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- 29 June 2004
Appropriaton Bill
Appropriation (Parliament) Bill
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Crown Lands Legislation Amendment (Budget) Bill
Sustainable Energy Development Repeal Bill
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APPROPRIATON BILL
APPROPRIATION (PARLIAMENT) BILL
APPROPRIATION (SPECIAL OFFICES) BILL
CROWN LANDS LEGISLATION AMENDMENT (BUDGET) BILL
SUSTAINABLE ENERGY DEVELOPMENT REPEAL BILL
Page: 10389
Second Reading
The Hon. TONY KELLY (Minister for Rural Affairs, Minister for Local Government, Minister for Emergency Services, and Minister for Lands) [7.37 p.m.]: I move:
That these bills be now read a second time.
I draw the attention of members to the speech of the Hon. John Della Bosca delivered on 22 March relating to the budget estimates and related papers for the financial year 2004-05, which appears at page 9683 of Hansard.
The Hon. PATRICIA FORSYTHE [7.38 p.m.]: The House will be pleased to know that as the sessional orders have been confirmed and honourable members will have an opportunity to debate the budget on Wednesday afternoons when the House resumes in August, I will not deliver what I call a budget speech, as I have done in recent years; I will concentrate on the bills. The cognate bills, with the exception of the Crown Lands Legislation Amendment (Budget) Bill, are essentially non-controversial. They are the normal cognate bills introduced with the Appropriation Bill. The object of the Appropriation (Special Offices) Bill is to appropriate out of the Consolidated Fund sums for both recurrent and capital works for the following offices: the Independent Commission Against Corruption, the Ombudsman's Office, the State Electoral Office and the Office of the Director of Public Prosecutions.
When one compares the bill with last year's bill, and given that State or local government elections are not anticipated, it is perfectly obvious that the amount to be appropriated to the State Electoral Office for its normal running has decreased significantly from last year. In the year ahead—my colleague the Hon. Don Harwin has a strong interest in this—the electoral boundaries will be considered. So a particularly important issue will be on the State Electoral Office agenda but apparently fewer resources are necessary to change electoral boundaries than to conduct both State and local government elections. I suppose that is correct. The State election was in 2003 and the local government elections were in the previous budget period.
I note that there has been a small drop in the recurrent allocations to the Independent Commission Against Corruption and to the Ombudsman's Office. However, there has been an increase of about $10 million to the Office of the Director of Public Prosecutions. We welcome increased resources for the Office of the Director of Public Prosecutions as it may allow for more efficient operation, and some of the delays the office is sometimes accused of may be addressed. However, the increase also recognises the higher workload. Crime overall in this State is not declining, and the role of the Office of the Director of Public Prosecutions is significant. As for the Appropriation (Parliament) Bill, a comparison between last year's appropriation and the amount for this year shows a $1.5 million increase in recurrent expenditure and a minor drop of about $400,000 in capital expenditure.
I imagine that someone in the media may want to write a story suggesting that it is good that there is less money for the Parliament, that the money spent on the Parliament is somehow a misuse of taxpayers' money. However, the strength of a democracy is a good working parliament, and the strength of the New South Wales democracy is partly the role of the Legislative Council and the committees. Sometimes we are told that there is an issue with resources in terms of the allocation of staff to support the work of members. That becomes most relevant when we are writing reports or reviewing available evidence. So while some people in the media may think it is good that there is only a marginal increase in the appropriation for the Parliament, I do not see it in that light. I see the work of the Parliament as fundamentally important. Indeed, it is at the essence of democracy. Effectively, any government that starves a parliament of its resources weakens democracy. Perhaps it is time some people in the media had another look at the role of parliament, and I am happy to talk to them at any time.
The Sustainable Energy Development Repeal Bill, another of the cognate bills, repeals an Act that was part of the Government's energy reform package in 1995. The words spoken in 1995 about the role of the Sustainable Energy Fund and the work of the Sustainable Energy Development Authority referred to the vision for sustainable energy in grand terms. As we know, the Government has moved on from there and the work of the Sustainable Energy Development Authority is to be incorporated within the energy administration. So what the Government saw as a grand achievement in 1995 has lasted less than a decade. But the Opposition does not opposed that.
The Crown Land Legislation Amendment (Budget) Bill is significant legislation. My colleague the Deputy Leader of the Opposition will want to say a few words about it later. Having heard Mr Ian Cohen yesterday, I have no doubt he will have much to say about the bill. Essentially, the bill provides for a uniform minimum annual rent in respect of certain leases, licences and enclosure permits relating to Crown land and other land. The bill also provides for the adjustment of the annual minimum rent in line with movements in the consumer price index [CPI], for the CPI adjustment of certain annual rents payable under the Crown Lands (Continued Tenures) Act 1989 and for a minimum annual instalment or half-yearly instalment in respect of the purchase of certain land under the Act and under the Hay Irrigation Act 1902. There are a number of other provisions.
The most important provision is the establishment of special arrangements for the purchase by a leaseholder of land comprising a perpetual lease under the Act. I am certain that that will excite some comment from the Greens. We were alerted to this bill in the mini-budget, when the Treasurer suggested that the management of Crown lands in New South Wales would be changed root and branch, to use his expression. As one can see from this legislation, he was not wrong. The Treasurer said:
We will simplify the administration of public land, introduce fairer rents and, by converting perpetual leases to freehold title, do away with the need for on-going administration.
This is all about saving money; it will be interesting to see at what cost. I am confident that my colleagues will welcome this measure. The Treasurer noted that the changes will reduce the cost to the State budget of running the Department of Lands by $36 million next year. In that context it is definitely a money-saving exercise. The most significant element of the bill is the fact that the minimum rent, which was previously between $50 and $70, will now be $350 per annum; it will be CPI adjusted. Our concern is that the bill provides that fees may be charged or an amount approved by the Minister for services provided by the Department of Lands in connection with Crown land. Given the Government's history of waste and mismanagement, one needs to ask what indeed the Minister might approve.
The amendments establish arrangements for the purchase of perpetual leases if the rent on the lease is not subject to redetermination. That means that holders of such leases can buy the land at 3 per cent of the land value. We are concerned that the amendments will allow the Minister to impose restrictions on public positive covenants, to use the expression in the bill, on the land on or before selling the land. My colleague the Deputy Leader of the Opposition will say more about that. On one hand the bill is about saving money for the Government; on the other hand it is about reaping additional rent. An increase from between $50 and $70 to $350 is significant, and I understand that about 11,500 freehold Crown leases are involved.
Finally, I turn briefly to the most important bill we are dealing with. The Appropriation Bill relates to the appropriation from the Consolidated Fund, the Government's principal account for general government budget-dependent transactions. The Consolidated Fund could be considered the public purse, to use the expression in the bill, and largely comprises receipts from and payments out of taxes, fines, some regulatory fees, Commonwealth grants and income from Crown assets. It is interesting to look at what is behind that because the Government notes that it includes revenue from taxes, fines and some regulatory fees—otherwise known in the budget papers as part of other State revenue. Fines, fees and licences are specifically referred to in the budget papers. It is interesting to note that the Government is becoming more dependent on that source of revenue. In 2002-03 "other State revenue" represented $852 million; this year in the budget papers it is $979 million. That significant increase is well above the CPI.
Last week this House debated licences. These are driver's licences and licences generally for road users. There has been a significant increase in recent years in revenue from licence fees. In 2002-04 the actual amount that the Government reaped from licences was $80 million. In the 2003-04 budget the revised revenue was $113 million, and this year it will be $171 million. So, from 2002 to 2004 there has been more than a doubling of revenue from licences—a substantial increase. The budget papers suggest that is due in part to the volatility of this revenue due to three-year and five-year renewals of licences. But nothing accounts for the significance of that increase other than the fact that there has been a real increase in licence fees.
