HILTON, Dr Doug, Chief Executive, Commonwealth Scientific and Industrial Research Organisation HUNTINGTON, Professor Elanor, Deputy Chief Executive, Commonwealth Scientific and Industrial Research Organisation MAYFIELD, Dr Peter, Executive Director, Environment, Energy and Resources, Commonwealth Scientific and Industrial Research Organisation [by video link] MUNYARD, Mr Tom, Chief Operating Officer, Commonwealth Scientific and Industrial Research Organisation [15:32] CHAIR: Welcome. I understand that information on parliamentary privilege and the protection of witnesses giving evidence to Senate committees has been provided to you. Do you have any comments to make on the capacity in which you appear? Dr Hilton : For the last 2½ years, I've been Chief Executive of CSIRO, after a 40-year career as a scientist working in basic health and medical research. Dr Mayfield : I've been at CSIRO for 15 years. CHAIR: Thank you. Do you have an opening statement you'd like to make? Dr Hilton : I do. CHAIR: Okay. You can do that, and, at the conclusion of any remarks, I'll invite members of the committee to ask questions. Dr Hilton : Thank you, Chair. On behalf of the CSIRO board and management, I'd like to make the following statement. For a hundred years, CSIRO has been entrusted with public funding to deliver research that has underpinned Australia's development, sustainability, productivity, resilience and global competitiveness, and I think you've heard from a range of witnesses today about the impact of that science. We'll never take this trust for granted. To retain this, we will continue to deliver on our primary legislative purposes, which include, doing scientific research that assists Australian industry, furthers the interests of the Australian community and contributes to the achievement of national objectives. As a national science agency, we'll deliver this through meaningful presence in each state and territory as well as in regional and rural Australia. We are acutely aware of our accountability to the Australian community and its elected representatives and appreciate that CSIRO's funding and resourcing is an important and ongoing discussion. Therefore, we welcome the Senate's decision to establish this inquiry. In our written submission, we offer a frank assessment of the complex challenges facing CSIRO. We outline why we must make difficult but necessary decisions to ensure a sustainable, safe and enduring national science agency for decades ahead while operating within our budget envelope. Irrespective of our financial circumstances, we must always make strategic choices about the science that we do, balancing our various legislative responsibilities while working at scale, collaboratively, and in safe and fit-for-purpose facilities to deliver impact for the country. I think some of the success stories that you've heard today have really come about by our ability to shape the skills of our workforce over time and stay contemporary. It's important to emphasise that the challenges to CSIRO's financial sustainability have accumulated over generations and have now reached a critical point. They are driven by a range of factors, including the growing costs of maintaining and operating an ageing and sprawling property portfolio—and I'd say also an incredibly complicated property portfolio, and a number of witnesses have talked to the complexity of managing science infrastructure—and also the sharp increases in the costs of doing science. As our submission explains, changes to CSIRO's research portfolio are driven by two major considerations. What research we do is shaped by strategic choices to work at scale on critical national problems where we can have a major impact. How much research we do depends on our budget parameters. These are distinct drivers, though they often intersect. To ensure CSIRO's research is focused on the areas of highest national priority, we've spent 18 months collectively reviewing our research portfolio. This is the first time, I think, in 10 to 15 years the organisation has looked comprehensively across its research portfolio. We've drawn insights from literally thousands of staff, from hundreds of our science leaders as well as external experts. This process has enabled us to clarify the focus and direction of our programs of research. It has given us, our partners and the public greater transparency of the work CSIRO does every day on behalf of the nation. It's also given CSIRO's leadership a sound, considered basis for the strategic choices we must take. While changes to our program of research are necessary, I have to say they are incredibly difficult, particularly for our talented staff and their families. CSIRO is such a connected workplace that a change that impacts one staff member impacts our whole CSIRO family. We're deeply aware of this impact and are committed to meaningful, ongoing consultation with staff as we work through the process. We'll also continue to collaborate and consult with the research sector, industry and our many partners in government. We're taking the same care in making decisions about sustainability as we are on implementing changes to our research portfolio. We're guided by our responsibility not only to steer a proven and impactful course today but to set CSIRO up for the decades ahead. Doing nothing is not an option. It would be unacceptable, as today's stewards, to allow the major financial challenges and pressures that have accumulated for CSIRO over decades to continue or indeed worsen. If we do not act, Australia's ability to respond to emerging challenges and harness new opportunities will become increasingly constrained. To begin to address these long-term issues, we must crystallise the savings that will come from the changes that are underway following our research review. In a stable budget environment, we might be able to invest some of the resources that we can find by shaping our capability into new science priority areas, but we need to crystallise those savings. We must also invest at least an additional $80 million to $135 million from our appropriation each year over the next 10 years so that our buildings, equipment, technology and digital assets are safe—and staff safety is utmost in our minds, certainly at the board and for the senior management and our leaders through the organisation as well as our staff—but also secure and fit for purpose. I'd like to acknowledge and thank all those individuals and organisations who've taken the time to provide submissions to this inquiry as well as the people and departments who provided valuable feedback to us directly. While we are marking CSIRO's centenary this year, we're focused on setting the national science agency up for the decades ahead because we firmly believe scientific research and development are central to Australia's future. Thank you. CHAIR: Thank you, Dr Hilton. We'll go to Senator Barbara Pocock. Senator BARBARA POCOCK: