Clubs, Liquor and Gaming Machines Legislation Amendment Bill 2011



About this Item
SpeakersGallacher The Hon Michael; Whan The Hon Steve; Maclaren-Jones The Hon Natasha; Green The Hon Paul; Mitchell The Hon Sarah; Mason-Cox The Hon Matthew; Deputy-President (The Hon Natasha Maclaren-Jones); Kaye Dr John; Voltz The Hon Lynda; Lynn The Hon Charlie; Temporary Chair (The Hon Sarah Mitchell); Searle The Hon Adam; Khan The Hon Trevor; Fazio The Hon Amanda
BusinessBill, Division, 2R, 3R



CLUBS, LIQUOR AND GAMING MACHINES LEGISLATION AMENDMENT BILL 2011
Page: 6667

Second Reading

The Hon. MICHAEL GALLACHER (Minister for Police and Emergency Services, Minister for the Hunter, and Vice-President of the Executive Council) [5.08 p.m.]: I move:
      That this bill be now read a second time.
I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.
      This bill represents the second stage of reforms arising from the Government's historic Memorandum of Understanding with ClubsNSW.

      These reforms focus on ensuring enhanced corporate governance and management protecting the community owned status of clubs and removing barriers to clubs amalgamating or merged clubs separating.

      They are comprehensive and will be implemented in consultation with the club industry.

      The Clubs, Liquor and Gaming Machine Legislation Amendment Bill 2011 also addresses several liquor and gaming-related issues which I will refer to later.

      Facilitating club amalgamations and de-amalgamations

      The best way for some clubs to continue operations and develop future prosperity is to amalgamate with another club.

      A key reform in the bill is the removal of all forfeiture requirements for gaming machine entitlement transfers between amalgamated club premises.

      This will enable amalgamated clubs to retain all their entitlements when relocating them to their other club premises.

      Existing forfeiture requirements can be a significant disincentive for clubs to amalgamate and this reform is a practical and sensible measure that will further encourage and assist amalgamations.

      However clubs will still be subject to the strict local impact assessment requirements of the Gaming Machines Act to ensure that any potential increase in gaming is properly assessed before it can be approved.

      Clubs that previously merged may wish to de-amalgamate for a variety of reasons. This bill facilitates club de-amalgamations by
        Ø enabling a club licence to be transferred to another club

        Ø enabling core property to be negotiated by private treaty and

        Ø exempting de-amalgamating clubs from the local impact assessment and forfeiture requirements for gaming machine entitlement transfers negotiated as part of a de-amalgamation.
          It will also apply appropriate controls around the de-amalgamation process to ensure transparency and protect members' interests.

          Improving club corporate governance, viability and sustainability

          Improving club corporate governance was a key Issue identified in the Government's Memorandum of Understanding with ClubsNSW.

          The need for reform was acknowledged by the Independent Pricing and Regulatory Tribunal in its 2008 review into the New South Wales registered clubs industry.

          Reforms which deal with club corporate governance issues are complex and can only be progressed in close consultation with the club industry.

          This is why the bill inserts several regulation making powers into the Registered Clubs Act.

          These powers will allow for the development of a mandatory training framework for club directors and managers.

          Comprehensive discussions will occur with the club industry and registered training organisations to develop training frameworks that meet the individual needs of club directors and managers.

          The Government and the club sector will consider how the training can be progressively introduced to reduce the cost impact on clubs.

          The bill also inserts other regulation making powers to enable matters to be prescribed relating to
            Ø voting eligibility for various classes of club members

            Ø a definition of the core features of a registered club and

            Ø the circumstances where a club board will be permitted to appoint club directors.
              These issues were identified by the Independent Pricing and Regulatory Tribunal as requiring reform to ensure club boards are functional, represent the interest of all members and are effective.

              However these issues are also contentious and need to be approached sensitively. Ideally the Government and club industry representatives will be able to encourage and support clubs to voluntarily address these matters.

              However the reserve powers in this bill to intervene via the making of regulations are necessary to ensure action can be taken in the event that these matters are not voluntarily addressed.

              The bill also inserts regulation making powers into the Registered Clubs Act to facilitate mandatory three year rolling elections if required.

              Club NSW has requested that a requirement for three year rolling elections be mandated as it will enhance board stability.

              It will also help to address concerns where funds spent on director training are wasted because of the short time some directors are appointed to club boards and facilitate board renewal.

              While the Registered Clubs Act already provides for clubs to voluntarily adopt three year rolling elections, inclusion of regulation making powers to mandate this requirement will send a message to the club industry about the importance of this issue.

              The club industry has expressed concern that some boards are quite large and at risk of being inefficient or dysfunctional.

              Therefore this bill amends the Registered Clubs Act to provide for a maximum limit of nine board members of a registered club.

              The industry has indicated that it is important there is consistency across all clubs and that a maximum of nine directors is an appropriate cap.

              The necessary transitional arrangements will be developed with the club industry to ensure there is an orderly introduction of the nine member limit.

              Protecting clubs from private takeovers

              Protecting our registered clubs and their assets from falling into the hands of private interests is vital to help the ongoing viability of the club industry.

              Significant concerns have been raised recently about private takeovers of clubs or financial and management contracts entered into between vulnerable clubs and private companies.

              The club industry contends that these companies may seek to take control over governance of a club to gain a share of the club's profits or property.

              This bill will implement several measures to help ensure financial and management contracts comply with the law and are in the interests of clubs and their members.

              Firstly, clubs will be required to notify members of a proposal to enter into a contract whereby the core property of the club is or will be used either directly or indirectly as security.

              Members can then voice any concerns directly with their club or if necessary to the Office of Liquor, Gaming and Racing.

              Clubs will also be required to provide a report on the proposed contract to the Director General of the Department of Trade and Investment, Regional Infrastructure and Services for review and comment.

              If the director general finds that the management contract does not comply with the legislation or is not in the interests of the club and its members the director general may direct the club to amend the terms of a proposed contract not to enter into the proposed contract or terminate the contract if it has already been entered into.

              If the contract is entered into the club may be required to show cause why it should not be terminated.

              An aggrieved club may seek a review by the Casino, Liquor and Gaming Control Authority.

              The bill also amends the Registered Clubs Act to strengthen the requirement for clubs to be "conducted in good faith" by more clearly identifying factors that could be indicative of a club not being so conducted.

              These include circumstances where clubs may be under continuous administration for an exceptionally long period or where arrangements have resulted in effective control of the club and its revenues being passed to a contractor or other party.

              A regulation making power is also provided so that other factors may be prescribed in the future, if necessary.

              To better emphasise the not-for-profit, member based nature and status of clubs the bill clarifies the principles governing benefits or advantages received from clubs.

              The bill also strengthens requirements to ensure club operations are adequately controlled and supervised by the club manager and board.

              Reciprocal rights for ex-servicemen and women

              Our service veterans' exceptional contribution to our country deserves respect and recognition.

              That is why I am pleased that the bill will result in ex-servicemen and women who are service members of the Returned and Services League of Australia no longer needing to sign in when entering an RSL or services club.

              This reform will also apply to current Australian Defence Force personnel as an appropriate recognition of their service to our nation.

              Defence provisions for club manager

              The bill introduces a defence provision for club managers where reasonable steps have been taken to comply with certain liquor laws.

              A similar defence provision previously existed under the Registered Clubs Act.

              Consistent with that previous legislation, a defence will not be available for the offence permitting intoxication.

              Nor will a defence be available where a specific defence is already available in the Liquor Act or where the Act provides that a club manager is guilty for failing to comply with a direction without reasonable excuse.

              Rescind section 41x of the Registered Clubs Act

              The bill also makes another important club industry reform by removing the ability for royal commission style investigations to be conducted under section 41 X of the Registered Clubs Act.

              This is being advanced because more appropriate and effective investigative powers already exist under the Registered Clubs Act and under crimes legislation.

              Decoupling liquor and gaming in hotels

              I will now turn to the liquor-related reforms in the bill.

              The bill will amend the primary purpose test in the Liquor Act to enable hoteliers to trade at certain times of the day without the need to sell liquor but continue to provide other services such as non-alcoholic beverages food entertainment and conference facilities.

              This reform will also help to decouple liquor and gaming by allowing hoteliers to operate gaming machines without the need to have liquor available, thereby helping to address concerns about poker machine players playing under the influence of alcohol.

              The reforms will also potentially limit late night liquor sales in venues that operate gaming machines as well as allow hoteliers to diversify early morning operations away from liquor and gaming operations by allowing hotels to open for breakfast or provide other non-gaming services.

              These reforms will help to create safer hotels and reduce levels of alcohol-related harm as well as helping to reduce the incidence or intensity of problem gambling from players under the influence of alcohol.

              There are a range of existing controls to prevent hotels from focusing their day-to-day business on gaming, including a mandatory daily shutdown of gaming machines, a prohibition on advertising gaming machines and controls on the location of machines in hotels.

              To address concerns that hoteliers may apply for extended trading to operate gaming machines, the bill specifically provides for regulations to be made so that the impact of gaming is addressed in a community impact statement which must accompany an application for permanent extended hotel trading.

              The Government will develop the necessary regulations prior to the commencement of these provisions.

              Directions to licensed caterers

              The bill introduces a new power relating to directions that can be issued to a licensee who sells liquor on other licensed premises such as a licensed caterer.

              These directions will allow limits to be placed on the use of an authorisation to sell liquor away from the licensed premises including controls on trading hours and preventing the exercise of the licence.

              This will help to ensure that a licence cannot be used in a way that undermines the integrity or objects of the liquor laws.

              Strengthen controls for gift sellers

              For many years the Liquor Act has provided an exemption from the requirement to obtain a liquor licence for gift sellers who may include up to two litres of liquor as part of a gift of flowers or food that is delivered to a third person.

              Some vendors have recently sought to exploit this exemption by delivering packaged liquor late at night that was included with a small amount of food such as a packet of chips or similar snack food.

              These deliveries have the appearance of home delivery liquor rather than genuine gift sales.

              The bill will therefore strengthen controls by requiring that vendors taking advantage of the exemption must market a genuine 'gift' service, package the gift in a way that the recipient would assume it to be a genuine gift and limit delivery hours to between 7.00 a.m. and 7.00 p.m.

              To ensure that legitimate vendors are not adversely affected by delivery delays the bill acknowledges that there can be unforeseen circumstances which may delay the delivery of the "gift".

              Other miscellaneous gaming machine matters

              The bill also introduces a range of miscellaneous amendments to the Gaming Machines Act regarding the 'cap and trade' scheme that controls the distribution of gaming machines in clubs and hotels.

              These amendments aim to improve the operation of the gaming machine threshold scheme particularly to address legislative gaps regarding poker machine permit trading.

              The reforms will also bring permit trading into line with gaming machine entitlement trading to ensure a level playing field between hotels and clubs and improve the overall integrity of the gaming machine threshold scheme.

              Other miscellaneous matters

              Finally the bill makes several other miscellaneous reforms which will
                Ø change the name of the Casino, Liquor and Gaming Control Authority to the Independent Liquor and Gaming Authority to better reflect its role

                Ø confirm that the authority has the power to reduce liquor trading hours when imposing conditions on a liquor licence

                Ø apply appropriate penalties to offences relating to responsible service of alcohol and responsible conduct of gambling training

                Ø clarify the status of charges that are currently levied by the New South Wales Office of Liquor, Gaming and Racing for gaming-related applications and services and

                Ø amend secrecy provisions to ensure liquor and gaming information can be released to appropriate persons to promote better regulation of the industry in accordance with good regulatory practice.
                  Conclusion

                  The bill before the House represents a landmark package of reforms aimed at ensuring the long-term viability of the club industry.

                  It will help to protect the interests of club members and ensure clubs continue to make a significant social and economic contribution to our community.

