The Hon. Jan Burnswoods
The Hon. Patricia Forsythe
The Hon. D. J. Gay
The Hon. Janelle Saffin


The Hon. C. J. Knowles, Minister for Urban Affairs and Planning, and Minister for Housing

Department of Urban Affairs and Planning
Ms G. Kibble, Director-General
Ms S. Holliday, Deputy Director-General
Mr P. Campbell, Financial Controller

Department of Housing
Mr A. Cappie-Wood, Director-General
Mr W. Brailey, Director of Finance

Office of Housing Policy
Mr A. Larkin, Acting Director


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CHAIR: At this meeting the Committee will examine the proposed expenditure from the Consolidated Fund for the portfolio areas of Urban Affairs and Planning and Housing. Before questions commence some procedural matters must be dealt with. Resolution 7 of the budget estimates reference provides that a member of a committee and any Minister present to answer questions may have staff present to assist them during the hearing of evidence and may refer to their staff at any time. I remind members' staff and any other persons that they should take care not to interrupt proceedings and must observe the usual courtesies which apply to a meeting of the House or of a committee.

Where possible messages for members should be given through the attendant on duty or to the Committee clerk. Members of the media: the Committee resolved on 2 June 1997 that the press and public be admitted to the proceedings of the Committee. I wish to explain to you what is required by the standing order of the Legislative Council in this regard, so that you will be aware of the position. Legislative Council Standing Order 252 provides:

Evidence taken by any Select Committee of the House and documents presented to such Committee which have not been reported to the House, may not, except with the permission of the Committee, be disclosed or published by any member of such Committee or by any other person.

In reporting the proceedings of this Committee, as with the reporting of the proceedings of both Houses of Parliament, you must take responsibility for what you publish or what interpretation is placed on anything that is said before the Committee. In order to accurately complete the questions and answers paper the Committee clerk requires that members complete and sign the appropriate form when a question is taken or given on notice. The Committee has agreed that we cover all portfolio areas in each segment, so rather than splitting up the portfolios we will cover them all. Are there any answers to questions on notice?

Mr KNOWLES: We received a question through the clerk of the Committee from the Hon. Patricia Forsythe at 17.41, that is twenty to six, last Friday night in relation to Budget Paper 3, Volume 2, page 716, programs administered by the Office of Community Housing: What organisations would apply for crisis accommodation places funding for 1996-97? There is a table seeking the information in a particular form.

I only discovered that question on Saturday, and although we do have an answer I would ask the Hon. Patricia Forsythe if I could have the opportunity of looking through it myself before I table it. Having done so, it is my intention to table the answer by the conclusion of the meeting unless, of course, I find that there are inaccuracies, and I will notify the Committee accordingly.

The Hon. PATRICIA FORSYTHE: Or are you telling me too much?

Mr KNOWLES: I will not be telling you too much. That I would not do. That is the only question or request we have received.

CHAIR: I declare the proposed expenditure open for examination. I will call over the program areas as listed in the budget estimates volume by agency, and that is Agency No. 73, Department of Urban Affairs and Planning; Agency No. 74, Ministry of Urban Infrastructure Management; Agency No. 75, Heritage Office; Agency No. 76, Payments to Other Government Bodies under the Control of the Minister; and Agency No. 77; Payments for Water and Sewerage Assistance.

The Hon. D. J. GAY: In relation to Budget Paper No. 3, Volume 2, page 705, the entry for employee expenses, how many members of the department’s staff were assigned to work on the City of Sydney Amendment Bill working party? What was the cost of conducting this work? Was a member of staff conducting an economic impact statement of the bill? Can the Minister please table the results of this work?

Mr KNOWLES: I ask Ms Kibble to respond.

Ms KIBBLE: Two staff were allocated to the work. The remainder of the question we will have to take on notice.

The Hon. D. J. GAY: Was there public consultation following the result of this working party?

Ms HOLLIDAY: It is a matter for the portfolio of the Minister for Local Government, who had responsibility for the amending bill.

The Hon. D. J. GAY: Were you a member of that working party?

Ms HOLLIDAY: I was a member of the working party.

The Hon. D. J. GAY: Were the recommendations of that working party ignored in the legislation that came to Parliament last week?

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Ms HOLLIDAY: The recommendations of the working party were made to the Minister for Local Government.

The Hon. D. J. GAY: And was there public consultation?

Ms HOLLIDAY: The working party consisted of people other than representatives of the relevant departments, which were Urban Affairs and Planning and Local Government. The Minister for Local Government would have to answer the question as to whether there was public consultation beyond that, as it was his responsibility.

Mr KNOWLES: The matter is obviously before the Parliament by way of legislation. The Minister for Local Government has carriage of that legislation. I would suggest that questions of any detailed nature be referred to the Committee examining his processes.

The Hon. D. J. GAY: Was an economic impact statement prepared by the working party?

Mr KNOWLES: As part of normal Cabinet procedure, as members may know, a variety of impact statements are provided for Cabinet's consideration. To the best of my recollection, given that the Minister for Local Government presented the Cabinet minute and not I, an economic impact statement was among other impact statements presented with the Cabinet minute.

The Hon. PATRICIA FORSYTHE: I ask a question in relation to the Honeysuckle Development Corporation, which is subprogram 76.1.2 in Volume 2, Budget Paper No. 3, page 732. In relation to the program objectives, how much is the commission of inquiry into the proposed hotel development on the Honeysuckle Development Corporation site expected to cost? How long is it expected to take and when will a final decision be made in relation to the site?

Mr KNOWLES: In accordance with your documentation provided to Ministers and their staff I will take that question on notice unless there is anything specific Ms Kibble wishes to add in relation to any overlap between Honeysuckle and her administration of DUAP. I will take that question on notice in accordance with the guidelines on page 11 of your estimates hearings manual.

Ms KIBBLE: It is not possible at this stage to say what the commission of inquiry will cost. The first thing that has to happen is the lodging of a development application for the site and then that development application will be exhibited and the commission of inquiry will follow. So it is not possible to say either how much the commission will cost or when it will actually sit, at this point of time.

The Hon. PATRICIA FORSYTHE: Also in relation to Honeysuckle, how much did the mediation process in relation to the Honeysuckle hotel development cost?

Mr KNOWLES: Again I will take that question on notice.

The Hon. D. J. GAY: At page 129 of Budget Paper No. 4 under the heading "Sydney Water Corporation" there is reference to Warragamba Dam spillway. Given the limited funding in the 1997-98 budget for the Warragamba Dam spillway, when will it really be completed? When do you propose to increase the funding to a realistic level?

Mr KNOWLES: The assertion in the question is wrong, as was Chris Hartcher's press statement that he put out three weeks ago. It is hardly a surprise that I get a question of this nature. I will take the detail of the question on notice in accordance with your guidelines, given that Mr Broad from Sydney Water is not with us because he was not required to be here. However, I make the point that this Government is the first government since the last Labor Government to do anything about Warragamba Dam, either its dam safety or the impacts of downstream flood mitigation.

The history of upgrades for Warragamba Dam is an indictment of seven years of administration of the previous Government. The last time anybody dealt with safety issues at Warragamba Dam was as far back as 1987 when Janice Crosio brought it up to a 73 per cent dam safety standard based on international dam safety records. For the following seven years the former Government and its Cabinet considered the issue of Warragamba Dam no less than seven times. Each time they squibbed it; each time they put off a decision that had to be made to fund the upgrading of the dam.

One of the first actions of this Government was to fund the upgrading of the dam to meet 100 per cent of international dam safety standards. The work program involved an EIS, which has been on exhibition - it is now off exhibition and under consideration - and a capital upgrade program which is within Sydney Water's budget and will be completed by 2001-02, as has been previously published and acknowledged. The fact of the matter is that the bulk of the money will be spent in the 1998-99 and 1999-2000 budgets and will be appropriately reflected during that time.

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The Hon. D. J. GAY: In relation to Budget Paper No. 3, page 705, the line item Operating expenses, what was the cost to the department of the residents' court case in relation to the Sydney showground?

Mr KNOWLES: I will take the question on notice.

The Hon. PATRICIA FORSYTHE: I have more questions on Honeysuckle, and again the reference is pages 730 to 733 in Budget Paper No. 3, Volume 2. What is the current debt level of Honeysuckle Development Corporation? Did you approve borrowings and did the Government provide a guarantee to the lender for such borrowings? How will the development corporation survive the - I might leave that part of the question.

Mr KNOWLES: How will it survive the cuts to Building Better Cities funding was probably the question you were going to ask.

The Hon. PATRICIA FORSYTHE: No.

Mr KNOWLES: If you had asked that I could say I am not quite sure.

The Hon. PATRICIA FORSYTHE: I know the answer; you gave it to me last year.

Mr KNOWLES: I am not quite sure and it is the same answer that you got last year. The fact that the Federal Government can cut Building Better Cities funding, which was the principal source of funding for both City West and Honeysuckle -

The Hon. PATRICIA FORSYTHE: How about answering the question I asked?

Mr KNOWLES: The question about the debt level I will take on notice. The second one, though I am not sure what you are talking about, I will also take on notice in accordance with page 11 of your manual for estimates hearings.

The Hon. D. J. GAY: My question is in relation to Budget Paper No. 3, page 704, which sets out a summary of average staffing for the Department of Urban Affairs and Planning. The number of staff has decreased from 477 to 439. How were these reductions implemented? Did these reductions include redundancies and does the 439 figure include additional staff taken on for specific purposes on a casual or part-time basis?

Mr KNOWLES: In general terms, the answer to all those questions is no. The reduction of staff is in relation to transfer of former departmental staff to the central corporate service unit which operates all the corporate services and administration in Governor Macquarie Tower, where the principal offices of the DUAP are located. Ms Kibble or Mr Campbell may wish to add to that.

Ms KIBBLE: No, I do not wish to add anything further, but we are happy to give you a more detailed answer if you want it.

The Hon. PATRICIA FORSYTHE: Again I ask a question about Honeysuckle. It is the same reference. What was the payout to the managing director of Honeysuckle who resigned last year? Have you appointed any consultants, and at what cost, to find a successor?

Mr KNOWLES: The first question I will have to take on notice. I am not sure there was a payout. I will find out for you. In answer to the second question, Ms Kibble tells me we have appointed consultants. I interpreted your question to mean to replace Mr Zullo since his departure. In that sense we have asked Mr Newman from the City West Development Corporation to oversee the operations of Honeysuckle. Ms Kibble advises me that we are employing professional search agents, euphemistically called head-hunters, to go through the search for a new chief executive officer for that important organisation for the Hunter region.

The Hon. D. J. GAY: Once again I refer you to Budget Paper No. 3, page 704 and the summary of average staffing for the Department of Urban Affairs and Planning. How many additional staff were taken on in order to review submissions to the integrated development assessment white paper, and at what cost? For how long have they been or were they employed? Have any consultants been used in the preparation of either the green paper, the white paper or the final bill? If so, at what cost?

Mr KNOWLES: Ms Kibble advises me that there were no additional staff employed other than some Local Government department staff who assisted us because of the proposed transfer of components of the Local Government Act to the Environmental Planning and Assessment Act, and some local government authorities lent us some staff to provide technical advice on the building aspects of the transfer. Ms Kibble assures me that the work on the integrated development assessment green paper and white paper has been done entirely within the department's resources.

The Hon. D. J. GAY: When will we see the final bill and will there be public discussion on it?

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Mr KNOWLES: The white paper was issued some months ago. My intention when I released it remains my intention, that is, to introduce it into Parliament in the remaining two weeks of this session. My intention then is to let the bill and the draft regulations sit on the table and to resume debate in the next session. It will be pleasing to see the high level of support that the legislation receives from the Opposition.

The Hon. PATRICIA FORSYTHE: In relation to Honeysuckle, in specific terms how much work in terms of dollars and management time has been expended in this financial year on preparing the Honeysuckle hotel site for which you issued a section 101 directive?

Mr KNOWLES: I will take that on notice.

The Hon. PATRICIA FORSYTHE: I also ask in relation to that directive what advice you were given and whether you would table that advice? Will you also table any working papers in relation to the hotel site for which you issued the directive? How many staff were dedicated to reviewing the Honeysuckle hotel site? Comparing it with competing hotel development sites, did your staff do any economic analysis of the benefits to Newcastle of having two hotel plans or proposals in the Honeysuckle area?

Mr KNOWLES: I will take the detail of your question on notice but I make this comment. The fact that Newcastle City Council was either unable or unwilling to get on with approving even one hotel development is an indictment of that organisation, particularly in light of the issues surrounding Newcastle and Hunter as a result of the withdrawal of jobs out of the Hunter region by BHP. The fact of the matter is that Newcastle City Council had any number of opportunities to approve one, two or a dozen hotels and baulked at the barrier every single time.

As far as I was concerned, in the context of the overwhelming need to provide alternative new employment opportunities, particularly for young people, there was only one action to be taken, only one issue at stake, and that was about providing new jobs for people up there. As far as I am concerned, the proof of the pudding is in the most recent action of Newcastle City Council. After my call the mayor wrote to me and said, "Give us one more chance. I can get the LEP through the council." He put it to his council and, indeed, it voted to support it. But within a matter of hours yet another recision motion was placed on it. As far as I am concerned that just continues the problems that have manifested themselves in Newcastle City Council since the time this matter came before it.

The other fact is that there are no hotels on the foreshore at Honeysuckle, despite everybody's desire to have a hotel, if not two. If the area can sustain two, well and good, let them wheel in their applications. We will now be providing a higher degree of certainty for anybody who wants to invest in Honeysuckle, whether it is for hotel development or other developments in accordance with the planning instrument, because the fact is that all governments - your Government, this Government, previous Federal governments but not the current Federal Government; it is the only exception - have poured hundreds of millions of dollars of Building Better Cities funding into Newcastle to upgrade that foreshore. There was any amount of consultation over any number of years to identify the opportunities for development in that area.

