171. After the second reading of a Bill, unless the Bill is referred to a Select or Standing Committee:
(a) the President may inquire of the House if leave is granted to proceed to the third reading of the Bill forthwith; or
(b) a motion may be made "That the President do now leave the Chair, and the House resolve itself into a Committee of the Whole to consider the Bill in detail", which shall admit of no debate or amendment, or a future day may be appointed for the purpose.
PETITION
Public Health System
Petition praying that the House resist all moves to implement productivity savings in the public health system, to close hospitals and to downgrade services without consultation with both the community and interested bodies, received from the Hon. Elisabeth Kirkby.
WATER BOARD (AMENDMENT) BILL)
Bill received and read a first time.
Suspension of certain standing orders agreed to.
CHELMSFORD PRIVATE HOSPITAL PATIENT COMPENSATION
Matter of Public Interest
Reverend the Hon. F. J. NILE [2.43]: I move:
That the following important matter of public interest should be discussed forthwith:
(1) the need for the Government to provide ex gratia payments for the victims of Chelmsford
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Hospital;
(2) the need for a quantum of $10 million to be set aside for such ex gratia payments; and
(3) the need for a committee to be established to distribute the ex gratia payments on an equitable basis to the victims of Chelmsford Hospital within three months.
The Hon. J. P. HANNAFORD (Minister for Health and Community Services) [2.44]: The Government is of the view that the motion should be resolved in the affirmative. The question can be put and the debate can proceed immediately.
Motion agreed to.
Reverend the Hon. F. J. NILE [2.45]: I thank all members of the House for their co-operation in agreeing that this matter should be discussed forthwith. This matter of public interest was raised as a matter of public importance in the other place by the Deputy Leader of the Opposition. It is important that this House supports the motion I have moved and gives comfort to the victims of Chelmsford hospital by demonstrating to them that the oldest and most senior House of Parliament is sympathetic to their concerns and needs. The motion in the other place was supported by the Opposition, the Government and Independent members on the crossbenches. During the debate, Dr Refshauge, the honourable member for Marrickville, said:
The tragedy of Chelmsford Hospital is still with us. Since 1963 victims have gone to Chelmsford Hospital, have suffered at the hands of doctors at that hospital and have tried to get some form of compensation. The history of what happened there reveals that no one here can take pride at all in the behaviour of the people involved with Chelmsford Hospital.
He went on to say:
I refer to Governments both Liberal and Labor, which were responsible for ensuring safety, particularly in the health area. There is probably only one person in this Chamber who can hold his head really high on this issue, and that is the honourable member for East Hills. The Attorney General, when Minister for Health, announced in this Chamber on 18th May, 1988, the following:
That human suffering occurred is not denied, nor is the fact that the Department of Health failed in its duty to protect patients from potential and real harm as a result of receiving the treatment denied.
At page 22 of the Hansard of the Legislative Assembly for 2nd December, Dr Refshauge said:
The first complaint about Chelmsford Hospital arose in 1970 but there was no investigation of any substance until 1985. The Department of Health failed to categorise complaints, acquire evidence to confirm the complaints or provide evidence to the Crown Solicitor to allow a formal complaint under the Medical Practitioners Act. Despite denials that he had promised to do so, the Attorney General, the former Minister for Health, initially refused to establish a royal commission into Chelmsford. After a public outcry and, I believe, political embarrassment, to his credit he did set up a royal commission. Initially the royal commission was required by its terms of reference to examine psychiatric services generally, but the terms of reference were expanded to include an examination of Chelmsford Hospital and the problems of those who had suffered as a result particularly of deep sleep treatment.
Dr Refshauge went on to say:
It is important to point out that the terms of reference given to the royal commission did not allow for the making of findings in relation to compensation or ex gratia payments for the
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victims of Chelmsford. The royal commission left open the question of prosecution for disciplinary matters, which compounded earlier delays on these matters. The royal commission recommended that the Director of Public Prosecutions consider laying criminal charges against doctors and officials.
Dr Refshauge concluded:
I believe that an examination of the report of the royal commission clearly indicates that the Department of Health was at fault.
The issue raised by the motion I have moved is the provision of justice and compensation to the victims of Chelmsford. Recently the Premier advised Chelmsford victims to apply to the Victims Compensation Tribunal, which was established in 1987. The activities of that tribunal are restricted. It was set up to compensate victims of crime and requires proof that a criminal offence has been committed. It seems clear at this stage that the evidence of most victims of Chelmsford is unlikely to meet the standard of proof required in the criminal jurisdiction. It might appear that the victims of Chelmsford have reached a dead end in the pursuit of justice. After stating that the victims should claim compensation through the Victims Compensation Tribunal the Premier recently suggested that they should claim damages through civil actions. More than 70 civil suits have been lodged but long delays can be expected because the judicial system moves very slowly in this area. Only one victim, Mr Jim Lawler, has made any progress, and he has been waiting for 13 years. The matter still has not reached finality. One victim has already spent $6,000 on legal fees and will have to pay an additional $100,000 to continue her civil actions through the courts. It is obvious that only a wealthy person would be able to afford such action. Legal aid has been rejected for as many as two-thirds of those who have applied for it. On 25th September I asked a question seeking confirmation that the Victims Compensation Tribunal was not the appropriate body to deal with compensation for Chelmsford victims. I asked:
Did the Victims Compensation Tribunal grant compensation to a victim from Chelmsford hospital for criminal assault? Does the Victims Compensation Tribunal give compensation to victims of medical malpractice or negligence? From evidence found in the royal commission, will the Government give an ex gratia payment to the victims of medical malpractice or negligence from Chelmsford Hospital. If so, when?
Obviously the Leader of the Government was not able to answer that question off the cuff. He said, "I will forward the question to the relevant Ministers and seek their replies". The Hansard of 13th November contains the answer from the Attorney General forwarded to the Leader of the House. He stated:
In response to the first question, the Victims Compensation Tribunal did grant compensation to a victim from Chelmsford hospital for criminal assault in that on 5 July 1991, a former patient was awarded the maximum amounts of $40,000 for pain and suffering and $10,000 for loss of income;
I ask the House to note the next part of the answer, which is very important:
. . . in response to the second question, the Victims Compensation Tribunal does not grant compensation to victims of medical malpractice or negligence; and in response to the third question, the issue of ex-gratia payment is a matter for the Premier.
The key sentence in that answer confirms what the Chelmsford hospital victims already had learnt: the Victims Compensation Tribunal is not the way to go. It is beyond the authority of the commissioner in charge of the tribunal to grant compensation in their cases. An amendment of the legislation would be required, which could cause
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complications in other areas. So it seems that the door is closed to the Victims Compensation Tribunal, which the Government had suggested - the Premier in particular - would be the appropriate body for the victims to apply to. Justice cannot be achieved from that tribunal. Therefore the Government has to decide whether it will make ex gratia payments, which is the heart of the proposal I have put to the House. The Australian Labor Party in the Legislative Assembly expressed sympathy and practical support for the victims. I hope there will be similar expressions of good will and mutual support in this Chamber and not just rhetoric. If the Minister could indicate today that action will be taken it would be a great relief to the victims of the Chelmsford hospital tragedy.
