Senate Finance and Public Administration Legislation Committee, , 9:13:49 to 9:38:17
Comcover provides updates on the live cattle export class action legal costs, followed by a debate on balance sheet spending.
Topics: Government legal services, Government spending
Speakers: Senator The Hon Katy Gallagher, Simon Newnham, Senator Susan McDonald, Senator The Hon Jane Hume, Kathleen Denley, Matt Yannopoulos, Senator Karen Grogan, Speaker 41
questions for com Papa >> Thank you very much. Um, I want to ask you about uh the live cattle export case, please. Um, I specifically want to ask you, uh, how much has the Commonwealth spent on legal representation, expert evidence, and administration since the proceedings commenced?
>> Senator, thank you for the question. Simon Nunham, Deputy Secretary, Business Enabling Services. Uh, Senator, it's been a long-standing practice not to disclose the Commonwealth's litigation expenditure whilst a proceeding remains ongoing uh for a couple of reasons uh but in particular it could prejudice the Commonwealth's position. Uh let me add Senator though there is a an ongoing commitment to resolving uh outstanding matters. there are a number of issues still at foot providing greater clarity of the member's loss. Um so I'll stop there Senator.
>> So just looking through the timelines June 2011 the suspension 2014 the class action commenced. 2020 the Commonwealth found liable 202122 compensation negotiations. Um and I think it was during that period, oh sorry, it was in 2020 that Brett Cattle Company was awarded their their compensation. 22 June 2025, dispute over the scale of losses. May 2026, the appeal dismissed. So where are we up to now? I mean, it's 15 years
Senator, thank you. Um, I mean, you're absolutely right. It has been a very prolonged matter. I would note that class actions by their nature can tend to be quite prolonged. Um, I would also note, Senator, that uh there is a firm commitment from the Commonwealth to resolve the claim as soon as possible. Uh, there's certainly an acceptance from the Commonwealth that compensation is payable. Um I would note uh there are still matters before the court so there's limits to what I can say but but let me let me flesh out a little bit Senator the remaining issues how losses uh are to be allocated across the class members uh uh and the resulting compensation payable and Senator you're absolutely uh I'm sure right I haven't checked all of the dates you just gave but I but I take those at face value um there are some remaining steps. But I but I would note the most recent matters that have been uh in dispute go to uh the decision about the quantum of cattle uh that were impacted by uh the suspension. And so there was a 5 June 2025 decision uh that found that loss caused by the suspension was limited to the 88,000 cattle identified by Justice Raries. And since then uh there has been an appeal by the applicants. So that has been in play which was dismissed uh earlier this year. Uh I'd also note Senator um that the determination of those disputed issues has actually provided greater clarity uh for the assessment of the class members loss. Um and if I can just note, Senator, um there has certainly been efforts to try and um progress the matter from the Commonwealth's perspective. Um uh and uh in terms of where we are uh there has been um uh uh I'll actually ask Miss Denley to go to this but there is a process now on foot for appointment of referees to assist in uh working through uh effectively the mechanics of uh how quantum is um is calculated. But I'll just pass to Miss
Kathleen Denley first assistant secretary business enabling services. Uh yes as Mr. Nunham said that the remaining issue is about how those um exports are allocated among the members. So uh the court ordered this be done through a referee process and that's underway at the moment. So at the moment parties are engaging on the appointment of a suitable referee and that's not yet final. So the timing of that uh depends on the court's management process but um the next case management hearing uh is next month
>> is next
>> next month Friday the 13th of November. So it's still progressing.
>> Right. So do you think it would be reasonable to expect that the referee would be appointed by next month?
>> Uh that that's a matter between the parties. So parties are still having those conversations at the moment. So it's all uh progressing in accordance with the court directions.
I mean I you know I keep going to funerals of people who have been waiting waiting and I I think it's now it's unconscionable. I appreciate the legal process. I I I I I don't resolve from that, but I I think given that this was an Australian government action against uh Australian producers, uh it is horribly slow, torturously slow.
>> consistently sought to uh to bring this to a conclusion, but there are people have rights under law to to contest.
Well, I think the last time the government sought to bring it to conclusion was when they made an offer in 2022. Um, I don't know about you, but four years doesn't >> but there's been other things that have
happened in that time, including uh, you know, inability to agree on things and further court action being
taken. I I understand all of that, but it still doesn't feel like a sense of urgency. And and as I said, another funeral just last month, >> you know, I I I it would be great if if the government could act with more elacrity. so I asked you around some legal costs. What about the total cost of administering and managing the litigation through comover the relevant department separate from the compensation ultimately payable to claimants? Can you give me any information on that?
>> Um, Senator, do you mean the overall costs of com cover?
>> No, for this this
>> particular matter. >> Um, I I think I could only repeat what Mr. Nunham has already outlined in terms of cost, Senator.