Another item that the Government notes as part of its Consolidated Fund is Commonwealth grants. As honourable members would be well aware, that has been the subject of much debate in this State in recent times, partly because the Government used Commonwealth grants as an excuse for introducing its mini-budget in April. The budget paper items relating to Commonwealth grants are interesting. I put this on the record because it is time the New South Wales Government became a little more honest in identifying Commonwealth grants. Of course, it quite honestly includes those grants in the budget papers; it is the spin from the Treasurer that is not quite honest.
The Hon. Duncan Gay: Like Minister Macdonald's spin on drought, which I sprung him on.
The Hon. PATRICIA FORSYTHE: Absolutely. It is the spin that is dishonest. In 2003-04 I am prepared to acknowledge that the actual amount of total general purpose payments made to the Government was below the amount that it had budgeted for—$10.039 billion compared to $9.941 billion. But the total of all Commonwealth grants to the New South Wales Government in fact increased. Last year the New South Wales Government budgeted for $15.497 billion, which was revised upwards to $15.595 million. Why did the New South Wales Government get more? It was because of an increase in the total of specific purpose payments. So, although the Government cries poor and says it has to raise new taxes and cut back services because it has received less from the Commonwealth Government, the New South Wales budget papers put the lie to that. In fact, this year's budget notes an increase in the total specific purpose payments, to $15.760 billion. So it is nonsense for the New South Wales Government to claim it got less from the Commonwealth. It might have been less than the Carr Government budgeted for by way of general purpose payments, but the Government is less than honest when it says that there has been a decrease in Commonwealth funding.
I do not wish to go line-by-line through each of the portfolios. I will reserve some comments on portfolio spending for the take-note debate on the budget. But I wish to note that recurrent spending has increased from $28.676 billion last year to $32 billion this year. This is the first time that State budget appropriations for recurrent services have exceeded the $30 billion mark. The sum allocated for capital works decreased from $3.590 billion to $2.711 billion. A breakdown of portfolio allocations establishes where the Government's priorities lie. I welcome the increase in funding for the Minister for Community Services. That is particularly significant in terms of the Department of Community Services. I hope at the end of the day the increase in the resources of the department will be matched by an improvement in outcomes. The Coalition has long argued that although a lot of money is poured into the department, that does not necessarily achieve an improvement in outcomes. The budget papers do not enable us to determine whether there will be such an improvement.
I am delighted that the allocation to the Department of Ageing, Disability and Home Care has more than doubled—although that is in capital works. I would hope that that is for more than office accommodation and computers. It is fair to say that the appropriations for health and education have increased, but one would expect that because of the increase in the salaries of nurses and teachers. However, some departments have reduced allocations. The Budget Statement hints where those would be, noting that the establishment of the Department of Primary Industries is intended to save $37 million, and noting a requirement that the Department of Environment and Conservation will work more closely with catchment management authorities, the Department of Infrastructure, Planning and Natural Resources, and the Department of Primary Industries to save $30 million in 2004-05. It notes also that there is to be continued reform of the Department of Infrastructure, Planning and Natural Resources in conjunction with catchment management authorities, increasing previously announced savings by $5 million to $75 million. The Budget Statement notes one-off reductions of suspension of grants to local government for work on floodplains, estuaries, waterways, river entrances and other minor works, saving $16.5 million. That is to be regretted because that is putting off work to another day. The Government talks about these as "minor works". They are only minor in relation to the overall allocation, but those works can be quite significant in the particular areas of spending.
The Hon. Duncan Gay: Like country water and sewerage spending.
The Hon. PATRICIA FORSYTHE: Absolutely. It is clear where the Government's priorities are. The Budget Statement notes as another savings measure capping of spending on the North West Transitway, with a saving of $80 million per annum. In essence, that sums up how some savings are to be made, although the budget papers make it clear that the Government intends to make savings of $80 million in advertising, travel and accommodation, printing, publications and other administration across a range of portfolios. Of course, the Opposition applauds those savings because those are some areas in which we know this Government is wasteful.
When I was looking through the appropriations for each portfolio, one stood out as being significantly increased, seemingly without justification in terms of services on the ground. The Coalition asks, "Where has the money gone?" We can read budgets as well as Government members. But why are not people getting better outcomes in the delivery of services? The one increase that struck me when I was going through the portfolios was the enormous increase in the appropriation for the Ministry for Police—not an increase in the number of police in the front line, or the delivery of police services that will make the community feel safer. Here we are talking about funding for the Ministry for Police increasing from $5.349 billion to $11.341 billion. The shadow Minister for Police, the honourable member for Vaucluse, noted in his summary of the budget that the number of Minister's advisers would increase from 24 to 44, while the ministry budget increased by 109.7 per cent. So more people will be engaged to provide advice to the Government. That does not translate to police on the ground providing services to ensure a safer community.
Because many other honourable members wish to comment on this important legislation, I will not take up any more of the time of the House tonight. I welcome the Government's acknowledgment that in recent years we have not been afforded a proper take-note debate on the budget, and I look forward to speaking further on those issues at a later date. Other than that, I note the bills as presented to the House.
The Hon. DUNCAN GAY (Deputy Leader of the Opposition) [7.58 p.m]: I wish to speak only to the Crown Lands Legislation Amendment (Budget) Bill.
Mr Ian Cohen: The fun part!
The Hon. DUNCAN GAY: Mr Ian Cohen says, "The fun part!" In most regards, I think this is a very good part of the legislation. It may be fun for the honourable member, but as far as I am concerned this is a quite outstanding part of the legislation for farmers. I have some issues that I wish to raise on behalf of Andrew Stoner, because this is not an area on which I normally speak. However, I would indicate that the Opposition supports changes to the Crown lands legislation that will give farmers more security of their land ownership. That said, we have some serious concerns about some of the provisions of the bill and its regulations.
I will return to those later and will ask the Minister to make a commitment in Committee that I hope will address some of those concerns. One concern is the new uniform minimum rent of $350 on all holdings. The concern that has been raised with me is what happens if a holding is made up of different bits? For example, if a residential piece of a holding is added to other parcels of land, they may add up to 25 hectares. The rent could be $2,000 or $3,000 if a number of small parcels are within a total holding. I hope a holding means a holding so that that minimum rent of $350 applies. Honourable members will understand the concern that has been raised by one of my colleagues. That is to be found in the explanatory notes, and we would like clarification of it.
The object of the bill is to provide for a uniform minimum annual rental in respect of certain leases, licences and enclosure permits relating to Crown land and other land; to provide for the adjustment of that minimum annual rent in line with movements of the consumer price index [CPI]; to provide for the CPI adjustment of certain annual rents payable and to provide for a minimum annual instalment or half-yearly instalment. Schedule 1 to the bill imposes new minimum annual rent for Crown land leased under the Crown Lands (Continued Tenures) Act of 1989. The minimum rent was between $50 and $70 but will now be $350 per annum and CPI adjusted. I hope those concerns are addressed. The amendments also allow regulations to impose a higher minimum rent.
It should be noted that minimum rents do not apply to the Western Division but the Government has allegedly left open the option of applying it to the Western Division through regulation. Frankly, many people do not trust the Government on an issue like that. Too many times, particularly with local government amalgamations and the Department of Primary Industries, we have seen that the Government cannot be trusted. We also note that we are waiting for the regulations in relation to the natural resources legislation that went through Parliament in December. I note that on 1 July the national livestock identification scheme [NLIS] is meant to start and that as of last Friday there was no regulation on the NLIS. Some are over-organised and some are just not organised at all.