It will come as no surprise that when an application was lodged for construction of a hotel on a site that was earmarked for a hotel, we expected a hotel to be approved. The fact that it has not been is not only a problem for the hotel, but it also sends a rather appalling message to anybody else who might seek to invest in revitalising the Newcastle foreshore. This was the first of any major investment proposals to be lodged for Honeysuckle. If the council cannot deal with the first one at a time when 2,500 jobs are being ripped out of Newcastle, what message does that send to those people who might want to invest and begin to reinvigorate and revitalise Newcastle? I think it sends a pretty poor message.

We all have a responsibility to show a little bit of leadership and demonstrate to the citizens of Newcastle that if their council will not get on with the job, we will. I was a bit concerned that the shadow spokesman for planning, Ron Phillips, whilst making some noises about getting on with it in the Chamber, was quoted in the press up there as saying I should have butted out of it. In my view, that makes him the John Moore of the New South Wales Liberal Party. There has to be a time when people say, "Enough is enough." Newcastle council had any number of opportunities to sort this out. I proposed a mediation process. The council could not even get through that, and as far as I am concerned its latest action in overturning, by way of yet another recision motion, another proposal to rezone the site just demonstrates that the council has not got what it takes when it comes to getting on with it.

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The Hon. PATRICIA FORSYTHE: I knew the Left would get its just rewards for doing over the right-wing lot there.

Mr KNOWLES: Am I allowed to respond to interjections? This is not a question about Left or Right. The fact is that there is a group of people in the council who must have work, who must be pretty comfortable drawing a salary while there are 2,500 people who are a lot more shaky and worried about their jobs than they were two or three weeks ago. If the suggestion is that I should sit by and do nothing about that when all the evidence is before me - all the strategic planning over a series of years, the hundreds of millions of dollars of investment that has been put into Honeysuckle by all levels of government and signed off by all levels of government, including that council - then whoever makes that suggestion is hopelessly wrong and hopelessly out of touch.

The Hon. D. J. GAY: Did you take this decision in consultation with the Minister for Local Government, Ernie Page, and did it have his support? Is the answer no to both questions?

Mr KNOWLES: No, and I am not obliged to. I am very pleased with my decision.

The Hon. D. J. GAY: Why would you not consult the Minister for Local Government in something that involves his administration

Mr KNOWLES: It is irrelevant. I do not consult the Minister for Local Government on any other matter that I call in. It is a matter for my administration. Did you consult the Hon. Patricia Forsythe about the colour of the socks you put on in the morning? That was your choice.

The Hon. D. J. GAY: Further in relation to Budget Paper No. 3, page 705, employee related operating expenses, how many departmental staff have been allocated to conducting the environmental impact statement into the Eastern Distributor, given that after June 11 the department will incur a $2.4 million fine with additional fines of $400,000 every week thereafter? When will the EIS be returned?

Mr KNOWLES: Ms Kibble can answer the first part about the staff numbers. I want to make a point about the second part. The Committee needs to understand that prior to, I think it was, 1994 matters such as the Eastern Distributor were assessed in an entirely different manner to the way they currently are. As a result of successful amendments to the Environmental Planning and Assessment Act, moved by myself in opposition with the support of the then crossbench Independents and the lower House, but also with the support of Robert Webster, who I think was sort of pushed into agreeing, the legislation was changed to separate the roles of a proponent and the determining authority.

Since that time matters such as the Eastern Distributor have had their assessments done independently, first by Ms Kibble in her role as Director of the Department of Urban Affairs and Planning. The statute allows her three months to consider the matter before her and then she reports to me. Her report is a public report. I then have three weeks to consider her report and make a decision, which, of course, becomes the Government's announced position.

Up until that time no such independence was possible. So there was the ludicrous situation of the Roads and Traffic Authority both proposing and determining roads such as the M4, the M5 and the M2 without proper environmental impact statements and without proper public scrutiny. Whilst people may have some concerns about the present Eastern Distributor proposal, the one thing they can be sure of is the independence of the assessment process, because it is legislated to be there. If there are any short cuts to be taken they become exposed pretty quickly, because everything is part of a very public process, including Ms Kibble's report.

I put it to the Committee, particularly to the questioner, that if it is suggested that I should be coerced or pressured or compelled in some way to speed up because of some contractual obligation that the RTA may have with the road constructing company, then whoever makes the suggestion had better say so. If that is the way they choose to do business then that is further demonstration of what I regard to be very poor planning practice. The truth is that the assessment of the Eastern Distributor will take as long as it takes.

The Hon. D. J. GAY: And you are not worried?

Mr KNOWLES: It will take place in accordance with the provisions of the Environmental Planning and Assessment Act and my determination will equally take place in those terms. Whether or not I am worried is irrelevant. Whether or not there are contractual obligations is also irrelevant. The only things that are relevant are the proper assessment processes within the terms of the Act and then my determination in the terms of the Act. That is where it begins and ends. I feel very strongly about this. After all, I was the person who introduced the amendments into the Parliament in the first place.

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Ms KIBBLE: There is a small core group of staff from within our existing assessment branch of four to five people who are working on this assessment. As director I did not receive the RTA's assessment representation report until 18 April, and the RTA was certainly well aware of the fact that the Act provided for three months for a proper assessment process. The question of the contracts is not relevant to my functions.

The Hon. D. J. GAY: When would you have expected the RTA document to have been with you? The inference in your answer was that it was later than it should have been.

Ms KIBBLE: They had to do a proper job on their assessment of the situation and it took them until 18 April to do that.

Mr KNOWLES: I would add, if you want a commentary on that issue - it is not for us to give it, because it is not within our jurisdiction - but there is certainly commentary on that issue in the Auditor-General's report that was tabled by the Minister for Roads in the Parliament last week. It makes compelling reading.

The Hon. D. J. GAY: I refer you to Budget Paper No. 3, page 707, subprogram 73.1.1, State and Regional Planning, line item Other services - Financial assistance to community projects. Why was only $5.198 million of the $7.2 million area assistance scheme budget allocation in the 1996-97 budget spent? What level of funds in the area assistance scheme was actually approved in 1996-97 and why has only $6 million been allocated for 1997-98? What impact will the reduction in financial assistance to community projects have on the number and quality of community projects supported and what specific projects will have their funding affected?

Mr KNOWLES: Ms Kibble may wish to make some additional comments. The budget does indeed provide for the payment of community grants totalling $6 million for the AAS. In addition, funding of approximately $0.7 million for administrative expenses associated with the operation of the AAS is included in the line items Employee related and Other operating expenses in subprogram 73.1.1. There has been no cut in the allocation to the AAS and the figure of $6 million is consistent with the usual budget provisions for AAS grants over recent years. That is similar to a question I have been asked in previous estimates committees.

The allocation of $7.2 million for AAS grants in last year's budget reflected an anticipated increased rate of financial claims from community organisations for projects approved in 1996-97 and earlier years. The anticipated increase in the rate of claims did not eventuate and the estimated expenditure for 1996-97 was approximately $5.2 million. The actual rate of take-up of AAS grants in any particular financial year is dependent upon the actions of funded organisations in getting projects under way and submitting financial claims to the department. To ensure that there is no unnecessary delay in the community benefiting from projects approved under the AAS, and to seek to achieve a more predictable cash flow associated with the scheme, the Department of Urban Affairs and Planning is following up on outstanding grants and will take steps to encourage funded organisations to submit claims at appropriate times.

The AAS is a very valuable program and the Government is committed to its continuation in an effective form. The regions in which the AAS operates - the north coast, Hunter, central coast, western Sydney, Macarthur and the Illawarra - comprise 78 per cent of the State's population growth for the last five years. These regions are also characterised by relatively high concentrations of young, low-income families, higher than average unemployment rates and a need for improvements in local facilities and services.

I can also advise the Committee that last year I sought a review of the Area Assistance Scheme. The Department of Urban Affairs and Planning, commissioned Ernst and Young in conjunction with Purdon and Associates to conduct the review. Given the unique position of the AAS in the Department of Urban Affairs and Planning and the time since the scheme commenced, the 1996 review considered, in addition to its effectiveness, whether the objectives of the scheme remained relevant.

Following the recommendations of the Ernst and Young report, the Department of Urban Affairs and Planning is reviewing a number of aspects of the AAS. The review is aimed at strengthening the link between the scheme and regional planning issues, and at improving coordination with other government agencies while delivering services to the community. The review will also examine the impact of funding projects for a six-year period and how this will relate to the objectives of other government agencies' funding programs and local government and community expectations of the scheme.

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It is my understanding - and I think that of most people - that AAS funding is very much a bottom-up program with local and regional priority ranking committees. Over the years I have served at both levels of those and the response from the community is sometimes variable in different regions. Usually there are lots of programs to be considered and when you fund them there are sometimes, as we have indicated in the answer, difficulties in getting the administration at the local level sorted out so that the funds can flow. I think I have allocated funding under the first round of AAS for the present financial year, and I am advised that a second round of funding is shortly to come before me. Ms Kibble might want to add to that.

Ms KIBBLE: No.

The Hon. D. J. GAY: Will the nearly $2 million that was underspent find its way back into the scheme?

Mr KNOWLES: Yes. You know as well as I do that it is a roll-over program and carries forward.

[Time expired.]

The Hon. JAN BURNSWOODS: I refer to Budget Paper No. 3, Volume 2, page 713. The budget papers indicate that the Resource and Conservation Assessment Council has continued to be allocated approximately $5 million in the 1997-98 budget. Could you tell us what RACAC has achieved for the Government?

Mr KNOWLES: The Resource and Conservation Assessment Council, known as RACAC, represents a core activity for this Government in pursuing rigorous and scientifically credible information to be used for forestry reform and for fulfilling this Government's policies in this area. The council completed the interim forest assessment process and in September 1996 Cabinet made its historic decision relating to the State's forests. Cabinet's decisions on the work of RACAC protected 280,000 hectares of candidate old-growth forest. Also, 816,000 hectares of State forest were placed into an interim deferred forest area. The Government declared a 90,000 hectare south-east forest national park, reserved eight new national parks and declared one new nature reserve totalling 45,000 hectares.

RACAC is committed to involving major stakeholders in every level of its decision making through the council itself, the joint Commonwealth-State steering committee and the technical committees. Additionally, further stakeholder involvement is occurring at the grass roots level through the regional forest forums. These forums have members from representative community groups with interest in the forestry issue. RACAC is now focused on the comprehensive regional assessment - CRA - which is a joint exercise with the Commonwealth covering both private and public forested lands along the east coast of New South Wales.

This is a mammoth project with leading-edge technology being developed and applied to ensure that the processes that New South Wales puts in place are rigorous and credible. At this stage of the CRA process, more than 35 projects have been approved by the council. They range from biologically oriented studies such as fauna and flora surveys, API vegetation mapping, through economic and social projects on the social impact assessments and the development of opportunities for wood-based forest industries. Central to the studies being undertaken is a fundamental understanding of the wood resources. These studies are also being undertaken in conjunction with Commonwealth agencies. This represents the most complete inventory of all State forests ever undertaken in New South Wales.

The first CRA to be concluded will be for the Eden management area, with the intention to enter into a regional forest agreement with the Commonwealth in December. The council concluded the work of the Natural Resources Audit Council - NRAC - and has published and distributed a major six volume report on the upper north-east of New South Wales. RACAC has begun fundamental work for a comprehensive regional assessment in the western part of the State. NRAC became RACAC, which conducted an IFA leading to an IDFA, which established the DFA. We are now working on CRAs to establish an RFA all in the context of the NFPS.

The Hon. JANELLE SAFFIN: I actually know what they all mean.

Mr KNOWLES: It makes sense if you do.

The Hon. JANELLE SAFFIN: I refer to Budget Paper No. 3, Volume 2, page 705. I understand that major reforms are proposed to be made to the Environmental Planning and Assessment Act 1979 to expedite the development assessment process and improve the way in which development proposals are dealt with. How are those reforms to
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be implemented and what budget resources will be required in the 1997-98 financial year?

Mr KNOWLES: It is not a dissimilar question to the one I was asked earlier, but it has some fundamental differences and nuances, so I should cover it in more detail. I made some offers to the Committee, Mr Chairman, and if you want to sit here for half an hour and listen to me read the answers to dorothy dixers, it is entirely up to you. In May 1996, the Government released two green papers aimed at initiating reform of land use planning and natural resource management in New South Wales. The green paper recognised that change was required if New South Wales was to encourage business activity and employment opportunities.

The point I made last week in relation to a number of proposals that were before the House was that as Australia's economy internationalises and, indeed, as competition between States for business continues to occur, it is incumbent upon the regulatory components of government to make sure that the regulatory framework is indeed world class so that, as we get those industries coming into the State, we are able to expedite their assessment, allowing them to make their investment decisions in a timely and efficient manner, but at the same time, of course, never losing sight of the very high environmental assessment standards that have been the hallmark of the Environmental Planning and Assessment Act since it was first introduced.

Submissions on the green paper show that there is strong support for regulatory changes to improve the current development assessment system in the State. I therefore obtained Cabinet endorsement to draft legislation which would speed up the development assessment process and improve the way development proposals are dealt with. I released the Government's white paper and exposure draft bill for integrated development assessment on 12 February. The reforms will involve major changes to part 4 of the Environmental Planning and Assessment Act. The three principal areas of reform are integrating development consents, providing for appropriate assessment and increasing the role of the private sector in the assessment system. More than 1,700 people have been briefed at 33 public information seminars in metropolitan and regional centres to explain and discuss the reform proposals.