It is perhaps easy for healthy people to suggest that people should go to court or take other action but we are dealing with people who have suffered tremendously. They should not be put through the anguish and suffering involved in fighting lengthy court cases which they do not have the resources to fight without legal aid. This would cause further mental stress to people who have suffered more than anyone would want to experience in a lifetime. An ex gratia payment would provide justice for the Chelmsford victims without putting pressure on them, thereby saving them further suffering. They should not be put through further mental torture in seeking justice. Even to get to this point those involved with the Chelmsford Victims Action Group, such as Barry Hart - I understand he is in the gallery today - and others, in seeking justice for the whole group, in dealing with departments, bureaucrats and the media to keep the issue alive, have paid the price. Their efforts in keeping the matter alive and before the media deserve congratulations but the time for congratulations will be when the matter comes to an end and they receive ex gratia payments. Nothing could be more frustrating than reaching the point they have reached now only to have the whole matter slip through their fingers with the Government setting up a delaying process without anything being done.
Mr Hart, on behalf of the others involved with the Chelmsford Victims Action Group, has stated that the matter has reached a critical point. As we all know, $15 million was spent on a royal commission. Though it focused enormous attention on the Chelmsford scandal, very little of consequence has resulted. I support the view of the Chelmsford Victims Action Group that the guilty are thriving and the victims are still victims and suffering because of inaction on this matter. The doctors from Chelmsford have continued to practise medicine, psychiatry and psychology; the victims continue to suffer. No criminal charges have been laid against any person as a result of the two-year royal commission despite evidence of manslaughter, false imprisonment, assault and battery, fraud, conspiracy to pervert the course of justice and perjury. The Queensland Government has granted ex gratia payments to the victims of Townsville's Ward 10B scandal and, despite a recommendation that the victims of medically induced AIDS be granted an ex gratia payment the Government appears to have turned its back on an ex gratia payment for the Chelmsford victims. The ball is now in the Government's court to show that it has not rejected the appeal for help and justice from the Chelmsford Victims Action Group and all those involved in it.
The Hon. ELISABETH KIRKBY [3.0]: I support the motion moved by Reverend the Hon. F. J. Nile. At least 48 people died through deep sleep therapy received at Chelmsford Private Hospital. Many others suffered permanent physical and psychological problems as a result, and only as a result, of their stay in that hospital.
Questions were first asked about deep sleep treatment at Chelmsford Private Hospital in
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1963 and then in 1967. Since then complaints have been lodged with the Government by former employees. There have been numerous media investigations, questions have been asked in Parliament, and finally a royal commission was set up to inquire into the matter at a cost of $15 million to the taxpayers of this State. Some 10 months have elapsed since Mr Justice Slattery released his report into the scandal, yet former patients and relatives are still waiting for charges to be laid against any of the surviving doctors and Department of Health officials involved. They are waiting also for financial compensation for the suffering they have endured. In fairness to the Government, a working party has been established to address a range of problems experienced by former patients. It should be noted, however, that considerable pressure had to be exerted before any former Chelmsford victims were included on that working party. Furthermore, concrete results from the working party have yet to be seen.
An ex gratia payment from the Government is not the only thing the victims of Chelmsford Private Hospital want. Above all they want justice to be done, and they have a right to see that justice is done. At least an ex gratia payment would be an acknowledgment of responsibility on the part of the Government to protect the citizens of this State. Evidence given at the royal commission clearly indicated that the Department of Health acted in a negligent way. This is in contradistinction to what happened to patients who acquired the human immunodeficiency virus through medical means. It is quite unlike the suggestion that the medically acquired HIV victims should be given a payout by the Government, because there is proven negligence on the part of the Department of Health. To use one example, when Mr Rimes, the under-secretary of the Department of Health between 1963 and 1973 and the Health Commissioner at that time was cross-examined about his failure to take a complaint made by Nurse Pett, a former worker at Chelmsford, apparently he did not know whether private hospitals were licensed by the department and he had no idea that private hospitals were licensed for certain purposes. He assumed that a medical hospital could receive psychiatric patients.
Furthermore, in 1971 Mr Dash, head of the poisons branch of the Department of Health, interviewed Dr Bailey, the chief psychiatrist in charge of Chelmsford Private Hospital. He allowed Dr Bailey to have the department's recognition of his so-called deep sleep therapy. It was clearly outlined to the royal commission that on 8th July, 1971, Dr Bailey was interviewed by the head of the poisons branch, Mr Dash. Mr Dash knew that Dr Bailey's drug regime included high doses of barbiturates. He was aware that barbiturates were fatal when taken in large doses and that their chronic use over a period of time may cause other symptoms which lead to death. He also understood that the deep sleep treatment advocated by Dr Bailey was not being carried out anywhere else in the world. Mr Dash conceded that it would have been prudent to have sought medical advice concerning the treatment proposed by Dr Bailey. Despite this, Mr Dash agreed to take up the matter on Dr Bailey's behalf and obtained the department's recognition of the procedure carried out by Dr Bailey at Chelmsford Private Hospital. The department duly approved Dr Bailey's standard deep sleep drug regime, and therefore, in my opinion, that put the department in charge of this procedure, and, judging by the results, totally negligent. It is clear that at that time the Department of Health was at fault.
A few moments ago Reverend the Hon. F. J. Nile mentioned what has happened in Queensland. The Ward 10B fiasco at Townsville Hospital led to the Queensland Government making ex gratia payments to 75 former psychiatric patients. When questioned, the Premier of this State said that the comparison between Ward 10B and Chelmsford hospital is invalid because Ward 10B is part of a public hospital and
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Chelmsford is a private hospital. However, I believe the Premier has ignored the fact that Chelmsford hospital was licensed by the Government and was monitored by the Department of Health under the Private Hospitals Act. The hospital was inspected by staff of the Department of Health. The inspections were so cursory - and this was proved in evidence at the royal commission - that apparently they did not appreciate the appalling conditions in Chelmsford and what was happening to the patients. Therefore, they were negligent in carrying out their duties.
It has been suggested that the Premier has rejected the idea of ex gratia payments and has referred former patients to the New South Wales Victims Compensation Tribunal, which can award payments of up to $50,000, or to the civil courts. As is well known, the Chelmsford victims have had great difficulty in obtaining compensation from the Victims Compensation Tribunal. The tribunal was not set up to deal with medical negligence. It was established in 1987 to compensate victims of crime, but applicants must first prove that a criminal offence has been committed. Of the 64 people who have lodged applications with the tribunal, only one has been successful. He was able to prove that he had not consented to treatment in Chelmsford hospital because he had written "No shock treatment", "No treatment", across the front of his admission form. The treatment constituted an act of criminal assault. Some patients had signed legally binding consent forms when they were referred to the hospital, so clearly the rules of the tribunal will have to be altered to suit Chelmsford victims, if the Premier is to pursue this line of argument.
The other avenue that Mr Greiner has been advocating is the courts. However, there are long delays and costs involved. About 70 suits have been lodged so far. One of the victims, Mr Jim Lawler, lodged his application 13 years ago and he has yet to get a hearing date. The costs of mounting a private civil claim are prohibitive. Mrs Munro, who had her legs fused as a consequence of untreated bed sores while undergoing deep sleep therapy at Chelmsford hospital, has been told that she does not qualify for legal aid and that a civil claim would cost her $50,000. Indeed, many of those who have lodged complaints have had their legal aid applications refused. There has been a failure of justice. No bureaucrats have been disciplined and no doctors have been charged, despite the fact that the royal commission recommended that criminal charges be considered by the Director of Public Prosecutions. How much longer will the Director of Public Prosecutions take to consider the commission's recommendation? A recent court decision determined that disciplinary action should not be taken against the doctors involved with Chelmsford. However, Mr Justice Mahoney dissented, arguing that the function of the medical tribunal was to protect the public. The royal commission provided ample evidence to show that at least some of the doctors involved acted irresponsibly, yet they are still free to operate and carry out psychiatric practice. This is a disgrace and an appalling slur on the medical profession, particularly the psychiatric profession in New South Wales. The least that can be done to assist the surviving victims of Chelmsford is to provide them with ex gratia payments.
