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Page 18 Senate Friday, 21 October 2016 Mr Fry: I will answer your question generally, in the main, and will ask Mr Maher to provide any definitive or more strengthened commentary around it. In terms of stakeholder engagement, I took the opportunity to throw open the door at the recent native title conference in Darwin. I structured the back half of every day, while we were there, and opened it up for Indigenous organisations on a scheduled basis to sit down with us and talk about exactly what their aspirations were and where we might be able to fit in. That stakeholder arrangement is certainly top of mind in everything we do. However, I would suggest, at this stage, whilst we are transitioning and, indeed, both the two organisations and positioning them to the state that we want, at the same time, we have met with the Noongar representative, the CEO of the south-west land council. We had a very fruitful meeting with him. He has gone away from that meeting with quite a lot of considerations. We are more than happy to work with those organisations to embed people into them, to help them, to redesign their business case, their structure, their corporate governance and to offer whatever capability we can to assist them achieve what it is they want to achieve—particularly the Noongar group. That in itself is very exciting but it needs a highly structured sophisticated approach to it. Mr Maher: Just to clarify, whereas the question was to do with pastoral interests and, certainly, we are heavily weighted in the north pastorally, across the country are remits to acquire and manage land for cultural heritage and environmental reasons. That is a far better spread across the country, which also includes into southern WA. To backup Mr Fry's point, we are in dialogue with the Noongar people with respect to the pending land rights. Senator DODSON: Of the number of properties that have been bought by the ILC, what proportion of those are still held by the ILC and what of those have been transferred to the native title holders or the relevant Aboriginal communities? Mr Fry: Out of the 252 that have been acquired, 33 per cent are still held and managed by the ILC. Senator DODSON: What is the strategy for the transfer? Mr Fry: I will pass this on to John, again. We are certainly revisiting our divestment strategy so that when the divestment occurs it is a viable property, that the capability and, indeed, the capacity is ongoing for those properties. I would like to think that everybody would be expecting that of the ILC, that we do not just acquire and hand over an asset that may well become distressed for all sorts of reasons. It then becomes a very costly matter. John, do you have anything to add? Mr Maher: One hundred and ninety three of those properties have been divested. About seven per cent have required remediation from ILC after that divestment. Our strategy is very much about ensuring that we develop the land we acquire and that the skills are with the people we are divesting to, so that property can be an ongoing concern or be used as an asset for an ongoing concern in the future. That is one area we will be focusing on, ensuring those divestments principles are evenly tied up with respect to that. It is incumbent upon us to ensure success. Senator SIEWERT: I wanted to follow up a couple of questions around the loan. I think it was Senator Dodson who asked about the $65 million loan to assist Voyages. Has the full amount of the loan being taken up? Ms Lindsay: Yes, it has. Senator SIEWERT: Which elements of the pre-existing loan arrangements have been refinanced by the Commonwealth loan? Ms Lindsay: The original loan, when we purchased Ayers Rock, was through a combination of a vendor finance arrangement with GPT and some additional funding from ANZ. We refinanced with GPT and ANZ in March 2016, earlier this year. ANZ increased their loan and GPT, consequently, reduced their loan. The GPT loan reduced down to $65 million and now GPT has been replaced with the Commonwealth loan. The vendor finance has been replaced with the Commonwealth loan in total. Senator SIEWERT: So that is the money that the Commonwealth loan replaces. What did the ANZ increase to? Ms Lindsay: From $60 million to $120 million. Senator SIEWERT: Okay. I know Senator Dodson was asking about the land fund investment. I am going to put some questions on notice, but I would like to know what is the current budget for the discretionary land management and land acquisition programs. I am trying to look at what the movement has been over the last couple of years. I have more-detailed questions that I will put on notice, on some of the other investments—the long-term investments. Mr Maher: Would you like us to map that out over the last five years perhaps, so that you get a feel for that? FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE
Friday, 21 October 2016 Senate Page 19 Senator SIEWERT: Yes. Is that something you can give me for this year and then, on notice, for the last five years? Mr Maher: Yes. Senator SIEWERT: Thanks. Mr Maher: I can give you this year's budget, if you like. It is $27.3 million for land acquisition and land management. Senator SIEWERT: $27.3 million. Are you able to give me last year's at this stage? I know it is a big ask to give me the other years, but if you have last year's that would be helpful. Mr Maher: Yes, it is $33.1 million. Senator SIEWERT: What is the reason for it going down? Ms Lindsay: The spend in 2015-16 was effectively catching up with some projects that were multiyear projects from prior years. Senator SIEWERT: So that increased it. Is that what you are saying? Ms Lindsay: Yes. Senator SIEWERT: If you could take on notice to give me the out years, that would be great. Mr Maher: The five years. Senator SIEWERT: Yes. That would be great, thank you. Can I go back to the issue that was touched on a while ago, and that is the talk of the merger. Can I ask just a couple of follow-up questions there. In terms of the merger of the backends, I presume you are talking about the administration facilities for both IBA and ILC? Mr Fry: Payroll and that sort of stuff. Senator SIEWERT: Okay. Is there any other organisation that you are talking about also combining into that process? Mr Fry: I will start and then I will hand it over to John and Jodie, and they can speak to it even more definitively than I will, because they have been charged with doing the work. But essentially, as I said earlier, there is no merger between the two organisations. It is about looking at the cost efficiencies between the two. It is working out the best way to apply a combined resource to all the things that we do in payroll, HR et cetera, and to work our way forward out of a project generation stage and work a high-level concept into feasibility so that we get proof of concept before we make a really concerted effort; and it will be primarily for the two groups, IBA and ILC. We will then look at what sort of work we can do with our subsidiaries in that area and to fold them in or vend them in, and it will be a very stepped and very measured process to do that. Senator SIEWERT: What specific subsidiaries are you talking about? Mr Fry: In particular in the ILC, NIPE, NCIE, Voyages. That is not going to take place for some time. Senator SIEWERT: What is the time line from here in terms of rolling that out? Mr Fry: I will hand that over to Jodie or John, who can give you a very detailed layout of the schedule, going forward on this. Mr Maher: Thanks, Senator, for the question. There has been a lot of work in exploring back-office efficiencies, if you like, or synergies with respect to IBA and ILC. That includes, as I think Mr Fry alluded to, HR, IT, accounting, finance et cetera—functions that do not really affect a brand—and the front office of both organisations. There has been no agreement at all with respect to 'where to'. Consequently, your question on time frame is one that we cannot answer. There actually has not been any agreement yet by either board with respect to that, going forward. Senator SIEWERT: In fact, you have pre-empted another question, where I was going next, which was about what has been discussed with the boards of both organisations. Mr Maher: Both boards are aware of the work that has been done. Certainly, Jodie and Jodie's peer in IBA have done a large amount of work with respect to the possibility and consequently the efficiencies. But certainly there has been no agreement by either board on 'where to' and therefore on time lines as well. Senator SIEWERT: Mr Fry and I were just discussing possible subsidiaries going in at a later date. Has that been discussed by the boards of any of those organisations? Mr Maher: Certainly the ILC board has discussed potential inclusion of subsidiaries, and the first two subsidiaries that would be involved, if they were, would be NCIE and NIPE. FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE
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