The seminars were attended by a wide range of community, local government, State agency and industry groups. Also, more than 7,000 copies of the white paper and exposure draft bill have been distributed around New South Wales. I take this opportunity to pay tribute to the regulatory reform unit in the Department of Urban Affairs and Planning. As was indicated in an earlier answer, this has been done essentially using the resources of the department with minor assistance from external sources, and it is a tribute to their efforts that they have managed to coordinate such major reform in such a short period of time and undertake such a comprehensive consultation process.

In response to the consultation process more than 550 submissions have been received to date and I have instructed the Department of Urban Affairs and Planning to review those submissions and advise me regarding the revision of the exposure draft bill. As I indicated earlier, I plan to introduce the bill into the Parliament in the current session. Further drafting and liaison will continue on the accompanying regulations during July and August with a view to debating the entire package in the spring session. The reforms, whilst maintaining established principles of thorough environmental assessment and public participation, will deliver major benefits to the New South Wales economy.

The new legislation will make the State's planning system more competitive and will increase our capacity to respond to a range of development proposals and investment opportunities. This may answer one of your earlier questions so it may deal with one of the ones we took on notice. A budget allocation of $677,948 has been included in the department's 1997-98 budget to provide for the implementation of the reform process.

The Hon. JANELLE SAFFIN: I refer to Budget Paper No. 3, Volume 2, page 713. Could you outline the process involved in the assessment of development applications to which State environmental planning policy 34 applies?

Mr KNOWLES: SEPP 34 makes me, as Minister of Urban Affairs and Planning, the decision maker for major industrial development of State significance. Under the policy I am the consent authority for certain industrial developments with a capital investment value of $20 million or more, or developments that would employ 100 or more people on a full-time basis or, in the case of intensive livestock operations, 20 jobs or more. The Department of Urban Affairs and Planning receives fees paid by the proponent upon lodging a development application under SEPP 34. The fees are based upon the estimated cost of the development.

Since July 1996, a grand total of $210,217 has been received in development application fees. The
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cost of implementing SEPP 34 is offset by the development application fees received. In particular, these fees fund resources across the branches of the department that are involved in assessing or providing advice on the relevant developments. DA fees specifically fund a specialist unit known as the major development unit - the MDU - established to coordinate and process applications to which the policy applies. The department also utilises specialist consultants to assist in the assessment process and similarly pays local councils on a fee-for-service basis. Since July 1996 salaries associated with staffing the MDU and other specialist requirements totalled $172,751. In the same period $62,805 has been spent on specialist consultants and a further $50,485 on contributions to councils.

Since this Government came to power I have approved 25 developments under the policy with a potential to create 3,903 jobs at a total cost of $2.9 billion. They included the $500 million expansion of the Australian Newsprint mill at Albury, the $400 million Cadia Hill gold and copper mine and the $300 million BHP tin mill upgrade in Wollongong. Indeed, it is probably worth noting that the great bulk of SEPP 34 projects occur in rural and regional New South Wales as a consequence of their scale and nature. However, in March 1995 in the Hunter and Newcastle region alone, a very important region that we have already discussed this morning, I have approved 10 developments under SEPP 34 with a potential to create 1,678 jobs at a total cost in excess of $1 billion.

These include the $700 million extension to the Kooragang coal loader, the Pasminco lead zinc smelter expansion and several coalmine extensions. A further five applications for development in this region are also expected to be lodged this year for consideration under SEPP 34. These have the potential to create a further 1,678 jobs at a total cost of about $173 million. All developments approved under SEPP 34 have conditions imposed which must be complied with to minimise any adverse impact of the development and to provide for ongoing monitoring and community participation during operation.

To ensure that these conditions are being complied with I have initiated a series of detailed audits, commencing last year with a $30,000 investigation into the first 29 projects approved under the policy. The audit found that compliance was generally occurring across all projects, although there were a small number where the developer had been dilatory in complying with certain conditions or where there had been some misunderstanding as to the intended operation of certain conditions. All SEPP 34 projects will continue to be regularly monitored. These audits will become complemented by other initiatives. The important thing about SEPP 44 is that it actually demonstrates the dual nature of the Environmental Planning and Assessment Act.

[Time expired.]

The Hon. JAN BURNSWOODS: I refer the Minister to page 705 of Volume 2 of Budget Paper No. 3. What resources have you directed to the preparation and assessment of the residential development strategies?

Mr KNOWLES: As all members of the Committee would remember, I repealed the previous Government's statewide provisions dealing with dual occupancy in the very early weeks of this Government's term of office; I think it was May 1995.

The Hon. PATRICIA FORSYTHE: 7 May.

Mr KNOWLES: 7 May. We will check the date. At the same time I requested that each council in the greater metropolitan region prepare and implement a residential development strategy. The strategy's approach gives councils the ability to develop measures that are tailor made to the local area and contribute to the achievement of the key metropolitan strategic objective of having a more compact city.

The preparation of the strategies also gives councils the opportunity to meet the equally important strategic objective of improving housing choice by increasing the diversity, quantity and quality of housing in their local government areas. I requested a draft SEPP metropolitan residential development be prepared in parallel with councils' preparation of residential development strategies. The draft SEPP streamlines the existing planning controls by replacing a number of existing policies relating to urban consolidation.

It also has provisions which allow me as Minister to alter planning controls over specific sites or areas to enable multi-unit housing. When gazetted, the SEPP is intended to apply only to local government areas where the council has not prepared and implemented a suitable residential strategy. Out of the total of 53 councils in the greater metropolitan region, 43 councils submitted strategies by the deadline set by me of 14 February 1997. I make the point at this juncture that initially we asked councils to prepare their residential strategies within a period of 12 months.

Page 9748

They have had in fact almost two years. That has been as a result of detailed submissions by individual councils, a formal request of the Local Government Association and with the understanding of the property and development industry. I suspect that the relative calmness of the market, if I can put it in those terms, over that same period made the property industry comfortable with the extension, in the hope that councils, rather than rush their strategies, would spend more time and provide a quality product.

The point I am making out of all that is there are no councils that can say they have not had enough time to prepare residential strategies. Though they all said they could do it in 12 months initially, they have now had almost two years to produce the work. To assess their strategies, I established essentially a peer group residential strategy advisory committee to review and comment on the appropriateness of each strategy and advise me on which local government areas should be made exempt from the metropolitan residential development SEPP.

The Committee consisted of people like Peter Woods from the Local Government Association; some specialist planners; Bruce McDonald from Penrith City Council; Neil Bird, a well regarded representative of the property development industry; and Bob Hamilton from Mirvac, as well as Mr Peter Lane, a practising surveyor and a UDIA representative. The strategies will be subjected to peer review rather than have me make an arbitrary decision. The committee is chaired by a senior officer of the Department of Urban Affairs and Planning. In cases where the committee had concerns regarding a council's residential strategy or wished to clarify its understanding of particular aspects of the strategy, representatives of the council were invited to meet with the committee. The committee met with representatives from 21 councils.

[Time expired.]

The Hon. JAN BURNSWOODS: I would be very interested in further information about these strategies.

Mr KNOWLES: It is important to understand that there has been a great deal of collaboration between the residential strategy advisory committee and those councils which sought further information. I understand that the meetings that took place with those 21 councils were very valuable in providing the committee with a better understanding of the issues being addressed by the councils through their strategies. The committee has now completed its consideration of the 43 strategies and I expect to be making some public announcements about either exemptions from the statewide SEPP, by way of agreeing to an individual council strategy, or enforcing the statewide SEPP in any given local government area. I think our approach has been very valuable. It is recognised that local government can indeed demonstrate responsible practice at a local level when it is given the opportunity.

There can be no excuse, however, for those councils that have either been unable, in the case of 10 councils, or unwilling to produce quality residential strategies. I can in general terms make the observation that the report by the peer assessment panel is very favourable. Many councils have done good work. Many councils will be given the exemption that they sought. There will be some that will not, and rather than, as they inevitably will, blame me, I will get in in advance. The thing they need to do is to go into the room of mirrors, as Roy and H.G. might say, and have a good hard look at themselves. How come, after two years of opportunity, they have not been able to produce quality work when their peers, other local government authorities, have been able to do so and receive the exemption?

Why is it that they are unable or unwilling to be the responsible third tier of government, that they always talk about wanting to be at every Local Government Association conference I have ever been to? So those councils which have not been able to satisfy their peers as to their ability to implement a residential strategy will have to deal with the consequences of my single State SEPP. They have had two years notice. They really have no more excuses and if people who are residents of those local government areas have anything to complain about, the complaints should be directled squarely at their local council representatives.

The Hon. JAN BURNSWOODS: My next question relates to page 707 of Budget Paper No. 3. Can you tell the Committee about the revenue received by the Department of Urban Affairs and Planning in the year 1996-97 for development proposals at the showground site?

The Hon. D. J. GAY: You would not tell me about it.

Mr KNOWLES: No, you asked how much it costs.

The Hon. JAN BURNSWOODS: We are very interested in revenue.

Page 9749

Mr KNOWLES: It is the other side of the ledger we are talking about. A total of nine development applications for the showground site were dealt with by the department in the year 1996-97. One application for utility works by the Ministerial Corporation for Industry, which essentially is administered by the Department of State Development these days, is to be determined shortly. Four of the applications were submitted by Fox Studios Australia. The remaining related to other proposals which require consent under SEPP 47, such as concerts, utility undertakings and filmings, for example Babe 2. The total revenue received by the department from development application fees amounted to $77,000.

The first Fox DA was approved on 24 April 1996. The approval was for a master plan development concept for film and television studio facilities and entertainment activities and for subdivision of the site into four lots. The approvals were granted in accordance with uses permitted under State environmental planning policy 47. The master plan consent is for staged development of the site and specifically requires the applicant to lodge further detailed DAs for works and activities. The master plan approval was subject to 29 rigorous conditions, which included requirements to prepare strategies to protect the heritage significance of the site, manage impacts and address concerns of local residents.

The first of the detailed DAs was for part of the working studio precinct and was approved on 5 December 1996, subject to conditions and compliance with management strategies. The second and third of the detailed DAs applying to the family entertainment precinct and studio tour, which was DA No. 37/96, and part of the working studio precinct, which was DA No. 36/96, were approved on 22 April 1997. DA No. 37/96 permits a range of uses surrounding the parade ring, including cinemas, restaurants, shops, amusement facilities and associated car parks and will ensure free public access to the ring. A DA for filming on part of the site a film which has the working title Babe 2, submitted by Kennedy Miller Media, that is DA No. 6/97, was approved on 28 April this year. A DA for the redevelopment of the horse stables precinct, which was DA No. 7/97, submitted by the Centennial Park and Moore Park Trust, is currently under consideration.

The Fox studio development at the site will be a major boost to the New South Wales economy by generating at least 800 jobs on site and hundreds of other jobs in the film and television industry. Capital investment at the site alone is in excess of $150 million and more than $100 million annually will be generated in film and television production activities. The development will enhance total direct and indirect production in New South Wales as measured by the gross State product by $241 million. The proposal will therefore create economic benefits not only to the locality but also for Sydney and the State of New South Wales. This development will ensure that Sydney, already the centre of the Australian film and television industry, will continue. Independent reports prepared for the Government have demonstrated the need for a major film studio complex and the significant strategic and economic benefits which would flow.

The Hon. JANELLE SAFFIN: I refer you to Budget Paper No. 3, Volume 2, page 710. What activities will the newly established South Sydney Development Corporation be undertaking in 1997-98 and what is its budget allocation for 1997-98?

Mr KNOWLES: The corporation was established in December 1996 under the Growth Centres Development Corporation Act to assist the Government to achieve quality urban renewal in Green Square and the surrounding areas, which, as most of the Committee members would know, is a rapidly changing area of South Sydney essentially between the CBD and the Sydney (Kingsford-Smith) Airport. The corporation was established for a period of three years with a budget allocation of $300,000 in 1997-98. The corporation has two key roles: first, to assist the South Sydney City Council reach quality outcomes at major development sites in the area; and second, to facilitate the implementation of an agreed vision for the area currently being prepared jointly by the Department of Urban Affairs and Planning and the South Sydney City Council.

In order to carry out these roles the corporation's activities will include liaising with public and private developers, potential employers, the community and other interest groups and undertaking studies when needed. The corporation, which is chaired by Mr Bill Kirkby-Jones who I think will be known to most of you, has employed executive support and is setting up an office in the area. The corporation is currently developing a business plan and a detailed budget and I anticipate further information in this regard in the near future. This corporation is quite clearly required to assist the Government implement its overall policy framework for revitalising that historically degraded industrial area between Redfern, or the CBD, and the airport.

There are a large number of sites in that area that lend themselves to urban renewal and redevelopment. The objective of the corporation is to
Page 9750
establish a cooperative environment, not only with South Sydney City Council - and I pay tribute to it for its assistance and efforts in the establishment of the corporation and its ongoing cooperation - but also with landowners in that area. It is very important to understand that the amount of infrastructure -

The Hon. D. J. GAY: It is a lot different to what you are proposing in the city of Sydney.

Mr KNOWLES: Well, it is horses for courses, I would put it to you that clearly there is a need to marshall some control in that area and ensure that the opportunities as they come on line are all taken. If Sydney is to be serious about the consolidated growth option then it is places such as South Sydney that will contribute to the overall solution. In that regard the efforts of Bill Kirkby-Jones and his board, the South Sydney City Council and the Department of Urban Affairs and Planning will go a long way towards assisting the stimulation of development in that area.

