National Parks and Wildlife Amendment (Jenolan Caves Reserves) Bill



About this Item
SubjectsNational Parks; Tourist Industry; Government Department: New South Wales: Environment and Conservation; Jenolan Caves
SpeakersHarwin The Hon Don; Cohen The Hon Ian; Nile Reverend the Hon Fred; Jenkins The Hon Jon; Chesterfield-Evans The Hon Dr Arthur; MacDonald The Hon Ian
BusinessBill, Division, Second Reading, Motion


    NATIONAL PARKS AND WILDLIFE AMENDMENT (JENOLAN CAVES RESERVES) BILL
Page: 19009


    Second Reading

    Debate resumed from 19 October 2005.

    The Hon. DON HARWIN [5.01 p.m.]: I was in the Chamber when my colleague the Hon. Rick Colless led for the Opposition on the National Parks and Wildlife Amendment (Jenolan Caves Reserves) Bill. His very good speech outlined many of my concerns about the bill, so I do not feel the need to reiterate those concerns this afternoon. As foreshadowed in my colleague's speech, the Opposition is of the view that the bill should not proceed to the second reading today but should instead be referred to General Purpose Standing Committee No. 5 for further inquiry and report. At the conclusion of my contribution I will formally move that amendment so that the House may consider it during the remainder of the second reading debate. A number of members have already made it very clear that they are against that course, and so be it. However, the Opposition believes that the issue of the referral of the bill to the committee is a matter that needs discussion during the second reading debate.

    The bill effectively abolishes the Jenolan Caves Reserves Trust, which was established by the Greiner Government and Minister Tim Moore, as Minister for the Environment, in July 1989 to manage Jenolan, Wombeyan and Abercrombie caves. It was an independent statutory body authorised under the National Parks and Wildlife Act. The trust was established as a financially self-sustaining body relying on income from visitor charges and lease revenue from Caves House. As my colleague the Hon. Rick Colless outlined comprehensively and at some length, many of the problems that have emerged have occurred simply because some of the expectations that the trust had of government, under the Carr Government and now the Iemma Government, have not been met.

    In 1997 the Carr Government transferred responsibility for Borenore Cave to the trust without any additional funding, placing a strain on existing resources. Indeed, the administrator, Mr Griffin, noted in his report that when responsibility for Borenore Cave was transferred to the trust there was no supplementation, and there is no revenue from this reserve. Consequently, Borenore Cave is currently managed on a minimalist approach using resources from Wombeyan Cave.

    In 2002 the Government instructed the trust to pay productivity increases amounting to almost 10 per cent to its staff. That increase was supposed to be conditional on a productivity increase but was paid despite static, or declining, revenue. The wages bill for 2002-03 thus rose from $2.237 million to $2.451 million, an increase of $214,000, which accounted for almost all the $240,000 supplementation that was required that year from the Government. In the 10 years of the Carr Government, and now the Iemma Government, a declining number of people have visited Jenolan Caves. This has been a major factor in the situation we have arrived at. The trust has been subjected to increased expenses and reduced revenue as a result of the Government's neglect.

    Much has been said about the trust. It is worth noting that the Council on the Cost of Government report stated that "the trust had performed extremely well". In all the circumstances, to simply blame the trust is an unsatisfactory approach. No satisfactory reason has ever been given for replacing the trust with the Department of Environment and Conservation. Jenolan Caves is an exceptional tourist site that deserves special attention, and I believe it deserves better than what it is getting from this Government. The situation regarding deferred capital works is very serious. The situation referred to by my colleague the Hon. Rick Colless in discussing the correspondence he received from the concessionaire at Jenolan Caves regarding the water quality at the caves certainly was very disturbing. I received copies of that correspondence from David Templeton of JMA as well. I hope the Minister addresses that aspect in his reply to the second reading debate. It is a serious situation, and it is indicative of what has happened to the Jenolan Caves precinct under this Government.

    The Opposition feels it would be appropriate for General Purpose Standing Committee No. 5 to inquire into and report on a number of matters. We believe that transferring responsibility for the caves from the trust to the Department of Environment and Conservation is a mistake, in the context of the capacity of the National Parks and Wildlife Service to manage the national park estate. I concede that there has been an increase in the funding per hectare, as General Purpose Standing Committee No. 5 reported to this House when it conducted its inquiry on feral animals. But the fact is that less than one-third of reserves have a plan of management in place. Yet the Jenolan Caves precinct is to be given to the Department of Environment and Conservation for it to manage as well.

    We need advice on which of the preferred options for operating the commercial precinct of the caves outlined by the administrator is the best way to go. Two types of split ownership models have been suggested, and an integrated lease is also a possibility. The House needs to know more about the marketing of Jenolan Caves as a tourist destination before it passes the bill. In particular, the House also needs to know whether the Government has fulfilled its obligations to the lessees and operators of the various businesses at Jenolan Caves.

