PARLIAMENTARIANS’ OVERSEAS STUDY TRAVEL

REPORTS

JANUARY TO JUNE 2011

PARLIAMENTARIANS’ OVERSEAS STUDY TRAVEL REPORTS 1 January to 30 June 2011 Background The previous Government announced on 15 May 2004 that overseas study travel reports would be tabled in the Parliament. The individual reports provided by Senators and Members are consolidated into one document and tabled separately to the other two tabled documents, which cover the costs of current and former Parliamentarians’ expenditure on entitlements for the period 1 January to 30 June 2011. Supporting Information To reduce the size of the tabled report, some pages may have been excluded from individual reports (indicated on relevant title pages). A copy of the full report (and any supporting documentation, including a wide range of reference material such as copies of legislation, itineraries and reports prepared by other entities) is available on written request to the Office of the Special Minister of State. Reports appear in travel date order. This report is also available on the Department of Finance and Deregulation’s website at www.finance.gov.au.

TABLE OF CONTENTS

Mr Patrick Secker MP Argentina, Chile and New Zealand 1 – 15 January 2011 Mr Luke Simpkins MP Vietnam and Thailand 5 – 13 January 2011 The Hon Alan Griffin MP United Kingdom 5 – 20 January 2011 Senator Mathias Cormann United States of America 7 – 29 January 2011 The Hon Anthony Byrne MP United States of America 8 – 23 January 2011 The Hon Peter Slipper MP Thailand, Cambodia and Vietnam 9 – 23 January 2011 Mr Michael Keenan MP Singapore, Indonesia and East Timor 27 January – 7 February 2011 The Hon Malcolm Turnbull MP China, the Republic of Korea and

Singapore 3 – 14 March 2011

Senator Glenn Sterle United States of America 25 March – 10 April 2011 Mr Steven Ciobo MP Hong Kong 25 March – 1 April 2011 The Hon Peter Slipper MP United Kingdom, Gibraltar, Morocco,

Portugal, Spain and Germany 26 March – 6 May 2011

Mr Craig Thomson MP United Kingdom, Ireland, France,

Spain and the United States of America

26 March – 8 May 2011

Mr Andrew Laming MP United States of America and the

United Kingdom 28 March – 24 April 2011

The Hon Alan Griffin MP South Africa, Zimbabwe, Ghana and

Ethiopia 31 March – 19 April 2011

Dr Andrew Southcott MP United Kingdom, the Netherlands,

France, Switzerland, Italy and Singapore

31 March – 24 April 2011

Senator David Bushby United States of America, the United

Kingdom and Hong Kong 1 – 20 April 2011

Ms Maria Vamvakinou MP Greece, Cyprus, Jordan, Palestinian

Territories and Israel 1 – 27 April 2011

Senator the Hon Michael Ronaldson United Kingdom, Italy and Turkey

1– 28 April 2011

Mr Luke Simpkins MP Greece and the Former Yugoslav Republic of Macedonia

4 – 20 April 2011

Mrs Sophia Mirabella MP United Kingdom, Belgium, Turkey, Italy and the United States of

America

5 April – 2 May 2011

Senator Cory Bernardi United Kingdom, the Republic of Ireland, the Netherlands, Belgium,

France and Italy

7 – 29 April 2011

TABLE OF CONTENTS

Senator the Hon Ian Macdonald United Kingdom, Spain, Switzerland, Austria, France, and Belgium

7 – 29 April 2011

Senator Stephen Parry Canada and the United States of

America 8 – 19 April 2011

Senator Helen Polley Italy, United Kingdom and Germany 8 April – 6 May 2011 The Hon Sussan Ley MP Jordan, Palestinian Territories

and Israel 12 – 27 April 2011

Ms Melissa Parke MP Syria, Jordan, Palestinian Territories

and Israel 12 April – 4 May 2011

Mr Rowan Ramsey MP Spain, Israel, Turkey, France, Sweden

and Finland 13 April – 7 May 2011

Mr Laurie Ferguson MP Hungary 15 – 22 April 2011 Ms Jill Hall MP Jordan, Israel and Palestinian

Territories 15 – 28 April 2011

The Hon Bruce Scott MP United States of America and the

United Kingdom 15 April – 2 May 2011

Mr Chris Hayes MP Indonesia 16 – 23 April 2011 Senator the Hon Helen Coonan Singapore, the United Kingdom,

France and Germany 16 April – 4 May 2011

The Hon Joel Fitzgibbon MP France 17 – 20 April 2011 The Hon Joe Hockey MP United Arab Emirates 17 – 23 April 2011 Mr Steve Georganas MP Vietnam 17 – 28 April 2011 Dr Dennis Jensen MP United States of America 17 April – 7 May 2011 Senator Bob Brown Papua New Guinea 28 April – 2 May 2011 Senator the Hon Richard Colbeck New Zealand 29 April – 6 May 2011 The Hon Dick Adams MP New Zealand 1 – 4 May 2011 The Hon Dr Sharman Stone MP Singapore 1 – 9 May 2011 Mr Steve Georganas MP Greece 13 – 23 May 2011 The Hon Julie Bishop MP India 9 – 12 June 2011 The Hon Teresa Gambaro MP India 9 – 12 June 2011 Senator Barnaby Joyce India and Malaysia 9 – 14 June 2011 The Hon Peter Dutton MP United States of America 24 June – 2 July 2011 Senator Glenn Sterle United States of America 24 June – 3 July 2011

TABLE OF CONTENTS

Ms Janelle Saffin MP Burma 28 June – 3 July 2011 Senator the Hon Ronald Boswell Indonesia 30 June – 4 July 2011 The Hon John Cobb MP Indonesia 30 June – 4 July 2011 Senator the Hon Nigel Scullion Indonesia 30 June – 4 July 2011

MR PATRICK SECKER MP

Argentina, Chile and New Zealand 1 – 15 January 2011

MR LUKE SIMPKINS MP

Vietnam and Thailand 5 – 13 January 2011

THE HON ALAN GRIFFIN MP

United Kingdom 5 – 20 January 2011

SENATOR MATHIAS CORMANN

United States of America 7 – 29 January 2011

THE HON ANTHONY BYRNE MP

United States of America 8 – 23 January 2011

THE HON PETER SLIPPER MP

Thailand, Cambodia and Vietnam 9 – 23 January 2011

MR MICHAEL KEENAN MP

Singapore, Indonesia and East Timor 27 January – 7 February 2011

THE HON MALCOLM TURNBULL MP

China, the Republic of Korea and Singapore 3 – 14 March 2011

The Hon Malcolm Turnbull MPMEMBER FOR WENTWORTH

SHADOW MINISTER FOR COMMUNICATIONS AND BROADBAND

The Hon Gary Grey AO MP

Special Minister of State

Parliament House

CANBERRA ACT 2600

Overseas Study Travel Report

Dear Minister

In accordance with the requirements of Clause 9.2(b) of Remuneration Tribunal

Determination 2006/18 (the Determination), I submit the following statement reporting on my

recent overseas study travel.

I note that, in accordance with Clause 9.5 of the Determination, a copy of this statement may be

obtained from you upon request by any Senator or Member. I also note that this statement will be

tabled in the Parliament at your discretion, including as part of the six monthly tabling of

entitlements expenditure for Senators and Members by the Department of Finance and

Deregulation.

Yours sincerely

The Hon Malcolm Turnbull MP9/09/2011

The Hon Malcolm Turnbull MP

Purpose of Journey

The purpose of accessing my overseas study entitlement was to travel to Shenzhen, Republic ofKorea and Singapore with the aim of understanding more about broadband in countries that havealready deployed extensive fast broadband networks.

I had briefings with Government Ministers and Departments as well as briefings with commercialcompanies and technology vendors involved in the rollout.

The main items for discussion were* Government regulatory oversight and policy• Competition policy• Industry development - technologies deployed and customer demand• Emerging technologies - deployment of next generation networks in these countries• Government policies to encourage private sector investment

The most advanced country in terms of broadband was South Korea where the Government has hada long term policy commitment to promoting very fast broadband in large measure in order tostimulate its technology sector.

While the main focus of the visit was broadband policy and deployment, I also took the opportunityto have meetings in both Seoul and Singapore to discuss urban issues with the Mayor Seoul and alsovarious authorities in Singapore. The focus of those discussions was planning and public transport.

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Detailed Itinerary Schedule

Date

3 March 2011

4 March 2011

4 March 2011

4 March 2011

4 March 2011

4 March 2011

6 March 2011

7 March 2011

7 March 2011

7 March 2011

7 March 2011

8 March

9 March 2011

9 March 2011

9 March 2011

10 March 2011

10 March 2011

10 March 2011

10 March 2011

11 March 2011

11 March 2011

Activity

Flight

In transit

Event

Meeting

Meeting

In transit

Flight

Meeting

Meeting

Meeting

Event

Meeting

Meeting

Event

Flight

Meeting

Event

Meeting

Event

Meeting

Meeting

Location

Sydney to Hong Kong - Cathay PacificAirways CX 138

Arrive Hong Kong airport and transfer toShenzhen

Tour and Technical Presentations HuaweiGlobal Headquarters,Shenzhen

Meeting with Global and AustralianExecutives of Huawei

Madam Chen, Global Vice President andHuawei Board Member

Transfer back to Hong Kong

Hong Kong to Seoul - Cathay Pacific AirwaysCX0416

Mr Sehoon Oh, Mayor of Seoul

Mr Younghwan Kim, Chairman of theKnowledge Economy Committee of theNational Assembly

MrTaegun Hyung, Commissioner, KoreaCommunications CommissionDinner with Ambassador Sam Gerovich andhis wife CeliaMr Youngjun Park, Vice-Minister of theMinistry of Knowledge Economy

Chairman Soogil Young, PresidentialCommittee on Green Growth

Tour CISCO'S facilities at Incheon City

Seoul to Singapore - Singapore AirlinesSQ0609

Deputy Director Ching Tuan Yee, UrbanRedevelopment Authority

Tour and Lunch, Khoo Teng Chye ChiefExecutive, Public Utilities Board (PUB)

CEO Dr John Keung, Building andConstruction Authority

Dinner Ms Chua Group CEO SingTel andSingTel Executives

Lui Tuck Yew, Minister for information,Communications and the Arts

Yaacob Ibrahim, Minister for Environment,Energy and Water Resources

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11 March 2011

11 March 2011

11 March

12 March 2011

12 March 2011

13 March 2011

Event

Meeting

Meeting

Event

Event

Flight

Tour and Briefing, Infocomm DevelopmentAuthority (Next Gen NBN and iExperienceCentre

CEO Khoo Chin Hean, OpenNet

CEO David Storrie, Nucleus Connect

Tour Integrated Transport Hub in Sengkang,CEOGanJuay Kiat

Visit to the Marina Bay Sands Development

Singapore to Sydney - British Airways -BA0015

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Meeting at Huawei in Shenzhen

Huawei is China's leading telecommunications equipment vendor.

They demonstrated a range of technologies used to deploy fibre to the home (FTTH) and fibre to thenode (FTTN) as well as wireless applications.

They emphasised that since 75% plus of the cost of rolling out any telecoms network was civil works,the key focus of their R&D was how to reduce that civil works element, endeavouring to ensure thatso far as possible equipment could be installed on a plug and play basis and with the ability toremotely reconfigure software in order to minimise time and expense.

Their analysis of the telecom world divides It into three- the cloud (Google, Facebook, Amazon etc);the device (Apple, Samsung etc) and the pipe (the telcos). Of these three, they noted that the telcos'business model was under the greatest pressure as they were providing more and more bandwidthfor less money - dollars per megabit kept coming down and nowhere in the world were telcossucceeding in securing meaningful premiums for higher speeds. Hence the need to constantlyimprove the efficiency of equipment both in operation and installation to reduce costs.

The contrast between the modern switches and their much larger predecessors of only a few yearsago was very striking.

Meetings in Seoul

Monday March 7

Met with Kim Young Hwan the Chairman of the Parliament's Knowledge Economy Committee. Wediscussed Korean telecommunications policy generally - he said that a key focus was to promoteprivate sector participation and facilities based competition.

At the Korean Communications Commission we met with Chairman Taegun Hyung and otherexecutives.

They said that broadband in Korea was most delivered as Fibre to the Basement - in almost all casesthe lines in the apartment building are the property of the owners' corporation and so the individualapartment owners choose with whom they connect. The KCC encourages facilities based competitonso typically there will be at least one fibre provider to the basement, a cable (HFC) provider who willresell bandwidth to a telco and sometimes copper/DSL as well. They emphasised that in theirexperience service level competiton (as is proposed with the NBN) had not worked and it wasimportant to ensure facilities based competition as well.

Tuesday March 8

At the Ministry of the Knowledge Economy (their overarching Economics Ministry) we met with ViceMinister Park Young Jun.

He described the very high priority Korea had put on technology and explained their drive intobroadband as an element in industry policy. He said Korea had originally been focussed on heavy

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industry, steelmaking, shipbuilding etc but had recognised they had to scale the new challenges of ITwhich he saw as converging across all industries on everything from shipbuilding to renewables toservices. He was very disappointed that Samsung had not been invited to tender for the wirelessportion of the NBN, especially given its achievements in WIMAX.

The Vice Minister reminded us of the very high level of mineral and energy imports from Australia,noting that Korea paid high prices to Australia on account of its perceived political stability, howeverexpressed again his disappointment about a NSW State Government decision not to approve a coaldevelopment owned by a Korean company for what he suspected were political reasons in the leadup to the State election.

He emphasised Korea's push into green technology and renewable energy which he said Korea sawas being the next big technological wave. Korea's target is to cut emissions by 30% from business asusual by 2020.

Later in the day we met with executives from Samsung - a good discussion about their vision for thefuture of the Internet. They gave us a presentation which emphasised the exponential growth ofwireless broadband. They said they saw the Internet as becoming increasingly a wirelessphenomenon from a user point of view with FTTH being largely used for HDTV.

Wednesday 9 March

Meeting with the Presidential Commission on Green Growth, with the Chairman, Dr Soogil Young.

Dr Young said that Korea proposed to initiate an emissions trading scheme shortly with an initialfixed price starting in 2015. He said that President Lee was very much behind the ETS and regarded itas vital from both an environmental and industry development point of view. He said thePresident's view was that Korea cannot continue on an old growth, high emissions approach toindustry - the country needed a low carbon growth plan. Dr Young described the comprehensiveplans his Commission oversaw for green growth ranging from electric vehicles, to smart grids to highspeed rail and of course broadband itself. Consistent with the message from the Vice Minister, itwas clear the Government sees green growth and technology as a critically important new field oftechnology in which Korea would seek to take a leading role as it already has with IT.

Later that day we visited Incheon and the smart city development there being managed by Cisco.There are three enormous, high rise cities being built on landfill in this area near the airport.

From an infrastructure point of view there is fibre to the basement with these new buildings beingwired with Ethernet as opposed to FTTH. Cisco demonstrated their videoconferencing in highdefinition which required, they said, 1.5 mbps each way. When I asked why they had not run fibreinto each apartment, the response was there was no need to do so from a bandwidth point of viewand Ethernet (Cat 5 cable) was cheaper to deploy.

Meetings in Singapore

Thursday 10 March

First visit was to the Urban Redevelopment Authority which is the central planning authority ofSingapore. We received a presentation by the Deputy Director Ching Tuan Yee. They have a verythorough planning ethos, focussing on sustainability and design. Providing incentives for betterdesign, sustainability etc.

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Then to the Marina Barrage which is run by the Public Utilities Board. This is a new reservoir whichlike a number of others on Singapore involves damming a natural estuary and turning it into afreshwater system. It also has a flood mitigation aspect because on high tides this double estuary ofthe Singapore and Kalang Rivers can flood - they have some big pumps so that they can lower thelevel of the freshwater reservoir even when the tide is high and the sealevel higher than that of thereservoir. They ran us through their familiar presentation on the "four taps" which provideSingapore's water: from Johore thru a pipe, from their own reservoirs, from desalination and fromrecycling "New Water".

Our host at the barrage and later at a lunch was Khoo Teng Chye the chief executive of the PublicUtilities Board who is also ED of the Centre for Liveable Cities. (He had come to dinner at our housein 2006 together with Tan Yong Soon who was at that stage the permanent head of the EnvironmentDepartment and is now the Permanent Secretary Climate Change of the National Climate ChangeSecretariat in the PM's Office.)

Tan said that they were currently thinking about how they were going to tackle carbon pricing, saidthat they were very committed to a market based mechanism so probably an ETS of some kind, butit was not imminent.

They were currently very focussed on driving energy efficiency measures. Their big problem is thatthey import all of their energy and while they are very interested in renewables they just don't haveanything like enough land area to be able to have solar, for example, make a meaningfulcontribution.

We then went out to Braddell Road to the Building Construction Authority where our host was DrJohn Keung, the CEO, the presentation was all about planning and once again the focus was onsustainability - not so much design, they do undertaken competitions and do provide substantialincentives for greener buildings. Every new building has to reach a certain standard and then moreFSA etc for higher attainments. We also saw their Zero Energy Building which generates moreelectricity from its roof of solar panels than it consumes itself. A lot of nifty things are tried there -green walls on the Western side for example (with mixed success), mirror ducts which stick out fromthe side of the building (like an awning) and have an open glazed end looking up to the sky, theinside of the big box like conduit is mirrored and it brings diffused light right into the middle of thebuilding, very clever.

A/C comes up from the floor and is aimed to cool the air at seating level rather than having to coolall of the air column. A very impressive and smart young man called Jonathan Cheng Seng Chye wasin charge of the presentation. He is a graduate of UNSW.

In the evening met again with Chua Sock Koong, the CEO of Singtel and Jeann Low the CFO.

Discussed the telecoms regulation environment here - in a nutshell the Government has given acompany called Open Net (of which Singtel has 30%) to roll out a FTTH network, and they areobliged to pull fibre into every apartment which is not without some difficulties. It has been given a$750 million grant from the Government and its shareholders have kicked in $127 million. It ispaying Singtel to use its ducts and engaging Singtel to do the job of rolling out the cable.

Singtel has agreed NOT to compete with FTTH to residences but it is free to compete with businesseslarge or small and will do so, it has quite a bit of fibre in the ground already especially in the businessdistricts.

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Friday 11 March

Visited with Yaacob Ibrahim the Environment Minister with whom I dealt when I was EnvironmentMinister.

Then called on Minister Lui Tuck Yew who is the Minister for information Communications and theArts. We discussed the broadband initiative and he agreed that they still hadn't seen the killer appfor very fast broadband, but it was an affordable investment in the future - of course here theGovernment subsidy is only $750 million for Open Net and $250 million for Nucleus (the Opco).

Visited SingTel's demonstration centre where our host was Sean Slattery and we saw examples ofthe various apps that broadband enables in the home, in education and in business. Interestinglynone of the apps demonstrated required 100 mbps or anything close to it. When asked what thistype of bandwidth would be used for, the response is a general discussion about households withfour or five people all using very high bandwidth HD streaming videos, interactive gaming etcsimultaneously.

We then went to the Infocomm Development Authority (IDA) which is the regulator. A goodpresentation by Ronnie Tay the CEO - the structure is as described: Open Net rolls out the networkand installs a termination unit in the home. It operates however an entirely passive, dark fibrenetwork - no electronics. Then there is an Opco, Nucleus Connect, which provides the Layer 2 and 3services and deals with the RSPS. Opco installs an ONT which is connected to the first terminationdevice and it has four ports each of which could be dedicated to a different RSP. Nucleus is the firstOpco but there is no limit on others and as Ms Chua told us Singtel is also going to be an Opco foritself. Now Nucleus received a $250 m subsidy and while it is a wholly owned subsidiary of Star Hubit has to be operationally separated. At the various central offices (exchanges), the Opco connects itskit to the fibre network and the RSPs hook in at the one main central office.

The backhaul from the central offices (9) to the main central office is the responsibility of the Opcoat the main c/o it is where the RSP connects its routers.