The South Sydney Development Corporation is not going to be a land owner or a developer as previous development corporations may have been - I am thinking particularly of, say, Bathurst-Orange or Macarthur or Albury-Wodonga. It will be there as a coordinator and facilitator using the good offices of the quality people that are on the board and who have been appointed to work with the board. In that way we can make sure that the market which will drive growth and development is properly coordinated and that we take advantage of opportunities that may exist of which the market may not be aware, simply because of the willingness of government, both at a State and local level, to join with the private sector in developing opportunities they may not be aware of.

[Short adjournment]

CHAIR: Last year Landcom commissioned Manidis Roberts to do an ESD strategy.

Mr KNOWLES: Where are you referring to? Can you give me a budget reference?

CHAIR: There is no budget reference for this. We do not actually need a budget reference for this Committee. That ESD strategy was very weak. My question is: does and will Landcom use "Environmental Guidelines for the Summer Olympic Games, September 1993" as the criteria for the development of future Landcom properties? If not, why not? What will be the environmental legacy of the Sydney summer Olympic Games if another sustainable development law along these lines is not passed?

Mr KNOWLES: Mr O'Toole from Landcom is with us. He may wish to add something to what I am going to say, but indeed Landcom did launch ecologically sustainable development guidelines to be applied to its future developments. That was as a result of work done by both Landcom officers and indeed Phillip Manidis of Manidis Roberts, and there was another person whose name I cannot remember - Geoff Robertson. It is fair to say both Phillip and Geoff are highly regarded in this area and have been for many, many years.

Indeed, Mr Chairman, you would be aware that Phillip Manidis made his name when Tom Uren was stalking the landscape as national Minister for Local Government and when he established, together with Whitlam, the regions which ultimately collapsed, with the exception of the old region 14, now known as WSROC - Western Sydney Regional Organisation of Councils. Manidis did an enormous amount of work with WSROC in terms of urban environmental issues and the role of local government in developing codes and practices to be applied to urban development, particularly in western Sydney, and the application of proper environmental management and controls over those developments.

So I think it is fair to say that Phillip Manidis' credentials are unquestionable, and that is why Landcom chose to employ him. I think the work he has done is very good. The second point I want to make is that I have long held the view that if governments have a role in land development, that is, if they are to be in there with the private sector doing work that essentially the private sector can do on its own, then the governments' incursions have to essentially add value to the process. I have made the point before - I think I may have even made it to you before - that it has been a long time since the days of Henry Wardlaw and Landcom when their charter was essentially one of social justice and equity and providing home sites at affordable cost to the bottom end of the market.

That changed, and the changes were endorsed by successive governments. There is no political point to be made here. It was a factor everybody embraced whereby organisations like Landcom were placed on a commercial footing and therefore the bottom line profit became the motivator rather than any social justice or equity or environmental considerations. I am pleased to say we have taken a shift under my administration and that is why Landcom is, if you like, more a planning tool to
Page 9751
assist with the broader government objectives of the consolidated -

[Time expired.]

CHAIR: The Minister may continue for a few moments.

Mr KNOWLES: We have moved back into a regime where I think we are getting closer to having Landcom adopting a more responsible position in terms of its role as a government owned and operated land developer, if I can use that broad description. For example, it has moved back into inner urban areas rather than being simply the provedore of house and land blocks on the urban fringe. The ESD work, soil and water management manuals, things like that, were really never in Landcom's charter, but probably would have had more of a chance of being there under Wardlaw in those early days than they ever would have over the last 10 or so years.

We are moving back that way and I think that is being recognised by the marketplace by way of Landcom demonstrating its capacity to make a profit and to do so with greater emphasis on broader government objectives. Environmental management is a tribute to Landcom. I pay particular tribute to Sean O'Toole, who was put into Landcom with a view to making some fundamental changes. His team and an advisory board - also, coincidentally, chaired by Bill Kirkby-Jones - are making some serious changes to the historic practices of the organisation. Is it enough? You would probably say no. I would say it is on the right track. I am unaware whether Phil Manidis has linked it to the Olympic Games in - which year was it?

CHAIR: I referred to "Environmental Guidelines for the Summer Olympic Games, September 1993", to be specific.

Mr KNOWLES: I cannot answer that question specifically, but will take it on notice. If it is not, I would undertake to check out where the variations are. But with regard to my recent announcement about the approval of the Olympic village, there is absolutely no doubt in my mind that we are making a substantial contribution to the notion of a green games. The use of solar energy, the use of recycled waste water and so on are all inherent in the consent I issued to the Olympic committee. I made some statements about that in the House only about two weeks ago and I would be more than happy to provide you with more detail on the specifics of the Olympic village. But in so far as Landcom is concerned, let us not get too churlish about how good its ESD principles were. Up until a few months ago it did not have any and we are moving down the path of trying to strap in some pretty basic policy changes that will see some changes to the operations of Landcom. Having said that, where we can continue to improve, we will.

CHAIR: My next question refers to RACAC, and it relates to page 713 in Budget Paper No. 3. The Environment and Heritage Technical Committee, established to oversee environment and heritage assessment projects, the comprehensive regional assessments - CRAs - of forested regions of eastern New South Wales, has identified $22 million as being required to undertake an adequate assessment. The budget allocation for environment and heritage projects is $13 million, of which the Commonwealth is contributing $11.1 million and the New South Wales Government $1.9 million. What actions are you taking to match the Commonwealth funding for CRAs and ensure that sufficient funding is provided to undertake a comprehensive and adequate assessment of environment and heritage values?

Mr KNOWLES: As you know, the budget for some of this work is controlled by my colleague the Minister for Land and Water Conservation. However, having said that, I make the following points. There is no doubt that the work being done in this State in terms of all the assessment criteria - and I referred to some of those earlier - is far and away more scientifically rigorous than is being done in any other State in this country. As you would know from the people who tell you about these things, the most glaring difference is right on our southern border, and that is, the East Gippsland work done by the Victorians which, as you well know, is going to be a real problem for the Commonwealth in signing off on an RFA following a CRA process.

Ministers Yeadon and Allan and I, together with officers from RACAC, advised Senator Hill of that fact some several months ago and he essentially shrugged his shoulders and indicated well, that is probably as good as we are going to get out of the Victorians. So let us understand that by contrast New South Wales is far and away ahead of any of the other States in preparing or going through the CRA process. It is of equal importance to recognise that whilst there may be, as you portray it, a shortfall or some sort of an inability to meet some magic $22 million fund that somebody has identified somewhere to conduct a proper heritage and environmental study, and we have allocated only
Page 9752
$13 million, according to your figures, many, many millions of dollars have been spent in the pre-CRA processes. That has not occurred anywhere else in Australia, only in New South Wales.

I refer to my earlier answer when I spoke about going through - with the environmental movement and, indeed, all stakeholders, unions and industry - a thing called the IDA and did what was supposed to be the 12-month analysis that turned into about an 18- or 19-month analysis to establish for the principal forest regions in the State the criteria that were required to set aside areas of forest for further assessment under the CRA. So the great bulk of the work, particularly on the environmental and heritage side of the equation, has been done, at least in a foundation or establishment sense, with more work to come during the course of the CRA and, of course, that is where, if your figure is correct, the $13 million comes into play. But do not forget that substantial work is required to be done on the socioeconomic side.

The grand total of the RACAC process nationally is many, many millions of dollars. As you know, we are currently in Eden and the CRA process is progressing along the timetable that the Commonwealth established, not the States. We are already into the regional forest forum process both in the Eden management area and the far north-east, where meetings have already taken place with regional forum workshops to be established. I am sorry, a third RFF meeting was held last Saturday in the lower north-east and the remaining region, the southern region, which is essentially from Sydney to Tumut and everything in the south excluding Eden. That meeting will be held on 14 June.

CHAIR: I ask a supplementary question. Can you quickly complete your answer?

Mr KNOWLES: Let me just complete it. I would assert that the New South Wales processes are far more intellectually and scientifically rigorous and honest than those of any other State in the country. We have applied more money than any other State in Australia and indeed we have invited all the stakeholders into the room as all the work has been going on since before the last election.

There will always be dispute and argument about how far you should go on the assessment of these things, but we have said that as a Government we are going to set to one side, for the purpose of the implementation of our policy, what we regard as some of the extreme elements at both ends of this spectrum and work with the overwhelming majority of conservation and environmental groups, the overwhelming range of industry groups and associations and the union representatives, to come to some agreed positions.

The work that has been done by Minister Yeadon particularly, and he takes substantial credit for this, has been fundamental in breaking, excuse the pun, the logjam of dispute over many, many years. You have been part of those disputes, Mr Chairman, and you know full well that in the last two years the level of disputation has been almost nil. The reason for that is that people are at last talking to each other rather than just taking their predetermined positions and refusing to progress any further.

I think that is a good thing. If there is argument about the scientific rigour of a particular species, for instance the assessment of the sooty owl, or whatever, they are matters for debate. There is a place for that debate, and that is within the forums and committees and technical working groups of RACAC. The debate occurs and it is vigorous and heated but at the end of the day they sort it out. That is what is happening in RACAC and it is to the credit of Kim Yeadon but also to the credit of the RACAC officials, Rex Bowen in particular. He has managed this debate for more than 2½ years now without, as I said, major dispute and with an enormous amount of goodwill by all parties who have come to the table and progressed the debate much, much further than we could have ever imagined.

CHAIR: I move to the question of Warragamba Dam and actually, more to the point, Welcome Reef Dam. Is Welcome Reef Dam on the agenda or is it not?

Mr KNOWLES: No, it is not.

CHAIR: Definitely not? Not even in 2030?

Mr KNOWLES: No. I am answering this question in the context of government policy as opposed to any operational aspect of Sydney Water. As the holder of Sydney Water's operating licence I note clearly that its demand management strategies are such that water consumption levels are, despite a little hiccup in recent months, at record lows. That on its own has pushed the dam out of the agenda - if there is ever to be a dam - until the second half of next century. On top of that, our recently announced waterways package, which talks
Page 9753
about reuse and recycling in the context of the operating licence, puts it out even further. It would be my expectation that there will never be a Welcome Reef Dam. It is certainly not the Government's policy and, as you know, it is explicit in our policy statement.

CHAIR: In relation to the Warragamba catchment, there has been some argument lately about whether or not there should be use. What is the Department of Planning doing about ensuring that no developments are approved which would pollute the catchment, particularly the proposed Collex landfill, which I think is now off the agenda.

Mr KNOWLES: If it is off the agenda?

CHAIR: I am not sure if it is, but it is certainly not active at the moment, that is, the Collex landfill proposal at Wingecarribee and also I believe there are one or two intensive livestock industries in the headwaters of the dam. Can you tell me what the department is doing to either ameliorate the pollution coming from those or to prevent further developments which would pollute Sydney's water supply?

Mr KNOWLES: It is essentially a matter for Sydney Water and the administration of its catchments.

CHAIR: You will take the question on notice?

Mr KNOWLES: I will take that on notice unless Ms Kibble wants to add anything further, but I would prefer to take that on notice. I make the observation that in accordance with government policy there is some joint work being done by National Parks and Wildlife and Sydney Water about the catchment lands. That is currently part of the public submission and consultation process.

CHAIR: I will go now to the question of protection of Sydney Harbour foreshores. What are you doing about increasing protection of the foreshores, and in particular what are you doing about the Robert Magid development in Manly, at Manly Wharf? Will you be listening to the people of Manly or the developer in that case?

Mr KNOWLES: If I may go from the general to the specific, the Government has made a number of changes in a number of public positions about public foreshore land generally. The most recent position, for example, on the Pyrmont headland was to actually increase the amount of the headland by about 173 per cent of the figures, if they are in my mind accurately - and I think they are. Ms Kibble is nodding. I invite anybody to pop down to Pyrmont to see just how wonderful that headland is. That is an enormous new benefit for Sydney. We have made it clear that, despite Bronwyn Bishop's desire to cash in on some of the defence department land that is around the harbour - de facto protecting the harbour foreshores from development over many, many years, and now attempting to cash in to deal with her budgetary problems - we will not play ball with her.

The Premier has indicated that the State's land use controls come into play to some extent. We have indicated that we will not be participating in Bronwyn's plans to concrete Middle Head and so on. In fact, we have tried to initiate a process whereby we can look at defence department land - I specifically focus on defence department land because of its importance, because of the scale and location of some of these key assets.

CHAIR: If that land were to come up for sale, would you acquire it through the Coastal Land Acquisition Fund?

Mr KNOWLES: I would not think the Coastal Land Acquisition Fund would be big enough. It is not my responsibility to bail out another level of government. After all, it does have some responsibilities. It was Malcolm Fraser and Neville Wran who entered into a joint agreement to establish high levels of open space and conservation type zonings over those defence department lands many years ago. I will not go any further on that, but there is more to be said about it. I can say the actions of Bronwyn Bishop have left a number of people in her own political party less than amused because they regard those historic agreements as pretty solid and well understood, and I think Bronwyn did as well.

As you know, Pam Allan, the Minister for the Environment, published mark 1 or draft 1 of the pamphlet for Middle Head which talked about dedicating land for open space. Mark II - I am paraphrasing here - involved some land for open space, some land to be sold for residential development. That change between the two documents came as a result of a desire for budget funding through asset sales. That is all well and good and she can propose that, but the Premier has already indicated we will not be playing ball. Indeed, we have withdrawn from the processes that were established for Middle Head and instead, suggested to the Commonwealth -

[Time expired.]

Page 9754

CHAIR: I would also be very interested if you were to answer the question about Robert Magid's development in Manly and also East Circular Quay.

Mr KNOWLES: Just to conclude quickly on the defence land, from a policy perspective it is important that there be dialogue between the two levels of government, and we have initiated correspondence to the Commonwealth that seeks its agreement to look at the entire portfolio of the Department of Defence around the harbour - and, as I said, there is a lot of it - to work out the future of those lands. However, our starting point is that they are a precious resource for the people of Sydney and should be conserved.