I want to ask for something on notice. I'd like a copy of the McKinsey report of 2021-22, for which I understand—correct me if I'm wrong—CSIRO paid $750,000. Can you provide that on notice, please. Dr Hilton: I think that was the subject of a previous question on notice. Mr Munyard : It was a question on notice. I'm just trying to get the detail for you. I think it was a question by the other Senator Pocock in December 2025, which we responded to—SI-377. But we're happy to take that. Senator BARBARA POCOCK: Sorry, can you explain that? Mr Munyard : We responded to a question from the other Senator Pocock, who was asking a similar question, but we'll happily take your question on notice as well and see what we can provide. Senator BARBARA POCOCK: What was the date of Senator Pocock's question? Mr Munyard : It was 12 December 2025. Senator BARBARA POCOCK: I think it's appropriate that that report be supplied to the Senate. Here we are in committee requesting it. It's public money, and there is a real public interest in how we spend our money with the very large 'big four' consultants. Dr Hilton: I agree completely. Senator BARBARA POCOCK: We have the experience of robodebt in front of us—a million dollar report by PwC for a set of overheads. We want to make sure we're not in that territory, so we'd like to see all of the outputs. I, personally, am asking you now for all of the outputs provided in fulfilling that contract, to be supplied to this committee. Dr Hilton: Certainly. Senator BARBARA POCOCK: Great. I want to go to the changed actual numbers of job losses. The staff association has said that 818 job losses have already been announced, with a further 350. We've heard today that there could be further losses, by attrition or other means. These cuts now surpass those delivered by the conservative Abbott government. Are those still the most up-to-date figures, and what commentary have you got on further possible losses? Dr Hilton: Your figures on the reduction in our staff numbers that has occurred over the last two years are accurate. I really want to emphasise that we take consultation with our staff over changes extremely seriously. It's part of our enterprise agreement. We have not yet made decisions on job cuts. That's important. We entered consultation, for example, with the environment research unit staff yesterday, and we take that consultation seriously. So we don't have final numbers, but we do have the estimate that we put out to consultation. It's around 300 to 350, total, but we've not landed on a number. Senator BARBARA POCOCK: So it could be higher? Dr Hilton: Three hundred to 350 is what we're consulting with staff on. Senator BARBARA POCOCK: And you've begun with the environment group; is that correct? Dr Hilton : I'll hand to Professor Huntington. She could walk you through the order that we are consulting on. Senator BARBARA POCOCK: Sorry—I need an answer, but I've got very limited time, so I don't want to fill it up with detail. I'm happy for you to take it on notice if you want. But why have you commenced with the environment group? What other groups are in the firing line here, and how is the consultation progressing? We've heard evidence this morning that the consultation is not real. Dr Hilton : I would reject that utterly. I absolutely support the role the staff association plays in supporting staff, but the executive team and I take consultation incredibly seriously. I think that's not a fair characterisation— Senator BARBARA POCOCK: Is it the case that these numbers could change and there could be fewer, following from consultation? Dr Hilton : Absolutely. We take consultation seriously. In the case of the work we did around enterprise service reform, which is part of the 880 you referred to, the process of consultation changed the outcomes of the proposals that we put forward. That's why we consult. We consult with staff because we get better outcomes as an organisation. We respect our staff and we respect their ideas. Senator BARBARA POCOCK: So the number of redundancies could be less than 300? Dr Hilton : Yes, it absolutely could be, because we haven't made the decision and we're going through consultation, which we take seriously. Senator BARBARA POCOCK: And why have you gone to the environment group first up? Dr Hilton : I don't think we have. There are a number that have gone through. Prof. Huntington : We entered into consultation with our Data61 and manufacturing research units last week, as well as with the agriculture and food unit. As Dr Hilton said, we opened consultation with the environment research unit yesterday, and we will be opening consultation with our health and biosecurity unit and the Australian Animal Health Laboratory next week. Dr Hilton : We've staggered it because we want to give those staff the best support we possibly can, and we can't do that if we do things in parallel. Senator BARBARA POCOCK: How long do you expect those processes of consultation to be, before you make your decision? Dr Hilton : The process takes a long time. It's part of our enterprise agreement, and we stick to that timeline very carefully. Prior to going into consultation, we have a period called 'early engagement', where we discuss with staff the challenges that are confronting the organisation and get their ideas about how to tackle those. We then form those into a proposal that goes into consultation. Professor Huntington can walk you through the timelines, but we stick to our enterprise agreement and we take our responsibility to consult properly with staff very seriously. Senator BARBARA POCOCK: If you could provide those timelines on notice, that would be helpful. Prof. Huntington : They're on page 53 of our submission. Senator BARBARA POCOCK: Thank you. Dr Hilton, we've heard a lot of evidence today—and it's a very consistent view—that, especially in international comparison and in view of the nature of the very serious challenges we face, which you've already referred to here verbally, the CSIRO is underfunded relative to the rising cost of research, looking at the trajectory of funding over the last two decades. Do you agree with that evidence? Dr Hilton : Certainly the increases in the appropriation have not kept pace with the cost of doing science, and I think we're also hostage to a hundred years of history. We have facilities that are spread across 45 sites. We have 800 buildings, and more than 80 per cent of them are at their technical end of life. We have had depreciation funding, which is what we use to renew our buildings through capital investment, that has not been indexed at all since 1999-2000, so it has remained at $80 million for the last 26 years. Those are constraints that make it difficult to continue to do the same volume of science on the same breadth of topics. Senator BARBARA POCOCK: When you consider the management challenges that that entails—we've heard a lot of evidence in support of