The DEPUTY-PRESIDENT (The Hon. D. J. Gay): Order! The honourable member's time for speaking has expired.
The Hon. J. W. SHAW [3.10]: The Opposition supports the motion and notes
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that essentially it reflects the substance of the motion moved in another place by the Deputy Leader of the Opposition, the honourable member for Marrickville. The proposition was strongly supported in that other place by the Australian Labor Party. There is no doubt, and I am sure all honourable members would agree, that Chelmsford is a tragic blot on the medical history of New South Wales. It must be analysed and considered if we are to learn some lessons from it. I say that without referring to the obvious and pressing need to compensate the victims of this tragedy. At the outset I shall refer to the important matters relating to professional discipline that have arisen from the Chelmsford disaster. Honourable members would know that to date courts have taken the view that proceedings before the Medical Disciplinary Tribunal can and ought to be stayed as an abuse of process because they are old and the respondents to the proceedings are disadvantaged. An alternative view is certainly open, and I believe it is the more attractive; that is, the role of the disciplinary tribunal is to protect the public, and disciplinary matters, however old, that reflect upon practising doctors might need to be ventilated before the tribunal if the contemporary public is to be protected from those who have committed offences against ethics and proper procedures.
The Hon. Dr B. P. V. Pezzutti: The honourable member should acknowledge that the Minister has appealed against the decision.
The Hon. J. W. SHAW: Quite rightly, that matter has been the subject of appeal. I believe that is appropriate. I am not being critical of the Minister. The Minister agitated the matter correctly and sought special leave from the High Court to appeal. I am expressing a view that reflects the dissenting view of Mr Justice Mahoney in the Court of Appeal, that the role of the disciplinary tribunal - and it applies to tribunals concerned with all practising professions, not only medical practitioners - is essentially protective of the public rather than something analogous to a criminal proceeding that can and ought to be stayed if it constitutes an abuse of process. The Labor Opposition remains committed to the view that the victims of Chelmsford ought to be compensated by the most expeditious and fair method available. To the Opposition that seems to be clearly the method of an immediate ex gratia payment. The amount of $10 million has been suggested by the Opposition, though it is accepted that a definite monetary sum could not be specified until individual claims have been adequately assessed. As presently advised, of the 1,200 people involved in the so-called deep sleep therapy from 1963 to 1970 to date about 200 have come forward with differing levels of physical and psychological injury. Obviously the most tragic cases are those who died as a result of being admitted to and treated at Chelmsford, sometimes for minor psychiatric disorders.
The Opposition supports the motion because ex gratia payments constitute the final avenue of redress of which the victims of Chelmsford can avail themselves, given the inadequacies of remedies in the civil law and the difficulty of the royal commission offering compensation. I do not say that critically of the royal commission. I realise that it was beyond the terms of reference of the royal commission to recommend any precise or actual compensatory payment. Be that as it may, the royal commission did not recommend any such payment. The avenue of civil remedy appears to be cumbersome and inadequate, given the length of time that this problem has been a matter of public record and the significance of the disabilities and injuries suffered by those who were admitted to and treated in Chelmsford hospital. A significant number of former patients
have lodged civil actions in the courts, but, given the lengthy delays that are likely to
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occur with the processing of such claims, they would seem merely to prolong the suffering and not provide the adequate remedy that the public interest demands. There are problems with securing legal aid and the delays associated with the actions being processed. Given the difficulties about legal aid, problems arise with regard to the costs involved in prosecuting successfully what undoubtedly would be complicated matters. Actions based on medical negligence can and probably would be vigorously defended by competing experts offering differing views. Therefore, the trials in the civil courts could be expected to be lengthy.
The Hon. Dr B. P. V. Pezzutti: As is proper.
The Hon. J. W. SHAW: As is proper. A defendant is entitled to vigorously defend his or her accuser. But here undoubtedly we are dealing with a special case. The Opposition argues that the Government has a responsibility to offer compensation quite apart from the long-term remedies and rather unsatisfactory remedies that might be offered in the civil courts. The royal commission into psychiatric services did not provide an avenue for monetary compensation. It is ironic that the cost of conducting the royal commission was in a sense sufficient to provide substantial compensation to the victims. The royal commission cast light on some of the problems at Chelmsford and elsewhere, and I would not want to be heard to argue that it did not play a useful role, but it was a royal commission conducted at considerable cost.
The Hon. Dr B. P. V. Pezzutti: What was the cost?
The Hon. J. W. SHAW: Of the order of $15 million. It is unfortunate that such an amount of money has been expended without the victims of what gave rise to the inquiry being provided with monetary compensation that obviously is justifiable. The Government has established a working party on Chelmsford. It seems to have praiseworthy intentions of coming to grips with the problem. In fact the working party has proved inadequate in dealing with the concerns of those injured.
The Hon. Dr B. P. V. Pezzutti: The working party was established only a short time ago.
The Hon. J. W. SHAW: It has been established for some time, but prior to the date on which this motion was dealt with in another place it had met on only three occasions. I am advised that the view has been expressed by those members of the committee associated with the Government that compensation as such would not be on the agenda of the committee; that it is to deal with ancillary and associated matters. The Government and the Premier seem to have taken an ambivalent view about this matter. They have not been favourably disposed to the idea of direct and immediate compensation by way of ex gratia payment. I hope that the Minister in this place will offer a more optimistic, positive and definite approach to the provision of compensation. It is reasonable to say that to date the Government has not been decisive and has been suggesting other avenues apart from the route of direct ex gratia payment. In particular, the route of the Victims Compensation Act is unsatisfactory. As the Hon. Elisabeth Kirkby said, that Act was designed to deal with the victims of crime. It would have to be shown before the tribunal that there has been an act of violence.
An act of violence is defined an act or series of related acts, whether committed
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by one or more persons, that has apparently occurred in the course of the commission of an offence and has resulted in injury or death to one or more persons. A criminal offence must be shown as an ingredient of an act of violence. In this case it is reasonable to assume that many injuries may have occurred which ought to be compensated but where no criminal offence can be proved other than medical negligence or lack of due care. Nevertheless, those situations ought to be addressed by way of compensation. It is wrong of the Government to suggest that a relatively lengthy process before a tribunal which lacks the appropriate power is the way forward. The Government should grasp the nettle and provide the much needed compensation.
The Hon. J. P. HANNAFORD (Minister for Health and Community Services) [3.20]: The long and appalling history of deep sleep therapy at the Chelmsford Private Hospital has now been well documented through the exhaustive inquiries of the recent royal commission conducted by the Hon. Mr Acting Justice Slattery. The Government can take some credit for its preparedness to deal with the issues raised by this terrible episode in the history of health care in this State. Previous governments can be shown to have ducked the difficult issues involved. It was only with the bringing down of the report of the royal commission in late 1990 and early 1991 that the full details of this matter have been exposed. The royal commission has found that 1,127 patients received deep sleep therapy at the Chelmsford hospital for a variety of complaints including depression, anorexia nervosa, stress, drug and alcohol problems, neuroses and schizophrenia.
