a log on request and a
log on acknowledged. Just two—so in that sense it was incomplete.
This is what we had at first, and it told us that it was likely that that transmission was triggered by fuel
exhaustion. There is no earthly reason why someone in control of an aircraft would exhaust its fuel and then
attempt to glide it when they have the option of controlled ditching. So in a sense it showed us at first that the
most likely scenario, not to the exclusion of every other, but the most the most likely scenario at that point was
that the aircraft was probably descending in an uncontrolled manner.
Senator CHISHOLM: In terms of making a determination about where you search, given the potential vast
area, is it because the different methods of whether it was controlled or not would widen the search so far that you
basically just have to limit it as much as you can?

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Mr Foley: Our strategy at first was to look at where along the arc, based upon those two key pieces of
information—the burst timing offset and the burst frequency offset—where it was most likely the aircraft crossed
the arc. That drew us down to fairly southern latitudes between about 32 degrees and 39 degrees south. Then of
course we had to simulate the end of flight. We didn't and we still don't understand perfectly what happened at the
end of flight. Boeing ran a number of simulations for us. Some of the outcomes of those simulations were
behaviour that was fairly stable. For example, we knew that the right engine consumed more fuel. It was likely to
have flamed out first, up to 15 minutes before the left engine. The autopilot compensates for that, so there is no
need for anyone in a cockpit to do anything at that stage. The thrust asymmetry compensation puts a little bit of
rudder on and the aircraft continues to fly a straight path on a single engine. However, when the second engine
flames out, you get a situation where the autopilot drops out and the thrust asymmetry compensation also ceases
to function. What happens is that a bit of residual rudder stays on and establishes, in this case, a left-hand
spiralling turn.
The Boeing simulations also showed that the behaviour of the aircraft was pretty stable. It was likely to be in
what we call a phugoid motion. This is where the aircraft pitches over, picks up speed and picks up lift and starts
to climb a little on the way down. The analysis that was latterly done by the Defence Science and Technology
Group on the last couple of communications, to try to ascertain or bound the rates of descent, showed us that the
aircraft was in a high and increasing rate of descent at some point in the context of that phugoid. There again, this
was evidence that we didn't have someone who was actively trying to glide it to a maximum range. It was much
more likely that the aircraft was uncontrolled.
The totality of all the evidence we looked at, when it became available—understand too that analysis was
continuous, right from the time that we started the search right to the time that we ended the search and beyond,
we were still analysing various information to try and narrow down that search area. We also had different times
when the debris coming inshore, for example, gave us key evidence that we used for other things like modelling
the drift of the debris. We commissioned the CSIRO to do that on our behalf. I can say with great confidence that
we considered every piece of evidence that we had at the time in an unbiased fashion. What we're seeing in the
press is perhaps a lot of speculation about a single piece of evidence.
Senator CHISHOLM: The recent media speculation has centred on disputing whether there was someone in
charge of the flight at the end. You're confident that the overwhelming evidence is that there was no-one in charge
of the airplane at the time it entered the ocean?
Mr Foley: What we've said continually in our reports, and if you read them carefully there are lots of pages, is
that the flaps being in a non-deployed state means that a controlled ditching is unlikely. It's not impossible,
because at some point they may have separated, but unlikely. However, we have also said that the high and
increasing rate of descent makes the intent of anyone in the cockpit to extend the aircraft to its maximum range
also unlikely. But we haven't ever ruled out someone intervening at the end. It's unlikely.
Senator CHISHOLM: Obviously we hope we never get another instance where we're investigating a similar
occasion, but with the benefit of hindsight would you conduct the investigation in a different way, if you were to
be looking at something similar?
Mr Foley: You have to understand that we didn't have certain key pieces of evidence available to us. It wasn't
all available right up front. We did the best analysis that we could. We also were working in parallel with the
investigation process. The actual cause of this is being investigated primarily by the Annex 13 Team in Malaysia
and also the Royal Malaysian Police. Our role was very, very clearly to find that aircraft and to access and analyse
the data that would help in doing so, and we did.
CHAIR: I spent 20 years investigating catastrophic accidents, international flights, from a factual point of
view. I still don't know how an aircraft stays up in the air, though I'm fascinated by it. But in all the rumours and
innuendo through the media and insurance pressures and so on, there are reports that the pilot overrode general
instructions and ordered a different fuel quantity. Is that nonsense?
Mr Foley: We know precisely much fuel the aircraft had on board at top of climb because we had an ACARS
message which included that. We know absolutely that the aircraft had on board what it should have had for a trip
to Beijing.
CHAIR: And there is no evidence that there had been alterations made? Is there a circumstance where a pilot
could?
Mr Foley: My understanding is that the pilot orders the fuel, and if he wants, a little more.
CHAIR: But consistent with calculated fuel volumes?

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Mr Foley: It appears so. That has never been questioned by the investigation. As I said, that's the
investigation. We knew precisely how much fuel was on board to give us a maximum range and therefore indicate
somewhere to look. That was our primary concern with fuel information.
CHAIR: That's interesting. That is a very thorough report, Mr Foley. We appreciate it.
Senator PATRICK: Going to the money aspects of the matter first, you said that $63 million was the cost to
Australia, $115 million to Malaysia and $20 million to China. How were those funds appropriated and to whom?
Did the Malaysian government write a cheque to the Australian government, to the ATSB, or through some other
method?
Mr Foley: It was done by electronic transfer, surprisingly enough. There was no-one with a suitcase.
Senator PATRICK: Into consolidated revenue or a special budget?
Mr Foley: It was into our budget at a time, as I understand it. There were some big lumps of money that came
in from Malaysia at different times to fund a big proportion of the search.
Senator PATRICK: There was some talk in the media that maybe the Malaysian government hadn't paid
what they had committed to.
Mr Foley: That is incorrect. They committed and paid.
Mr Hood: There was also a program management board that oversaw the expenditure of the funds, and we
had the processes and funds audited by KPMG. In terms of all the audit reports and the moneys in and out, that's
certainly available if you'd like that.
Senator PATRICK: Maybe it's worth tabling the KPMG report.
Mr Hood: I'll take that on notice to provide that.
Senator PATRICK: Mr Foley, you were describing the last stages of the flight, and you said you'd conducted
a whole bunch of analysis—modelling effectively—of this perturbation. I'm not sure what you called it.
Mr Foley: Phugoid.
Senator PATRICK: No doubt it is named after some smart person. This has been modelled. When you model
something, you then try to match the model back to any data points. It sounded to me that you said you had a last
transmission, which was eight minutes apart. You didn't have any data after that, did you?
Mr Foley: Apologies if I was unclear, Senator. What we had, you're correct, the previous transmission was at
what we call the sixth arc, and the final transmission was at the seventh arc. There were two, that consisted of a
log on request and log on acknowledged. So there are two data points at the seventh arc. Boeing did the majority
of the simulations, although some others were conducted early in the search by the air accident investigation
branch, for example, to work out a maximum unpowered glide distance. That's included in our report. In fact, all
this is included in our reports. The phugoids that Boeing looked at in the final series of simulations, the advice
from Boeing is that the rates of descent determined by DSTG were consistent with a phugoid that was less stable.
This, of course, was all raised at the first principles review which we conducted in November 2016. We sat
back and said, 'Why haven't we found it?' Where you don't find something is evidence as well. We looked
carefully at the search and the search data and where we'd looked and stripped all the assumptions back to say,
why?
Senator PATRICK: I'm going back to that last transmission, the last piece of data that you had from the
aircraft.
Mr Foley: Correct.
Senator PATRICK: You've made the assumption that that occurred at the point of the flameout of—
Mr Foley: The second engine. It's actually two minutes beyond. The scenario was that the second engine
flamed out, which interrupted power to the satellite communications system, and then—we modelled this and
Boeing modelled it too—there was just enough fuel for the APU to start up, spool up, come on line and for the log
on process to be complete. It takes about two minutes.
Senator PATRICK: But at that point the aircraft was in level flight, corrected by the rudder offset that had
been applied.
Mr Foley: After the first engine flamed out you get the rudder correction, the thrust asymmetry compensation.
When the second engine flames out, it spools down, the rudder comes back and just a little rudder stayed on.
That's what established that left hand turn.
Senator PATRICK: The data you had, coming back to the satellite, was giving you rudder angles?

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Mr Foley: No, the data was—


Senator PATRICK: Just handshaking, you said, wasn't it?
Mr Foley: Correct. But the actually behaviour of the aircraft, once one engine flames out and a second engine
flames out, is well understood.
CHAIR: It's predictable.
Mr Foley: Boeing provided that analysis.
Senator PATRICK: I understand where you're going, but the reality is that you've got a data point.
Mr Foley: Yes.
Senator PATRICK: And then from there you make some assumptions and you do some modelling. You've
based the modelling on what happens when no-one is in charge of the aircraft. You've gone to Boeing. They've
described the rudder movements and the perturbation and you've modelled that.
Mr Foley: Correct.
Senator PATRICK: But you actually have no data points to say, 'From that point, that is correct.' If, for
example, there was someone still in control of the aircraft, that last data point could have occurred and a
completely different set of events could have then followed. You have no data that would show you conclusively
that that didn't occur.
Mr Foley: We have nothing conclusive, but I can't imagine why any pilot would be looking at flying an
aircraft with descent rates between 13,800 feet a minute and 25,000 feet a minute.
Senator PATRICK: Where did you get those descent rates from?
Mr Foley: These come from the analysis of the—
Senator PATRICK: The models again?
Mr Foley: No, not the models. This is based purely on hard data. This is analysis of the burst frequency
offsets associated with those final two transmissions. This is work done by DSTG.
Senator PATRICK: You're saying between the eight-minute bursts you could see rapid changes in altitude?
Mr Foley: It was eight seconds between those two communications, so what we've got is a rate of descent
which varies between 2,900 feet a minute and about 5,000 feet a minute. Eight seconds later it's doing about
13,000 to 25,000 feet a minute.
Mr Hood: That's from the scientists in Adelaide at the Defence Science and Technology Group. That's the
burst frequency offset analysis from the—
Senator PATRICK: So that's a Doppler. You're looking at Doppler or something, aren't you?
Mr Hood: It's a Doppler.
Senator PATRICK: Looking at the frequency of the transmission and no doubt a whole bunch of angles to
satellites, there could be a bunch of errors within that Doppler measure?
Mr Foley: That's why we've got a range. If they could have established the angle, the heading the aircraft was
flying and the length of the power outage of the satellite data unit, we could have narrowed it down to a single
rate of descent. But these are rates of descent which allow for everything—the actual direction the aircraft was
flying and the time of the outage. The longer the outage—it gets pretty technical here—the longer it takes to
warm up the oscillator within the satellite communications system, which makes the error potentially larger of the
burst frequency offset. So they modelled all of that and accounted for all of that. It's published, if you care to read
the analysis.
Senator PATRICK: So that's in this report?
Mr Foley: The summary is in the operational report. But DSTG have independently published that one in the
IEEE conference papers. I've got a copy here if you'd like to see it.
Senator PATRICK: If you could table that, that would be good.
Mr Foley: Sure.
Senator PATRICK: Let's go back to the finding of the flap, or the flaperon, which is slightly different. It's a
bit of a combination between a flap and an aileron; is that right?
Mr Foley: Yes.

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Senator PATRICK: In the news media, people have referred to Swissair Flight 111 and the results of the
aircraft going into an uncontrolled drive. Basically they say that the damage to the flaperon is not consistent with
what happened in the Swissair 111 flight.
Mr Foley: You're talking about Larry Vance?
Senator PATRICK: Yes, I am talking about Larry Vance.
Mr Foley: And you're talking about Larry Vance's book?
Senator PATRICK: I haven't seen the book.
Mr Foley: I have.
Senator PATRICK: I had only the new reports, so I'm in the same position as you.
Mr Foley: No, I've actually read the book. Mr Vance provided me with a copy last week. The flaperon came
ashore in July 2015. Of course, at that time, everyone looked at the trailing edge damage and they made all sorts
of conclusions based on just that trailing edge damage. We also thought long and hard about that. We didn't have
access to it. The French judiciary took it to France for analysis. One of our analysts went, but he wasn't allowed to
actually do anything meaningful in the analysis of the flaperon.
Senator PATRICK: So there was some sort of preventative order that stopped the accepted investigator—
Mr Foley: Yes.
Senator PATRICK: under international law from getting access to the flaperon?
Mr Hornby: The French have their own judicial inquisitorial system, so it's a little bit different to how we
operate in Australia with access to evidence. Mr Foley's evidence is that the French judicial authorities took
control of the flaperon.
Senator PATRICK: Aren't the French signatories to the agreement in relation to—
Mr Foley: Yes, correct. Our partner agency over there, the BEA—and I'm not going to spell BEA out for you,
because it's a long French word!—were extremely helpful and had some really excellent experience on Air France
447 and finding it off the coast of Brazil. They were extremely helpful. We had mostly pretty constructive
dealings also with the judicial authorities—the counsel assisting inquiry. But they were very slow. We wanted
answers yesterday, I guess, and we also looked at other possible mechanisms for the damage that was evident on
that flaperon, and we couldn't conclude. There are many scenarios that will damage the flaperon. For example, it
sits right over the top of engine and in most crash scenarios you're going to liberate the engines and they'll come
adrift. If your wings are reasonably level, there is going to be consequential damage, and you can't conclude from
a missing trailing edge on a flaperon that it was deployed at that time. So we didn't make that conclusion.
Senator PATRICK: This wasn't a wings-level event, in your view—
Mr Foley: We don't know—that's the whole point.
Senator PATRICK: You were pretty sure before what happened.
Mr Foley: We've never speculated on the speed of the impact. What we've said was it was between 20,000
and 30,000 feet. When those two final transmissions occurred the aircraft was in a high and increasing rate of
decent, and likely to be in a phugoid.
Senator PATRICK: So you can tell me that a rudder moved slightly, and then it did a slow left turn, and then
it perturbated for a while, but the modelling didn't continue to the point of impact?
Mr Foley: Yes, it did.
Senator PATRICK: What did that modelling say about rate of descent?
Mr Foley: It depends on the starting altitude; we don't know the altitude the aircraft was at. We know what the
turbulence was at different times, so we tried to simulate that. We had a couple of different starting altitudes that
we gave Boeing to test. We had quite a few different set-ups, if you like, for the set-up of the aircraft. Each of
those ended in a different way. Can I refer you to, perhaps, the final report, or, indeed, a presentation I have here
of the spirals that we got at the end of flight, or the track plots, if you like, from the simulations. They're all
different. So, some of them—
Senator PATRICK: One of those tracks has a wings-level option in it?
Mr Foley: Some of them. It took 20 minutes for the aircraft to descend to the surface of the water, and the
spiral is 90 nautical miles long, so it took a long time in some simulations to get there, and it flew a long way,
albeit in a spiral. What we've never been able to simulate is the effect of one or both the engines spooling up

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again—which, of course, they're trying to do; once they flame out they're continually trying to restart. It can't be
simulated because once the simulator sees zero fuel it doesn't allow the engine to start.
Senator PATRICK: You might have some rolling of fuel in the tank, or something like that.
Mr Foley: Correct. There's lots of caveats on that work. I think probably the report we produced in November
2016 has got the most fulsome explanation of those simulations and the caveats. It's the best possible guess, but,
as you know, two engines out is not ever flight tested.
Senator PATRICK: So if you get to the point where the flaperon has turned up, and you've got conjecture
about what that means—what the analysis of the flaperon means—what input did you take? There were a number
of pilots suggesting that they'd contacted the team and provided some thoughts in relation to that?
Mr Foley: Yes.
Senator PATRICK: How did you—
Mr Foley: Bear in mind that we had Boeing on the search strategy working group. We had access to the best
possible knowledge on how the aircraft was flown and operated, from the Boeing guys. We had pilots from the air
accident investigation branch on that team, and we had pilots from NTSB also on that team advising. We were
taking pilot input all the time.
Senator PATRICK: Were you taking pilot input from people external to that team?
Mr Foley: We certainly listened to everything that people had to say.
Senator PATRICK: So, in the case of the pilots, who were named Keane, Hardy and Bailey—
Mr Foley: I can deal with each in turn. We had lots of interactions with Simon Hardy over the course of the
early part of the search. Indeed, Simon's initial area, where he was postulating the aircraft might have been
controlled, with someone in control to the end—not a ditching—was actually searched. We went a long way to
the east in that search area. We went 42 miles to the east. If you look at down-track distance, because the aircraft
was flying pretty much north-south, the arc is perpendicular at times but it's pretty much tangential. If you look at
the actual down-track distance that we searched, it was more like 70 miles. So, yes, we certainly listened very
carefully to what Simon had to say. We certainly read the articles in The Australian where Byron Bailey was
quoted, where he said 'Clearly, the pilot's done this. The pilot in command has hijacked his own aircraft and
therefore he must have been controlling the aircraft at the end. It must be a controlled ditch.' But it wasn't
substantiated by—
Senator PATRICK: Working back to your analysis or your conclusion that the aircraft wasn't piloted, at what
point in the flight do you say it became a pilotless aircraft?
Mr Foley: It's absolutely evident. We've always been in agreement with the notion that an aircraft doesn't turn
itself. I mean, there must have been someone in control of that aircraft, probably until about 18.25 or thereabouts.
Thereafter, we've got a situation where—
Senator PATRICK: Just to help me out because I don't understand the time, the aircraft flew over the South
China Sea and then turned left across Penang, from memory—
Mr Foley: From the Malacca Strait to the northern end—UTC.
Senator PATRICK: I understand, but how long had the aircraft been airborne until 18:25?
Mr Foley: It was from 16.42 to 18.25. It took off at 16.42, so an hour and a half.
Senator PATRICK: So it has flown from KL to a number of places in Asia. Normally, within half an hour
you're over the South China Sea.
Mr Foley: Yes, correct.
Senator PATRICK: So there's been a left turn, they've come across Malaysia and at some point there was a
southerly turn?
Mr Foley: No, a right-hand turn around the island of Penang, and then flew up the Malacca Strait to the
northern tip of Sumatra.
CHAIR: In doing that, can you indicate at what stage you may have had the view that it was no longer on
course?
Mr Foley: Perhaps I should go back to a little bit of the explanation. The aircraft took off at 16.42 UTC,
which is 42 minutes past midnight, local time. At about 17.19 the aircraft had reached top of climb and had signed
out of Malaysian air traffic control, out of Malaysian air space. Shortly after, the transponders failed or were
turned off and it was lost on secondary radar, which is ATC's radar.