Ms Kibble correctly points out rezonings still are a matter for the State, so one would hope the Commonwealth would see the sense in talking to us. With regard to the Manly Wharf proposal, I have consistently said to Dr Macdonald, when he has asked me whether I am going to call it in or take control of it, that I am not. It is a matter for the council - and that is my position.

The Hon. D. J. GAY: A bit different from Newcastle.

Mr KNOWLES: Let me explain to you why it is a bit different from Newcastle. Can I also make the point that in a recent inspection of the area with both Dr Macdonald and the Mayor, Councillor Sackar, I put to them that there was a desperate need for all the various government agencies to do something about the Manly Wharf environment. It is dangerous. I stood there and watched a young mother try to push her little baby in a stroller from the wharf across to the other side, to The Corso, and I can tell you that it was pretty difficult and very, very dangerous. You have to dodge buses and other traffic. There is an enormous need for some integration and coordination.

I am happy to sponsor any such attempts. I am happy to be the party that seeks to drag all the various public landowners and private landowners into the one room together with Manly Council and see if we can improve what is there, because what is there is unsatisfactory. The impression I got from the Manly Council representatives was that they liked it just the way it was, or their plans for change were such that perhaps they would like change, but they will not recognise that to achieve the change they may have to give a little bit themselves and therefore establish a cooperative environment.

I have no plans or desire to call in the Magid development. I think he would like me to, but I do not think that will fix the entire problem. All it will do is fix a bit of the problem. What has to happen is for the parties over there to work a little bit more cooperatively. I am not a landowner there and in many senses I have to remain passive whilst the landowners sort themselves out. But if ever there was a problem needing to be fixed, that is it. It is about time Manly Council came out of the bunker a little bit and recognised the need to do something about it.

CHAIR: Going on to another issue, SEPP 44, covering koala habitat, can you tell me whether there has been any investigation by the department as to the effectiveness of SEPP 44 and whether it has actually saved any koala habitat at all?

Ms KIBBLE: The department has dealt with a number of applications under SEPP 44. We have not looked at the whole range of those to evaluate them, but I am absolutely certain that from the conditions that I apply, and the detailed evaluation of the koala plans, it has saved the habitat. I have no doubt that it has. I am sure we can provide some further advice on that if you wish.

CHAIR: Yes. The next question on SEPP 34 relates to the Minister's consent for intensive livestock industries which provide 20 jobs or more. As part of that consent is there a condition that there be shelter for the animals?

Mr KNOWLES: I would assume that every application is proceeded with on its merits. But Ms Kibble may wish to add something.

CHAIR: It does not include shelter?

Ms KIBBLE: No, I cannot answer that. We can take it on notice.

CHAIR: When will SEPP 15 be gazetted?

Mr KNOWLES: It will not be gazetted until I have concluded the consultation.

CHAIR: What is roughly the time frame?

Mr KNOWLES: I am not going to give you any rough answer. I will do it when consultations are concluded.

CHAIR: SEPP 14 covers coastal wetlands but there is no environmental planning policy for inland wetlands or inland rivers. Is there any proposal to have a policy for those?

Mr KNOWLES: Ms Kibble reminds me that Kim Yeadon's department is indeed doing quite a considerable amount of work on non-coastal wetlands.

Page 9755

CHAIR: Including working with you on an SEPP?

Mr KNOWLES: The outcomes in terms of a regulatory regime will be dependent on his work. An SEPP is an option but it is something I would not contemplate or explore until I have seen the work from Mr Yeadon's department.

[Time expired.]

The Hon. D. J. GAY: In relation to Budget Paper No 4, page 122, under City West Development Corporation there is an entry about major works in progress. Why has the completion date of the Eveleigh South project, which was started in 1992, been delayed? What does this project now include and what work was commenced and/or completed in 1996-97?

Mr KNOWLES: In accordance with my earlier comments about corporations I will take that on notice and provide you with detail.

The Hon. PATRICIA FORSYTHE: I ask a question about the accelerated sale of Landcom’s landbank assets, which is identified in Budget Paper No. 2, at page 3-22. It refers to the fact that revenue from the accelerated sale of the landbank assets is being included under advance repayments, which are then identified on page 1-13, the broad budget information. My particular question in relation to all of that is in regard to Landcom's contribution to the budget result. Can you detail how much revenue from the accelerated sale of the landbank assets is included under advances repaid to the budget sector of $297 million this year, which is found on page 1-13?

If Landcom asset sales are not achieved will this impact on the overall budget result? Will it be returned to a deficit? Can you indicate if you are confident of achieving the target set for 1997-98 and was the target set by Treasury? Where are these Landcom assets located? You may wish to take that part of the question on notice. Did Landcom achieve its asset sales targets for the year 1996-97? How much of the $512 million listed under the item for advances repaid was from Landcom asset sales and where were these located?

Mr KNOWLES: Obviously some of those questions I will certainly take on notice. In terms of Landcom's payments to Treasury, I think it is worth noting, as I said last year, that I do not write these budget papers and sometimes their interpretation is hard for all of us. Having said that, I will give the budget paper references and their relationship to both the 1996-97 and 1997-98 contributions to Landcom payments to Treasury. Dividends which are, of course, based on the previous year's operating result are found in Budget Paper No. 2, page 3-20. In 1996-97 the amount was $1.126 million. In 1997-98 it would be $21.62 million. The tax equivalents are also in Budget Paper No. 2, page 3-20, amounts of $11.946 million in 1996-97 and $18.106 million in 1997-98.

Landcom also pays land tax and stamp duty and makes contributions to Treasury in that way as well. Landcom will be paying those amounts as of this financial year, 1/7/1997, and will be paying land tax of $8.692 million and stamp duty of $0.605 million. The advance repayments referred to are again listed in Budget Paper No. 2 on page 1-13. In 1996-97 the amount was $96.354 million; for 1997-98 it was $35.977 million. The total amounts paid to Treasury in 1996-97 are $109.426 million. The total amount anticipated to be paid to Treasury for 1997-98 is $85 million. Of course, "anticipated" is the operative word because rates of sale will determine stamp duty and land tax and the operating result.

I make the observation with regard to the other parts of your question that Landcom performs in a market and if land sales are slow, land sales are slow and there is not very much we can do about that. Equally, if land sales are rapid, then we sell more land. I think it is fair to say that Landcom's performance when gauged against other large-scale land developers is creditable. Its rates of sale and costs per unit of sale are at market level as are the administration charges. As a consequence, the results are market driven. Having said that, I am pretty confident that the targets established for Landcom for 1997-98 are realistic and that they are achievable. The inference in the part of the question about whether Treasury sets these without references is wrong. There is a process which I think we are all aware of. I wanted to talk about statements of financial performance.

[Time expired.]

The Hon. D. J. GAY: In relation to Budget Paper No. 4, pages 128 and 129, can you explain why, despite claims made in the State capital program about addressing the stormwater problem, 35 sewerage and stormwater overflow outlets are still unlicensed by the EPA and therefore in breach of the Clean Waters Act of 1970? When will Sydney Water submit environmental impact statements for each of these outlets?

Mr KNOWLES: I would have thought that would have been a question you would never ask, frankly. I do not know who researched it for you,
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but it is this Government that actually started the EIS program on the unlicensed outflows and they are coming off line and going through the proper environmental assessment process. The other side to that coin is that the previous Government knew about these problems and did nothing about them for seven years. In fact, it did less than nothing. It had a thing called the special environment levy and the Clean Waterways program and wound them back.

Indeed, your Government took $200 million out of the organisation by way of a special dividend. So, as far as the general tenor of the question is concerned, I think it is pretty silly, after having done nothing for seven years other than wind the clock back further and reduce the capacity of Sydney Water to deal with overflows, you are now suggesting to me that we should be fixing up the problems instantly. There is a process dealing with EISs for overflows. I will take the rest of the question on notice in the context of the previous position, in the absence of Mr Broad.

The Hon. D. J. GAY: I ask a supplementary question. Why do we find in the local government capital program the Blue Mountains stormwater scheme? Why has that money gone into the local government budget and out of your budget?

Mr KNOWLES: I will take the question on notice.

The Hon. PATRICIA FORSYTHE: I ask a question in relation to housing, in particular the Office of Community Housing, which is dealt with at page 716 of Budget Paper No. 3. With the closure of over 400 beds in licensed boarding houses during the past year and the likelihood that more will be closed in the coming year, is any funding being made available through capped funds or elsewhere in the budget to provide both short-term and long-term accommodation for people displaced from these boarding houses? What discussions has your department had with the Ageing and Disability Department and the health department about strategies for dealing with people being displaced as a result of licensed boarding houses either voluntarily closing or closing due to failure to meet regulations?

Mr KNOWLES: Mr Larkin has provided me with some information which I will advise Hansard about, and if there is further information that does not satisfy the question, I will provide it by way of an answer on notice. It might have been indicated in the question, but the primary responsibility for the accommodation and support of people with disabilities lies with my colleague the Hon. Ron Dyer, Minister for Community Services and Minister for Aged and Disability Services.

However, in recognition of the difficulties and complexities of the task, I have been working closely with the Minister for Aged and Disability Services to find appropriate and affordable housing for people with disabilities. Currently some 146 boarding houses in New South Wales are licensed by the Ageing and Disability Department. These boarding houses accommodate over 2,500 residents with mental or physical disabilities. Standards of care in these facilities vary enormously. The Government has therefore developed minimum standards of care and amenities for licensed boarding houses.

From January 1997 boarding houses applying for new licences will be assessed against these standards. Boarding houses unable to develop satisfactorily towards these standards are being closed. The Government is actively managing the reform of the licensed boarding house sector through the Executive Strategic Planning Committee for the implementation of reform of private licensed accommodation for people with disabilities to ensure that proper standards of care and amenity are provided. With this committee's support the Department of Housing and the Ageing and Disability Department have recently endorsed a protocol which ensures that the relevant agencies all work together in a coordinated manner at the time of a closure to achieve appropriate and timely new accommodation for residents displaced by closures. The Department of Housing has successfully rehoused every single displaced boarding house resident for which it has taken responsibility in the last year.

To deal with the more strategic long-term issues associated with the provision of accommodation linked to support services for people with disabilities, the Minister for Aged and Disability Services and I have set up the accommodation task force in relation to people with disabilities and older people. In July this year the task force will be reporting to me and to Minister Dyer on, among other things, the feasibility of alternative accommodation and support options for people with disabilities currently living in inappropriate private boarding houses. This is quite clearly a difficult but high-priority issue and, of course, the work that I am doing with Ron Dyer should go towards dealing with some of the solutions for these people who have very few or diminished life choices as a result of their disabilities.

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Ms KIBBLE: Andrew Cappie-Wood and I both attended last week a meeting of the CEOs of Ageing and Disability Services, Community Services, Health and Consumer Affairs. We have in principle signed off on the directions of the advice that is going to Ministers, so it is getting very active consideration at a very senior level.

The Hon. D. J. GAY: My next question is in relation to Budget Paper No. 3, page 727, subprogram 75.1.1, Heritage Policy and Assistance, the line item Operating expenses. Why has the allocation for employee-related expenses increased from $1.093 million in 1996-97 to $1.75 million in 1997-98? What salary has the Chair of the Heritage Council been paid in 1996-97 and what salary will be paid to that person in 1997-98? What allowances or entitlements have been paid to and what reimbursement has been received by the Chair of the Heritage Council in 1996-97? Why has the allocation for Other operating expenses increased from $843,000 in 1996-97 to $1.653 million in 1997-98?

Mr KNOWLES: Ros Strong is the Chief Executive of the Heritage Office. I understand Hazel Hawke's chairman's allowance is $30,000, which is in accordance with the standard procedures that are set by whoever sets allowances for committee board membership. I think it is done by the Cabinet Office. I will take on notice the expenses item. In the context of Hazel's appointment, I think she has been a real boon for the image of heritage and conservation in this State. I am on record as saying that in the past I always regarded the Heritage Office and the administration of heritage as being good from a regulatory perspective but there was not very much, if you like, communication or marketing of the important promotions behind heritage and conservation value. There is no criticism there of previous incumbents of Mrs Hawke's position or, indeed, previous Heritage Council members or that office. It just was not their bag; it was not a thing that they did.

If we are to value heritage properly we have to take a long-term view and focus particularly on the younger generations. We have to make them understand that there are things worth conserving and they are not just buildings and old places; they are cultural environments. They should be encouraged to recognise the important things like indigenous heritage and moveable heritage. They are things that we have set about to achieve - in a bipartisan fashion, I might add, through the Parliament. Our first-phase changes of the heritage legislation which were put through last year were received in a bipartisan fashion by the Parliament and well received by the entire community.

I have letters of endorsement, which I could probably show you, from the National Trust. I do not want to waste time but if I get time I will read one into Hansard. The changes in budget are for a couple of reasons: first, all previous budget allocations were for part-year. The Heritage Office is in full-year operation only in this coming year and hence the increase. Second, there is also some additional funding to deal with the long-overdue State heritage inventory. As you know, Justice Hope, under Robert Webster's regime, produced a fairly detailed report of the future of heritage in this State.

The fundamental recommendation was that we needed to establish a State heritage inventory. Nothing was done about that and I suspect that was because of resourcing issues. We have resourced it and once the inventory is established - and that is happening at a pace; in fact I have already launched part of it during Heritage Week - we will be able, in theory, to remove a lot of the dispute over heritage properties when they come up for consideration as their uses are proposed to change. The National Trust, unsolicited, in correspondence to me signed by Ms Elsa Atkin, the Executive Director of the trust, of 1 May this year made the following point:

I want to take the opportunity to reiterate the Trust's endorsement of the direction you are taking with regard to the work of the Heritage Office and Heritage Council. We fully support the need to focus resources on educating the community and broadening its understanding of heritage conservation. We also appreciate your focus on the Aboriginal and ethnic communities' contribution to our heritage. I believe the whole heritage movement can only benefit enormously from your government's direction.