    I was extremely disturbed to hear the details that the Hon. Rick Colless went through in his speech during the second reading debate about the relationship between the Government and the leasehold of the Jenolan Caves commercial precinct. I am certainly aware of a lot of that material myself. I believe the House would benefit from further information as a result of an inquiry conducted by General Purpose Standing Committee No. 5 before the bill is second read. Therefore, I move:

    1. That the question be amended by omitting the words "now read a second time" and inserting instead "referred to General Purpose Standing Committee No. 5 for inquiry and report.

    2. That notwithstanding the generality of paragraph 1, the committee examine in particular the following matters:
            (a) which of the preferred options for operating the commercial precinct of the caves outlined by administrator Allan Griffin in his interim report of 31 March 2004 would provide the best combination of return to Government, visitor satisfaction, commercial viability and environmental protection:

    (i) a split ownership model, under which the cave tours are operated by Government or under licence by a private operator and the accommodation by a private operator, with a new integrated management approach; or

    (ii) a split ownership model with the Government and the current lessee of the caves accommodation jointly contracting for a single operator to manage all services; or

    (iii) an integrated lease with the cave tours, accommodation and hospitality services offered as an integrated package to the private sector.
            (b) the marketing of Jenolan Caves as a tourist destination since they were transferred to the National Parks and Wildlife Service in 1996;

    (c) whether the Government has fulfilled its obligations to the lessees and operators of the various businesses at Jenolan Caves; and

    (d) any other relevant matter.

    I apologise to the House that the amendment has only just now been circulated, but we have taken some time to make sure we get this right. There are very serious issues at stake and we want them considered but, by the same token, this bill first came before the House in 2004, so it is not as if this is a new issue.

    The future of Jenolan Caves has been under review by all members for quite some time and the issue of a reference to a committee has certainly been discussed with the National Parks Association. I know for a fact that members received advice from the National Parks Association about the matter several days ago. Government members knew the Opposition was about to move this amendment because we told them about it and members have been able to consider the advice they received on the issue of whether an inquiry should proceed. Having said those few brief remarks, I commend the amendment to the House.

    Mr IAN COHEN [5.12 p.m.]: The National Parks and Wildlife Amendment (Jenolan Caves Reserves) Bill abolishes the Jenolan Caves Reserve Trust and transfer management and control of the four karst reserves currently under its control to the Department of Environment and Conservation [DEC]. These reserves are the Jenolan, Wombeyan, Borenore and Abercrombie karst conservation reserves. Members will be aware that a bill to a similar effect was introduced last year and was subsequently withdrawn this year. The Greens did not support the previous bill. However, the current bill has been very substantially changed, and has met many of the demands of conservation groups. The Greens are now happy to support the bill. It is an opportunity to establish an example of best practice for commercial operations in the reserve system. It is a chance to avoid another Quarantine Station.

    The Greens feel this bill is well on the way to providing for sustainable management of the system. Jenolan Caves is an exceptional part of our heritage, and is part of the World Heritage listed Greater Blue Mountains. It is one of Australia's most well-known natural attractions. When people think of the Blue Mountains they think of the Three Sisters and they think of Jenolan Caves. It is important that the stunning caves at Jenolan, which have delighted visitors for more than 130 years, do not succumb to the crass vagaries of commercial exploitation. It is essential that these caves, as well as the three other karst reserves, are operated in such as manner as to ensure their preservation so that subsequent generations can enjoy their irreplaceable beauty in the future. Protecting Jenolan Caves is the Jenolan Caves Karst Conservation Area that is an important component of the eight reserves listed in December 2000 as a part of the Great Blue Mountains World Heritage Area.

    The karst conservation area ensures that the unique karst environment is protected for all time. But the management model for Jenolan was flawed. Jenolan Caves, along with Wombeyan Caves to the south and Abercrombie Caves to the west, and recently Benore Caves further west, were managed by the Jenolan Caves Reserve Trust. The trust was established in 1989 as an independent statutory body for the care, control and management of the four karst conservation reserves. Revenue for the trust was tied to income from cave tours and any lease payments from Caves House. The trust was supposed to be self-financing. With visitor numbers dropping over the past few years for a number of reasons, including a decline in international tourism, the income levels dropped.

    The trust needed an ongoing stream of funding that was not tied to visitor numbers at Jenolan Caves to fund the management of above-ground infrastructure, visitor facilities, and weed and feral animal control. With the Government unwilling to do this while the trust was independent of government, it was clear a different management model was required. As a result of problems with the financial model of the trust, a review was carried out by the Council on the Cost and Quality of Government, which recommended the trust board be replaced by an administrator upon the expiry of its term. This happened in January 2004. It also became clear that the management of commercial operations at Jenolan Caves was critical to providing a good experience to visitors to the caves and protecting the environment.