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CHAIR: But at that time it was on course?


Mr Foley: At that time it was on course. Very shortly after that, and it became evident later, it had done pretty
much a 180-degree turn and flew back across the Malaysian Peninsula, around the island of Penang and then up to
the northern tip of Sumatra.
CHAIR: Sorry to do this, but, without any other evidence to contradict it, it had to be a controlled flight to do
that.
Mr Foley: Yes, absolutely.
CHAIR: And we are now virtually flying in the opposite direction to the designated path?
Mr Foley: Yes, we are.
Senator PATRICK: I'm just curious. You can't explain how a pilot might do very strange things at the end of
a flight, but somehow it's reasonable that the pilot did some very strange things at the start of the flight.
Mr Foley: And that is the difficulty that I think a lot of commentators have. The evidence at the end of flight
is that the aircraft wasn't being controlled, but certainly there were control inputs early in the flight. Bear in mind
that it took six hours from that turn at the tip of Sumatra to get to the southern Indian Ocean, where it's most likely
to be.
Senator PATRICK: So I go back to my question: at what point do you think you lost—I'm now looking at
page 9; it's quite a good little diagram that shows the movement across the Malaysian Peninsula and then into the
Andaman Sea.
Mr Hood: We've haven't really got any evidence and we don't want to get into conjecture. Once again, we're
not saying it was the pilot either; we're saying that control inputs were made, because we've got no evidence to
suggest that it was the pilot.
Senator PATRICK: Respectfully, control inputs—
Mr Hood: Yes, we're saying control inputs.
Senator PATRICK: We've said at the end of the flight the autopilot was working. It corrected a flame-out on
the right engine first and then the left engine. So the autopilot was clearly working; the aircraft was functioning.
How do you explain an aircraft doing what it did in those initial two hours of flight? I know you're an experienced
crash investigator. I'm even more dangerous because I've got a private pilot's licence.
CHAIR: We could spend a week on this—we really could.
Mr Foley: In five minutes I'll give you one plausible explanation. Is that okay?
Senator PATRICK: Yes.
Mr Hood: Without conjecture.
Mr Foley: Without conjecture. This is one possible explanation. Most of the pundits—most of the people out
there speculating—are talking about a long period of depressurisation of the aircraft. After the transponders went
off, if the pilot was doing what they believe he was doing, there was a period where he depressurised the cabin
and the cockpit to incapacitate the passengers. This may have been as long as an hour. You've read, no doubt, lots
of these hypotheses. Larry Vance goes into this in some detail. What I think they failed to understand is, while
you don an oxygen mask and prevent the worst of the hypoxia situation, you're flying an aircraft at 40,000 feet.
So, if you like, you're taking that aircraft from sea level to the height of Mount Kosciuszko in about 20 minutes
and then you're taking it, over the course of a couple of minutes, to the height of Mount Everest plus 10,000 feet
in terms of altitude. The first and most egregious risk to anyone on that aircraft is hypoxia. But, over a protracted
period, you will find that, if you're exposed to that sort of altitude, you'll get decompression sickness too.
Perhaps I can take you to an NTSB report of March 1994, where there was actually an incident onboard a cargo
aircraft. It was a DC-8 and they'd had some maintenance to an emergency exit on the ground. I'm reading from
the report:
Later, during climbout, the flightcrew was unable to pressurize the airplane. Despite objections from the other crewmembers,
the captain elected to proceed with the flight. The crew donned their oxygen masks & a climb was continued to a cruise
altitude at fl330. Shortly after level off, the captain became incapacitated from decompression sickness. The first officer took
command—
and they landed the plane. The probable cause, which is what NTSB do, states:
The captain's improper decision to conduct flight at high altitude in an unpressurized airplane, which resulted in his
incapacitation from depressurization—

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within several minutes. Most of the people sitting in their armchairs looking at MH370 are saying that the aircraft
was depressurised for up to an hour. The pilot of this particular aircraft was 51 years old and overweight, and, if
you look at the pilot in command of MH370, he was 53 and overweight. So there's one possible—I'm not saying
that happened and I hate to speculate, but it's at least one plausible scenario.
Senator PATRICK: I'm just a bit perplexed that you have absolute conviction about what happened at the
end of the flight, from very few data points, but no understanding—or no ability to give any definitive
description—of what happened in those early stages of the flight in terms of whether or not a pilot was still in
command.
CHAIR: Some of these things can be interpreted with confidence, and others, in the absence of another
explanation, would exercise your mind as to what happened.
Mr Foley: Perhaps I can just sum it up for you. Today, we have an analysis of the flap that tells us it was
probably not deployed. We have an analysis of the final two transmissions that tell us the aircraft was in a high
and increasing rate of descent. We've got almost 30 pieces of debris from around the African coastline, some from
within the fuselage which indicate that there was significant energy on impact—we won't hazard a guess at how
much. So we have quite a bit of data to tell us that the aircraft, if it was being controlled at the end, wasn't being
controlled very successfully. The flaps weren't deployed. Given the timing, that first logon request, if you like, is
most consistent with a scenario where the aircraft had exhausted its fuel. So we have quite a lot of evidence to
support there being no control at the end. That's the totality of the evidence.
CHAIR: Can I suggest something, because I could go for an hour here. I know that some members of the
committee have had approaches about this, and there's been some public speculation that this committee might
take on a references inquiry in relation to this search effort. I don't think there's any mood for that. No-one's
expressed anything to me. But it might be useful—through you, firstly, Dr Kennedy and, you, Mr Hood—if we
could invite Mr Foley to give the committee a briefing when we've got a bit of time and space—
Mr Hood: We'd be delighted to.
CHAIR: and then each of the members with a particular interest can exhaust their lines of inquiry. It might
equip us better for an inquiry, if there's persistent pressure for us to contemplate an inquiry. I'd leave that to the
next chair, to be honest. But it might help us in managing that.
Senator PATRICK: I think that's an agreeable path.
CHAIR: Are you patient enough to wait until we get together?
Senator PATRICK: Absolutely. Can I ask one more question?
CHAIR: Yes, of course. You can ask as many as you like.
Senator PATRICK: In your report, the pilot had his mobile phone on, and we all know that's bad during a
flight.
Mr Foley: No, the co-pilot.
Senator PATRICK: The co-pilot, sorry. I apologise. I've actually been in the jump seat while landing at an
airport—I won't mention which airline, and it was a long time ago, before 9/11—and I watched mobile phones
being turned on by pilots. Is that something that's common in this type of analysis? They picked this mobile phone
up as the aircraft was going over Penang, I think, so it logged on and did its own handshaking with the plane. Is
that common?
Mr Hood: We do find that from time to time. In fact, I think there's an ATSB investigation of an Australian
aircraft on descent into Singapore where the captain had the mobile phone on. It wasn't so much that the mobile
phone interfered with instruments; it was the distraction factor of it.
Senator PATRICK: Sure.
Mr Hood: When you go into Singapore, all of a sudden you get SingTel logging on and you get all the SMS
messages. So we do see it from time to time, and we certainly discourage it in terms of practice.
Senator PATRICK: Sure. You can't make referrals, though, can you, for—
Mr Hood: No. Once again, these are reported to us and conveyed also to the Civil Aviation Safety Authority.
It's a matter for them.
Senator PATRICK: The best thing we can say to all the pilots out there is they're being watched!
Mr Hood: They are.
Senator PATRICK: Okay. Thank you.

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CHAIR: No-one else has any burning issues? No. Mr Foley, before you go, you've been an impressive official
witness before us today. Truly, you really were able to take the questions and understand them, and give good,
plain-English answers, which you could have avoided doing. With your efforts over the four years, it's got to
torment your soul, as much as anything else—
Mr Foley: It certainly does.
CHAIR: doing a job like that. Our thanks to you for that. With Dr Kennedy's agreement, we'll send Mr Hood
an invitation for you—the good doctor here will make arrangements—and we'll try and get some time and space
when we're not interrupted, because it is a very, very serious question.
Mr Foley: My very great pleasure.
CHAIR: Mr Hood, thank you. We know what preparation goes into coming here. We thank you and, through
you, all your staff, and we wish you all the very best in your journey home. We'll now suspend until 3.55 pm.
Proceedings suspended from 15:40 to 15:55
Airservices Australia
CHAIR: We'll now resume this budget estimates for 2018-19 of the Rural and Regional Affairs and Transport
Legislation Committee. Airservices Australia is with us now. Welcome to you and your team. Thank you for all
the effort you've put into being here. Do you wish to make any opening statements?
Mr Harfield: No, Senator.
Senator COLBECK: I want to ask some questions about the implementation of the new systems in Hobart.
I'll start with the Aircraft Noise Ombudsman's report into complaints, following the introduction of the new flight
paths over Hobart. Have you accepted the recommendations in the ombudsman's report?
Mr Harfield: Yes, we've accepted all 13 recommendations.
Senator COLBECK: How can the community be assured that all of those will be implemented? What
measures have you got in place to demonstrate that, particularly community consultation?
Mr Harfield: The assurance that can be given is that our response to the noise ombudsman's report said that
we had accepted the recommendations and that we had actually conducted our own internal systemic review,
which was completed in December and which we've posted up on our website and given to the community in
Tasmania. It shows that the actions that we're taking out of that are very consistent with the recommendations
made by the noise ombudsman. The noise ombudsman will now publish those recommendations, with our actions
associated with them, and they'll be tracked on their website, as well as on the Airservices website.
Senator COLBECK: In the report, the ombudsman said that it was her view that Airservices did not consult
with the community prior to implementing the paths. She also said that Airservices did not provide her with the
evidence that it had undertaken an assessment of the social impact on the community, as it is required to do under
the EPBC Act. Do you accept those findings?
Mr Harfield: We've been on the public record, prior to the noise ombudsman making her findings, stating that
we did not do the consultation appropriately in Hobart. That was actually admitted in October last year. That was
an own goal by us that we didn't do it appropriately before implementing the flight paths. As a result, that's where
we picked up a number of complaints and, subsequently, the review has occurred.
Senator COLBECK: Is that an admission that you're in breach of the act?
Mr Harfield: No, Senator. What we didn't do was the appropriate consultation. The issues around assessing
the social impact elements is that we need to work through to an extent—for example, the noise ombudsman's
report referred to the fact that we didn't take into account that there had been bushfires through that particular
area. We're trying to work out how that impact is associated with the flight path change. It's actually quite a broad
definition, but we have not breached the act.
Senator COLBECK: According to what I've got in front of me, and as I said to you in my question, you had
not provided her with evidence that you had undertaken an assessment of the social impact on the community.
There's nothing about a bushfire in that.
Mr Harfield: No, but that was the example given in the report of what was meant by 'not assessing the social
impact'. We didn't provide the evidence; however, our assessment takes that into account; it just wasn't explicit—
not that we took into account the bushfires but that social impact. As we said, we did not then do the appropriate
consultation before we did the implementation.
Senator COLBECK: So you're accepting that you didn't provide her with the evidence but you see that as
being different to having undertaken the assessment?

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Mr Harfield: Yes. Our environmental assessments are conducted in accordance with the guidelines, the
provisions of the EPBCA Act. Because if we, for example, deem the changes to be significant, we need to refer it
to the minister under the EPBCA Act. This was not assessed as being significant. As a result of that, we also
didn't do the right stakeholder plan and do the right appropriate consultation before implementing the change.
Senator COLBECK: In the context of the implementation of the new scheme, there's a report in The
Australian on 19 May which refers to a dramatic spike in safety breaches, including loss of separation on four
separate incidents, and two loss of separation and one loss of separation assurance incidents related to the new
paths, and 22 safety incidents related to failures to comply with the new routes. Can you give us an explanation
around those claims, please?
Mr Harfield: Absolutely. It's easier to work with a diagram. If I can have that tabled, I've got multiple copies
for all the senators that might explain it.
Senator COLBECK: That might assist.
CHAIR: Just wait. It will take us two seconds to evaluate that and then you can refer to it in the Hansard. Do
any senators have any objection to the tabling of the map and plan to assist in this? There being no objection, we'll
table that.
Mr Harfield: So if you refer to the diagram, I would like to highlight the area in the yellow dashed box,
which has got Copping and Denali there. That's the area that is in dispute, the implementation of the flight path.
Where you see the red lines is where the flight path used to be. It used to be a spread. It wasn't consistent and that
was before September 2017. The white line there is the flight path that was implemented. We implemented what
is called a standard terminal arrival route, which provides consistency for the flight rather than being relatively
splayed. The issue is although it is in the vicinity of where the other flight paths are, there has been much more of
a concentration because it allows for predictability and sustainability and for improving safety.
If you go up to the north of Hobart where you've got the red dashed box, that's where the air safety incidents
reported on 19 May occurred. There were only two losses of separation during the period that wasn't before as
reported. Those losses of separation were between the same company. One was with the aircraft on descent and
the other was an aircraft on climb. In the first incident, the aircraft got no closer than five kilometres with nearly
1,000 feet between the aircraft diverging. In the second incident, the aircraft were no closer than eight kilometres
and diverging, but they weren't associated with the change of the flight path we made earlier. We continue to
monitor the safety of any airspace, regardless of whether it's Hobart, and sometimes when you do change things
there is what we call heightened implementation risk. However, the way that those incidents were reported is not
correct in the assertions that were made.
Senator COLBECK: So what do you attribute the loss of separation to then?
Mr Harfield: The loss of separation in both cases was when the pilot didn't meet an actual height requirement
that is actually specified in the approach plate, which most aircraft for whatever reason—and we're in contact with
the company to make sure it's rectified. On both occasions, they released the aircraft from a height restriction and
they busted the height restriction. That was picked up and rectified at the time.
Senator COLBECK: So, there's some company involvement in this process?
Mr Harfield: Yes, with all safety incidents there is—we have letters of agreement with all the airlines and
airspace users and, when there is an incident, we actually work with airlines and airspace users to make sure that
we can make things safer. On both of these occasions, these were classed as pilot attributable. It wasn't air traffic
control related. It was a mistake made, but we continue to work to make sure the system remains safe.
Senator COLBECK: I think we're at cross-purposes. I took it that you were attributing that there was a—let's
call it a mission. It's probably not the right word, but something that the airline had done which permitted or
caused the pilot to make the decision. That's not what you're saying?
Mr Harfield: No, not at all.
Senator COLBECK: The fact that they were from the same company really has no relevance. In the broader
technical scheme of things, it's just a coincidence that they were two aircraft from the same company that were
involved in each of those incidents.
Mr Harfield: Correct.
Senator COLBECK: It doesn't change the fundamental elements of the incidents—or not?
Mr Harfield: It doesn't change the fact there was a still a loss of separation event, and we continue to treat it
as seriously, regardless of a range of what we call separation standards. They're the minimum distances that you
can allow aircraft to come together. They've got buffers and buffers associated with them so that, as soon as you