Another worrying element in schedule 1 is that it was made clear that fees may be charged, of an amount approved by the Minister, for services provided by the Department of Lands in connection with Crown lands. Once again, these fees are left to the Minister's discretion. We are looking for some reassurance from the Minister in this area. Schedule 2 provides for the adjustment of the annual rate of a perpetual lease, special lease, term lease or Commonwealth lease under the Crown Lands (Continued Tenures) Act for CPI movements. These provisions will not apply to leases of land situated in the Western Division, meaning existing minimum rent provisions and CPI adjustment provisions will continue to apply to those leases. However, again, the regulations may extend the application of the new provisions to those leases. I ask the Minister to explain how he plans to use the powers in relation to regulation making under this legislation and give some guarantees about how he will act and whether he will act equitably and sensibly.
Currently, redeterminations occur every five years but now they will be done every three years on the market value of the land. This legislation allows for the phasing in of the new redetermination intervals. Western Division leases will continue on five-year redetermination intervals and any existing concessions on the redetermination of rent will remain unchanged. However, regulations may be introduced to apply the new provisions to those leases. The Crown Lands (Continued Tenures) Act allows land that is the subject of a lease under that Act to be purchased. The minimum annual instalment in relation to incomplete purchases is $100 but this legislation imposes a new minimum annual instalment of $350, CPI adjusted. The new minimum instalment provisions will be phased in so that the full amount of the minimum annual or half-yearly instalment will not be payable in respect of existing incomplete purchases on dates that occur before 1 July 2006.
For any purchases notified after 1 July this year land-holders will not be able to pay by instalments. They will now have to pay in full within such time as the Minister requires. That is pretty tough in the current climate. The amendments establish arrangements for the purchase of perpetual leases where the rent of the lease is not subject to redetermination. Holders of such leases can buy the land at 3 per cent of the value of the land. As I indicated earlier, we applaud and congratulate the Minister on this. As stated elsewhere, it is something we tried to do in government, and in opposition we have not changed our minds. I am pleased that the political opportunists in the Government have changed their minds and are with us.
As I understand it, if the leaseholder does not convert he will be charged an annual market rent to be determined according to the purchase of the lease. The NSW Farmers Association has described this element of the legislation as a win for all affected farmers because it will improve the value of the land. The legislation places a two-year time frame for this to occur. I take this opportunity to flag our concerns about the time frame farmers are given to convert—just two years! After the worst drought in living memory, a number of farmers will be simply unable to have the liquid assets available to convert their leases, even though it is only at 3 per cent. This will put considerable pressure on a number of farmers at a time when they need it least. I put it on the record that the Opposition is not in favour of increasing fees and charges to farmers during the worst drought in living memory. I ask the Minister what hardship provisions he is putting in place for those land-holders suffering under drought? One concern we have is that the amendments allow the Minister to impose restrictions or "public positive covenants" on the land on or before selling the land. The bill states:
Such restrictions or covenants may be imposed for the purpose of protecting the environment, protecting or managing natural resources, or protecting cultural, heritage or other significant values of the land or of items or works on the land.
I was under the impression that the Government's natural resources legislation, passed late last year, governed how our natural resources were to be managed, in association with other legislation. This seems to be in conflict. I ask the Minister what role the Minister for the Environment will take in the process of the public positive covenant?
I note that schedule 3 amends the Hay Irrigation Act 1902 in a similar manner to the other amendments I have outlined already. The Opposition welcomes the conversion to freehold title, which will improve the value of the affected farmers' land and could give them more rights under the law. But we will watch the Government closely to ensure that Crown leases do not become yet another revenue raiser for this financially inept Government. We will also look for an undertaking from the Minister at the Committee stage that rental increases will not rise to unreasonable levels and that the Minister will not use regulations to impose a higher minimum rate and do what he did recently to fishing clubs along the coast of New South Wales. Their rents increased by up to 500 per cent when the Government decided to cash in on waterfront locations on Crown land leases. Having asked the Minister for that assurance, I indicate that the Opposition will support the bills.
Mr IAN COHEN [8.10 p.m.]: As I clearly indicated when I delivered my second reading speech on the Crowns Lands (Prevention of Sale) Bill, I am particularly concerned with the Crown Lands Legislation Amendment (Budget) Bill and the Sustainable Energy Development (Repeal) Bill. The Crown Lands Legislation Amendment (Budget Bill) provides for the adjustment of certain annual rents payable under the Crown Lands (Continued Tenures) Act 1989. It also establishes special arrangements for the purchase of perpetual leases. The bill also makes for the imposition of certain public positive covenants on land that is purchased under the special arrangements. Honourable members will be aware that I commented extensively on this proposal yesterday when I spoke to my private member's bill, the Crown Lands (Prevention of Sale) Bill. The bill proposes a number of changes to charges and also sets a purchase price of 3 per cent of the market value for leases.
I understand that these changes are based on a report by PricewaterhouseCoopers on the management of Crown land in New South Wales. I call on the Government to table the PricewaterhouseCoopers report, and I seek the Minister's assurance in reply that, if possible, that will be done. Both this House and the general public are becoming heartily sick of the secrecy surrounding this Government and its financial management of public assets. What comes to mind is the Government's approach to quarantine stations. The Greens are firmly of the view that it is inappropriate for the bill to be cognate with the Appropriation Bill. The fact that it is cognate means that it was passed through the other place without any debate. The bill was introduced in that place on 22 June and passed on 23 June. It appears that not one word was uttered about Crown lands in the blink of an eye it took to go through that place.
I felt the urgent need to protest the process, which prompted me to introduce a private member's bill that is exactly the same as the 1993 bill introduced by the Australian Labor Party in the lower House when the then Coalition Government proposed to lift the moratorium on the conversion of Crown leases to freehold. The Labor opposition was most strident in its vocal rejection of the proposal. It prepared the Crown Lands (Prevention of Sale) Bill, which was, and remains, an excellent bill. With the support of Parliamentary Counsel, I was able to copy it and introduce it yesterday. Originally an urgent motion was moved to insist that the government of the day reinstate the moratorium until both Houses had the opportunity to consider the prevention of sale bill. As honourable members know, in those days the government of the day needed the support of the Independents in the other place to pass legislation. Alternatively, the Opposition, if supported by the Independents, could succeed in passing both motions and legislation. We look forward to the time when a similar situation exists in the other place. Only then, perhaps, will the arrogance of government be reined in.
The Hon. Rick Colless: So one member has all the power. How fair is that?
Mr IAN COHEN: The Hon. Rick Colless mentioned one member with all the power, but the power is derived only from the fulsome support of other major parties. Perhaps the honourable member, in his interjection, is misconstruing the emphasis on power in the House. Any member who has the so-called balance of power in this House or in the other place, as happened in the lower House between the Independents and the Greiner Government and later the Fahey Government, is totally dependent on the support of one or other of the major parties. To say that individuals or one member somehow has that power is misleading. It is not the case. The power derives from the support of either major party. I know from reading the debate on the original bill that the Labor Party did a sterling job in opposition during that time. It acted decisively.
The Hon. Duncan Gay: They will after the next election, as well.