    A lease was signed by the Greiner Government in 1990 offering Caves House to a private company on a 99-year lease. That is a very long lease and in hindsight shows the Greiner Government to have moved very foolishly on this matter. This has proved an unhappy event for those planning to visit Jenolan Caves and stay overnight. The leaseholder has a long history of poor performance. The Minister for the Environment has received more than 100 complaints from people who have stayed at Caves House, and he received several more just this week. It is becoming widely known that Caves House is not a great place to stay, further reducing visitor numbers. I am aware that the Government is now initiating legal action for non-compliance of the lease conditions by the current owner. Yet the lease is written in a way that even if the current owner is found to have breached lease conditions, he may install a new owner of his choosing. The current lease then continues to run for another 85 years. We are stuck unless the Government wishes to foot a huge compensation bill.

    This should not be allowed to occur again. The Greens are opposed to long-term leases of our public places. No lease should be allowed to last longer than one generation, or about 21 years. This is the case with the leasing of public lands under the Local Government Act that are limited to a maximum of 21 years. Last year, the Greens voted against an attempt by the Government to simply amend the National Parks and Wildlife Act to permanently install an administrator to replace the Jenolan Caves Reserve Trust. We did not believe that the problems of Jenolan Caves were to be solved just by the Government running the trust with an administrator indefinitely. More fundamental change was required.

    The Greens have been concerned about commercial activities in our national parks for some time. Look at the influence that the ski resorts have been able to apply over the National Parks and Wildlife Service [NPWS] in Kosciuszko National Park: it is difficult for NPWS officers to put pressure on the ski resort owners to deliver on environmental outcomes without political interference. In Murramarang National Park there is a long history of the caravan park situated within the national park consistently damaging the environment. The proposed lease of Quarantine Station in Sydney Harbour National Park has been fraught with local opposition. The process of preparing the lease has been conducted in secrecy. Conservation and heritage values have lost out. This has been an embarrassment for the Government.

    Any commercial operators who provide tours of the caves or run accommodation services need to operate to the highest standards of accountability, transparency, protection of the public interest and environmental performance. The bill is to come into effect in two stages. The first stage will allow the lands controlled by the trust, apart from the Jenolan commercial precinct, to be transferred to the DEC. The trust will be abolished. The Director General of the DEC will then be responsible for the care, control and management of the karst conservation reserves. The Director General will be guided by the establishment of the Karst Unit and the Management Advisory Committee. The second stage will not commence until the plan of management has been finalised and the lease issues with Caves House resolved.

    The remaining areas will then be transferred to the DEC. The Greens support this timeline of events. It is especially prudent to have a strong plan of management in place before the commercial precinct is transferred to the department. Jenolan, Abercrombie and Wombeyan karst conservation areas are to be managed by the National Parks and Wildlife Service, as is the Jenolan commercial precinct after the plan of management is in place. The Greens support this move. Other cave areas in New South Wales, such as Yarrongobilly caves and Willi Willi caves, are managed successfully by the DEC. Jenolan presents an opportunity to get commercial operations right. If we can get it right here, we can extend this new model to other NPWS national parks.

    The Greens are aware of the problems that can arise out of using trusts to manage important natural areas such as Jenolan Caves. Up until 1967, all our national parks were managed by trusts. There was a trust managing Kosciuszko State Park, another one managing the Blue Mountains National Park, and another managing Royal National Park. Local interests can capture trusts and then the trust loses sight of protecting their lands for the whole of New South Wales or for all of Australia. Trusts can also come to be dominated by political appointees. While this may not have been an immediate problem for Jenolan Caves Reserve Trust, it was envisaged it could occur in the future.

    In 1967 the National Parks and Wildlife Service Act was passed. This transferred all the trust-managed national parks to a professionally run National Parks and Wildlife Service This has proved highly effective in ensuring that the conservation values of the areas are conserved while providing compatible opportunities for recreation. Thus the Greens support abolishing the Jenolan Caves Reserve Trust and handing over management to the National Parks and Wildlife Service. However, we will not support this without other changes. We will only support abolition of the trust if the management of commercial activities in karst conservation areas is improved at the same time. This is an ideal opportunity to get the management right.

    Commercial activities in karst should be conducted with the following principles: leasing and licensing should be controlled by an adopted plan of management; no lease should be issued for more than 21 years; the public should be given the opportunity of input into future leases and licences through comment on both the plan of management and draft leases and licences; leases and licences should comply with performance indicators spelt out in the plan of management; the National Parks and Wildlife Service should publicly report on the performance of lease and licence holders at least every year; all details about finalised leases and licences should be publicly available; performance indicators should be regularly reviewed and improved—in Committee I will move some amendments to strengthen the provisions regarding performance indicators—and an auditing process should ensure that compliance and reporting are accurate.