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infringe the separation standard, you don't get into close proximity, and we take every one of those seriously,
regardless of whether the infringement is one centimetre, a mile or two miles. As soon as there's an infringement,
we investigate fully and make sure that we make the rectifications that are required.
Senator COLBECK: So, your attribution to cause at this point—and I say 'at this point' advisedly—is around
implementation of the new system and familiarity with compliance with the new system?
Mr Harfield: I wouldn't characterise it in that particular way. The two incidents were what we would class as
an operational deviation where there's been a failure to comply with the rules which has led to a loss of separation
event. We get those loss of separation events in other parts of the country—it's not just in Hobart—and it's to do
with requirements. We do see a heightened risk of those when there is a change in the system—when it's a flight
route procedure et cetera, there is a heightened risk associated with a potential for a failure to comply.
Senator COLBECK: Which goes effectively to my next question which is about evidence that you might
have that the new system is safer and more efficient—but that's more to do with its broader operational
parameters, I suspect.
Mr Harfield: Yes. We've put in what's called a standard terminal arrival route into Hobart and what they call
standard instrument departures, which are applied at all major aerodromes, and we've been on a pathway at some
of our other locations, such as Rockhampton and Mackay recently. It's where we're seeing traffic growth and
where, as you've seen from that map, previously, the aircraft have tracked from certain points and come down,
and they've just converged on the point with that white triangle just south of Dunalley. As traffic has increased
down in Hobart, we need to actually put in more regularity and systemise the approach there to manage the
increase in traffic.
One of the reasons for having that predictability is that it allows the aircrafts to be managed more efficiently
and it allows them to get into a stabilised approach to land much sooner, and they can set up in a very busy time
for the pilots. What we have seen since the new flight path and the stars have been implemented is a reduction in
what we call 'go arounds'. That's when the aircraft goes around because it is in an unstable approach. We've seen a
reduction in the number for the corresponding period 12 months prior. So we're seeing evidence that the system
integrity and safety is improving, with improved efficiency from the systemisation. That indicates that that's
where we need to continue—otherwise, we'll get into a situation where air traffic growth for Hobart will be
restricted.
Senator COLBECK: So you do see there are some improvements from the changes?
Mr Harfield: Absolutely.
Senator COLBECK: And, there are, obviously, higher levels of safety and efficiency from what you're
implementing?
Mr Harfield: Hobart is an area that is continuing to grow and the air traffic's growing but it's something we
have to look at across the entire country because we're experiencing year-on-year growth of three to four per cent
in air traffic continually. We're expecting to see a 60 per cent increase in traffic over the next 15 years and we've
got to continue to maintain the safety and efficiency of the system. That doesn't take into account that, with this
change in implementing it, we made a mistake at the start and didn't do the appropriate consultation. We're not
taking away from that. Now, going forward, we're going back out to the community. One of my executive
managers was down there in the last three days talking to the community as we actually work to make further
improvements with this particular track. We're working with the community and consulting, pushing that track
further east away, which requires air space changes and a number of things. But we're working through that with
the community as we speak.
Senator COLBECK: You would refute the assertion in The Australian that few if any of the safety or
efficiency benefits have been realised as part of the program?
Mr Harfield: Yes.
Senator COLBECK: And you haven't reactivated any of the other navigational aids or changed any of the
other approaches?
Mr Harfield: There is a ground based navigation aid called a VHF omni-direction range, currently known as a
VOR. It is a ground based aid that is at the airport. We've had to turn that and relocate it due to the runway
extension, because of where it was. That has been relocated and now we're working through its future because of
our move to satellite based navigation—and having a backup navaid network—and what role it continues to play.
But it was turned off and moved as a result of the runway extension.
Senator COLBECK: Has it been reactivated?

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Mr Harfield: I have to take it on notice, because there's a time you have it on and you're testing versus when
you have it operational, and I'm not quite across that.
Senator COLBECK: Are there any proposals to provide noise relief to the residents, apart from relocation of
the flight path?
Mr Harfield: We made a change in March, after the initial change in September, where we adjusted the flight
path to where it is today. We're continuing to work with the community to find where we can actually get relief,
while we work through the longer term proposal. I'm really reluctant to just sit there and say, 'Yes, we'll do that,'
because we've obviously got to measure up the safety versus the benefit, and I also don't want to go through and
do exactly what we did before and not consult appropriately with any change.
Senator COLBECK: While you're finalising that process in Hobart, the implementation of the system in
Launceston has been put on hold; is that correct?
Mr Harfield: Yes. We're making sure that we get our community consultation and process right before we go
and do something there.
Senator COLBECK: But it's not going to change the fact that the new system will be implemented?
Mr Harfield: At some stage we will do it, otherwise you'll restrict capacity of the airport.
Senator COLBECK: Okay. Thanks, Chair.
CHAIR: Thank you. Senator Patrick.
Senator PATRICK: Thank you, Chair. Mr Harfield, I think I signalled to you that I was going to ask you
some questions about costs, particularly in relation to regional air travel. I asked for some information under FOI,
and I thank you for providing me with a very extensive response to that, which set out the negotiations that
Airservices were having with Defence in relation to the OneSKY project, trying to control the budget. I want to
read out one of the letters in that series, which was written by you—and I presume you're familiar with the letter
I'm talking about. I'll just read the paragraph. You're writing to Defence: 'To assist your considerations of the
options, I would like to reassure you that Airservices will provide, at no cost to Defence, the facilities and
equipment necessary in Brisbane and Melbourne centres to accommodate the consolidation of Darwin,
Townsville and Nowra approach services. We would intend to recover these costs by extending our existing
charging regime at Darwin and Townsville for civilian aircraft'. So, on the face of that, it appears you're absorbing
a cost relating to a Defence project and that you are going to then subsequently charge that to customers or air
travellers at Darwin and Townsville. I'm just giving you an opportunity to explain what you meant in that
paragraph.
Mr Harfield: Yes. I'll start off and then I'll hand over to Mr Logan, the chief financial officer, to work through
the charging mechanisms there.
Senator PATRICK: I am interested in that.
Mr Harfield: To give you context, that's one letter in a range. What's in there is a snapshot to broader
conversations that are going on. If you have a look through the documentation, particularly at the memo of 30
November, you will see where it goes into more detail about why that's the case. During the negotiations, Nowra
was taken out of play. That wasn't a change at the particular time, as we were trying to explore how we could
come back to what was, in the end, a budget target of $521 million for Defence's portion. In doing so we either
maintained capability, or enhanced the capability but reduced the cost burden. One of those proposals was the
consolidation of Darwin and Townsville approach, the air space that's around the airport. So the tower remains—
it's just the air space around—and consolidating it into Brisbane centre, along lines of what we already do with
not only the civil side but also what Pierce approach has done from our Perth facility, Airservices does Edinburgh
approach for Defence. We do it for Melbourne. For example, here in Canberra, for 20 years it's been done from
Melbourne.
Senator PATRICK: So the tower basically takes control on finals?
Mr Harfield: The finals and the take-offs and the aerodrome. It's that air space that it's around. To put it
bluntly, instead of the military controllers sitting in a windowless room in Darwin, they're sitting in a windowless
room in Brisbane.
Senator PATRICK: I understand.
Mr Harfield: Ninety per cent of the traffic in Darwin is civil traffic. Having it much more integrated into the
civil network and civil system and having the military controllers work side by side with the defence controllers
allows us, under our existing regime—because we do charge already in Darwin—to absorb or cover the cost of

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that equipment, because of the economies of scale—as part of our Brisbane centre and it's assigned to actually
providing a service to civil aircraft. I'll leave Mr Logan—
Senator PATRICK: That's recovered in the landing charge or in some other charge?
Mr Harfield: I'll hand you over to our chief financial officer to walk you through our charging and then what
we do.
Mr Logan: Maybe if I walk through a little bit of the cost structures in the first instance. The proposition that
we were dealing with was a number of different instances of the system around the country, and in this case the
likes of Darwin, Townsville and Nowra. We saw an opportunity to, rather than have a separate instance of the
system sitting in Darwin and sitting in Townsville and needing to synchronise those back with the main systems
for business contingency purposes—we were already building capacity in the likes of Brisbane and Melbourne to
operate, in effect, the complete airspace so that we had some duplicated capacity between Brisbane and
Melbourne. Rather than the cost associated with implementing an instance in Darwin and an instance in
Townsville associated with the approach airspace, we could merely use the contingency that had already been
built into the system in the case of the Brisbane environment.
Senator PATRICK: You're talking about the functional contingency, not the financial contingency?
Mr Logan: Correct. Business contingency. The word that we use in terms of contingency is: if any part of the
system was to fail for any reason, we've got failover into different compartments.
Senator PATRICK: Redundancy?
Mr Logan: Yes. Based on the capacity that we've got in the Brisbane environment, the marginal cost was
considered to be almost negligible—albeit that we will still go through a cost allocation exercise when we start to
get real and final costs coming through. As Mr Harfield said, we already charge for services in both Darwin and
Townsville associated with equipment that we've put in primarily for—the driver for us putting in the equipment
in Darwin and Townsville was for civil operations in those locations. In both of those locations, the number of
movements is around 90 per cent civilian and around 10 per cent Defence in terms of movements through both of
those airports. At a point in time in the past we've put equipment in to help to facilitate some of the civilian traffic
movements, instrument landing systems, which, primarily, are the large ones.
The savings that we've achieved, as Mr Harfield has spoken about before, mean that the costs that we were
already recovering in that environment—we're looking at a lower cost going forward. The potential for an
incremental cost in the Brisbane environment is considered to be very, very small. We think that the savings that
are generated across, ostensibly, our overheads as an organisation—that we will be able to absorb that cost. If you
look at the cost of an air traffic management automation system—which is what CMATS is—it is typically about
five per cent of our cost base in terms of the recovery of those acquisition costs, because we are taking that
original cost and we're effectively recovering it over the life of those assets.
Senator PATRICK: Sure, but, just to be clear—and this is where I'm trying to get to—firstly, you had a fixed
price arrangement with Defence and you were dealing with cost blowouts, and I get that. You had a situation
where you wanted to reduce the scope, and you were thinking of smart ways of doing that.
Mr Harfield: There was no cost blowout. Defence's affordability envelope—or their budget they had to spend
on the CMATS equipment was 521—
Senator PATRICK: But you had an original scope of supply that you had attached a price to, and in those
negotiations you were saying: 'Hang on, we're exceeding costs. We now need to work out how to reduce that cost
to remain within that envelope.'
CHAIR: I've been here listening intently, and I'm going to open by saying—this is my fault; not yours—I
haven't understood one thing that either of you have said to the burden of his question. I'm going to have to ask
you to dumb it down a bit. What we have here: Defence has got a problem, they're out of pocket, they don't have
enough money, you're going to fix their problem with capacity you've got that's not going to cost you anything
more and you're, however, going to recover additional money. Now, the reason we're a bit exercised about this—
Mr Harfield: No.
CHAIR: No, let me go. That's my understanding. You'll be able to put that to rest. We've just been around
these communities, and I'm telling you there's a lot of pain and suffering in regional air services—a lot of horror
stories. We will fight tooth and nail to see that not one more cent goes on the cost of an airfare to Darwin or
Townsville or these country centres. You might have to break it down and unpack it a bit further for me. I don't
know how my colleagues are going.

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Mr Harfield: Senator, to your latter point: when we're talking about covering the costs, none of that—I've
been on the public record for the last three years; we have held our prices at our July 2015 level. I am on the
record and have said that, going forward, we will be holding our prices and not increasing our prices to what their
current levels are for the rollout of OneSKY. In doing so, we're investing in a range of things. It's actually part of
our regional airfares submission. We have had that detailed in our corporate plan, and our new corporate plan
going forward is proposing that we continue holding our prices for at least another five years. In other words, it's
within our existing cost base, absorbing these costs.
Senator PATRICK: But—
CHAIR: Sorry—maybe you're going to ask this question. It's gone. Why is that paragraph in that letter?
Senator PATRICK: You talk about this capacity in Brisbane and a cost allocation—so you're trying to make
sure there's no additional money. You've said there may be a small amount and you'll sort that out at the end. But
then you talk about allocation of that cost to somewhere. On the plain reading of what you've said, you've said
that, 'We would intend to recover those costs by extending our existing charging regimes at Darwin and
Townsville for civilian aircraft.
CHAIR: Hold the phone.
Senator PATRICK: That's the fundamental problem. If you said to me that there's a cost increase somewhere
and you amortise that across the entire system, I could get that. But for some reason it appears, on the face of it,
that you are going to take whatever cost allocation that is, however small, and direct it at Darwin and Townsville.
I'm interested in the mechanism by which you allocate charging to these regional airports.
Mr Harfield: Going back, that's one letter in a history of letters. As you can see, it goes on—and the context,
as I said, at the start. If it's helpful, you need to put all of those together. I've got the final letter and what the
agreement is where it happens.
Senator PATRICK: But the agreement gets to the point of agreeing a scope change with Defence and a final
number.
Mr Harfield: Yes.
Senator PATRICK: This is another subpart of the conversation. The committee has a general concern that
you would allocate a cost—in the words here: you would recover the costs by 'extending our existing charging
regimes at Darwin and Townsville'. Do you amortise costs and charge equally across the entire network or do you
allocate costs, in general, to each centre?
Mr Logan: We've got a combination of both. In the case of en route charges, effectively it's a network charge.
I would suspect that, looking at these numbers, that's where the funding for this would come from. When the letter
was written, I guess we were trying to work and understand where the best place was and how to fund it. Given
the level of materiality and given that it's already operating out of a latent contingency in the system, which would
have been charged through the network charge, then that's where it would be recovered.
Senator PATRICK: Can you talk about the second element of that? The network charge for en route and then
there are other charges that are levied to, I presume, airline operators—
Mr Logan: Yes, that's correct.
Senator PATRICK: That's not a landing charge—the landing charge goes to the airport, doesn't it?
Mr Harfield: The airport landing charge, they actually charge separately.
Senator PATRICK: So there's some fee that's paid back to air services from the airline?
Mr Logan: Yes.
Senator PATRICK: And you're saying that you allocate those charges according to the location where the
flight is going to?
Mr Logan: Yes. In this case, Senator, it's for the instrument landing systems at the location.
CHAIR: Can I ask this: some traveller in Darwin, as a result of this decision, is going to pay more money at
some stage—correct?
Mr Logan: No, Senator.
CHAIR: Read that paragraph again, because I've misunderstood it.
Senator PATRICK: We would intend to recover these costs by extending our existing charging regimes at
Darwin and Townsville for civilian aircraft.
CHAIR: Full stop. Is that a new charge into Darwin?

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Mr Logan: At the time the letter was written—


CHAIR: No, please. We'll come back to that. I'll allow you to talk until you've run out of breath. Is that a new
and additional charge in Darwin?
Mr Logan: No.
CHAIR: I don't know whether you've got to read it a third time, but that suggests that it is. Prima facie, that
statement suggests that it is.
Mr Harfield: We already charge in Darwin today for the equipment in Darwin, and the intent of what that
was saying is that we would end up extending or covering. Our charging regime would absorb the costs of the
equipment that would normally be in Darwin and Townsville being relocated into Brisbane. We have a charging
regime which exists today in which we already charge, I think, $1.86 or something like that per tonne into
Darwin, and part of that is for the navigation aids and the instrument landing system. In going forward, we would
accept those costs—
CHAIR: We'll get to that. When you say, 'We will intend to recover these costs by extending,' is that a
reference to time?
Mr Harfield: We're extending our charging regime to absorb those costs.
CHAIR: Are you any the wiser, Senator Patrick?
Senator PATRICK: What is being said in that letter is different from what's being described here. I'm happy
for you to say that that letter is misleading because it's out of context, but I would like to know the charging
retime. I think we're getting to that. You guys are saying that, for each airport, there is a charge, and it sounds like
it's a per-tonne charge for aircraft for the landing phase.
Mr Logan: That's correct.
Senator PATRICK: You're a monopoly supplier, so I guess you'll have no problems tendering to the
committee what the charge rates are for each regional airport around Australia.
Mr Logan: Absolutely.
CHAIR: I'm sorry; we're going to interrupt, but we're going to come back to it. We're going to go to Senator
McKim and then we'll come back to this.
Senator McKIM: Good afternoon. I wanted to go back to the issue that Senator Colbeck was asking about:
the change in flight paths to Hobart International Airport. In relation to the diagram you've tabled, can you
confirm, firstly, that that doesn't show all of the previous flight paths and about eighty per cent of previous flight
paths actually aren't shown on that?
Mr Harfield: This is only showing the flight path that is the one that the community has raised.
Senator McKIM: So visual and VOR paths aren't shown on this.
Mr Harfield: Not all of them, no.
Senator McKIM: Are any of them shown on this map?
Mr Harfield: The original one that we're talking about is those red lines. Those red lines are the original flight
path prior to September 2017. It is the one to which we made the adjustment that the community has—
Senator McKIM: Okay, but visual and VOR paths for this period are not—
Mr Harfield: No, this is not trying to show all the flight paths.
Senator McKIM: Okay. Didn't the ANAO report highlight that this is misleading when shown at community
consultation?
Mr Harfield: They said that a previous chart that we have—not this particular chart; this chart has been made
just for this particular hearing—
Senator McKIM: Was that previous chart one that didn't show the visual and VOR paths, and was that why
the ANAO report highlighted it as misleading?
Mr Harfield: One of the charts that was used could have been put as misleading because it didn't accurately
display—what actually occurred in that chart, if my memory serves me correctly, is about how, as you can see,
for example, the display of the red lines that are there. It's the same flight path, but each individual aircraft is
flying it differently. It was displayed as one single line similar to that white line and it did not represent
appropriately the spread of where the aircraft were flying.
Senator McKIM: And your contention would be that you have now represented that correctly.