The royal commissioner observed that though treatments termed deep sleep therapy had been practised in various parts of the world, principally during the 1950s, the variant of treatment administered at Chelmsford was unique and largely unrelated to established practices, which had in any case been discarded elsewhere in the early 1960s. The royal commissioner noted in particular that no scientific evidence supported claims of the efficacy of the treatment and that the cocktails of barbiturates and the levels at which they were administered rendered deep sleep therapy inherently dangerous; that the treatment often was administered by untrained staff or doctors who little understood the interaction of the drugs administered, and that compounded the dangers.
The royal commissioner concluded that at least 24 deaths at Chelmsford were directly caused by deep sleep therapy. A number of other deaths, suicides in particular, were also considered to be linked to deep sleep therapy, although a number of cases of brain damage and other serious physical injury also resulted from the deep sleep therapy. The exact number is not known. The royal commissioner noted that many complications occurred, that many patients had severe complications, and that almost all patients had some problem. The evidence of complications and problems is overwhelming. The evidence of causation of these problems is similarly overwhelming. In the light of those findings, in August this year the Government established a working party to examine assistance which might be provided to former Chelmsford deep sleep therapy patients who suffered injury as a result of their treatment at the hospital. The terms of reference of the working party included the issue of compensation as well as other forms of assistance in terms of public and private sector services which former patients may require. The working party is comprised of very senior officers from the Department of Health, the Attorney General's Department, the Cabinet Office and Treasury, together with representatives of the Chelmsford Victims Action Group. The working party is assisting
the Chelmsford Victims Action Group to conduct a survey and a phone-in which will
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provide important information on the number of people involved and the extent of their problems.
In response to consideration of the issues to date the Government has made it clear that it seeks bipartisan, non-political resolution of the Chelmsford issues. Essentially, the Government supports the payment of compensation to former deep sleep patients of Chelmsford Private Hospital through the established mechanism of the Victims Compensation Tribunal. In taking this approach the Government has consulted with interested Independent members of the lower House. As recently as Monday evening of this week the Premier met with these Independents, the Deputy Leader of the Opposition in the lower House, the honourable member for East Hills and representatives of the Chelmsford Victims Action Group to confirm the Government's proposed course of action. It was agreed at this most recent meeting that the parties would await the outcome of the meeting of the Victims Compensation Tribunal scheduled for tomorrow, 5th December, to consider the question of eligibility of Chelmsford patients to have access to that tribunal. The Victims Compensation Tribunal is considered by the Government to be the natural venue for compensation claims because of the very strong view expressed by the royal commission into deep sleep therapy that Chelmsford deep sleep therapy patients were the victims of criminal assault. I reiterate the view of the Government that we accept the finding of the royal commission. The burden of proof of the tribunal is that of the civil jurisdiction, namely, on the balance of probabilities. On the basis of these considerations the Government is hopeful that the Victims Compensation Tribunal will be able to deal with the matter, otherwise the Government will move immediately to introduce legislation which will allow the tribunal to do so.
The motion before the House has three components. First, the motion proposes ex gratia payments. The Government strongly supports compensation in preference to ex gratia payments, which would involve difficult precedents for any government in any area of the public or private domains where individuals have suffered injury. There would also be the difficulty of establishing appropriate and equitable distribution of those payments. Compensation by the established mechanism of the Victims Compensation Tribunal addresses those problems and provides a fairer means of assessing eligibility and the appropriate level of compensation in each individual case. Honourable members may recall the comments of the royal commissioner in that regard, and I quote from page 93 of volume 6 of the report:
Each Chelmsford patient should, in principle, be seen in the context of his or her own particular situation. The general principles can be stated but whether they apply to this patient or that depends on the facts surrounding the treatment and the patient.
Second, the motion proposes that an amount of $10 million be set aside for ex gratia payments. The Government has indicated to Treasury that an appropriate amount of funds will need to be identified to support the Victims Compensation Tribunal's consideration of these claims. The tribunal may award up to a maximum compensation payment of $50,000 in each case. A figure of 200 possible claimants is sometimes mentioned. However, at this stage there is no way of knowing the total number of the more than 1,000 patients who received deep sleep therapy at Chelmsford Hospital who would be eligible for compensation. Therefore, we do not know how much money would have to be set aside but, as I indicated, Treasury has been given an instruction in that regard. Third, the motion proposes that a committee be established to distribute payments within three months. Again, the Government considers it would be counter-productive to duplicate the established processes of the Victims Compensation Tribunal.
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The tribunal is constituted so as to determine on an equitable basis appropriate compensation for victims of criminal actions. The Government would expect the tribunal to finalise the matter by no later than the middle of next year. It is unlikely that any other process could be instituted and completed as expeditiously as that which is proposed.
On the basis of the foregoing I propose, therefore, that the House not accept the principles embodied in the motion but support the course of action proposed in good faith by the Government to pursue the issue of compensation for former deep sleep patients of the Chelmsford Private Hospital through the established processes of the Victims Compensation Tribunal. Reverend the Hon. F. J. Nile referred to the fact that more than 70 claims have been lodged. The Hon. Elisabeth Kirkby, in her contribution to the debate, accused the Department of Health of being negligent and totally at fault. So far as the Department of Health is concerned, currently about 17 claims are being made against the Health Administration Corporation, as it is now known, being the successor of the Health Commission, alleging a breach of duty of care to former Chelmsford patients.
Though such claims are only in the preliminary stages, the corporation at this time is prepared to defend them. Accordingly, any response that may be made to the comments of both members should in no way be seen as making any admissions that the Health Commission or its successors were negligent - that is, that they breached a duty of care. Though it is unclear to which particular piece of legislation members may refer when suggesting that there was legislation that conferred a duty of care upon the department, in context it would seem that the Mental Health Act 1958 may be the one to which they were referring. Unlike the current mental health legislation, under the Mental Health Act 1958 there was no mandatory licensing and inspection regime for private psychiatric hospitals licensed under private hospitals legislation nor automatic application of the official visitor provisions to such establishments. Because Chelmsford was not required to be an authorised hospital under the Mental Health Act 1958 but only licensed under the Private Hospitals Act 1908, the only regulation and inspection regime that applied was that Act and its regulations.
Clearly the legislative scheme at that time was inadequate. However, the administration of such a scheme does not in itself constitute a breach of duty of care. Negligence in the administration of the scheme such as to cause injury to Chelmsford patients rather than inadequacy in the scheme itself would have to be demonstrated to prove breach of duty of care by the Health Commission. That is a matter for the courts to determine and is a matter that honourable members perhaps ought to debate in this Chamber in order to find an answer. The Hon. J. W. Shaw referred to the disciplinary process involving the doctors. I am able to inform the House that immediately upon the Court of Appeal handing down its decision I asked the department to obtain advice on the lodging of an appeal to the High Court. Within 48 hours instructions were given to the department's solicitors to pursue such an application to the High Court for leave to appeal from a decision of the Court of Appeal. The Government took the view that this is a matter of such importance that the decision of the High Court on the issue must be sought to clarify the legal principles that were used by the Court of Appeal to come to its decision. That would have precluded the taking of disciplinary action. Since the matter
is still, therefore, before the courts, I should not make any comments as to my personal
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views. The view I took was that expeditious action should be taken, and I am pleased that that occurred.