longitudinal guaranteed rates of increased funding for CSIRO and a provision for the challenges in terms of buildings and so on. Do you support that argument for predictable, long-term, CPI related funding for CSIRO? Dr Hilton : That's a matter for government and a matter for parliament. We will work within whatever budget envelope the Australian community, through their elected representatives, allocate to CSIRO, and we will take seriously our ability to deliver incredible impact for the community through that investment. Senator BARBARA POCOCK: I know my time is short, so I want to go to some questions about expenditure. Could you provide on notice the salary ranges, in bands, for the executives in CSIRO—anonymised, of course—and could you also tell me now about your salary package. Dr Hilton : My salary package is set by the Remuneration Tribunal. It was offered to me as part of my contract two and a half years ago with the board. I did not negotiate that salary; I accepted the salary as it was. Again, it's up to parliament and the Remuneration Tribunal to set that. Senator BARBARA POCOCK: So your salary is on the public record? Dr Hilton : It's absolutely on the public record. Senator BARBARA POCOCK: Can you tell us what it is. Dr Hilton : I can't, to the dollar. I'm happy to take it on notice. Senator BARBARA POCOCK: Thank you. And does your salary include a bonus? Dr Hilton : Yes, and I think I am the only employee of the organisation that has an at-risk component. That's not something that I feel particularly comfortable about, and it's certainly something that I've discussed with the board about addressing. Senator BARBARA POCOCK: Does the board set the criteria for your bonus? Dr Hilton : Yes, absolutely. Senator BARBARA POCOCK: What is that? Dr Hilton : There are a whole range of criteria. Again, I'd be happy to share those with you on notice. Senator BARBARA POCOCK: Thank you; that'd be great. Are any of your senior executive service likely to receive redundancy offers or be part of redundancy restructures? Dr Hilton : I have to be careful about identifying anybody. Senator BARBARA POCOCK: I'm not asking you to identify. Dr Hilton : It would depend on your definition of where senior executives begin and end. Senator BARBARA POCOCK: Perhaps you could take that on notice and use a reasonable definition, one that the average person in CSIRO would understand 'executive' to mean. But I would be curious to know that. Dr Hilton : Sure. Mr Munyard : In relation to your earlier question on executive team salaries, I'd refer you to page 115 of our annual report. All the executive team—'key management personnel', it's called—and their salaries are listed there. Senator BARBARA POCOCK: Thank you. CHAIR: Senator David Pocock. Senator DAVID POCOCK: Thank you for your time this afternoon. I also wanted to pick up on a question that Senator Barbara Pocock asked about the question I put on notice to you late last year. The QON sought the report provided under a contract worth $742,500. What were the deliverables on that contract? Dr Hilton : I'll hand that to Mr Munyard. I was not chief executive at the time that work was done. Mr Munyard has the details of that. Mr Munyard : Very importantly—at a very high level—McKinsey were brought in to support a team of CSIRO employees who were working on trying to improve our processes and practices to address feedback that we received through staff surveys around some of the bottlenecks or the length of time it took to do admin. McKinsey were contracted to help inform and further shape that program of work that CSIRO was leading, leveraging their experience in undertaking similar work with other organisations. By virtue of the nature of that engagement, it didn't necessarily require the provision of a finalised report at the conclusion of the contract period but rather saw McKinsey providing us with advice and strategic documents, including a road map and solutions to assist us in our decision-making around where we would invest. Senator DAVID POCOCK: So there was no report for the 750 grand, and we paid 750 grand essentially to support staff. What were the actual deliverables? Mr Munyard : As I said, there were some strategic documents in the advice. The key element of the work included advancing areas where we could digitise and simplification opportunities that would help staff in their day-to-day job. For example, the work helped us progress and finalise the launch of CSIRO's people-connect human resources platform along with the centralisation of CSIRO's people advisory services, which has helped to streamline access to some resources for our staff. Another area of focus out of that was related to talent acquisition, including the development of a recruitment and staff onboarding model. McKinsey were able to provide us with some better practice, across the sector, to be able to help inform that. Dr Hilton : Coming into this after that work has been done, I think there are certainly things that have been valuable to the organisation through that consultancy. I'm not sure, in 2026, that would be the way we would go about it again. Senator DAVID POCOCK: I understand that. But, in the answer to the question on notice, you said a report was not written under the contract. Now you're saying that there was a road map. Mr Munyard : It wasn't necessarily a report; they were documents to help support and to verify what we were doing. Senator DAVID POCOCK: Sure. But you can see that, from where I'm sitting, as a Senate we say, 'Hey, you spent 750 grand on this consultancy.' Senator Barbara Pocock sat on the committee that looked at consultancies and some of the shenanigans that have been happening in that sector. I say, 'Okay, what was the report?' and you say, 'A report was not written under the contract,' and you're cutting staff. Dr Hilton : Technically it's true. There are artefacts that we can share with you that were created to support our staff in those process improvements, and we'd be happy to share those with both of your questions, Senators Pocock. Senator DAVID POCOCK: As Senator Barbara Pocock said, please—all the deliverables and the actual initial scope of engagement with McKinsey. Dr Hilton : We'll take that on notice. Senator BARBARA POCOCK: And—if I could add—was it put out to contract? Was it tendered? Mr Munyard : I'll take that on notice. Senator DAVID POCOCK: Could you also maybe just check if there were any conflicts of interest declared in the procurement process. Mr Munyard : I'll take that on notice as well. Senator DAVID POCOCK: Dr Hilton, you said in your opening statement that you'll need an additional $80 million to $135 million. I understand that's an annual figure. Dr Hilton : Yes. That is at least an amount annually probably for 10-plus years. Senator DAVID POCOCK: Can you provide a quick breakdown of what that does? Dr Hilton : Yes. Mr Munyard can give you a breakdown of those investments. They