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Mr Harfield: We're ensuring that the information that we are providing to the community is more accurate
than what was there before.
Senator McKIM: Have you provided this to the community?
Mr Harfield: No. We did this morning on questions that we could have got today referencing the safety
incidents from the article of 19 May.
Senator McKIM: By the way, do you intend to provide this to the community as part of the consultation?
Mr Harfield: Probably not this particular chart, but a chart that would depend on what we're actually trying to
consult with the community on.
Senator McKIM: I've just sent it down to my office, so it's fair to say they're going to have a look at it very
soon if they haven't already. I just want to ask about safety first. We all want to see safe airports; I'm sure we can
all agree on that. Can you just confirm, firstly, there were no loss of separation incidents at Hobart airport in the
nine years prior to the changes?
Mr Harfield: No, I can't confirm that. I would say that there were; however, I'll have to take that on notice.
Senator McKIM: Could you provide that on notice to the committee, please.
Mr Harfield: Absolutely.
Senator McKIM: I'm talking about the five months since the new paths were implemented up to 5 February.
Do you accept there were three loss of separation assurance incidents in those five months?
Mr Harfield: Say the dates again?
Senator McKIM: The five months since the implementation of the new paths?
Mr Harfield: We're looking at from September through to January?
Senator McKIM: I think it's February actually?
Mr Harfield: No, I don't think so. There were two losses of separation and one loss of separation assurance
event during that time.
Senator McKIM: Two losses of separation and one loss of separation assurance?
Mr Harfield: Correct.
Senator McKIM: There were no other incidents in that time that were related to the STAR routes?
Ms Hall: There were a number of operational deviations. That chart that you have there—in that red box up
the top to the north of Hobart—is where the incidents have occurred.
Senator McKIM: Those are from 1 September 2017—sorry, was that the date that the changes were
implemented?
Mr Harfield: Yes. If you look at the key on that chart it says: 'The location of the nine operational deviations
and two loss of separation occurrences between 1 September 2017 and 18 May this year'.
Senator McKIM: And loss of separation assurance, that fits—
Mr Harfield: That's a separate category, which is in a similar area. So the loss of separation assurance
incident was at the control. Two aeroplanes were departing and, when they departed, although the aircraft were
separated, the plan did not continue to assure the separation until the controller stepped in. They're very different
from an actual loss of separation event.
Senator McKIM: Thanks for that. How does that compare to perhaps a similar period of time prior to the
changes?
Mr Harfield: Prior to the changes, we did a comparison. We had a look at the same period of time but 12
months prior. There were not the two loss of separation events or a loss of separation assurance event during that
time but, as I was saying to Senator Colbeck, we did see a reduction in the number of go-arounds.
Senator McKIM: Post the implementation of the change?
Mr Harfield: Post the implementation. In the incidents we saw beforehand, we saw more go-arounds than we
did in this period after the implementation.
Senator McKIM: Do you have the figures for that?
Mr Harfield: Off the top of my head, it was 27 prior and 22 after; it was a difference of five.
Senator McKIM: So a reduction of five for the same period in the previous year?
Mr Harfield: Correct.

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Senator McKIM: Do you have the data for the same period in the previous years?
Mr Harfield: We can do that. I don't have it off the top of my head, but we can provide that.
Senator McKIM: Maybe going back five years, if that's data that you keep. It's your assertion that the
changes have made the Hobart airport safer—is that right?
Mr Harfield: They improved the safety of flying in and out of Hobart airport, yes.
Senator McKIM: I just want to go to some evidence you gave the committee earlier this year. You said that
Airservices had corrected the Hobart flight path as much as you possibly could and that it will be
reimplemented—it will be as close as they can get to the previous flight path.
Mr Harfield: Sorry, Senator?
Senator McKIM: This is your evidence, Mr Harfield, to this committee earlier this year. I'm advised that you
said that Airservices have corrected the Hobart flight path as much as you possibly could and that will be
reimplemented. It will be as close as they can get to the previous flight path. Do you think you've delivered on
that commitment?
Mr Harfield: Yes. You said, 'As close as we could to the original flight path.' If you have a look at this chart
again, the red lines are the ones that were originally before 17 September. The white line that goes down through
that yellow box is where the flight path was moved to in March this year and is as close as we could get back to
the original flight paths, taking into account the improvements that we're trying to make in the system. We
understood that this is just an interim measure, and we are now working with the community on a longer term.
The idea is that one of the solutions—the next step, longer term thing—we're looking at is pushing that white line
further east.
Senator McKIM: Further east, so across—
Mr Harfield: Hopefully, over the bay.
Senator McKIM: When you say 'over the bay', do you mean the bay on the eastern side of the peninsula?
Mr Harfield: Correct. Over—
Senator McKIM: Out over the water?
Mr Harfield: Yes. The reason it's taking longer is we actually have to change the airspace arrangements there
and introduce more controlled airspace to capture those flights.
Senator McKIM: Where would it come across the peninsula in that scenario?
Mr Harfield: I couldn't tell you at this point. That's what we're in consultation on: trying to work out what's
the best solution.
Senator McKIM: No worries. I want to ask about your accelerate program. Do you think your accelerate
program has had an effect on the changes made to the Hobart flight path?
Mr Harfield: I can actually say that they haven't. The reason I can say that categorically is that, when this
Hobart occurrence occurred and we didn't do the consultation, we did a systemic review. The reason we did a
systemic review is that the issues resulting in inappropriate consultation with the community were exactly the
same to a change that was made at the Gold Coast prior to the accelerate program, which was also very similar to
changes on a trial that we did in Perth—it was the same thing. We're seeing the same area. During the accelerate
program, that function was untouched, relatively—a couple of people changed but, ostensibly, it was untouched.
Part of the review is that we had to make changes, and it was one area where we've subsequently done a lot of
work. However, I can say that it wasn't as a result of the accelerate program; it was probably because we hadn't
applied that program that we continue to make the same mistakes.
Senator McKIM: Could you say that last sentence please.
Mr Harfield: In some ways, we would've liked to have taken a closer look during the accelerate program
because we were still making the same mistakes as we did previously. That's one of the reasons why we haven't
acted with haste, despite the community wanting further changes because we need to work through this properly
rather than continue to make the same mistakes.
Senator McKIM: I'm happy to hear that you intend to work through this properly. The community's a bit past
wanting good consultation and just wants a rectification of the flight path but, nevertheless—at least the
community that's been in touch with me—do you have a consultation plan?

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Mr Harfield: Absolutely. One of my executive general managers has been down in Hobart over the last three
days meeting with councils, community leaders and working out and highlighting what our forward plans are for
community consultation as we work towards to rectifying the flight path—
Senator McKIM: You're consulting on the consultation—is that what you're telling me?
Mr Harfield: Absolutely.
Senator McKIM: It's been put to me that workload stress on Hobart controllers, resulting from the change—
do you accept, by the way, that there has been an increased stress on Hobart controllers as a result of the change
to the—
Mr Harfield: No, I don't.
Senator McKIM: You don't?
Mr Harfield: No, we're not seeing any indications internally, or I haven't seen any reports to the states. With
any change that we conduct, whether it's procedures or anywhere, there is a changing environment and there is a
period of time where controllers, like anyone, have to work change as a new system, and we continue to monitor
that.
Senator McKIM: Have you done any internal review that found, at least in part, that the new flight paths
were neither safer nor more efficient?
Mr Harfield: Not that I'm aware of.
Senator McKIM: Can I ask you to take that on notice, and maybe you can have a look?
Mr Harfield: Yes, we will, but nothing's come to our attention that it's not safer. But whether there's
something in there—
Senator McKIM: That's all right. You've taken that on notice, Mr Harfield, and you can come back to the
committee once you've had a look. Airlines weren't consulted about the change originally, were they?
Mr Harfield: I don't think that's correct. For the implementation of standard instrument departures and
standard terminal arrival routes, we had a program. Hobart wasn't the only place. We'd been doing it in
Rockhampton, Mackay and Hobart. We will do Launceston at some particular stage and, as I mentioned
beforehand, we want to get this one right before we take the next step. That's been a publicly known program, and
we would have been consulting with the airlines with that.
Senator McKIM: The evidence you're giving is that airlines were consulted about the change?
Mr Harfield: That's my understanding.
Senator McKIM: Is it your contention that air traffic control staff at Hobart were also thoroughly consulted
about the change?
Mr Harfield: The air traffic control staff would have been consulted in our normal change process that we do
for any procedures or air route changes within the operation.
Senator McKIM: All of them? Does that include all air traffic controllers or a part?
Mr Harfield: Technically, they wouldn't be operating under their licence if they weren't deemed to be
competent or understand the changes that they shouldn't be—
Senator McKIM: No, I'm asking about the consultation.
Mr Harfield: There's a normal change process that we have in the operations. That would have been carried
out.
Senator McKIM: I'm asking: did that normal change process involve consulting all air traffic control staff at
Hobart about the change?
Mr Harfield: It would depend on your definition of 'consultation'. I'm not trying to be—
CHAIR: Mr Harfield, it's a pretty simple question. You've got X number of air traffic controllers; you've got a
change coming down the pike; you have processes of consultation. The senator's question is quite clear.
Mr Harfield: No, no. The thing is that they would be made aware of the change, and they would have—
CHAIR: That's not consultation. The burden of his question is consultation.
Mr Harfield: So they would have been made aware through our normal operational change processes, and
they would have had the ability to object to the change or raise any issues that they had with the change, which is
our normal process—
Senator McKIM: After the change had been made?

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Mr Harfield: No, Senator. Our requirements are that we do a safety assessment and people have the ability to
raise issues associated with that safety assessment, and that's our normal operational change process.
Senator McKIM: That includes all air traffic controllers in Hobart?
Mr Harfield: There is an ability for all controllers—the reason I'm saying that is that I can't say that all
controllers were applied, but it's available to them. I'd have to take it on notice to find what the process actually
was.
CHAIR: Prior to you designing the architecture of the change—that is, when you're mulling over what you
might or might not do, developing rules or internal regulations—there's a process?
Mr Harfield: Correct.
CHAIR: Someone's in charge of that—Fred, Betty or together. They're going to build this proposition to put
to you which you'll either agree or disagree with as a change—right?
Mr Harfield: Correct.
CHAIR: Were any of the air traffic controllers in Tasmania involved in those legs of the process, so leading
up until the point where you go: 'Bang! This is the new way'?
Mr Harfield: The normal process is that somebody from Hobart would have been involved in that.
CHAIR: There we go.
Senator McKIM: I understand that to be true, but 'somebody' is obviously nowhere near all of the control
staff at Hobart. Perhaps I could just ask you to take on notice how many of the air traffic control staff at Hobart
were consulted and the nature of that consultation. Can you take that on notice?
Mr Harfield: Yes.
Senator McKIM: Thanks. I'm running a little bit short of time here, but I want to ask: is the new route
designed specifically for regional airports, or is it based on a design that was created specifically for regional
airports rather than capital city airports—because, of course, for some bizarre reason Hobart's classified as a
regional airport not a capital city airport?
Mr Harfield: It's the same that is applied to both regional airports and capital city airports. It's the same
thing—standard terminal arrival routes and standard instrument departures. Standard instrument departures can
actually even occur at non-controlled aerodromes where air traffic control isn't. The design is that the pilot flying
instrument flight rules has a set path to depart and arrive at the airport, and it's agnostic about whether it's a capital
city or not.
Senator McKIM: I'm aware my time's up, but, as I have other commitments in other committees, the chair's
very kindly allowed me just a couple more questions. Was the new route design based on a trial at Albury
Airport? If so, why was that, given that Albury's got a much lower level of traffic than Hobart and has almost no
jet traffic?
Mr Harfield: No, it wasn't.
Senator McKIM: Isn't it the case that some air traffic controllers in Hobart actually made alternative
suggestions that weren't accepted—
Mr Harfield: I'm unaware of that, but I'll take that on notice.
Senator McKIM: thanks—and also that workload stress on Hobart controllers actually was raised as part of a
safety assessment by the tower supervisor at Hobart?
Mr Harfield: I'll take that on notice.
Senator McKIM: My final question: why don't you just go back to the way it was?
Mr Harfield: As you can see from that chart, it's very hard to go back to where it was because we're actually
taking systemisation out of the system. The whole idea—
Senator McKIM: That's your choice, though, Mr Harfield, isn't it? No-one's standing over you making you do
that.
Mr Harfield: The reason we put it in place, and one of the things that I'm very conscious of, is continuing to
maintain the safety and efficiency of the flow of traffic into Hobart, to not restrict the traffic growth that is
currently experienced in Hobart and should continue to be.
Senator McKIM: Just on that: on what basis are you suggesting that, if you hadn't made these changes, there
would have been a restriction to traffic growth into Hobart? Whose assertion is that, and on what foundation is
that assertion based?

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Mr Harfield: It is our experience around the country where we've seen traffic growth happen at regional
locations where we haven't systemised the air traffic to ensure certainty and predictability of the flight paths. One
of the big areas that we have with traffic growth is that, once you start getting delays into the system, it's actually
showing that the system is no longer necessarily at its optimum. And, particularly when you get things like
weather and other disruptive events, it is how you recover from that and keep the capacity up at the airport. The
way that that occurs is systemising and having the right predictability and consistency in flight paths so that the
pilot and controller all know exactly what is going on at any particular time. It also helps the flight crews manage
their descent profiles and their arrivals in a very high workload situation. As we sit there and we continue to go
through and we see growth, we have to be ahead of it. We can't wait for it to happen, because it's the one thing—
Senator McKIM: This has come from CASA, has it?
Mr Harfield: There was a review on, I think, either 16 or 17 February, an airspace review there that
recommended—
Senator McKIM: From CASA?
Mr Harfield: It was from CASA, because they're the airspace regulator. It recommended standard terminal
arrival routes. We have things in our corporate plan and also our normal program of trying to improve the
integrity of the airspace design across the country.
Senator McKIM: But not to implement SIDs or STARs. CASA never recommended implementing SIDs or
STARs.
Mr Harfield: They recommended STARs into Tasmania as part of the aeronautical study.
Senator McKIM: At Hobart?
Mr Harfield: At Hobart, and we've seen it around the country. We've put SIDs and STARs into Rockhampton
and Mackay as well as other ports as we've seen traffic grow.
Senator McKIM: Chair, I do have some more questions, but you have been very generous. I might try and
pop back in a bit later.
CHAIR: You're welcome back. We always look forward to you being here, Senator McKim. Senator Ketter.
Senator KETTER: Mr Harfield, my questions relate to the aviation rescue and firefighting service at the
Whitsunday Coast Airport. I understand that's been the subject of a line of questioning at previous estimates that
you might recall. We previously asked about the establishment of an ARFF service at Proserpine, and the answer
that was provided on the last occasion was that Airservices would be proceeding with the establishment of a
service there. Is that correct?
Mr Harfield: That's correct.
Senator KETTER: Can you tell me: when did the Whitsunday Coast Airport meet the 350,000 passenger
threshold?
Mr Harfield: I'd have to take on notice the exact month it ticked over, but it's been within the last 12 months.
Senator KETTER: Would somewhere around June 2017 be about right?
Mr Harfield: Yes.
Senator KETTER: That was last financial year.
Mr Harfield: Correct.
Senator KETTER: It's now been 11 months since the airport was eligible for the service. Can you tell me
what's been accomplished in that time?
Mr Harfield: As per the agreement, when an airport reaches that 350,000-passenger threshold, we put
together a plan—we call it a safety case—for implementing the fire service, which we send to CASA. How we
ramp up the service has to be approved by CASA. Our current process is that next year we will have a service on
the ground. It won't be the fully-fledged certified service; that will come online in 2020. But we'll gradually
increase the service level at Whitsunday Coast Airport over the next two years.
Senator KETTER: You say the safety case was sent to CASA. Can you tell us when that occurred?
Mr Harfield: Off the top of my head, it was in the last couple of months, and it's been approved by CASA.
Senator KETTER: It's been approved, but you say the service won't commence until 2020. Is that a normal
lag?
Mr Harfield: It's usually about two years, but because we're conscious of that lag, we're going to introduce an
interim service on the way through, as we ramp up. We call it a graduated service. We're quite conscious that