Reverend the Hon. F. J. NILE [3.32], in reply: I am sure that the victims of the Chelmsford hospital disaster are pleased that the Government is following up with an appeal to the High Court. That is a step in the right direction for those involved. The hospital caused great suffering and the death of a number of people. However, it appears from the Government's reply that it is intent on working through the Victims Compensation Tribunal, though the Government acknowledges that there are major problems with that course. I am concerned that there will be further delay. It may not be the Government's intention to delay finalising this matter, but that is the effect of its actions. At some time I am sure it will be shown that the Victims Compensation Tribunal cannot achieve what the Government says it can. The bill will then have to be amended or new legislation will have to be drafted. The Christmas period is approaching. It is difficult to imagine the Government moving rapidly enough to prepare new legislation or draft amendments. Therefore, honourable members are looking at nothing happening before 1992. The matter drags on and never comes to a conclusion. It has virtually become a test of the stamina and steadfastness of the people from the Chelmsford Victims Action Group, who have to keep hoping that some day they will get justice.
The Government does not appear to understand fully that many admissions of guilt have been made. The royal commission indicated that and the Attorney General, Minister for Consumer Affairs and Minister for Arts is on record as making strong statements in that regard. I should like to place some of the Attorney General's comments on the record in an endeavour to have the Government reconsider and move more promptly to provide justice for the Chelmsford victims. The simplest procedure is ex gratia payments. In a ministerial statement the Minister for Health, the Hon. Peter Collins, made in Parliament on 18th May, 1988, about Chelmsford Private Hospital, he said, at page 221 of Hansard:
That human suffering occurred in [Chelmsford] is not denied, nor is the fact that the Department of Health failed in its duty to protect patients from potential and real harm as a result of receiving the treatment denied.
On page 223 Mr Collins said of the failure of the Department of Health to investigate complaints:
To permit delays in investigating complaints is to be negligent in protecting the public from incompetent or erring doctors.
The year before, on 5th March, 1987, Mr Collins said in Parliament:
The glaring ineptitude of the Department of Health in regard to Chelmsford Hospital has left no satisfactory solution to a case that involved the death of 18 people [then known] and the survivors of that hospital's deep sleep treatment.
Mr Collins described the performance of the Department of Health as disgraceful and fumbling. He said also:
At least 60 survivors of the treatment are still seeking compensation nine years after initial allegations were made about that treatment.
A short while ago the Hon. Dr B. P. V. Pezzutti interjected and suggested that
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honourable members should be patient, that more time is needed and the Government is moving rapidly. Chelmsford patients have been seeking justice and are still waiting. Though Mr Justice Slattery did not make a finding on compensation - he said he could not because it was not in the terms of reference - quoting from the submission on the victims' behalf he said:
The New South Wales Government has a strong moral obligation to compensate former patients and relatives.
Honourable members know there has been a lot of support in the community and that editorials have been written but still the Government has made no commitment to compensate the Chelmsford victims. That is a matter for concern. I received a statement from Mr Barry Hart dated 4th December in which he indicated that the discussions, in which he has been involved, are not very satisfactory. Ex gratia payments have been made by the Queensland Government to the Ward 10B patients. That should give the Government a lead. The Premier has failed to acknowledge that Chelmsford was licensed by the Government and monitored by the Department of Health under the Private Hospitals Act. The Victims Compensation Tribunal, which the Government is looking towards, was not set up to deal with a Chelmsford-type situation. At a recent meeting of the Chelmsford Victims Action Group a representative from the Victims Compensation Tribunal, Mr Ferguson, told the group that those with similar cases to Mr Voce, who had succeeded, had not had much trouble. However, he stated:
Those who suffered injury because of negligence or medical malpractice would not qualify for compensation under the Victims Compensation Tribunal criteria.
The answer is there. The Government and the Premier particularly are concerned, as they are in other areas, about setting a precedent, but I believe that Chelmsford is a unique situation and that it must be dealt with promptly and should not be delayed any longer. The Minister for Health and Community Services has already referred to the meeting attended by Mr Hart, the Independents, Dr Refshauge and the Premier. When confronted with the problems relating to the Victims Compensation Tribunal the Premier said it may be necessary to change the law so that the victims of Chelmsford could fit into the tribunal's terms of reference. Mr Hart and the action group believe that despite statements by Mr Collins to the contrary, the Government is reluctant to admit any responsibility for the failings of the Department of Health. So far as I am aware no bureaucrat has been disciplined. Mr Hart referred to the charging of senior public servants in France over their failure to take action in regard to the supply of blood contaminated with the AIDS virus. That is the other side of the coin. The most important matter, of course, is compensation. The other important matter is the laying of criminal or disciplinary charges against the staff or the doctors from Chelmsford hospital. In that regard an appeal has been lodged in the High Court against a recent decision of the New South Wales Court of Appeal.
I understand the victims' sense of frustration. The Hon. Dr B. P. V. Pezzutti seems to believe that the victims should be patient and wait in some vague hope that things will come right. I wish to emphasise that the victims of Chelmsford are a special group of people. We are not talking about 20 doctors or 20 lawyers who have grievances. We are talking about people who have already suffered extensively. If the Hon. Dr B. P. V. Pezzutti and other honourable members have not spoken to people from the Chelmsford Victims Action Group, they should do so. They would then realise that the Government is again subjecting those people to the risk of further serious mental
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and physical pressure. If the Hon. Dr B. P. V. Pezzutti, as a medical practitioner and a member of the Government, advises the Government to adopt delaying tactics, he will bear some of the responsibility for deterioration in the mental and physical health of the victims of Chelmsford. They are in a special category. I urge the Government to review the decision it has made and to decide upon urgent action to approve the ex gratia payments. The sum of $10 million amounts to $50,000 for each of the 200 victims. If those payments are made, this chapter can be closed and justice will have been done.
The DEPUTY-PRESIDENT (The Hon. D. J. Gay): Order! The honourable member's time for speaking has expired.
Discussion of matter of public interest concluded.
HUNTER WATER BOARD (CORPORATISATION) BILL
Bill received and read a first time.
Suspension of certain standing orders agreed to.
BOARDING HOUSES AND LODGING HOUSES BILL (No. 2)
In Committee
Consideration resumed from 3rd December.
Part 2
The Hon. ELISABETH KIRKBY [3.44], by leave: I move the following amendments in globo:
Page 12, clause 21. After clause 21(2), insert:
(3) If the Tribunal grants an application under subsection (2), it must by its order declare the owner to be entitled to immediate possession of the room to which the agreement relates.
Pages 12 and 13, clause 24. Omit clauses 24(1) and (2), insert instead:
(1) A person may not, except in accordance with a judgment, warrant or order of a court or an order of the Tribunal, enter premises or any part of premises of which another person has possession:
(a) under a lodging agreement; or
(b) as a former lodger holding over after termination of a lodging agreement,for the purpose of recovering possession of the premises or that part of the premises.
Maximum penalty: 50 penalty units.
(2) For the purposes of subsection (1), it makes no difference whether the person entering the premises or part does so in order to recover possession on his or her own behalf or on behalf of another.
The first amendment I have moved complements the amendment I moved earlier in the debate. It seeks to ensure that under an order of the tribunal an owner can take
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immediate possession. A balance between the rights of the owner and the rights of the boarder or lodger will thereby be achieved. If a proprietor obtains an order from the tribunal because of a problem tenant, he or she will be entitled to take immediate possession. I believe that is perfectly proper. The second amendment I have moved strengthens clause 24 and relates to unlawful entry to recover possession. The amendment provides that an owner cannot enter premises occupied under a lodging agreement to recover possession without either a court order or an order from the tribunal. It is similar to the amendment I moved earlier to clause 21. This amendment will prevent arbitrary eviction. Honourable members will recall that in Committee debate last evening we were discussing problems associated with arbitrary eviction and the problems which would be faced by those on low incomes if landlords were able to effect arbitrary evictions. If honourable members recall those discussions, they will realise why I am moving these amendments. It is improper for any legislation to institutionalise immediate arbitrary evictions, particularly at a time when there is little low-cost housing and, because of high unemployment, people are being forced to live on social welfare benefits or to become dependent on assistance from charitable organisations to survive and to help their families survive. For these reasons I commend my amendments.