                  It also represents a balanced and sensible approach to liquor and gaming-machine regulation.

                  I commend the bill to the House.
              The Hon. STEVE WHAN [5.08 p.m.]: The Clubs, Liquor and Gaming Machine Legislation Amendment Bill 2011 is complicated. Like many Government bills introduced this week, the bill has been introduced with little time to examine it. The bill has a number of positive measures, but the Opposition is concerned about a couple of matters. I foreshadow that the Opposition will move amendments in Committee and I will go through them in detail. First of all, I want to talk in general about the bill. The Opposition recognises that large portions of this bill are implementing the agreement, the memorandum of understanding, that the Government made with ClubsNSW prior to the election, and some of the provisions of this bill are putting the memorandum of understanding into place. We recognise that in some senses that gives the Government a mandate, though obviously some details need to be carefully considered.

              The Opposition strongly supports the provision in this bill to facilitate the de-amalgamations of clubs. Over the last decade or more we have seen the amalgamations of clubs in a number of areas around the State. In many cases that has led to a stronger club network overall and, in some cases, to the survival of a club in a local area. That is a very positive thing, but some clubs would now like to de-amalgamate for a variety of reasons—whether that is because they have committees who wish to go it alone again and believe that they will be financially viable, or whether that is because relationships are not as good within the clubs— but we recognise there needs to be a capacity for de-amalgamation. The Opposition certainly supports the Government in its decision to introduce in this bill the capacity for that to happen. As part of that, there are some issues about local impact assessment which we do not have a particular problem with, and the forfeiture requirements for poker machine entitlements which I will come back to a bit later.
                A number of measures in this bill improve club corporate governance, viability and sustainability, including things like mandatory club director and manager training frameworks that could be introduced—it does not introduce them at this stage—changes to voting for boards and the move to facilitate a mandatory three-year role in elections. Those things seem quite reasonable and the Opposition is happy to support those. There are some miscellaneous reforms, including measures to prevent clubs and their assets from falling into the hands of private interests and entrepreneurs, and also a defence provision for club managers where reasonable steps are taken to comply with certain liquor laws. That is particularly important considering that later in this session we will be debating the Government's revised three-strikes bill. One of the changes the Government has introduced is removing the ability of the regulator to hold royal commission style investigations into clubs under section 41X of the Registered Clubs Act. I will come back to that a bit later.

                The Opposition has no difficulty with a number of changes in here for hotels. We did ask for clarification of some of these issues in the other place and I am pleased the Minister was able to alleviate some of the concerns we had. One of those was a measure in this bill which will allow hotels to be able to open for business without being obliged to have the bar open, and that seems reasonable. At the moment their licence conditions specify they have to have the bar open. That means that even if they open for breakfast they have to have the bar open. I think it is reasonable to decouple that aspect of it. However, we asked the Minister to clarify whether that could be a de facto extension of trading hours for poker machines. Minister Souris was able to clarify that for us in the other place. He said:

                    The second question raised related to decoupling powers. The overriding point to be made is that only existing hours are able to be decoupled and again only on application. Consequently if—this example was given—a hotel wishes to open for breakfast it can certainly do so. However, as to whether it operates either a liquor service or gaming machines, if those hours are an extension of the hours provided in the licence the hotel would have to make an application to the Casino Liquor and Gaming Control Authority, which will be renamed after the passage of this legislation. If that is the case, and depending on other circumstances, a local impact assessment will have to be completed. That is the case whether or not a licence application for decoupling is made.
                The Opposition is satisfied with that assurance from the Minister to an issue which was certainly raised with us and caused some questions to be asked by Opposition members. In the hotels provisions of the bill a number of other matters are quite positive. A measure being put in place there is to provide for directions that can be given to a licensed caterer. My understanding is that that is to overcome a situation which apparently has occurred, where a venue which had its licence removed, brought in a caterer which had its own licence to overcome that prohibition. It seems eminently sensible to remove that loophole.
                  The bill also strengthens controls relating to gift sales of liquor by unlicensed businesses, which again was in response to moves by some businesses to make home deliveries, essentially of alcohol, at all hours of the night under the guise of gift services. There are a number of other fairly minor measures in there, about which I will not go into detail, including changing the name of the Casino Liquor and Gaming Control Authority to the Independent Liquor and Gambling Authority, to better reflect—as the Government says—the independent role of the authority. The Opposition does not have a problem with that but does not think it is really all that necessary to change the name. There are also a number of other measures about the Department of Trade and Investment being able to charge reasonable costs for services provided. I come to some of the issues the Opposition has problems with. Our first issue is that while the new legislation makes provision for a number of things to be taken into account when a de-amalgamation is occurring, and the provision at the moment includes, for example, in section 17AM:

                      (a) the de-amalgamated club will meet the requirements set out in section 10 (1) and

                      (b) the de-amalgamated club will be financially viable, and

                      (c) the proposed de-amalgamation is in the interests of the members of the parent club and the dissolved club, and

                      (d) the proposed de-amalgamation has been approved in principle at separate extraordinary general meetings of the ordinary members of the parent club and the members of the dissolved club.
                  Those things which the authority has to be satisfied about do not include the entitlements of the staff in the clubs. The Opposition will move an amendment in the Committee stage to include a provision relating to the entitlements of staff of those clubs. Our concern about that, and I think it is a concern which the industry and Government have acknowledged in a sense, and I have had some discussions with the Minister's staff on that—and I appreciate their opinions on this as well—is that when a club de-amalgamates we do not want to see employees who are working at that de-amalgamated club to have their continuous entitlements—for instance long service leave—entitlements which accrue, terminated and then restarted, as if they were employees of a new organisation. It is entirely reasonable to ask them to carry over those entitlements, and to ask for an assurance on that.
                    I recognise that the Government's position on this is that it believes this issue—if it is an issue—can be dealt with in other ways. The Government's advisors have said to me they do not believe this bill is the appropriate place in which to put this. However, I believe that the terminology I am proposing in the amendment is quite reasonable for this bill and fits with the other provisions of section 17AM and section 17AB (e). The wording I am suggesting be included for the de-amalgamated clubs would be that as well as considering those other four things I mentioned—(a), (b, (c) and (d)—that the authority has to be satisfied that the proposed de-amalgamation is in the interests of the persons employed by the parent club at the relevant premises, having regard in particular to the proposed arrangements for protecting their long service leave entitlements or other entitlements based on length of continuous service of those persons and for ensuring that those entitlements will continue to accrue as a result of the de-amalgamation.
                      It has been suggested to me that that may slow the process. However, when one considers that that section already asks the authority to be satisfied that the amalgamated club will be financially viable, and that the de-amalgamation is in the interests of the members of the parent club and the dissolved club, it does not seem to be unreasonable that the authority should also at that same time check that it is in the interests of the employees. I ask for the support of the House for that provision to be included in this legislation.

                      The other issue of concern to the Opposition relates to part of the provisions for transfer entitlements. At the outset I state that we do not have a problem with what the Governments is essentially trying to achieve, which is the inclusion of provisions that exempt clubs in certain circumstances of amalgamation or de-amalgamation from the previous Government's requirement that on the transfer on poker machine licences to areas outside a designated local government area, some machines will be forfeited. The Opposition does not have a problem with an exemption from that provision if it is for a de-amalgamation and will assist the viability of the newly de-amalgamated club. In other words, in the circumstances of a de-amalgamation resulting in a smaller local club in a local community, the Opposition would want that club to be viable.
                        In those circumstances the Opposition does not have a problem with exempting the requirement to forfeit some machines, but we have an issue with changing the previous Government's framework when it comes to machines being transferred to different local government areas in the circumstances of an amalgamation. The Opposition believes that the previous Government's conditions on forfeiture should remain in place in certain circumstances. On advice from Parliamentary Counsel, the Opposition will seek to amend schedule 3 at the Committee stage. I will deal with this matter later in more detail. The amendment will make clear that it will be a requirement not to have that provision if the premises are in the same local government area. That is consistent with the previous Government's position and will leave undisturbed the new exemption that this Government wants to introduce for de-amalgamated clubs. I make it very clear that the Opposition draws a distinction between the two situations. We want to retain the previous Government's policy for amalgamated clubs, which also addresses some concerns people have expressed about transferring machines.

                        I recognise that in addition to entitlements to transfer machines, whether or not that involves forfeiture of entitlements, an impact assessment process must be undertaken when clubs move poker machines. I recognise that when they are moved into the red zones, which are areas in which a high concentration of poker machines already exists, that is a very onerous and effective process. However, the Opposition believes that no part of the previous Government's position should be watered down. I foreshadow that the Opposition will move an amendment to that effect. I have mentioned hotels being allowed to trade without selling alcohol. In the lower House, the Minister gave an assurance during his reply that that would take place only in existing approved trading hours and that any proposal to increase trading hours overall would be subject to normal processes. The Opposition will accept the Minister's justification for removal of inquiry provisions, although I do not entirely accept some of his wording. He claimed it was a political provision for a particular investigation, but the Opposition will certainly not die in a ditch over that provision. We accept the Minister's assurances that there are other avenues for investigation of clubs.
                          During the Minister's reply, the Opposition will be interested to hear about expectations for taking up de-amalgamations. I have heard of some clubs in this State that are likely to take advantage of de-amalgamation provisions very quickly. Indeed, communities have been enthusiastic to do that. The Opposition is pleased to support provisions that will enable that to happen, particularly when that will leave a local community and a local committee with a club that they believe is viable and that they feel better reflects and services their community. In previous debates on clubs and gaming, the Opposition has recognised the very vital role played by clubs and pubs in our communities. They provide social outlets for people in the community. The club industry in particular provides support for so many community groups. As always, New South Wales Labor supports the viability of those clubs and the important role they play in the community. I am sure all members could speak at length about the wonderful community work of our local clubs and pubs. I will not take up the time of the House by dealing with that at length—there is quite a lot of legislation on today's program—but suffice it to say that each member of the Opposition appreciates the work of clubs in New South Wales; indeed, many Labor members are involved in that work.
                            The Hon. Dr Peter Phelps: So you are opposed to pre-commitment?

                            The Hon. STEVE WHAN: The interjection by the Government Whip harks back to an issue about which the Opposition has stated its position on the record already. Moreover I stated my position on the record sometime ago in relation to that issue. One would hope that in debating this bill, we would be able to focus on the provisions of this bill and not embark on attempts to make up positions that others believe members have.
                              The Hon. Dr Peter Phelps: You said Labor is supportive of clubs. I was just wondering whether there had been a change in policy.
                                The Hon. STEVE WHAN: The Government Whip who interjects might care to exercise his memory on this issue. His memory seems to be really good at relating issues that occurred hundreds of years ago, but not so good for those that occurred a few months ago. The Opposition has stated on the record its view about the importance of clubs in New South Wales as well as our attitude to proposals of the Federal Government at the behest of Andrew Wilkie. I am confident that ClubsNSW and local clubs in New South Wales know the Opposition's position quite well and are quite comfortable with it. As I foreshadowed earlier, the Labor Opposition will move amendments at the Committee stage. Other than that, I compliment the Government on a number of measures in this bill that enhance the environment in which hotels and clubs operate. The Opposition will support those aspects of the bill and will seek support for Opposition amendments.