offer, obviously, change in value from year to year. We'll give you a brief rundown of what would be included. Mr Munyard : At a high level, the investment—we're on the record as saying—is to ensure that our infrastructure is safe and fit for purpose and enables our long-term financial sustainability. When we talk about our infrastructure, we're talking about not just the physical but also the digital infrastructure. So it will help us strengthen cybersecurity to ensure the security of our research, given the escalating number and sophistication of attacks that we are seeing. It will also help us maintain operations at the Australian Centre for Disease Preparedness and address, as I said before, the urgent repairs and maintenance that we need to do across our buildings and make sure that we're utilised. Senator DAVID POCOCK: So it is just like base-level critical upgrades, infrastructure and cybersecurity. We're not talking about anything extra here. Dr Hilton : We're not talking bells and whistles, flashy buildings or anything like that. We're talking about ensuring that our staff have a safe workplace and continue to have a safe workplace. Again, I think that's important in every workplace. But in a workplace that is complicated and has such a diverse range of equipment and facilities, from experimental farms to monumentally large telescopes, buildings like ACDP and vehicles, that responsibility for safety is one that sits very heavily. Senator DAVID POCOCK: If you don't get this additional funding, and I assume this would need to be indexed properly as well, what further cuts would you have to make? Have you identified what would need to happen to make space for that, given it does sound critical? It's not something that you can just punt into the future. Dr Hilton : It's a great question. As I said, we need to find at least $80 million to $135 million from the appropriation. For a number of reasons, it's not possible for me to give you an estimate of what that would mean in terms of staff reductions. As we've done over the last 2½ years, we will always look first to find operational savings. That's something we take very seriously. But it also depends on our budget trajectory, and that depends both on our cost base, which is pretty volatile at the moment given global circumstances, and on our ability to secure external revenue. I know external revenue has been a topic for discussion today, but fundamentally our ability to take the appropriation and work with partners who also co-fund what we do is the reason that we currently have 4,200 staff. If we were to fund our science just off the appropriation, we would have half that number. So there are some really good consequences from being collegial and collaborative and working with others to leverage the appropriation to drive impact and opportunities for staff, but it makes it extremely difficult to give you an estimate of staff numbers until we know with more certainty what areas might be impacted and how that would then flow on to external revenue. I'm not trying to be evasive there. It's just a number that's hard to pin down. Senator DAVID POCOCK: I want to come to the rationale behind some of the cuts that you're making. We've heard evidence today that one justification has been that others will fill the gaps—that someone else will do this research or this piece of work. But we've also heard pretty convincing evidence that there is in fact nobody to fill those gaps. Ms McCluskey, the chief executive of the NFF, said: The important thing though is that if you did not have the CSIRO, who would actually do this? And even if you reduce the funding, who is going to fill the gap? There is no-one to come in and fill the gap. The Australian Academy of Science gave similar evidence, which you may have heard. Do you really expect the gaps to be filled in the areas that you're cutting, particularly when it comes to the environment, which is obviously a public good and there's often no private sector entity which is going to make money off the research? Dr Hilton : Maybe I'll make a general comment and then hand to Professor Huntington, who can talk you through the criteria we've used around the research review. It's not one-dimensional. It's not simply that if somebody else can do it, we'll handball it over. There are a range of different criteria, as you would expect for us, in the way we prioritise what we do. Eleanor, do you want to speak to those? I think it has been a really important part of how we have taken a whole-of-portfolio approach and looked for areas of duplication and areas where there are strategic opportunities for the organisation. Prof. Huntington : We covered it in some detail in our submission to the inquiry in our response to term of reference A. There is a diagram on page 11—and a lot of text. To briefly summarise, the process took 18 months. It went over two phases. There was an initial phase that was around organising and articulating the existing portfolio of work. Then there was a second phase around looking into the future for the build of the work going forward. The six questions that Dr Hilton refers to are actually on the bottom of page 11— Senator DAVID POCOCK: If they're in there, I'll have a look. Prof. Huntington : I would just observe that there are six, one of which is: is CSIRO best placed to do this? But, as Dr Hilton said, there were a range of issues considered with the prioritisation process that went forward from there. Senator DAVID POCOCK: On that, can you guarantee us that the Australian climate model will survive these cuts? Dr Hilton : To give you an idea about the extent of cuts, we have approximately 60 staff involved in climate modelling. There are 12 that are potentially impacted by the changes. We retain an absolute major commitment to climate modelling and supporting the collaborative research that gets done. I know that the various collaborative groups that are involved in climate modelling, including CSIRO, are looking for funding from a range of areas. That will be ongoing, and we'll continue to support that. But the idea that CSIRO is retreating in a major way that will decimate a climate modelling and prediction is just not the case. Senator DAVID POCOCK: Well, 12 out of 60 in a climate crisis, where it's getting harder and harder to model and predict, seems like a fair reduction. It's not nothing. Dr Hilton : No. That's not what I said. What I said was that we still retain—I think you would agree also that 48 is a significant contribution too. Senator DAVID POCOCK: Sure. Dr Hilton : So I'm not trying to belittle the change. I guess what I'm saying is there should be no area of science that is immune from that kind of scrutiny and from accountability. We take that very seriously irrespective of what area we're working on. One of the primary responsibilities is ensuring the most efficient possible delivery of impact for the community. We're looking at that on