The Hon. R. D. DYER [3.48]: The Opposition supports the amendments moved by the Hon. Elisabeth Kirkby. Looking at the matter in retrospect, these amendments could well have been dealt with in globo with the fourth amendment moved by the Hon. Elisabeth Kirkby. The Opposition takes the view that these amendments effectively seek to insert due process and facilitate the intervention of the tribunal to avoid arbitrary proceedings. The Hon. Elisabeth Kirkby has clearly stated her arguments in support of the amendments. I am content to merely indicate the Opposition's support for them.
The Hon. J. P. HANNAFORD (Minister for Health and Community Services) [3.50]: Amendments 5 and 6 are consequential on amendment 4, which was moved and defeated last night when the Committee divided. As a result, to an extent, amendments 5 and 6 are redundant. Amendment 5 proposes that the Residential Tenancies Tribunal will have to justify the owner's taking of immediate possession. As the Residential Tenancies Tribunal will not be involved in the first place, the amendment is not relevant. However, it is provided in the legislation that an owner prosecuted through the Local Court for unlawful entry to recover possession from a boarder or lodger will have to satisfy the court that there were adequate grounds for terminating the agreement.
Amendment 6 is also dependent upon amendment 4 in relation to clause 21. The legislation as it is proposed says that the owner is guilty of an offence which would attract a penalty of a maximum of $5,000, together with the possibility of an order for unlimited compensation, if a room is entered to take possession before the agreement is terminated. The amendment proposes that an owner must have an order or judgment before entering, which is the same requirement as under the Residential Tenancies Act. This ties in with the proposal that the owner must go to the tribunal before taking possession, which was rejected by the Committee last evening. It is believed that the penalty is a sufficient deterrent to an owner abusing the proposed section. The legislation is sufficiently flexible for an owner to have control over the residents while at the same time safeguarding residents who comply with the conditions of the agreement. Therefore, the Government does not accept either of the amendments.
The Hon. ELISABETH KIRKBY [3.52]: The Minister has just stated that the Residential Tenancies Tribunal will not be involved. On page 10 of the bill in division
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3 under the heading "Circumstances in which agreement terminates" clause 19(1)(c) reads, "if the Tribunal orders termination of the agreement". Yesterday the Minister stated that one of the provisions of the bill was being introduced by the Government to assist boarders and lodgers in that in certain circumstances they would be protected by the Residential Tenancies Tribunal. It appears to me that the Government wants to make this protection very selective. In certain areas the Government agrees that the Residential Tenancies Tribunal has a role to play but in other places, when it does not suit the proprietors, the Residential Tenancies Tribunal will not have a role to play. This is not in the best interests of boarders and lodgers, who need protection. There is reference to the tribunal in clause 27(2), and clause 27(1) states:
If a boarding agreement or a lodging agreement is terminated and goods of the former boarder or lodger are left in the boarding house or lodging house, the owner of the boarding house or lodging house may . . . apply to the Tribunal . . .
Clause 27(2) states:
The Tribunal may, on the application of the owner, make any one or more of the following orders:
The tribunal has the power to authorise the sale of the goods and to make an order authorising the destruction or disposal of the goods. So I cannot see the logic behind the Minister's answer stating that the Residential Tenancies Tribunal is not involved. It is very clearly involved. It is so delineated in the bill. All I am suggesting with the two amendments is that before an owner can take immediate possession he must get a tribunal order. I cannot see how the Minister's statement of a few minutes ago is correct. On my reading of the bill the Minister's statement appears to be in direct contravention of what is plainly laid out in the bill, particularly in clause 27(1) and (2). Perhaps the Minister would like to reconsider his reply.
The Hon. J. P. HANNAFORD (Minister for Health and Community Services) [3.56]: My comments were in relation to amendment 5, which proposes to add a new subclause to clause 21. I said that as the Residential Tenancies Tribunal will not be involved in the first place the amendment is irrelevant. I stand by that comment. Amendment 5 is consequential upon proposed amendment 4, which was rejected by the Committee last evening. Amendment 4 sought to impose the requirement that an application would have to be made to the tribunal for an order terminating the agreement. Had that amendment been carried, amendment 5 may have been a consequential necessity. However, as amendment 4 was not accepted by the Committee and therefore there is no ability now to apply to the tribunal for an order terminating the agreement, amendment 5 is not relevant because the tribunal will not be involved. That is what I meant. I am not suggesting that the tribunal otherwise will not have powers in relation to matters under the proposed Act. The honourable member mentioned clause 19(1)(c) and other clauses which refer to the tribunal. I am not suggesting that the tribunal is not involved; I am merely saying that the tribunal is not involved in so far as amendment 5 it is not necessary as amendment 4 has been defeated.
The Hon. ELISABETH KIRKBY [3.57]: In spite of the Minister's full explanation I still question the Government's logic in this regard. If the tribunal is involved, as is clearly laid out in clause 19(1)(c) in termination of agreements, and if the tribunal is clearly involved in clause 27(1) and (2) in relation to goods left by a boarder or lodger after the termination of an agreement, I do not see why the Government does
Page 5413
not accept that the tribunal can also be involved in preventing arbitrary eviction. It would be a greater safeguard for the tenant and would fit in perfectly with the whole tenor of the rest of the bill. That is why I said that the Government was attempting to be selective in the legislation by allowing the tribunal to have a function in certain areas but refusing any amendment which would allow the tribunal to have any jurisdiction in other areas which would give greater protection to tenants. That is why I introduced the amendments. I believe it was proper for the tribunal to have jurisdiction in preventing arbitrary evictions. I am aware that the Government is not willing to accept the amendments - that has been made clear - but that does not alter my feeling that that is a selective way of using the tribunal and it will not be in the best interests of boarders and lodgers. In the long run it may not be in the best interests of proprietors also. Once again I commend my amendment to the Committee.
Progress reported and leave granted to sit again.
QUESTIONS WITHOUT NOTICE
______
MINISTER FOR LOCAL GOVERNMENT AND COOPERATIVES HOUSE NOTES LEAK
The Hon. M. R. EGAN: My question without notice is to the Minister for Police and Emergency Services and Vice-President of the Executive Council. Has the major crime squad been called in to investigate last month's leak of the Property Services Group ministerial briefing notes? How many officers are involved in this investigation and at what cost? What role did the Minister play in initiating the investigation by the major crime squad? What representations did the Minister receive from the Minister for Local Government concerning this matter? Will the Minister release all papers relevant to the initiation of the investigation?
The Hon. E. P. PICKERING: The only light I can throw on this matter is that I received a telephone call from the Minister for Local Government, indicating that he wished to speak to the Commissioner of Police on this matter. He merely formally asked whether I would be offended if he spoke directly to the commission. I told him that I thought it was a perfectly proper course of action and that he could inform the commissioner that he had cleared that direct access with me. I have heard no more about the matter. Obviously it is an operational matter that I would not normally be involved in. However, I am happy to put the other detail of the question to the commissioner, and if there is an appropriate response I shall be more than happy to provide that to the Leader of the Opposition.