                                The Hon. NATASHA MACLAREN-JONES [5.25 p.m.]: I support the Clubs, Liquor and Gaming Machines Legislation Amendment Bill 2011 and I will make a brief contribution to the debate. This bill yet again demonstrates the Government's commitment towards securing the long-term financial viability and sustainability of New South Wales registered clubs. Clubs are an integral part of our local community. They provide hundreds of jobs, support community groups and sporting clubs, not to mention the vital community services they provide. In New South Wales and across Australia, clubs are the lifeblood of many communities, particularly in rural and regional areas. More often than not communities are strengthened and lifelong friendships are developed. Clubs bring families and friends together. Many people start out on the sidelines of local sporting teams and go on to become involved in coaching, playing or fundraising.
                                  This Government is committed to ensuring the sustainability of clubs in New South Wales. We have a record of supporting clubs and the vital role they play in our community. This bill builds on the reforms already implemented by this Government to assist clubs and the communities. Those reforms resulted in a reduction in gaming machine taxation rates from 1 September and the establishment of the new ClubGRANTS Scheme, which is expected to benefit clubs by approximately $300 million over the next four years. The key elements of the bill on which I wish to focus attention will help to ensure the long-term future of clubs through better corporate governance and management. Improvement of club corporate governance structures, viability, and sustainability were key issues identified in the memorandum of understanding that was signed between the New South Wales Liberals and The Nationals and ClubsNSW last year.
                                    The need for reform in these areas was first acknowledged in the 2008 review into the New South Wales registered clubs industry by the Independent Pricing and Regulatory Tribunal. The tribunal reported that stakeholders had expressed concern about deficiencies in the skills of some board directors. In its review, the tribunal found some directors unfortunately did not have a strong grasp of financial concepts and lacked business acumen. They did not clearly understand their role and responsibilities or have a strategic focus, and instead opted to deal with more minor operational matters. To address those deficiencies, the Independent Pricing and Regulatory Tribunal recommended that directors be required to complete appropriate training. Mandatory training for club directors as well as club managers is strongly supported by ClubsNSW as a club viability issue. These reforms will provide much-needed reforms in governance of clubs around our State.

                                    ClubsNSW previously advised that approximately 4.5 per cent of club directors had completed its director's duties course and that approximately 1.3 per cent had completed its financial management course. The bill inserts regulation-making powers into the Registered Clubs Act to allow for the development of a mandatory training framework for club directors and managers. It is vital to ensure that those who are elected to administer our clubs have the knowledge and skills to do so.

                                    This approach is consistent with the current responsible service of alcohol and responsible conduct of gambling training framework models. It will allow comprehensive discussions to occur with the clubs industry and registered training organisations to develop training frameworks that meet the individual needs of directors and managers. It will also allow the Government to examine how the training can be introduced progressively to reduce the cost impact on clubs.

                                    The Independent Pricing and Regulatory Tribunal also considered that action was needed to improve board effectiveness by addressing difficulties in electing appropriately skilled directors and addressing difficulties in attracting directors. In addition, it also noted that many clubs experience difficulty attracting suitably qualified persons to club boards and that some club constitutions limit the number of board positions that social members can hold and who is eligible to vote in club elections. It is claimed that this can narrow the pool of persons from which to elect to the board and inhibit people with appropriate skills from being elected. There are also industry concerns about ensuring appropriate diversity in club directors, including representation of various classes of members. The tribunal recommended that clubs be encouraged to remove constitutional restrictions and restrictions on voting eligibility. However, it also noted that some club members are concerned that broadening voting eligibility may lead to boards seeking to change the objectives of their clubs.

                                    These issues are contentious and need to be approached sensitively. Ideally, the Government and clubs industry representatives will be able to encourage and support clubs to address these issues voluntarily and statutory intervention will not be necessary. However, to ensure action can be taken in the event that the issues are not addressed voluntarily, the bill inserts regulation-making powers to enable matters to be prescribed relating to voting eligibility for various classes of club members, a definition of the core features of a registered club, and the circumstances where a club board will be permitted to appoint up to three club directors. Given the complexity of those issues, any proposed reforms via regulation will be progressed only in close consultation with the clubs industry should intervention be necessary in the future.

                                    The bill also inserts further regulation-making powers into the Registered Clubs Act to facilitate mandatory three-year rolling elections, if required in the future. The Independent Pricing and Regulatory Tribunal recommended that ClubsNSW encourage clubs to move voluntarily to three-year rolling elections. However, ClubsNSW has requested that the requirement for three-year rolling elections be mandated as it will enhance board stability and may lessen the opportunity for factional control of boards. It will also help to address other issues such as when funds spent on director training are wasted because of the short time that some directors are appointed to club boards, or alleviating concerns about board renewal when some directors are appointed to boards for a significant length of time. Three-year elections will facilitate the establishment of good working relationships between boards and management, and encourage directors to invest time and money in undertaking training. While the Registered Clubs Act already provides for clubs voluntarily to adopt three-year rolling elections, the inclusion of regulation-making powers to mandate this requirement in the future will send a message to the clubs industry about the importance of this issue, as well as providing the flexibility to act if necessary.

                                    The final reform in the bill deals with club corporate governance. The bill amends the Registered Clubs Act to provide for a maximum limit of nine board members of a registered club. When considering the recommendations of the Independent Pricing and Regulatory Tribunal in the 2008 review, the industry expressed concern that some boards are quite large and at risk of being inefficient or dysfunctional. I am advised that there are approximately 80 registered clubs with 10 directors or more, with the largest board consisting of 14 members. The industry agrees it is important that there is consistency across all clubs and that a maximum of nine directors is an appropriate cap to enable club boards to operate effectively. A maximum of nine board members also facilitates three-year rolling elections and may lessen the opportunity for factional control of boards.

                                    The necessary transitional arrangements will be developed with the clubs industry during the implementation of this reform to ensure that there is an orderly introduction of the nine-member limit over time and that clubs are not disadvantaged. Clubs provide much-needed jobs, high-quality facilities and services, and financial support for community and sporting organisations across the State. The Liberal-Nationals Government is committed to ensuring the sustainability of clubs and to strengthening the already significant social and economic contribution they make to communities. We have wasted no time in implementing a range of comprehensive measures to secure the integrity and viability of clubs in our community. The clubs industry reforms in this bill will contribute to real improvements in club governance and management over the next few years, but there is much work still to be done. The Government will continue to work with the clubs industry to develop and implement reforms to ensure their long-term viability and protect the many benefits they deliver to our society and economy. I commend the Minister for Tourism, Major Events, Hospitality and Racing, and Minister for the Arts for his diligence and hard work in moving forward with these reforms. I commend the bill to the House.

                                    The Hon. PAUL GREEN [5.35 p.m.]: On behalf of the Christian Democratic Party I support the Clubs, Liquor and Gaming Machines Legislation Amendment Bill 2011. The object of the bill is to make miscellaneous amendments to certain Acts, including the Registered Clubs Act 1976, the Liquor Act 2007 and the Gaming Machines Act 2001 for numerous purposes. The bulk of the bill deals with structural reforms dealing with club governance—a key initiative identified in the Government's memorandum of understanding with ClubsNSW. This bill introduces a number of regulation-making powers into the Registered Clubs Act—for example, the power to facilitate the development of a mandatory training framework for club directors and managers in a consultative process that addresses the needs of individual clubs. The bill improves the transparency of club amalgamation or de-amalgamation processes while protecting members' interests. The bill improves the efficiency and functionality of club boards by regulating, standardising and providing limits on the number of board members of a registered club.

                                    The bill protects clubs and their assets from private interests by implementing a number of measures to make sure that financial and managerial contracts comply with the law and are in the best interests of clubs and their members. These measures increase transparency in the overall management and decision-making of clubs. Importantly, the bill increases recognition of current and ex-service men and women by ensuring they no longer have to sign in when entering an RSL or services club. This is a gesture of goodwill and a well-deserved recognition of the service that these citizens provide to our State, and indeed our nation. I have no doubt that honouring them is a great move, and should be extended to all service people through the nation.

                                    The bill also tightens a number of liquor-related issues. It enables hoteliers to make a distinction between current liquor and gaming arrangements by allowing hoteliers to operate gaming machines without needing to make liquor available. This should help reduce the incidence of people gambling while under the influence of alcohol. This is indeed a welcome change. Separating the two will help many individuals who are unable to stop gambling above their means and abilities. The bill places limitations on licensees who sell liquor away from licensed premises, ensuring that a licence cannot be used to undermine the objectives of current liquor laws. I note the example given by the Hon. Steve Whan, which I know happens a lot in rural and regional areas.

                                    The bill provides consistency between hotels and clubs in regard to gaming machines. It does this by bringing permit trading into line with gaming machine entitlement trading. The bill changes the name of the Casino Liquor and Gaming Control Authority to the Independent Liquor and Gaming Authority. It further empowers this authority to reduce liquor trading hours when placing conditions on a licence. The bill also allows the authority to apply appropriate penalties for offences relating to the responsible service of alcohol and the responsible conduct of gaming training.

                                    In summary, the bill balances a number of reforms protecting the interests of club members and enhancing club viability while, importantly, to a certain degree it improves on the current scenario of the problematic impacts of alcohol and its effects on gambling and the wider community. I will take on board the amendments foreshadowed by the Hon. Steve Whan, particularly in relation to carrying over entitlements of staff in a de-amalgamation, which is very wise. Employees should not be penalised in the event of a de-amalgamation. The Christian Democratic Party does not like gambling but sees the merits of a good governance structure so that we have a regulated clubs industry. I commend the bill to the House.

                                    The Hon. SARAH MITCHELL [5.40 p.m.]: I support the Clubs, Liquor and Gaming Machines Legislation Amendment Bill 2011. I do so as a proud supporter of the clubs industry. I declare a personal interest in the industry in that my father is the manager of the Gunnedah Golf Club. He has been a manager of clubs for about 15 years and was previously at the Kyogle Golf Club. I know from experience the importance of ensuring the long-term viability of the industry, and the reforms contained in this bill will achieve that. The bill will help to facilitate club amalgamations and de-amalgamations where necessary. It will also improve club corporate governance, viability and sustainability. The Hon. Paul Green pointed out that the bill provides for RSLs and kindred clubs to permit serving and ex-service defence force personnel to enter their clubs without the need to sign in. Although this appears to be a minor change, it is a great initiative because those people give and give up so much to serve our country, and this is appropriate recognition of that sacrifice.

                                    During my contribution I will focus on the changes that the bill will make to the Liquor Act in order to maintain its integrity. The bill implements several important reforms to the Liquor Act that are necessary to ensure the integrity of the liquor laws is maintained. The Government recently identified several circumstances where licensed and unlicensed operators have sought to exploit various aspects of the liquor laws. As well as undermining the spirit and intent of the liquor laws, the action of these operators had the potential to lead to significant public disturbances and/or serious alcohol-related harm. On one occasion significant concerns were expressed about the use of a caterers licence to host hundreds of patrons at a function on a Saturday night in a nightclub setting in Newcastle. On two previous occasions the nightclub operator had been refused an application to remove a hotel licence to the premises where the function was being held. As a result, the operator sought out a licensed caterer to supply liquor during the event.

                                    The Government quickly took action to prevent further events being held by the making of a regulation prohibiting the use of a caterer's licence on premises that had previously been refused a liquor licence. The Government then requested a review of the caterers licence provisions in the Liquor Act to ensure that this category of licence could not be used to undermine the integrity of the liquor laws in any other manner. That review identified that there may be additional circumstances in which it would be appropriate to prevent the use of a caterers licence for an event that is not captured by the regulation. Such events may be proposed to be held in public places such as parks, beaches or other unforseen locations and they may have the potential to lead to disturbances.

                                    As a result, the bill introduces a new power relating to directions that the director general can issue to a licensed caterer. These directions will allow limits to be placed on the use of an authorisation to sell liquor away from the licensed premises, including controls on trading hours and preventing the exercise of the licence at a particular event away from the licensed premises. This will help to ensure that a caterers licence cannot be used in a way that undermines the integrity of the liquor laws or which may have a significant negative impact on the local community. This approach will also ensure that the director general can respond promptly to other events where the use of a caterers licence raises significant public concerns or is not considered to be in the public interest.