The price of access is $21 a month per line of which $15 goes to the Opennet and $6 to the Opco.Most plans start at around $40 and go up from there. For example Mi's rate card has for 25 mbpsup and down $39 and for 100 down and 50 up $59. Top product of 1000 down and 500 up is $399 amonth. Lots of bundling going on.

Then we visited an Experience Centre in a big shopping mall where the whole broadband experienceis explained - people can experience video conferencing (talking to the folks in Hong Kong seems tobe a big feature) and other e-learning applications. Apparently one of the problems they are facing isthat many people are not keen on signing up because they cannot see what is in it for them - ie whatit delivers that they either want or don't currently have.

Then walked to OpenNet which is run by Khoo Chin Hean who used to be the energy regulator andbefore that an executive in the environment and water department. He described OpenNet's role -essentially to lease duct space from Singtel, pay them to build the network and then lease it to Opco.

I then took the subway out to TaiSeng where Nucleus Connect's office is located.

This is staffed by StarHub people and the CEO is an ex BT executive David Storrie. He told me thatout of 1.2 million households on the island 330k have a termination point in their house and afurther 270k have been passed but not hooked up. The obligation of OpenNet is to pass 95% of the

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island's residences by mid 2012. From 2013 the USO will require Nucleus and Opennet to connectany new or unconnected homes in short time frame and for a very modest charge. He said Starhub isdoing the installation of the ONT for themselves and Nucleus have a field force doing the ONTs forother retailers. It is clearly early days in the rollout.

Saturday 12 March

Visited metro/light rail/bus interchange at Sengkang. Singapore is very committed to mass transitbut it did appear that while the metro (subway) had been a great success, the light rail loops whichwere carried on viaducts had been less successful. The consensus seemed to be that for those areaswhere the subway was not present buses were a better option than an elevated light rail.

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SENATOR GLENN STERLE

United States of America 25 March – 10 April 2011

MR STEVEN CIOBO MP

Hong Kong 25 March – 1 April 2011

Report not received at time of preparation of this document.

THE HON PETER SLIPPER MP

United Kingdom, Gibraltar, Morocco, Portugal, Spain and Germany 26 March – 6 May 2011

MR CRAIG THOMSON MP

United Kingdom, Ireland, France, Spain and the United States of America 26 March – 8 May 2011

1

Overseas Study Travel Report

Special Minister of State

Parliament House

CANBERRA ACT 2600

Dear Minister

In accordance with the requirements of Clause 9.2(b) of Remuneration Tribunal Determination 2006/18 (the Determination), I submit the following statement reporting on my recent overseas study travel.

I note that, in accordance with Clause 9.5 of the Determination, a copy of this statement may be obtained from you upon request by any Senator or Member. I also note that this statement will be tabled in the Parliament at your discretion, including as part of the six monthly tabling of entitlements expenditure for Senators and Members by the Department of Finance and Deregulation.

Yours sincerely

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The Global Financial Crisis – The European and US experience – Lessons Learnt and Future Expectations

1. Introduction - Purpose of Visit The purpose of the trip was to go to some of the key Euro zone countries that were having economic difficulties following the Global Financial crisis and to access their prospects for recovery, issues that contributed to their economic position, and the implications for Australia. I aimed to meet Central Banks, Commercial Banks, Government regulators, Government officials and Trade Union representatives to get a rounded view of the impact of the crisis and the evaluation of policy responses to the crisis. I was also looking at analysis of the expectations of the future economic position of each country. In the last week of the trip I travelled to the United States where the crisis started.

The Countries that I visited were the United Kingdom, Ireland, the OECD in France, Spain and the United States.

i) UK

In the UK I had meetings with the following:

1. Spencer Dale - Director & Chief Economist Bank of England 2. Jose- Lis Guerrero - Co Head of Global Markets, Simon Jowers -

Manager Public Policy HSBC 3. Dr Luke Wainscoat & Mr Sam Woods Secretariat to The

Independent Commission on Banking 4. Adam Cull Director & Sally Scutt Deputy Chief Executive British

Bankers Association 5. Owen Tudor Head European Union and International Relations

& Richard Excell Senior Policy Officer TUC 6. Mr John Dauth High Commissioner 7. Ralph Ricks - Director Group Regulatory Affairs, Mr Russell

Gibson- Director Group Regulatory Affairs, Andrew Friel - Head of EU Public Affairs The Royal Bank of Scotland

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ii) Ireland

In Ireland I had meetings with the following:

1. The Australian Ambassador to Ireland 2. Irish Congress of Trade Unions 3. Macquarie Capital Advisors National Treasury Management

Agency 4. Brian Hayes Minister of State, Department of Finance 5. Brian Lenhian Opposition Finance Spokesman

iii) OECD

At the OECD I had meetings with the following:

1. Deputy General Secretary 2. Chief Economist 3. Trade Union Advisory Committee

iv) Spain

In Spain I had meetings with the following:

1. Banco de Espana which is Spain’s Central Bank; 2. the Ministry for Economy and Finance 3. The Confederation of Employers and Industries of Spain 4. BBVA (Large Bank) 5. La Caixa (large Bank) 6. General Workers Union 7. Secretary for the Economy and Finances of the Catalonian

State Government; and 8. IESE Business School

v) USA

In the USA I had meetings with the following:

1. Douglas F Stolberg – ANZ

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2. Pieter Bierkens – Head of Markets Americas, Ian M. Phillips EVP & General Manager Commonwealth Bank of Australia

3. Richard Franulovich – Director, Senior Currency Strategist, Hugh Killen – Managing Director, FX & CCE, Head of America’s Division Westpac

4. Thomas F DeMaio – Managing Director Head of Markets Americas, Courtney A Cloe – Director, Head of Client Coverage Americas NAB

5. John F Medel – Vice President Government Affairs, Sven Jari Stehn Vice President – Global Economics, Commodities & Strategy Research Global Investment Research Goldman Sachs

6. Michael E Feroli – Managing Director Chief US Economist J.P. Morgan

7. Ethan S Harris - Managing Director Head of North America Economics & Global Coordinator Global Research, Sarah J Lee – Managing Director General Counsel Global Fixed Income Derivatives, John W Horkan – Managing Director, Gustavo Reis – Vice President Economist Global Research Bank of America Merrill Lynch

8. Steven Wieting – Managing Director Economic & Market Analysis CITI

9. Robert K Steel – Deputy Mayor, New York City Tokumbo Shobowale Chief of Staff for Deputy Mayor

10. Denis M Hughes – President AFL –CIO New York 11. Phillip H Scanlan AM – Consul General, Rebecca Smith –

Consular & Visits Manager Australian Consulate General

A. Findings

A. Economic Conditions Of The Countries Visited

The countries I visited had all experienced significant downturns during the global financial crisis. Below is a table that compares inflation, unemployment and debt to that of Australia. What is striking is the extraordinary high unemployment in Ireland and Spain and the massive government debt in all 4 countries compared to Australia.

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Country Units 2009 2010 2011 2012 2013 2014

Unemployment rate

Australia Percent of total labour force 5.6 5.2 5.0 4.8 4.8 4.7

Ireland Percent of total labour force 11.8 13.6 14.5 13.3 12.8 11.9

Spain Percent of total labour force 18.0 20.1 19.4 18.2 17.1 16.3

United Kingdom Percent of total labour force 7.5 7.8 7.8 7.7 7.4 6.9

United States Percent of total labour force 9.3 9.6 8.5 7.8 7.0 6.3

Inflation rate

Australia Percent change 2.1 2.7 3.4 2.9 2.7 2.7 Ireland Percent change -2.6 -0.2 0.7 1.0 1.4 1.5 Spain Percent change 0.9 2.9 2.1 1.4 1.4 1.6 United Kingdom Percent change 2.1 3.4 3.9 1.9 2.0 2.0 United States Percent change 1.9 1.4 2.1 1.4 1.5 1.8

General government net debt Australia Percent of GDP -0.03 5.53 7.79 8.33 7.62 7.41

Ireland Percent of GDP 38.04 69.39 95.21 104.32 110.34 108.67 Spain Percent of GDP 41.83 48.75 52.56 55.71 58.49 60.74 United Kingdom Percent of GDP 60.90 69.42 75.13 78.62 79.54 78.66 United States Percent of GDP 59.85 64.82 72.41 76.66 79.30 81.32

Interestingly when speaking to the markets, central banks and government in each Country, with the exception of the United States, people were confident that they were over the worst and that there were positive signs for their country. Trade Unions had different views in each country believing that working people where being disproportionately effected by government strategies to resuscitate their economies.

In the UK, on the day that I arrived, there were massive labour Union protests in London, over the austerity measures announced by the Cameron government. In Ireland the Labour unions were concerned that the tight fiscal settings were exacerbating the record unemployment rates. In Spain the Labour Unions were quick to point out that the Spanish government’s proposal to reduce worker conditions to increase labour market flexibility appeared to be “punishing” innocent workers when it was the housing and financial sectors

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that were the cause of the crisis. The high unemployment figures in Spain and Ireland continue to be a concern for all I spoke to. After having completed substantial improvements over the second half of the 1990s and during the 2000s which put a few regions on the brink of full employment, Spain suffered a severe setback in October 2008 when it saw its unemployment rate surging to 1996 levels. During the period October 2007-October 2008 Spain had its unemployment rate climbing 37%, exceeding by far the unemployment surge of past economic crises like 1993. In particular, during this particular month of October 2008, Spain suffered its worst unemployment rise ever recorded and, so far, the country is suffering Europe's biggest unemployment crisis. By July 2009, it had shed 1.2 million jobs in one year and was to have the same number of jobless as France and Italy combined. Spain's unemployment rate hit 17.4% at the end of March, with the jobless total now having doubled over the past 12 months, when two million people lost their jobs. In this same month, Spain for the first time in her history had over 4,000,000 people unemployed, an especially shocking figure even for a country which had become used to grim unemployment data. Although rapidly slowing, large scale immigration continued throughout 2008 despite the severe unemployment crisis, thereby worsening an already grave situation. There are now indications that established immigrants have begun to leave, although many that have are still retaining a household in Spain due to the poor conditions that exist in their country of origin.

Spain and Ireland have both experienced good growth in exports and manufacturing and in the instance of Spain have very strong banks and are going through some consolidation of smaller mutuals and credit unions. The Spanish banking system has been credited as one of the most solid and best equipped among all Western economies to cope with the worldwide liquidity crisis, thanks to the country's conservative banking rules and practices. Banks are required to have high capital provisions and demand various proofs and securities from intending borrowers. Spain's largest bank, Banco Santander, took part in the UK government's bail-out of part of the UK banking sector.

All groups that I spoke to in both countries despite their unemployment problems and problems in the housing industry were very confident that their economies would see this through and that better times were ahead.

However, in Spain in particular structural issues with the EU were raised and to some extent these were raised in Ireland as well. Specifically the fact that a German dominated Central Bank for Europe is raising interest rates to deal

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with inflationary pressures in some countries but particularly Germany and that is acting as a brake on the economy at a time when in Spain and Ireland the issue of available credit and high unemployment are primary issues. European leaders should move toward economic and fiscal union to shore up the euro area against further financial market turmoil, according to Spanish government spokesman Jose Blanco.

“What is missing, after having given Europe a common currency, is a common economic and fiscal policy, to provide global responses to challenges,” Blanco, who is also the development minister, said.

In the United States the view from those I saw, was much more mixed. In particular the concern about the lingering high unemployment rate, sluggish growth, the ongoing depression in the housing market but particular concerns relating to the fiscal problems of the government were all raised as major issues for the US economy. Opinions were as divided as “when growth improves all these issues will sort themselves out” to views that the US “is heading for another crisis”. I will talk about this in relation to fiscal responses and the issue of health care costs.

What is clear from each of the countries that I visited is that government debt as a percentage of GDP is at extraordinary and unsustainably high levels.

B. Regulation

Following the global financial crisis most commentators saw the need for greater regulation to ensure that the market failure that occurred with the global financial crisis could have more safeguards.

i) USA

In the United States the key legislation in this respect is the Dodd- Frank Act which was signed into law in July 2010. The Dodd Frank act is a highly complex law requiring significant federal agency rulemaking. With more than 2300 pages, Dodd-Frank is complex and impacts virtually all aspects of US financial services. Dodd-Frank delegates to federal regulatory agencies tremendous discretion with respect to how the new law will be implemented and

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interpreted. Dodd-Frank requires eleven federal regulatory agencies to conduct an estimated 243 new rulemakings and 67 studies. Given the significant amount of delegation to federal regulatory agencies and the amount of ambiguity in the law, the effectiveness of Dodd-Frank will be determined largely by the results of the new rulemaking.

Among the areas fundamentally impacted by Dodd-Frank:

• Systemically Important Financial Institutions

• The orderly Liquidation Regime

• Over-the-counter Derivatives

• Asset Backed and Mortgage-Backed Securities

• Bank Leverage and Risk-Based Capital Requirements

• Bank Proprietary Trading

• Investment advisors

• Additional Areas include: Clearing and settlement, executive compensation, Corporate Governance, Credit rating agencies and Consumer Financial Protection

Dodd- Frank created the Financial Stability Oversight Council (FSOC) to identify risks to the financial stability of the US which could arise from material financial distress of domestic or foreign bank or non bank organisations. The FSOC is also to promote market discipline and respond to threats to the stability of the US financial system.

The creation of the FSOC represents a significant step forward for inter-agency coordination and the monitoring of systemic risk.

Dodd-Frank is especially tough on big banks. By tightening the regulation of big banks, providing new macro-prudential oversight and requiring more and higher- quality bank capital, Dodd-Frank should help increase financial system stability and resiliency. However the impact is uneven. Some types of financial institutions and markets (banks, securitization and derivative markets) are facing significant new regulation, while others (hedge funds, private equity funds, insurance companies and credit rating agencies) got off relatively lightly.

This is of some concern if the new regulation pushes more financial activity into the more lightly regulated areas but given the difficulty in passing any

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legislation with the current Congress there is little chance that there will be changes to the laws to tighten less regulated areas.

For this reason some experts have argued that the Dodd–Frank Act isn’t strong enough, arguing that it fails to protect consumers adequately, and, more importantly, does not end too big to fail.

On the other hand, Ed Yingling, president of the American Bankers Association, regarded the reforms as haphazard and dangerous, saying "To some degree, it looks like they're just blowing up everything for the sake of change. If this were to happen, the regulatory system would be in chaos for years. You have to look at the real-world impact of this." This is clearly because the weights of reforms are aimed at banks.

There are implications for Australian companies with this legislation as the FSOC has a broad mandate to identify risks to financial stability in the US arising from domestic and foreign firms and market activities. To fulfil its mandate the FSOC is required to consult and coordinate with foreign regulators and multilateral organisations. Hopefully this will improve consultation and coordination between countries.

ii) UK

On 16 June 2010, the Chancellor of the Exchequer announced the creation of the Independent Commission on Banking, chaired by Sir John Vickers. The Commission has been asked to consider structural and related non-structural reforms to the UK banking sector to promote financial stability and competition and to make recommendations to the Government by the end of September 2011.

The Independent Commission on Banking will consider the structure of the UK banking sector, and look at structural and non-structural measures to reform the banking system and promote competition. It will formulate policy recommendations with a view to:

• Reducing systemic risk in the banking sector, exploring the risk posed by banks of different size, scale and function;

• Mitigating moral hazard in the banking system; • Reducing both the likelihood and impact of firm failure; and

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• Promoting competition in both retail and investment banking with a view to ensuring that the needs of banks’ customers and clients are efficiently served, and in particular considering the extent to which large banks gain competitive advantage from being perceived as too big to fail.

UK Banking Commission Recommendations Retail ring-fence The Commission recommends the implementation of a retail ring-fence, with the purpose, objectives and principles set out immediately below. Purpose and objectives The purpose of the retail ring-fence is to isolate those banking activities where Continuous provision of service is vital to the economy and to a bank’s customers in order to ensure, first, that this provision is not threatened as a result of activities which are incidental to it and, second, that such provision can be maintained in the event of the bank’s failure without government solvency support. A retail ring-fence should be designed to achieve the following objectives at the lowest possible cost to the economy: • make it easier to sort out both ring-fenced banks and non-ring-fenced banks which get into trouble, without the provision of taxpayer-funded solvency support; • insulate vital banking services on which households and SMEs depend from problems elsewhere in the financial system; and • curtail government guarantees, reducing the risk to the public finances and making it less likely that banks will run excessive risks in the first place. This can be done by following the five principles below. Principles 1. Mandated services. Only ring-fenced banks should be granted permission by the UK regulator to provide mandated services. Mandated services should be those banking services where: a) Even a temporary interruption to the provision of service resulting from the failure of a bank has significant economic costs; and b) Customers are not well equipped to plan for such an interruption. Mandated services currently comprise the taking of deposits from, and the provision of overdrafts to, individuals and small and medium-sized organisations.

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2. Prohibited services. Ring-fenced banks should be prohibited from providing certain services. Prohibited services should be those banking services which meet any of the following criteria: a) Make it significantly harder and/or more costly to resolve the ring-fenced bank; b) Directly increase the exposure of the ring-fenced bank to global financial markets; c) Involve the ring-fenced bank taking risk and are not integral to the provision of payments services to customers, or the direct intermediation of funds between savers and borrowers within the non-financial sector; or d) In any other way threaten the objectives of the ring-fence. As a result prohibited services should include (though need not be limited to):

i) Any service which is not provided to customers within the European Economic Area;

ii) Any service which results in an exposure to a non-ring-fenced bank or a non-bank financial organisation, except those associated with the provision of payments services where the regulator has deemed this appropriate;

iii) Any service which would result in a trading book asset; iv) Any service which would result in a requirement to hold

regulatory capital against market risk; v) The purchase or origination of derivatives or other contracts

which would result in a requirement to hold regulatory capital against counterparty credit risk; and

vi) Services relating to secondary markets activity including the purchase of loans or securities.

3. Ancillary activities. The only activities which a ring-fenced bank should be permitted to engage in are: the provision of services which are not prohibited; and those ancillary activities necessary for the efficient provision of such services. Ancillary activities should be permitted only to the extent they are required for this provision, and not as standalone lines of business. Ancillary activities would include, for example, employing staff and owning or procuring the necessary operational infrastructure. In particular, a ring-fenced bank should be permitted to conduct financial activities beyond the provision of non-prohibited services to the extent that these are strictly required for the purposes of its treasury function – i.e. for risk management, liquidity management, or in order to raise funding for the provision of non-prohibited services. In conducting ancillary activities a ring-fenced bank may transact with

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and become exposed to non-ring-fenced banks and non-bank financial organisations. Backstop limits should be placed on the proportion of a ring-fenced bank’s funding which is permitted to be wholesale funding and on its total exposures, secured and unsecured, to non-ring-fenced banks and other non-bank financial companies. 4. Legal and operational links. Where a ring-fenced bank is part of a wider corporate group, the authorities should have confidence that they can isolate it from the rest of the group in a matter of days and continue the provision of its services without providing solvency support. As a result:

a) ring-fenced banks should be separate legal entities – i.e. any UK regulated legal entity which offers mandated services should only also provide services which are not prohibited and conduct ancillary activities;

b) Any financial organisation owned or partly owned by a ring-fenced bank should conduct only activities permitted within a ring-fenced bank. This organisation’s balance sheet should contain only assets and liabilities arising from these services and activities;

c) The wider corporate group should be required to put in place arrangements to ensure that the ring-fenced bank has continuous access to all of the operations, staff, data and services required to continue its activities, irrespective of the financial health of the rest of the group; and

d) The ring-fenced bank should either be a direct member of all the payments systems that it uses or should use another ring-fenced bank as an agent.