    The Greens particularly support the more transparent and accountable measures introduced in the bill, including the requirement for a report on the performance of the lessees and licence holders, which must be produced annually and displayed publicly. The bill establishes the Karst Conservation Advisory Committee. The Greens support this measure. The committee will report to the National Parks and Wildlife Advisory Council, and will advise on major karst areas within all national parks and wildlife reserves. Furthermore, the NPWS Regional Advisory Committee will be given responsibility for providing community input on strategic management issues relating to the transferred karst conservation areas. It is important that there should be this input at local level.

    The transfer of management of the caves and reserves is also an opportunity to fix some long-term problems in the area. I have been contacted by staff at Jenolan Caves, who are concerned about the quality of water at the caves. They also raised other industrial relations issues relating to water pipes. There is also a substantial problem with noxious weeds in the region. I hope that the department will investigate and address these issues when it takes over control of the area. The Government has already allocated $18 million to stabilise Five Mile Hill Road and $4 million in capital works to upgrade the caves and other trust infrastructure. This is a good start, and I hope that the department will take seriously its role in revitalising the caves and precinct, and turn this into an example of sustainable, best-practice operations. With that, the Greens support the bill.

    The Hon. Don Harwin, in his contribution to the second reading debate, referred to an upper House inquiry. This issue had been raised with me by the shadow Minister for the Environment, Mr Michael Richardson. At this stage we have gone through a significant amount of negotiation on this process. A bill was to come before the Parliament but it was rejected by the Greens. There has been a lot of discussion on this matter. I raised the issue with the Environment Liaison Office [ELO] after receiving information about the intention to propose an upper House inquiry at some stage. So I speak from the perspective of being the Greens spokesperson on this matter as well as being the Chair of General Purpose Standing Committee No. 5. A document signed off by Andrew Cox, the Director of the National Parks Association of New South Wales, stated:

    The issues raised appeared to relate to the current and future commercial operations in the Jenolan Caves.

    Provided the National Parks and Wildlife Amendment (Jenolan Caves Reserves) Bill 2005 passes, the future commercial operations in Jenolan Caves will be determined by the proposed plan of management for Jenolan Caves Karst Conservation Area. There is extensive public input into the content of this plan and any proposed commercial operations. The draft plan is placed on public exhibition for at least three months and advice from the Blue Mountains Regional Advisory Committee, the Karst Management Advisory Committee and the National Parks and Wildlife Advisory Council must be taken into account before the Minister for the Environment adopts the plan.

    The current management of commercial operations at Jenolan Caves is largely controlled by the 99-year lease issued in 1990 and applying to Caves House. The Government is currently in a legal dispute with the current lessee. The ELO Group does not think that this dispute would be assisted by an Upper House inquiry. The ELO Group believes that the Government is attempting to resolve the situation in the best interests of Jenolan Caves. The best outcome would be if the current lease is cancelled and a new lease is offered under the new plan of management. Unfortunately the terms and conditions are not satisfactory, but there is little that can be done about this, beyond activating non-compliance provisions, without a major compensation claim.

    For these reasons, the ELO Group does not consider conservation interests would be assisted through additional scrutiny by the Upper House.

    I am well advised by Andrew Cox, who has put in a great deal of time and effort with the ELO Group to look into this issue. When the shadow Minister raised the issue with me I said that I would look at it. However, given the history of the development of this bill and the issues with Jenolan Caves, I am not inclined to support the Opposition's amendment to be moved before the bill is second read. Instead, I support the reasoned and well-educated position put forward by those who have been involved in these issues for a long time through the Environment Liaison Office. In summary, the Greens support the bill. We will move a number of minor amendments in Committee, and we will not support the call for an upper House inquiry at this stage.

    Reverend the Hon. FRED NILE [5.26 p.m.]: The Christian Democratic Party supports the National Parks and Wildlife Amendment (Jenolan Caves Reserves) Bill, which will transfer the assets, rights and liabilities of the Jenolan Caves Reserve Trust to the Director General of the Department of Environment and Conservation. He will then have the care, control and management of Jenolan Caves Reserve Trust lands, and will make provision for continued management of certain areas in those lands. The bill will dissolve the trust and transfer the trust staff to the Department of Environment and Conservation. It will establish a caves management advisory committee to advise the National Parks and Wildlife Advisory Council on matters relating to the conservation and management of the karst or caves environments. Finally, it will require certain leases and licences relating to the land within the conservation reserves to include conditions requiring the environmental performance of the lessees and licensees to be measured against environmental performance indicators contained in the plan of management for the land concerned, and to provide for their environmental performance to be monitored and reported on.