                                    Significant concerns were also raised regarding two unlicensed operators who sought to use an exemption under the Liquor Act for gift sellers to run a 24-hour liquor delivery service. That exemption, which is contained in section 6 of the Liquor Act, enables gift sellers to include up to two litres of liquor as part of a gift of flowers or food without needing to hold a liquor licence. In order to claim the exemption other requirements must be met, including that the liquor must be delivered together with the flowers or food to an adult person other than the purchaser away from where the business of the gift seller is conducted. This exemption is meant for legitimate businesses delivering gifts such as food and wine hampers, and flowers and wine.

                                    However, an investigation into the two unlicensed operators by the Office of Liquor, Gaming and Racing found that both operators were claiming the exemption to sell and deliver liquor that was combined with a small packet of chips or similar snack food. The investigation also found that both operators did not advertise a gift service and that the liquor and food were simply packaged together in a brown paper bag at the scene of the delivery. It was also alleged that most deliveries tended to occur late at night, outside the standard trading period provided under the Liquor Act. While it is evident that the nature of such operations seriously undermines the spirit and intent of the exemption, the Office of Liquor, Gaming and Racing has alleged that both operators were in fact selling liquor without a licence. As a result, both were issued with a range of penalty notices for unlicensed liquor sales and other related breaches of the liquor laws. I am informed that both operators have sought to defend their matters in court but that a hearing date is yet to be set.

                                    To prevent these types of operations from occurring in the future, the bill will make important changes to strengthen the controls relating to the exemption. The bill does this by providing that the vendor must market a genuine gift service, the gift must be packaged and presented in a manner that a person receiving it would reasonably assume it to be a genuine gift, and the vendor may deliver the gift only between 7.00 a.m. and 7.00 p.m. These changes make it clear that the exemption may be used only by legitimate gift sellers. To ensure that legitimate vendors are not adversely affected by an unforseen delivery delay, the bill acknowledges that unforeseen circumstances may delay the delivery of the gift.

                                    The bill contains several other miscellaneous reforms to ensure the integrity of the liquor laws is protected. The Casino Liquor and Gaming Control Authority has routinely imposed trading hour restrictions using liquor licence conditions on many occasions since the commencement of the current Liquor Act. The authority has done this to ensure consistency with the hours sought by applicants for licences and to ensure that liquor trading hours for a new licence parallel restrictions on business trading hours imposed by local consent authorities under planning laws. It was commonly understood that this practice was consistent with the legislation.

                                    However, advice from the Crown Solicitor indicated that imposing a trading hour condition that is more restrictive than the standard trading period provided under the Liquor Act is inconsistent with the authority's powers under section 53 of the Act, and is therefore invalid. To remove any uncertainty about the authority's condition-making powers, the bill provides that the authority may impose a condition with respect to the trading hours of a licensed premises that is more restrictive than the standard trading period. The bill also validates any previous decisions to impose trading hour conditions on a liquor licence made by the authority or by a local court.

                                    The bill changes the name of the Casino Liquor and Gaming Control Authority to the Independent Liquor and Gaming Authority. This change will better reflect its role as an independent statutory authority not subject to direction or control by government and provide reassurance to the public. The Liberal-Nationals Government is committed to ensuring that the integrity of our liquor laws is maintained. Unlicensed and rogue operators increase the risk of alcohol being supplied irresponsibly and falling into the hands of minors. The responsible service of alcohol and reducing the harm associated with excessive consumption of alcohol, including violence and antisocial behaviour, are taken seriously by this Government. That is why the liquor reforms in the bill are necessary. As I said, I am a big supporter of the clubs industry in this State and that is why I support the bill, which I commend to the House.

                                    The Hon. MATTHEW MASON-COX (Parliamentary Secretary) [5.49 p.m.]: Like my colleague, I am a strong supporter of the clubs industry in this State and the great contribution that members of the Australian Hotels Association make to our community. Clubs are a part of the social fabric of this State, which is under threat from the Federal Labor Government, and perhaps the State Labor Opposition.

                                    The Hon. Steve Whan: Do not misrepresent us.

                                    The Hon. MATTHEW MASON-COX: I acknowledge the shadow Minister's comments in that regard. He should once and for all time repudiate the elephant in the room, which is the precommitment proposal being pushed by the Federal Government.

                                    The Hon. Steve Whan: Point of order: My point of order relates to relevance. Madam Deputy-President, I ask you to direct the member to address the provisions of the bill. All previous speakers have done so and it is inappropriate for the Hon. Matthew Mason-Cox to introduce new material.

                                    The Hon. MATTHEW MASON-COX: To the point of order: This goes directly to the heart of the bill, which deals with the regulation of clubs, and to the heart of the vibrant contribution that clubs make to our community. In particular, it goes to the regulation of clubs—a State responsibility that the Federal Government is impinging on through its policy.

                                    DEPUTY-PRESIDENT (The Hon. Natasha Maclaren-Jones): Order! There is no point of order.

                                    The Hon. MATTHEW MASON-COX: I understand the sensitivity of those opposite in relation to this matter. The regulation of clubs has always been a State responsibility. In response to governance issues, a trend is emerging for the Commonwealth to take over State responsibilities. The Commonwealth Government intends to use its corporations power to enforce a grubby deal with Mr Wilkie from Tasmania to ensure that Labor maintains power federally at all costs. Mr Wilkie—a weapon of mass destruction against clubs and pubs—intends to pursue a precommitment policy in relation to poker machines that will strike at the heart of the clubs industry in this nation. In New South Wales the Government is introducing reforms that will make clubs more vibrant and reduce regulations to ensure that pubs and clubs are better able to survive in a difficult marketplace. But the Federal Government is seeking to walk into a State area and enforce new regulations that will strike at the heart of our efforts to make our vibrant clubs industry even more so. The reality is that this is an area of New South Wales regulation and the Commonwealth is moving in to unfairly impose regulations that will strike at the future of clubs.

                                    Before the last election the then Opposition struck a new deal with the clubs industry in New South Wales. I was proud to sign a memorandum of understanding with a range of clubs in Queanbeyan. The Queanbeyan Kangaroo Club, the Queanbeyan Leagues Club, the Queanbeyan Tigers Club and the golf clubs were all there, together with their juniors, to lend support to the then O'Farrell-Stoner Opposition's new deal with clubs in New South Wales. At the time the Coalition candidate for Monaro, Mr John Barilaro, spoke passionately about his commitment to the clubs industry and all the great things that clubs do in our communities. I felt privileged to be present when the commitment was made and to see that local people understood the important contribution that clubs make to their community.

                                    In government we have already steered one bill through Parliament that delivers on our commitment. This bill is a continuation of the commitments made in that memorandum of understanding, particularly so far as it relates to the regulation of clubs. It strikes me as perverse that, on the one hand, the New South Wales Government is implementing, in good faith, a memorandum of understanding agreed to before the election while, on the other hand, the Commonwealth is pursuing its precommitment policy on gambling that will undo the good work that we are seeking to do in this place. The New South Wales Government wants to see a vibrant clubs industry; it does not want it attacked. The State Government wants to ensure that the clubs industry has a future so that it can continue to contribute to the community it has served so well, but the Commonwealth Government is seeking to do the opposite. This is at the heart of the problem facing the clubs industry in New South Wales—it is the elephant in the room during this debate. The Commonwealth Government continues to undermine our policy of engagement on this front.

                                    The bill also deals with a range of miscellaneous regulatory issues. I will not go into them in detail, except to say that I was pleased to see further regulation in relation to three-year rolling elections, if required in the future. It is recommended that ClubsNSW encourage clubs to move voluntarily to three-year rolling elections. It is a good development and I hope that clubs pick it up over time. I note that ClubsNSW has requested that the requirement for three-year rolling elections be mandated as it will enhance board stability and may lessen the opportunity for factional control of boards. Having seen the impact of factions on the New South Wales Labor Party and the clubs that they control, one can only suggest that that would be a wise course of action.

                                    The bill also deals with several Independent Pricing and Regulatory Tribunal recommendations that will improve the management of clubs and the way in which they contribute to the community. They are welcome regulations. The mandatory training of club directors and club managers is strongly supported by ClubsNSW as an important issue of club viability. Last month I attended a WorkCover mentoring awards ceremony and spoke to Kevin Junee, who is the manager of a club on the North Coast of New South Wales. He told me of the struggles he had initially concerning training in relation to WorkCover issues as well as the many responsibilities he has as manager of a small club. It is gratifying to note that a larger club in the Tweed lent support to Kevin at that time, ensuring he was able to get across the myriad of regulation. That type of assistance is welcome. The training and mentoring provided through organisations such as WorkCover is valuable. It was heart warming to see 50 or 60 people participating in that program. They were all of the view that it is worthwhile, and I trust that the program will continue.

                                    This bill is about positive regulation of the clubs industry. It is welcome and will contribute to vital community infrastructure that continues to serve the best interests of this State. I wish the Federal Labor Government would see that its proposed changes to gambling are wrong. I call on the shadow Minister to clarify his comments, and particularly the Opposition's views, in relation to this bill. Perhaps another Opposition member could stand up in this House and repudiate Federal Labor's plans regarding mandatory precommitment. At a rally held in Braidwood some months ago, which was attended by many members of the community, the member for Eden-Monaro, Dr Mike Kelly, stood up and mumbled through his moustache—he does not have a beard—and left no-one any the wiser as to where he stands on this issue. I call on him to repudiate the legislation being proposed by his Government that will pull the rug from under clubs in Eden-Monaro. It is time that Federal Labor members found their voices on this important issue.

                                    I know that the shadow Minister is close to the member for Eden-Monaro. Perhaps he could whisper in his ear and let him know that it is time to stand up and repudiate what the Federal Government intends to do if it has its way in relation to the Wilkie amendments. Mr Wilkie is known as a weapon of mass destruction on a Federal level. As far as ClubsNSW and the Australian Hotels Association are concerned, he does not understand the impact of the changes on those industries. He does not understand the value of those industries to local communities and he does not understand that the proposed changes will have no effect in reducing problem gambling in this State. I look forward to seeing Dr Mike Kelly, MP, standing up for his community and the shadow Minister standing up for the people of New South Wales who are the direct beneficiaries of all the good work that clubs do.

                                    Dr JOHN KAYE [6.00 p.m.]: I lead for The Greens on the Clubs, Liquor and Gaming Machine Legislation Amendment Bill 2011. The Greens do not support the bill. The Hon. Matthew Mason-Cox talked about the elephant in the room. I took that to mean that the elephant in the room was the Labor Party's support for mandatory precommitment at a Federal level on gaming machines. But the real elephant or pachyderm in the room is the 40 per cent of revenue—or around $2.2 billion annually—that New South Wales clubs make from the pockets of those who are unable to control their gambling activities and who are losing a lot of money in gaming machines.

                                    Like every other member in this place, I want to see a viable clubs movement. I recognise the important role that clubs can and do play in our communities, particularly in rural and regional New South Wales. I also recognise that for many people clubs are the centre of their social life and important to them. But New South Wales faces a major policy issue. How do we reconcile the human misery not only for those who have problems with gambling, their families and their communities, but also for society? Members may well have read the excellent article by Jacob Saulwick and Matthew Moore in the Sydney Morning Herald last Saturday. That article outlined practices that some clubs engage in to maximise revenue—practices which can only be described as rank exploitation of lonely individuals unable to control gambling. Throughout society the lives of some people are being ruined by gambling.

                                    On the one hand, we have the human tragedy of addiction problem gambling and, on the other hand, we have the valuable and important role that clubs play. But resolving this important and difficult conundrum will not be achieved by a memorandum of understanding between the clubs and one or two political parties during an election. It will certainly not be resolved by a memorandum of understanding, given extremely positive treatment in magazines such as Club Life. I have spoken previously about the October 2010 edition of Club Life, volume 26, No. 9, effectively being Liberal-Nationals propaganda.