Following the May 2026 appeal decision, has the Commonwealth revised its settlement position in light of the
Uh, Senator, um, I would just go back to an earlier question too that there was a public offer made in in 2023 uh, of 215 million. And since then, I note the the previous points I've made about the areas for contention which included the quantum of cattle um, in play. um uh Senator that there has not been a a revised offer. Um I would note uh that those issues have still been in contention and I would perhaps just also point to the need for the Commonwealth to comply with the legal services directions. Uh and that includes ensuring that any settlement represents a reasonable and defensible uh use of public funds. um but also that we should seek uh to reach a fair and equitable resolution based on the court's findings, the available evidence and the model litigant uh obligations. And in light of the recent um findings in the federal court, um we do feel that the um position put previously has solid foundation. But I would repeat uh that there is now a process to work through uh as I said through or Mr. Denley said through the referee process, the quantums and the application within the class itself.
>> So that's the only process that stands between the Commonwealth reaching a settlement is going through this referee process.
I I I'm not sure I would characterize it quite that way, Senator, but but but I partly what I would say is the focus now is on that referee process drawing from uh the single uh federal court judge uh decision backed in by the full federal court earlier this year, which does put clear contours around the quantum of cattle involved in the loss and then a series of calculations to be made underneath that through that referee process to determine the allocation of loss within that member uh cohort.
I >> mean, I don't seek to reprosecute the case, but as a butcher at the time, I can tell you that the impact on the cattle market and the price of beef right across Australia was devastating. I uh it's always a mystery to me how the courts calculate these things. So, the Commonwealth is actively seeking to settle the remaining claims. Is is would that be a fair characterization?
Certainly, Senator, I can say that that now and previously, there has certainly been a strong appetite to to resolve these matters, but as I noted earlier, that's within the boundaries of our obligations under the legal services directions, which as I mentioned include finding a resolution that's based on court decisions, the evidence available, uh, and our obligations as a model
Is previous minister Joyce Lewig still a party to this action? Is he um being defended or you know what's the
>> senator? So the role of com cover is to um prosecute these claims. So um it's it's not a matter of individuals. So this this is something that comover is delivering.
>> Right. Okay. So um would he be receiving taxpayer
isn't a party to the claim. It's a claim that is against the Commonwealth and so the Commonwealth through um the Department of Finance comb is managing the claim.
so it's my understanding it's my understanding that Mr. Lewig Mr. Lewig or an associated legal firm with Mr. Lewig has been receiving taxpayer support, legal support.
>> Um, Senator, I'm I'm not sure um that I have an answer to that question in terms of Brett Cattle. Um, if you could provide more information, I could look into that. But in terms of Brett cattle, I can only repeat what I've said, which is that com cover is managing it on behalf of the Commonwealth.
>> Right. So on notice then I ask you um if Mr. Lewig has received finan financial assistance through comover or through the Commonwealth for legal support andor advice.
>> Thanks Senator. We take that on notice.
there is some questions around whether or not Mr. Lewig still is involved in advising the case or the government's position and and a concern that he has delayed the outcome between industry and government which has as we've already identified has been waiting some 15
Senator, I don't I don't have any understanding of of that or that that is the case, but I will take it on notice to be completely sure.
>> Okay, we'll go to Senator Hume. >> Thank you. Uh thank you, Chair. I just want to turn to page 106 now of budget paper one. uh a different table of truth which uh is about offbalance sheet offbalance sheet um Uh there was uh I think some commentary from veteran budget watcher Chris Richardson who said that the headline balance is now becoming the figure that deserves more attention than the underlying figure because this allows I think the phrase he used was allows politicians somewhere to un to hide their trash. Um I'm not entirely sure that the minister would agree that this is where she is hiding her trash, but I would um that's his his line, not mine. I want to understand if you add the the balance sheet spending the sort of hidden balance
>> like sorry cuz you're well you're asking about it so it's I would argue it's not hidden. report the headline uh cash balance in the same way the underlying cash balance has been reported um for
If you add the balance sheet spending is the hash is the headline cash deficit more than double the underlying cash deficit at 2.1% of the economy.
It's nowhere near as bad it was would be
if you'd been funding all those not the question that I
>> uh well it's it's reported as per the um you know the budget papers >> um and I would just again point out that you were planning to fund all of those nuclear power stations off budget >> which would have added deteriorated that that uh line
>> you know we talk about how to answer
questions in like you have criticisms of our off budget funding, but you have >> your hairbrain national party scheme of funding.
other. Let's let the minister finish and then let's go back to Senator. We're
just talking >> Well, maybe if you were listening and
not speaking over, you might be able to
understand it. >> Power station.
>> Thank you. Senator talking about your election commitments that you made the
last. >> So turning to the historical tables on page 428 and 429. Can you then tell me has there ever been a budget with a bigger hidden balance sheet spending?
Page 428
>> and 429.
>> 429
>> and
>> Oh, and 429. >> Well, the tables are there, Senator
>> Yeah, but I'm asking the question.