every area and we'll continue to work. I've engaged, and so has Dr Mayfield, with some of the senior executives at ACCESS. We, out of respect for our staff, want to engage with our staff first in consultation. Then, almost immediately afterwards, we began that external engagement. I think it would just be inappropriate for us to be discussing major staff changes with partners before we've had the conversations with staff. So I think we've handled it respectfully. Those communications will continue and are scheduled over the weeks ahead, because we don't want to leave the country in the lurch in areas of crucial science. It's something that we're absolutely focused on. Senator DAVID POCOCK: Thank you. CHAIR: Senator Darmanin. Senator DARMANIN: Following on from that discussion—and I appreciate pointing us in the direction of the process that you've followed—I was wondering if you could talk briefly about what CSIRO has done to cut operating costs and try and reduce other areas of wasteful spending to be more sustainable before resorting to staffing and research programs, in particular. Dr Hilton : Mr Munyard can talk to that. Mr Munyard : We've spent a bit of time over the last one to two years looking for operational savings as best we can. We've been able to identify and reduce research operating costs, for example, by $25 million per annum, including in travel, sponsorship of events and memberships of professional bodies. We've been able to reduce our research overheads, including in areas of governance and management, by around $20 million per annum. We have reduced in order to maximise the investment into research in enterprise services reform, finding efficiencies in our corporate services, which has harvested $85 million per annum ongoing. Over the past decade, and probably even longer, we've been self-funding significant property consolidation to realise savings. We implemented a property strategy in 2019 and have reduced sites from 58 to 45 over that period. That self-funded significant property consolidation includes things like Canberra consolidation, which has been funded from the proceeds of wi-fi, probably starting over a decade ago, which has reduced sites from six to—we'll end up at one in the near future. We'll continue to review our cost base and find operating savings wherever we possibly can in the first instance. We'll continue to do that. Dr Hilton : I also want to emphasise that, although we took that first look in the non-research side, our enterprise services side—because we, as a national science agency, want to do our very best to preserve research capability—it had a deep impact on some incredibly passionate and talented staff in our enterprise services. It's not that we somehow see those staff as second-class citizens; they are absolutely crucial to this organisation's ability to deliver impact across the community. Just as the changes with research staff have deep impacts on their teams, on individuals, on families and on a lot of communities in rural Australia—that, again, is something we take very seriously. It hits hard for the whole organisation. Senator DARMANIN: Moving on to a different topic, we've heard today that this is about partnerships with industry and that CSIRO requires 70 per cent funding for research projects to come from external industry partners. I want to test whether or not that's still true. In addition to that, what kind of governance arrangements do you have in place to support decisions on when you will partner with industry, in order to protect the integrity of the projects and public trust in these partnerships? Dr Hilton : I can hand this over to Elanor, but I will say that the overriding consideration we have, whomever we partner with, is the generation of impact for Australian industry, for the community and in response to national objectives. That's what our act says. It may be old fashioned, but we take our act really seriously. We take it seriously to deliver on the intent of our purpose. Elanor, do you want to speak to the much greater flexibility around how we partner—more than has perhaps been articulated through the day? We do take a very flexible approach. Senator DARMANIN: That would be very helpful. Prof. Huntington : Yes. Thank you, Dr Hilton. Senator, we engage in partnerships for a range of reasons. As Dr Hilton said, there is not a uniform mandate that any particular collaborative project needs to have a particular co-investment ratio. We partner for the purpose of achieving impact. As an applied science agency, we certainly ask people to think very carefully about how they go about achieving impact. That ranges from some very fundamental work all the way through to some really quite translational work. There are a range of mechanisms that we employ to partner externally, and a number of those are outlined in our response to term of reference (e). What I would say with regard particularly to the co-investment question is that we co-invest for a range of reasons, one of which is to potentially secure IP for Australia. One of the reasons for doing that would be, for example, to ensure that the IP can be used sector-wide, rather than for the benefit of individual shareholders of individual firms. A lot of our external partnerships are actually with government agencies, and we partner on the basis that it is either a strategic alliance and both of the partners will contribute fully because of the mutual benefit—we might do commissioned work where we would potentially co-invest in order to, for example, secure IP and things like that. We also sometimes do directly commissioned work where we undertake that work on a cost-recovery basis. That unfolds across the organisation very differently, as you would imagine. Different parts of the organisation would engage in very different ways. For example, if you are doing extremely fundamental research, we would not be setting a mandate for people to engage potentially with industry. But, obviously, as a former academic, I would imagine that any individual researcher would seek to gather funding from grant schemes such as the national collaborative research infrastructure scheme and activities like that. All of that occurs, and it is incredibly diverse across the organisation, going forward. To your question about governance, we have a set of governance rules about who gets to make which decision. A number of these decisions are devolved very deep inside the organisation so that the people who are most closely related to the research can make the best possible decisions on the basis of the type of work that they're doing, the type of partners that they want and their imagination of how the pathway to impact would unfold. Dr Hilton : One of the things that really surprised me, coming into the organisation 2½ years ago, was the extent to which government was the major additional funder of the work the CSIRO does. For industry, Australian industry provides