Mr IAN COHEN: That might be the case. But we do not see the same degree of stridency emanating from the Opposition benches in this House during the term of this Parliament. Could it be that both major parties are becoming so similar that there is a commonality of interest that seems to override any opportunity to differentiate between the two? I certainly look forward to the time when a similar situation exists in the other place. Then, perhaps, we can see some change and improvement in performance all round. Both the Government and the Opposition should keep each other on their toes rather than spend so much time agreeing with each other. As a result, poor governance seems to persist. It is clear that the Government is looking increasingly to privatise important components of our natural and built heritage and, in general, it gets the support of the Coalition for the sell-off. I was interested to read the speech of Michael Richardson in the other place about the long-term lease of the quarantine station, in which he said:
The Opposition has consistently opposed leases of longer than 10 years on significant public lands. We believe that the original proposal for a 45-year lease on this property to Mawland was tantamount to selling public property.
Last week the Coalition was more than happy to support the ALP's legislation to extend 15-year leases on water access to perpetual leases. They were not prepared to support the Greens amendment, which would have resulted in public consultation before major public water infrastructure could be sold. At least on this bill they are being consistent with their support for the sale of public assets. The Greens will move several amendments to the bill that will seek to remove the provision that allows the sale of these leases If that is unsuccessful we will attempt to change the sale price of the leases from 3 per cent of market value to 93 per cent of market value. We will ensure that land that is a wilderness area under the Wilderness Act 1987 cannot be sold, and that any lands the Minister administers under the National Parks and Wildlife Act that he advises are of conservation interest cannot be sold. A relevant article in today's Sydney Morning Herald by Richard Macey states:
Sydney researchers believe they have found strong evidence that land clearing can trigger devastating climatic changes.
The Macquarie University team also said its findings warn that the climate can respond suddenly and dramatically, almost without warning, to centuries of environmental abuse.
The article quotes a Professor Pittman as saying:
Forests, now cleared for farming, had slowed moist winds blowing in from the Indian Ocean." This slowing of the atmosphere causes turbulence, which in turn generates rainfall. Without the tree cover, the water in the atmosphere flows across the landscape and is deposited elsewhere.
The article continues:
The findings, to be published in the Journal of Geophysical Research, also showed that climatic changes could appear decades or centuries after humans began interfering with the environment.
Professor Pittman is then quoted as saying:
It may be that when the effects of deforestation suddenly exceed a threshold the climate is likely to respond in a dramatic way.
That is relevant to this discussion. I turn now to the Crown Lands Legislation Amendment (Budget) Bill. I remind the House of the statements made by Bob Carr, the Premier of New South Wales, when he was Leader of the Opposition. When Government tried to hold a fire sale on Crown land he is reported in the Canberra Times of 8 May 1983 as stating:
There may not be a decision in this parliament that will reverberate down through the years like this one... If that land is sold and much of it cleared, then there is no comeback. The public hasn't got a chance of asserting its interests. If there is environmental degradation … as a result of that land passing into private ownership, there is no way a future government, no matter how good its environmental intentions, can rectify that wrong.
The Telegraph-Mirror of 8 May 1983 stated:
Opposition leader Bob Carr said the Premier had "caved in" to National Party pressure and lifted the three year moratorium on the sale of public bush land.
In those days the ALP was the champion of the environment. These days it just chases votes and is quite happy to give away public assets if it will appease powerful sectors of industry or if it needs to sell the family silver to balance the books. It is a mere shadow of its former governmental self, I would suggest. In regard to the Sustainable Energy Development Repeal Bill, the Sustainable Energy Development Authority [SEDA] was a visionary project and gave a lot of environmentalists considerable faith and optimism in the Government. It had a charter that involved genuine environmental programs and not just hot air. Unfortunately, hot air is what it is to become. Nearly all of the programs that SEDA initiated to remove carbon from the atmosphere and to contribute to the fight against global warming and climate change have been undermined by budget cutting measures under this Government.
We have no confidence that the components of SEDA that are now to go to the Department of Energy, Utilities and Sustainability will produce any real results, other than hot air. Between July 2001 and July 2004 SEDA was responsible for a large number of greenhouse gas abatement programs that targeted more than 20 million lifetime tonnes of carbon dioxide and $150 million of private investment. Its programs were targeted and its outcomes focused on the endgame: reducing greenhouse gas emissions in New South Wales. A second focus for SEDA was the preparation of investment in 30 commercialisation and use of sustainable energy technologies. Sustainable energy is the fastest-growing industry sector in New South Wales, valued at $5.3 billion, and employment opportunities are currently increasing at a rate of 12 per cent a year. However, the Carr Government has failed to ensure that New South Wales is no longer a major greenhouse gas producer and investor in renewable, non-polluting technologies and it has done all it can to ensure that old, coal-fired power technology continues to be first off the rank for planning approval.
The simple fact remains that unless there is a commitment to invest in the future of the renewable energy industry, New South Wales will lose its away and be left behind the rest of the world. The Premier committed his Government to reducing greenhouse gas emissions and to achieving the targets set out in the Kyoto protocol. However, last year it cut SEDA's funding by 25 per cent and this year it has been abolished completely. We have gone from having a dedicated organisation providing information and encouragement for the adoption of renewable energy technologies to a minor component of a department that sees our energy future in coal-generated power.
The Hon. Duncan Gay: It used to be the only department that bought green energy, so there will be none now.
Mr IAN COHEN: That is right. The Deputy Leader of the Opposition points out the abject failure on green energy production in this State. In my area I often see alternative energy producers, consumers using alternative energy and perhaps hundreds of thousands of people in the community who are really dedicated to trying to improve the environment, in a small way, by putting energy-efficient systems in their houses. I often talk in this House about the Rainbow Power Company and other organisations that are dedicated to alternative production. Stand-alone electricity generation and other activities can be undertaken, often in isolated areas. However, instead we see the development of grid electricity, often at greater cost and certainly at greater cost to the environment. The Government has taken a significant step backwards.
After statements made in this House by the Minister for Transport Services and the Treasurer about the scepticism of global warming and climate change resulting from increased man-made CO2 emissions, one has to wonder whether the demise of the authority has something to do with their views. A brief comparison of the web sites of SEDA and the Department of Energy, Utilities and Sustainability shows that the SEDA web site is information rich, full of suggestions for action at a personal and professional level about how to decrease our emissions. The department's web site, on the other hand, is information poor, with very few pointers to more information or how to effect change. This decision is a dumbing-down and yet another sad day for the New South Wales environment. This is an interesting set of circumstances, particularly with something so symbolic as SEDA being shut down. Equally, the Greens will continue to be a thorn in the side of any government that does not live up to its rhetoric about many environmentally enhancing opportunities at the State level. It is regrettable that we see what I believe to be a great failure of the Government at this time in history. This really reinforces the suspicions of many people in the green movement, when we see the so-called green Labor Government going a decided brown in these pieces of legislation. It really is troubling to see that.
Whilst I acknowledge that others in the House see benefits to landholders and security of land, and a certain windfall in certain circumstances through the Crown Lands Legislation Amendment (Budget) Bill that has passed through the House, it is a very sad day to see such a fragile tenure for environments. Both bills have a significant, negative impact on the environment. I ask everyone to be concerned about that and to not look at the short term. In the long term the bills will have a significant detrimental effect on the quality of life and the New South Wales environment.
Reverend the Hon. FRED NILE [8.26 p.m.]: The Christian Democratic Party supports the Appropriation Bill, the Appropriation (Parliament) Bill, the Appropriation (Special Offices) Bill, the Crown Lands Legislation Amendment (Budget) Bill and the Sustainable Energy Development Repeal Bill. As honourable members know, the object of the Appropriation Bill is to appropriate various sums of money required for the recurrent services and capital works and services of the Government during the 2004-05 financial year. I refer to the appropriation of funds for the Department of Education and Training. An analysis of the appropriation expenditure from the Catholic Education Commission indicates that no existing expenditure items for non-government schools have been deleted or reduced. There was some concern that there might be a reduction. The $659.9 million for non-government schools is only 8.7 per cent of the total State allocation for all schools, whereas 32.8 per cent of students attend non-government schools.