                                    In that environment a memorandum of understanding was signed between the Liberal Party, The Nationals and ClubsNSW and only one conclusion can be drawn from that—namely, the memorandum of understanding and some of the provisions in this legislation were payback for political assistance given during the election campaign. That is an appalling way to deal with an extremely difficult problem. We will not be able to resolve the dual objectives of maintaining viability in clubs and resolving the addiction of problem gamblers that way.

                                    The Hon. Michael Gallacher: Is it okay for clubs to attack political parties?

                                    Dr JOHN KAYE: I acknowledge the interjection of the Minister about clubs attacking political parties. ClubsNSW, its Australian group and individual clubs, have not been backwards in saying how much they dislike The Greens, some of the Independents and the Labor Party.

                                    The Hon. Michael Gallacher: Is it okay for them to do that?

                                    Dr JOHN KAYE: I have no difficulty with clubs saying whatever they like.

                                    The Hon. Dr Peter Phelps: Clearly you do.

                                    Dr JOHN KAYE: No. The member does not understand. What the Minister, the Government Whip and the Parliamentary Secretary simply do not understand is that my criticism is of them, not of clubs. My criticism is of them signing off on a memorandum of understanding in the context of an election where they were being delivered a massive poll boost by clubs advertising for them. Policies written in that environment will not solve this problem. Much of the policy intent of the memorandum of understanding will make the problem far worse.

                                    Before turning to specifics, I acknowledge that some of the provisions in the bill are particularly positive and supported by The Greens. The introduction of mandatory training for club directors and managers to strengthen their knowledge and skills in improving club operations and financial viability is a good thing. Pleasingly, the bill contains provisions that will do that. Strengthening the structure and operations of club boards is also a good thing. I am not convinced about a maximum limit of nine directors, but the objective of attracting and electing skilled directors is a desirable outcome.

                                    Preventing clubs and their assets from falling into the hands of private interests by creating government scrutiny of management contracts between clubs in periods of financial viability and private companies—particularly some development companies—to protect the best interests of club members is a good thing. I witnessed a developer make a move on a bowling club in my area, which was strapped for cash, and attempt to take three-quarters of the club's only income-bearing asset—its bowling greens—for development. Fortunately, common sense prevailed. The developer was booted out, but there was no protection to the club.

                                    The Greens also support serving and ex-service Australian Defence Force personnel entering RSL and service clubs as honorary members, without the need to sign in. It is a small matter but it is appropriate. But how the Government intends that provision to be enacted will be interesting. How will the people at the front desk know that a person is either a serving member of the Australian Defence Force or an ex-service person?

                                    Two provisions in the bill are of particular concern to The Greens. The first relates to schedule 3, item [31], subsections (2) and (3) of section 21, which deals with clubs that amalgamate and de-amalgamate being allowed to transfer licences for gaming machines without forfeiting any licences as they move the gaming machines about. The excellent article I earlier referred to by Jacob Saulwick and Matthew Moore in the Sydney Morning Herald last Saturday, and the follow-up in the Sun Herald on Sunday, made clear what many people already know: gaming machines earn more revenue in areas of concentrations of families from low socioeconomic backgrounds where more problem gamblers are to be found.

                                    This provision allows clubs to amalgamate and take gaming machines from less profitable areas and move them into areas where they are more profitable. This process of amalgamation and de-amalgamation will allow clubs to concentrate gaming machines in areas of high levels of potential addiction. This is a major problem. The more gaming machines that are in those areas, the more people will become addicted. The seeming paradox is that clubs in those areas are more valuable to their members. As I said at the outset, finding a way of weaning clubs in New South Wales off gaming machines is a very important objective, and it is not achieved by this bill.

                                    The Hon. Dr Peter Phelps: What is your solution?

                                    Dr JOHN KAYE: I do not have a solution. That does not mean—

                                    [Interruption]

                                    Madam Deputy-President, I ask that I be allowed to continue without the Government Whip continually interjecting.

                                    DEPUTY-PRESIDENT (The Hon. Natasha Maclaren-Jones): Order!

                                    Dr JOHN KAYE: I make the following observation. With a process of amalgamation and de-amalgamation without penalty, allowing clubs to concentrate gaming machines in areas where they will get more people with gambling problems and earn more revenue is not the solution to the problem. It is going backwards. It is creating more human misery. It is enabling New South Wales clubs to become more addicted to poker machine revenue and deepening the problem, not moving in the right direction. There is probably no magic solution, but at least we could be moving towards a solution, not away from one. This legislation entrenches problem gambling more profoundly. The Greens intend to move amendments to remove the amalgamation and de-amalgamation provisions, although they are contained in the memorandum of understanding. If those provisions are enacted they will become a source of ever bigger gambling problems.

                                    Our second concern is the decoupling of gaming machine licences and alcohol licences in relation to hours of operation. We are concerned that the legislation effectively allows for longer hours of operation. One of the most moving aspects of the investigative report by Matthew Moore and Jacob Saulwick on the weekend was the way in which late night gambling was particularly destructive. It gave evidence that was frightening in respect of the impacts on individuals of overnight gaming machine operations. Instead of increasing the hours of gaming machine operation we should be looking at ways to restrict the hours and restrict access to machines by people who will potentially become addicted or develop problematic gambling behaviours, thus reducing those problems. Allowing longer hours of operation is moving in the wrong direction. This legislation will create more problem gamblers and more problems for their families and loved ones, their community and New South Wales. This is entrenching an inherently adverse arrangement, making it worse, not better.

                                    I turn now to an observation made by the Hon. Steve Whan, who led for the Opposition, with respect to staff entitlements at the time of de-amalgamation. He raised an important issue, because if this legislation goes through we are bound to see more amalgamations and de-amalgamations. Protecting the entitlements of club employees in those processes is important. We look forward to the debate. In principle, we strongly support the Opposition's proposals. We look forward to exploring those issues more thoroughly and, hopefully, to supporting the Opposition's amendments.

                                    I conclude by saying what I said in the beginning. The Hon. Matthew Mason-Cox is right: there is an elephant in the room that people are not addressing. Andrew Wilkie has been excoriated by the Coalition at every possible opportunity. The Hon. Matthew Mason-Cox threw invectives at him and called him a weapon of mass destruction. I have had the honour and privilege of campaigning with Mr Wilkie. In respect of moral fortitude and commitment to the best interests of Australia, he leaves most members in this Chamber for dead. He is a remarkable individual who is grappling with an important problem about which the Coalition is in denial. If Coalition members left their North Shore ivory tower, visited south-western Sydney and spoke to the families of those whose lives are being destroyed by problem gambling, if they opened their hearts—indeed, if they had hearts—to those who are suffering, rather than making political points out of this, they might engage constructively in the debate. Instead, all Coalition members can do is threw epithets. They refuse to engage in the debate.

                                    I note, interestingly, that the Federal Leader of the Opposition has recognised that, despite the massive disingenuous campaign run by clubs throughout Australia against mandatory precommitment, more than 50 per cent of Australians still support mandatory precommitment. One must admire the Federal Leader of the Opposition for this, if for nothing else—indeed, I do not admire him for anything else. At least he can read an opinion poll and he is beginning to drag the Coalition into engaging with the problem gambling issue. That is a step in the right direction. If some of the wiser and more humanitarian heads in the Coalition prevailed, perhaps the Coalition would change its position and its absurd opposition to mandatory precommitment. Let me make a final observation. It is a great shame that some of the minor provisions in the legislation have been wrapped up with two provisions which we find completely unacceptable. We have no choice but to vote against this bill because it will increase problem gambling and the human misery that flows from it.

                                    The Hon. LYNDA VOLTZ [6.16 p.m.]: I will speak briefly on the Clubs, Liquor and Gaming Machine Legislation Amendment Bill 2011. I will make a couple of points about ex-service personnel and their ability to be honorary members when they go to a club. When I first heard about this I asked: How will a club know who is ex-service personnel like me? I do not have a card to identify myself. Obviously serving members carry identification cards. The legislation applies to persons who are not only former Defence Force personnel but also members of the Returned Services League of Australia. The RSL is a good secular, non-political organisation with between 45,000 and 50,000 ex-service personnel as members. People pay $30 a year to be a member of the organisation, and are issued with an RSL card. In addition, they need to be a member of an RSL club. The honorary membership issue is not a requirement for former Defence Force personnel; it is a requirement for ex-service personnel who are members of the Returned Services League of Australia. That clarifies the matter. Several members raised that issue in their contributions, so I looked at the legislation.

                                    Another concern I have about the legislation is the use of the word "independent" in the new name of the Casino Liquor and Gaming Control Authority. I cannot understand that change because I understand that board members are still appointed by the Minister. Perhaps the Minister can correct me if the board members are not appointed by the Minister. The implication that board members are appointed by the Minister and that that is not changing raises the question of why the word "independent" is included in the name of the Independent Liquor and Gaming Authority. These Acts are regulated by the Government so the Government is making the regulation and appointing the board, yet somehow the word "independent" has been inserted in the name. So either a change is being made—I hope the Minister will elucidate that in his reply—or it is simply a bit of spin. The Minister should clarify the position: Is it Government spin or has the legislation been changed so the Minister is no longer appointing the board and the Government is not regulating the industry?

                                    Another concern relates to the movement of gaming machines. When machines are moved from one club to another, the current legislation requires that for every three machines moved, one machine must be forfeited. That provision was introduced for good reasons. I do not think anyone would deny that gambling is an issue in this State. I will not stand here and be cute about it. Quite frankly, I will not wash my hands of the issue. The issue goes back to the Labor Government and I will not hide from that.

                                    The Hon. Dr Peter Phelps: It goes back further than that.

                                    The Hon. LYNDA VOLTZ: If the Hon. Dr Peter Phelps wants to say it goes back further than the Labor Government, he can go back to the Greiner Government. Society has changed over time. Society has had an impact on the way that we operate. Quite often in communities, clubs—

                                    [Interruption]

                                    I am sorry, Madam Deputy-President, I am finding it difficult to speak as there is so much noise in the Chamber.

                                    DEPUTY-PRESIDENT (The Hon. Natasha Maclaren-Jones): Order! The Hon. Lynda Voltz has the right to be heard in silence.

                                    The Hon. LYNDA VOLTZ: I grew up in Birrong. The only facility in that community was the Birrong Bowling Club. If people wanted to go somewhere they went to the Birrong Bowling Club—unless they walked to the Sefton hotel. In certain communities, for example, clubs fundamentally—

                                    [Interruption]

                                    Madam Deputy-President, I am again having difficulty speaking due to the number of interjections.

                                    DEPUTY-PRESIDENT (The Hon. Natasha Maclaren-Jones): Order! Members will listen to the member with the call in silence.

                                    The Hon. LYNDA VOLTZ: These clubs were the only facilities within these communities where people could congregate. Society changed during the seventies and eighties—for example, random breath testing was introduced. The Government's response to the difficulties these industries were facing—quite often as a result of legislation—was usually some kind of concession for the pokies industry. Quite frankly, we cannot wipe our hands of our responsibility for that—whoever we are in this society. Whatever we think, problem gambling affects families and we need to find solutions.

                                    The Government Whip raised the question of the State Government in regard to the Federal legislation. The Government has said that it would like to see voluntary regulation of this industry. However, we should not be critical of people who are trying to address the issue. If people do not like the solutions they should put up other solutions. If people do not think this system will work they should let us at least find a club that will put its hand up for a trial and see whether it works. We need to address this issue. It is the Government's responsibility to address the issue. The clubs and the hotels industry are not responsible for addressing it. We have allowed the system to become what it is. We have to find a solution.