about 10 per cent of the CSIRO's research effort from external funding. Government provides nearly half. One of the other things that surprised me was the extent to which the environment unit is incredibly successful in leveraging its appropriation to generate that additional external revenue. Most of that comes from government, but not all. Most of it is almost by definition public good. So, the idea that somehow the externally funded work we do is for industry, maybe focused towards the benefit of individual companies, and the appropriation is used for public good just does not stand up to scrutiny. The public-good research is incredibly successful at leveraging additional funding on top of the appropriation. The reason our environment unit is as big as it is that it is so good at doing that. Senator DARMANIN: On another topic—I'm trying to be efficient with my questions—earlier today we heard about the work at Cape Grim, in Tasmania. Can you talk about how that facility is funded and whether there are any changes to your commitment to Cape Grim and the important work that's done there, which we heard about earlier today. Dr Hilton : I had the privilege of visiting Cape Grim about 18 months ago, and it was an incredible privilege to go to that part of Tasmania. I think that's a great example of a strategic collaboration, in this case between the Bureau of Meteorology and the CSIRO. Professor Huntington, do you want to talk a little bit to that? Prof. Huntington : We might pass to Dr Mayfield to talk, to get to the heart of the senator's question. Dr Mayfield : We have a relationship agreement in place with the BOM, which pays for a lot of the work that's done at Cape Grim. We've only recently worked through renewing that for another five years, so it will continue. But we are looking at ways to deliver the services, in terms of the monitoring and measuring that needs to be done there, in a more efficient way. We are looking at that. Given that there have been a lot of advances in equipment and devices there, there are better ways of doing it. We remain committed to Cape Grim, or Kennaook. Dr Hilton : I think Dr Mayfield highlighted something really important, and that is: science changes. The skills we need in science change. We wouldn't have thought, five or six years ago, that we and every science agency would be investing in AI to be able to analyse increasingly large datasets. Also, 30 or 40 years ago, we wouldn't have thought of the reach of recombinant DNA technology. Again, I just want to emphasise how important it is, despite the impact that it has on individual staff, that we do need to be able to refresh the skills that the organisation has. Sometimes that's with retraining. Sometimes it's about hiring in new staff with new skills. That's something that, despite how difficult it is, we have to continue to do to work in the national interest. Senator DARMANIN: Very quickly—if you could keep your answer brief—this is my last question. We've heard a lot today about public-good science. I think you did talk a little bit about that in some of your answers to earlier questions. What does that really mean for your organisation, which also has this legislative mandate around industrial research, and how do you think about that together? Dr Hilton : We speak to this in our submission, and we really try to lay it out very openly. I think it's a false dichotomy to think about public-good science and industry science. I'll try and keep it really short. I had the privilege of visiting Narrabri, where we do a lot of work in agriculture. We've had a 40-plus year relationship with Cotton Seed Distributors, where we've taken the cotton industry with them from being a bit of a basket case 40 or 50 years ago to being the most sustainable and productive cotton industry in the world. That is fantastic for those farmers, but that prosperity is also remarkable for the community. Whether it is generating new pharmaceuticals from basic medical research discoveries or commercialising technologies for clean energy, there is such a tight link between what can be in the public good and what we require industry for. I think we take that responsibility, as executives, of looking across the whole of the research portfolio and asking whether we have the right mix. That's an incredibly difficult decision for an individual scientist working either with industry or on climate change or on biodiversity to make. One of the reasons we're employed as executives, one of the reasons we have such deep science expertise among our executive team—in the case of Elanor, Jen Taylor, Rob Hough and Peter Mayfield—is that it's like 120 years of deep science expertise. This is not an organisation that is being run by non-research-capable bureaucrats in any way. It's people with deep science expertise trying to make really difficult choices about the balance of science we do for the nation's interest. It's something that makes it the best job in the country, but it also makes it an incredibly tough job. Senator DARMANIN: Thank you. CHAIR: Senator Whish-Wilson. Senator WHISH-WILSON: A couple of points of clarification, Mr Hilton—you mentioned science changing and that you used AI in your statement. Is the use of AI now behind potential job cuts or efficiencies at CSIRO? Dr Hilton : No, I don't think that's the case. We're certainly looking at how we apply AI to do a lot of corporate tasks more efficiently. I do that with complex papers that I'm reading. We are working out how we do two types of AI research. The first is that we need to be doing research on AI in a way that allows Australia to be able to utilise, in a safe and productive way, advances in AI. We also need to be deploying AI into all of the different research areas that we operate in, to be able to analyse big datasets. We're not seeing it in terms of, 'If we can hire one AI researcher, then we can replace 10 of somebody else.' That's not what we're seeing at all. But we do see it being crucial, as a modern national science agency, that we utilise every possible tool at our disposal to generate the impact that we think we can generate. AI is just one of those tools. Senator WHISH-WILSON: I'll come back to that if I've got time. I have another point of clarification. Senator Barbara Pocock asked you about bonuses and the at-risk component of your salary. I wanted to check: is that set aside as an option for you? Is it signed off by a board or a minister, or is it just given to you as part of your package, if you want to take it? Dr Hilton : No, it depends on my performance and the organisation's performance in a range of different areas. The performance metrics for the organisation are outlined in the corporate plan. They're very transparent, and, through the board, the people and safety subcommittee have a rigorous process for determining that. Senator WHISH-WILSON: It's a bit hard when you're doing this by teleconference—apologies