The funding is based on 25 per cent of students, so there is a major difference between the old formula and reality, because of the movement from government schools into non-government schools. That has caused concern. On the other hand, the government school sector has projected a decline of 2,929 students, or 0.4 per cent, and a net decline of 102 teachers in 2004-05. The capital expenditure of $364 million for government schools does not have a flow on to non-government schools. Thankfully, there is no change in the Interest Subsidy Scheme, which was signalled by the Government and appeared to be something that would flow on from the April mini-budget. That decision is to be supported. The School Student Transport Scheme is being maintained. Projected expenditure for 2004-05 will be $469.1 million, compared with $447 million in the previous budget. There is concern about the continuous increase, with an estimated 52.8 per cent of the expenditure going to non-government school students.
I turn now to the Crown Lands Amendment (Budget) Bill. The New South Wales Farmers Association has requested that the Christian Democratic Party support the bill being passed into law so that the conversion of perpetual leases to freehold can begin as soon as possible. The association is adamant that we should do what we can to defeat the Greens Crown Lands (Prevention of Sale) Bill, which it claims will only add unnecessary administration and cost. Lands NSW is already developing a transparent review process for what are regarded as environmentally sensitive leases. Changes in Crown lands management will mean that holders of perpetual leases that are not regarded as sensitive will be able to convert them to freehold. It is intended that the moratorium on the conversion of sensitive perpetual leases will be lifted, a review process will be undertaken and certain licences will be able to be transferred.
The changes in the bill will benefit farmers, the environment and the community. The main benefit to most farmers will be the upgrade in asset class of the converted leases. This will allow farmers more flexibility and certainty in their financial arrangements. It will also encourage farmers to be better environmental custodians of these pieces of land. The increased security that freehold title gives will allow farmers to make investment and planning decisions that benefit the environment. With a decrease in loss-making administration, the Government will also make large cost savings. The New South Wales Farmers Association believes—and we support this position—that the current rules for the conservation of the environment apply equally to all land regardless of title. Therefore, the prevention of the conversion of leases will not give better environmental outcomes. I remember the hardship that occurred a few years ago when the leases of people who had virtually been pioneers in the north of New South Wales were not renewed. They had invested in those properties with buildings, fences and other capital expenditure, but suddenly they had nothing. Conversion of perpetual leases to freehold wherever possible will take away that uncertainty. We commend the Government for initiating the legislation.
The Hon. Dr ARTHUR CHESTERFIELD-EVANS [8.33 p.m.]: As we cannot amend money bills some people have questioned why members bother talking on them. I guess that reflects an interesting approach to the way the Government looks at the function of this House. The Appropriation Bill lists how much money is spent on each department but it is interesting that a large amount of the finance of the budget of this State does not come under the bill. Health expenditure is an estimated $7.9 billion, an extra $707 million. That is obviously good. I would like to take some credit for the changes as one of the instigators—probably the instigator—of the Walker inquiry and the terms of reference of General Purpose Standing Committee No. 2, looking at health and the failings of health in New South Wales.
On my web site, chesterfieldevans.com, I have a plan to fix the health system. It involves one funding source: in other words, a rationalisation of the Federal-State divide and the problems of cost shifting within that to try to make more money available for productive use. That was a big element in the problems at Campbelltown. However, I take credit for the fact that we are spending more money on health because of the problems shown up by the inquiries that I put together. I notice that there is $241 million extra for mental health. Again, I take credit for that, having got the numbers for the motion that set up the mental health inquiry. Initially the Government was not interested in it, but it has since taken a very positive interest in it. The Hon. Dr Brian Pezzutti is sharing the implementation of it with Cherie Burton. They are working very hard in that area.
I was interested to find that what was allocated from the top did not necessarily get to the bottom: it was siphoned off down the passage from the Department of Health through the area health services to the managers at departmental level, and they could not account for where the money was spent at the bottom. The Government supposedly allocates money to various areas but what happens on the ground is not necessarily what was intended. I will take up with the Minister whether the Government now has an accounting system that ensures that moneys go where they are supposed to go.
The budget for the Department of Community Services [DOCS] is $2.15 billion, with the much-touted $1.2 billion increase over six years after the DOCS inquiry. Again, I take some pride in the DOCS inquiry. I gave notice of a motion for an inquiry into DOCS. According to Coalition members, I was two votes short—although this was not tested on the floor of the Chamber. Eventually they moved an amendment to the motion and supported the inquiry 20 months after I gave notice of it. So while the Government takes credit for these things one ought to ask where it was initiated. There is an extra $100 million for DOCS this year. Again, it is not entirely clear with DOCS how much money is spent. The Government always talks about how much it spends. It is always much less clear whether there are results. It is hoped that the DOCS database to manage where the money goes, which has been very long in gestation, will have some results this year.
Legislation and money allocations have to be justified with results, not just money. It is not good enough for a Minister to say that he has spent X dollars without the slightest pretence that the Government is getting any value for money from the dollars. There must be evidence-based legislation. It must be outcome based, not just money input based. I noticed that there is now a department called DEUS—the Department of the Environment, Utilities and Science. Of course, DEUS is under Frank Sartor and "deus" is Latin for god. Is that not odd? I wonder whether Frank was involved in the formulation of the acronym? It is a bit of a worry.
Under DEUS the Sustainable Energy Development Authority [SEDA] has been abolished. That is a great step backwards. Nine months or more ago somebody in the know in the energy sector said, "All the good people in SEDA are leaving—at least the ones who are not very naive. The ones who can see what is going on are leaving. SEDA is not interested in doing anything about sustainable energy and greenhouse gases; it is only interested in appearing to do something. The people who actually want to do something rather than put up plans that are going to get nowhere or have intentions which are not going to be fulfilled are leaving." It is interesting that now SEDA is being abolished. I think the Government's commitment to greenhouse gas abatement and sustainable energy is highly suspect. It has been put to me by people who run the coal-fired power stations—whom I know because I used to judge their first-aid contests years ago when I was at Sydney Water—that production of a lot more greenhouse gases could be prevented by making coal-fired power stations more efficient rather than conducting small projects involved in sustainable energy.
While that may be so in the short term, it should not be a major driver of government policy. I believe that the development of sustainable energy in the domestic, industrial and commercial sectors is extremely important. A government without an energy agency pushing the use of sustainable energy at derisory cost with quite good prospects of cost recovery as a percentage of its budget is reprehensible. I note that the Government talks up its big investments of $30 billion over four years, which amounts to $7.5 billion per year in its simplest form. The total capital works budget set out in the Appropriation Bill is $2,607 million in round figures. Therefore, a great deal of capital works expenditure is being financed from a source that does not appear in the Appropriation Bill. Bob the Builder boasts about the provision of infrastructure, but the fact is that a large component of that is being financed by private-public partnerships [PPPs].
The Government boasts that as part of its Education budget, new schools will be constructed at Ashtonfield near Maitland and at Hamlyn Terrace near Warnervale. An overall allocation of $364 million has been earmarked for the construction and enhancement of schools during 2004-05, but the budget does not set out that the cost of those schools and 32 other big projects was not included among State expenditure items because they are privately financed under PPPs. This is already happening because the construction of three schools has been privately funded by ABN Amro and St Hilliers, Hansen Yucken and SSL Nationwide Facilities Management, which is known as Spotless. The Treasury is very keen on the model of private sector funding of public infrastructure because it does not appear on the Government's books as debt. That is a worrying trend because PPPs are not necessarily value for money. The Government often bears the liability but does not necessarily own the assets.