5. Economic links. Where a ring-fenced bank is part of a wider corporate group, its relationships with entities in that group should be conducted on a third party basis and it should not be dependent for its solvency or liquidity on the continued financial health of the rest of the corporate group. This should be ensured through both regulation and sufficiently independent governance. Thus, where a ring-fenced bank is part of a wider corporate group:

i) Its relationships with any entities within the same group which are not ring-fenced banks should be treated for regulatory purposes no more favourably than third party relationships;

ii) All transactions (including secured lending and asset sales) with other parts of the group should be conducted on a commercial and arm’s length basis in line with sound and appropriate risk management practices;

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iii) Where third party arm’s length relationships are not ensured through the application of existing regulation, additional rules should be considered;

iv) Assets should only be sold to and from the ring-fenced bank and other entities within the group at market value. The ring-fenced bank should not acquire any assets from other entities within the group unless such assets could have resulted from the provision of non-prohibited services;

v) The ring-fenced bank should meet regulatory requirements, including those for capital, large exposures, liquidity and funding, on a solo basis;

vi) Dividend payments and other capital transfers should only be made after the board of the ring-fenced bank is satisfied that the ring-fenced bank has sufficient financial resources to do so. In addition, any such payments which would cause the ring fenced bank to breach any kind of capital requirement, including requirements to hold buffers above minimum requirements, should not be permitted without explicit regulatory approval;

vii) The board of the ring-fenced bank should be independent. The precise degree of independence appropriate would depend on the proportion of the banking group’s assets outside the ring-fenced bank. Except in cases where the vast majority of the group’s assets were within the ring-fenced bank, the majority of directors should be independent non-executives of whom:

i) One is the Chair; and ii) No more than one sits on the board of the parent or another

part of the group; iii) A ring-fenced bank should make, on a solo basis, all disclosures

which are required by the regulator of the wider corporate group and/or its other relevant substantial subsidiaries, and those which would be required if the ring-fenced bank were independently listed on the London Stock Exchange; and

iv) The boards of the ring-fenced bank and of its parent company should have a duty to maintain the integrity of the ring-fence, and to ensure the ring-fence principles are followed at all times.

Loss-absorbency The Commission makes the following recommendations on loss-absorbency. Equity

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• Ring-fenced banks with a ratio of risk-weighted assets (RWAs) to UK GDP of 3% or more should be required to have an equity-to-RWAs ratio of at least 10%. • Ring-fenced banks with a ratio of RWAs to UK GDP in between 1% and 3% should be required to have a minimum equity-to-RWAs ratio set by a sliding scale from 7% to 10%. Leverage ratio • All UK-headquartered banks and all ring-fenced banks should maintain a Tier 1 leverage ratio of at least 3%. • All ring-fenced banks with a RWAs-to-UK GDP ratio of 1% or more should have their minimum leverage ratio increased on a sliding scale (to a maximum of 4.06% at a RWAs-to-UK GDP ratio of 3%). Bail-in • The resolution authorities should have a primary bail-in power allowing them to impose losses on long-term unsecured debt (bail-in bonds) in resolution before imposing losses on other non-capital, non-subordinated liabilities. • The resolution authorities should have a secondary bail-in power to enable them to impose losses on all other unsecured liabilities in resolution, if necessary. Depositor preference In insolvency (and so also in resolution), all insured depositors should rank ahead of other creditors to the extent that those creditors are either unsecured or only secured with a floating charge. Primary loss-absorbing capacity

• UK-headquartered global systemically important banks (G-SIBs) with a 2.5% G-SIB surcharge, and ring-fenced banks with a ratio of RWAs to UK GDP of 3% or more, should be required to have capital and bail-in bonds (together, primary loss absorbing capacity) equal to at least 17% of RWAs.

• UK G-SIBs with a G-SIB surcharge below 2.5%, and ring-fenced banks with a ratio of RWAs to UK GDP of in between 1% and 3%, should be required to have primary loss-absorbing capacity set by a sliding scale from 10.5% to 17% of RWAs.

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Resolution buffer

• The supervisor of any (i) G-SIB headquartered in the UK; or (ii) ring-fenced bank with a ratio of RWAs to UK GDP of 1% or more, should be able to require the bank to have additional primary loss-absorbing capacity of up to 3% of RWAs if, among other things, the supervisor has concerns about its ability to be resolved at minimum risk to the public purse. Liabilities secured with a floating charge only should also be subject to the secondary bail-in power.

• The supervisor should determine how much additional primary loss-absorbing capacity (if any) is required, what form it should take, and which entities in a group the requirement should apply to, and whether on a consolidated or solo basis.

Competition The Commission makes the following recommendations on competition. Market structure:

• The Commission recommends that the Government reach agreement with Lloyds Banking Group (LBG) such that the entity which results from the divestiture:

• has a funding position at least as strong as its peers, including as evidenced by its loan-to-deposit ratio (LDR) relative to its peers’ LDRs at the time of the disposal; and

• has a share of the personal current account (PCA) market of at least 6%. Barriers to entry The Commission recommends that the Prudential Regulatory Authority (PRA) work with the Office of Fair Trading (OFT) to review the application of prudential standards to ensure that prudential requirements for capital and liquidity do not unnecessarily limit the ability of new entrants to enter the market safely and to grow. In particular, it should ensure that use of the standardised approach to calculating risk weights does not penalise banks that

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are unable to transition to an advanced approach because of the high fixed cost of doing so. Switching The Commission recommends that a current account redirection service should be established, to smooth the process of switching current accounts for individuals and small businesses. To be effective, it should:

• catch all credits and debits going to the old (closed) account, including automated payments taken from debit cards as well as direct debits;

• be seamless for the customer, so that throughout the process they have complete, problem-free use of their banking services and are not inconvenienced by debits or credits going to the wrong account;

• Last for at least 13 months, to catch annual payments;

• continue to send reminders and provide support to direct debit originators to ensure that they update their details for people who have switched accounts;

• guarantee that customers will not suffer loss if mistakes occur in the switching process; and

• Be free to the customer.

The redirection service should be fully operational by September 2013. The Government should monitor progress to ensure that this deadline is met. The redirection service should be introduced in a way that does not impose disproportionate costs on new entrants and banks that access payments systems through agency arrangements. In particular, small banks/building societies and small business direct debit originators should not be penalised by this move to improve the switching system. To ease switching for small businesses, in addition to the redirection service above, a maximum timescale should be introduced for the release of security after repayment of borrowing, and banks should improve the process for transferring security.

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Transparency The Commission recommends that the OFT, and the Financial Conduct Authority (FCA) once it has been established, should work with the banks to improve transparency across all retail banking products, and in particular for PCAs and business current accounts (BCAs). Banks should provide data on the cost of their services (including before and after any introductory period) for a sample of representative customer profiles to demonstrate potential costs, and should provide price information in an accessible form in response to any reasonable request from a price comparison site. As a first step, the Commission recommends that interest foregone relative to the Bank of England base rate should be incorporated into the annual statements that are currently being introduced in response to the OFT’s initiatives on PCAs. The FCA should carry out customer research to identify the best way to present foregone interest on bank statements, and should require banks to provide this information in the standardised way it identifies. Foregone interest should appear on bank statements as soon as possible, and in any event no later than January 2013. In addition, once the OFT’s current transparency remedies have been implemented, the Commission recommends that the FCA consider other options for improving transparency further, including:

• making account usage data available to customers in electronic form, enabling it to be used as an input by price comparison sites;

• requiring product ranges to include an easily comparable standardised product;

• improving price comparison tools for PCAs and creating a code of practice for comparison sites; and

• developing comparison tools for non-price product characteristics. Financial Conduct Authority The Commission welcomes the Government’s commitment to give the FCA a new primary duty to promote competition. To clarify this duty, the Commission recommends that in the FCA’s draft objectives, the efficiency and choice operational objective should be replaced with an objective to “promote effective competition” in markets for financial services. That would be entirely

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consistent with promotion of efficiency and choice because they are advanced by effective competition. The duty to discharge its functions in a way which promotes competition should also be kept, to make clear that in pursuing any of its operational objectives – not just the competition objective – the FCA should use competition as a means of achieving them wherever possible. In addition, the Government should reconsider the FCA’s strategic objective to provide greater clarity on the fundamental issue of making markets work well – in terms of competition, choice, transparency and integrity. Market investigation reference The Commission is not recommending an immediate market investigation reference to the competition authorities of the PCA and/or BCA markets. But such a reference could well be called for depending on how events turn out in the next few years and specifically whether:

• A strong and effective challenger has resulted from the LBG divestiture;

• Ease of switching has been transformed by the early establishment of a robust and risk-free redirection service; and

• A strongly pro-competitive FCA has been established and is demonstrating progress to improve transparency and reduce barriers to entry and expansion for rivals to incumbent banks. If one or more of these conditions is not achieved by 2015, the Commission recommends that a market investigation reference should be actively considered if the OFT has not already made one following its proposed review in 2012 of the PCA market.

In recent months the macroeconomic and sovereign debt problems consequent upon the financial crisis that began in 2007 have widened and deepened, and levels of stress in bank funding markets have risen again. The ongoing strain on the economy and financial markets reinforces the importance of improving the resilience of the UK banking system. The reforms proposed in this Final Report are aimed at long-term stability. The Commission’s view is that setting 2019 as the final deadline for full implementation provides ample time to minimise any transition risks. Although deliberately composed of moderate elements, the reform package is far-reaching.

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Together with other reforms in train, it would put the UK banking system of 2019 on an altogether different basis from that of 2007. In many respects, however, it would be restorative of what went before in the recent past – better-capitalised, less leveraged banking more focused on the needs of savers and borrowers in the domestic economy. Banks are at the heart of the financial system and hence of the market economy. The reforms, if implemented, also go further than the US and the Euro zone.

iii) EU

The EU is putting in place a comprehensive reform package based on five principles:

I – Supervision,

II – Transparency,

III – Stability,

IV – Responsibility,

V – Protection.

I – First, supervision

The crisis revealed there was no proper coordination between national supervisory authorities. No institution anticipated risk accumulating in the financial system or was able to take measures at European or global level.

Therefore, one of the first tasks was to envisage a new supervisory architecture.

The new system started on the 1st of January 2011. It is composed of three European supervisory authorities: for banks (EBA), financial markets (ESMA) and insurance and occupational pensions (EIOPA).

These authorities will play a key role in preparing new common rules. They will ensure the proper application of European law. They will encourage cooperation between national supervisors. And they will settle possible disagreements between them.

The reform gives the new Authorities a role in ensuring that colleges of supervisors function well, in the interests of both home and host country supervisors.

The European Securities and Markets Authority has exclusive competence to regulate credit rating agencies. It is envisaged that new proposals to reduce

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over reliance on credit rating agencies, and new rules as regards sovereign debt ratings.

II – To succeed, the new European supervisory agencies will need a more transparent financial sector. This is the second principle.

In 2008, opacity played a major role in the transmission of the crisis. No one knew who was holding risky assets like subprimes. And this led to general suspicion.

Transparency must apply to all financial institutions. This is the purpose of the directive on alternative investment fund managers (AIFM), which imposes reporting obligations on financial actors like hedge funds.

Transparency must also concern all financial instruments and techniques, even the most sophisticated ones.

The EU has made important proposals on derivatives and short-selling. These will allow it to act efficiently against abusive use of credit default swaps on sovereign debt. These initiatives are now being debated by the European Parliament and the Council.

Transparency will help reduce the probability of future crises. But it will not be sufficient to prevent a new crisis from happening.

III – The third principle is stability

In 2008, banks were not capitalised enough to face the crisis and continue financing the real economy.

We must avoid a repetition of this situation. And that is what the proposal on capital requirements (CRD IV) is about. This proposal faithfully implements the Basel III agreement. It requires banks to hold more capital, of better quality.

This package of measures will represent a significant cost for the banks. But the efforts will be spread over 7 years (until 2019) and will be more than compensated by the benefits of a stronger banking system.

The Basel Committee estimates the EU will gain between 0.3 and 2 GDP points per year. But CRD IV goes further. It also aims to create a Single Rulebook of financial regulation. It will be directly applicable in all Member States.

The goal is to create a real single market for financial services, making it easier for cross-border banks to operate in Europe and to allow supervisors to act in a coordinated way.

Supervisors will also be able to require more own funds from banks that face more risks.

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IV – With CRD IV, banks will be more resistant. But we also need financial institutions to be more responsible. That is the fourth principle.

The huge bonuses which were being given to traders before the crisis were an incentive to short-termism and excessive risk-taking.

That is why the EU now regulate bonuses. Under our new rules, a large part of bonuses must be deferred for at least three years. It is also proposed that a new framework on bank recovery and resolution be created. By setting up common tools, our goal is to prevent potential crises from having systemic effects. We also want to avoid a situation where the cost of a potential new bank crisis is borne once again by taxpayers.

V – The last principle is protection.

One of the first initiatives after the crisis was to ensure that every bank in Europe, in case it fails, guarantees each depositor up to 100,000 euro.

The EU has also proposed measures to regulate mortgage loans. The responsible lending directive will make sure that all mortgage lenders act in a fair, honest and professional manner.

Perhaps the greatest difficulty for the EU is that whilst there is an economic zone and monetary union there is not political union and therefore independent member bodies also have to enact the changes through their democratic institutions. This was raised with me frequently on this trip as a serious issue. In Spain it was put as high as the current political institutions are and the EU structure are unsustainable and that member nations at some stage will need to choose as to whether they continue with the EU or transcend to a greater integration of democratic and bureaucratic institutions to give common application to European wide issues. I will be saying a bit more about this difficulty in relation to monetary and fiscal policy in the next section of this report.

C. Fiscal Response

The OECD made the following point in relation to the crisis and government action around the world.

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“The global recovery from the deepest recession since the Great Depression has been underway for some time now, but it remains overly dependent on macroeconomic policy stimulus and has so far been insufficient to address high and persistent unemployment in many countries. With fiscal stimulus bound to be gradually withdrawn to address unsustainable public debt dynamics and little if any further support to be expected from monetary policy, the main challenge facing OECD governments today is turning a policy driven recovery into self-sustained growth. Speeding up the structural reform process, which outside the financial regulation area has slowed during the global recession, could make a decisive contribution in this regard. In a context of crisis recovery, priority may be given to reforms that are most conducive to short-term growth and help the unemployed and those outside the labour force to remain in contact with the labour market.”

In countries that I visited the fiscal stimulus was ending and being replaced by austerity programs aimed at reducing government debt. Monetary policy has also been responding with the US keeping its rates at effectively zero whilst in the Euro zone and the UK small increases in monetary rates occurred in the first six months of 2011.

A. UK

The major theme for UK's economic outlook and the sterling's prospect in 2011 is fiscal consolidation. With general government debt at 69.42% of GDP and expected to peak at 79.54% in 2013 the incoming Conservative/liberal coalition government introduced a series of austerity measures aimed at fiscal consolidation. At the same time the Bank of England has tightened monetary policy slightly in relation to naggingly long term high inflation which is also acting as a major break on the UK economy. The Central Bank has also deliberately allowed sterling to reduce in value as a mechanism to make manufacturing and exports more competitive and help stimulate the economy. The austerity measures are very politically unpopular and labour unions have been able to turn out hundreds of thousands in protests against the measures. There is also some commentary questioning whether with low private sector activity still in the economy if having the public expenditure tap turned off will have recession provoking effects on the UK economy and dramatically affect the labour market that has stood up remarkably well during the 2008 crisis.

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B. Ireland

Ireland has government debt levels at 95.21% of GDP in 2011 and it is estimated to peak at 110.34% in 2013. The previous Irish government introduced tough austerity measures and saw their 70 odd seats in the Irish parliament reduced to just over 20. Despite this the new government has adopted the introduced measures and continues to work at reducing government expenditure. Unlike the UK, Ireland has over 14.5% unemployment. As part of the EU of course it also faces a tightening monetary policy which whilst it may suit Germany and the tier one European nations one has to wonder if that and the austerity measures are going to contribute to a very long term recovery. In Ireland discussion about defaulting was also high and it appears with a weak domestic economy that restructuring EU loans appears to be the most viable option for the Irish government. The value of the Euro which remains relatively high is also working against the recovery of the Irish economy.

C. Spain

Spain is better-placed than Italy or France because it has already set in motion steps to tackle the deficit and restructure its banking industry.

Spanish Socialist Prime Minister Jose Luis Rodriguez Zapatero called two exceptional cabinet meetings on Aug. 19 and Aug. 26 to take measures to ensure the country will meet its deficit target this year and boost growth.

The government plans to encourage temporary contracts to help the labour market and modify the taxation calendar for large companies to increase tax receipts by 2.5 billion euros ($3.6 billion) in 2011. An extra 2.4 billion euros of cuts will come from reductions to regions’ pharmaceutical spending. This initiative is put in the context of 19% unemployment rates in 2011. I will talk a little about labour market reforms and outcomes later in this report.

The Spanish federal Government has also uniquely with the agreement of the various states set fiscal and debt consolidation targets. This sharing of the burden is seen as essential to make sure that cuts to the various government spending packages.

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D. U.S. Fiscal Policy

Turning first to U.S. fiscal policy, the slow pace so far of economic recovery and weak job creation—despite the wide margin of excess capacity—argues for maintaining supportive monetary and fiscal policies in the very near term. Indeed, expansionary fiscal policy already played a critical role in averting a deeper U.S. recession. According to IMF analysis, fiscal measures contributed about 2 percentage points to GDP growth in 2009, and another one percentage point last year. At the same time, federal debt held by the public has risen from about 36 percent of GDP in 2007 to about 62 percent of GDP in 2010, while prospective debt dynamics have worsened significantly. In the absence of corrective measures, and taking into account underlying fiscal pressures that predated the crisis, debt could reach about 95 percent of GDP by the end of this decade—a level last reached immediately following World War II. Without policy adjustments, subsequently the debt simply would keep rising. From this perspective, the need for urgent action to secure medium-term fiscal sustainability appears to be self-evident.

Given the sluggishness of the recovery, the recent adoption of a new U.S. fiscal package is understandable. The measures likely will boost growth this year by about half a percentage point. Of course, it also will raise the deficit. Maintaining a supportive fiscal policy stance at this time reflects the reality that with policy interest rates near zero, the effectiveness of monetary policy is uncertain. Having said this, the Fed’s latest quantitative easing program—that likely will have only a modest impact on growth—appears nonetheless to have reduced perceptions of downside risks, by reinforcing the Fed’s commitment to preventing an ongoing decline in already-low long-term inflation expectations and to supporting the recovery. Although causality is difficult to demonstrate convincingly, inflation expectations rose notably last August—as reflected in the yields on Treasury Inflation Protected Securities (or TIPS)—after the Fed signalled the imminent prospect of further unconventional easing.

The new fiscal package includes several measures that are likely to help boost aggregate demand, although the package also includes other measures that may be less likely to do so. The extension in unemployment benefits will put cash directly into the hands of those with a high propensity to spend—although that is not the sole justification for such a move. The extension of temporary tax breaks for low and middle-income households also will have a positive impact on spending, although with the well-known limitations of temporary tax measures. Other measures were not as well targeted, and the package entails a sizable increase in the deficit—by about 1 percent of GDP in both FY2011 and FY2012—compared to the IMF’s previous forecast, that

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already included the impact of some anticipated measures (like not changing marginal tax rates for low and middle-income households).

Despite the expected positive impact on growth, the new measures also will make it more difficult for the United States to meet the commitment made by G-20 members at last year's Toronto Summit to halve the deficit as a percent of GDP between 2010 and 2013. In this sense, the stakes are being raised on the development of credible plans to attain medium-term fiscal sustainability.

Indeed, the challenges facing U.S. public finances should not be underestimated, given the sluggish recovery and the prospect of significant increases in aging and health-related spending.

Nonetheless, it’s important to note that only about one-fifth of the overall increase in U.S. public debt projected by the IMF through the end of the decade—a little over 10 percentage points of GDP—is accounted for by the discretionary fiscal measures implemented in response to the recent downturn. And of this, the net cost of the financial sector rescue efforts probably will represent less than 1½ percentage points of GDP (including the support provided to Fannie Mae and Freddie Mac). The bulk of the projected debt increase reflects the severity of the recession that lowered output, raised spending and depressed tax revenues. The prospect that the crisis will have lowered potential growth—thereby lowering the future rate of revenue growth, as well as its current level—also could play a role. Of course, to the extent that growth surprises on the upside, the eventual burden of needed fiscal adjustment could be lightened.