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introducing new fire stations creates a burden in a pricing sense—once we have a service in place, we'll be
charging the airlines for the use of that service. But we're also conscious, as we introduce a service, that, if we go
too quickly—and this is where we're balancing managing the risks associated with the airport and the firefighting
service—we don't want to hamper the growth by adding extra charges. That starts restricting the growth at the
airport. So we've been quite conscious of ramping up the fire service at the same time as not distorting by
charging and restricting the growth at that particular airport, particularly when it's hovering around the 350,000
mark.
Senator KETTER: Can you tell me when you commenced working on the safety case?
Mr Harfield: It would've been a couple of months before it actually reached 350,000. But, once it reached
350,000, it went full steam. We'd been watching Proserpine for a while. It would jump up to about 340,000 and
then seasonally come back to about 320,000 or 310,000. It would come up again to 340,000 and then drop down
again. This was the first year, after a couple, that it went across the 350,000 threshold.
Senator KETTER: Can you tell me—and you might want to take this on notice—how many ARFFS fire
stations Airservices has built in the last five to 10 years?
Mr Harfield: I'll take that on notice, but it's in the vicinity of five to six. But I'll get that clarified on notice.
Senator KETTER: You've had some experience in recent times. When was the last one established?
Mr Harfield: I think that was Ballina in 2016.
Senator KETTER: You say the service will commence in 2020. Any—
Mr Harfield: That is the fully regulated service, but we intend to have some form of service in there next
year, 2019. We ramp it up because there's category. The full CASA certified service will be in place in 2020, but
before then there will be a level of service but it won't be fully CASA certified. However, because we've got 26
fire stations around the country, it still has the same standards and procedures; it's just not certified.
Senator KETTER: What's the difference between the interim service and the fully—
Mr Harfield: There are a number of regulatory requirements, like the size of the fire station and the
equipment at the fire station, rather than making sure that we've got vehicles in place and people trained to deal
with the risks, and making sure that we've got the more permanent facility available. That's essentially the
difference. There's no difference in the service outcome, as I'll call it; it's just making sure that we've got all the
infrastructure in place.
Senator KETTER: So the amount of equipment and the number of staff will—
Mr Harfield: The number of fire trucks, the number of staff and all that won't be any different materially.
Senator KETTER: So you're confident that that interim service will be up and running next year?
Mr Harfield: That's our plan that we're currently working to—
Senator KETTER: You're working to it?
Mr Harfield: and we don't intend to not fulfil it.
Senator KETTER: I understand that in your visits to other fire stations you've talked about interim
arrangements and about the Queensland Fire and Emergency Services. Can you tell us what that's about?
Mr Harfield: The Queensland Fire and Emergency Services?
Senator KETTER: Yes.
Mr Harfield: I haven't; however, I am aware of visits of, for example, the chief fire officer in talking in regard
to when we're looking at places where it doesn't necessarily meet the threshold for a fire service by meeting the
350,000 passenger mark. There are places around the country that probably deserve to have some sort of
heightened fire rescue service available to them. We've looked at local communities and places—and the
Whitsunday Coast comes to mind as one—and whether the Queensland fire service, in the interim, can work with
them to be able to provide some sort of level of service as a bridging to when we actually can arrive.
Senator KETTER: So they will provide the interim service—is that what you're saying?
Mr Harfield: Not an interim service. We've helped them with the capability. In the event that something
happens between now and when we start, they would be able to assist. So they're not to run the service; that will
be up to Airservices to run. To give you an example, at a local airport there's no firefighting and no air traffic
control. We would work with the local community and the local fire service to teach them and grow their
capability—if ever you came across an aircraft accident, what would you do since we're the experts even though

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we'd never provide the service? It's actually trying to help bring up other fire services' capability to assist if
necessary, whether we're there or not.
Senator KETTER: So you can assure us that you're not trying to avoid your responsibilities to the people of
Proserpine—
Mr Harfield: Absolutely not, Senator.
Senator KETTER: and do some sort of sweetheart deal with Queensland Fire and Emergency Services?
Mr Harfield: I can say categorically that is not the case. If we are to provide the service, Airservices will be
providing the service with Airservices staff.
Senator KETTER: So, to finish off, you are definitely establishing an ARFF service in Proserpine?
Mr Harfield: Yes.
Senator KETTER: And will it be category 6 or 7?
Mr Harfield: It will depend on what aircraft are flying in at the time, but most likely, at this stage, not
knowing what aircraft off the top of my head, it would most likely be a cat 7.
Senator KETTER: Category 7?
Mr Harfield: Category 7. However, I do preface it by saying that the category level is based on the aircraft
type that is flying into the location.
Senator KETTER: It will be provided by Airservices and staffed by Airservices ARFF firefighters, working
under the current or new enterprise agreement?
Mr Harfield: Yes, Senator.
Senator KETTER: Thank you very much for that.
Senator PATRICK: Continuing in relation to the charges, I want to get some help in understanding how you
might charge, so it might be useful if you provided the committee with data, limiting the data to airports where
regular public transport flights go. That's all you really deal with, isn't it?
Mr Harfield: Yes. We would only charge—I call it the airport charge or terminal charge—where we are
actually providing a service and where we've got an air traffic control tower.
Senator PATRICK: What about Broome, for example?
Mr Harfield: We've got an air traffic control tower and firefighting service there.
Senator PATRICK: Wherever you have a service that you provide, I would be interested. Perhaps you could
provide the data from across Australia, with maybe a five-year separation over the last 15 years—that is, three
datasets—just to see how it might have changed for each of the locations. Of course, I would accept that, when
data came back, there may be very valid reasons as to why a charge might have gone up as services were
provided. That might allow us to explore that, perhaps at the next estimates.
Mr Harfield: If it would be helpful, how our prices or charges are—
Senator PATRICK: The methodology?
Mr Harfield: The methodology, the building block. For example, based on activity, when you go location-
specific, it depends on how many tonnes are flying in. It's not about movements; it's about the tonnage. We
construct some that are networked and some that are location-specific. We try to get a blend between the two
because we don't want to have a place with low tonnage costing $100 a tonne and somebody up the road pays
only $15 a tonne.
Senator PATRICK: I think it would also help our reference committee. We now have data, for example, on
some of the security costs at airports and some of the landing charges, and seeing your charges may assist us in
how they vary from location to location. A methodology would provide us with some understanding of that. I'd be
grateful for that. I just warn you that, particularly in relation to Townsville and Darwin, we might ask for that data
yearly.
Mr Harfield: Absolutely. If it's possible, I really encourage the ability to table the 30 November—
Senator PATRICK: Sure.
Mr Harfield: The reason is that there is a pertinent paragraph. As we've gone along the timeline from the start
to where we got to, we were covering that through our existing charges.
Senator PATRICK: Sure.
Mr Harfield: It's on the basis of language and letters.

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Senator PATRICK: I don't have it with me, but I'll arrange to—
Mr Harfield: I've got a copy here that we can table.
Senator PATRICK: All right. If the deputy chair would allow—
Mr Harfield: It's with a contextual piece of—
Senator PATRICK: I presume we can advertise the fact that the entire documentation set is on your
disclosure log.
Mr Harfield: Absolutely.
ACTING CHAIR (Senator McCarthy): Do you have that document there, Mr Harfield?
Mr Harfield: Yes, I do.
Senator PATRICK: There is another area that I was talking to the chair about earlier. You might be able to
help us out in relation to our inquiry into regional air fares. It's just a question as to whether you could point us to
someone who has data that shows aircraft movements into regional centres and load factors on the aircraft. To
understand why we want the data: in all the places that we've been to, we've had a situation where people have
made claims that the aircraft are always full and therefore the cost should be lower. We don't have any empirical
data that helps us untangle what's going on. Is that something Airservices has?
Mr Logan: We don't keep load factors per se. We'd be more than happy to share the data we've got in terms of
the smaller locations. We keep all of the data for instrument flight rules for aircraft flying between locations.
We've got a record of those.
Senator PATRICK: Would that identify RPT aircraft versus charter aircraft or something?
Mr Logan: I'm pretty sure we can.
Mr Harfield: It depends on how they flight planned, but we should be able to provide that difference.
Whether they were scheduled or non-scheduled is the terminology between charter and RPT.
Senator PATRICK: I won't ask you for it on notice yet. I'm just after the information because the references
committee will then be in a position to ask you, based on what you tell us you can provide us. Where would we
get the load factors from?
Mr Logan: The department may be able to answer. My only understanding is that BITRE capture more
general aviation and commercial operator information. I'm not sure of the extent to which they capture load
factors, though.
Ms Spence: A little bit earlier on, we undertook with Senator O'Sullivan to organise for our Bureau of
Infrastructure, Transport and Regional Economics to meet with the chair and whoever else just to talk about what
sort of data we collect within BITRE and also, possibly, to come up with some ideas about who we might be able
to approach to fill the gaps that exist in the data—airlines and airport operators, for example.
Senator PATRICK: That's very helpful. Maybe, rather than what you've just said, if you take it on notice—
just the data that may be able to help us, but not a request for that data—we may come back to you. Deputy chair,
through the secretary, there are no problems with them providing us with that data to share with the references
committee? Or does that present a procedural issue?
ACTING CHAIR: Senator Patrick, the references committee will write to them in relation to that.
Senator PATRICK: Okay. So we'll disregard this then.
Ms Spence: Senators, if it's at all helpful, I think the department would be very happy to play a coordinating
role so you're not being inundated by different agencies. We'd be very happy to help bring whatever sources there
are together as well, if that would assist.
ACTING CHAIR: Thank you, Miss Spence.
Senator PATRICK: That is it from me.
ACTING CHAIR: Senator Colbeck?
Senator COLBECK: That's it from here.
ACTING CHAIR: There are no further questions. Mr Harfield, I would like to thank you and the department
for your presence here this evening and to say that that is the close of this output.
Civil Aviation Safety Authority
[17:11]

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ACTING CHAIR: We are quite early, but I'm hoping that the Civil Aviation Safety Authority are in the
room. Senator Patrick, do you have questions on this?
Senator PATRICK: I most certainly do.
ACTING CHAIR: Mr Carmody, welcome. Would you like to present an opening statement to the
committee?
Mr Carmody: No, I'm fine just to take questions.
ACTING CHAIR: Thank you, Mr Carmody, I'll go to Senator Patrick.
Senator PATRICK: Mr Carmody, I just want to raise an issue with you in relation to the way in which
CASA handles mechanical incidents. In order to do that, I seek the indulgence of the chair to table a couple of
photographs just to help me to explain the scenario. There are photographs of some balding tyres and, indeed, a
report that's associated with those tyres. There are about six of them. Maybe they could be provided to the witness
as well.
ACTING CHAIR: Senator Patrick, there is just a bit of housekeeping. Some of these documents are
obviously from the previous output. Can I just get an acceptance from the committee that these documents are to
be formally accepted? Are there any objections?
Senator COLBECK: I haven't seen them yet. Do we know the source of the documentation?
Senator PATRICK: They've come from ground staff dealing with the aircraft and with the tyres. It's from a
technical reporting log that explains the circumstances which I'd like to go to.
Senator COLBECK: Are the ground staff permitted to be distributing these documents outside the business?
Senator PATRICK: I'm not sure what the situation with that is, but they have certainly been passed to me for
the purposes of these proceedings.
Senator COLBECK: I get that, but I'm just asking questions around where the documents came from and
how they got to be here in consideration of the committee, rather than—
ACTING CHAIR: What I might do is this: Mr Carmody, we're going to adjourn for five minutes while we
deliberate over these documents.
Proceedings suspended from 17:16 to 17:20
Senator PATRICK: So these photographs are of the state of a tyre for a Qantas aircraft that landed in
Brisbane. It was transiting through Townsville, this was in 2016, and the log of events shows that, due to
insufficient manpower available to carry out the wheel change, the aircraft was sent on: 'The tyre may continue in
service without safety concerns but must be replaced at the next check.' The bottom line is that there were not
enough engineers on the ground to change the tyre, so they sent the aircraft on to the next location—possibly
under commercial pressure; I don't understand the reasons why. But you would I'm sure appreciate, Mr Carmody,
the seriousness of having an aircraft take off with a tyre in that state, noting in extremis the Concorde, when it
took off from Paris, shed a tyre which went through the fuel tanks, with a tragedy at the end of that. So I suspect
you would be concerned about an aircraft that might take off with a tyre like that?
Mr Carmody: I'm aware of the matter because it was 18 months ago. It's been referred to us. It's been referred
to the Industry Complaints Commissioner, and the Industry Complaints Commissioner has reviewed the matter.
So it's gone through our internal processes. I will make a couple of points: I saw the document, which hasn't been
tabled but which you read out, that the tyre was released. So an engineer certified that the tyre was okay. I don't
know, therefore, what damage occurred on subsequent landing. I assume that's not take-off damage; that's landing
damage. An engineer certified it was suitable for take-off.
Senator PATRICK: I've talked to a number of engineers who have suggested that that sort of damage to a
tyre couldn't happen on a single landing; you might get an isolated location; the point of the two photographs is
they show that it's all around the tyre. But, in general, would that not concern you at all?
Mr Carmody: I was concerned, but, as I said, the matter was raised, it went to the independent Industry
Complaints Commissioner and it was reviewed. So, as far as I'm concerned, any matters have been resolved.
Senator PATRICK: That's noted.
Mr Carmody: There is a completely independent mechanism; it's independent of me.
CHAIR: I appreciate that. I often have a plumber come to my house and the tap is still leaking afterwards. If
that's the case, then I'd be concerned about the independence or the attention paid by an independent—

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Senator PATRICK: Can I just stop, because I think there is a step in the middle that you are missing. That is
that this gets investigated by CASA, and in this instance it was. There were concerns over the investigation and it
then went on to the complaints commissioner. The role of the complaints commissioner is not to conduct an
investigation. The complaint was that CASA had not conducted its job properly.
Mr Carmody: So it was investigated by CASA and it was then peer reviewed by another office, so a different
part of the organisation, to see whether the investigation was well founded, which we do quite often in
contentious cases. We put inspectors from a different location on to review the matter so that we have a different
set of eyes—an independent set of eyes. That was done in the process. Then it went to the industry complaints
commissioner.
CHAIR: We could spar around all day here—I hope I don't mow your lawn, Senator—I'd like you to take on
notice to supply the committee with the entire file, cover to cover: any artefacts; any photographs; any interviews,
whether audio or otherwise; any files that are held, IT, however it does. You know the drill. From A to Z, supply
it to the committee so that we can have a look at this.
Mr Carmody: Certainly, Senator.
Mr Crawford: One of the important things to be aware of is: when you look at these pictures, you cannot
suggest or assume the aircraft took off with a tyre in that condition, which has been suggested. We saw the
pictures after it landed in Brisbane. It's possible that sort of damage can be done in a landing. You can see there
are a couple of flat spots if there's been severe breaking, so it's potentially happened in the last landing. There's a
set of limits. When it took off from Townsville it could well have been within limits.
Senator PATRICK: In terms of possibilities, is the possibility that the damage that you're looking has been
there for some time by looking at the photographs?
Mr Crawford: The suggestion is that somebody did an inspection of it in Townsville and said it was
serviceable and they signed it off in the maintenance release as serviceable, so it clearly wasn't in the condition
that the photograph shows.
Senator PATRICK: I think there was a Qantas report that confirmed that the damage was there before taking
off.
Mr Crawford: My understanding is that there's a Qantas report that says that maintenance personnel
inspected and signed it off in Townsville.
CHAIR: You've seen the document, I imagine. It says, 'On arrival found one wheel tyre wear has tread
reinforcement/cut. A protected plywear (exposed).' The next sentence is the key sentence: 'It would seem that the
LAME would have liked to have taken a particular course of action but did not due to insufficient manpower
available.'
Mr Crawford: With respect, Senator, is that first statement not referring to the condition in Brisbane?
CHAIR: I hope not. I hope it's before it took off, because if you are suggesting that due to insufficient
manpower they're not going to change that tyre after it's been damaged in Brisbane—on your account—then that's
even worse for my money. My understanding of the providence of this is that this is a LAME at the point of
embarkation, is that right?
Senator PATRICK: Yes. The key point is 'due to insufficient manpower'. At Townsville they were not able
to change the power, so they sent it on. They knew it was damaged, but they sent it on.
CHAIR: I've had this experience. We can spar all day until we are pink in the face with CASA. I for one want
the file—from start to finish—so the committee can make its own judgement or assessment. As I've said to you
before, I'm concerned that you're not concerned. I may be the one who is out of step.
Mr Carmody: We'll happily provide the information we have to you. One final point I would make, which I
think is a reasonable point. If I was a LAME I would not certify an aircraft to take off if I was not satisfied,
because it would be on my head. We might have particular judgements, looking at the photographs, and I'm quite
happy to provide the material to you, but I wouldn't do it and I don't know whether you would.
CHAIR: No. But the intent of this is that if the LAME had had sufficient manpower he would have changed
the tyre. Why would he do that if there were no safety concerns? If he had sufficient manpower he would have
replaced the tyre.
Mr Crawford: But he says in the same statement that the tyre was serviceable.
CHAIR: I get that.
Mr Crawford: If he though it wasn't serviceable he should have absolutely changed it.