Governments are responsible for developing the State and need to borrow for infrastructure development at rates that are as favourable as possible. This Government has a triple-A credit rating and should be negotiating on its own behalf to borrow in the international money market rather than acting through an intermediary with additional costs associated with the agent's profit motive. No intermediary will broker a deal unless it can make a return of 12 or 15 per cent, or at least a return that is comparable to returns that can be achieved by investing in the stock market. Instead of the Government borrowing money cheaply, it engages private sector agents on the assumption that the private sector is so efficient that the agent's cost is absorbed by the favourable rate of interest and other lucrative arrangements attached to the deal. If the Government cannot control its costs and expenditure, how can it control the cost of capital works expenditure when the entity undertaking the construction is not endeavouring to control costs but, rather, is trying to maximise profits?
The cost of lease payments over 30-year terms of public-private partnership arrangements is greater, even if there are no unforeseen costs, than if the money for construction is borrowed by the Government at competitive rates and the Government retains ownership of the property. An article by Allison Pollock in the British Medical Journal of May 2002 examined the United Kingdom experience of public finance initiatives [PFIs] since 1992 and, in particular, analysed the relative cost benefits of private versus public financing of infrastructure. The author stated that the way PFIs operate in the hospital sector is that a private consortium designs, builds, finances and operates the hospital. In return, the government, through a National Health Service [NHS] trust, pays an annual fee to cover both the capital cost—which includes the cost of borrowing and maintenance of the hospital—and any non-clinical services provided over the 25-year to 35-year life of the contract.
There is no evidence that PFIs have increased overall levels of service. On the contrary, its use has had two adverse effects: first, it has displaced the burden of debt from the central government to the NHS trusts and with it the responsibility for managing spending controls and planning services. Second, the higher cost of PFI schemes has presented the NHS with an affordability gap. This has been closed by external subsidies, diversion of funds from clinical budgets, sale of assets and more reliance on charitable donations that have led to a 30 per cent cut in bed capacity and 20 per cent reduction in staff in hospitals that are financed through PFIs. The author concluded:
Not only are the macroeconomic arguments in favour of PFIs illusory but there is also a negative impact on levels of service... the government claims that PFIs deliver value for money through lowering costs over the life of the project because of greater private sector efficiency and because the private sector assumes the risks that the public sector normally carries. The M2 has illustrated this in NSW, as did the Sydney airport rail link.
It also refers to a document that was produced by the Evatt Research Foundation that examined the Australian experience with PPPs. The document stated:
Project: Sydney airport rail link
The Sydney airport rail link involved the construction of a 10 kilometre underground railway line linking the Sydney CBD to the airport. The former Coalition Minister for Transport, Bruce Baird, called for expressions of interest for the privately funded rail link in October 1990. Minister Baird assured the community that the "airport link will not require one cent of government money".
The experience so far:
By January 1994 it was clear that the government would pay $470 million out of the $600 million cost. Over the five years since the contracts were signed, the taxpayer contribution continued to grow. In May 1996 the taxpayer had contributed $570 million. Furthermore, a station at Wolli Creek added another $130 million, amounting to a bill of $700 million. In July 2000 one of the PPP consortium members, ALC, lodged a claim with the State Rail Authority claiming $15 million. In November 2000 the consortium defaulted on a $200 million loan with the National Bank. ALC went into receivership on 30 November 2000.
A number of other critical problems arose with the project. Passenger levels were projected to be around 48,000 when the link opened, rising to 68,000 within 10 years. In practice they were around 12,000 a day. Problems with the service included overcrowded carriages at peak times, lack of luggage space and high ticket prices. A one-way ticket from the airport station at Mascot to the city's Central Station is $9, compared with $7 on a bus and approximately $22 by taxi. The end result of this PPP was that the NSW Carr Labor government had to bail out the project, costing taxpayers $704 million.
When I was at Sydney airport last year I was asked, "Who is paying for pumping all this water?" When I sought elucidation, I was told that water in the tunnel has to be pumped out because the tunnel has a roof but not a floor, and water pours in from below. I asked the Minister about it and received a reassuring answer that did not mean very much. I wonder whether water will have to be pumped from the tunnel forever? I am worried about redevelopment of the Newcastle Mater Misericordiae Hospital being touted as a model PPP in New South Wales. Management is restricting its definition of establishment figures so that the hospital will not be seen to be affected by downsizing.
The problem with PPPs is that every aspect of the project must be defined. Anything that is not in the contract will not be part of the project, and variations of the contract to remedy mistakes are a highly expensive exercise, which sometimes results in additional expenditure in the order of 20 per cent on top of the original contract agreement that had been signed with such official fanfare. Redevelopment of the Mater hospital site will incorporate the James Fletcher Hospital, which is a mental health facility. I have been informed that the private sector is not interested in private-public partnerships unless the project is worth approximately $1 billion, which is the reason for incorporation of the James Fletcher facility into the project despite concerns over a lack of space. Some of the funding for the redevelopment may be offset by the sale of the James Fletcher Hospital site—a prime investment site that is within a stone's throw of Newcastle's surfing beach. The site has a magnificent outlook over the park and the ocean. The borrowing of money would be no problem because we have a triple-A credit rating. In effect, the market is telling us, "You can borrow. We will give it to you extraordinarily cheaply because you have so little debt for the amount of equity you have."
If we look at other examples of PPPs, the M2 is a shining example of the South Sea bubble in New South Wales. The M2 prospectus overestimated the number of vehicles that would use the road. Some estimates of the percentage of proper available traffic that would use the toll road, even if there were an even slower pre-road, are as low as 10 per cent. The overestimated traffic for the tollway allowed the promoter of the scheme to sell the ideas to government. In many cases the promoters are the government agencies themselves, like the Roads and Traffic Authority, in concert with the consortium, because it gets investors on board.
The return to shareholders of the M2 was promoted at 15.8 per cent. The figure is essentially underwritten by the Government because, whether it is in the building stage or the operating stage, the project has to be completed and has to be kept running. The cost of the cross-city tunnel was originally estimated to be $273 million; the latest cost estimate is $640 million. For this money we get a 2.1 kilometre tunnel that will fill with cars. For less than half this price, we can get a 4.4 kilometre tram track, which would take thousands of cars off the road because the carrying capacity of one tram is approximately equal to the carrying capacity of 35 cars.
The alternative plan, which was to run trams from Central to Kensington to carry the 20,000 students who commute to the University of New South Wales daily, was floated at the time of the Eastern Distributor tollway project, and would have cost roughly the same amount. The beauty of the alternative plan was that because the trams would transport students to university and commuters to the city, a large amount of traffic would have been taken off the roads to Central railway station, which is an excellent hub for any light rail that goes through the city. However, the Government did not see fit to introduce such a plan but instead built the cross-city tunnel, which makes people become highly car dependent in areas where they have the best opportunity of not becoming car dependent. The Government does not have a transport strategy; it has a roads strategy. It is therefore spending a large amount of money without necessarily ensuring ecologically sustainable development.