STUDENT AND TEACHER AWARDS
The Hon. D. F. MOPPETT: I desire to direct a question without notice to the Minister for School Education and Youth Affairs. Will the Minister inform the House
of the nature and value of her awards for excellence in student achievement and in teaching? How are the awards decided and what do they achieve?
Page 5414
The Hon. VIRGINIA CHADWICK: I thank the honourable member for his question and for his practical concern for public education in New South Wales. In particular I thank the honourable member for his attendance today at the presentation of these awards. It was a great pleasure for me to see so many members of this House, albeit from the Government side of the House, who made the effort to join with those young students, teachers and principals at what is an important function in the public education calendar. In 1989 this Government established a special award system for students and teachers. The awards were designed to acknowledge and encourage excellence in education, through the recognition of outstanding achievement and contribution on the part of senior students in government schools and their teachers. I believe these awards have become one of the highlights of the year in the education portfolio.
Earlier today I had the honour of presenting awards to 24 of our most outstanding students and 26 outstanding teachers. These awards form part of a series of awards, which include the Premier's awards for excellence in the higher school certificate and the director-general's awards for excellent service to public education. This morning I noted that all the award recipients were well and truly leaders within their schools. They were not just good teachers or excellent students with high academic achievement; they were active participants in and contributors to their schools' culture. The students' achievements were many and varied. They participated in a wide variety of sports, excelled in the performing arts, maintained a high level of academic achievement, and contributed significantly to the corporate life of their schools as captains, prefects, members of student representative councils and school committees. Many of them were effective communicators who took part in debating and public speaking.
The fundamental reason that these students do so well is because of the great efforts of the teachers in the school system. That is why the Government instituted the awards for excellence in teaching. Throughout New South Wales, on every school day, about 47,000 dedicated and professional teachers help students achieve their full potential. It is only fitting that today 26 of those teachers were acknowledged as being quite exceptional. These teachers are outstanding because of the exemplary nature of their teaching, their contribution to learning beyond the classroom and their contribution to the culture of excellence in their schools. Some teachers devoted considerable time working with students in the performing arts. It was most pleasing to see those involved in that more recent development in our schools so honoured today. Those teachers were responsible for major school drama and musical productions, the training of choirs, orchestras and bands. This year two principals, two deputy principals and a leading teacher were among the awardees.
[Interruption]
The DEPUTY-PRESIDENT (The Hon. D. J. Gay): Order! There is too much audible conversation in the Chamber. I am having difficulty hearing the Minister's answer, as I am sure are other members. I ask honourable members to keep their conversations at a lower level.
The Hon. Delcia Kite: It is very boring.
The Hon. VIRGINIA CHADWICK: I am sorry that the Hon. Delcia Kite
Page 5415
regards my comments concerning the honouring of our teachers and students today as boring. I most certainly do not regard the recognition of such excellence, and in many cases life-time contributions by teachers, as boring. The honourable member's interjection is a fair indication of why it took until this Government's coming to office before such teachers were recognised publicly. It tells us a lot about what Opposition members truly think of many of our excellent teachers and students. Awardees were nominated from within their schools, and these nominations were considered by a regional committee. The committee comprised educational officers, parents and community members. In other words, local communities nominated those to be considered for the awards that were bestowed today. It is important to involve the community in the selection process as it enhances and adds value to the awards. It is also a recognition of the important part that the community plays in the education system. I hope I speak for all members of this Chamber when I congratulate all awardees for 1991 on their achievements and thank them for their contribution to education in New South Wales. Both the teachers and students have enriched the culture and excellence of the schooling system. This Government will continue to encourage such excellence. I look forward to working with the teachers, parents and students to achieve next year such outstanding and exemplary teachers and students.
CANTERBURY COUNCIL CHRISTMAS PARTY
The Hon. ELISABETH KIRKBY: My question without notice is directed to the Minister for Police and Emergency Services and Vice-President of the Executive Council. Is it a fact that an Independent alderman, Barbara Coorey, and an employee of radio station 2UE, Ms Wendy Kay, received threats of death and violence following their exposure of the unnecessary spending by Canterbury council of $10,000 on a Christmas party? Did an anonymous male caller repeatedly threaten to shoot Ms Coorey and to bomb her house after she had made adverse comments about the Labor Party's behaviour in Canterbury council? What steps is the Minister taking to investigate these death threats? Will the Minister request from the Labor Party a list of all its members in the Canterbury district in order to assist police inquiries?
The Hon. E. P. PICKERING: Honourable members would be aware of my policy of not canvassing in the House the detail of ongoing police investigations. Obviously that would not be productive. I shall also resist the temptation to make a personal inquiry about the membership of the Labor Party; that too would be inappropriate. I would not want to become involved in a pseudo-policing role, despite the political connotations. I am sure the Police Service has the matter well in hand. However, I will request the commissioner to provide me with an update on the matter to satisfy myself that the matter is being investigated.
YOUTH REFUGE ACCOMMODATION FUNDING
The Hon. R. D. DYER: I direct a question without notice to the Minister for Health and Community Services. Has the Minister authorised recently some additional funding to the Young People's Refuge at Marrickville and Yeena's Young Women's Accommodation at Gosford? Does this mean that contrary to previous indications by the
Government the Young People's Refuge at Marrickville will continue under its existing administration? Is the Minister aware of claims by numerous other youth refuges, including those on the Central Coast and in the Blue Mountains, that they are likely to
Page 5416
face early closure unless supplementary funding is granted by the Government?
The Hon. J. P. HANNAFORD: I was about to say that obviously the honourable member did not listen to last evening's adjournment debate. On a number of occasions in this House I have addressed the issue of funding for refuges, particularly the suggestion that refuges are suffering financially as a result of the community services award. I said on those occasions that no refuge would close as a result of the award. During the hearing of the award the State and Federal governments made it clear that they would not automatically pick up funding as a consequence of the award. I met with representatives of the Young People's Refuge and Yeena's Young Women's Accommodation following an announcement by the Young People's Refuge peremptorily that it would close on Monday, 11th November. At that meeting I said that if there were an immediate commitment to meaningful reorganisation and restructuring of the operations, I would immediately authorise an extension of funding. That commitment was not forthcoming. A number of further discussions have taken place between the department and the Young People's Refuge. To some extent the discussions were agitated by the union. Obviously the union is wanting to maintain its position because of its activities in this regard. The Young People's Refuge has indicated its willingness to reorganise its operations, and a number of reconstruction proposals have been pursued. I will not be involved in that; it is a matter between the refuge and the department. As a result of the commitment by the refuge to reorganise its operations to enable it to work within budget, I have authorised the allocation of $37,000, which will provide the refuge with funding through until 17th January. Those who were involved in the discussions regard that as a reasonable period within which to reorganise the operations of the facility.
The Hon. Ann Symonds: Will the refuge still have to close?
The Hon. J. P. HANNAFORD: I have said that no refuge need close. The way in which these facilities operate is a matter for them. They are not government facilities. The Government simply provides funding to assist them to operate. However, if a facility wants 100 per cent government funding, one might wonder whether it should remain as an independent organisation or whether its employees should be employed by the department. That matter will have to be addressed by individual refuges in the future. I remind honourable members that Yeena's Young Women's Accommodation was instrumental in the mounting of a public relations campaign that centred around the activities of the Young People's Refuge and Yeena's Young Women's Accommodation. Soon after that campaign was drawn to the attention of the public, representatives of Yeena's sat down with the department to discuss its position. The parties agreed that the facility could function in other ways and within the terms of the award.