In fact, there may be a brief near-term window of opportunity opening for U.S. fiscal policy adjustment that shouldn't be missed. For now, U.S. interest rates remain low by historical standards—in part due to low growth and inflation prospects, but also reflecting a low risk premium on U.S. government debt. As a result, total public debt service payments have not risen relative to GDP, despite the sharp rise in the U.S. debt-to-GDP ratio. Moreover, as the economy gains momentum, automatic stabilizers will help to lower the deficit—at least in the short run. In our view, the United States needs to make the most of this window of opportunity to tackle structural fiscal problems—especially entitlements—before real rates begin to renormalize, and the positive impact of the automatic stabilizers on the deficit recedes, adding to the perceived difficulty of making progress on longer-run fiscal challenges.

The ongoing debate on how best to achieve medium-term fiscal consolidation has received an important boost from the National Commission on Fiscal Responsibility and Reform. In its recent report, the Commission proposed an ambitious consolidation plan, emphasizing the need for broad-based revenue

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and spending measures. The plan sets very ambitious targets—to stabilize public debt by FY2014 and return it to its pre-crisis level of about 40 percent of GDP by 2035. Under the Commission's proposals, tax expenditures would be scaled back, allowing marginal tax rates to be reduced. Social Security would be put on a sound financial footing through measures such as means-testing benefits and increasing the retirement age. And to contain health care costs, significant medium-term savings would be attained through a reform of cost-sharing rules and of certain public programs, and also by setting limits—beginning in 2020—on the growth of all federal health-related transfer programs. Another widely-cited idea to support fiscal consolidation—although not put forward by the Commission—is to introduce a national consumption tax, such as a value-added tax—or VAT. Such a measure could enhance national savings while raising revenue with limited economic distortions.

The Commission also calls for reforming budgetary processes to help keep deficit reduction on track. These would include caps on discretionary spending through 2020—with the goal of bringing such spending in real terms back to 2008 levels by 2013; and from then onwards limiting its growth to one-half the projected inflation rate. More generally, by enshrining fiscal targets (including the debt-to-GDP ratio) in budget proposals and by enacting concrete legislation relatively soon, private sector expectations could become progressively more optimistic about fiscal policy prospects, helping the sustained effort that will be needed to anchor fiscal credibility.

Fiscal consolidation not only is a challenge for the federal government, but also for state and local governments. State and local debt currently amounts to about 20 percent of GDP, or about a third of the size of the federal debt. However, unfunded state and local pension and retirement health care entitlements pose significant medium-term risks, as they are estimated at anywhere from $1 trillion to $3 trillion, or possibly equal in size to their outstanding debt. In some states and localities, servicing such a debt burden under current constitutional and other legal strictures would require significant cuts in discretionary spending and/or huge tax increases. Although many states and localities already have started facing these issues, for example by scaling back retirement benefits for new employees, much more decisive action will be required over time in order to reduce medium-term solvency risks.

In contrast to the federal government, most state and local governments are mandated to maintain balanced operational budgets. While this arrangement has prevented a greater run-up in debt, it also has mandated cuts in discretionary spending (and other measures like staff furloughs), following a period in which such spending had increased significantly. Emergency federal

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transfers, covering about a third of the states’ shortfalls in FY2009 and FY2010, have helped to cushion the blow some extent. For now, state and local revenue appears to be recovering, with tax receipts up 5 percent on an annual basis in the third quarter of 2010. However, the expected phase-out of federal emergency transfers, combined with the need to re-build fiscal reserves and create room for rising entitlements, mean that fiscal consolidation at the local level will remain an ongoing and urgent challenge for some time to come.

D. Health a special case i) OECD

Rising health care spending is putting pressure on government budgets. Governments will have to make their health care systems more efficient if they are to maintain quality of care without putting further stress on public finances. The OECD has assembled new comparative data on health policies and health care system efficiency for its member countries. These show that all countries surveyed can improve the effectiveness of their health care spending. If all countries were to become as efficient as the best performers, life expectancy at birth could be raised by more than two years on average across the OECD, without increasing health care spending. There is no single type of health care system that performs systematically better in delivering cost-effective health care, as both market-based and more centralised command-and-control systems have strengths and weaknesses. It seems to be less the type of system that matters, but rather how it is managed. Policy makers should aim for policy coherence by adopting best practices from other health care systems and tailoring them to their own circumstances. Nevertheless, the international comparison highlights a number of sources of potential efficiency gains, such as from improving to co-ordination of the bodies involved in health care management, strengthening gate-keeping, increasing out-of-pocket payments, enhancing information on quality and prices, reforming provider payment schemes or adjusting regulations concerning hospital workforce and equipment. By improving the efficiency of the health care system, public spending savings would be large, approaching 2% of GDP on average across the OECD.

ii) US

In the United States there was general concern about the US government’s fiscal consolidation strategy. In particular however the main area of federal

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spending that was raised as a concern was in relation to healthcare. Net Medicare outlays in the US have risen at a rate of 9% annually since 1980. At CITI the view was put that not only was this unsustainable but that in fact Healthcare was consuming such an ever growing proportion of the US government’s expenditure that it was unlikely ever to be able to bring this under control.

CITI estimate that within the next 5 years there will be a fiscal crisis in the United States based around the ever expanding and out of control health expenditure. Other commentators I saw were not as pessimistic but all conceded that the US healthcare model needed to be reformed dramatically as its costs to the government were unsustainable particularly as the baby boomer bubble moves into their elderly and health wise more costly years.

E. Housing Market i) OECD Overview

OECD compares a number of housing policies for a range of OECD countries and concludes that badly-designed policies can have substantial negative effects on the economy, for instance by increasing the level and volatility of real house prices and preventing people from moving easily to follow employment opportunities. Some of these policies played an important role in triggering the recent financial and economic crisis and could also slow down the recovery. Financial market liberalisation eased access to credit and increased owner-occupancy among credit-constrained households Housing finance markets have changed drastically over recent decades, reflecting a wave of financial reforms motivated by broader economic efficiency goals. Liberalisation significantly expands borrowing opportunities and lowers borrowing costs for housing, resulting in a substantial expansion in the supply of mortgage loans in many countries (ECB, 2009; Ellis, 2006). One key development has been the significant reduction in down payment requirements, enabling households to rely more on debt to finance housing investment. Requirements for high down payments tend to negatively affect lower income consumers and particularly younger households, who often have had less time to accumulate the necessary capital for a deposit. One measure of this down payment constraint is the maximum loan-to-value ratio – the

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maximum permitted value of the loan as a share of the market price of the property. Estimates suggest that a 10 percentage point decrease in the maximum loan-to-value ratio is associated with a 12% rise in the home ownership rate among younger low-income households (i.e. owners aged 25-34 years in the second income quartile) compared to a typical household. The links between deregulation, house prices and house price volatility The expansion in the availability of credit has increased housing demand and real house prices in many countries. Financial deregulation is estimated to have increased real house prices by as much as 30% in the average OECD country over 1980 to 2005. On the one hand, more competitive mortgage markets with more diverse funding sources, lenders and loan products are likely to strengthen economic resilience by facilitating housing equity withdrawal. On the other hand, they also make it easier for investors to borrow to buy homes, which may make house prices more volatile. In fact, increases in permissible leverage (measured by the maximum loan-to-value ratio) tend to exacerbate real house price volatility in a large sample of OECD countries (Table 4.2). Greater house price volatility in turn can decrease macroeconomic stability and income certainty for households. It can also raise systemic risks as the banking and mortgage sectors are vulnerable to fluctuations in house prices due to their exposure to the housing market. The link between banking supervision and house price volatility Inadequate banking supervision and, in turn, poorly underwritten residential mortgage contracts played a significant role in the run up to the recent financial crisis, which was characterised by a noticeable increase in house price variability. While easing credit constraints is generally desirable, in the absence of adequate regulatory oversight, policy changes that trigger a relaxation in lending standards can increase non-performing loans (i.e. loan that is in default or close to being in default), thereby jeopardising macroeconomic stability. For instance, lending standards in the United States were significantly relaxed during the housing boom: in 2001, only 8% of home purchasers had a down payment of zero, but by 2007 this figure had risen to 22% (US Census Bureau, 2007). The OECD estimates that the quality of banking supervision can have a large impact on house price volatility. For the average OECD country, a further improvement in supervisory arrangements equivalent to that observed over the 1990-2005 period could reduce real house price volatility by around 25%, all other things being equal.

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House prices increase more where housing supply is slow to respond to demand The price responsiveness of new housing investment determines the extent to which increases in demand for housing, for instance following easier access to credit. Higher prices rather than in more housing investment. According to OECD estimates, the long-run price responsiveness of new housing supply tends to be relatively strong in North America and some Nordic countries, while it is weaker in continental European countries and the United Kingdom In the short to medium term, an increase in housing demand (e.g. caused by mortgage market deregulation, higher levels of activity and employment or migration inflows) would translate into smaller increases in real house prices if housing supply is more responsive. Responsive housing supply is especially important to avoid bottlenecks in different segments of the market. However, the flip side is that in flexible-supply countries, housing investment adjusts more rapidly to large changes in demand. This contributes to more cyclical swings in economic growth, as witnessed by recent developments. Despite this trade-off, in the longer term a more flexible supply of housing is generally desirable as it allows a better match of housing construction to changes in housing demand patterns across the territory. Estimates show that the influence of supply responsiveness on the reaction to housing demand shocks is likely to be large, all else being equal.

ii) Spain

The residential real estate bubble in Spain saw real estate prices rise 201% from 1985 to 2007. € 651,168,000,000 is the current mortgage debt (second quarter 2005) of Spanish families (this debt continues to grow at 25% per year - 2001 through 2005, with 97% of mortgages at variable rate interest). In 2004 509,293 new properties were built in Spain and in 2005 the number of new properties built was 528,754. 2004 estimations of demand: 300,000 for Spanish people, 100,000 for foreign investors, 100,000 for foreign people living in Spain and 300,000 for stock; in a country with 16.5 million families, 22-24

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million houses and 3-4 million empty houses. From all the houses built over the 2001-2007 period, "no less than 28%" are vacant as of late 2008.

House ownership in Spain is above 80%. The desire to own one's own home was encouraged by governments in the 60s and 70s, and has thus become part of the Spanish psyche. In addition, tax regulation encourages ownership: 15% of mortgage payments are deductible from personal income taxes. Even more, the oldest apartments are controlled by non-inflation-adjusted rent-controls and eviction is slow, therefore discouraging renting.

As feared, when the speculative bubble popped Spain became one of the worst affected countries. According to Eurostat, over the June 2007-June 2008 period, Spain has been the European country with the sharpest plunge in construction rates. Actual sales over the July 2007-June 2008 period were down an average 25.3% (with the lion's share of the loss arguably happening in the 2008 tract of this period). So far, some regions have been more affected than others (Catalonia was ahead in this regard with a 42.2% sales plunge while sparsely populated regions like Extremadura were down a mere 1.7% over the same period).

Banks offered 40-year and, more recently, 50-year mortgages. Unlike Ireland, Spanish labour costs did not track house market rises. While some observers suggest that a soft landing will occur, others suggest that a crash in prices is probable. Lower home prices will allow low-income families and young people to enter the market; however, there is a strong perception that house prices never go down. As of August 2008, while new constructions have come virtually to a halt, prices have not had significant movements, neither up nor downwards. The national average price as of late 2008 is 2,095 euros/m2.

Other significant features of the Spanish property market are the fact that Spain has one of the highest levels of home ownership and very low levels of rental properties. This is partly explained by the social arrangements of Spanish families were children often don’t leave the family home until they are in their mid thirties and therefore are in a position of having high level of personal savings to enable property purchasing. In terms of the rental market, overly protected tenants rights are blamed for the low level of stock in this area. The Spanish government as part of the crisis response introduced a range of measures to get a better balance in this area.

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iii) Ireland

The property bubble in the Republic of Ireland began in 2000 and peaked in 2006, as with many other western European countries, with a combination of increased speculative construction and rapidly rising prices. As elsewhere, prices stabilized in 2007 and the bubble burst during 2008. By the second quarter of 2010, house prices had fallen by 35% compared with the second quarter of 2007, and the number of housing loans approved fell by 73%. The fall in domestic and commercial property prices contributed to the Irish banking crisis. As of March 2011, prices continue to fall.

Unoccupied Housing in Australia

NSW Vic Qld SA WA Tas NT ACT Aust

9.5 10.3 9.2 10.3 10.7 12.8 9.5 6.5 9.9

• Over the last 30 years the national rate of unoccupied dwellings has remained between 9 and 10 per cent.

1976 1981 1986 1991 1996 2001 2006

9.4 9.1 9.5 9.3 9.5 9.2 9.9

International Comparison

Total numbers of unoccupied dwellings in selected other countries are listed below.

Unoccupied

Dwellings Total

Dwellings Per cent

Unoccupied Reference

Year Country (million) (million) % USA 18.7 131.2 14.3 June Qtr 2011 Ireland 0.3 1.8 16.7 2006 England 0.7 22.9 3.1 2010

Spain 3.4 20.9 16.2 2001

Denmark 0.1 2.5 3.6 2001 Finland 0.2 2.5 8.0 2001 France 2.0 28.7 6.9 2001 Greece 1.3 5.5 24.2 2001 Italy 5.6 27.3 20.6 2001 Poland 0.6 12.5 4.9 2001 Portugal 0.5 5.0 10.8 2001 Switzerland 0.1 3.6 3.4 2001

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F. Labour Market and Unions response

One of the area’s that was raised in discussion in all countries that I visit was the Labour market and the way in which it operated during the crisis. The position that was put to me by both industry and trade unions in the UK was that the more flexible nature of the UK labour market protected it to some extent from the projected job loses. I was told that employers chose to reduce hours rather than shed jobs and that this was unique in relation to industries’ response to a recession.

In Ireland and Spain the unemployment story was very different. Ireland and Spain both had the global financial crisis compounded by a property market crash that I have already discussed.

In Spain there were policy initiatives and ongoing employer and employee discussions to change the nature of the labour market. In Spain employees who are given permanency by their employer enjoy significant employee entitlements including extended redundancy pay. Policy makers and employers have argued that in Spain this has contributed towards higher unemployment rates as employers put new employees on temporary (and in terms of entitlements much inferior) contracts which employers feel no compunction to retain these employees in downturn. The Spanish compare this structural inefficiency with the UK and German result (and indeed Australia) where employers retained employees to a far greater extent than was expected and used labour flexibility in those countries to reduce hours rather than simple reduce the size of the workforce.

Labour unions are naturally finding this confronting in relation to having to look at structural change that will reduce the benefits to their members and employees generally as the difference in entitlements between permanent and temporary employees is reduced so that incentives to hire temporary employees and fire them in downturns is also reduced.

In the US however employers have not responded to the flexibility that exists in that labour market by adopting similar approaches to German, the UK and Australia. Rather despite the flexibility of the US labour market, US employers responded to the crisis by shedding staff in large numbers. One has to perhaps

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question whether it is the issue of flexibility or the corporate culture of a country’s employers that determines the different responses to the crisis in relation to employment patterns and options. Having said that clearly the rigidity of the Spanish labour market could not have helped employers retain staff at reduced hours during the worst of the crisis.

3. Conclusion

The trip provided an invaluable insight into the economies of key countries in Europe and the US on a multifaceted basis with discussions occurring at national, state and local government levels, with industry and the finance sectors, Central Banks and labour unions. The trip exposed me to the many and varied approaches that were taken and the impact on economies and communities. There was also the opportunity to look at different ways to deal with similar problems that arose out of the global financial crisis.

A large part of the report is spent examining the regulatory response because I feel as legislators a better understanding of responses overseas puts me in a better position to look at alternative responses in this country.

Perhaps as important however there was the opportunity on this trip to make observations about the likely success of the measures adopted and the ramifications for Australia and the global economy of such measures not just in the short term but over the coming years.

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Appendix A

Thomson itinerary

Date City Meeting Travel 26 March Flight

Sydney – Singapore - London

QF 31

27 March London Flight arrives in London 28 March London Bank of England London CitiGroup London Barclays Capital London HSBC 29 March London Independent Commission on Banking 30 March London British Bankers Association London Trade Union Congress London Australian High Commission 31 March London Royal bank of Scotland 1 April London Free day 2nd April London Weekend 3 April Flight

London - Dublin

Airlingus Flight 169

4 April Dublin Irish Congress of Trade Unions 5 April Dublin Macquarie Capital Dublin Australian Embassy Dublin Dail Chamber 6 April Dublin National treasury Management Agency Dublin Finance Minister 7 April Dublin Opp Finance Minister 8 April Flight Dublin

- Paris Airlingus Flight 524

9 April Paris Weekend 10 April Paris Weekend 11 April Paris OECD 12 April Paris OECD 13 April Paris OECD Trade Union Advisory Committee

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14 April Paris Free day 15 April Paris Free Day 16 April Paris Weekend 17 April Flight Paris -

Madrid Iberia Flight 3435

18 April Madrid Banco de Espana Madrid Ministry for Economy and Finance Madrid Confederation of Employers and Industries

Spain 19 April Madrid BBVA 20 April Madrid General Workers Union 21 April – 25 April

Madrid - Barcelona

Easter Holidays

26 April Barcelona Catalonian State Government 27 April Barcelona La Caixa Barcelona IESE Business School 28 April Flight

Barcelona – New York

Travelling

29 April New York City Hall NYC 30 April New York Weekend 1 May New York Weekend 2 May New York CBA 3 May New York Specialist in Dodd Frank reform New York Westpac New York Citi New York Goldman Sachs New York JP Morgan 4 May New York Reserve Bank 5 May New York Bank of America New York ANZ 5 May Flight New

York – LA - Sydney

Return flight home

MR ANDREW LAMING MP

United States of America and the United Kingdom 28 March – 24 April 2011

THE HON ALAN GRIFFIN MP

South Africa, Zimbabwe, Ghana and Ethiopia 31 March – 19 April 2011

A number of pages from this individual study report are not included in this Tabling document. A copy of the full report (and any supporting documentation) is available on written request to the Office of the Special Minister of State.

DR ANDREW SOUTHCOTT MP

United Kingdom, the Netherlands, France, Switzerland, Italy and Singapore 31 March – 24 April 2011

SENATOR DAVID BUSHBY

United States of America, the United Kingdom and Hong Kong 1 – 20 April 2011

MS MARIA VAMVAKINOU MP

Greece, Cyprus, Jordan, Palestinian Territories and Israel1 – 27 April 2011

SENATOR THE HON MICHAEL RONALDSON

United Kingdom, Italy and Turkey 1 – 28 April 2011

MR LUKE SIMPKINS MP

Greece and the Former Yugoslav Republic of Macedonia 4 – 20 April 2011

MRS SOPHIE MIRABELLA MP

United Kingdom, Belgium, Turkey, Italy and the United States of America 5 April – 2 May 2011

SENATOR CORY BERNARDI United Kingdom, the Republic of Ireland, the Netherlands, Belgium, France and Italy

7 – 29 April 2011

SENATOR THE HON IAN MACDONALD

United Kingdom, Spain, Switzerland, Austria, France and Belgium 7 – 29 April 2011

SENATOR STEPHEN PARRY

Canada and the United States of America 8 – 19 April 2011

Report not received at time of preparation of this document.

SENATOR HELEN POLLEY

Italy, United Kingdom and Germany 8 April – 6 May 2011

Due to the size of this individual study report a number of pages are not included in this Tabling document. A copy of the full report (and any supporting documentation) is available on written request to the Office of the Special Minister of State.

THE HON SUSSAN LEY MP Jordan, Palestinian Territories and Israel

12 – 27 April 2011

MS MELISSA PARKE MP

Syria, Jordan, Palestinian Territories and Israel 12 April – 4 May 2011

A number of pages from this individual study report are not included in this Tabling document. A copy of the full report (and any supporting documentation) is available on written request to the Office of the Special Minister of State.