                                    The Hon. CHARLIE LYNN (Parliamentary Secretary) [6.23 p.m.]: I support the Clubs, Liquor and Gaming Machines Legislation Amendment Bill 2011, which makes several reforms to the Gaming Machines Act. Licensed clubs are an integral part of the social fabric of our communities throughout New South Wales. They are important community assets that make major contributions to the communities they serve. They are a vital part of the social fabric of those communities. I have listened to a number of contributions from honourable members. I believe that a number of them focused on the negatives of the club industry. We all acknowledge that there are problem gamblers. However, the only way we can fix a problem gambler is not give them any access at all to a computer that is hooked to the net. We should certainly take their telephone off them. We should not let them watch television.

                                    The Hon. Duncan Gay: No sporting venues or newsagents.

                                    The Hon. CHARLIE LYNN: We should not allow them to go to sporting events or to the newsagent to buy a paper. In fact, they should not get the paper delivered. We should remove the racing section from the paper. None of us likes to see people with any sort of addiction—whether it is alcohol, drugs or gambling. However, we have got ensure that we do not focus entirely on their issues, as many people in our community benefit greatly from the club industry. For example, Anzac Day would not happen in its current form if it were not for the support of the club industry. Things do not just happen on Anzac Day; people do not wake up in the morning and just find a dawn service. It has been properly planned. The clubs provide a place for people to get breakfast early in the morning. If older veterans do not have access to vehicles and so forth the clubs assist. The clubs assist with everything that brings that day of commemoration together. There is a system.

                                    Years ago—after I had been taking many groups from Youth Insearch, Father Chris Riley's Youth Off The Streets and Punchbowl Boys High School across the Kokoda Trail—I approached Graeme Carroll, the Executive Director of the RSL and Services Clubs Association of NSW. We discussed the opportunity for what we call a peer group leadership program based on young people trekking across the Kokoda Trail. Since then—I declare an interest because they do it through my company—135 young Australians have trekked across the Kokoda Trail. If I had their reports here I would table them. Those young people experience incredible growth through that experience. In fact, I defy any program anywhere in Australia—and probably the world—to get the results that come out of a 10-day experience based on everything that is good about Australia.

                                    The Hon. Matthew Mason-Cox: You should take the Labor Party across the Kokoda Trail.

                                    The Hon. CHARLIE LYNN: Tony Stewart, the former member for Bankstown, accompanied us on a couple of those treks. He gets a lot of support from across the political spectrum. We all like to see young people develop. Young people have sporting venues to go to and sporting competitions to participate in because of clubs. The great thing about the club industry is that it offers a quality of life. The great majority of people in western Sydney go to clubs. You feel proud to walk into some of the clubs. People in western Sydney do not have the resources to go to a five-star or six-star hotel, but they enjoy their clubs in St Marys, Richmond, Rooty Hill and Penrith. As a previous speaker said, clubs are the centre of many rural and regional towns. Without them there would be no social life, there would be few sporting opportunities and so forth for young people. It behoves us to acknowledge that problem gambling is a serious issue. We must put in place systems to address that issue. However, we should not focus the entire industry on the problem gambler. We should also look at the benefits that clubs bring to the community.
                                      The Minister outlined the details of the legislation in his second reading speech, and I will not repeat them. However, I acknowledge and thank the clubs for their recognition of service veterans' exceptional contribution to our country, which I believe deserves special recognition. I am an ex-service veteran. When I was in the army I had the problem of getting knocked back when I went to clubs because my identification card was not acceptable. We used to take exception to that. We thought, "What else do we have to do to be allowed into this place?" However, I am pleased that the bill will result in ex-service men and woman who are active members of the RSL no longer needing to sign in when entering an RSL or ex-services club. This reform will apply to Australian Defence Force personnel. This is an appropriate recognition of their service to our nation.

                                      The bill introduces a defence provision for club managers where reasonable steps have been taken to comply with certain liquor laws. A similar defence provision previously existed under the Registered Clubs Act. Consistent with that previous legislation, a defence will not be available for the offence of permitting intoxication, nor will the defence be available where a specific defence is already available in the Liquor Act or where the Act provides that a club manager is guilty for failing to comply with a direction without reasonable excuse. The bill makes another important club industry reform by removing the ability for royal commission style investigations to be conducted under section 41X of the Registered Clubs Act. This reform is advanced because more appropriate and effective investigative powers already exist under the Registered Clubs Act and the Crimes Act.

                                      The reforms do not impact on the well-established harm minimisation controls in the Gaming Machines Act, such as provision of a self-exclusion scheme, restrictions on the locations of gaming machines and automatic teller machines, prohibition of inducements to gamble such as offering free credits, and the display of gambling warning notices, information about the chances of winning, and contact details for problem gambling counselling services. The gaming-related reforms of the bill are largely technical and clarifying in nature. Primarily they aim is to improve the operation of gaming machine threshold schemes while also providing some assistance to clubs that choose to merge or separate.
                                        Pursuant to sessional orders business interrupted to permit a motion to adjourn the House if desired.
                                          The House continued to sit.

                                          [The Deputy-President (The Hon. Natasha Maclaren-Jones) left the chair at 6.30 p.m. The House resumed at 7.45 p.m.]
                                            The Hon. CHARLIE LYNN (Parliamentary Secretary) [7.45 p.m.]: This bill demonstrates the Government's clear commitment to assisting the club industry. The Government has wasted no time in implementing a comprehensive range of measures to secure the financial viability of the club industry. I commend the bill to the House.

                                            The Hon. MICHAEL GALLACHER (Minister for Police and Emergency Services, Minister for the Hunter, and Vice-President of the Executive Council) [7.46 p.m.], in reply: I thank all members who contributed to the debate. A number of members made worthy comments so I sought advice from the department and the Ministry in preparing my reply. The Hon. Steve Whan in effect asked why the Government is repealing section 41X, which is an important regulatory control to ensure that clubs are conducted for the benefit of members. The removal of section 41X of the Registered Clubs Act implements a key election commitment made under the memorandum of understanding with ClubsNSW.

                                            Under section 41X of the Registered Clubs Act, the Director General of the Department of Trade and Investment, Regional Infrastructure and Services has power to establish major inquiries into registered clubs for the purpose of investigating an allegation about any corrupt or other improper conduct in relation to a registered club. In the past the royal commission styles of investigation have consumed considerable resources, were particularly disruptive to club operations and found little evidence to support allegations of corrupt activities. There are less disruptive but equally effective investigative powers already available under the Registered Clubs Act in addition to provisions against fraud in the New South Wales Crimes Act.

                                            The Hon. Steve Whan asked about the decoupling of trading hours and the sale of liquor. Hoteliers still will be required to comply with the hotel primary purpose test under the Liquor Act. A key element of that test mandates that the keeping or operation of gaming machines in a hotel must not detract unduly from the character of the hotel or from the enjoyment of persons using the hotel otherwise than for the purpose of gambling. There is also a range of existing gambling harm minimisation measures under the Gaming Machines Act that operate to ensure that hotels do not become what has been referred to as gambling dens and that gaming operators are responsibly managed. For example, restrictions exist in relation to the advertisement, promotion and location of gaming machines in hotels.

                                            Hoteliers also are prohibited from displaying gambling-related signs anywhere outside or in the vicinity of the hotel or anywhere inside the hotel so that it can be seen from outside the venue. The Director General of the Department of Trade and Investment, Regional Infrastructure and Services can also direct a hotelier to move or screen gaming machines that are located in a manner that is designed to attract the attention of the public or is contrary to the public interest. Although inspectors already monitor gaming machine operations as part of their normal course of compliance activities, specific monitoring of the operation of these arrangements will be undertaken.

                                            The Hon. Steve Whan also asked what clubs might be expected to take up the de-amalgamation process. I am advised that for some clubs the best or only way to survive and develop future prosperity is to amalgamate with another club. Several provisions already exist under the liquor, gaming and registered clubs laws to facilitate club amalgamations. Many clubs already have taken advantage of those provisions. However, last year the need for further reform was identified and agreed to under the memorandum of understanding between the New South Wales Liberals and Nationals and ClubsNSW. The bill achieves this by reintroducing a specific type of amalgamation that allows two or more clubs to merge and create an entirely new club rather than the existing type of amalgamation whereby one club, which is known as the parent club, effectively takes control of the other club.

                                            The club industry has indicated that this type of approach will appeal to some clubs because a more even share of the new club's governance can be negotiated under such an arrangement. The bill also exempts amalgamated clubs from the remaining forfeiture requirement when poker machines and entitlements are transferred between their premises that are situated in different local government areas. Amalgamated clubs already are exempt from forfeiture if entitlements are transferred between their premises that are situated within the same local government area.

                                            Dr John Kaye asked a question in relation to the clubs memorandum of understanding election commitment. Quite simply, I think it is fair to say that the memorandum of understanding is well known and was well received by the club movement. The memorandum of understanding recognises the significant contribution made by the club movement to the community and to the economy of the State, and that is well and truly on the record. It is simply wrong for Dr John Kaye to dismiss those contributions in the manner he did during his contribution to the debate today.

                                            Dr John Kaye asked also about a reduction in problem gambling. The Government is committed to reducing problem gambling through a range of measures. New South Wales has a network of face-to-face telephone and Internet problem gambling counselling and support services that are funded through the Responsible Gambling Fund. Frontline problem gambling counselling and support services will receive a record $10.2 million this financial year from the Government. That funding supports approximately 150,000 counselling hours annually, delivered by 44 face-to-face services, operating from more than 200 separate locations throughout the State. In addition to that funding, $780,000 has been allocated this financial year towards the 24-hour-a-day, seven-day-a-week Gambling Helpline, and $218,000 has been allocated towards the national Gambling Help Online Service, which provides live online and email counselling 24-hours-a-day, seven-days-a-week.

                                            All those initiatives complement the strict in-venue controls that exist in New South Wales. They include patrons having access to problem gambling counselling services and self-exclusion schemes, venue staff being trained in the responsible conduct of gambling, mandatory gaming machine shutdown periods, and bans on gaming machine advertising and credit card cash withdrawals from automatic teller machines in gaming venues. There are also requirements for gaming venues to install clocks, and Gambling Helpline information must be placed on every gaming machine. The latest research shows that 0.4 per cent of people in New South Wales are problem gamblers, and that figure is down from 0.8 per cent in the previous study. It is worth noting that that is the lowest rate in Australia.

                                            Dr John Kaye asked also about mandatory pre-commitment. The regulation of poker machines in New South Wales is a matter for the Government. The Liberal-Nationals Government does not support the Federal Government's mandatory pre-commitment proposal. There is no evidence that mandatory pre-commitment would effectively address problem gambling, and the unworkable timeframes attached to the proposal are likely to adversely affect local clubs and consequently their contributions to communities. In addition, the Government is concerned that a mandatory pre-commitment system could drive players away from licensed venues to underground or online gambling sites where the risk of under-age and problem gambling would be much worse.

                                            The Government is committed to further reducing the prevalence of problem gambling by developing targeted, effective and evidence-based measures. To that end the Government supports a system of pre-commitment that is voluntary for the player, venue-based and cost effective. The Government is also concerned to ensure that the regulation of online gambling and the promotion of live betting odds during sporting commentary are dealt with effectively by the Federal Government.

                                            Dr John Kaye asked also about the transfer of gaming machines. This bill does not affect the existing requirements applying to club amalgamations. An amalgamated club is already exempt from having to forfeit any poker machine entitlements when transferring entitlements between its premises if both premises are situated within the same local government area. If an amalgamated club transfer entitlements between its premises that are situated in different local government areas a lesser forfeiture rate of one out of every four to six entitlements transferred applies.

                                            These forfeiture concessions were introduced along with a range of other gaming machine reforms in 2008 to encourage and support club amalgamations, particularly amalgamations between clubs in the same local government area. However, the clubs industry is seeking the removal of the lesser forfeiture rate to help encourage and facilitate amalgamations between clubs in different local government areas. That is what the bill does: it implements a minor reform to remove the lesser forfeiture rate. It is a sensible and practical measure to assist club amalgamation ventures and give them the best possible chance of remaining viable as poker machine entitlements are valuable assets.