    As honourable members know, we debated the Jenolan Caves in 2004, when the Government introduced a bill to provide for an administrator to control the trust indefinitely. We had concerns about the proposal; the legislation did not have the support of the upper House and the Government withdrew the legislation so that it could further review the situation. This bill is the result of that review. In particular, the Government called for a special review by the Council on the Cost and Quality of Government, which was carried out. That review recommended that upon expiry of its term in January 2004, the trust board be replaced by an administrator to facilitate the transfer of management of the karst reserves to the Department of Environment and Conservation.

    Following that, the Government drafted this legislation, which will come into effect in two stages, to allow certain issues with the lease of Caves House to be resolved and the plan of management to be put in place. Stage one will allow all lands controlled by the Jenolan Caves Reserve Trust, apart from the Jenolan Caves visitor use and service zone, which includes Caves House, to be transferred to the Department of Environment and Conservation and the trust abolished. Responsibility for the care and control of the management then reverts to the director general.
    Stage two will commence after lease issues are resolved and a plan of management finalised. The Jenolan Caves visitor use and service zone and remaining trust staff will be transferred to the Department of Environment and Conservation. During the debate in 2004 we received many submissions from staff, who were concerned about their future and the future of Caves House. We trust that this bill, which I assume will be passed tonight, will give some job security to the people employed at Caves House—probably people who live in that region—so the whole area can be reinvigorated, renewed, and once again become a great tourist attraction, more viable that it has been in recent times.

    The Government took measures to improve the area even before this legislation. An $18 million program of works on Jenolan Caves Road at Five Mile Hill generated 12 new jobs during construction. A $4 million capital works program to upgrade caves and aboveground infrastructure will also create six new jobs during construction. A new specialist unit within the Department of Environment and Conservation will be established comprising experts in cave science and management. The unit will ensure the highest level of knowledge within the Department of Environment and Conservation. Five staff members will be located in Bathurst, and that will inject some $400,000 per annum into the local economy.

    One of the obvious concerns I have is that people in that unit need to be experts, not just in cave science but also in management, marketing and promotion. They need to have commercial skills otherwise we will repeat the cycle that has led to the breakdown in management that caused the Government to introduce this legislation. Often government departments do not have those commercial skills, so it is important that the Government ensures that people with those skills are involved in the unit, which will now have responsibility for Jenolan Caves and all the other caves.

    The Government will bring together other caves in the region, such as Abercrombie Caves, to ensure that management of all significant caves is located within the one organisation. That seems to me to be efficient. This will engender increased learning and sharing of knowledge and experience, guided by this new specialist policy unit. It will also provide staff with increased and broader career development opportunities and, hopefully, will ensure that the caves are managed in a more appropriate manner. The Government will provide some $120,000 per annum in additional funding.

    I have information that there has been a breakdown in relationships with the lessee of Caves House and that no payments have been made for the past six months. The buildings have been run down, so there is a degree of urgency in having this area efficiently managed. Therefore, I do not see the purpose of a committee taking time to set up an inquiry. That will only delay the inevitable process. We should proceed with the passage and implementation of the bill as quickly as possible.

    The Hon. JON JENKINS [5.33 p.m.]: In order to understand this legislation we need to understand some of the long history of the Jenolan Caves Reserve Trust and its forerunner, the Crown Lands Trust. The current trust was formed in 1996 and the assets—if one can call them that—were the caves themselves and what is known as Caves House. The Peppers hotel group was granted a 99-year lease over Caves House in the 1980s. The Jenolan Caves Reserve Trust operates under a plan of management that was devised in the 1970s. In 1990 some controversial changes were made to the trust. Instead of just scientists and managers, stakeholders were appointed. Representatives of the National Trust, National Parks, local council and tourism representatives were elected to the Jenolan Caves Reserve Trust.

    Speleologists have had a long and prestigious association with the management and care of Jenolan Caves. Indeed, the caves have a long tourist history and speleologists have been involved since they were discovered. They were also represented on the Jenolan Caves Reserve Trust until 31 January last year. There have been few major problems with the caves until recently. Tourist movements have increased over the years and some concern has been expressed as to how to manage both human and vehicular traffic entering and leaving the caves area. There are two access roads to Jenolan Caves. The one through Oberon is a very steep and winding road with numerous switchbacks and is unsuitable large traffic volumes or large vehicles, in particular buses. The other main access is via Katoomba, what is known as Five Mile Hill Road. One problem is that the main access road passes through a large natural arched structure. Reduced space creates problems for traffic and pedestrian movement in the arch area. Further, some have expressed concern that particulate fumes from large diesel buses may be having an impact on the caves.