[Time expired.]

The Hon. D. J. GAY: You will take on notice the questions I asked.

Mr KNOWLES: Of course.

The Hon. PATRICIA FORSYTHE: In relation to community housing, I refer to the number of crisis accommodation places available for the coming year. Where is it intended that the additional 75 places will be provided, both locational and the bodies who may well be funded to provide them? Who will benefit by the places? Does the Office of Community Housing audit the level of need and unmet need? What is the department's assessment of the level of unmet need in terms of crisis accommodation?

Mr KNOWLES: We might have to take that on notice. You can ask another question and we can add that to the answer we are giving you.

Page 9758

The Hon. PATRICIA FORSYTHE: I refer to the broad area of Office of Housing Policy and Housing Assistance, and particularly your program objectives. I refer also to the estimates committee held in November 1995, during which you advised the Committee in answer to a question from me that the Government was reviewing options for new home purchase assistance programs, "Within the context of its overall housing assistance policy."

Mr KNOWLES: Whereabouts in the estimates committee in 1995?

The Hon. PATRICIA FORSYTHE: I will come back and give you the precise details of that shortly.

Mr KNOWLES: I do not want to eat into your time but I am being quoted, I would like to see what I have said.

The Hon. D. J. GAY: I refer to Budget Paper No. 4, page 127, Sydney Cove Authority, Major Works. What work has been completed on the Dawes Point Park revitalisation and what work is left to be completed?

Mr KNOWLES: I will take that question on notice.

The Hon. D. J. GAY: In relation to Budget Paper No. 4, page 127, Sydney Cove Authority, Major Works and New Works, is the 132 Cumberland Street housing development the same project as the Cumberland Street housing development that was listed in last year's Budget Papers? If so, why is it again listed as a new work?

Mr KNOWLES: I will take that question on notice.

The Hon. D. J. GAY: If not, how does it differ from the previous project and what is the status of the first housing development? What will it specifically entail?

Mr KNOWLES: In accordance with the guidelines, I will take that on notice as well.

The Hon. D. J. GAY: In Budget Paper No. 4, page 127, again relating to Sydney Cove Authority Major Works, why does the refurbishment and upgrade of the police station building listed as a new work in last year's budget, expected to finish in 1998 and allocated half of the $700,000 estimated to complete the project not appear in this year's budget?

Mr KNOWLES: I will take that question on notice.

The Hon. D. J. GAY: What happened to the $350,000 that was allocated to the project last year?

Mr KNOWLES: I will take that question on notice.

The Hon. D. J. GAY: Budget Paper No. 3, page 723, deals with Agency 74, the Ministry of Urban Infrastructure Management. How much will this plan cost to prepare and implement? What status will the five-year plan to be prepared by the ministry have in relation to other government departments' strategic planning procedures? When will the plan be completed and when will it be made public? What are the terms of reference for this plan? Will consultants be used for this plan and, if so, are they budgeted for in the department's operating expenses?

Mr KNOWLES: My starting point is to recognise the commentary about the proposed infrastructure plan received from the Auditor-General in his report last week on the Eastern Distributor where he made the point that successive governments have failed in attempts to establish, if you like, a whole-of-government approach to the management of urban infrastructure. The Ministry for Urban Infrastructure, which was set up in 1996 after the Eastern Distributor was proceeded with, is this Government's method of developing a more integrated approach. Maria Zannetides is the director of the ministry. The infrastructure plan she might detail in a moment is the first real attempt to have those agencies that have a stake in providing infrastructure work more cooperatively together, if I can put it in those terms.

However, the history of cooperation between State government agencies has been pretty poor. Each one of them seems to have its own objectives and its own piece of turf which it guards tenaciously. In that sense, if I just ask them to attend the party, chances are we would not get very much happening other than repeats of previous failures. The Government has agreed, however, to recast an old Cabinet committee to establish the urban infrastructure management committee. At that table you will find all those Ministers who have a stake in the provision of physical or human services infrastructure.

It is fair to say that work is beginning. It is not far advanced but the intention is that in time - and I do not see this happening rapidly, because of the enormity of the task - an infrastructure plan will be
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developed that will be less about lines on maps and more about financial analysis, financial modelling and cost-benefit approaches to existing budget assessment tasks. I do not think I would be wrong in saying that most people would find the current budgetary processes, which are very much the same as previous governments' attempts at casting budgets each year, to be less than adequate. This is a personal view I am expressing here but it is one that I hold strongly, and I intend no criticism of individual Treasurers or individual governments.

It is a fact of life that the current structure of agency bids are rather self-centred and self-serving and there is, in my view, less than adequate analysis of the linkages between agencies. There is inadequate focus on outcomes and, as a consequence, the ministry has been established to begin the rather herculean task of getting those agencies to work a little more cooperatively and in time ensure that the budgets that are brought down by State governments are able to be better understood and are cast in a way that will deliver results on whole-of-government needs rather than individual agency needs, that is, higher level coordination within the budget process. It would be my desire, and I think it is inevitable, to be able to have a situation develop over time, and I am not saying this will happen in the next couple of years, but over time as we move towards -

[Time expired.]

The Hon. PATRICIA FORSYTHE: I ask a question about the Office of Housing Policy and Housing Assistance. Are you aware of the Victorian moveable units program? As the program provides housing to people in receipt of the aged pension or disability support pension and with a waiting list in Victoria for these of between four and six months due to the Victorian stock of 2,200 moveable units, has the Office of Housing Policy examined this initiative in the context of high waiting lists in New South Wales and difficulty in providing housing suitable for people with a disability? Does this initiative have application to New South Wales? If not, why not?

Mr CAPPIE-WOOD: We are aware of the program. In fact, in collaboration with the Victorians we have delivered the first such unit.

The Hon. PATRICIA FORSYTHE: In Albury?

Mr CAPPIE-WOOD: In Albury, and we are now assessing the feasibilities of extending that program to the rest of the State. We have worked out the cost-effectiveness of doing this, and it does look like a program well worthwhile pursuing.

Mr KNOWLES: Can I add further to that in a general sense and make the obvious point that our ability to enter into these sorts of programs or pursue any innovative type of approach to dealing with the problems that you have quite correctly identified, and we all acknowledge, continues to be further constrained by the national budget cutbacks and the difficulties that all States face.

[Time expired.]

The Hon. JANELLE SAFFIN: I refer to Budget Paper No. 4, State Capital Program, page 12. Can you advise the Committee on the strategic directions for community housing for 1997-98 and further, what resources will be applied to support these directions?

Mr KNOWLES: The Government supports the continued expansion of the community housing sector to give tenants a choice of social housing providers and encourage the better delivery of services. The Government established the Office of Community Housing on 1 July last year. The new office brings together the Government's community housing administrative functions and rolls them into a single organisation. This change has been achieved within existing budgets. Under the new arrangements the Department of Housing, as an alternative provider, will no longer be administering the community sector.

The Office of Community Housing will undertake sector administration, with the sector resourcing and support roles to be undertaken by community-based organisations on a contractual basis. During 1996 I published the New South Wales community housing strategy, which sought to create a framework for the expansion of community housing as part of the diversified and viable system. I place on record my appreciation to all those community housing organisations, particularly peak bodies which commended the Government on that initiative.

It is something that we have been pursuing for many, many years and it is fair to say that the community housing sector was all but rubbed out under the administration of Joe Schipp, who simply took a very narrow view of the role of a State housing provider, and was revived somewhat by the former Minister, Robert Webster. But we have certainly run the race now and established an independent body external to the Department of Housing to give the community housing sector the
Page 9760
autonomy it has long held as an important component of its own future and viability.

The budget allocations for community housing in 1997-98 will underpin all of this. The Office of Community Housing will deliver a large component of the total capital expenditure, in line with the strategy to diversify housing providers. Capital expenditure for community housing will be $125.4 million and will result in the commencement of 806 dwellings, including 400 through housing associations and cooperatives. The main components of the community housing program include the housing associations and cooperatives program, which provides long-term accommodation for low to moderate income earners as part of the growth strategy for the community housing sector specific housing associations.

To acquire additional housing stock other community-based organisations, including cooperatives as well as pilot projects under the older persons housing strategy, will receive funding under the program. In 1997-98 it is intended that 400 new dwellings will result from the program allocation of $67 million. The crisis accommodation program targets people who are homeless and in crisis. A budget for new acquisitions of $12.5 million has been established for the forthcoming financial year.

In 1996-97 I approved new projects providing 35 new refuges, hostels and medium-term supported accommodation. The housing partnerships program involves partnerships between the Government, community-based organisations and local government organisations to provide housing assistance, particularly for special needs groups. I have allocated $11.4 million for projects in 1997-98. It is worth noting that we were also pursuing, as I said, the housing partnerships program and that is, of course, partnerships between the office and community-based organisations and/or local government organisations.

These have been very successful around the State. They are designed to provide housing assistance, particularly for special needs groups. In 1997-98 it is intended that 400 new dwellings will result from the program funding of $67 million. The crisis accommodation program targets people who are homeless and in crisis. A budget for new acquisitions of $12.5 million has been established for the forthcoming financial year. In 1996-97 I approved new projects providing 35 new refuges, hostels and medium-term supported accommodation. The housing partnerships program involves partnerships between the Government, community-based organisations and local government organisations, to provide housing assistance particularly for special needs groups. I have allocated $11.4 million for projects in 1997-98.

The Hon. JAN BURNSWOODS: Will the Minister continue with his initiatives?

Mr KNOWLES: As I said, the housing partnerships are designed to provide housing assistance particularly for special needs groups and I have allocated $11.4 million for projects of that nature in the next financial year. Housing partnership funds will be available for the construction and purchase of suitable stock and the plan is to start up to about 70 units of accommodation - 70 projects - in the next financial year.

We have also allocated just under $30 million - in fact I have allocated $29.317 million - to the youth housing initiatives program to provide housing for young people. The commencement of this program in 1997-98 is subject to negotiations with the Commonwealth guaranteeing funding and subsidy payments over the line. Under this program 246 dwellings will be purchased and head leased to community housing organisations, and subsidies of $3.28 million will be applied to support the loan repayments. The continued expansion of the community sector will depend on resourcing arrangements to support community housing providers and tenants and deliver training programs.

The point of all that is that at a time when we are trying to diversify the range of providers and do something particularly for young kids in need of supported accommodation, the ability to do so under this important youth housing initiatives program has been negated by the Commonwealth, which is refusing to enter into commitments beyond the existing interim agreement. That is an unusual statement, to put it mildly. My hope is that at the Ministers' conference this Friday the Commonwealth might understand the gravity of what it is doing and agree to essentially come out with its hands up and recognise that despite whatever it is doing with budget savings measures and so on, these specific programs are particularly important.

It is important for everyone to recognise that those sorts of initiatives are pretty fundamental to the wellbeing of homeless young kids and unless there is a program of funding that allows us to enter into these loan arrangements, we simply are unable to implement them. We cannot enter into the contractual obligations that are implied in the program and, as a consequence, it will be impossible to implement that program. This is a program we want to pursue, one that we would pursue, but one
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that we simply cannot pursue unless we get agreement from the Commonwealth under the terms of the interim arrangements.

The Hon. JAN BURNSWOODS: I am referring to Budget Paper No. 2, page 4-183. The neighbourhood improvement program is a major feature of the department's asset management program. In addition to the physical changes in the estates, what other policies are in place to ensure harmony in housing estates?

Mr KNOWLES: The neighbourhood improvement program is obviously an area for almost another question entirely, and I hope I get one on that. But in addition to that, the question is really about other policies and what effect they might be having to ensure a greater degree of harmony in public housing estates where, as most of you would be aware, there is an inordinately high level of stress amongst residents, simply because of the agglomeration factors and some of the socioeconomic impacts that exist as a result of their location.

As a consequence, the department has taken on the task of dealing with antisocial behaviour in public housing through its good neighbour policy which was launched in November last year. The objective of the policy is to ensure that we can provide residents with safe homes and harmonious communities. The policy was developed in response to our tenants' concerns, or the concerns of an overwhelming majority of our tenants, that they wanted to live in their homes free of vilification, harassment and violence and, in some cases, illegal activities.

We have put in place tougher procedures for people who breach their tenancy agreements through such behaviour, which could include persistent and intentional noise, intimidation, violence and using their properties for illegal purposes such as trafficking in illegal drugs. Under the policy, officers of the department are required to proactively manage these kinds of complaints. There are new and more stringent time frames to investigate these complaints. That means they will be dealt with more quickly and there will be formal documentation, whereas in the past issues may have been informally notified but never properly documented.

Tenants will receive a number of warnings and be given an opportunity to rectify a problem, but if the tenant persists in breaching the tenancy agreement, the department will commence eviction proceedings in the Residential Tenancies Tribunal. I guess, in simple terms, the first time a complaint is lodged it is recorded and a warning is issued. The second time we will deal with the issue on a more direct basis, including referral to the RTT, and if the behaviour persists, we will proceed through to eviction.

I want to stress, having said that, that this is a policy that is more about giving the overwhelming majority of residents quiet enjoyment in their homes as opposed to any attempt to evict people. Our hope is that the first two warnings will be sufficient for people to modify their behaviour. However, we need to make it clear to those Department of Housing tenants who are unwilling or unable to change their behaviour, which has been documented and has been properly recorded and all due process has been pursued, that if they are unwilling to do that, then we can no longer stand by and see them destroy the lives of people in the surrounding area. That is overwhelmingly the desire of the many, many public housing tenant groups that I visit and talk to; they simply want to get on with their lives and raise their families in a peaceful and harmonious environment.