The point that the Greens have made, coming through quietly in this debate, is that the Crown Lands Legislation Amendment (Budget) Bill gives the Government the ability to sell land at 3 per cent of its value. I was horrified to hear this. It turns out that PricewaterhouseCoopers reports that because these are perpetual leases the Government cannot revoke them without providing compensation. Effectively, the land has already been given away in the perpetual lease, and thus the equity that the Government retains, according to PricewaterhouseCoopers, is between 2 per cent and 4 per cent. Apparently, the Government says that that is the reason for the mid-range figure of 3 per cent provided in the bill. Given that the native vegetation legislation is in place, the Government says that regardless of whether the land is subject to a perpetual lease or is freehold, the vegetation on it is covered by that legislation.
The Hon. Michael Egan: Are you speaking to the right bill?
The Hon. Dr ARTHUR CHESTERFIELD-EVANS: I am speaking to the Crown Lands Legislation Amendment (Budget) Bill.
The Hon. Jan Burnswoods: Why were you talking about hospitals?
The Hon. Peter Primrose: Point of order: I raise the issue of relevance.
The Hon. Dr ARTHUR CHESTERFIELD-EVANS: To the point of order: I had finished talking about the funding of hospitals. I was talking about the Crown Lands Legislation Amendment (Budget) Bill when I was rudely interrupted by a question about a subject I had finished speaking about some time ago. I am now talking about the Crown Lands Legislation Amendment (Budget) Bill and the 3 per cent—
The Hon. Michael Egan: It's outside the leave of the bill.
The Hon. Dr ARTHUR CHESTERFIELD-EVANS: It is not outside the leave of the bill.
The Hon. Charlie Lynn: Point of order: The Hon. Dr Arthur Chesterfield-Evans does not understand which point of order he is talking about.
The Hon. Rick Colless: Point of order on the point of order: Mr Deputy-President, the Hon. Dr Arthur Chesterfield-Evans is trying to justify what he has been saying and members are speaking to two points of order at the same time. There should be only one speaker at a time on a point of order.
The DEPUTY-PRESIDENT (The Hon. Eric Roozendaal): I uphold that point of order. I draw the attention of the Hon. Dr Arthur Chesterfield-Evans to Standing Order 92, which provides:
A member may not digress from the subject matter of any question under discussion.
The contribution of the Hon. Dr Arthur Chesterfield-Evans should be relevant to the question before the Chair.
The Hon. Dr ARTHUR CHESTERFIELD-EVANS: I was making a point about the Government retaining equity of 3 per cent. It is outrageous that I was criticised for that by way of an absurd interjection from Government members who were not paying attention. Schedule 2 [31] inserts in the Act new schedule 7A, clause 3 of which reads:
(1) The purchase price of the land comprised in a lease to which this Schedule applies is the special purchase price, or the purchase price that would apply under Schedule 7 but for this Schedule, whichever is the lower.
(2) the special purchase price is 3 per cent of the land value of the land (within the meaning of the Valuation of Land Act 1916) as at the date the application to purchase the land is made under Schedule 7.
When I was rudely interjected upon I was speaking about the price of land under one of the bills we are dealing with. I am flabbergasted at such an absurd interjection. It is worrying that the Crown Lands Legislation Amendment (Budget) Bill has been introduced as a budget bill, because it perhaps weakens the scrutiny of the legislation. The Government's responses are that as the leases are perpetual leases they are currently traded at much the same price as freehold, that not all the land will be sold, that the land will be inspected prior to any sales, and that caveats will be placed on land of special conservation value.
As I said today on another subject, the Government's approach of Bob the seller—who is more than happy to sell assets to avoid borrowing, basically because of a dogmatic following of the idea that we must not have debt even if we are losing equity or not gaining equity—is of concern and, I believe, will ultimately be the end of the Government because the public will simply not tolerate the lack of services provided by this foolish funding strategy. The Appropriation Bill cannot be modified or even rejected, but there are certainly elements of the Government's economic strategy that are extremely suspect. Some of the matters that are not provided for in the bill, such as the PPPs, will come back to bite the Government, as they have in the past.
The Hon. TONY KELLY (Minister for Rural Affairs, Minister for Local Government, Minister for Emergency Services, and Minister for Lands) [8.58 p.m.], in reply: I thank members for their contributions to the debate. With regard to the questions from the Deputy Leader of the Opposition and Reverend the Hon. Fred Nile in relation to the two-year time frame, I can assure them that while we will encourage perpetual leaseholders to convert to freehold, we will sympathetically handle cases that face extreme hardship, most notably because of the ongoing drought. All I would encourage leaseholders to do is to get their applications in to the department within the two-year time frame, so we can consider their ability to pay on a case-by-case basis. There are provisions within the Act to consider individual cases on hardship grounds.
With regard to multiple holdings, the Opposition can rest assured that the department recognises that there are anomalies and huge complexities in lease holdings throughout the State. This is one of the reasons we undertook these reforms in the first place. The department will consider individual circumstances. With regard to the Western Division, I can assure the Opposition that these reforms will not affect Western Lands leases. Regardless, I will take the matter up with my colleague Craig Knowles, who has carriage of the Western Lands Act.
With regard to rent increases, the Government has catered for some instances in which rent increases will be considerable. In these cases, we will stagger rent increases. For example, minimum rents going from $70 to $350 will be staggered over a three-year period. I believe that this will accommodate any significant increase in the rents payable.
These important changes to the management of Crown land in the Eastern and Central Division of the State of New South Wales were foreshadowed in the recent mini-budget. The bill applies to the Crown Lands Act 1989, the Crown Lands (Continued Tenures) Act 1989 and the Hay Irrigation Act 1902, which relate to the Eastern and Central Division of the State. For the purposes of the Crown Lands Act 1989 the State is divided into two divisions, the Eastern and Central Division and the Western Division. Hence, the measures referred to later will not apply to tenures in the Western Division. Within the Eastern and Central Division of the State, which is the focus of these legislative changes, around 20 per cent of the land area is within the Crown estate.
The purpose of this bill is to enable the Government to obtain a fair and equitable return on the Crown land assets of the State on behalf of the people of New South Wales. This will be achieved by applying the principle of market rent to all Crown land tenures while retaining an equitable rebate system, addressing the cost effectiveness of administrative arrangements and managing Crown land assets as a sustainable public asset. In recent times the community's expectations for effective management have changed to that of responsible land management and stewardship, addressing the risks on Crown land of bushfire, weed and feral animal control and the provision of land to meet the diverse needs of the community.
In relation to minimum rents it is proposed that the lessees be subject to a market rent or an explicit subsidy by way of rebate, subject to a minimum rent. In the case of minimum instalments on purchase, the size of the minimum instalments will be increased to a level consistent with minimum rents in order to make the collection of purchase money more cost effective. There are some 11,000 Crown land leases in perpetuity at very low rents, the majority on base rents of $146 per year, with very low annual rental yields. They have lease conditions that provide limited effective control over the activities of lessees.
Environmental protection for lands to be converted from perpetual lease to freehold title will be achieved by strengthening the Minister's power to include conditions on title at the time of conversion. This includes the capacity to impose covenants, which run with the land providing for the protection of environmental or other significant values, and to provide that the land cannot be subdivided without the Minister's consent. The bill has been drafted to protect these covenants from being overridden by environmental planning instruments. Section 28 of the Environmental Planning and Assessment Act 1979 will not suspend the operation of these covenants without the concurrence of the Minister for Lands. In addition, the existing provisions that protect forestry resources have been retained.