    At one time the Government asked for expressions of interest—otherwise known as tenders—to provide a cableway system of access to Jenolan Caves. However, this option appears to have disappeared due to cost and local opposition. Around that time—and some honourable members may remember this, although I was not a member of the House then—the then Minister, the honourable member for Wentworthville, made a promise in the second reading speech of the original trust legislation. That promise was that Jenolan Caves Reserve Trust would not be handed over to National Parks. In her speech the Minister particularly referred to the trust being taken over by National Parks and said:

    The Government has given the trust repeated assurances on this issue. I hope that the message has finally got through although I will not hold my breath.

    Why is the Government now proposing legislation that breaks the original promise? The reason given is that the trust is in financial difficulty and requires recurrent funding to support itself. I would go so far as to say that it is possible that the financial crisis in the Jenolan Caves Reserve Trust has been engineered deliberately to facilitate transfer to National Parks. In 1996 the Jenolan Caves Reserve Trust was operating as a well-run trust, both in a professional and an environmental sense. The visitor site was managed with good management principles and the other off-limits caves and areas were managed with environmental ideals at the forefront. However, at this point the Government transferred to the trust control of the Borenore Caves. Borenore Caves has no income but incurs a significant debt for Jenolan Caves Reserve Trust. Borenore Caves alone caused a shortfall of nearly $200,000 annually in the trust's operating budget. In other words, a loss-making cave was transferred to the Jenolan Caves Reserve Trust with a continual recurring debt and with no income to support that debt. Was that an accident? I do not believe so.

    The trust had significant reserves of about $1.6 million and the Caves House lease, but continuing recurrent debt combined with a dip at that time in tourism numbers. Honourable members will remember that at about this time there was the severe acute respiratory syndrome outbreak and 9/11. Around the world there was a big drop in tourist numbers. That did not help the recurrent debt. So, in addition to these debts being placed on the trust, there was a dip in world tourism. Honourable members must keep in mind that the trust also cares for the Wombeyan and Abercrombie caves systems. Of these four caves systems only Jenolan has the potential to, and does, provide a reasonable income stream. In effect, Jenolan Caves subsidises the maintenance and care of the other three cave systems, and while the trust has these natural wonders under its care, it will always require input from the Government—for the simple reason that expenditure exceeds income.

    This legislation will not change that one iota. In fact, logic raises the spectre that the Department of Environment and Conservation will make large-scale tourist centres of all the cave systems in order to make them self-funding. I hope not. Currently, approximately $4 million of infrastructure spending is required. Wombeyan Caves needs about $700,000, Borenore about $160,00, Abercrombie about $210,000 and Jenolan an estimated $2.8 million.

    Further, geotechnical experts have questioned seriously the viability of the main access road and the road requires significant maintenance to be serviceable. The access road has nothing to do with the trust, but it is a Crown road for which the New South Wales Government is directly responsible—presumably through the Roads and Traffic Authority. In the year prior to this situation arising, Jenolan Caves Reserve Trust, realising that it could not sustain the recurrent debt put on it from the loss-making caves, approached the Government for assistance. The Government instituted a review by the Council on the Cost and Quality of Government and the council made several recommendations to the Government. These recommendations are salient.

    On 31 January last year the trust's term expired and the Minister appointed an administrator for six months, until 31 July. From that point on the Minister proposed legislation that would have transferred control of Jenolan Caves to the Department of Environment and Conservation in perpetuity. This is a direct breach of the promise made by the then Minister when the trust was formed. I note that it was not the outcome that the Council on the Cost and Quality of Government had recommended either. The council recommended that only Abercrombie, Borenore and Wombeyan caves be transferred to the department's control. The report acknowledged also that the trust had been operating efficiently and that the recurrent debt was solely due to the burden of the non-income-producing cave systems. Further, all of the review's recommendations can be carried out under the existing legislation with no legislative changes required at all. Someone has to ask the question: Why does this legislation exist? There is simply no need for it unless one wishes, for philosophical and ideological reasons, to remove Jenolan Caves from the care of the existing trust.

    I now turn to the Minister's second reading speech from last year to point out some of the anomalies. The legislation is different but the intent is the same. He stated that the trust has met its obligations only by deferring essential capital works. However, this is due only to the fact that the Government had transferred significant loss-making assets to the trust. In other words, the trust was doing fine so the Government just kept putting more debt on it until it could no longer handle it. As I understand the situation, the trust is quite happy to manage these loss-making assets if the Government assists with funds to do the job. No-one in government would dare to suggest that the National Parks and Wildlife Service should be self-funding—nor should it be. If the trust is going to manage the multiple loss-making sites, it should not be required to do it on a self-funding basis.