    The Hon Gary Gray AO MP Special Minister of State Suite M1 23 Parliament House Canberra ACT 2600   

3 June 2011 Dear Minister,   Report on Overseas Study Tour  In accordance with the requirements of Clause 9.2(b) of Remuneration Tribunal Determination 2006/18 (the Determination), I submit the attached statement reporting on my recent overseas study journey.  I note that, in accordance with Clause 9.5 of the Determination, a copy of this statement may be obtained from you upon request by any Senator or Member. I also note that this statement will be tabled in Parliament at your discretion, including as part of the six‐monthly tabling of travel costs for Senators and Members.    Yours sincerely,    Melissa Parke MP Federal Member for Fremantle         

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 STUDY TOUR TO PALESTINE  Tour participants:  Members of Parliament  Ms Maria Vamvakinou MP, Member for Calwell, Chair of the Australian    Parliamentary Friends of Palestine The Hon Sussan Ley MP, Member for Farrer, Deputy Chair of the Australian Parliamentary Friends of Palestine Ms Jill Hall MP, Member for Shortland, Deputy Government Whip Ms Melissa Parke MP, Member for Fremantle  Palestinian Ambassador to Australia Mr Izzat Abdulhadi  Palestinian Legislative Council Public Relations  Mr Rabiya Al Barghouti  Family of Members Ms Stella Michael Ms Georgina Ley Mr Lindsay Hall  Aides: Mr Basem Abdo Mr David Forde Mrs Patricia Abbott                  

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(i) Purpose(s) of the journey:   

• To study inter‐parliamentary and inter‐governmental relations between Australia‐ Palestine/Israel and the potential to progress bilateral relations in the areas of education, health, culture, aid and development.   

• To Examine Australia's development aid programs/projects in the West Bank and Gaza.   

• To study the operations of UNRWA, the UN refugee agency, a significant recipient of Australian aid in West Bank, Gaza and Syria.   

• To examine the contribution and potential of Australia’s foreign policy approach to a lasting two‐state solution by engaging with senior members of the Palestinian Authority, civil society, academics and NGOs.   

• To visit the Commonwealth War cemetery in Gaza.   Amendments to program:  The group had developed an alternative program for two days in the event that we were not granted access to Gaza. The alternative program included meetings with Israeli Knesset members and with the Palestinian Minister for Foreign Affairs.   When the group was informed late on the evening of the day we were due to go to Gaza that we would be granted entry by the Israeli authorities the following day, it was decided that I would go to Gaza to represent the group while the other members of the group would attend the meetings in Israel and Palestine as had been arranged as an alternative.  Due to the security situation on the day we were in Nablus (24 April), the group was unable to visit the Balata refugee camp, Al Najar University, or the Care Australia projects in Tubas, although the manager of the Care Australia projects, Mr Abdel Aziz from the Applied Research Institute‐Jerusalem (ARIJ) came to Nablus to brief the group on the projects.         

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(ii) Summary of Travel and Key Meetings   Syria:  Wednesday 13 April I arrived in Damascus from Australia in the late afternoon and checked into the Talisman hotel at 116 Al Hijara Street in the old city.   Thursday 14 April Meeting with Mr Roger Hearn, Director of UNRWA in Syria Mr Hearn provided an overview of the security situation in Syria and the effect on UNRWA operations.  He then described the modernisation and reform processes that have been taking place within all UNRWA departments and field offices. For instance all UNRWA directors have been recruited from outside rather than candidacy being restricted to long‐term employees of UNRWA. Mr Hearn also spoke about some of UNRWA’s successful programs in Syria, including the Damascus Training Centre’s new competency‐based approach to training that is tailored to the needs of the local market and is achieving 90‐100% employment for graduates. Syria’s approach has now been adopted in other UNRWA fields. In addition, UNRWA Syria is trialling the establishment of 12 youth centres that are promoting leadership and entrepreneurship among youth. He said it is completely “un‐UNRWA”.  Mr Hearn noted that UNRWA is facing a financial crisis, being $50million in the red this year.  There have been steep salary increases across the region, for example, a 33% increase in government salaries in Syria last month alone. UNRWA is committed to matching local salaries.   Mr Hearn noted that Australia is one of UNRWA’s best donors, giving 3 year commitments of $10 million on average, and increasing the commitment each year.   Mr Hearn said Australia could assist further by funding Junior Professional Officers (JPO) and 5 P‐3 positions to provide special assistants to directors.  He also noted that the AVI program had been suspended by Ausaid last year.   Meeting with Mr Fawzi Al‐Madfa, Principal Damascus Training Centre, UNRWA  The DTC was established in 1961 and has a staff of 150 and a capacity of 1,090 trainees, although they currently are over capacity with 1177 trainees.  The DTC has moved in the last few years from an academic approach to competency based courses tailored specifically to the local market needs. DTC has achieved 90‐100% employment for graduates of its training courses and is being emulated in other UNRWA training centres. 

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 The DTC offers training on 2 levels: trade and semi‐professional. Students can apply to enter one of 18 one‐year trade courses (e.g. kitchen cabinet, carpentry, central heating, computing) after they have finished 9 years of study at school. To become a craftsman, students must complete 2 years of a trade course.  Students who have completed 12 years of school study can apply to enter one of 13 2‐year semi‐professional courses (eg assistant architect, assistant civil engineer, graphic design, assistant pharmacists, lab technicians, banking, financial management, secretarial, marketing, mechatronics). 53% of students undertaking semi‐skilled courses are girls, while very few girls undertake trade courses (except sewing).  This is at least partly to do with employer attitudes as female graduates of trade courses could not find on the job training or employment.  DTC, with assistance from the Danish Refugee Council, is also conducting short‐term courses of 3‐4 months to move people from a no‐skill level to a semi‐skilled labourer level.  This moves them one step upwards and helps them to achieve more job security. For example, the DTC enabled 48 unemployed Palestinian refugees in Homs to secure jobs in welding after completing a short‐term course. There are also short‐term courses for assistant cooks and beauticians, sewing, installation and maintenance of air conditioners. The DTC selects courses according to the identified needs of local industry. It established that 18 medical laboratory technicians were needed in El Assad hospital and was able to supply 13 out of the 18 assistants. UNRWA has a good reputation in the market. The DTC uses its facilities after regular working hours to conduct the short‐term courses.   Now that career guidance is offered in schools, DTC wants to see a change in how people regard vocational/technical training.  Lifeskills have been incorporated into the certificates, including ability to work under pressure and as part of a team.  Meeting with project coordinator and youth volunteers: Engaging Youth program  The Engaging Youth program is a new project funded by the EC that has been running for a year. It aims to give young Palestinian refugees access to the labour market by opening up career guidance centres and links to short‐term training courses and employment opportunities. It also provides business guidance and assistance in developing business plans and seeking micro‐finance.      There are 12 youth centres in Syria, 7 in Damascus and 5 in the regions where Palestinian refuge camps are located. They offer lifeskills training according to the model developed by UNICEF. They also teach problem‐solving, teamwork, gender issues and offer individual career counselling, workshops on CV writing and interview skills. The centres also offer youth development activities, providing a space where youth can get together, plan their own activities and be assisted to implement them. I met with youth who had established a variety of clubs for young people, including an English club, social club, cultural club, IT club, journalism club, embroidery club, health club, music club. Many of these clubs carry out worthwhile activities within their communities, for instance, the social club provides Iftar (feast) for elderly 

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people during Ramadan, collects second hand clothes for the poor, and conducts blood donation campaigns. The health club is educating young people about the problems with marriage between relatives and the English club is helping young people to improve their English in a fun way. The clubs emphasise the important roles that young people can play in society.   

  Meeting with Ms Amneh Hassam Sager, Chief of UNRWA Field Relief and Social Services (RSSP)  I met with Ms Amneh Hassam Sager, the Chief of UNRWA Field Relief and Social Services (RSSP). The 2 main aims of RSSP are to ensure a decent standard of living and that human rights are enjoyed to the fullest extent.  Relief services: There are 11,500 refugees registered as special hardship cases and who receive minimal allocations of food and cash ($140 per annum). The Agency currently uses status‐based criteria, however later this year the Agency will move to a poverty‐based approach which has already been successfully trialled by UNRWA in Jordan.  There is a ceiling on the relief budget, which includes $77,000 in annual emergency assistance.  The Chief noted that the demands on the emergency budget are increasing while the Agency’s capacity to respond is necessarily limited. She reported that social workers in the camps are bearing the brunt of the dissatisfaction. Shelter is particularly an issue given the population growth within the same plot of land that was allocated by the Syrian government 62 years ago.  Ms Sager noted that the unemployment rate in Syria is around 16%, although this is an imprecise number as there are no surveys in Syria and no real indicia of social or economic situation. UNRWA is planning is carry out its own survey of refugees in the near future.  

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Social services:  Ms Sager gave me a tour of some of the Agency’s social services including the Yarmouk Community Centre where many of the services are delivered, including child care and kindergarten, microfinance (with a repayment rate of between 90 and 100%), and rehabilitation such as speech therapy and physiotherapy for children.  Children at the centre put on a display of singing and dancing. 

  

 

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 Visit to Al‐Malkyiyeh boys school, Yarmouk refugee camp I visited the Al‐Malkyiyeh boys school, watching a school assembly, visiting student artworks and visiting a classroom where boy students from 4 schools were conducting a model parliament.  Many of the students spoke very good English and asked a number of questions about Australia’s electoral and parliamentary system.  I found this very interesting in light of the developments sweeping Northern Africa and the Middle East, and indeed in Syria itself.    

   Meeting with Ms Elna Sondergaard, Project Manager, International Organisation for Migration (IOM) Ms Sondergaard explained that IOM runs shelters for victims of trafficking, including trafficking for purposes of prostitution and for domestic labour.  Many trafficking victims are Iraqi but also include women from Ukraine, Philippines and Indonesia and some Africans. Given the shared interest in anti‐trafficking activities, IOM in Syria has formerly received Ausaid funding for a project on border management and is applying again to Ausaid in relation to two separate projects. I agreed to write to the Australian Embassy in Jordan to support such an application.  Friday 15 April  Travel from Damascus to Dead Sea, Jordan  Jordan: Saturday 16 April Meet with other parliamentarians at the Movenpick Hotel, Dead Sea to exchange information concerning UNRWA operations in Jordan and Syria and to prepare for the tour to Palestine.  

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West Bank: Sunday 17 April  The group travelled together through Allenby Bridge crossing to the West Bank. We experienced delays totalling 4 and a half hours for processing of documentation and collecting searched luggage.   Meeting with Mayor of Jericho, Mr Hassan Saleh Hussein, and Governor of Jericho Eng. Mr Majed Al‐Fityani, Jericho  The Mayor noted that Jericho is the world’s oldest (11,000 years old) and lowest (300m below sea level) city.  He said that prior to the start of Israel’s occupation in 1967, it was necessary to take a ferry to cross the large Jordan River and the Jordan Valley was the food bowl of the whole region. He said that now the Jordan River is dry and the Valley is like a desert because Israel is diverting the water to settlements and areas within Israel. This has undermined agriculture in the area.    The Mayor commented on a prior visit of Prime Minister Netanyahu to the Jordan Valley, where Mr Netanyahu is reported to have said that Israel cannot withdraw from the area for security reasons. The Mayor’s view is that there can be no valid security reasons in view of the fact that Israel has a peace treaty with Jordan. He says the Israeli presence in the Jordan Valley is more to do with the economic reasons of controlling water and agricultural resources.  The Mayor made the point that the Palestinians are not asking for the whole moon, just some of the moonshine, and simply to live in dignity on 22% of historical Palestine, according to the 1967 borders.  The Governor of Jericho noted the Palestinians’ desire for peace but questioned Israel’s desire for peace, given continuing settlement building, the uprooting of Palestinian owned trees and agriculture, and the ejection of Palestinians from their homes.   

  

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 Meeting with Mr Mohammed Esh’tieh, President’s Adviser, Ramallah  Mr Esh’tieh is the former Dean of Bir Ziet University and recently the Minister for Public Works but resigned from the cabinet 7 months ago and is now the President’s Adviser and the head of negotiations in international fora.  He noted that the Palestinians have made an important shift from a strategy of armed struggle to peaceful negotiation, and have made one compromise after another, however, in his view the Israeli government is not interested in peace. He noted the comment of Dov Weisglass that “this is the first time Palestinians cannot be blamed for losing an opportunity”.  Mr Esh’tieh said that the Palestinian Authority had given the Israel negotiators written position statements on borders, Jerusalem, refugees, water and settlements but they were not interested in reading them. He said the Palestinian Authority is making an incredible effort to maintain security but this not being recognised.  The Israeli military governor of Ramallah decides whether the Palestinian President can have a permit to travel overseas.  Meanwhile Israel continues to take land and water from Palestinians for free without suffering any apparent repercussions for its actions in violation of international law.  He said this is why the Palestinian Authority is turning to the international community for recognition of a Palestinian State and he spoke of the impending processes in the United Nations Security Council and the General Assembly in September 2011.  

   Dinner with Mr Christian Gergis, Deputy Representative, Australian Representative Office in Ramallah, Caesar’s Hotel, Ramallah   

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Monday 18 April  Meeting with Palestinian Negotiation Affairs Department Support Unit, Mr Wassim Khazmo, Policy Adviser, Mr Tarek Hamam, Legal Adviser, and Mr Ashraf Khatib, Communications Adviser, Ramallah  This team works within the negotiation support unit to provide support and advice to the Palestinian leadership. They provided our group with a comprehensive presentation regarding the permanent status negotiations with Israel covering the historical background to the conflict and the issues of statehood/sovereignty, Jerusalem, security, refugees and water.  The team also noted the challenges to a negotiated solution, including Israel’s ongoing building of settlements and the Wall, its internal closure regime in the West Bank, and its control of Palestinian air, land and sea borders.   Meeting with Prime Minister Mr Salam Fayyad, Ramallah  Mr Fayyad noted how odd it is in this day and age that a population should continue to be subjugated by an occupying power.  Mr Fayyad commented on the looseness and high degree of ambiguity with which the issue of Palestinian statehood is discussed. He questioned what kind of state PM Netanyahu might have in mind for Palestine if he intends Israel to continue to control the Jordan Valley and for Jerusalem to be the undivided capital of Israel.    Mr Fayyad pointed out that Palestine cannot be a state of leftovers. He also spoke of some of the challenges facing his people under occupation – that they are prohibited from pursuing economic development, to build roads, to pave roads, to dig wells or to build or extend their own homes without permits from the Israeli military authorities, that olive trees are chopped down on a daily basis.    Mr Fayyad spoke of the program launched by the Palestinian authority to complete the task of getting ready for statehood by creating a critical mass of positive changes on the ground together with a very clear commitment to non‐violence.  He noted that bodies such as the UN, the World Bank and the IMF have confirmed in reports that the PA has crossed the threshold of readiness to form a state.   Mr Fayyad noted that the Australian program of assistance has been significant because it offers a very advanced program of community development over a longer timeframe.   Meeting with Members of the Palestinian Legislative Council Mr Bernard Sabella, Dr Najat Al‐Astal, Mr Ala’a Eddin Yaghi and Dr Walid Mahmoud Mohammed Assaf  Mr Sabella represents the Jerusalem area. He stated that peace is not for the Israelis alone. It is for both Israelis and Palestinians who all want to live as normally 

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as possible with a good education and access to health services, healthy environment and living a peaceful life. But at present the Palestinians are still in the middle of the tunnel without seeing any light.  For instance, in the Jerusalem area Palestinians are discriminated against in the municipal budget and are threatened with eviction from homes they have lived in for decades and with withdrawal of their ID cards.   Dr Najat stated that the situation in Gaza has become worse under the 7‐year siege, and this is particularly affecting youth who may be vulnerable to extremist direction. There are 140,000 families in Gaza without shelter and 80% are living under the poverty line.  Mr Ala’a: Palestinians have shifted from a 30‐year armed struggle to peaceful means. They would like the international community to recognise this and finally grant them their own state. 

   Meeting with Mr Qaddura Fares, Chairman, Palestinian Prisoners Society  The Palestinian Prisoners Society is an NGO established in 1993 as an initiative of the prisoners. Mr Fares himself spent 14 years in Israeli jails and was a member of the Palestinian Legislative Council from 1996‐2006.   There are now 6,000 Palestinian prisoners in Israeli jails, of whom 700 are from Gaza and the remainder are from West Bank, Jerusalem and Israel.  Mr Fares spoke of the Israeli practice of administrative detention, whereby Israeli military officers can arrest and detain a person without charge for 6 months, which 

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is renewable. Some prisoners have been in administrative detention for successive 6 months periods totalling more than 7 years.   Mr Fares spoke of the difficulty for prisoners with severe health issues, including cancer, in receiving adequate treatment.  He said the families of prisoners from Gaza have not been able to visit for more than 4 years.   Mr Fares said that some 80% of prisoners are denied a visit from a lawyer. Such prisoners frequently make ‘deals’ with the courts in order to received reduced sentences. If they try to stand on their rights they will receive the maximum sentence.    He also claimed that a high proportion (95%) of Palestinian prisoners in Israeli prisons are subjected to methods of torture including sleep deprivation of more than 5 days, being made to stand up for 48 hours, having a foul‐smelling bag placed over their heads, being tied onto a chair in a painful position, suffering beatings to their hands and face, being put in a small room with a lack of air, facing humiliation and threats of arrest of family members and demolition of their homes.  This alleged torture is occurring notwithstanding the Israeli High Court decision that torture is only permitted if an Israeli officer believes it is necessary to apply real physical pressure, and a judge grants permission.  Mr Fares spoke about the need for the international community to focus not only on strengthening security forces but also on strengthening judicial institutions and conditions in prisons in order to uphold human rights and democracy in both Israel and the Palestinian Territory.  The group noted that it was Prisoners week in Palestine at the time we visited. 

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 Evening at Orthodox Club, Ramallah The group had a tour of new and renovated community facilities and was treated to a music performance and Dabkeh cultural dancing display, followed by dinner with Dr Husam Zomlot, Executive Deputy Commissioner to Dr Nabil Shaath, Fateh Commission for International relations, Club President Dr Hani K Husary and Mrs Barghouti, wife of Marwan Barghouti, noted Palestinian leader, who is presently serving time in an Israeli prison.   

  Tuesday 19 April  Meeting with Mr Fuad Kokaly, Bethlehem member of the Palestinian Legislative Council, Bethlehem  Mr Kokaly spoke about the issues of settlements, Jerusalem and Gaza. He expressed the view there could be no Palestinian state without Gaza, which contains 40% of the Palestinian population, therefore unity between Fatah and Hamas is vital.  Mr Kokaly also spoke about an impending water crisis in the West Bank, given that Israeli people are receiving 4 times as much water as Palestinian people and in the settlements the ratio is 20:1 in favour of the Israeli settlers.   

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 Tour of the Church of the Nativity and the Milk Grotto Church, Bethlehem  

  Tour of Bethlehem University, presentation and lunch   Father Peter Bray, Vice Chancellor Bethlehem University led the group on a tour of the university including the grounds and the renovated church, and then provided a comprehensive presentation on the work and aims of the university to be an oasis of peace in a troubled land, to be a beacon of hope to keep hope alive, and to provide high quality higher education.    The student body is made up of 700 Christians and 2,300 Muslims. The tuition fee is $1,200 per student of which students pay $700 and this is often waived for cases of financial hardship. 69% of the university’s operating budget comes from fundraising.    Father Bray is particularly proud that the university is teaching a 4 year course in nursing in a Palestinian Muslim village, of which the first graduates will be finishing this year. He said this is having a tremendously positive impact on the girls of the village who might otherwise be married very young.   Father Bray said the university is creating a pool of people who will help to create the new Palestine. With regard to the situation of Palestinians generally Father Bray said he doesn’t claim to be neutral, he will always fight against injustice. He noted that 30% of the students are from refugee camps and 20% must go through checkpoints twice per day and are often late for class as a result.   

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Father Bray then introduced the group to 4 female students of the university. One student from Hebron described the difficulty of travelling from Hebron to Bethlehem because of the security around settlements and flying checkpoints. It takes her 1 and 1/2 hours to make the journey one‐way, which would normally only take 15‐20 minutes. She noted that her friends from Jerusalem are also frequently late for 8am and 9am classes because of checkpoints. The students noted the importance of education and expressed concern that a number of students had left to study abroad and were not coming back because of the situation in the Palestinian Territory.  Following the presentation the parliamentary group enjoyed an excellent lunch in the university dining room with Father Bray, Mr Rizek Sleibi, Dean of the Faculty of Education, and academics and students at the university.  