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CHAIR: You're a hundred per cent right, but where I'm concerned is that you're not concerned that we have
got a conflicted LAME here. Had he had the capacity, he would have changed the tyre. He didn't have the
capacity—
Mr Carmody interjecting—
CHAIR: Hold on, let me finish. He didn't have the capacity, so he sent it on. Now, do you think he's going to
write there that he doesn't have any safety concerns? He had a concern. It's expressed in that. Why would he write
the log up? Someone's pulled him over the tyre and he goes, 'Yeah, that's no problem, mate.' You don't write a log
up if you are satisfied there's no problem. He's written a log up, he's described damage and he's talked about
insufficient manpower. I don't want to spend hours on this, so I'll wait for the file.
Senator PATRICK: That's not the point of what I want to get to, actually.
CHAIR: Well, it's my point.
Senator PATRICK: I understand your frustration, Chair. I'm disturbed as well.
Senator Scullion: Can I just get a point of clarification. For the interests of completeness, the body is slightly
independent from you. So the material of the committee you are going to provide includes their deliberations as
well?
CHAIR: Absolutely.
Senator Scullion: Just for clarification.
CHAIR: Thank you for that, Minister—A to Z.
Senator PATRICK: I'll mention another incident as well that you are probably aware of, a TCAS incident on
a Qantas flight. The aircraft arrived into Sydney on 19 November 2016. The tech crew reported that, 'TCAS:
some targets displayed in wrong position last three sectors—that is, aircraft landing in Melbourne appeared 90
degrees out on final.' Are you familiar with or have you heard—
Mr Carmody: I'll have to take that on notice. I haven't got the documentation in front of me.
Senator PATRICK: All right. I can help you identify what the flight was. Here's another instance where this
was raised and CASA appears to have investigated the matter. The fundamental problem presented to me by the
whistleblower is that CASA did not conduct the investigation properly and that that's why it went to the Industry
Complaints Commissioner. Chair, I'd now like to table a document which will be part of the series that comes
back to us, which is the response from the Industry Complaints Commissioner, because it has a very disturbing
statement in there that I'd like the committee to be aware of.
CHAIR: This is in relation to the Melbourne incident?
Senator PATRICK: This is in relation to both. Concerned persons raised both the tyre incident and the TCAS
incident. And I believe another incident went to the commissioner. On the bottom of page 3 of this document
there's a very disturbing remark. I'll read it in its entirety.
CHAIR: It's not tabled yet. You can refer to it.
Senator PATRICK: I might wait until the witness has it, actually, Chair.
CHAIR: Have you got another line you can pursue? Do you know what, Mr Carmody? I've been impressed
by you, and I expect that you reflect your entire executive team, and your interest in safety. This is not directed in
any way at CASA. You're at home asleep in bed and I'm at home asleep in bed and these processes are happening
independently—but the buck does stop with you. What I'm concerned with is prima facie, until we're satisfied
otherwise, as to whether the processes need a bit of a rejig in certain circumstances. I'm not directing it at CASA.
I'm not suggesting that somehow your team sit around and go, 'Let's just lower the bar a bit further.' I know that's
not the case. So I just wanted to make that point.
Mr Carmody: Thank you, Chair.
CHAIR: You people don't come here to be belted around by us for no reason.
Senator PATRICK: Can you just help me with something. When a plane lands—and I'm showing my
ignorance—and there's that initial contact with the tyre, wouldn't impact be isolated to that spectrum of the tyre
that was in the initial contact? The fact that it continues to revolve—
Mr Carmody: It depends on whether there's any subsequent braking action.
CHAIR: Braking action.
Mr Carmody: There can be some; depending on the speed of the landing there can be subsequent braking
action.

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CHAIR: So a tyre that would not attract anyone's attention can go from being what we might say, visually, is
a reasonable tyre, to this status with one landing—
Mr Carmody: Yes, to an unreasonable tyre. From which I can see in the photograph, yes—it's only one side
of it.
CHAIR: If we were just dealing with that we'd be a bit stumped. But we've got the trigger before it leaves
Townsville that someone's felt compelled to write a log, which would suggest that they've seen some visual
damage to the tyre—it may have still been serviceable—that they would have liked to have changed. I think, at
the very least, that's a fair assessment of what we're dealing with.
Senator PATRICK: In fact, I do have the investigation report here from Qantas, and it says, under a heading
'Decision to release the tyre': 'Originally, there was a concern that the condition of the tyre in Townsville was not
serviceable but Lamie 1 stated, "The above tyre wear was present on the tyre, but the cut to the tread was not
present at the time of the inspection, or was not visible." This is inconsistent with both the AMM and the check 2
guidelines'. So Qantas were looking at this and suggesting that this was not an acceptable approach in their own
investigation of the matter.
The difficulty I've got is that these matters went to CASA for investigation, and the claim by the people that
I'm talking to is that the investigation was effectively a whitewash. That's why it was sent to the Industry
Complaints Commissioner. When the commissioner concluded his investigation, he said: 'In reaching that
conclusion, I've taken into account advice from a CASA regional manager, unaware of the specific personnel
background or operators involved in your complaint. That regional manager set out that given the overly
prescriptive nature of the CASA Surveillance Manual, failures to comply with the mandated procedures in the
CSM are not uncommon.' That's the view of the Industry Complaints Commissioner about CASA's approach to
surveillance.
CHAIR: Just a minute, the secretary's rightly pointed out that they're working at a disadvantage in not having
this document.
Senator PATRICK: Sure.
CHAIR: Can we just give it a couple of minutes? I'm nearly there. You've had the benefit of reading it.
Senator PATRICK: It's the bottom of page 3, Chair.
CHAIR: Are you able to assist to put this into context, if you can, without necessarily identifying someone, if
that's an issue? How do the two things come together? We've got a tyre in Brisbane that's obviously got this
damage. If we accept the proposition it could happen on a single landing, what brought the two things together?
Did someone go to the log book when they changed the tyre? Is that what they've done?
Senator PATRICK: What's happened is that the concern has been propagated through senior Lamies, who
are concerned that CASA are not conducting investigations properly. Something's happened on the ground. It's
something that needs to be looked at. No-one's looking for anyone to be fired over the process, but one would
expect a corrective action. The people I'm talking to are concerned that CASA are not doing their job, they're not
following through with the investigations. And when they go to the complaints commissioner, he says: 'That's
routine. They don't actually follow their own surveillance manuals in accordance with the views of the regional
manager.'
CHAIR: Would that log, in and of itself, on landing in Brisbane—you've seen the log—
Mr Carmody: Yes. We haven't got that anymore but we saw it.
CHAIR: You have sighted it.
Mr Carmody: Yep. We glanced at it.
CHAIR: From your memory of it, would that log cause something to happen? As I understand it, if you enter
in an aircraft log that the toilet down the back is not working, on arrival someone must peruse to see if there are
any current logs for effort.
Mr Carmody: Correct.
CHAIR: So would that have travelled with the aircraft and, on arrival, was it inevitable that somebody would,
as a matter of practice, check the log book—and this comes up and then they have seen that. That's how the two
things have come together, it would seem. Is that a fair—
Mr Carmody: That is essentially right.

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Mr Crawford: They essentially have a carbon document, a log, where, prior to each take-off, if there are any
findings they will write them down and determine whether it is serviceable or not. That is essentially a
maintenance release that you have there—to say that there is a condition but it is acceptable.
CHAIR: I understand that. I am interested in what happens at the other end.
Mr Crawford: When it arrives at the other end, the receiving engineers will go on the aircraft and they'll look
at that log to see if there is anything that needs attention.
CHAIR: And quite apart from any check they may have made on the tyres as a matter of practice on arrival or
prior to departure, this would trigger a special inspection perhaps if they hadn't already detected this issue? That
log would drive an engineer to go down and have a look at the tyres.
Mr Crawford: It may drive them to have a second look.
CHAIR: You'd want to hope not in this case.
Mr Crawford: No. You would hope not in this case, I agree.
Senator PATRICK: I'll be very blunt. The people I am talking to are senior—
CHAIR: Sorry, Senator. Have we agreed to table the document?
Senator Colbeck: Which one are we talking about now?
CHAIR: We are talking about the letter to the Australian Licensed Aircraft Engineers' Association dated 8
December.
Senator Colbeck: From the complaints commissioner?
CHAIR: From the complaints commissioner. Are you okay with that?
Senator Colbeck: Yep.
CHAIR: Okay, so we'll tender that and you might provide Mr Carmody and company with a copy.
Mr Carmody: I am familiar with the complaint and I am familiar with the organisation that has raised the
complaint—
CHAIR: The letter will be useful—and I'm sure Senator Patrick will refer you to sections of it if he needs to.
Senator PATRICK: At the end of the investigation—after the tyre incident, the TCAS incident—another
incident involving a Jetstar RPT was raised with the industry complaints commissioner. The very last paragraph
on page 3 sets off an alarm bell in my mind. It says: 'That regional manager set out that, given the overly
prescriptive nature of the CASA surveillance manual, failure to comply with mandated procedures in the CSM are
not uncommon.'
CHAIR: That makes it even worse. Could you look at a copy of the log. The top line has got a flight number,
978. This log suggests that it was departing from Brisbane and arriving in Townsville—the opposite way around.
That would make this more critical; if the manpower wasn't in Brisbane, it certainly wasn't in Townsville. That is
unambiguous. I think it could show the witness that without disclosing any other information. In any event, they
have seen it.
Senator PATRICK: Sure, but I've described a couple of very disturbing incidents which should have been
investigated by CASA and were investigated by CASA. People had concerns about that investigation. They went
to the industry complaints commissioner and he dealt with it by saying, 'CASA doesn't follow our manuals so
you're just going to have to wear it.' Actually, he gave them an option to appeal.
Mr Crawford: To be a little bit more accurate, what I think he's actually saying is we have policies and
procedures but sometimes people don't follow them. That's a consistency thing.
Senator PATRICK: Particularly in relation, in this instance, to investigations that concern aircraft
maintenance related problems that affect aircraft safety.
Mr Crawford: I think you'll see he refers to surveillance; he doesn't refer to maintenance activity.
Senator PATRICK: Isn't the surveillance manual the way in which they conduct—
Mr Crawford: The surveillance manual is the way you conduct audits and oversight.
Senator PATRICK: That's right. That's the point, isn't it?
Mr Crawford: A situation was reported, a condition was reported and we investigated it. We're not
conducting surveillance or an audit in that situation. We're actually investigating to try to understand if there is an
issue. It is just a nuance.

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Mr Carmody: It's a nuance I'd like to confirm with the Industry Complaints Commissioner, and I will. But as
Mr Crawford said, this is an activity subsequent to a complaint.
Senator PATRICK: But dealing with the entire chain of how CASA deals with—
Mr Carmody: We weren't surveilling this activity in accordance with our surveillance manual because it
wasn't a surveillance activity. I need to understand, really, what the Industry Complaints Commissioner is getting
at.
Senator PATRICK: Even on its own, that was a disturbing remark. Irrespective of any of the detail I
provided to you beforehand, if you've got a regional manager saying that, because of the CSM is so prescriptive,
failures to comply with mandated procedures in the CSM are not uncommon—not discretionary procedures,
mandated procedures.
Mr Carmody: I take the point entirely. I'll talk to the Industry Complaints Commissioner and ensure I
understand what it is that he means. I also take into account what Mr Crawford said a moment ago: we have a lot
of very detailed procedures and sometimes people don't follow them. There's an element of that nuance in there as
well. I'll need to get to the bottom of it.
Senator PATRICK: There's a detailed set of concerns that the federation has laid out as to what did not occur
in the investigation of the tyre matter and in the TCAS matter, and hence the relation to what I've tendered to the
committee. I don't know where we go from here, Chair. I'm disturbed by that and maybe they need some time to
look at it and respond. Could we also get the TCAS file?
CHAIR: I'm satisfied that Mr Carmody and his team will mull over this for a little bit, and we'd look forward
to a further conversation soon and not after waiting for next estimates. When you think you've satisfactorily had a
look and talked to the commissioner, you might contact Dr Thompson and we can just have a meeting for 15
minutes—
Mr Carmody: Chair, that would be fine. I'd also be happy to provide you with a specific written response on
the issues that you've raised surrounding this so you would have something formal, if that would suit the
committee as well?
CHAIR: Yes, I think that's suitable for the committee.
Senator KETTER: I have a follow-up question. The issue that gave rise to the problem is the manpower
shortage at Townsville Airport, as I understand it. Was that investigated as part of CASA's processes, and what
was the result of that? Has that been rectified?
Mr Crawford: That would ultimately be a matter for the SMS at Qantas. Their safety management system
should follow-up on that. What we do is we review the effectiveness of their SMS.
Senator KETTER: Sorry, I can't hear you, Mr Crawford.
Mr Crawford: That should have been followed up with the operator's safety management system. What we
do is we do surveillance on the operator; we look at the effectiveness of their safety management system.
Senator KETTER: Is the answer to my question that—
Mr Crawford: The issue is that, at the end of the day, we cannot determine from the photograph taken at the
other airport whether that tyre was serviceable or not. We can't by looking at that photograph. But the
maintenance engineer says that the tyre was safe to go, so he is saying it was serviceable. That's what we have to
work with.
Senator KETTER: That's not the issue I'm raising. I'm talking about the assertion in that log that there were
manpower shortages which gave rise to the fact that the tyre couldn't be changed.
Mr Crawford: We'll take that on notice.
Senator PATRICK: Just as you may have people who don't follow your procedures correctly, I put it to you
that given the choice of not letting a flight continue—one loaded full of passengers, so stopping a plane flying—
and a lineball call, maybe a LAME may release an aircraft? There are humans involved, but the point is that there
ought to be corrective action. When an issue is identified, it should be investigated properly irrespective of
whether it's Qantas, Jetstar, Virgin or a commercial charter operator.
Mr Crawford: The aircraft we're talking about carries 170 passengers, I think. I would say that maintenance
engineers working at that airline are very familiar with rules and regulations. If they thought it wasn't serviceable,
they wouldn't have released it.
Senator PATRICK: CASA appears not to have regard to its own regulations by the words of—
Mr Crawford: That's not our regulation; that's our procedure.

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CHAIR: Let's not split hairs.


Senator PATRICK: I think that's what we're doing.
Mr Crawford: It's a fact.
Senator PATRICK: If you'd provide the TCAS incident—and if you some need help identifying that, I think
it was identified within the complaints regime.
Mr Carmody: It was in the same series of complaints by the same individual.
Senator PATRICK: The individual involved is identified. It's the federal secretary of the Australian Licensed
Aircraft Engineers' Association. I think that's a pretty credible person.
Mr Carmody: I'm very familiar with the individual and have been for a number of years.
Senator PATRICK: I'm sure he's familiar with you too.
Mr Carmody: I'm sure he is.
Senator COLBECK: I want to express concern about the allegation Senator Patrick made about the LAME
on the ground—
Senator PATRICK: Look, I was just saying there's a possibility that LAMEs could, under commercial
pressure—I'm not directing anything at that particular LAME. I'm just exploring the idea that commercial
pressure sometimes comes into play, or may come into play, in those circumstances.
CHAIR: It might help if you just detach it completely from this incident.
Senator PATRICK: Sure. I thank you for pointing that out.
Senator COLBECK: Just a caution in that sense, because that's the way I interpreted what you had said. I
was concerned about that implication, because I don't think that would have been in the LAME's mind at all.
Senator PATRICK: If I said that at all, I withdraw that. I was just trying to be—
Senator COLBECK: I just don't want to cast aspersions of someone who appears to be this diligent about his
job, because that's where this whole thing started. It was someone who was diligent about his job and was
concerned about—
CHAIR: If that log entry hadn't had the words 'shortage in terms of labour', there would be nothing to see
here. It was all perfectly well explained. That to me suggests some sort of a torment: 'Had I had labour, I may
have taken some other course of action to deal with this tyre.' That's my interest with the situation.
Mr Carmody: That's what it suggests to me. I take your point; I understand it completely. That's what it
suggests to me: 'On a perfect day, if I had the manpower, I'd rather change this tyre rather than let it go; but it's
still serviceable and I'm going to let it go.' That's what it suggests to me, and that's a decision made by the LAME.
Licenced aircraft maintenance engineers make these decisions every day, and that's what they're paid to do. They
make the judgements. This person has made that judgement. But I understand your point entirely.
CHAIR: If you're sitting up in seat 19C—where I sit—and if it's a lineball call out the window there, and he's
going, 'Will I or won't I?' then I want to get off, personally.
Mr Crawford: A point I would like to make is that clearly that operator values the safety and the reputation of
safety very highly, so I think the engineers at the organisation—
CHAIR: I tell you what, there's a theme and I've run into it. This is a big statement from me: I think that
CASA's probably even more unpopular than I am. It's a lineball call, and not everyone here is going to agree with
it.
Mr Carmody: I'm not sure, Senator!
Mr Crawford: It's touch and go!
CHAIR: I go on the defence often about CASA out there. I don't want to identify them, but there were 26 old-
timers in antique aircraft—I think most of them were older than the plane they were flying—and when someone
made the mistake of telling them about this committee and that I was associated with it, life became a misery for
the next three or four hours as they came to give me a report card on CASA and everything that has ever
happened over the last 47 years. There is a perception out there. It may not be valid or entitled to be held, but
there is a perception, and I don't think these things help. Once you know those things you'll fix them. It mightn't
be fair, but there just may be some things that we've got to do to restore confidence. Maybe they're all wrong, but
there's a lot of noise out there where CASA is concerned.
Mr Carmody: And there is, Chair. I understand that. I look at the sector you're talking about and they're
flying very old aircraft.