    This view was upheld by the quality review, which found that the trust could not sustain continued recurrent losses caused by the non-income-making cave systems. If this demonstrates the extent of the Government's understanding of cost reviews, it is no wonder that it has other problems with its infrastructure costing. The statement that Jenolan Caves was not recovering enough income to reinvest in its own infrastructure is simply not true. The statement should read that the Jenolan Caves Reserve Trust does not recover enough to sustain the infrastructure costs of Jenolan Caves and the three other cave systems that it manages. The review acknowledged the high level of scientific and management expertise within the existing trust system.

    There is a further false statement in the Minister's second reading speech. The review did not recommend that all four cave systems should be transferred to the department; it recommended that the three non-income-producing cave systems be transferred to the department and that Jenolan Caves be assessed for further consideration. The National Parks and Wildlife Service has just had a significant decrease in funding and the caves will now have to compete for limited funding within the National Parks and Wildlife Service system. I have had long consultation with some of the existing trust members, many of whom have had a lifetime's experience with the care and management of Jenolan Caves, and I do not understand why the Government wants to remove control of Jenolan Caves from the trust. The Opposition has intimated that it would like to defer the bill in preference to referring the matter to a committee. I would like to do both, but in view of the fact that the caves have not had a significant plan of management for more than 12 months, I probably would not support the proposal. I foreshadow that I will move a couple of amendments in Committee.

    The Hon. Dr ARTHUR CHESTERFIELD-EVANS [5.45 p.m.]: I am quite concerned about the situation that has come to my attention. The road to Jenolan Caves has been poor and visitor numbers have been down. As has been pointed out, this may be due to factors beyond the control of the Jenolan Caves Reserve Trust—the collapse of Ansett, severe acute respiratory syndrome, 9/11 and so on—although one would have thought that something that receives most visitors by bus would be less affected by these things than other tourist attractions. In a sense the trust has been criticised by faint praise. The Speleological Society says that the trust has not done a bad job and if visitor numbers had held up and if the Opposition had been wiser when in government in terms of the leasing of Caves House, which seems to be a considerable problem, the existing model might have been okay. I have had correspondence from Caves House about the unsatisfactory water quality. There should not be coliforms in the water. Some degree of analysis is necessary. Surely the Government ought to be providing reasonable quality water through the infrastructure. It seems that what is needed is a plan of management. An administrator has already been appointed. If there is a 99-year lease, it would seem that the lessee would be responsible for the piping or tank problem.

    Presumably the trust did not set the terms for the lease of Caves House and as the road has not been repaired and tourist business has dropped, it may be a little hard to blame the trust. If it has given emphasis to science rather than marketing, presumably the Government could fix the problem when it renews appointments, or the trust could obtain expertise in that area. Giving management to the National Parks and Wildlife Service concerns me. The extraordinarily bad deal given to Murramarang, the leasing of Sawpit Creek, the inability to make a profit and deals at the quarantine station are quite a blot on the National Parks and Wildlife Service. The service does reasonably well managing flora and fauna and the environment but it does not necessarily do well in managing buildings, the management of which requires an entirely different type of expertise.

    It worries me that the transfers have somewhat shackled the operations of the trust. The environmental groups have negotiated with the Government and the Government has the basis of a management plan. It is not to continue leasing to the private sector unless it has a plan of management and considerably better transparency than it usually manages. I am worried also about the Government's enthusiasm to hand everything to the private sector, on the basis that it cannot be managed, so it should be sold for a peppercorn. Something needs to be done. The trust is almost caught in limbo. If we have an inquiry presumably there will not be a decision for a long time. So I will go along with the bill but I have considerable misgivings about it.

    The Hon. IAN MACDONALD (Minister for Natural Resources, Minister for Primary Industries, and Minister for Mineral Resources) [5.50 p.m.], in reply: The National Parks and Wildlife Amendment (Jenolan Caves Reserve) Bill aims to achieve a comprehensive revitalisation package to conserve the State's caves as iconic assets, whilst assisting local economies by providing regional employment and increasing tourism opportunities. The Jenolan caves Reserve Trust, which looks after the caves, had been operating on the same basis since originally created by the Greiner Government in 1990. The trust has the unenviable task of administering the 99-year lease of the historic Caves House, signed off by the Greiner Government. Following financial concerns raised by the trust to the Government, the Minister for the Environment initiated a special review of the trust in 2003 by the Council on the Cost and Quality of Government.

    The review found the trust had long-standing structural and commercial impediments caused by the business model put in place by the Coalition and recommended that the trust not be reappointed. To implement the review's recommendations the Minister for the Environment appointed an administrator to develop proposals for structural and legislative change to place the caves on a sound footing. The administrator's ongoing appointment was approved on advice by the Crown Solicitor, and his appointment will cease following the implementation of the transfer of the Jenolan reserve areas. As part of the plan to revitalise the State's cave networks the Government proposes the incorporation of the significant areas of Abecrombie, Wombeyan, Borenore and Jenolan caves into the Department of Environment and Conservation [DEC] to join the other 33 significant karst areas, ensuring the management of all significant caves are located within the one organisation.