The policy is focused on early intervention and stopping problems from escalating before they start. To achieve that we will be working much harder with a range of government and community support services to case manage difficult tenants and tenancies and we will be more carefully managing allocations to housing to ensure there is a greater social mix in some key projects and estates.

[Time expired.]

The Hon. JANELLE SAFFIN: I refer to Budget Paper No. 2, page 4-183. Included in the main features of the 1997-98 program is a reference to the Department of Housing's maintenance program. Could you advise what is the department's commitment to improve maintenance in public housing in 1997-98?

Mr KNOWLES: As you and others know, improving maintenance of public housing has been a major priority of my administration. We are implementing two main strategies to improve the level of service that has historically been delivered to public housing tenants in this area. Obviously the first and probably the more important of the two strategies, without diminishing the second, is increased funding, putting more money into the pot to look after the asset. It is worth looking at the record of maintenance funding, and I do so by recognising that industry standards suggest that about 1½ per cent of capital replacement value is the target amount that should be put into the pot each year, and that is about $115 million, give or take.

Page 9762

Under the previous Government's regime, maintenance had slipped down to about $63 million, about half of what it should be. That is an appalling thing to do to people who rely on governments for their homes. It is also a pretty poor business practice when the business you are in is providing shelter and you are allowing the homes that let you run your business to run down to that extent. It is not only the annual problem of not maintaining the properties; it is the cumulative impact: each year you do not spend the money it builds up the problem and continues to build up the problem. For seven years the previous Government built up the problem.

Over the last two years I have increased the budget, firstly to $93 million and then last year to $115 million, to the benchmark. In 1997-98 I will be spending $120 million on maintenance. That is money well spent in anybody's book. Not only does it deal with the social objectives of providing better quality housing and an opportunity for better standards of living, but it also deals with the asset and allows us to run the business a little more effectively. On top of that we have our capital upgrading programs and our neighbourhood improvement program. The neighbourhood improvement program this year is about $35 million and the capital upgrade is $90 million.

So you can see there is a fundamental shift in focus to getting what we already own in better shape. You need to understand that a lot of the properties around the State were built post-war, into the sixties and seventies, and therefore most of our housing stock is more than 25 years old. During the critical period of the life of any one of those homes less than half of what should have been spent was spent on them and so they are, as a general position, in a pretty poor state. And so we are spending the money. That is the first strategy.

The second strategy is improving the delivery of maintenance. We are fundamentally reviewing the way we provide maintenance. For example, at the moment, for implementation right around the State, we are trialling in the south-west Sydney region a centralised call centre so tenants can phone one number and access an efficient and reliable service. That means that tenants would get a reference number so their request for maintenance can be tracked and there will be independent follow-up to make sure the work has been done.

The Hon. JANELLE SAFFIN: I ask a supplementary question. I want to know more about the reference number.

Mr KNOWLES: This has been working in South Australia quite successfully for some time and it is something that other States are now investigating, but it will allow us to have a greater degree of control over maintenance expenditure than has ever been the case in the State. The other thing we are dealing with is the competency and ability of the external contractors who do the work for us and their ability to do the work well and on time - efficient quality work. I am not going to spend $120 million on bodgie jobs or half-done jobs. That requires a greater degree of audit and management.

As a first I have commissioned a review of all existing contractors who currently work for the department. That review of their performance will include detailed inspections of their work. The message to them is that if they have not been performing they will not get another contract. It is as simple as that. We are not in the business of employing contractors to see them either waste money or do half-baked jobs simply on the assumption that it is the Department of Housing and it does not matter. It does matter; it does matter a lot. It matters not only from the financial aspects; it matters a hell of a lot more for the people who live in these homes and who feel frustrated because when they finally get the tradesmen around to their houses they get a half-baked job and then they get back on to the blower and they cannot find anyone.

This new method will seek to improve that dramatically, because the people will phone one number to a central location and that will enable their maintenance call to be tracked effectively and efficiently and will allow proper performance monitoring and auditing procedures to be put in place. So, $120 million has been allocated for maintenance, at last getting funding back to the benchmark standard after the near criminal approach of, particularly, Joe Schipp in gutting maintenance funds. In addition to that a substantial amount of money will be provided to continue our neighbourhood improvement program - $35 million. A $90 million capital upgrade program will make sure that we deal with our existing stock in a way that will provide a standard of service and quality to our tenants.

The Hon. D. J. GAY: You forgot about Frank Walker.

Mr KNOWLES: I have said in the past that I think public housing administration has been paid a lot of lip-service by many politicians, and I will make no further comment about that. But we are doing this, I might remind the Committee, in the
Page 9763
context of another Government that is ripping the guts out of public housing nationally. That was based on some assumption that there would be an increase in subsidy to private renters. That did not happen. It cut that as well.

Let us be clear about this: these are tough times for housing administrations right across Australia and we are making sure that in that context we are delivering on our existing stock, on our existing assets, and looking after our tenants. That has been a problem for a lot of governments over a lot of years. But the real problem was Joe Schipp and what he did. The cumulative effects are pretty horrible when you work them through.

The Hon. JAN BURNSWOODS: I refer to Budget Paper No. 2, page 4-183. The neighbourhood improvement program is a major feature of the department's assets strategy. What is the Department of Housing doing to improve quality of life for people living on large public housing estates?

Mr KNOWLES: I did not answer the earlier question in the detail that I would have liked to. I addressed it in a general sense, as one of the components of looking after the department's assets. The neighbourhood improvement program is one of the cornerstones of improving housing in public housing estates. In 1995-96 we gave $10 million to the program; in 1996-97 we gave $25 million to the program and this year - in the forthcoming financial year 1997-98 - a further $10 million will be added to take it to $35 million.

The program is a key element in the Government's housing policy. Put simply, and I am trying to paraphrase a whole lot of verbiage here, the turnover in our housing stock means that four out of five offers of housing to people on the waiting list are from the existing rental portfolio. Approximately 20 per cent of the department's portfolio is made up of housing situated on large estates, and those estates are characterised by factors like high rejection rates, high turnover, high rental arrears, high housing management costs resulting from things like having to fund security patrols, very high levels of unemployment, poor proximity to services, stigma and isolation, inappropriate housing designs and so on.

Those are problems that have to be addressed and they have to be addressed strategically, because if 20 per cent of our portfolio is considered unsatisfactory, that inevitably will lead to longer waiting lists right across the State. So we have to improve the equity of service and housing standards amongst the tenants, many of whom see their circumstances worsen simply because they are in a large housing estate. If we fail to address the problems that have occurred in the past, and indeed in some estates still occur today, the value of the asset that I was talking about, from a business side of the portfolio - putting aside for just a moment the social and equity issues - continues to decline and in the end will cost the community a hell of a lot more.

While speaking about the social and equity issues I should say that unless we deal with those problems that occur in the estates, enormous costs to the Government will be associated with extra policing, additional calls on social support services and a disproportionate call on unemployment benefits. I commend the analysis that was done of the Airds neighbourhood improvement program regarding the overall cost-benefit of it, and the overall cost to the community of not doing it, which arrived at some very positive results.

The neighbourhood improvement program is about creating sustainable and viable communities through a wide range of economic, social and physical rejuvenation strategies. The program focuses on the following specific strategies: improving the delivery of the department's services; employment generating schemes in partnership with TAFE and the private sector; addressing physical problems of poorly designed housing, such as poor security, lack of private open space, common walkways, high concentrations of bedsitter housing, poorly designed open space; in addition to improving the overall quality of dwellings to increase their value and functionality; improving and -

[Time expired.]

The Hon. JAN BURNSWOODS: I would certainly like to hear more about this important program.

Mr KNOWLES: An important feature of neighbourhood improvement programs is that we actually talk to the tenants, which has been an absent feature of previous attempts to deal with some of these problems. We use neighbourhood advisory boards and involve communities to ensure a greater sense of ownership, so that as the improvements take place there is a greater degree of community involvement and community acceptance of the changes.

This year we will be targeting the following priority estates: Waterloo, Riverwood, Bidwill, Macquarie Fields, Airds, Claymore, Minto,
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Villawood, Windale - which is in Newcastle - West Dubbo, South Kempsey, Moree, Allambie and Warrawong in the Illawarra. It goes without saying, that the Government is extremely committed to this program. I suggest that anybody who might be critical of it just go and talk to some of the residents who live in the area.

There have been assertions recently that this program did nothing to alleviate crime in public housing estates. I put it to you that the statistician took a less-than-one-year snapshot to try to deal with problems that had been occurring for more than 20 years in some of these estates, so the veracity of the analysis I would question initially. The real proof can be gained from talking to the residents. Talk to the people who have to put up with all the hoons and all the people who make life miserable for them in some of these large estates. Ask them whether things have improved.

They will tell you most certainly that their lives have never been better, and that is the real test here. The other important component is the involvement of the community. The neighbourhood improvement program is giving the community opportunities. It is not just the bricks and mortar; it is what happens inside the house that is also important. As part of neighbourhood improvement we have been endeavouring to employ long-term unemployed people in these estates to involve them in the redevelopment of their own suburbs. In some areas where we have conducted pilot programs not only has the work been done, the levels of crime decreased and the level of resident satisfaction increased. We have also seen a major reduction in the amount of vandalism and post-improvement abuse because the residents themselves have done the work and own it.

More than half a dozen Pacific islanders got involved in building a whole lot of fences in some of these estates about 12 months ago. Nobody graffitis those fences any more. They understand that this work was done by them, for them and they look after it. The value adding that I will get out of those sorts of programs will make neighbourhood improvement more than just a bricks-and-mortar fix and go well into the wider-than-wide portfolio social programs that must be addressed if we are to improve the life circumstance of people in public housing estates.

The Hon. JAN BURNSWOODS: I refer to the same page as before. I admit that I have a special interest in this subject. Can you tell the Committee what progress the department has made in installing smoke detectors in its housing?

Mr KNOWLES: I was hoping the Hon. J. F. Ryan would have asked me this question.

The Hon. JAN BURNSWOODS: He stayed away for some reason. He should be here on this Committee, yes.

Mr KNOWLES: Normally I like to be able to hold up the notion of on time and on budget. Well, it is on budget and ahead of time. We have quite clearly accelerated the retrofitting of hard-wired battery-backed smoke detectors in public housing homes. Combine that with the short-term fix of a battery-operated smoke detector and in excess of 80 per cent of all public housing dwellings are now fitted with a battery in this State. We will complete the fitout well ahead of time and certainly on budget, if not under it.

CHAIR: I refer to Budget Paper Number 3, volume 2, page 707, subprogram 73.1.1, State and Regional Planning, and to line item Other services, Financial assistance to community projects. Why was only $5.198 million spent of the 1997 budget allocation of $7.2 million for this item?

Mr KNOWLES: I answered that question - that is area assistance. I also took some questions on notice as well.

CHAIR: I beg your pardon, I was not sure about that. What resources will your department be devoting to the proposed Lake Cowal goldmine? Will your department be obliged to approve the mine regardless of proper planning and environmental considerations? Will your department for example consider approving a mine which used cyanide with its concomitant side effects on bird life?

Mr KNOWLES: The department is not obliged to approve anything, whether it be the Lake Cowal goldmine or any other matter before it. The department is obliged to assess any proposal in context and under the provisions of the Environmental Planning and Assessment Act, which provides a range of assessment options including, as was the case the last time the Lake Cowal proposal was before the Government, a commission of inquiry. At the moment there is nothing before the Government to assess. However, I understand that discussions are taking place between the proponent, Norths Ltd, and officers of the Department of Planning, which would indicate that they are preparing to lodge a further application. All I can say, and Ms Kibble inevitably would like to add something to this, is that if and when the Government receives an application the Government
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will apply the provisions of the Act to it and assess it. That is where we begin and end.

Ms KIBBLE: Can I add one thing to that? A new application must be accompanied by a new environmental impact statement and at this time there has been no request to me for director's requirements for a new EIS. So we are some little way away from the lodging of a new development application, if one is to be lodged.

CHAIR: The Federal Minister has alleged that you spent only 70 per cent of your $315 million Commonwealth grant on actual housing and has also made the assertion that Department of Housing tenants should be means-tested.

Mr KNOWLES: This is the 31 per cent.

CHAIR: Do you means test tenants as to their ability to pay full rents? What proportion of tenants are able to pay a full rent who are not currently paying full rent?

Mr KNOWLES: About 8 per cent, I am told. The great bulk of our tenants are on one form of support or another; and yes, we do means tests. They have to provide information -

CHAIR: What proportion of those are able to pay full rent do not actually pay full rent?

Mr KNOWLES: We would assert not that many now, as we have just undergone a rental fraud amnesty, which is what you are talking about. If what you are asking is how many people are in public housing who could pay market rents but are not doing so because they are falsifying their records, we think that compliance is pretty good now as a consequence of the rental fraud amnesty. Mr Cappie-Wood might talk about that in a moment to give you more detail. The 8 per cent figure that I gave you represents the number of people paying market rent and therefore not receiving any form of rental subsidy.

With regard to the alleged 30 per cent of Commonwealth-State Housing Agreement funds going on overheads, that is just nonsense, and Jocelyn Newman knows it is nonsense. Her officials were advised two Fridays ago at an officers’ meeting in South Australia in preparation for the Ministers' conference this Friday. New South Wales is not the best performing State but it is certainly not the worst. It is probably in the middle, and our administration costs are about 12½ per cent, or in that order. Mr Cappie-Wood advises me that, based on the same standards that are applied to every other State, those costs are 6.75 per cent, a much lower figure. An amount of $40 million is spent on the sorts of things that Senator Newman was talking about.