  Meeting with Jerusalem Heads of Churches at the Pontifical Institute, Notre Dame of Jerusalem Centre:  Grand Mufti; His Beatitude Theophilios III, Greek Orthodox Patriarchate; His Beatitude Fuad Twal, Latin Patriarchate; His Beatitude Torkom Manoigian, Armenian Patriarchate; His Eminence Archbishop Aris Shirvanian, Armenian Patriarchate; His Grace Dr Anba Abraham, Coptic Orthodox Patriarchate; Very Revd Father Pierbattista Pizzaballa, Custos of the Holy Land; Bishop Suheil Dawani, Anglican Bishop; His Grace Archbishop Abba Kwestos, Ethiopian Orthodox Patriarchate; His Grace Archbishop Mar Swerios Malki Murad, Syrian Orthodox patriarchate; Archbishop Joseph‐Junes Zerey, Greek Mlkite Catholic Church; His Eminence Msgr Paul Nabil Sayah, Archbishop Maronite Archdiocese of Haifa and the Holy Land; His Grace Bishop Gregor Peter Malki, Syrian Catholic Church; His Excellency Bishop Raphael Minassian, Armenian Catholic Church; Bishop Dr Munib A Younan, President of the Lutheran World Federation;    

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The religious leaders raised the following issues: ‐ Jerusalem is the City of God, belonging to the three faiths of Abraham, and 

all have a right to worship in peace and freedom, however, this is often not respected by the Israeli authorities;  

‐ Christians face many of the same difficulties in movement and restrictions as Palestinians in general; 

‐ Many Palestinian Christians and Muslims cannot access Jerusalem during the Holy Week. It was noted that as Australians we could get closer to the holy sites in the old city than the Palestinians; 

‐ The Municipality of Jerusalem provides far fewer services to residents of East Jerusalem than to residents of West Jerusalem, despite East Jerusalem residents paying almost the same fees; 

‐ Israeli authorities do not allow Palestinian Christians from Jerusalem to live in Jerusalem if they marry a person from the West Bank. They are required to reside in the West bank. 

‐ The Christian community has reduced significantly since 1967 from 27% or 30,000 people down to 1% or 6,000 people. 

‐ The Anglican Archbishop of Jerusalem had his residency permit revoked last year by the Israeli authorities, as they said he was born in Nablus and had no right to live in Jerusalem. He has refused to leave and the situation remains unresolved. The Israeli authorities offered him an A‐3 visa (which applies to foreigners) but he has refused this on the grounds he is not a foreigner. His case is to be heard by the Israeli Supreme Court in the coming months; 

‐ Armenians located on Mt Zion next to the Jewish Quarter of the Old City – who have been in Jerusalem for 1,700 years since the construction of the Church of the Nativity and the Church of the Holy Sepulchre ‐ are experiencing harassment from right wing Jewish people passing through the Armenian quarter on the way to the Jewish quarter. Such indignities include being spat on and rude remarks being made.  

‐ It is important that religion not be politicised. There is no religious conflict between Muslims, Jews and Christians, it is purely a political problem; 

‐ The Kairos Palestine document originated from the grassroots Christian movement and not from the heads of churches, however it does reflect the realities of life for Palestinian Christians. 

 The Church leaders suggested that as Australian parliamentarians we could help by being pro‐justice, pro‐truth, pro‐reconciliation, rather than by being pro‐Palestinian.   

 They also suggested that as Australia is rich in education we should link our educational institutions with Palestinian institutions. This is because the Middle East will not be transformed by shelling and bombing but by education and interfaith dialogue and the achievement of dignity, justice and equality for all its people. 

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 Tour of old city, afternoon tea at American Colony hotel  Dinner at the Cardo restaurant in the Legacy hotel, East Jerusalem with Australian Ambassador to Israel, Ms Andrea Faulkner and 3 Australian military personnel serving with UNTSO: Lieutenant Colonel Nicholas Bolton, Commander Australian Contingent UNTSO; Major David Toohey, Staff Officer to Chief of Staff UNTSO; Captain Cameron Aitken, UNTSO JOC J3.   Wednesday 20 April  

   Meeting with Israeli civil society organisations: Breaking the Silence, Rabbis for Human Rights, The Israeli Committee Against House Demolitions, and Machsomwatch at the Swedish Christian Studies Centre, Old City, Jerusalem  Yehuda Shaul, Co‐director Breaking the Silence, explained that he served with the IDF in Hebron from 2001‐2004 and formed the organisation Breaking the Silence (BTS), together with other former IDF soldiers, who were shocked at what they had seen and done in the OPT.  They believe that the Israeli people do not know the reality of what is done under the occupation in their name.  BTS does 2 things: 

(i) Interviews soldiers about their experience in the OPT. The group has so far interviewed 730 people who all served as conscripts from 2000 to now. One third of interviewees testify during their service while two‐thirds testify approximately one year after the end of their service.  The group interviews 100 soldiers per year on average. The interviews are conducted on the basis of anonymity, however more than 50 members will voluntarily expose their identities over the coming months. All interviews are verified and cross‐checked then published. 

(ii) Use information obtained to conduct educational tours and lectures. The group conducts around 350 tours or lectures per year. The target audience is young Israelis before they are drafted. 

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The purpose of BTS is not to bring specific political solutions to the conflict between Israel and Palestine but to hold up a mirror to Israeli society and to take moral responsibility for what is being done in its name. BTS comments that “When you don’t look nice, you don’t tend to spend too many hours in front of the mirror.” It  then asks the question, “What are our moral boundaries and at what point do we say no, not in our name?”  BTS is concerned that whenever wrongdoing by the IDF is exposed, it is reported as an exceptional case of a rotten apple, rather than as the norm that it is.  Mr Shaul pointed out that he and other former IDF soldiers have earned the right to speak out, however he noted that a turning point came in July 2009 when BTS published testimonies of events that had occurred in Gaza during Operation Cast Lead.  At that moment, BTS became an “enemy of the State”.  When asked about whether Israelis can conscientiously object to performing military service, Mr Shaul confirmed that this is possible and that some 25‐30% of the Israeli public have said they sympathise with people who refuse to serve in the military. However, in Mr Shaul’s view, to refuse or not to refuse military service is a fringe issue. The main issue is that of responsibility for the occupation, how it is being conducted and what is being done in the name of Israel.  Rabbi Arik W. Ascherman, General Secretary, informed the group that the Rabbis for Human Rights was formed as a response to the first intifada to advocate for the human rights of Jews and non‐Jews in Israel or under Israel’s control.  It has 3 main goals: 

(i) To prevent human rights abuses; (ii) To introduce Israelis to another way of doing things; (iii) To break down stereotypes. 

 Rabbis for Human Rights is well known for its work with Palestinian human rights organisations, including creating the Committee against House Demolitions, and protecting Palestinian farmers carrying out olive harvesting from violence from settlers.  Rabbi Arik noted that a majority of Palestinians and Israelis want peace but that an even greater number of people think the other side does not want peace.  He noted that the Israeli people were more sympathetic to the Palestinian people during the first intifada than in the second intifada, which was more violent. Furthermore, whereas many Israelis supported human rights and human rights organisations before the war on Gaza, this changed in a big way after the Gaza war as what Israelis were shown about the war was completely different from what the world saw. For instance, many Israelis believed the reports of the use of white phosphorous by the IDF in Gaza were lies and they blamed human rights organisations for this. Many Israelis now think the whole world hates them and that the UN is biased. They do not understand why the things that always worked for them in the past no longer work. Rabbi Arik believes this is at least partly because 

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the internet has brought much more information about the situation in the OPT to the world.  Rabbi Arik said surveys have found that around 70% of Israelis now have a negative view of Israeli human rights organisations and 56% have agreed with the proposition that if human rights abuses are discovered it should be illegal to talk about it.  Hannah Barag, Machsomwatch: Women against occupation and for human rights. Ms Barag is a 75 year old Israeli Jewish woman who served in the IDF as an officer. She spoke of the group’s work as a political and human rights organisation involved in monitoring checkpoints twice a day and demonstrating against the occupation, in particular restrictions on freedom of movement and access to health and education services.  Ms Barag noted the tension between the human rights and political aims of the group since every victory against human rights abuses “improves the occupation” making it more sustainable.  Ms Barag noted that the system at checkpoints has changed over time so that there is less to photograph – it is not so much about guns any more as a crazy inhuman bureaucracy, which is cruel and manipulative, and which Palestinians cannot understand and cannot fight because they don’t have the language.    Ms Barag gave an example of an Israeli woman owner of a curtain shop who came to her for assistance because she wanted to employ a Palestinian man from the West Bank who was skilled at making curtains but who was denied a permit to enter Jerusalem.  Hannah explained that the rules about permits are set down by the “civil authority” which is controlled by the army, and they are not published anywhere.  She said the rules are confusing in that a person may apparently apply for a 2‐day permit to enter Jerusalem to look for work however a person cannot get a permit without an employer to vouch for them. Furthermore, permits are only given by allotment and such allotments are now only for agricultural workers despite the fact that there is no visible need for agricultural workers in Jerusalem. When this Israeli shop owner went to the work exchange office of the civil authority to try find out the rules there was repeatedly no‐one available.  When she eventually did find a person to speak to and asked why they would only give out agricultural permits for Jerusalem, she was told only that they would contemplate the question.  Ms Barag used this story to illustrate her point that most of the checkpoints impeding Palestinian life in the West Bank are not what you can see: they are invisible checkpoints.    Ms Barag also spoke about the 7 Israeli military courts in the West Bank, where young Palestinians (12‐14year olds) may be detained without access to lawyers, parents or social workers and may be put on “flying blacklists” without recourse to appeal. Non‐Israeli Palestinians do not have access to Israeli courts. 

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Hannah also spoke of the seam zone, where many Palestinians are cut off from their land by the Wall.  Farmers have a problem of getting to and working their land because the gates in the Wall are only open certain hours and not at particular times of the year. Furthermore, a person must establish a connection to the land to get a permit to enter but is not permitted to enter with agricultural implements or tools. Sometimes a permit is given only to one person in a family and it may be to the most elderly person.   Ms Barag said that to her the Occupation is about getting as much Palestinian land as possible with as few Palestinian people as possible.   The website of Hannah’s group is: http://www.machsomwatch.org/en  

  Meeting with Mr Filippo Grandi, Commissioner‐General, UNRWA  UNRWA is the UN agency solely responsible for the Palestinian refugees, who originally numbered around 700,000 but who now, together with successive generations, number around 5 million.   UNRWA’s budget is around US $1 billion per year, which is entirely funded by voluntary contributions from governments. This cost will continue until the plight of the refugees is resolved.  Mr Grandi noted that Australia is now one of UNRWA’s most important donors and is providing a positive example to other donor countries. There are 17 Australians working for UNRWA, a number of them in senior positions. UNRWA has been very serious about improving its effectiveness and value for money and has greatly reformed both its management and its health, education and welfare service delivery.  

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 UNRWA has no political mandate to find a solution to the conflict, unlike UNHCR which is so mandated in respect of the world’s other refugees for which it has responsibility. However, Mr Grandi noted that the right to return is a right for any refugee in the world and emphasised that it is essential that the refugees be included in discussions about what will happen to them.  In response to the charge which is sometimes levelled at UNRWA that “it perpetuates the conflict”, Mr Grandi noted that if it wasn’t for UNRWA, the conflict would certainly continue, but it would continue without children going to school etc. Furthermore, Mr Grandi noted that Israel cannot do without UNRWA since according to international law, the occupying power is responsible for the occupied territory and for the refugees and this cost would fall onto Israeli if the international community did not undertake the responsibility.  Mr Grandi spoke of the challenges posed by the occupation in the West Bank and East Jerusalem in terms of checkpoints, the Wall, increased house demolition orders together with decreased permission for Palestinians to build on their own land, reduced access to services and religious facilities, and continual settlement building.    He noted that the situation in Gaza is different because the settlements were taken out in 2005. He said the blockade which was almost total until about a year ago (except for strictly humanitarian supplies), is now selective.  Some building materials for UNRWA projects to build 24 new schools are now being allowed in but it is a slow and cumbersome process.  Mr Grandi noted that the blockade on exports means there is no economy in Gaza, and this in turn increases the need for humanitarian aid. He noted the entrepreneurial spirit of the Gazan people is being stymied by the blockade.   Mr Grandi referred to the murder of the Italian activist in Gaza and noted that it was carried out by Salafist extremists. He said Hamas in power has behaved responsibly from a security point of view, but that the blockade and isolation imposed on Gaza is producing radicalism that is not under control.  Mr Grandi noted that the public health infrastructure in Gaza is in poor condition and the restrictions on freedom of movement and lack of economic opportunities have had an impact on mental health. He believes it is counter‐productive to increase poverty and keep life at subsistence level.        

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    Visit to Augusta Victoria Hospital, East Jerusalem, Meeting with Dr Tawfiq Nasser CEO, Augusta Victoria Hospital, Dr. Omar Abdel Shafi, Senior Surgeon for mastectomies, Dr Bassem Sweis, Director  and Ms Misha Coleman, CEO Anglicord re Gaza breast cancer project, visit cancer wards.  Dr Nasser provided the group with a presentation about the work of the Augusta Victoria hospital, specifically in the context of cancer patients from Gaza. The hospital carries out breast cancer screening on 6,500 women per year. It accommodates some 30‐40 patients per day from Gaza. Patients stay anywhere from 1 day to 90 days. They often need to stay because of the limited medical services inside the Gaza Strip and the unpredictability in obtaining permits to go outside of Gaza for treatment.    The Israeli government control of the Gaza Strip restricts access to essential oncology medication, medical equipment and personnel qualified to provide oncological services. No radiation therapy is available in Gaza. Any patient requiring medical treatment outside Gaza must gain permission to travel from the Israeli authorities. Many patients miss appointments because permits are granted after the appointment dates, or permits are issued for the escort/carer and not for the patient, or vice versa, and some patients are simply denied permission to seek medical treatment outside of Gaza. Doctor Nasser noted that before the second intifada Israel used to issue 20,000 permits per year for medical patients; now it is only 1,200 per year. The referral system for the medical treatment is managed by the Palestinian Authority in Ramallah.   An Anglicord briefing paper notes that “It is a combination of the Israeli occupation of the OPT and political divisions within Palestinian authorities in the West bank and Gaza that has seriously undermined health care services available to Palestinian people.”  The doctors noted that there is an increasing trend towards younger women suffering breast cancer and commented that the Gaza population as a whole is increasingly poor, subjected to pollution and great stress.  Breast cancer is the leading cause of cancer‐related death among women in Gaza. Significant disparities exist between the five year survival rates for Palestinian, Israeli and Australian women diagnosed with breast cancer: Australia: 80%, Israel: 71%, Gaza: 40%.  Following the presentation, Dr Bassem Sweis led the group on a tour of the hospital including several women’s and children’s cancer wards.   

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Meeting with Jeff Halper, Director of ICAHD, Israeli Committee Against House Demolitions  Mr Halper explained that ICAHD was established in 1997 with the purpose of carrying out non‐violent direct action resistance to Israel’s occupation. The main focus of ICAHD is Israel’s policy of demolishing Palestinian homes in the OPT, noting that some 24,000 homes have been demolished since 1967. ICAHD maintains that the motivation for demolishing these homes is not based on security but rather is political: “to either drive the Palestinians out of the country altogether, or to confine the four million residents of the West Bank, East Jerusalem and Gaza to small, crowded, impoverished and disconnected enclaves, thus effectively foreclosing any viable Palestinian entity and ensuring Israeli control.”  Mr Halper stated that in more than 95% of cases of house demolitions, the inhabitants had not committed any act of terrorism and were never charged with any crime. The reason given for the demolitions is that the Palestinians have constructed their homes without a permit. However, the Jerusalem municipality has zoned much of the Palestinian‐owned land as “open green space” reserved for “public purposes” and thereby denies construction permits. Any building is then deemed “illegal” and subject to demolition.    According to ICAHD, since 1967, 35% of Arab‐owned land in East Jerusalem has been expropriated for Israeli settlements, roads and other facilities, while another 54% has been zoned “open green space”.  This zoning and expropriation action has created an artificial housing shortage, forcing Palestinians to seek affordable housing outside the city borders. Once they have shifted their “centre of life” from Jerusalem, the Ministry of the Interior revokes their Jerusalem residency turning them into West Bank residents. ICAHD believes this is part of an Israeli policy to maintain a 72% Jewish majority in Jerusalem.   Mr Halper led the group on a visit to Maale Adumin settlement and to the site of a demolished house in East Jerusalem.  

 

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 Thursday 21 April  Travel to Gaza: I am grateful for the significant assistance I received from Lisa Arnold of APHEDA with respect to arrangements for travel to and from Gaza and liaison with the Israeli authorities for entry into Gaza. 

The Gaza Strip, a narrow piece of land on the Mediterranean coast, is home to a population of more than 1.5 million. Gaza covers an area of just 360 square kilometres and is considered one of the most densely populated areas in the world. 

 

 

 

 

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 Visit to Al Ahli Arab Hospital, Gaza City together with Misha Coleman, CEO Anglicord   The Al Ahli Hospital was established in 1882. It is a private Christian hospital that provides medical services to more than 56,000 people each year in Gaza, regardless of ethnicity, religion or political affiliation.   

  Dr Suhaila Tarazi, Director and Dr Mofeed Mokhallati, Surgeon, explained that the hospital has 80 beds. Because of the increased poverty rate in Gaza it has had to expand its emergency services to the poor and vulnerable and it has special programs for elderly women and malnourished children. The hospital has an agreement with UNRWA under which UNRWA buys 50 beds for $90 per patient per day, but with a condition that the patient pays $10 per day. As many of its patients cannot pay the $10 per day fee, the hospital is seeking ways to cover the gap.   The hospital has had a partnership with Anglicord for 15 years to run breast cancer screening for very poor women. This support is the result of a significant bequest by Janet Reid, an Australian donor who supported Al Ahli hospital for many years and who recently died of cancer.  Breast cancer is the leading cause of cancer‐related death among women in Gaza. Significant disparities exist between the five year survival rates for Palestinian, Israeli and Australian women diagnosed with breast cancer: Australia: 80%, Israel: 71%, Gaza: 40%.  

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  Dr Tarazi led the group on a visit of the hospital, including to cancer wards and also to view an Australian government funded water treatment facility.  

  At the hospital, we also met with Mrs Beris Bird, an Australian palliative care nurse, who together with her husband Dr Geoff Bird, a plastic surgeon, have been coming to Gaza for 6 weeks each year since 2000 to assist patients. Dr Bird sees 400 patients in consultation and operates on between 80‐100 people during the six week period. Beris Bird carries out training in palliative care nursing at the hospital.         

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UNRWA program of events led by Gemma Connell of the UNRWA Gaza Field Office:  Visit to Beach Refugee Camp Food Distribution Centre, Gaza 

An estimated 1.1 million people, or three‐quarters of the entire Gaza population, are Palestine refugees registered with UNRWA. About half a million refugees live in Gaza’s eight refugee camps. 

The UNRWA Beach Refugee Camp Food Distribution centre is one of 10 such food distribution centres in the Gaza Strip. 

Direct relief and social services assistance remains critical to tens of thousands of refugee families in Gaza. The Agency works to alleviate refugees’ burdens and protect the most vulnerable. Food and cash assistance is based on needs determined through a poverty survey. 

Each month, more than 750,000 refugees receive basic food rations and 14,000 people receive short‐term employment. Through its job creation programme, UNRWA provides much needed support to farmers, fishermen, the private sector, and new graduates. 