>> You're calling it hidden, but you're referring to tables that are published in the budget documents.
>> Forget the tables, then. You can tell me straight. Has there ever been a budget with bigger hidden balance sheet
uh the the tables outline the expenditure uh and give you that historical perspective. Um and I would also say we are investing and have invested uh in a number of areas um whether it's in sovereign capability in the national reconstruction fund in housing Australia to build more houses or in the energy transition um we believe using the balance sheet to support those important economic um and and community needs uh is uh an important part of the budget.
Yeah. So, this is the housing future fund that isn't building enough houses, the rewiring the nation policy that isn't making electricity prices cheaper, or the national reconstruction fund that is billion dollars of corporate welfare and bureaucracy. Is that right?
>> Well, I accept that you don't agree with them. Um, I would say when you were in government, you created the medical research future fund, the Northern Australia Infrastructure Facility, the Regional Investment Corporation, [clears throat] the National Housing and Finance Investment Corporation, the Australian Infrastructure Financing uh, Facility for the Pacific. And in in con addition to that in your election commitments you were going to fund nuclear power policy critical gas infrastructure fund the future generations fund the regional Australia future fund uh the housing infrastructure program. So I think coming in here and uh
>> asking a question about your
>> well asking it's it's legitimate but just as legitimate is me pointing out that you had significant commitments that you were making to fund off budget. So there's a recognition that governments can use their balance sheet in order to deliver particular decisions acknowledging that our decisions may have been different.
>> All right. I'm gonna ask the secretary the same question that I asked you if I still haven't got an answer. Secretary, has there ever been a budget with bigger hidden balance sheet spending than this
>> Nothing's hidden. So, I don't agree with the proposition and the question. It's but it is outlined in the table that you've referred to.
>> And I think
>> has there ever been a budget with bigger balance sheet spending than this Well,
have a look at the headline cash balance as a percentage of GDP and you can see uh that in that column uh there is difference across the years including in the years that you were in government.
>> Has the net cash flow from investments ever been larger than the negative $33 billion in this budget in history?
We and I'm not I'm it's right that I answer this because it's the government decisions. Um so just to be clear, we have been very upfront about using our balance sheet appropriately to fund national priorities. uh just as you were in your election commitments uh which were greater than ours if you were being honest about them to use the balance sheet to deliver those particular outcomes that you were after.
>> Okay. I'm really comfortable with you answering the questions but you have to actually answer the questions that I'm asking.
>> I have answered it.
>> So I asked you the question that I asked you has net cash flow from investments ever been larger than the 333 billion in
this budget? You don't get to tell me how to answer. And so my answer yes or no is a question. >> Well, my answer to that question is we have been clear about using the balance sheet to fund national priorities. uh whether it be in clim in energy policy, in housing, in sovereign capability um and uh support for um innovation uh and you know uh projects that are run through the National Reconstruction Fund uh in a whole range of areas um it is entirely appropriate to use the balance sheet to fund those priorities. Yeah,
you're absolutely right that it is your decision and it is your decision to have record balance sheet spending and it is your decision to do that even knowing that it keeps inflation higher and interest rates higher. So I'm happy for you to own it. That is fine. In 2027 and 28 and 28 29 it is consecutively negative 23 billion. Has it ever been 23 billion before in
history? Well, you the the historical tables are published uh there, Senator we are doing a lot uh we've got a lot of issues and policies and programs that we are delivering um and we are using the balance sheet to do that just as when I read out all of the commitments that you made in the recent election to do the same and presumably you will do in the uh election uh you know in a year and a last time because that's what you've done. The history is that you set up funds and used the balance sheet to deliver your election commitments. It's what you promised last time and frankly it would be a lot more if you had won that election because you would be funding nuclear power stations.
>> So in your 2% real spending growth, >> is balance sheet spending included in
Senator, not if it's not if you're referring to um growth in payments.
>> Okay. Thank you. That I think that's what I'm referring to when I say it's >> Minister. In a supply constraint environment,
>> it's not hidden. It's written. It's published in exactly the same way that happened under your government, Senator Hume, when you were investing in all of those things.
balance sheet spending has risen dramatically, but that's not included in spending growth that you were referring to earlier.
>> Well, it's reported in exactly the same way that it was when you were establishing the MURF um the National Australia facility, the regional investment corporation and all of those that you established in government. So
in a supply constrained environment when there is no productivity growth and having driven government balance sheet spending at record highs and onbudget government is 40-year highs. Do you not recognize that inflation is staying higher than it needs to be for longer and that interest rates are staying higher than they need to be for
In terms of um the budget and the decisions we make uh we have been very conscious of the role that the budget plays in demand across the economy and that is why we have had a focus on savings uh and improving the bottom budget bottom line in every budget update that we have handed down and including two surpluses. is havinging the deficit on what we inherited. Now, that is what contributes uh to support the work that the bank is doing uh and we will continue to do it. Senator Hume
>> and we'll rotate the call if you've got