that I'm not there today—but I did sense some emotion from you, when you were giving your opening statement, about the difficulties of what CSIRO is going through at the moment. Is that why you expressed some discomfort around taking an at-risk payment, because people are losing their jobs and you don't think it's a good look for a CEO or senior executive to be taking an at-risk payment? Dr Hilton : I don't think it's a good look for one person in an organisation to have an at-risk component. It's something I've discussed with the board. There are some complications with working out what the right level would be if I was to give that up. I'm not somebody who's wealthy. I've worked as an academic researcher. I live in an environmental cooperative in a mud brick house. I don't own any property; I lease a property in a cooperative. I'm not somebody who is sitting on huge assets, so my salary is important to me, but I would also be very happy to have a negotiation with the board around how to roll that at-risk component into a base salary. That's something that I've already spoken to. It's a remuneration tribunal issue. Again, I accepted a salary that was offered, and I didn't negotiate that salary. I feel very fortunate to be paid well. I feel the emotion around staff not because of some guilt about my salary but because it's difficult for staff. These are people I genuinely like and admire. It's the reason I came to CSIRO. It's the reason I would never want to work in a large multinational company. I'm somebody driven for purpose. I'm passionate about science. I found my place in the world when I started as a scientist when I was 21. I feel like these are people I connect with. Senator WHISH-WILSON: Okay. In terms of the at-risk, you said you're the only senior executive. Previously, I understand, other senior executives have taken at-risk bonus, including Dr Mayfield. Is this just now available only to a CEO? Mr Munyard : I can probably take that question. Three or four years ago, we started to remove from the executive and CSIRO leadership team employment arrangements, bonuses or at-risk payments that were there, so they were steadily phased out from, I think, 2022, but I'd have to take the exact timeframe on notice. Senator WHISH-WILSON: What was the finding and the reasoning behind that? Mr Munyard : That was a decision of the board at the time. I'd have to go back and look at papers that were put to the board, but I think, again, it was a decision of the board on the basis of whether at-risk payments were appropriate in a publicly funded agency. Senator WHISH-WILSON: Was that while Larry Marshall had his tenure as CEO, or was that after his departure? Mr Munyard : No, it was while Dr Marshall was still employed at CSIRO. Senator WHISH-WILSON: But he took a he took a substantial at-risk payment before he departed. Is that correct? Mr Munyard : Again, his salary was set and the board operated within the Remuneration Tribunal parameters. And, yes, he was entitled to an at-risk payment as part of that. Senator WHISH-WILSON: Okay. I have two last questions, but certainly this one's quite important. Mr Hilton, at estimates you said that, when you had your interview for this role, it was raised with you that there were challenges, including around the capital costs, at CSIRO. Who's accountable for failing to address these issues at CSIRO? You've inherited them and you've got a job now to deal with this. This was raised in 2012. It was raised by the National Audit Office as ongoing CSIRO management failures back in 2020 to address this. Who's had tenure as the senior executive during this time period, and why hasn't this been dealt with prior to your time? Dr Hilton : I think, to be fair to my predecessors, there have been some valiant attempts to address the challenge. I know one of the reasons that Dr Marshall was so passionate about entrepreneurship, about being able to build Australian companies, about CSIRO being able to take an equity stake in those new companies that were employing people, was that he wanted to be able to invest the value of that equity when it was crystallised back into CSIRO's property. That was valiant. That was brave. It has made a really major contribution to some of the uplifts that we've been able to do in the last few years. But, ultimately, it's not a mechanism by which we can fund the depreciation backlog and the maintenance backlog. So things have been attempted, and I think they became more acute as the costs of renovations, maintenance and buildings went up pretty precipitously following the Ukraine war and through COVID. So things have compounded. I don't think it's fair to lay the blame on any one individual chief executive or any one government over the last period. This issue—I'd be happy to share this with the committee—was discussed by the chief executive, Jerry Price, at the 50th anniversary of CSIRO in the 1970s, following the oil crisis. So it's something that has dogged the organisation for the best part of 50 years, and it was actually very illuminating to read Jerry Price's reflections on his tenure as chief executive. Senator WHISH-WILSON: Okay. CHAIR: Dr Hilton, there would have been strategic plans that had been done by the organisation, probably in very recent times. Can you tell me what work has been done on the opportunity lost, given the amount of thinking and input that would have gone into any plan that is currently before the organisation? Dr Hilton : I'm not quite sure what you're getting at. CHAIR: Your had some certainty. You knew where you were heading, to a certain extent—where you had control. You've now got this proposition in front of you. What work has been done on opportunity lost, given the uncertainty that has been created for your organisation? Dr Hilton : There's a range of modelling that's been done to project, for example, how we might find the $80 million to $135 million a year that we would need to find to get on that pathway to sustainability. I think it would be fair to say that it would be difficult to do that without the organisation becoming smaller and more focused. So the opportunity cost, in many ways, would continue the discussions that the organisation has had around the 300 to 350 staff. We made a strategic decision that we were not going to 'tip prune'—that is, just cut a little bit off everything to the point where we can't have a major impact in important areas. The strategy is that we will choose areas that we focus on, where we can maintain scale and the diversity of scientific thought that can be applied to those problems and, therefore, where we can continue to have impact. I think the opportunity cost is that we would not work on as broad a range of problems as we could if our budget trajectory was different. CHAIR: I'll go to Senator Barbara Pocock, and if we've got some time we'll come back. Senator BARBARA POCOCK: I want to argue with your earlier statement that