 

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 Visit to UNRWA Rimal Health Centre, Gaza  UNRWA staff at the Rimal Health Centre explained UNRWA’s programs of maternal and child care, including vaccinations, growth and development monitoring, supplementary vitamins, ante‐natal care, breast‐cancer screening and family planning. They noted that UNRWA has increased the consultation time between doctors and patients (used to be less than one minute consultations).  With increased unemployment and poverty in Gaza has come decreased immunity of the population to disease and increased psychological issues, and domestic violence. UNRWA is working on referral mechanisms to link up psychologists with midwives and is establishing five one‐stop centres where women can access nurses, lawyers and counsellors. The agency UN Women is also working to establish a shelter for women in Gaza. UNRWA is also bringing together health and education reforms to identify and assist students who are failing at school and to put in place summer learning programs where children can receive the one on one attention they do not receive in the regular classroom.    Visit to UNRWA Beach/Rimal Co‐ed School  UNRWA Operations Support Officer Abdullah and the school principal spoke to us about the school which has 650 students in grades 1‐9 on a 2‐shift basis. Some classes are held in transportables and classrooms are rotated so that another class can use the room when a class is playing sport or using the computer room.  With the situation in Gaza there has been a dramatic deterioration in school scores, and this has led to unified exams and the stopping of automatic upgrades. The summer learning programs include teaching English and human rights through games.   Abdullah outlined UNRWA’s development of a comprehensive human rights curriculum for grades 1‐9, teaching respect, tolerance and discipline in the early years and human rights principles and instruments in later years.  It is reportedly the world’s first comprehensive school curriculum on human rights as a stand‐alone subject. Abdullah reported that South African MPs who had visited Gaza were interested in taking the curriculum back to South Africa for use in schools there.   We visited a girls’ classroom where the students sang “Kookaburra sits in the old gum tree” and then spoke of their enjoyment of the human rights classes and what they had learned. 

 

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    Meeting with Christer Nordahl, Deputy Director UNRWA Gaza Field Office  Mr Nordahl noted that the most important thing for Gaza is to have the blockade lifted in order to get the economy working.  Unemployment is at 45%, and new graduates are sitting on the street with nothing to do, leaving them vulnerable to recruitment by extremists including the militant Salafists who murdered the Italian activist recently in Gaza and who are firing rockets from Gaza in order to undermine Hamas.  The militants are also being paid to fire rockets by businessmen who own the tunnels running into Egypt and who have a vested interest in the blockade continuing.   Mr Nordahl questioned whether the international community really wants to lose a generation to extremists or might it be better to reach an agreement with Hamas.  Mr Nordahl noted that UNRWA has a good working relationship both with Israel and with Hamas in Gaza.  Mr Nordahl spoke of some of the infrastructure problems in Gaza, arising from the inability to carry out construction work, to do repairs or obtain spare parts because of the blockade.  This has implications for the power station, the sewerage treatment plant, for schools and housing among other things.  Mr Nordahl spoke of the problems experienced by farmers in not being able to access the best farming land in Gaza due to it being designated a buffer zone by the Israeli authorities. The area is controlled by infrared cameras and weapons. At least 2 people per week are being shot in the buffer zone and the majority of these people are farmers not militants.   He also noted the problems Gaza fishermen are experiencing. They are supposed to be able to fish up to 3 nautical miles off the coast but are presently being shot or 

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shot at by the Israeli navy if they go up to 2 miles offshore. This is occurring on a daily basis.  Mr Nordahl spoke of UNRWA’s education program coming under pressure due to population growth. It has 19,000 year 9 students and 21,000 year 1 students. Two UNRWA schools are made entirely out of shipping containers and 40,000 students cannot be accommodated at all.   Visit to Commonwealth War Cemetery in Gaza At the Commonwealth war cemetery in Gaza we met the Palestinian family who have been managing the cemetery for 3 generations and placed poppies on the graves of the 273 Australian soldiers from WW1 and WW2 buried there.   

 

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  Meeting with Palestinian NGOs at Al‐Deira Hotel, Gaza  Dr Jean Calder, Consultant Rehabilitation and Training, Palestine Red Crescent Society, Khan Younis, Gaza: Dr Calder, originally from Queensland in Australia, has lived in Khan Younis since 1995 and works with people with disabilities. With the exception of one occasion when she was allowed to go to Nairobi to accept an award in 2009, Dr Calder has not received a permit from the Israeli authorities to leave Gaza since 2006.   Dalal: Dalal is a Palestinian refugee who was born in Lebanon and lost her parents during the war. She received a Ford Foundation scholarship to study at Edinburgh university and now works with Dr Calder in Kahn Younis with people with disabilities. Dalal is blind.   Fadi El Hindi, Ma’an Development Center: Ma’an is concerned with agriculture and food security, women’s development, youth and adolescent participation, environmental advocacy.  Mahmoud El Hindi, British Council, Gaza  Palestinian NGO network: PENGO: Director Amjad, Mohammed AbuRamadan, Hamad Bahri, Union of Agricultural Committee PENGO is an umbrella group for over 60 organisations in Gaza and 90 organisations in the West Bank. It is a democratic body with a common vision representing various sectors including youth, health and agriculture. The network runs a number of campaigns as follows: 

1. Campaign against the blockade on Gaza. According to PENGO the blockade is a form of collective punishment against the population and is therefore in violation of international law.  

2. Campaign for ending separation between Gaza and the West Bank. The blockade has isolated Gaza from the West Bank which PENGO asserts is also 

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a violation of international law and gives Israel cause to accuse Palestinians of not being a partner for peace. PENGO stressed the importance of unity for Palestinian civil society. 

3. In addition, each sector runs its own campaigns, for instance the fishermen, who are running a campaign called “Doors to the Sea”, and the farmers in the buffer zone, who face being shot at on a daily basis. 

4. PENGO conducts a number of mediations between Hamas and the PA governments, for example regarding patients transferred outside of Gaza, electricity supply and the shortage of medicines in Gaza.  

According to PENGO, Gaza is regarded by the international community as being a humanitarian issue, when there is not a humanitarian crisis in Gaza; rather there are grave ongoing violations of human rights. “Gaza does not need more biscuits but rather construction materials for economic development”.  PENGO noted that the $1.2 billion raised at the Sharm El Sheik conference on Gaza’s economic development was spent entirely on humanitarian aid.  Youth comprise around 45% of the population of Gaza and there are 15‐17,000 graduates from university each year, yet there is nothing for them to do, no housing, no jobs, no opportunities.   Respect is important in Gaza, but fathers are now being humiliated in front of their children, they could not protect them during the war on Gaza and cannot provide them with food or water. It was noted that the siege is not only on the border but in people’s minds.  

  

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   Friday 22 April Departure from Gaza and travel to Ramallah  Travel from Ramallah to Jerusalem Meeting with Jeff Halper, Director of ICAHD, Israeli Committee Against House Demolitions, East Jerusalem  Mr Halper explained in detail more of the challenges faced by Palestinians in East Jerusalem and the West Bank and he offered some reflections regarding the Middle East peace process:  

(i) If you support a two‐state solution why wouldn’t you consider a Palestinian state? 

(ii) The conflict is feeding Islamic terrorism. With the world’s largest Muslim population on our doorstep it is in our national interest to resolve this. The Pentagon has recognised this in the US. 

(iii) This has to be a win‐win for both sides. If one side wins and the other loses, you’re not resolving anything. 

(iv) Israeli security framing says that Israel is a small Western democracy besieged by Arab Muslim terrorism. The word “occupation” is missing from this picture. 

(v) Israel claims there is no occupation but the position of the international community is that there is an occupation. The term is used by the Quartet – including the US and the UN ‐ in the Roadmap.  

(vi) There is a power imbalance here. Israel claims a false symmetry “both sides”. But the Palestinians are not occupying Tel Aviv. Israel is the strong party, not the victim. It is the 4th largest nuclear power in the world, the third largest military hardware expenditure. 

(vii) The Occupation is not a reaction to terrorism, it is not based on security. The settlements, the house demolitions and the permit system are not related to security, they are about control. Most checkpoints are inside 

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West Bank to block movement. See maps: they show that Palestinians are locked into small areas.  

(viii) There are more than 200 settlements, including 7 key settlement blocks that Israel says are Israel and are not to be negotiated. Israel has never claimed a security reason for the settlements. It is a proactive claim to Judea and Sumaria and to foreclose the establishment of any sovereign viable Palestinian state. Highways are not built for security but to link the settlements to Israel.  The Wall defines cantons in concrete and incorporates settlements into Israel. 

  I accompanied Mr Halper to observe a peaceful demonstration regarding settlers who have forcibly taken over Palestinian homes in East Jerusalem.      

     Travel from Jerusalem to Ramallah       

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Dinner at the Movenpick Hotel, Ramallah hosted by Minister for National Economy Dr Hussan Abu Libdeh with representatives of the Palestinian business community including PalTrade, CEO Birzeit Pharmaceutical Co, Mr Talal Nasereddin and Nassar Group investment director Mr Arafat Assfour   

   Saturday 23 April  Breakfast meeting in Ramallah with Bir Zeit University: Dr Khalil Hendi, Director; Dr Adel Zagha, VP Planning, Development and Quality; Dr Munir Qazzazz, VP Community Outreach  Dr Hendi noted that there are 3 types of university in Palestine: private not for profit; public; and private for profit (one).  Most of the universities are private not for profit, operate autonomously from government and do not receive funding from government. Many students are unable to pay the fees so the universities are only able to operate due to philanthropy from Palestinians.  The university has 11 institutes and centres working on community outreach and capacity building in community health, water, law, justice sector, media, continuing education for professionals and government institutions. The university has trained every judge in Palestine and has a database of laws, regulations and military orders. The legal system is based on precedent (not Napoleonic).  Bir Zeit has been a beacon of enlightenment in society and wishes to remain so. It has established an institute of women’s studies, which for a long time was the only one in the region including Israel, and is now one of only two in the Arab world, the other being in Cairo.  A major problem is that while in the 80’s the international community was forthcoming with PhD scholarships, this is no longer the case. These academics are now approaching retirement and it will be difficult to replace them without PhDs 

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coming through the system. Australia is presently offering scholarships in Masters degrees but not PhDs.  Freedom of movement has been highly circumscribed for students and faculty in terms of accessing the university.  There are severe restrictions on faculty’s links with the international academic community. For international academics to stay at Bir Zeit, they need to obtain visas and work permits from the Israeli authorities, which are normally denied. So, academics are forced to come on tourist visas for 3 months. There is a case before the Israeli Supreme Court regarding a Palestinian man from Berkley university who came to teach history. He could only obtain a 3 month tourist visa and went out twice in order to renew the visa. He was denied entry the third time.  Students and faculty at Bir Zeit are not allowed to go to Gaza, nor are people from Gaza universities allowed to come to the West Bank.   Dr Khalil noted the suggestion by some Israeli commentators that the West Bank and Gaza can be linked by a “data highway”. However, the university does not want internet solutions to restrictions on freedom of movement. It wants real freedom of movement.  Dr Khalil stated that it is because of the Israeli government academic boycott on Palestinian universities that the university subscribes to the BDS movement. He acknowledged that it is a blunt instrument but stated that it has proved its effectiveness without bloodshed.    Travel to Nablus  Meeting with Deputy Governor of Nablus, Ms Anan Atteereh The Deputy Governor explained that Nablus is the second oldest city in Palestine (9,000 years old) and second biggest governorate in Palestine, located between two mountains. It contains 4 refugee camps and 60 villages, some 340,000 citizens. Nablus is one of the world’s ancient cities and most of Palestine’s political leadership and its academic and artistic life started in Nablus. Al Najar university in Nablus is the largest in Palestine with 29,000 students.   There are 10 big settlements and 30 outposts near Nablus. The settlers are a constant threatening presence day and night. The Israeli occupation forces disrupt the Palestinian security infrastructure and economic and educational life through imposition of curfews and checkpoints throughout Nablus.  

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   Tour of old city with Deputy Governor The Deputy Governor led the group on a visit of the old city. Highlights included seeing a former olive soap factory, and walking through the markets and eating falafel, halva and the kunafeh dessert Nablus is famous for.   

  

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Lunch meeting with Mr Shaher Sa’ed, General Secretary, Palestine General Federation of Trade Unions (PGFTU)  Mr Sa’ed explained that the PGFTU is an independent federation which defends the rights of Palestinian workers and represents 13 unions across all sectors and industries in Palestine with memberships of 915,000 workers including 750,000 in the private sector, some with Israeli employers. The PGFTU conducts campaigns in support of collective bargaining, minimum wage cases, social insurance, and worksite accident compensation.   Mr Sa’ed noted that some Palestinian employers are exploiting workers, especially women and there is no implementation of occupational health and safety regulations.    

  Mr Sa’ed explained the situation of Palestinian workers in Israel as follows: There are around 22‐24,000 Palestinians working legally in Israel. There are more than 30,000 workers who have permission to be in Israel but not work permits. These workers have no rights regarding minimum wages, working hours, health and safety conditions. There are more than 27,000 workers in Israel illegally. They are not organised and are often beaten by security forces and settlers. Many of them live under bridges. There are around 35,000 Palestinians working in settlements.  There are around 300,000 Palestinians who are unemployed due to the weak economy and the unwillingness of investors to lose their money in Palestine.  Mr Sa’ed stated that the Israeli checkpoint at Qalqilya is very difficult for Palestinian workers to get through as they suffer delay and harassment. They must pass through 4 rooms, take off their jackets, be fingerprinted, answer many questions and are sometimes asked to be spies. He said that from January to April this year 9 workers were killed at checkpoints inside Palestine, which is documented in an ILO report.   

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  Visit to Ausaid funded APEHDA‐Ma’an projects in Tulkarem  The group visited four long‐term projects run by APHEDA and Ma’an around the Tulkarem area. These were: 

(i) Rehabilitation of land, rock clearing, tree planting (olives and almonds), and the installation of a new cistern to store water;  

  

   

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(ii) Greenhouse for growing tomatoes and cucumbers, and installation of water cistern; 

(iii)  Beehives;  

  

(iv) Women’s committee: In the first year the community established a centre with a computer, chairs, table and sanitation. In the second year they established a kindergarten for children aged 4‐5. They are now engaged in capacity building and micro‐finance projects involving 15 women beneficiaries from 4 villages. The women receive $800 each for such projects as agriculture, sheep‐rearing, supply of gas cylinders, shop tools, feed for sheep, sewing. UNICEF and Ma’an are delivering a lifeskills project for girls aged 8‐18. 

 

   

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 Dinner with Mr Jibreen Al‐Bakri, Governor of Nablus Mr Al‐Bakri told the group of his wish for Nablus to achieve a sister‐city relationship with an Australian city and also of his request for each country including Australia to send 2 representatives to “The World in Nablus” event to be held in September this year.   Sunday 24 April Meeting with Mr Ayed Abdel Aziz, Applied Research Institute‐Jerusalem (ARIJ), Nablus  Due to the prevailing security situation around Nablus, the group was not able to travel as planned to the Ausaid funded Care Australia project in Tubas. Mr Aziz from ARIJ who runs the projects kindly came to Nablus to brief the group on the projects.  Mr Aziz said he has worked in agriculture for 28 years but this is the first time he has had a 5‐year development project; prior to that it was just aid and relief projects.  There are a number of components to the development project: 

(i) Seed gene bank: Jenin is the main area in Palestine that produces cereals (barley, wheat etc). Each year the seed bank distributes 100,000 tonnes of seed to farmers who will return this amount when they harvest their crops. Food crops are one of the most important sources of food security for Palestinians because they are bread eaters. 

(ii) Nursery in Jordan valley: This land is completely isolated by settlements and checkpoints and the Wall. The nursery project supports farmers in 3 cooperatives to produce 1 million seedlings per year. The profit and revenue is divided between the farmers. 

(iii)  Animal breeding farm in Tubas area. Has 60 different types of sheep. Each farmer is provided with one of the offspring of a ram. 

(iv) Queen bee centre: produces and improves queen bees imported from Italy. Will soon start producing mated queens. This project also supports farmers benefiting from Ma’an/APHEDA bee hive projects. 

(v) Marketing and food processing interventions: to link small cooperatives with a company called Newfarm that produces traditional products like raisins, grape syrup, couscous and yogurt. 

(vi) Home gardens and small greenhouses: provide them with seedlings from the nursery. 

 The key thread running through all these projects is sustainability. For each project there is a project committee.  Mr Aziz outlined the following challenges to the program: 

(i) Lack of water, land confiscations, blockages and closures through checkpoints. 20% of Palestinian goods are spoiled waiting to go through checkpoints within the West Bank, especially in summer. It is very rare to have a cold storage transport system. 

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(ii) Release by settlers of pigs and deer into areas near the settlements. Arij is helping farmers to build fences for their crops. 

(iii) Israel’s control of borders and therefore exports. Israeli security checks sometimes destroy products. 

(iv) There is no accreditation system within Palestinian laboratories. Israeli laboratories carry out the accreditation, which is very expensive and often not fair. Mr Aziz gave an example of receiving 4 completely different analyses for the same sample. He also noted that if a product is in demand in the Israeli market it will be passed very quickly, whereas if there is a surplus on the Israeli market, they may say that all the Palestinian samples failed. 

 Travel to Ramallah  Dinner with Omar Barghouti, co‐founder of BDS campaign, Caesars Hotel, Ramallah  BDS was established in July 2005 with a focus on 3 basic issues: 

(i) Ending the occupation (ii) Full equality for Palestinian citizens of Israel (iii) Right of return for refugees 

 With regard to the issue of full equality for Palestinian citizens of Israel, Mr Barghouti said there are a number of laws that directly or indirectly discriminate against non‐Jewish citizens. He said that Israeli citizens are not necessarily nationals of Israel as Israel does not define itself as a nation of its citizens but as a Jewish state. He said a Jewish Australian has more rights in Israel than an Arab Israeli and that 93% of Israeli land is off‐limits to non‐Jews. The orthodox religious establishment has total control over who is defined as a Jew, i.e. birth to a Jewish mother. This would mean for instance that an Israeli Russian soldier with a Jewish father is not allowed to be buried in a Jewish cemetery.  Mr Barghouti said the BDS movement is based entirely on international human rights law. It does not target individuals but institutions, official exchanges and links. This includes Israeli universities because none of them has condemned the occupation. He said that one the campuses of Hebrew University is built almost entirely on Palestinian land in  East Jerusalem, which is a violation of the Geneva Convention prohibition on transfer of population from the occupying state to the occupied territory.  He also said that Tel Aviv university had developed weapons and the “Doctrine of Disproportionate Force”, which provides that since Israel cannot effectively target military targets, it is legitimate to target civilian targets.   Mr Barghouti spoke of some parallels with the South African anti‐apartheid movement and noted that the University of Johannesburg was the first to sever links with Israeli universities. He said people only tend to remember the anti‐apartheid movement in the last part of the struggle, in the 1980’s, but it actually started in the 1950’s and took a long time to take off. He said by contrast the BDS campaign has had some significant successes, including recruiting church groups 

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around the world, the Jewish Voice for Peace, many trade unions, the Norwegian Pension Fund which has divested from 3 Israeli companies, and Deutschebank which has divested from the Israeli military. It has also caused the major French transport company Veolia to lose $10 billion in contracts because of its light rail project in East Jerusalem  Mr Barghouti said the implementation of BDS campaign is very practical and may be partial, eg boycotting one contract or event or company, or full, eg everything to do with the occupation. He noted that the World Council of Churches had adopted a partial boycott.  Monday 25 April  ANZAC Day service, Ramallah The group held its own ANZAC day service on the roof of the Caesars hotel in Ramallah in the early morning. This was because the UNSCO ANZAC Day service the group had originally planned to attend at Mt Scopus in Jerusalem was postponed until 27 April.  

  Meeting with Dr Ghassan Katib, Director Government Media Centre, Ramallah Dr Katib spoke of how the media centre will develop into a public institution independent of government, whose role will be to licence and regulate media outfits in Palestine.  Dr Katib spoke of how at present two‐thirds of the Palestinian public is getting its news from non‐Palestinian media. Palestinian media is weak, while surrounding media in Israel, the Arab states and internationally, e.g. Al Jazeera, is strong. However, the non‐Palestinian media does not pay attention to local news, while the local media talks of local news but does not reach the majority of the population.  