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CHAIR: Yes.
Mr Carmody: And there are risks in that space as well.
CHAIR: Yes. They think you should stay out of their lives. If they're silly enough to go up in the old Foxtrot,
they think you should just let them crash in the middle of the Simpson Desert.
Mr Carmody: And I think there's some validity there. But, if they go to an air show, I've got some concerns.
It's a bit of an interesting mix.
CHAIR: I just saw the minister stifle a yawn. I know he didn't mean to. I think it was a signal that we're done
on this matter. Are we?
Senator PATRICK: I've got one other matter to deal with on CASA, if you're fine.
CHAIR: You have the call, Senator Patrick.
Senator PATRICK: I'd like to bring your attention to another issue that a constituent has raised with me that
also causes some concern. I'd just like to explore that a little bit with you. I don't want to identify the people
involved so, hopefully, you have at least an inkling of the matter. It goes back to 2012. Maybe I'll just put this to
you and then we can work from there.
Mr Carmody: That was three CEOs ago, if I may say.
Senator PATRICK: That's a high turnover. The story goes like this. There is a video of the events that took
place. A helicopter pilot decided not to fly an aircraft because there was an inlet caution light flashing in the
aircraft on the ground. The manuals suggested that he shouldn't fly the aircraft until that was rectified. He advised
his chief pilot of that. It looks like the chief pilot tried to convince him that he should fly, but then proceeded to
assault him.
Mr Carmody: I'm with you so far, Senator.
Senator PATRICK: Are you—
Mr Carmody: No, I'm not familiar with the matter at all. I'm sorry.
Senator PATRICK: There is video of this, which could be made available to you. The end result is that the
person was charged with assault and dealt with by the local police. It went to a magistrate. The person involved
ended up not working there anymore, not surprisingly, and indeed ended up pursuing a compensation matter and
was successful in that matter. The person who was assaulted, the pilot, has approached CASA and suggested in
simple terms that this person shouldn't be a chief pilot. I'm kind of sympathetic to his view. Somebody walked up
and said, 'I don't want to fly the aircraft; I think it's unsafe,' and they got punched around a bit. It's been put to me
that CASA hasn't dealt with this because it's a police matter. It is a police matter in relation to the assault; I agree
with that. And there is a compensation matter. But there is an issue here in relation to the suitability of a chief
pilot. Those are the circumstances. If you are unfamiliar with it, Mr Carmody, perhaps I can off-line provide you
with the details and you might provide an undertaking that you'll look at the matter.
Mr Carmody: I'm very happy to. I wasn't aware of the matter. I'm very happy to have a look at it. We do
make assessments on the suitability of chief pilots all the time.
Senator PATRICK: Because they're effectively a delegate in some instances—
Mr Carmody: Essentially, yes.
Senator PATRICK: There's a requirement for you to approve chief pilots?
Mr Carmody: Yes, we approve chief pilots.
Mr Crawford: They're a key personnel—
Mr Carmody: They're a key personnel or a key office holder in an organisation. They have a particular
function.
Mr Crawford: [Inaudible] of certain codes of conduct.
Senator PATRICK: All right; I'll have an offline conversation with you.
CHAIR: Thank you, Mr Carmody, as always. We know there is a lot of preparation for estimates for you and
your team, and we thank you for your attendance and your frankness with us. We wish you all the best in your
return journey.
Mr Carmody: Thank you, Chair; thank you members.
[18:01]

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CHAIR: We now move to the Aviation and Airports Division. Welcome. Ms Spence is pretty versatile, Dr
Kennedy. She's bobbed up with about eight or 10 different lots today. I don't know how that works.
Dr Kennedy: I wouldn't have got much done today if it wasn't for Ms Spence.
Senator COLBECK: Go to the front of the class!
CHAIR: I don't know what he's paying you, but it's obviously not enough. Would you like to make an
opening statement?
Mr McRandle: No thanks, Chair.
CHAIR: Thank God for that! I want to open the questioning. You know we've got this regional inquiry going
on. The further west we went to the more remote ports, where we call them airports or airfields rather than much
else, we consistently learnt that—for example, one mayor told us that nearly one-third of his council's rates base is
dedicated to maintenance of these airstrips. There were no real complaints about capital upgrades and the like,
because I know the Commonwealth does a fair bit of work in that space, but it seems crazy to me that they are
burdened with this. These are people who had to buy their post office because it was becoming less viable, but if
they didn't it was lost. These are people who put $8 million of their rates base into putting fibre optic through
three of their communities so that they could get on the internet. They get flogged from pillar to post, as opposed
to all other Australians. That's my introduction. What I want to know is: why can't we assist them? I mean, if we
went to Canberra or Brisbane or Sydney and asked the good people to take one-third of their rates base to
maintain their airport—and we'd have to charge them more rates obviously—we'd have civil war on our hands!
Can you put any of this into context for us? We were all there; we all heard this. This is a really serious problem
out there. Why don't we assist them in funding the maintenance?
Ms Spence: To start off with, the Australia Airports Association has done a lot of work looking at just that. It
has done a review of the cost for regional airports. Obviously matters about what money goes out in the budget
are a matter for government.
CHAIR: I appreciate that.
Ms Spence: Yes, we are certainly aware of the issue. We've worked very closely with the AAA and have
looked at the proposals that they've been putting forward. There are programs, and Mr Borthwick can talk you
through some of the support we do provide for the more remote aerodromes. But, as I said, any other programs
for support for regional airports are a budget matter and a matter for government.
CHAIR: Yes, I do appreciate that. But this is an essential service. They have no capacity for cost recovery.
They're trying to keep the route open so the flying doctor can come and pick their kids up when they break their
neck.
Ms Spence: If it would assist, we can talk through some of the support we do provide for some of the more
remote aerodromes.
Mr Borthwick: The program Ms Spence was referring to is the Regional Aviation Access Program. There are
a number of components to that program. They are, as Ms Spence mentioned, directed to support remote and very
remote communities. We have a Remote Aerodrome Upgrade Program which was recently extended in this year's
budget. That provides around about $8 million per year towards essential safety works at remote aerodromes. We
also have a remote air services scheme, which underwrites mail and passenger services to over 300 remote
communities. We also have an on-route subsidy scheme which provides, for selected routes, a rebate of air
services on-route charges.
CHAIR: We're aware of all of those. And they're very grateful for them, but this is about the maintenance.
This isn't about capital works, it's not about flights. This is about the maintenance of these airports where they
have to meet a standard for them to operate and they have to bear the cost 100 per cent on their rates base. Are
you able to tell me where any other community has to meet the costs of a local airport out of a rates base? Does
that happen anywhere else in the country other than the places we are referring to in these remote communities? I
know the answer. It's not a question. The answer is no—zero. I don't need you to do anything. I'll bite into this
myself. I just needed to know whether something was in the works that might save me having to strip down and
get ready to have a brawl my own government.
Dr Kennedy: We are definitely aware of the issue. The AAA, as Ms Spence talked about earlier, also talks to
us about this issue a lot. You're absolutely right; for regional connectivity, it's a crucial part of the story. As Ms
Spence also said, it is a matter for government, the extent to which it offers financial support in those areas. To
give you some assurance, it is an issue that we are acutely aware of and one that we do talk to the Deputy Prime
Minister about. I suspect your process will give that an opportunity to—

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CHAIR: I've got a ring in his nose. He's going out there to see firsthand in about three weeks' time. We'll do
what we have to do. Now you've answered me—and I thank you—I won't take any more time off the committee.
There is nothing in the works. We'll just have to start to generate it. We do so knowing that we have your
sympathy, if you're asked for policy advice, I hope. I have to go now. I won't be far away. I hand over to the
deputy chair.
ACTING CHAIR (Senator McCarthy): Thank you. See you in the morning. Dr Kennedy or Mr McRandle,
can I can take you to the Northern Territory. What consideration has the department given to the reasons for the
high cost of air travel within the Northern Territory and for travel from Darwin and Alice Springs to other states?
Mr McRandle: We've made a submission to the Senate inquiry into regional air fares. As you may have heard
earlier in estimates today, the Bureau of Infrastructure, Transport and Regional Economics monitors airfare prices
as well, so we take account of those things. But the department is not a setter of airfares. We don't regulate
aviation economically. As Dr Kennedy said, the work underway with the Senate inquiry is going to be a very
good focal point for a discussion around access in regional Australia.
ACTING CHAIR: I might just expand a bit, though, on factors contributing to high costs. Is it airlines
charging monopoly prices, or is it because of high airport charges, or is it other reasons that the department looks
at?
Mr McRandle: There are a number of factors that will affect the price setting of airfares. All those factors that
you mentioned could be elements. In terms of level of competition between airlines, where there is competition
that tends to push down prices, but there are obviously economic margins which airlines need to meet as
commercial entities and get a return on their investment. I think it's a really case-by-case basis, depending on the
route you're talking about, depending on whether it's internal flights for some of the smaller centres, as opposed to
the capital city flights, say, from Darwin down to one of the east coast cities.
ACTING CHAIR: So when we look at some flights—for example, from Darwin to Timor Leste—what are
some of the reasons the costs would be so high?
Mr McRandle: I wouldn't be able to give you a specific comment about an international service, other than I
know that it's not a route that would have a lot of competition on it. I haven't looked at the particular economics in
detail.
ACTING CHAIR: Has the department sought information from the airports and airlines about the basis for
their fare charging to and from Darwin and Alice Springs to southern states, or even within the Northern
Territory?
Ms Spence: As Mr McRandle indicated, we don't regulate domestic airline routes or airfares. As we indicated
earlier on this afternoon, we'd be very happy to work with the committee in terms of the data that's available and
to work with industry to identify any other sources of data that would assist the committee in its inquiry. But, as
indicated, we're not a regulator in this space. We're obviously going to be closely engaged with the committee, but
we have no levers for actually addressing some of the issues that you are raising.
ACTING CHAIR: The Northern Territory government recently pointed out to this parliamentary inquiry that
national aviation safety requirements—namely fixed airport security and safety costs—coupled with per
passenger fees like the passenger movement charge, 'result in a disproportionately high cost burden on passengers
through the territory's airports compared to other jurisdictions'. Do you have any comment on that, as a
department?
Senator Scullion: Could you give us a little more information on that? There has just been an assertion made
that it's more expensive through the Northern Territory than Perth or somewhere. Is that just an assertion?
ACTING CHAIR: No. This is in relation to the Northern Territory government's submission.
Senator Scullion: Did they indicate there was any particular area? Like we need it more because it was
international?
ACTING CHAIR: It named, 'fixed airport security and safety costs, coupled with per passenger fees like the
passenger movement charge'.
Senator Scullion: Thank you.
Ms Spence: The passenger charge, which is for international passengers, is on a per passenger basis so I can't
see how that would be disproportionate. It's just on a per passenger basis. On the other elements, I don't know if
they're influenced by volume. But, again, we're happy to look at the information, but we haven't done any analysis
to see whether there is a disproportionate impact on fares into non-territories. We'll certainly look at the Northern
Territory submission to the inquiry.

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Senator Scullion: I'm not sure if the report's been finalised. I know you have been gathering evidence. If we
could have those elements of the Northern Territory submission and the Hansard around cross-examinations of
the Northern Territory government, then we can perhaps give a comprehensive response on those.
ACTING CHAIR: It's a public submission. It's on the website. But I appreciate your comments there.
Shortage of pilots is also a real issue for the smaller regional airlines which often act as a training ground for the
larger airlines. What consideration has the department given to assisting regional airlines, particularly in the
Northern Territory, in expanding training programs and increasing incentives to attract and retain pilots? I'm
curious to know where the department would sit?
Mr McRandle: Again, the department is not involved in providing specific programs or support around pilot
training. We are, however, closely working with the industry. There is an industry group that was established this
year which is looking at the skills pinch points in aviation, both in engineers and in pilots—particularly the
experience that goes along with the qualification of pilots for particular roles. The department is providing a
supporting role for that group.
ACTING CHAIR: What is the supporting role that you provide?
Mr McRandle: We are providing a secretariat service and a research service behind the scene.
ACTING CHAIR: So you have given consideration to that area of concern.
Mr McRandle: Yes. This is an industry group that has been set up for industry to come to terms with the
challenges that the industry faces and, to a large extent, I think it will be about what solutions industry can
identify for itself. We note, for example, that Qantas recently announced that it was setting up its own pilot
training academy. Obviously, Qantas has a certain amount of scale that it can bring to these things. There are
other challenges that exist in the more remote parts of Australia where charter services and other aviation services
are very critical for getting around. But I want to be clear: the government does not provide a basis for subsidised
training or funding of those things, but we are very happy to work with the industry to identify solutions that we
can all work towards that would improve the pool of pilot training and other skill sources needed to support
aviation in those regions.
ACTING CHAIR: Who is on that industry group, Mr McRandle?
Mr McRandle: Let me refer to my notes and I'll let you know.
Ms Spence: Just while Mr McRandle is checking that, we are also working very closely with the department
of education, because there is general support that is provided from a vocational education and training
perspective. So we are making sure that they are closely engaged in the work that industry is doing as well.
Mr McRandle: The panel is chaired by Mr Greg Russell from the Australian Aviation Associations Forum.
Members include: Chris Hine, chair, Rex flight training academy; David Trevelyan, managing director, Basair
Aviation College; Mark Thompson, technical training manager, Aviation Australia; Mike Higgins, chief
executive officer, Regional Aviation Association of Australia; Stuart Aggs, director of flight operations, Virgin
Australia Group; and Aaron Keevers, process improvement coordinator, Aircraft Structural Contractors. That's in
relation to engineering aspects.
ACTING CHAIR: So you have representatives from Virgin and Rex flight on that industry group?
Mr McRandle: That's correct.
ACTING CHAIR: How often does that industry group meet?
Mr McRandle: It's a group that was established by Mr Russell. He sought the department's support to help
with management of the meetings and note-taking and those sorts of things, which we are doing. It met for the
first time in April this year, in Brisbane. It met subsequently, I think, a couple of weeks ago in Canberra, and it's
due to meet again in the coming weeks.
ACTING CHAIR: What is its terms of reference?
Mr McRandle: The terms of reference were the determined by the group itself. As I said, it wasn't set up by
the government; it was set up by industry.
ACTING CHAIR: Yet the department is paying the secretariat costs for it. Is that correct?
Mr McRandle: We are absorbing those costs from staff. It's our contribution to helping this group with their
work. I think everyone in that group is really doing it as an additional task, beyond their the normal day jobs, to
wrestle with the sorts of challenges facing the industry.
ACTING CHAIR: What are the challenges that you see, which are part of the terms of reference for this
group?

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Mr McRandle: Its purpose is to recommend strategies for a sustainable and successful aviation training sector
to support the adequate training and retention of aviation professionals, focusing on pilots and maintenance
personnel for all sectors of the Australian aviation industry and build a foundation for Australia to be the leading
exporter of aviation skills and training services for the Asia-Pacific region. They are the twin objectives of this
group. It's anticipated that they will bring together their views over the coming weeks and provide a report that
would be provided to government for consideration.
ACTING CHAIR: As an independent report?
Mr McRandle: As an independent report. And I think to a large extent identifying those things that the
industry can also do for itself, to identify opportunities. If there are areas where the government can facilitate or
help, we'll certainly be able to look at those. And we'll work with the minister in assessing how we can take some
of those recommendations forward.
ACTING CHAIR: Does this industry group look at regional areas, for example, in the Northern Territory?
Mr McRandle: Given its membership, it will look across a range of sectors. And given that it includes the
Regional Aviation Association of Australia, there'll be a strong regional element to it. There are, of course,
different challenges in terms of attracting, say, pilots or engineers, depending on whether they are in capital city
Australia or regional parts of Australia. I think those differences will come out through the work that they look at.
What are the things that are needed to support some of those skills in areas outside of capital cities? At this stage,
we need to let that group work through the issues, formulate its views and see what it is they provide to us.
ACTING CHAIR: So does this group or the department give any consideration to measures to counteract the
cancellation of flights or anything like that?
Mr McRandle: I'm sorry, Senator; I missed the beginning part of your question.
ACTING CHAIR: Does this industry group and/or the department give any consideration as to why flights
are cancelled at short notice in places like the Northern Territory, for example?
Mr McRandle: In terms of the specific services, no, it's not something that we are resourced to do or have
been asked to do. We do pay attention to a number of things that I mentioned. The bureau do a number of
monitoring exercises, including on-time performance and cancellation rates more generally, but they're looking at
regular passenger transport services—that is, scheduled airline services—to monitor the state of health of a
number of routes in Australia.
ACTING CHAIR: Can I take you to aviation security. Following the foiled aviation terror attack in Sydney
last July and the government's subsequent review of airport security by the Inspector of Transport Security, is
there consideration being given to changing security requirements at airports?
Ms Spence: Subsequent to the machinery of government changes from, I think, earlier this year, the Office of
Transport Security was moved to the new Department of Home Affairs, so questions relating to transport security
should be directed to the Department of Home Affairs.
ACTING CHAIR: Okay. I've got two more questions. I might still ask them, Ms Spence, and let's see how
we go. There's been certainly considerable public interest in regional aviation and its affordability in recent
months. If there are potential changes to security at regional airports, is the government considering providing a
funding assistance package to ensure regional aviation remains commercially viable and affordable?
Mr McRandle: There was an announcement in the budget—$50.1 million, I think, was the contribution to
assist regional airports with new security arrangements. But, as Ms Spence said, the Department of Home Affairs
is best placed to provide details on that.
ACTING CHAIR: In terms of where those airports are?
Mr McRandle: Which airports and what the program is for rolling that out.
ACTING CHAIR: Is there a potential for there to be differing security requirements between capital city and
regional airports, and, if so, how will this impact on the network?
Mr McRandle: I'd refer you to Home Affairs to give you the best response to that.
ACTING CHAIR: All right. Thank you very much. Senator Patrick, you have the call.
Senator PATRICK: My questions relate to the $50.1 million announcement. I'm doing the rounds here, just
trying to follow the trail. I was advised by Transport Security in Home Affairs that that money covers screening
equipment and infrastructure that might be required around that screening equipment but not the operational costs
and maintenance costs. Their submission to the regional air routes inquiry suggests that the cost of operating those
facilities ranges between about $530,000 and $730,000. That might not be exactly accurate, but of that order of