                                            The Hon. Lynda Voltz raised a question about trading hours. If she had taken the opportunity to read the agreement in principle speech of Minister Souris in the other place, she would have known about this matter. The Minister said that the authority is an independent body and exercises its statutory role at arm's length from the Minister and Government with respect to the Casino, Liquor and Gaming Control Authority. The Hon. Lynda Voltz raised a concern also about the reduction in liquor trading hours. That matter was also well addressed by the Minister in his agreement in principle speech in the other place. The Hon. Lynda Voltz would be well served to read the Minister's speech if she has other concerns about the proposed legislation. I commend the bill to the House.

                                            Question—That this bill be now read a second time—put.

                                            The House divided.
                                            Ayes, 27
                                            Mr Ajaka
                                            Mr Blair
                                            Mr Clarke
                                            Mr Colless
                                            Ms Cotsis
                                            Mr Donnelly
                                            Ms Fazio
                                            Ms Ficarra
                                            Mr Foley
                                            Mr Gallacher
                                            Miss Gardiner
                                            Mr Khan
                                            Mr Lynn
                                            Mr MacDonald
                                            Mr Mason-Cox
                                            Mrs Mitchell
                                            Mrs Pavey
                                            Dr Phelps
                                            Mr Primrose
                                            Mr Roozendaal
                                            Mr Searle
                                            Mr Secord
                                            Mr Veitch
                                            Ms Voltz
                                            Mr Whan


                                            Tellers,
                                            Mr Borsak
                                            Mr Brown

                                            Noes, 5
                                            Ms Barham
                                            Mr Buckingham
                                            Ms Faehrmann
                                            Tellers,
                                            Dr Kaye
                                            Mr Shoebridge
                                            Question resolved in the affirmative.

                                            Motion agreed to.

                                            Bill read a second time.

                                            In Committee.

                                            Clauses 1 and 2 agreed to.

                                            The Hon. STEVE WHAN [8.10 p.m.]: by leave, I move amendments Nos 1 and 2 on sheet C2011-107B in globo:

                                                No. 1 Page 6, schedule 1. Insert after line 28:
                                                      [17] Section 17AEB (e)
                                                          Insert at the end of section 17AEB (d):
                                                          and
                                                          (e) the proposed amalgamation is in the interests of the persons employed by each of the clubs that are amalgamating, having regard in particular to the proposed arrangements for protecting the long service leave entitlements (or other entitlements based on length of continuous service) of those persons and for ensuring that those entitlements will continue to accrue as a result of the amalgamation.

                                                No. 2 Page 8, schedule 1 [17], proposed section 17AM. Insert at the end of line 21:
                                                          and
                                                          (e) the proposed de-amalgamation is in the interests of the persons employed by the parent club at the relevant premises, having regard in particular to the proposed arrangements for protecting the long service leave entitlements (or other entitlements based on length of continuous service) of those persons and for ensuring that those entitlements will continue to accrue as a result of the de-amalgamation.

                                            As I said in my speech on the second reading, these amendments are designed to ensure that, in considering an amalgamation or de-amalgamation, as well as considering the four items the Government has already provided for in the bill, which includes the interests of members, the authority also considers the interest of employees. In particular, we believe it should have regard to proposed arrangements for protecting long service leave entitlements or other entitlements based on continuous service. As I said in the second reading debate, our concern is not to slow down or oppose de-amalgamation but to ensure that when a de-amalgamation occurs the creation of a new entity does not mean the termination of people's continuation of service. The concern of the Opposition is that in the case of an employee who finishes up on Friday and returns to work on the same site on Monday, even if technically or legally the employer is a different entity, the employee's entitlements continue to accrue. So someone with seven years long service leave has a right to continue to 10 years service and get their entitlement.

                                            It is not an onerous provision. It will be up to the authority as to how that is enforced. I would suggest that, as part of the material submitted to the authority, it would seek submissions from clubs containing details on how they propose to preserve workers' entitlements. I urge support for these two amendments to protect employees' rights. In support of that I refer to a press release put out by Tara Moriarty, the Secretary of the Liquor and Hospitality Division of United Voice. She has highlighted this concern on behalf of her members. She said:
                                                Obviously when you're talking about de-amalgamating clubs, it's important that no one involved gets burnt unfairly ... So the Government has rightly included transferable liquor licenses for owners and transferable entitlements for members. But they seem to have forgotten something—where are the transferable entitlements for workers?

                                            The press release goes on to "urge the NSW Government to take another look at this legislation and insert appropriate protections for the thousands of club employees across the State". The Opposition has great pleasure in moving amendments to do just that.

                                            The Hon. MICHAEL GALLACHER (Minister for Police and Emergency Services, Minister for the Hunter, and Vice-President of the Executive Council) [8.14 p.m.]: The Government does not support these two amendments.

                                            The Hon. Amanda Fazio: Well, you ought to.

                                            The Hon. MICHAEL GALLACHER: I refer the member to the Long Service Leave Act 1955, section 4 (11) (c) of which states:
                                                    (c) where a business, undertaking or establishment or any part thereof has, whether before or after the commencement of this Act, been transmitted from an employer (in this paragraph called the transmittor) to another employer (in this paragraph called the transmittee) and a person who at the time of the transmission was a worker in the employ of the transmittor in that business, undertaking, establishment or part thereof becomes a worker in the employ of the transmittee:

                                                      (i) the continuity of the period of service of the worker shall be deemed not to have been broken by reason of the transmission, and

                                                      (ii) the period of service which the worker has had with the transmittor or any prior transmittor shall be deemed to be service of the worker with the transmittee.

                                            The interjection by the Hon. Amanda Fazio was that they are different companies. It goes on:
                                                In this paragraph "transmission", without limiting its ordinary meaning, includes transfer, conveyance, assignment or succession, whether by agreement or operation of law, and "transmitted" has a corresponding meaning.

                                            So the Opposition's concerns are already covered under the Long Service Leave Act. Those opposite have identified a concern but hopefully what I have said will now allay their concerns: they are no longer valid. The paramount concern is that the amalgamations and de-amalgamations are in the interests of the members of the clubs, and without wishing to minimise concerns about employees and their entitlements—which are important concerns—as I have indicated, it is a separate issue addressed under relevant industrial relations legislation, the Long Service Leave Act 1955.

                                            The memorandum of understanding which members must consider in deciding whether or not to amalgamate must address the intention regarding the future direction of the amalgamated club. Consideration of workers' entitlements is already part of this process and the de-amalgamation process will mirror this in regulations. With the provision that I have read from the Long Service Leave Act, and our intent in relation to the Opposition amendments, I think it is fair to say the Government has no reason to support it and indeed, neither should those opposite.

                                            Dr JOHN KAYE [8.15 p.m.]: As I said in the second reading debate, The Greens would be interested to hear the debate on this. We have heard the Opposition spokesperson raise the issue of an amalgamation being in the interests of persons employed and de-amalgamation being in the interests of persons employed The Government comes back and says the Long Service Leave Act 1955 has provisions which legally protect the rights of workers in the transfer from one enterprise to another. I am not convinced that I fully understand the nuances of the Long Service Leave Act or of what the Hon. Michael Gallacher has said. I would like to hear more debate on this issue. It is a serious matter. The issue has been raised by the organisation representing workers and the Government claims there is no issue here. The words of the shadow Minister are that this is "in the interests of." So this is a question about a decision being made by the regulator in allowing an amalgamation to go ahead.

                                            My question to the shadow Minister is, is the intent of his amendments to make sure that when a de-amalgamation or an amalgamation occurs there are sufficient funds in the amalgamated or de-amalgamated entities to cover those entitlements? If that is the case, then what the Minister says although interesting and important, is not necessarily relevant to how we vote on this amendment. If I am reading this correctly, the amendment covers the issue of whether there are adequate funds available or whether the regulator considers that the amalgamation or de-amalgamation will leave entities behind it that are capable of servicing the long service or other entitlements of employees in those sectors.

                                            The Hon. STEVE WHAN [8.17 p.m.]: I thank the members of the Government for their helpful advice across the Chamber but I do not intend to withdraw the amendments. The Opposition would like to see the amendment carried. I appreciate the explanation from the Minister, which the Government was not able to give me yesterday in such detail, but I believe it is valuable for a consideration of an amalgamation or de-amalgamation to explicitly consider the interests of the persons employed in a club. It is the union's opinion that it had not got the level of comfort that it felt was important.

                                            The Hon. Dr Peter Phelps: The union has set you up.

                                            The Hon. STEVE WHAN: I have one thing to say to the Opposition Whip: None of us on this side will ever be embarrassed about trying to protect workers' rights. That is one of the key reasons we are here

                                            TEMPORARY CHAIR (The Hon. Sarah Mitchell): Order!

                                            Dr John Kaye: Point of order: I am genuinely trying to sort my way through some complex amendments. I want to hear what the shadow Minister has to say. It would be easier to hear without the chorus of interjections.

                                            TEMPORARY CHAIR (The Hon. Sarah Mitchell): Order! I uphold the point of order. Members will desist from interjecting. The Hon. Steve Whan has the call.

                                            The Hon. STEVE WHAN: I appreciate the Government's reading of those parts of the Long Service Act that it feels are relevant, but this amendment still has value. It is important for those employees going through a de-amalgamation process to be confident that the accrued funds have been held by the new club. It is reasonable to include that provision in the bill, given that the provisions already include the authority being satisfied about members' rights and a number of other things. I intend to proceed with this amendment.

                                            The Hon. PAUL GREEN [8.20 p.m.]: I indicated earlier that I would support the amendment of the Hon. Steve Whan, but given the clarification by the Hon. Michael Gallacher—

                                            The Hon. Amanda Fazio: Don't believe him. He is always trashing workers' rights.

                                            The Hon. PAUL GREEN: In this place it is very hard to know who to believe and when to believe them. Everyone says, "Believe me".

                                            The Hon. Eric Roozendaal: The classic rule is to never listen to The Greens.

                                            The Hon. PAUL GREEN: I acknowledge the interjection by the Hon. Eric Roozendaal. In light of my experience in local government I will trust the Government on this. I am happy that workers' rights will be protected.

                                            The Hon. ADAM SEARLE (Deputy Leader of the Opposition) [8.21 p.m.]: I was not going to participate in this debate but I heard what the Minister said—and I am directing some of these remarks to the Hon. Paul Green through the Chair. The Minister referred to the Act. What the Minister said is true as far as it goes. It may create legal entitlements but that is no good if the employing entity does not have the assets to meet the liabilities. The Opposition's proposed amendment places an obligation on the regulator to satisfy itself amongst other things that those assets will be available when considering the proposed amalgamation or de-amalgamation.

                                            We are talking about two separate things here. The legal rights might be there but there is no obligation to put the money aside into a separate fund or trust as they go. In many cases there are avenues under legislation for employees to recover their entitlements but they may not be able to do so because the employer is not required to put the money aside as it goes and, for example, due to hard times in business, the employer may not have the assets to meet the liabilities when the worker needs them. This problem will be squarely addressed by the Opposition's amendment. I implore the Christian Democratic Party to reconsider its position. I implore the Christian Democratic Party to adhere to its early position of supporting the Opposition amendment and support the rights of working people in this industry.

                                            The Hon. TREVOR KHAN [8.23 p.m.]: I suggest to the Hon. Adam Searle that he invites a very impractical solution.

                                            [Interruption]

                                            The Hon. Adam Searle seeks a regulator to look at a point of time, at the point of de-amalgamation, but essentially with some sophistry going into the future. That would be an impossible task for any regulator. Businesses are transferred day in and day out. What is being required in the de-amalgamation in the club industry is something that no other industry is obliged to go through. The issue of long service leave raised by the Hon. Steve Whan earlier was clearly and explicitly addressed. Those opposite, having been embarrassed by the exposure of their lack of understanding, are now moving to another point. Anyone who has been involved in the transfer of business would well recognise the calculations that are done for long service leave adjustments, et cetera, each time a transfer is undertaken.