What Senator Newman would appear to have done is to lump into administrative costs the costs of the housing assistance program, rent assistance, which we do not get but tenants do; disability rent assistance, which we do not get but tenants do; the HIV AIDS subsidy, which we do not get but tenants do; and head leasing costs. If that is an overhead then how do I fund, under those four categories, 42,700 households that receive rent assistance, 1200 households that get the special rental subsidy, 3000 homes that are currently leased and 1000 new houses leased for social housing, suitable for HIV-type accommodation? So she is just wrong; she knows she is wrong and she has said it three times. She will have an opportunity to say it to me on Friday in Perth. She will probably reassert it but her officers know that it is wrong and they know where her mistake is. Either they are not communicating with their Minister or she is just continuing a lie.

CHAIR: Has there been a policy change by your Department on where public housing should be situated? Is it your policy to retain mixing of public housing and high-value private housing areas, as implemented by previous governments? Is there pressure from the Treasurer to acquire or build public housing stock in areas where it costs less and where more people can be housed for the same dollars? Is it not a fact that this policy would lead to ghettos of disadvantaged people and increase social problems?

Mr KNOWLES: The scenario you have just painted is an inevitable consequence of what would happen if the Federal Government proceeded with its proposed change in policy direction, that is, to shift away from a supply-side response by the States, stripping them of their capital allocations, and moving into a full-rent subsidy model. That means that in the Sydney context, for example, there would be simply areas that would be no-go areas for people on low incomes.

The Federal Government, as a consequence of its last budget, seems to have jettisoned its entire policy reform program, shifted into a cutting regime and basically said that its only interest in reform now is to reform the State housing agencies. That is an abrogation of responsibility. There should be a national housing policy, and we support that. We also support the need for reform that would bring forward a balanced model that would maintain a mix of supply-side housing through the States and
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through other housing providers like the community housing sector and through our various programs as well as an increase in private rent subsidy.

What we got out of the Federal budget was a reduction in the supply-side capacity. Over the remaining two years of the interim agreement, there will be a $200 million cut based on earlier commitments given by John Howard to all State Premiers, $200 million over two years, and in addition no increase in private rent subsidy payments. In fact there was not only a decrease in dollar terms, but a decrease in the context of a greater degree of stringency in application of the guidelines - a double whammy for private renters.

It is and remains this Government's policy to have a dispersed housing provision model. It was the model pursued by the previous Government and the Government before that. As far as I am concerned we will not pursue in any way, shape or form the housing estate model which is the cause of so many other problems that affect the lives of the people who live there. Chris Hartcher seems to be the only person in the State system advocating a move away from the present model. He is on record as saying he did not want the State Government building houses or acquiring houses on a dispersed basis. He wanted us to send them all to the cheap areas.

Chris Hartcher is known for his approach to Robert Webster not to build any public housing in his electorate in Gosford, and that is something that he should deal with in his own way through his own conscience. But the Government's position is clear, and it is consistent with previous government policy. We will have problems with the dispersion model in managing the housing program in the context of the cuts that have been made and our ability to supply. One of the options we had was to pursue a head leasing model that would allow us not only to vary supply but also to vary the tenure capacity of those houses over time as individual circumstances changed.

[Time expired.]

CHAIR: Is there a program of demolition of poor-quality and outdated housing stock such as fibro homes from the 1940s and 1950s and replacing these with high-quality cluster housing designed specifically for today's higher security needs? Are any tenants displaced? How are they housed during the building program? Are existing tenants given first priority in new developments? Also, is there any suggestion that this program could be self-funding with the sale of a proportion of the new stock to tenants or others so that there is a net increase in housing stock but at no net cost?

Mr KNOWLES: Mr Cappie-Wood can give specific detail, which he has in front of him. He does not need me to recycle his answers. I will just make some general comments. A substantial proportion of the Government's new dwelling construction program will be through the redevelopment of older stock. There are very sensible reasons for that. Let me continue from the point I had reached at the conclusion of my last answer. One of the problems with managing about 130,000 homes throughout the State is that they are rooted into the ground and you cannot move them despite changing community needs. So with large housing suburbs full of three-bedroom fibro-tile homes, the chances are that the people who live there do not need that sort of accommodation. Indeed, almost certainly they do not these days.

In relative terms they need single-bed and two-bed accommodation. The community has got older, and chances are mum or dad has died, the kids have left home and there is now one person living in a house where there used to be four or five. How do we manage those assets? One way is to redevelop them, build new homes on the old sites and give the tenants who are in the old homes the first right to occupy the new spaces. That has been very successful. We find a very high level of acceptance amongst our tenants when a single aged person is offered the chance to no longer have to mow the lawns and rattle around a four-bedroom home by moving into accommodation that is much more sympathetic with his or her current lifestyle needs and usually in a more community-based environment. For example, where we are building older persons’ housing we tend to redevelop and create the developments around a central square where people can interact and have some greater relationship with their neighbours.

That lets us increase densities in some cases but it also lets us manage the asset a lot more creatively. It also goes towards the Government's broader objectives of containing Sydney's growth by looking at existing urban areas rather than the new areas. So it is done sympathetically and with a great degree of sensitivity. We are not marching in and telling residents to move, although some people would like to make cheap points about these matters. In every case we have worked closely with the tenants. They have first right. That is as it should be because we are not just dealing with bricks and mortar, we are dealing with the individuals who live in the homes. I will ask Mr Cappie-Wood to cover the detail.

Mr CAPPIE-WOOD: In the department's program for next financial year over 830 units of accommodation will be redevelopment units - units
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built on former housing sites where old fibro houses have been removed and integrated developments put in their place - principally for pensioner housing. More than 522 of the 830 units will be for pensioner housing. This will be partly funded by the sale of housing assets referred to earlier. In 1997-98 $63.5 million, in addition to the Commonwealth-State housing assistance funds, will be sourced from the department's sale of poorly performing assets, and that will be used to supplement the capital works fund.

Mr KNOWLES: I take the approach on these things that we deal with each one on a case-by-case basis. Depending on a whole range of factors, locational aspects particularly, we sometimes will consider taking in the private sector to vary the social mix, if I can put it that way, between public housing tenants and private renters and/or investors. That, of course, allows the financial components to be dealt with more effectively but it also allows us to begin to break down some of the more intense concentrations of public housing tenants in some parts of Sydney which we have talked about earlier in terms of some of the attendant social problems that arise out of that.

[Time expired.]

CHAIR: Did you receive adequate advice about pollution from the proposal for the Port Kembla copper smelter? As I understand it, various figures have been bandied about and allegations have been made about significant pollution emissions from that smelter. Why did you introduce legislation to abort the court case? Was that not contempt for the law and for due process?

Mr KNOWLES: I assume the rationale behind the introduction of the legislation was the same rationale that brought the great majority of lower House members to vote for it. That rationale was that they felt that, all things considered, there had been almost three years of assessment including a commission of inquiry. Approval had been validly given. There had been a subsequent amendment to that original approval to toughen the environmental prescription, I think in November last year, and the court case was not about the merit of the proposal; it was about procedural aspects. Those notification processes were associated with the consideration of the development.

I understand that the court case is based principally on those grounds, although there has been an attempt to widen the case to try to take in merit-type considerations. I have reviewed these matters, as of course I would, before considering the introduction of legislation. There has been an enormous amount of public and community consultation and participation in this process. Indeed, the person bringing the matter to the court has been a member of some of the consultative groups and participatory groups. To suggest that she or her neighbours did not know about this proposal, as is the tenor of the procedural appeal, flies in the face of reality. That can only be described as an attempt to frustrate development, because, as is their right, the people who were appealing did not want to see it go ahead.

At some stage, somebody has to draw a line under all that. The Government was notified that the entire proposal was at risk. Given that the $200 million capital upgrade to implement the environmental conditions, $170 million of which was to implement very strong environmental conditions, the $350 million worth of annual output from the plant, the $200 million of annual export, the 360 construction jobs, the 400 indirect jobs and the 270 long-term jobs would be put on one side of the scales against an appeal based on whether or not a person was properly notified, when all the evidence showed that that person was involved in the process, led me to believe that it was worth asking the Parliament to make a decision as to whether or not the proposal should or should not proceed. The lower House has backed my judgment.

You will get a chance in the upper House, of course, and inevitably you will do what you need to do, but the Parliament so far has said all of those things are too important to disappear. Was there adequate environmental assessment? Quite clearly, the umpire said yes. A commission of inquiry process said yes. After hearing all the submissions and receiving all the representations from all the authorities on balance they said this proposal could go ahead subject to conditions. It was approved subject to those conditions, and additional conditions were added I think eight or nine months later. The original approval was in February 1996. The subsequent approval was made in November 1996 and the environmental conditions were toughened.

[Time expired.]

CHAIR: Is it not a fact that the Environment Protection Authority told your office that the EIS massively underestimated lead emissions produced by a development factor of 4 to 6?

Mr KNOWLES: It did not tell my office. I am not avoiding your question, but I think it probably made its submission to the EIS. As you know, the EIS is not a snapshot. It is a document for
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assessment. I might add that the EPA and other agencies invariably raise concerns when they make submissions to environmental impact studies. That is what they are making their submissions for. Those submissions were then worked on collaboratively - with complete cooperation, I am being advised by Ms Kibble - to develop a set of conditions that satisfied the EPA. Ms Kibble, do you want to add to that?

Ms KIBBLE: No, I do not think there is anything else to add.

Mr KNOWLES: I stand very firmly on this. I know what the assessment processes are, and many people in the Illawarra know what the assessment processes are. I suspect that Mr Robinson, who is conducting the court case, knows what the assessment processes are. They know, as we all know, that the conditions applied to that development are sound: they are appealing not on the merits but on a procedural point.

CHAIR: Why did the Director-General of the EPA describe your decision to allow the development to proceed and to exceed EPA standards by 150 times as madness?

Mr KNOWLES: When did he make the statement?

CHAIR: I was advised that he made that statement fairly recently.

Mr KNOWLES: I have said to you we then revisited the application to take on board those additional concerns and issued tougher environmental prescriptions in November last year.

CHAIR: We might go on to another matter if I may.

Mr KNOWLES: I would ask Ms Kibble to confirm that is the case.

Ms KIBBLE: Yes, that is the case.

CHAIR: I turn to coastal development. I refer to Budget Paper No. 3, volume 1, page 707, line item Coastal zone cumulative land area acquired. There is provision for 230 more hectares to be acquired this coming year. Which land is that? Does it include Cullendulla and part of the coast? Will you be also ensuring that the Koala Beach and Iron Gates developments do not proceed any further?

Mr KNOWLES: I am not going to say what land we are going to buy because, as you know, we have a coastal policy that is reaching its conclusion in the consultation processes. We will be making some announcements in the not too distant future. My hope is that as part of that policy we can add to the State's holdings, and the coastal land protection fund will be used in that context. I did place a section 101 over Koala Beach -

CHAIR: Koala Beach and Iron Gates.

Mr KNOWLES: It has several names, does it: Sea Ranch, Koala Beach?

CHAIR: It has several different names. It has the ironic name Koala Beach.

Mr KNOWLES: It has an SEPP 44. Does it have a koala management plan or something like that?

CHAIR: A Koala destruction plan actually.

Mr KNOWLES: It is all a matter of perspective, is it not? It is up on the Tweed. I think I have put a section 101 over that and the Iron Gates development. You were so pleased that you kissed me on the cheek outside my office. Do you remember that? I had to turn my head away quickly. I took that sign as a fraternal symbol of gratitude that would bond us as one forever. As you well know, those things affect me deeply. It is like signing in blood. My intention will be, as is required of me under the Act, to assess any application that may be made in the context of future applications. I think my intentions and the Government's intentions are pretty clear but I cannot and will not telegraph my punches. I cannot be seen to be predetermining the outcomes of any application that may or may not come before me. The reason there is a section 101 over those sites is because of the high environmental status the Government has placed on these sites. In that context I will look at any application very, very closely.

Ms KIBBLE: There is an issue at Iron Gates of the relocation of the road, which has been built in the wrong location. It is in a zone in which it is prohibited. I will not be issuing a section 65 certificate to re-zone wetlands in order to fix up the road problem.

Mr KNOWLES: The council would like us to help it out to fix a road problem.

The Hon. JAN BURNSWOODS: That it created.

CHAIR: Which you are not going to fix.

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Mr KNOWLES: Which we are not going to help it with.

CHAIR: Will there be an order to re-establish the wetland and the habitat that was destroyed along that corridor there, and how will that be done?

Mr KNOWLES: Ms Kibble has advised me that it clearly a matter for court. I cannot issue those sorts of orders.

CHAIR: Have you considered the problem of East Circular Quay? Have you been asked or have you sought on your own initiative to talk to the developer with a view to actually pulling down that building and considering an alternative development which would cost the people of New South Wales nothing? If not, why not?

Mr KNOWLES: The developer is not the person that was mentioned in the newspaper this morning. It is actually the Hong Kong and Shanghai Hotel Group.

CHAIR: The developer would be happy to talk to you.

Mr KNOWLES: I am happy to requote the letter that the Premier read from in the House last week, a letter to me dated 28 May last week from Mr Pier Boch, the senior executive in Hong Kong of the Hong Kong and Shanghai Hotel Group, informing me of progress, a brief update. Would it be possible to respond?

CHAIR: It could be incorporated in Hansard.

Mr KNOWLES: But I would like to say that I have received no approaches. I read what I read in the Sydney Morning Herald, as one does. I am in communication with the developer and it tells me that its position has not changed. Having said that, if its position has changed and it tells me, then I will deal with that issue then. But the letter I got last week makes it pretty clear what the position is. I suggest you read in Hansard what the Premier said.

The Committee proceeded to deliberate the recommendation of the vote.

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