moving away from core government funding is not hazardous to the shape of a research program. I agree that industry partners can be incredibly productive to your research question, your resources and where you go, and they can improve your research project, but they're not blue sky. I've held a five-year research fellowship where I was sent off to think deeply and work with others on a core problem that I thought was really critical. And that's what climate science needs. There's no-one from industry out there barracking for some of the areas we need to go, in terms of climate and health. There's no commercial partner. There's not a government department there. I've done plenty of linkages as well—I know how good they can be. But there is a big difference with a 75 per cent leverage, up to 100 per cent. That reshapes a research program, in my view, and I think there'd be very few scientists, including social scientists, who would argue with that proposition. Dr Hilton : I think we've— Senator BARBARA POCOCK: It is a real concern, and it's not trivial. Dr Hilton : No, and I don't think that's what I said. I'm happy to go back and look at the Hansard. I don't think that's what I said. I said I didn't think there was a dichotomy— Senator BARBARA POCOCK: No, I don't think— Dr Hilton : between industry and public-good funding. I think they're intimately linked. There are some great examples—and the National Farmers' Federation representative alluded to this—where industry is co-funding with CSIRO some amazing blue-sky agricultural research. But I'd also say I would agree with you. There are some research areas— Senator BARBARA POCOCK: And that is the concern— Dr Hilton : I certainly benefitted from that, as somebody who had NHMRC funding for 40 continuous years. Senator BARBARA POCOCK: Yes. Dr Hilton : There were things that we could do with that funding that we could never have done with industry funding, and we have that at CSIRO. So I would completely agree with you. The mix is important. Senator BARBARA POCOCK: Let's not set up a straw man here. A very important part of the work of the CSIRO has always been blue-sky research, where scientists decide, 'This is an important question; we're going there,' and there's no partner anywhere around. Dr Hilton : No. That's exactly right. Our astronomy is exactly that. Senator BARBARA POCOCK: Exactly. So we're agreeing. Dr Hilton : We're furiously agreeing. Senator BARBARA POCOCK: Okay. Well, I think we've had a lot of evidence on that today. This will be my last question. You've been very careful about saying it's up to parliament to set the funding envelope for CSIRO, but you've set out your criteria for strategy: scale, critical problems and where we can make a difference. Does CSIRO have enough resources to face the critical problems where we can make a difference? I'd be very surprised if you said yes, and that is why the question of envelope is a critical issue for this committee. Dr Hilton : I think the question of the funding envelope for Australian science more generally—and you've heard discussions from a range of participants and witnesses in this inquiry today—is a crucial question for government, parliament and the community. CHAIR: I'm going to go back to Senator Whish-Wilson. He's got a final question, and then we'll finish up. Senator WHISH-WILSON: You point out in your submission that, under the SIRA Act, CSIRO's primary purpose is to carry out scientific research to assist industry. With the proposals knocked back within the CSIRO by the CSIRO executive—if there's a challenge identifying paying customers, is that the kind of lens that you put over proposals, and is it the lens you're putting over your current job cut decisions at the moment? We could be a little bit cute with the language here, but that is in the act. Dr Hilton : No, I don't— Senator WHISH-WILSON: I'll give you one example, and if you could be specific about this. I understand that the climate intelligence and advice portfolio research proposal was developed by CSIRO staff and was rejected by the executive because of a lack of paying customers. Is that reasonable? Dr Hilton : To answer your general question, our ability to leverage appropriation is one factor, and it has to be a factor because we take our staff numbers seriously. As I said, the reason that we currently have 4,200 staff is because we leverage the appropriation in ways that we hope generate more impact. I can ask Dr Mayfield to comment on your specific example. Senator WHISH-WILSON: Please. Dr Hilton : It would be naive to say that it was not a factor, but it's not an overwhelming factor. We're looking at: how do we generate impact for the community in Australian industry and deliver on national objectives by deploying our appropriation in the best possible way? Senator WHISH-WILSON: Externally, that does look like there's, basically, a push to make the CSIRO into a consulting business. This is what it looks like externally. Dr Hilton : No. I reject that. Senator WHISH-WILSON: You've got to understand. We dealt with the same issue 10 years ago. The same issues have arisen in 2026. Dr Hilton : Absolutely. I'd be happy to send you a copy of the CSIRO book that outlines the wonderful breadth of science that we do in support of public policy, in support of industry and in support of generating incredible benefits for the community. It's something that I'm incredibly proud of. Senator WHISH-WILSON: Sorry, could you— CHAIR: I'd like to thank all the senators today. Have you finished up? Senator WHISH-WILSON: Sorry, Chair. Dr Mayfield was just going to respond to that last bit very quickly, please. CHAIR: I understood that what he was doing was telling you that he had a book there that you could actually look at. Is that right? Dr Mayfield : I can give a very quick answer. CHAIR: Right. Thank you. Be quick. Dr Mayfield : Actionable climate science continues to be a part of our forward-going program. The work that we did during the portfolio build process was that we were looking for a more integrated approach where we're bringing the adaptation pieces closer to where we're getting the climate intelligence, which is driven from the monitoring and measurement. They've brought that together. We've also tried to put a biodiversity lens into that work. So we're trying to do a more integrated approach. We're still doing that work. The dollar consideration you referred to was not a consideration in that decision. It was more about: how do we deliver the science in a more integrated way? That's how we approached it. CHAIR: Thank you to the CSIRO for your evidence today. That concludes today's hearing. Thank you to all witnesses who appeared, to Hansard and Broadcasting for their assistance and to the senators that participated today. The committee has agreed that responses to questions on notice should be provided by close of business on Monday 23 March 2026. Committee adjourned at 16:33