In circumstances where environmental and other significant values cannot be adequately protected by covenants and restrictions on subdivision the lands will be kept in public ownership. We will continue dialogue with the environmental stakeholders. Existing arrangements to consult the Department of Environment and Conservation will continue in relation to the assessment and protection of high environmental or other significant values in relation to perpetual leases. The bill requires consultation with the Minister for the Environment on perpetual leases that do not have an automatic right to convert to freehold before any decision is made to allow conversion in relation to the conditions to be imposed before any decision is made to remove conditions and before giving concurrence in relation to Section 28 of the Environmental Planning and Assessment Act. With the passing of the bill this State will be in a better position to enable the Government to obtain a fair and equitable return on the Crown land assets of the State, to ensure administrative arrangements are cost effective, to manage the Crown land assets as sustainable public assets and to ensure that environmental values are adequately protected. I commend the cognate bills to the House.
Motion agreed to.
Bills read a second time.
In Committee
The CHAIRMAN: Order! With the consent of the Committee I will deal with the Appropriation Bill, the Appropriation (Parliament) Bill and the Appropriation (Special Offices) Bill by putting the question, That the clauses, schedules and title be agreed to, in respect of each of them. The Committee will deal first with the Appropriation Bill.
Clauses, schedules and title agreed to.
The CHAIRMAN: Order! The Committee will deal now with the Appropriation (Parliament) Bill.
Clauses, schedules and title agreed to.
The CHAIRMAN: Order! The Committee will deal now with the Appropriation (Special Offices) Bill.
Clauses, schedules and title agreed to.
The CHAIRMAN: Order! The committee will deal now with the Crown Lands Legislation Amendment (Budget) Bill.
Clauses 1 to 6 agreed to.
Schedule 1 agreed to.
Mr IAN COHEN [9.07 p.m.], by leave: I move Greens amendments Nos 1, 2 and 3 in globo:
No. 1 Page 22, schedule 2 [7], lines 31–34. Omit all words on those lines.
No. 2 Page 26, schedule 2 [24], lines 1–4. Omit all words on those lines.
No. 3 Pages 28–34, schedule 2 [31], line 1 on page 28 to line 32 on page 34. Omit all words on those lines.
These amendments seek to remove new schedule 7A, which establishes special arrangements for the purchase of perpetual leases. Given the lack of debate and the scarcity of information provided to members on this matter, it is inappropriate that a major change to policy on the management of Crown leasehold land should proceed in this manner. I commend the amendments to the Committee.
The Hon. TONY KELLY (Minister for Rural Affairs, Minister for Local Government, Minister for Emergency Services, and Minister for Lands) [9.08 p.m.]: The Government does not support these amendments, which seek to delete proposed new schedule 7A of the Crown Lands (Continue Tenures) Act 1989. There are 11,000 land leases held in perpetuity at very low rents, the majority of these on base rents of $146, with very low annual rental yields. They have lease conditions that provide limited effective control over the activities of lessees. The leases are costly to the ratepayers and do not in themselves provide adequate protection for the environment.
Proposed new schedule 7A establishes special arrangements for the purchase of perpetual leases, which apply only if the rent of the lease is not subject to redetermination. The arrangements allow land to be purchased by the holder of the lease at a price that is currently payable under the Crown Lands (Continued Tenures) Act 1989, or at a special purchase price of 3 per cent of the value of the land, whichever is the lower.
The option to purchase at 3 per cent of market value will be available only to those lessees who have perpetual lease, the rent of which, under current legislation, cannot be redetermined to market rent. Whilst 3 per cent of market value represents a significant theoretical discount of the purchase price in the case of low rent leases, the discount is theoretical because the leases sell on the open market at prices approaching the freehold price. The rent of the lease will become subject to redetermination by the Minister at market rates at the end of the period of two years after the Minister has notified the leaseholder of the special purchase arrangements.
These special arrangements will also allow the Minister to impose, on behalf of the Crown, restrictions or public positive covenants on the land. These restrictions or covenants may be imposed for the purpose of protecting the environment, protecting or managing natural resources, or protecting cultural, heritage or other significant values of the land, or of items or works on the land. Restrictions may also be imposed to prevent or restrict subdivision of the land. Restrictions or public positive covenants are to be imposed under the Conveyancing Act 1919.
The Hon DUNCAN GAY (Deputy Leader of the Opposition) [9.11 p.m.]: The Opposition opposes these amendments. In debate on the second reading and in speaking in debate on these amendments, Mr Ian Cohen either deliberately or accidentally said that converting these leases was akin to converting something of a lesser value to something of a greater value, which is understating the purpose of a perpetual lease. A perpetual lease is very close to freehold title. It is like comparing a company title to a strata title in a block of units. They are close in value and ownership and there is not much between them. There is even less between a perpetual lease and freehold title. I suspect that Mr Ian Cohen deliberately misled the Chamber in order to give the impression that the Government is giving people a huge financial benefit. The Government, by transferring a little more security, is saving itself a lot of money in administration fees.
Amendments negatived.
Mr IAN COHEN [9.13 p.m.]: I move Greens amendment No. 5:
No. 5 Page 34, schedule 2 [31]. Insert after line 32:
10 Wilderness and other areas not to be sold
An application to purchase land comprised in a lease to which this schedule applies must not be granted (and any reservation from sale under the Crown Lands Acts in respect of such land is not to be revoked) if:
(a) the land is a wilderness area under the Wilderness Act 1987, or
(b) the Minister is notified by the Minister administering the National Parks and Wildlife Act 1974 that the land is considered to be of conservation interest.
While this bill includes a requirement for consultation with the Minister administering the National Parks and Wildlife Act 1974, the Threatened Species Conservation Act 1995, and the Wilderness Act 1987 before making a decision to convert leasehold to freehold or imposing a covenant on the land, there is no requirement for the deciding Minister to heed the advice given. This amendment will ensure that, when a conversion application is for land that is a wilderness area under the Wilderness Act 1987, or the Minister administering the National Parks and Wildlife Act 1974 advises that the land is considered to be of conservation interest, the land is to be reserved from sale. This bill is a budget bill because the Government is counting on the money to balance its books, and there is a strong incentive to proceed with as many sales as possible. I commend Greens amendment No. 5 to the Committee.
The Hon. TONY KELLY (Minister for Rural Affairs, Minister for Local Government, Minister for Emergency Services, and Minister for Lands) [9.17 p.m.]: The Government does not support this amendment. The bill contains extensive provisions for the protection of the environment and other significant values. As part of the consultation provisions the Minister for Lands is required to consult with the responsible Minister for administering the Wilderness Act 1987, the Minister administering the National Park and Wildlife Act 1974 and the Minister administering the Threatened Species Conservation Act 1995 in relation to moratorium leases that are subject to perpetual lease special purchase arrangements in proposed schedule 7A. That consultation is required before any decision is made to allow conversion in relation to the conditions to be imposed, before any decision is made to remove conditions, and before giving concurrence in relation to section 28 of the Environmental Planning and Assessment Act.
Environmental protection for lands to be converted from perpetual leases to freehold title will be achieved by strengthening the Minister's power to include conditions on title at the time of conversion. That includes the capacity to impose covenants that run with the land providing for the protection of environmental or other significant values, and it includes the capacity to provide that the land cannot be subdivided without the Minister's consent. The bill has been drafted to protect these covenants from ever being overridden by environmental planning instruments. Section 28 of the Environmental Planning and Assessment Act will not suspend the operation of these covenants without the concurrence of the Minister for Lands. In addition, the existing provisions that protect forestry resources have also been retained.
Amendment negatived.
Schedule 2 agreed to.
Schedules 3 and 4 agreed to.
Title agreed to.
The CHAIRMAN: Order! The Committee will now deal with the Sustainable Energy Development Repeal Bill.
Clauses, schedules and title agreed to.
Bills reported from Committee without amendment and passed through remaining stages.
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