                                            Dr JOHN KAYE [8.25 p.m.]: I am a great admirer of the Hon. Trevor Khan's legal skills, but I am not an admirer of his understanding of how regulatory bodies work. Regulatory bodies constantly make forecasts. Regulatory bodies constantly look at the situation of the entity it is regulating and make a decision as to how it is going to operate. That is how prices are set for public utilities, and that is how these things work. The proposed amendment to item [17] would create an obligation on the regulator to look at the business position of entities left over after an amalgamation or de-amalgamation and ask whether there will be adequate funds to provide for the entitlements of the workers in the pre-changed organisations as they make the transition. It is a completely different position from that in the Long Service Act 1955, which says that there is a legal obligation to do so. I thank the Hon. Adam Searle for his explanation. To understand the difference one only has to take the situation of those workers who have been left by companies that do the midnight flit leaving their workers without their owed entitlements. The Greens support the amendment.

                                            The Hon. STEVE WHAN [8.26 p.m.]: I understood the Hon. Trevor Khan to suggest that the authority should not be able to do the assessment of the clubs. In the bill the Government is asking the authority to assess whether the de-amalgamated club will be financially viable. The extension of the bill by an extra point in that area will not impose an additional burden on the authority.

                                            Question—That Opposition amendments Nos 1 and 2 [C2011-107B] be agreed to—put.

                                            The Committee divided.
                                            Ayes, 16

                                            Ms Barham
                                            Mr Buckingham
                                            Ms Cotsis
                                            Mr Donnelly
                                            Ms Faehrmann
                                            Mr Foley
                                            Dr Kaye
                                            Mr Primrose
                                            Mr Roozendaal
                                            Mr Searle
                                            Mr Secord
                                            Mr Shoebridge
                                            Mr Veitch
                                            Mr Whan

                                            Tellers,
                                            Ms Fazio
                                            Ms Voltz

                                            Noes, 18
                                                Mr Ajaka
                                                Mr Blair
                                                Mr Borsak
                                                Mr Brown
                                                Mr Clarke
                                                Ms Ficarra
                                                Mr Gallacher
                                                Miss Gardiner
                                                Mr Gay
                                                Mr Green
                                                Mr Khan
                                                Mr Lynn
                                                Mr MacDonald
                                                Mr Mason-Cox
                                                Mrs Pavey
                                                Mr Pearce


                                                Tellers,
                                                Mr Colless
                                                Dr Phelps
                                            Pairs

                                            Mr MoselmaneMs Cusack
                                            Ms SharpeMr Harwin
                                            Ms WestwoodMrs Maclaren-Jones
                                            Question resolved in the negative.

                                            Opposition amendments Nos 1 and 2 [C2011-107B] negatived.

                                            Schedule 1 agreed to.

                                            Schedule 2 agreed to.

                                            Dr JOHN KAYE [8.36 p.m.], by leave: I move The Greens amendments Nos 2 to 4 on sheet C2011-116 in globo:

                                                No. 2 Page 26, schedule 3 [31], lines 5–25. Omit all words on those lines.

                                                No. 3 Page 27, schedule 3 [37], lines 28–30. Omit all words on those lines.

                                                No. 4 Page 27, schedule 3 [38], lines 31 and 32. Omit all words on those lines.
                                            The intention of these amendments is to remove the concessions on the removal of gaming machine licences in the process of amalgamation and de-amalgamation. I spoke at some length about this issue during the second reading debate and I will not rehearse the arguments entirely again, other than to summarise that the problem is that if these provisions are not deleted from the bill it will be possible for clubs, by a series of amalgamations and de-amalgamations, to concentrate gaming machines into areas where they will do the most damage. Those areas are attractive to the club industry because they are where gaming machines make the most profit. They are also the areas where they do the most individual and social damage. Therefore it would be inappropriate to create a mechanism that allows the aggregation of poker machines into such areas.

                                            I refer again to the excellent article in Saturday's Sydney Morning Herald and the follow-up article in Sunday's Sun-Herald by Jacob Saulwick and Matthew Moore which looked at the impacts of gaming machines in areas of low socioeconomic background. From that it is possible to extrapolate the impacts of yet more gaming machines in those areas. These amendments simply delete the provisions in the Government's bill that would allow amalgamation and de-amalgamation to happen without the loss of gaming machine licences. I commend the amendments to the Committee.

                                            The Hon. STEVE WHAN [8.38 p.m.]: The Opposition will not be supporting The Greens amendments. As I said in my contribution to the second reading debate, we believe it is appropriate for a de-amalgamating club to have the full entitlement of poker machines so that it is financially viable. Our objection to the Government's proposal, which is dealt with in an Opposition amendment, is the removal of the reduction in the number of entitlements as they are transferring to amalgamating clubs. On that basis, we will not support The Greens amendments.

                                            The Hon. MICHAEL GALLACHER (Minister for Police and Emergency Services, Minister for the Hunter, and Vice-President of the Executive Council) [8.39 p.m.]: I will deal with each amendment seriatim, recognising that the amendments are being dealt with in globo. Amendment No. 2 is not supported by the Government. It is only applicable to a limited number of clubs. The bill provides flexibility for amalgamated clubs and assists with the financial viability of de-amalgamating clubs. To put it simply, it is not a practical solution or suggestion by The Greens.

                                            The Government does not support The Greens amendment No. 3. The bill provides consistency with other provisions in the Act, such as existing sections 23 and 24, by recognising that entitlements are held at the licence level. If the licence is cancelled or surrendered, clubs have 12 months to transfer entitlements before they may be forfeited to the Casino Liquor and Gaming Authority. This amendment is unnecessary and impairs the overall operation of the Act. Finally, The Greens amendment No. 4 is not supported. The bill merely consolidates existing provisions in sections 25 and 25A by incorporating them into new sections 20 and 21. The Greens amendment misunderstands that the provision in the bill is for the purpose of clarification, and indeed simplification.

                                            Question—That The Greens amendments Nos 2 to 4 [C2011-116] be agreed to—put and resolved in the negative.

                                            The Greens amendments Nos 2 to 4 [C2011-116] negatived.

                                            The Hon. STEVE WHAN [8.41 p.m.]: I move Opposition amendment No. 3 on sheet C2011-107B:
                                                No. 3 Page 26, schedule 3 [31], line 11. Omit "not required". Insert instead "required unless the transferring premises and the other set of premises are situated in the same local government area".

                                            I foreshadowed in my speech during the second reading debate that the Opposition would move this amendment. It is a fairly simple amendment that seeks to restore the requirement that when machines are transferred from premises in one local government area to another local government area there is the forfeiture of a percentage of the machines, as was established by the previous Government. As I said before, we do not have a problem with trying to ensure the viability of the de-amalgamating clubs—we are happy with that part of the legislation—but we wish to change the provisions in new section 31 (2) to the way they were under the previous Government. This amendment will ensure that if there is a transfer of machines from one local government area to another local government area there is some forfeiture. I outlined my arguments in support of the amendment during the second reading stage, so I will not repeat them now.

                                            The Hon. MICHAEL GALLACHER (Minister for Police and Emergency Services, Minister for the Hunter, and Vice-President of the Executive Council) [8.42 p.m.]: The Government does not support Opposition amendment No. 3. We believe it is inappropriate for the following reasons. First, if the amendment were to be adopted it would undo the concession introduced by the former Government in 2008. The fundamental principle in this area is that clubs that wish to amalgamate may transfer poker machine entitlements between the clubs to facilitate the benefits available from the amalgamation. It also provides flexibility to existing amalgamated clubs by enabling the transfer of poker machines between amalgamated club premises.

                                            Any proposed increase is still subject to the statutory test, which is the local impact assessment process that is determined by application made to the independent Casino Liquor and Gaming Control Authority. The relevant test is that there must be a positive or overall benefit to the local community. The proposed amendment is therefore redundant and represents a misunderstanding of how the existing legislation operates. The amendment would also have the unintended consequence that two amalgamated clubs in the same local government area—possibly a high-risk area—would be exempt but two clubs in different areas would be caught.

                                            Dr JOHN KAYE [8.43 p.m.]: The Government's argument would make sense only if the viability of clubs could be secured, or if the trade-off between increasing the number of poker machines in high-risk areas and the viability of clubs fell on the ground of allowing yet more damage to occur. Therefore, The Greens support the amendment.

                                            The Hon. AMANDA FAZIO [8.43 p.m.]: I speak in support of my colleague's amendment. In addressing why he did not support the amendment, the Leader of the Government gave the example of clubs in different local government areas being discriminated against. He said that if there were two amalgamated clubs in a single local government area they would not have any penalty placed on them if they de-amalgamated. That is the current situation. If the two clubs between them had 250 poker machines regardless of whether they amalgamated or de-amalgamated there would still be 250 poker machines in that local government area. To say that the clubs would be placed in an advantageous position compared with clubs in other local government areas is nonsensical and illogical. It goes to show that those opposite are desperate to allow clubs to transfer poker machines willy-nilly across New South Wales with no cognisance of the harm that it may cause.

                                            The Hon. STEVE WHAN [8.44 p.m.]: To clarify, section 21 (2) of the Gaming Machines Act 2001 states:

                                                (2) If, in the case of a registered club that has more than one set of premises, poker machine entitlements allocated in respect of one of those sets of premises (the transferring premises) are transferred to another set of the club’s premises:
                                                    (a) the forfeiture to the Authority of one entitlement per transfer block is not required if the transferring premises and the other set of premises are situated in the same local government area, and
                                                    (b) if the transferring premises and the other set of premises are situated in different local government areas—the forfeiture to the Authority of one entitlement for every 2 transfer blocks is required.
                                              In this amendment we are seeking to retain the existing provisions, rather than introduce new ones.

                                              Question—That Opposition amendment No. 3 [C2011-107B] be agreed to—put.

                                              The Committee divided.
                                              Ayes, 20
                                              Ms Barham
                                              Mr Borsak
                                              Mr Brown
                                              Mr Buckingham
                                              Ms Cotsis
                                              Mr Donnelly
                                              Ms Faehrmann
                                              Mr Foley
                                              Mr Green
                                              Dr Kaye
                                              Mr Primrose
                                              Mr Roozendaal
                                              Mr Searle
                                              Mr Secord
                                              Mr Shoebridge
                                              Mr Veitch
                                              Ms Westwood
                                              Mr Whan
                                              Tellers,
                                              Ms Fazio
                                              Ms Voltz

                                              Noes, 16
                                              Mr Ajaka
                                              Mr Blair
                                              Mr Clarke
                                              Ms Ficarra
                                              Mr Gallacher
                                              Miss Gardiner
                                              Mr Gay
                                              Mr Harwin
                                              Mr Khan
                                              Mr Lynn
                                              Mr MacDonald
                                              Mr Mason-Cox
                                              Mrs Pavey
                                              Mr Pearce

                                              Tellers,
                                              Mr Colless
                                              Dr Phelps

                                              Pairs

                                              Mr MoselmaneMs Cusack
                                              Ms SharpeMrs Maclaren-Jones
                                              Question resolved in the affirmative.

                                              Opposition amendment No. 3 [C2011-107B] agreed to.

                                              Schedule 3 as amended agreed to.

                                              Schedules 4 to 6 agreed to.

                                              Title agreed to.

                                              Bill reported from Committee with an amendment.

                                              Adoption of Report

                                              Motion by the Hon. Michael Gallacher agreed to:
                                                  That the report be adopted.

                                              Report adopted.

                                              Third Reading

                                              Motion by the Hon. Michael Gallacher agreed to:
                                                  That this bill be now read a third time.

                                              Bill read a third time and returned to the Legislative Assembly with an amendment.