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Dr Katib also spoke of the challenge of how to reach the international public, whose political and financial support is necessary. He noted that Israel too depends on the outside world and invests a lot in external relations. Israel has 2 advantages: 

(i) It is very rich, advanced and sophisticated compared to the Palestinians with its tools, equipment and professional abilities; 

(ii) It has powerful lobbies devoted to Israel inside important countries.  Dr Katib said the centre will work at both levels, local and international, to refine its messages, deal with misinformation, train Palestinian spokespeople, and advise on different approaches to the peace process. Eg the bilateral approach of negotiation behind closed doors has not worked because the power imbalance between the parties is so great. Better to move to the multilateral fora for open discussions.  Travel to Hebron  Meeting with Mr Khaled Osaily, Mayor of Hebron  Mr Osaily spoke of Hebron being a biblical city, 8,000 years old, known as the home and burial place of Abraham (1800BC). King David is also believed to have lived and reigned in Hebron (1000BC).  Hebron is the largest city and governorate in the West Bank. It has a population of 250,000.  Under the Oslo Accords Hebron was divided into 2 areas: H1 under PA control and H2 (old city and Ibrahimi Mosque/Cave of Machpela) under Israeli control. This means the Mayor must coordinate with the Israelis to do anything, even municipal work.  Israeli settlers from Brooklyn and Russia have settled in the city numbering some 400, while they are guarded by approx. 6,000 IDF troops. Many of the settlers are themselves armed.  

   

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The old city, which used to be a cultural and commercial centre, has become like a ghost city, surrounded by 110 checkpoints and closures and there is now only one entrance to the old city. Bt’selem has reported that 1,819 shops have closed and Palestinians have been forced from 1,000 apartments, some of which are now being occupied by settlers.  The Palestinian Authority has been paying some shopkeepers $200 per month to stay open to prevent the settlers taking over.     

   Settlers have taken over many Palestinian apartments. The deserted main road has a bus stop. The number 160 Israeli bus will take settlers down Israeli‐only roads to central Jerusalem, meanwhile the Palestinian Mayor of Hebron does not have the right to walk down many of his own city’s roads.  In the old city, wire netting has had to be placed over the street market area to prevent rocks thrown by settlers from hitting Palestinians below.  

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  The West Bank has an estimated unemployment rate of 37%, which includes a significant number of graduates of engineering, IT, management and accountancy. He also spoke of farmers not being able to access and cultivate their land due to the presence of settlers and the army.   Mr Osaily then outlined the actions of the city to improve the situation of youth, including a potential “IT Park” project. The city is one of 33 councils in Hebron and Bethlehem involved in a solid waste project funded by the World Bank. Mr Osaily emphasised that the City’s priority is to bring a normal life to people.   

 

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 Visit to TIPH (Temporary International Presence in Hebron) The group had lunch at the TIPH headquarters followed by a presentation about TIPH and about the historical context and present situation in Hebron. This was followed by a tour of the Old City led by TIPH.  TIPH has 68 international staff from Norway, Italy, Denmark, Sweden, Turkey and Switzerland. It was established as a civilian observer mission in 1997 which reports to the parties on breaches of international law but cannot intervene. Its role is to patrol, observe and report. It has completed more than 15,000 incident reports since 1997. 

 

  

  

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 Meeting with His Excellency President Mahmoud Abbas, Ramallah The President noted that he would be seeing Australia’s foreign minister at the end of the week we were there. He wished us to note his appreciation for Australia’s support of the PA and its provision of scholarships and assistance with agriculture projects.  The President noted that if the Palestinians could reach agreement with the Israelis, this would defuse the pretext of many disputes in the region and Israel would receive instant recognition from 58 Muslim countries in one go. He talked about the Palestinians’ desire for peace and their own state.  Dinner with Chief of Staff to the Hon Dr Riad Maliki, Minister for Foreign Affairs, Ramallah  Tuesday 26 April  Attendance at media centre to make group media statement, Ramallah (statement attached)   Travel from Ramallah to Jordan via Allenby Bridge  Wednesday 27 April – Monday 2 May: personal time at own expense.  Tuesday 3 May ‐ Wednesday 4 May: return to Perth                       

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(iii)   Conclusions  The study tour was incredibly comprehensive, covering as it did Australia’s role in the region with respect to bilateral relations in the areas of education, health, culture, aid and development, as well as specific Australian development aid programs/projects in the West Bank and Gaza being run through respected organisations as APHEDA, Anglicord and Care Australia in cooperation with local partners including Ma’an Development Agency, ARIJ and the Augusta‐Victoria and Al Ahlia hospitals.   It was instructive to visit the operations of the UN refugee agency UNRWA in the West Bank, Gaza and Syria, given that the agency is a significant recipient of Australian aid.  The Engaging Youth program in Syria and the comprehensive school human rights curriculum in Gaza are innovative and ground‐breaking.   It was important too to hear about IOM’s counter‐trafficking programs in Syria and to learn how Australia may be of further assistance in this area.   Our program coincided with ANZAC Day, so it was appropriate to visit the Commonwealth War cemetery in Gaza in the lead up to ANZAC day and to conduct a ceremony in Ramallah on ANZAC day itself.  In view of the momentous changes sweeping the region now, it was important to examine the contribution and potential of Australia’s foreign policy approach to a lasting two‐state solution by engaging with senior members of the Palestinian Authority, academics, unions, and Palestinian and Israeli civil society organisations and NGOs regarding the present reality of occupation, the Gaza blockade and settlement building in East Jerusalem and the West Bank, as well as the final status issues of Jerusalem, settlements, borders, water, refugees, political prisoners, economic and trade relations, and security.   I attach copies of the group’s media statement made in Ramallah on 26 April, as well as a speech I gave in the House of Representatives on 26 May.  It was not possible to cover the detail of the situations in Gaza, in East Jerusalem, in Hebron and other parts of the West Bank in such a short speech so I anticipate further speeches during the course of the year. 

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Thank you  There are many people to be thanked for meeting with our group, for showing us wonderful warmth and hospitality and for facilitating our visit. They include the following:  The Palestinian Authority: President Mahmoud Abbas Prime Minister Salam Fayyad Foreign Minister Riad Maliki Minister for National Economy Dr Hussan Abu Libdeh Palestinian Ambassador to Australia: Izzad Abdulhadi Adviser to the President, Mohammed Esh’tieh  Palestinian Negotiations Support Unit, Negotiations Affairs Department Government Media Centre Members of the Palestinian Legislative Council Fateh Commission for International Relations Mayor and Governor of Jericho Governor and Deputy Governor of Nablus Mayor of Hebron  Jordanian authorities Israeli authorities  Heads of Churches and Grand Mufti, Jerusalem Israeli Civil Society Organisations Palestinian Civil Society Organisations Palestine General Federation of Trade Unions (PGFTU) Temporary International Presence in Hebron (TIPH) Palestinian Prisoners Association Bethlehem University Bir Zeit University Swedish Christian Studies Centre Orthodox Club, Ramallah PalTrade ARIJ Omar Barghouti Jeff Halper, ICAHD Ma’an Development Agency  UNRWA HQ, UNRWA Syria, UNRWA Jordan, UNRWA Gaza, UNRWA West Bank Australian Representative Office in Ramallah Australian Embassy and Ambassador to Israel Andrea Faulkner UNTSO Australian officers APHEDA, Ms Lisa Arnold Anglicord, Ms Misha Coleman Ms Patricia Abbott 

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MR ROWAN RAMSEY MP

Spain, Israel, Turkey, France, Sweden and Finland 13 April – 7 May 2011

MR LAURIE FERGUSON MP

Hungary 15 – 22 April 2011

MS JILL HALL MP

Jordan, Israel and Palestinian Territories 15 – 28 April 2011

THE HON BRUCE SCOTT MP

United States of America and the United Kingdom 15 April – 2 May 2011

Due to the size of this individual study report a number of pages are not included in this Tabling document. A copy of the full report (and any supporting documentation) is available on written request to the Office of the Special Minister of State.

MR CHRIS HAYES MP

Indonesia 16 – 23 April 2011

Due to the size of this individual study report a number of pages are not included in this Tabling document. A copy of the full report (and any supporting documentation) is available on written request to the Office of the Special Minister of State.

SENATOR THE HON HELEN COONAN

Singapore, the United Kingdom, France and Germany 16 April – 4 May 2011

THE HON JOEL FITZGIBBON MP

France 17 – 20 April 2011

THE HON JOE HOCKEY MP

United Arab Emirates 17 – 23 April 2011

MR STEVE GEORGANAS MP

Vietnam 17 – 28 April 2011

DR DENNIS JENSEN MP

United States of America 17 April – 7 May 2011

Due to the size of this individual study report a number of pages are not included in this Tabling document. A copy of the full report (and any supporting documentation) is available on written request to the Office of the Special Minister of State.

SENATOR BOB BROWN

Papua New Guinea 28 April – 2 May 2011

Bob Brown Australian Greens Senator

Australian Senate

www.bobbrown.org.au GPO Box 404, Hobart TAS 7001 Phone: 03 6224 3222 Fax: 03 6224 2999 Freecall: 1300 133 251 (Tas only)

Parliament House, Canberra ACT 2600 Phone: 02 6277 3170 Fax: 02 6277 3185 Email: senator.bob.brown@aph.gov.au

The Hon Gary Gray MP Special Minister of State Suite M1 23 Parliament House CANBERRA ACT 2600 11 May 2011 Dear Minister In accordance with the requirements of Clause 9.2 (a) of Remuneration Tribunal Determination 2006/18 (the Determination), I submit the following statement reporting on my recent overseas study journey: (i) (a) Confirmation of Purpose: I travelled to Papua New Guinea on an overseas study trip to better understand the issues facing our closest neighbour. (b) Itinerary: Thursday 28 April

10.10 Depart on Air Nuigini Flight 4

13:10 Arrive Jacksons International Airport (PX4)

14.00 Meeting with Mr John Feakes, Deputy High Commissioner Location: Level 3, Australian High Commission

16.30 UN Development Program hosted reception Venue: Section 51, Lot 100, Unit # 1, Davetari Drive, Touguba Hill

18:30 Dinner with Dorothy Tekwie and Paul Winn, Team Leader Forestry Campaign, PNG Office, Greenpeace Australia-Pacific

Location: Asia Aromas, Champion Parade, Town Centre Friday 29 April

09:00 Meeting with Benny Allan MP, Minister for Environment and Conservation Location: Level 7, Somare Foundation House, Independence Drive, Waigani

10:00 Meeting with David Sode, Chief Executive, Sustainable Development Program Location: 7th Floor, Pacific Place, Champion Parade, Town Centre

11:00 Meeting with Dr Phil Shearman, School of Natural and Physical Sciences, UPNG Location: Science Two Building, UPNG

13:00 Lunch at PNG Greens Convention Location: Institute of Public Administration, Waigani Drive

Bob Brown Australian Greens Senator

Australian Senate

www.bobbrown.org.au GPO Box 404, Hobart TAS 7001 Phone: 03 6224 3222 Fax: 03 6224 2999 Freecall: 1300 133 251 (Tas only)

Parliament House, Canberra ACT 2600 Phone: 02 6277 3170 Fax: 02 6277 3185 Email: senator.bob.brown@aph.gov.au

14:00 Key-note address to PNG Greens Convention

15:00 Meeting with delegates at PNG Greens Convention

19:00 Dinner Speech to NGO and Business Community Location: Crowne Plaza Hotel Saturday 30 April

10:00 Depart Jacksons Domestic Airport (PX910)

11:05 Arrive Madang Airport

12:00 Tour of Madang - Meet with Hon Ken Fairweather MP, Member for Sumkar; Dr Bob Danaya MP,

Governor of Western Province; and Hon Jamie Maxtone-Graham MP, Angalimp- South Wahgi

- Meet with Madang-based NGOs Bismark-Ramu Group, Centre for Environmental Law and Community Rights, WWF and other local groups

19:00 Speech at Divine Word University

Sunday 1 May

14:40 Depart Madang Airport (PX911)

15:40 Arrive Port Moresby, Jacksons Domestic Airport

19:00 Public Lecture - Australia and PNG relations, climate change policy issues Location: University of PNG Monday 2 March

06:15 Depart Jacksons International Airport – Air Nuigini Flight 3 to Brisbane (ii) Key meetings and findings: High Commission – provided a good briefing and confirmed that Australia is targeting its aid more on HIV/Aids, health and provision of drugs. While school attendances are up, there is a lack of teacher training but Australia has a successful program to supply textbooks. United Nations Development Program – the UNDP reception was focused on efforts to promote women in public life in PNG. It was an impressive group in attendance, including the women from the PNG Council of Women who are working to progress the Bill for 22 women in parliament. Dame Carol Kidu, Minister for Community Development and the only woman in the current PNG parliament came to the reception. Department of Environment – there were a number of advisors in attendance but the responses on several issues were vague. I was left with an impression of a regulator that is not keeping up with the vast number of developments being proposed in sensitive environments. I raised the issue of tailings to be dumped in the ocean, and the response was that it’s only into a deep sea canyon that’s already damaged by flood saltation anyway.

Bob Brown Australian Greens Senator

Australian Senate

www.bobbrown.org.au GPO Box 404, Hobart TAS 7001 Phone: 03 6224 3222 Fax: 03 6224 2999 Freecall: 1300 133 251 (Tas only)

Parliament House, Canberra ACT 2600 Phone: 02 6277 3170 Fax: 02 6277 3185 Email: senator.bob.brown@aph.gov.au

PNG Sustainable Development Program – I met with CEO David Sode who briefed me on the ideas for the program - 52 mobile phone towers for the western province, a trade school at Ok Tedi and the Purari Dam. He did not seem concerned about the displacement of communities that would occur if the dam was developed. Dr Phil Shearman – from the School of Natural and Physical Sciences at the University of PNG raised concern about tailings dumping into highland rivers by an Australian mining operation. He also raised concern about the poor deal struck for the PNG community between the government and the Chinese developer of the Ramu Nickel project. Madang seminar - local NGOs, Ken Fairweather MP, Jamie Maxtone-Graham MP. Three major issues were raised by attendees:

o the Nautilus undersea mining venture off the coast, with an impressive intervention from a man from New Ireland who was against this project,

o the Ramu nickel mine dumping east of Madang, and o the Madang industrial zone being set up for 5 or 7 fish canneries and

concern about the collapse of the tuna fishery near Madang. (iii) Conclusion: The trip was extremely valuable for me in my role as Foreign Affairs spokesperson for the Australian Greens to better understand some of the issues facing our nearest neighbour. I made a statement on this trip to the Senate on 11 May 2011. I note that in accordance with clause 9.5 of the Determination a copy of this statement may be obtained from you upon request by any Member or Senator. I also note that this statement may be tabled in Parliament at your discretion. Yours sincerely, Senator Bob Brown

SENATOR THE HON RICHARD COLBECK

New Zealand 29 April – 6 May 2011

THE HON DICK ADAMS MP

New Zealand 1 – 4 May 2011

THE HON DR SHARMAN STONE MP

Singapore 1 – 9 May 2011

A number of pages from this individual study report are not included in this Tabling document. A copy of the full report (and any supporting documentation) is available on written request to the Office of the Special Minister of State.

MR STEVE GEORGANAS MP

Greece 13 – 23 May 2011

THE HON JULIE BISHOP MP

India 9 – 12 June 2011

THE HON TERESA GAMBARO MP

India 9 – 12 June 2011

Hon Teresa Gambaro MP Shadow Parliamentary Secretary Citizenship and Settlement

Shadow Parliamentary Secretary International Development Assistance

Federal Member for Brisbane

Overseas Study Travel Report

Special Minister of State Parliament House CANBERRA ACT 2600 Dear Minister In accordance with the requirements of Clause 9.2(b) of Remuneration Tribunal Determination 2006/18 (the Determination), I submit the following statement reporting on my recent overseas study travel.

I note that, in accordance with Clause 9.5 of the Determination, a copy of this statement may be obtained from you upon request by any Senator or Member. I also note that this statement will be tabled in the Parliament at your discretion, including as part of the six monthly tabling of entitlements expenditure for Senators and Members by the Department of Finance and Deregulation.

Yours sincerely ................................................................................. Teresa Gambaro MP 21/09/2011

Hon Teresa Gambaro MP

Page | 2 Overseas Study Travel Report – Hon Teresa Gambaro MP

Purpose of Journey

The purpose of accessing my overseas study entitlement was to travel to India to see a particular International Development Program. The program targets people from the Arunodaya area. The Development Program is aimed at helping children and their families, HIV affected families’, widows, women and poor farmers.

I met with program officials to discuss infrastructure and program funding and outcomes. I also met with local officials and families.

Items for discussion Quality Health Care within the community; Access Water and Sanitation; and Livelihood Options for Youth and Women

Hon Teresa Gambaro MP

Page | 3 Overseas Study Travel Report – Hon Teresa Gambaro MP

Detailed Itinerary Schedule

Date Activity Location

8th June 2011 Flight Brisbane Perth

9th June 2011 Flight Hyderabad

10th June 2011 Meeting Arunodaya Area Development Program

11th June Event Private Reception

12th June Flight Hyderabad to Singapore

12th June Flight Singapore to Brisbane

Hon Teresa Gambaro MP

Page | 4 Overseas Study Travel Report – Hon Teresa Gambaro MP

Key Meetings and Outcomes / Findings

Meeting 1 Mr N I Solomon Raju with Arunodaya Development Program(ADP) I met with Mr Raju at the ADP head office and met with the staff working there. G.K Reddy shared with us all the history and background of the ADP with a presentation on ADPs current situation strategies and the impact of the programme in the communities it serves. Mr Newton explained the functioning of the women’s self help groups and the different livelihoods taken up by them

Meeting 2 Field Visit Veljerla Village We visited Veljerla village which is a tribal dominated community. The tribes are originally migrants from Rajasthan located in Western India. The village head Mr Ramulu welcomed us and the world Vision team that administers the program. We met with community leaders and many children. A group of tribal women warmly welcomed us with singing and dancing. I addressed the group on my role as Shadow Parliamentary Secretary for International Development Assistance. I presented the local children some books for their library.

Meeting 3 Field Visit Life School for Transformational Development (LSTD) We were welcomed into the class by children and listened to them why they explained learning on integrity, Health, Social Issues and Peace building, and their aspirations. I then had time with local women groups. The women explained that they are in need of health service centres right in their local village to get immediate help during pregnancy. They also are in need of financial support. We heard that the Australian Government is planning to provide funds to the needy for HIV and AIDS, health and Nutrition of women’s sanitation and childhood educations programs under AusAID.

Meeting 4 World Vision Livestock Development Program and Water purification Program We visited the beneficiaries of the World Vision livestock development program. We discussed how participants are increasing their income through the dairy project and how the income is spent on children’s education and family health needs. I also visited the reverse osmosis Water purification plant in the same village. We discussed the benefits that clean water and sanitation has for the entire community.

Hon Teresa Gambaro MP

Page | 5 Overseas Study Travel Report – Hon Teresa Gambaro MP

Conclusion

Issues emphasised by the community women and leaders The importance of Quality Affordable Healthcare The essential need for Clean Water and sanitation The Livelihood options for the Youth and women Entrepreneurs The focus of good International Development assistance programs shows that improving heath, nutrition of women and children is essential in smaller villages in poorer areas. Three essential outcomes should be our focus when implementation Aid programs that are designed to for women and children These are:

• Mother and Child are well nourished • Mother and Child are protected form infection and disease though access to clean water and

adequate sanitation • Mother and Child can access essential health services.

SENATOR BARNABY JOYCE

India and Malaysia 9 – 14 June 2011

THE HON PETER DUTTON MP

United States of America 24 June – 2 July 2011

SENATOR GLENN STERLE

United States of America 24 June – 3 July 2011

MS JANELLE SAFFIN MP

Burma 28 June – 3 July 2011

SENATOR THE HON RONALD BOSWELL

Indonesia 30 June – 4 July 2011

THE HON JOHN COBB MP

Indonesia 30 June – 4 July 2011

SENATOR THE HON NIGEL SCULLION

Indonesia 30 June – 4 July 2011