    The establishment of the first ever Karst Conservation Unit in New South Wales will ensure the highest level of knowledge in karst management within the DEC across the State. Karst staff will be located in Bathurst and will inject some $400,000 per annum into the local economy. The bill will also see the establishment of a Karst Management Advisory Committee to provide expert advice to the Minister for the Environment and the Director General of the Department of Environment and Conservation. Despite the mistruths espoused by the Coalition regarding visitation and promotion, over the past several years visitation at the caves has been increasing steadily. Indeed, visitation to Jenolan Caves was up some 6 per cent in the past financial year and up a further 5 per cent in the previous year.

    These increases demonstrate how successful we have been in promoting the caves to ensure we get the most from these significant attractions. The ongoing promotion over the past 18 months has seen Jenolan Caves featured widely in both paid and editorial features on television and radio and in print. Perhaps the question the Coalition should be asking is: Has the increase in visitation at the caves been reflected at Caves House? If the Coalition had asked that question, it would have found that the answer was no. In addition, it would have found out that the current lessee has been unable to make rent payments on time and has failed to implement a satisfactory building maintenance program over a protracted period. The Government assisted Jenolan Caves Resort by providing a 3½-month moratorium on rental payments, followed in mid-2004 by a further extension of time for rental payments ranging from four to six weeks.

    The lessee sought a further extension of the moratorium, but unfortunately the trust was not in a position to provide any further financial assistance. Negotiations were under way with the lessee to reach a joint approach in providing integrated services to visitors, and to re-negotiate the current lease, especially in respect of rental payments and the duration of the lease. However, the lessee proved unco-operative during the process of developing a joint approach to an integrated management solution at Jenolan. This, combined with the lessee's continued inability to meet its obligation under the lease, resulted in the termination of negotiations and the formal issue of default notices. Now the Coalition wants us to delay implementation of this urgent revitalisation package by instigating an inquiry to assist its friend who is the beneficiary of their 99-year lease.

    There is no point in carrying out further investigations into the leasing arrangements at Jenolan. We know the model implemented by the Opposition is dysfunctional. Caves House has been the subject of over 50 non-solicited complaints in recent times. It is for this reason that the Government has acted to resolve this unacceptable situation that has arisen due to the extremely generous nature of the Coalition's commercial 99-year lease. I have noted that the Greens propose several amendments, and after carefully reviewing those amendments and discussing them with the Minister for the Environment, we will accept the eight amendments. The Outdoor Recreation Party has proposed two additional amendments to remove one of the conservation representatives on the proposed committee whilst increasing certain regional advisory committees to 18.

    There is nothing to be gained from removing a nature conservation representative from the proposed Karst Advisory Committee, and I do not accept increasing already overflowing regional advisory committees of 17 community representatives to a whopping 18. Whilst the Government will not support the Hon. Jon Jenkins' proposed amendments, we will seek, on his suggestion, to include an appropriate person with karst knowledge and experience on existing regional advisory committees when casual vacancies from existing members become available. I urge all members to support this bill with the Greens amendments to ensure the ongoing conservation and promotion of the State's cave networks through the establishment of these numerous initiatives to protect and enhance the future of the State's caves. I commend the bill to the House.

    Question—That the amendment be agreed to—put.

    The House divided.
    Ayes, 12
    Ms Cusack
    Mrs Forsythe
    Mr Gallacher
    Mr Gay
    Mr Jenkins
    Mr Lynn
    Ms Parker
    Mrs Pavey
    Mr Pearce
    Mr Ryan
    Tellers,
    Mr Colless
    Miss Gardiner

    Noes, 23
    Mr Breen
    Ms Burnswoods
    Dr Chesterfield-Evans
    Mr Cohen
    Mr Costa
    Mr Della Bosca
    Ms Fazio
    Ms Griffin
    Ms Hale
    Mr Hatzistergos
    Mr Kelly
    Mr Macdonald
    Reverend Dr Moyes
    Reverend Nile
    Mr Obeid
    Mr Oldfield
    Ms Robertson
    Mr Roozendaal
    Ms Sharpe
    Mr Tsang
    Dr Wong
    Tellers,
    Mr Primrose
    Mr West

    Pairs

    Mr ClarkeMr Catanzariti
    Mr HarwinMr Donnelly

    Question resolved in the negative.

    Amendment negatived.

    Motion agreed to.

    Bill read a second time.

    Consideration in Committee ordered to stand as an order of the day.