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magnitude—between $500,000 and $700,000 per annum. You guys look at policy related to airports and at least
have some input into the process, so I'm happy to restrict my questions to the input you may have provided. In
particular, can you just give me what your role was in relation to the Inspector of Transport Security review,
noting it reported before the changes to Home Affairs.
Ms Spence: That's certainly correct, but, as I said, it is the responsibility of Home Affairs. We'll have a go at
answering your questions, but the policy responsibility for transport security does lie with Home Affairs. We'll try
to answer questions as best we can, but I fear most of them may need to be referred to—
Senator PATRICK: But it previously resided with you?
Ms Spence: That's correct.
Senator PATRICK: The legislation changed only this year; I can't remember the exact dates—
Ms Spence: Yes, but the only point that I'd make is the decisions around the ITS review were subsequent to
transport security moving to Home Affairs. But, as I said, I'm very happy to try and answer your questions.
Senator PATRICK: My question is about your input to that review. Was your department responsible for the
review?
Ms Spence: The ITS was part of our portfolio responsibility, so yes.
Senator PATRICK: I note that that report is not going to be released, and I understand why that might be.
Noting it's a legacy report, does your department still hold the conch in respect of that report?
Ms Spence: No, that would be a matter for Home Affairs.
Senator PATRICK: It's not been made public, and I completely understand the security reasons for that. But
the cost reasons or the cost details associated with that would surely be releasable; I will perhaps seek that
through other means. Did you provide any input to that review that related to cost?
Ms Spence: No. It was done by the ITS. I think the Office of Transport Security would have provided limited
secretariat support for the ITS as he undertook the review. I don't recall any specific input to it beyond the
secretariat support that would have been provided.
Senator PATRICK: Can you check that on notice, just to confirm? You don't seem 100 per cent sure—
maybe 99 per cent!
Ms Spence: Of course.
Senator PATRICK: Prior to the transfer of responsibility to Home Affairs, what data or analysis or
considerations did your office hold in respect of security screening equipment and costs associated with it? We've
come from a policy where, if you go to most regional airports, they have something like a Rex flight that only has
34 passengers and doesn't require screening. We've progressed from that circumstance. It looks like we are
moving forward—it's not clear exactly how we're doing that—to a situation where these airports will now have
screening equipment and are now a $700,000 per annum cost, potentially, which will add to the cost of every
regional airport operator. I'm trying to understand what the situation was prior to those decisions being made.
Ms Spence: I'm conscious that the report's not going to be released. What I can say is: when the report was
provided to the minister, we would have been providing advice around what the implications of the
recommendations might be for airport types and what we would understand some of the costs associated with the
various equipment would be, but—
Senator PATRICK: So insofar as those—
Dr Kennedy: Sorry, just to be clear: the Office of Transport Security was the lead on understanding what the
costs of different types of equipment would be and what it might be across subsequent decisions. Even in the
period before they left us, in preparing advice within the department, it wasn't one of my colleagues' responsibility
to prepare the background material while the inquiry was being undertaken: what would this type of equipment
cost, where is it available and all those sorts of things. All of that information and advice is developed through
OTS and forms the basis of the government's decision around the $50.1 million program. It gets developed there.
Then, of course, it left without getting to the report. The decisions are made with Minister Dutton.
Senator PATRICK: I'm putting to you that the reason for not releasing that report relates to security and not
to cost. I typically have about 10 FOIs on foot at any particular time. I've got two in the AAT at the moment: one
appealed by the department, one appealed by me. I'm very familiar with that space. I probably will FOI that
document, seeking only the information relating to cost, and I'm pretty confident I'll get that, unless there's some
real commercial sensitivities in there. There was a different regime between the Senate and FOI. Rather than FOI-
ing you, can I ask you to table some of the material that you may have provided to the minister, specifically in

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relation to the costs associated with screening. In fact, I'm not interested in the equipment cost because that's
actually been covered; I'm interested in the operating costs and what recommendations you may have or advice
you may have given in relation to costs.
Dr Kennedy: We'll take that on notice. I'll have to go and consult with my colleagues. Because the
responsibility—
ACTING CHAIR: Senator Patrick, I'm conscious that Senator Rice has to go soon. I just want to see how
many questions—
Senator PATRICK: I'm almost to the end.
Dr Kennedy: We'll take that on notice and try and sort out what we can.
Senator PATRICK: I'm interested in the temporal position of the government over time, and we have
obviously got to a different spot. I have asked Home Affairs about that. That would be appreciated.
Dr Kennedy: Let's just be crystal clear what you seek. You seek our advice on the costs of screening
equipment?
Senator PATRICK: No, because, in this instance, the $50 million covers the cost of that equipment, so that's
no burden to the airports. I'm interested in advice or data you have around the operating costs. You might have
done analysis that said the impact of that will be X number of dollars on a terminal charge or something like that.
Dr Kennedy: I'm happy to take that on notice.
Senator PATRICK: I'm staying away from the security aspects of it. I am just looking at costs. That would
be appreciated.
Dr Kennedy: Yes.
Senator PATRICK: Are you looking at public safety zones around Sydney Airport?
Mr McRandle: We're looking at public safety zones generally across Australian airports as part of the
National Airports Safeguarding Framework. A consultation process commenced a little over a week ago with the
community around public safety zones. It will include all airports. Queensland has already incorporated the public
safety zone approach to their airports. There are others around Australia that haven't adopted it.
Senator PATRICK: That's on your website, is it?
Mr McRandle: It is on our website.
Ms Spence: We can send the link to the secretariat if that would help?
Senator PATRICK: That might be helpful, and I'm happy to help advertise that.
Senator RICE: I want to ask questions about the proposed third runway at Tullamarine, starting with what the
expected time line is going to be for the release for community consultation of the major development plan. Your
website is still just saying '2018'.
Mr McRandle: I'll ask the general manager for the airports branch and division to give you the advice that we
can for the major development plans for this third runway.
Ms Horrocks: We're expecting the draft major development plan to go out in July or August at this stage.
Senator RICE: I've got a group of residents who are very keen to see it.
Ms Horrocks: I've no doubt.
Senator RICE: They're concerned about what the potential noise and pollution impacts are going to be of the
additional runway. They are also concerned that having 60 days to respond, given this is going to be a rather
substantial piece of work, is going to be very tight for them. Are you aware if any of the MDB studies have been
completed and whether it will be possible to release them earlier than that July-August period?
Ms Horrocks: From memory, a number of the studies—and I'd have to go back and check on notice exactly
which ones—have been released through the community aviation consultation group, which is the community
forum, and they have been releasing them as they become complete so they've been passed through. I can get you,
on notice, a list of which ones have actually been released.
Senator RICE: And whether there will be more that are going to be released prior to that July-August date?
Ms Horrocks: Yes.
Senator RICE: Presumably that draft plan goes to government before it gets released for community
consultation; is that the process? The plan's done by the airport, isn't it?

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Ms Horrocks: Yes. With the major development plan there is a process whereby the airport can choose to
provide us with an exposure draft. That enables us to look at the data and at what the proposal contains and look
for compliance with the Airports Act and then provide comments back to the airport for any issues that we feel
need to be reviewed or amended. Also, where there is an exposure draft, we get comments from other agencies,
such as CASA, Airservices, and the environment department and we pass all of those comments back through to
the airport. Then, the preliminary draft major development plan is circulated for comment—for a minimum of 60
business days. Following the closure of that period the airport is required to give due consideration to all
submissions received. When that draft MDP is submitted to government the information on issues raised during
submissions is demonstrated in a report.
Senator RICE: Regarding the process of the airport giving you an exposure draft, do you expect that to be the
case in this instance?
Ms Horrocks: Yes, that has occurred.
Senator RICE: You've already given your feedback to the airport?
Ms Horrocks: That's correct, and they're working through that.
Senator RICE: Was the consideration of the exposure draft all done in-house or did you engage any external
reviewers to look at it?
Ms Horrocks: Do you mean apart from the agencies—the ones that I just said? We reviewed it internally, yes,
and then we circulated it to the agencies, as I mentioned.
Senator RICE: Which agencies was it circulated to for getting feedback from?
Ms Horrocks: CASA, Airservices and the environment department.
Senator RICE: When was the exposure draft given to you?
Ms Horrocks: About a month—six to eight weeks ago. We need to take that on notice.
Senator RICE: Have you sent your feedback to the—
Ms Horrocks: That's correct.
Senator RICE: So you turned that around in a two-month period?
Ms Horrocks: Six to eight weeks, yes.
Senator RICE: The other issue I have concerns the land acquisition for the proposed runway. We've heard the
media reports about not being able to track down the descendants of John Pascoe Fawkner. What currently is the
status of the process to track down who actually owns the land that you want to acquire?
Ms Horrocks: We're working with the Department of Finance in regard to the Lands Acquisition Act. In
acquiring land it's necessary to issue a notice of pre-acquisition declaration. That's normally issued to the
registered owner of a portion of the land. In doing our due diligence prior to the issue of the PAD, it was unable to
be determined, apart from Mr Fawkner, the descendants—
Senator RICE: Who died in 1869, I'm told.
Ms Horrocks: The current owner—since 1850. According to advice, the best way to do that was to advertise,
so we did that. We're waiting for people to nominate who is the actual owner. We've received 22 nominees so far
and we'll be working through that. We've asked for information as to their names and their bona fides—how
they're connected to Mr Fawkner.
Senator RICE: Do you engage consultant genealogists or historians or other experts to help you determine
the bona fides as to who is the genuine owner of this land?
Ms Horrocks: We'll be taking advice on how best to determine that. Obviously, it's a bit unexpected.
Senator RICE: Yes. Have you set a time period by which people have to put in their claims?
Ms Horrocks: Yes, 1 June. Then we'll work through that, obviously in consultation with the Department of
Finance and also obviously appropriate advice from there.
Senator RICE: Is this delaying the major development plan process for the third runway?
Ms Horrocks: No, it's all working at the same time.
Senator RICE: If you hadn't had this issue, when is the land acquisition expected to take place—or even with
this issue, when do you want to be able to acquire the land?

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Ms Horrocks: We'd obviously like to acquire the land as quickly as possible. But, obviously, we're very
interested in making sure that due process is followed and that everyone who's involved or has an interest in the
land parcel is duly noted and has an opportunity to contribute. We're just working at a steady pace.
Senator RICE: But your standard process would be having the land acquisition occurring at the same time as
the assessment?
Ms Horrocks: Agreed.
Senator RICE: If your major development plan is out for consultation from 60 days from August, that takes
us through until the end of October, or no later than that.
Ms Horrocks: That's correct.
Senator RICE: What's the time line on the government's decision?
Ms Horrocks: The government has 50 business days to make a decision on the MDP and has the opportunity
to add an additional 10 business days if the minister feels that that is necessary.
Senator RICE: So that's 12 weeks or something—an extra three months. So you'd be looking at a decision no
later than early next year?
Ms Horrocks: We also need to factor in the period where the airport gives due consideration to the
submissions received. Depending on how many submissions are received, how complex they are and what the
outcome of those submissions is, there could be a couple of months before the draft is submitted to government
for assessment.
Ms Spence: It's probably worth noting that there's a stop the clock mechanism if more information is required.
Senator RICE: So it may not be as speedy as I was indicating. I've got another issue, which is about training
airports, which I understand are considered secondary airports. I've had residents concerned about issues around
these airports contacting me.
Ms Spence: Which airports?
Mr McRandle: It depends on the nature of the question.
Senator RICE: In general. Jandakot is the one that has been raised with me. I'm particularly wanting to know
about how the provisions for secondary or training airports are different to primary airports when it comes to
amenity and noise management?
Mr McRandle: The term 'secondary airport' is a term that describes a general aviation airfield. These airports
are regulated under the Airports Act. So Jandakot is operating under the same regulatory regime as Perth airport,
Moorabbin the same as Melbourne and so on. They're actually treated in the same way under the regulations.
There is no distinction. The term 'secondary' might be perhaps misleading. The regulatory oversight is the same.
Senator RICE: So the regulations regarding noise around those airports would be the same?
Mr McRandle: They need to develop ANEFs as part of their master planning process. We may have some
additional information.
Ms Horrocks: My colleague was just referring to some questions on notice that you raised previously.
Ms Spence: A lot of these matters are potentially better directed to Airservices Australia.
Mr McRandle: On the monitoring in particular, because they're responsible for putting the monitoring in
place.
Senator RICE: Are you able to tell me whether there's any permanent noise monitoring at any of these
secondary airports? I understand there is around the airports. I can put it on notice to Airservices if you aren't able
to tell me.
Ms Spence: I don't think we've got it easily to hand, but we can take that on notice and work with Airservices
Australia.
Senator RICE: My final issue is, what status does the National Airports Safeguarding Framework have as a
guide to zoning and planning issues around airports? It's a document that I've been alerted to on your website, and
I'm keen to know how it's used in airport planning.
Mr McRandle: I might ask Mr McArthur to come to the table and assist with this one. There are a number of
guidelines that operate around the National Airports Safeguarding Framework. These have been developed over
several years, and it's been a focus of the Transport and Infrastructure Council, which is a ministerial council of
state and federal governments. You'd recognise that a lot of the planning aspects are beyond the airport boundary

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and really sit with local government and state government to implement. Mr McArthur may be able to provide
some additional advice.
Ms Spence: I can jump in a little bit. By way of context, the National Airports Safeguarding Framework is a
commitment from Commonwealth, state and territory governments, with involvement of local government, to
address a number of issues associated with airports. It's supported by the National Airports Safeguarding
Advisory Group, which is a forum that brings together transport and planning officials to work through issues—
whether it be noise, whether it be the public safety zones or whether it be technical issues such as wind shear—to
make sure that planning approvals and processes can actually take into account how to factor in airport operations
with the amenity of the community.
Mr McArthur: As has been indicated by Ms Spence, the National Airports Safeguarding Advisory Group is
formed with both the Commonwealth and the states and territories, basically around land use planning off
airports, because essentially land use planning still falls within the purview of the state and territory authorities to
actually manage the off-airport parts of that. There are a number of guidelines that basically sit under that. As
Senator Patrick alluded to, the public safety zone guideline is now out for consultation at the moment publicly.
That's been endorsed by the Transport and Infrastructure Senior Officials' Committee and is going to the
Transport and Infrastructure Council for the ministers' endorsement later this year—that is the anticipation around
that one.
Senator RICE: That's all of these guidelines or just the—
Mr McArthur: There are a number of guidelines that actually fall under that in a number of areas that have
been indicated: public safety zones, wind shear, aircraft noise, helicopter landing sites—there's a guideline that's
been put out currently around that one—and wind turbine risk to aircraft. There's also pilot lighting distraction,
managing airspace intrusion, and protection of airspace facilities around communication, navigation and
surveillance.
Mr McRandle: Some of these have been dealt with previously. The current issues before the council will be
around the public safety zone and the helicopter strategic landing facilities.
Senator RICE: The helicopter strategic landing facilities?
Mr McRandle: This is around protecting access for emergency helicopters, such as medical helicopters
coming into hospitals, so that the planning in cities takes account of the fact that these aircraft need to get into
hospitals and landing pads safely.
Senator RICE: So they're signed off by the—I can't remember the—
Mr McRandle: The ministerial council.
Senator RICE: The ministerial council. But, even after they're signed off, they are still guidelines? They're
not mandatory?
Mr McRandle: They are guidelines, and it's the responsibility of the relevant state or territory to actually
implement those.
Senator RICE: Do they apply to all airports or just the major airports?
Ms Spence: They actually apply to all airports, not just the federally leased airports. As we were saying, it's a
matter for all the states and territories to implement through their planning regimes, but they should apply to any
airport.
Senator RICE: So states and territories should be applying them around the more secondary airports?
Ms Spence: Yes.
Senator RICE: Good. Thank you very much.
ACTING CHAIR: On that note, Dr Kennedy and Minister, that being the final output for the evening, we
will adjourn the proceedings of the Rural and Regional Affairs and Transport Legislation Committee. Thank you
very much to you and your departmental staff for today.
Committee adjourned at 18:48

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