As a consequence of Yeena's Young Women's Accommodation's willingness to reorganise its operations I agreed to provide further interim funding to allow an adequate time frame within which the necessary reconstruction of the operation could take place. That approach is consistent with the attitude I have referred to both in this House and publicly. If an organisation is experiencing financial difficulties, it should approach the department. The department would discuss the award and other awards with organisations to ensure that they can operate within the terms of the award to provide suitable services. If after that time there remains a need for funding, I will determine whether to provide funding to enable the facilities to continue to operate. I am pleased that individual services recognise that situation and are willing to work towards that
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outcome, notwithstanding the agitations of the relevant union.
PISTOL LICENCES
The Hon. R. T. M. BULL: I direct a question without notice to the Minister for Police and Emergency Services and Vice-President of the Executive Council. Has the attention of the Minister been drawn to recent claims by crime reporter Bob Bottom about the issue of pistol licences in New South Wales? Will the Minister advise the House whether the claims are correct?
The Hon. E. P. PICKERING: At the outset I remind honourable members that prior to the appointment of this Government the method of application and granting of pistol licences in this State left much to be desired. Upon assuming office in March 1988 the Government overhauled radically the existing legislation. It is now a requirement that persons applying for a personal pistol licence not only satisfy police that they are persons of good character but also establish they have good reason to obtain a personal pistol licence. Section 25 of the Firearms Act states:
The Commissioner of Police must not issue a licence that authorises possession and use of a pistol unless the Commissioner is satisfied that the applicant for the licence has good reason for possessing and using the pistol.
The editorial to Mr Bottom's magazine contains a number of inaccuracies. Mr Lauer has advised me that the records of the Firearms Registry reveal that during the late 1970s three persons by the name of Sergi had their applications for pistol licences refused on the recommendation of local police at Griffith. Contrary to the assertion in Mr Bottom's editorial, I am advised that there are now no persons with the name Sergi with a personal pistol licence. I advise honourable members further that earlier this year the Firearms Registry undertook a general review of all persons holding personal pistol licences. Included in that review was the licence on issue to Mr Bruce Galea, who was granted a pistol licence on the basis of the need for him to carry large amounts of cash. As a consequence of this review Mr Galea was unable to satisfy the Firearms Registry of his continuing need to hold such a licence. Consequently, the licence was revoked. As the Minister responsible I share the deep concerns not only of this House but also of the community about the effective licensing of all firearms. The concern of the Government about this matter has been demonstrated amply by its willingness to address the critical issue of firearms access and control within the community. The Government will continue to make those difficult decisions. My concerns in this regard are shared by Commissioner Lauer.
In July of this year all patrol commanders were advised that applications or renewals of personal pistol licences were not to be approved unless the applicants could clearly demonstrate good and sufficient reason to be granted or hold a licence. Police are instructed that they are not to issue personal pistol licences when applicants state they require the pistol merely for personal protection. It is anticipated that Mr Lauer's initiative in this area will greatly reduce the number of persons holding personal pistol licences. Honourable members will have noted that Mr Bottom alluded to the fact that
a number of persons identified by him in his article had either their licence application refused or existing licences revoked.
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The commissioner advises me that the situation in respect of the persons named in Mr Bottom's editorial is as follows: Danny Casey - shooter's licence refused; Tom Domican - shooter's licence revoked; Benny Esposito - pistol licence revoked; Kevin Humphries - pistol licence refused; Les Jones - pistol licence refused; David Kelleher - firearms prohibition order in place; William Lambert - pistol licence refused; Todor Maksimovich - pistol licence refused; Wayne Martin - shooter's licence revoked; Barry McCann - now deceased; Joe Meissner - shooter's licence revoked; Murray Stewart-Riley - no application made; Tony Samuel - shooter's licence revoked; George Savvas - no application made, convicted fire arms offender; Peter Wong - pistol licence refused. I am satisfied with the legislative and administrative arrangements now in place and accept the assurances of the commissioner that every conscious effort is being made by the Police Service to ensure greater accountability within the community of all firearms and those to whom firearms licences are issued.
LOCAL GOVERNMENT VOTING REFORM
The Hon. J. W. SHAW: My question without notice is directed to the Minister for Planning and Minister for Energy, representing the Minister for Local Government and Minister for Cooperatives. Has the Government considered the responses to the discussion paper on the reform of local government? Does the Minister agree that there has been shown in those responses an overwhelming opposition to the scrapping of proportional representation as the voting method for local government? For example, has the Minister noted the views of the Local Government and Shires Association that so-called equal value voting could exclude minority views and representation from outlying rural areas? In light of these responses will the Government abandon the proposed change to the voting method?
The Hon. R. J. WEBSTER: I shall certainly seek detailed answers to the questions raised by the Hon. J. W. Shaw from my colleague the Minister for Local Government and Minister for Cooperatives. I reject the implication in the question asked by the honourable member that the Government has been in some way deficient in the way it has gone about reforming the Local Government Act, which is in marked contrast to the way the crew opposite went about reforming that Act when in office. I well recall being in another place when the Hon. Janice Crosio, the Minister for Local Government at that time, pushed through the House in the middle of the night, in a thoroughly undemocratic way, some absolutely disgraceful legislation which took democracy away from the city of Sydney. The Government has undertaken a sustained and planned period of consultation with local government. I am sure that the views of all councils will be taken into account by the Minister for Local Government and Minister for Cooperatives, and I shall seek detailed answers to the matters raised by the honourable member.
LOOK AT ME NOW HEADLAND OCEAN OUTFALL
Reverend the Hon. F. J. NILE: I ask a question without notice of the Minister for Police and Emergency Services and Vice-President of the Executive Council, representing the Premier, Treasurer and Minister for Ethnic Affairs. Is it a fact that more than 200 arrests have been made at Emerald Beach, including children, women and
elderly people who were protesting about the new ocean outfall at the Look at Me Now Headland? Will the Government order construction on the outfall to cease immediately while this controversial project is fully investigated in view of the problems being
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experienced in Sydney with the new deep water outfall? Will the Government order the Willis Creek and Back Beach outfall, which is currently in use, to be updated to a tertiary treatment level or some other environmentally acceptable level?
The Hon. E. P. PICKERING: I acknowledge the honourable member's question. The suggestion that the Government should act to cause the council to desist with that construction is a matter for another Minister in the other place.
Reverend the Hon. F. J. Nile: The Premier.
The Hon. E. P. PICKERING: I agree it would almost certainly fall on the Premier's shoulders, and I shall take the honourable member's suggestion to the Premier for his consideration. This development, I understand, was recently appealed against in court but the appeal was not upheld.
The Hon. Dr B. P. V. Pezzutti: There is still one ongoing.
The Hon. E. P. PICKERING: I am not confident that that is so. I was aware that about a week ago the court decided that the council was acting legally with regard to the development and as such the development has continued. Until recently protests have continued, which have led to people being detained. I understand that the vast majority, if not all, of those people have been granted bail by the court on the condition that they do not return to the protest site. The report to me, in discussions I had yesterday with the commissioner, was that there was little activity around the site. I have not yet had a briefing today: the protest may have diminished, though I do not know that. The policy suggestion in the honourable member's question is a matter for the Premier and I will pass it on to him.
CURRICULUM SUPPORT MATERIALS
The Hon. PATRICIA FORSYTHE: I direct my question without notice to the Minister for School Education and Youth Affairs. Will the Minister inform the House of support materials being produced to assist classroom teachers of kindergarten to year 6 to deliver the science and technology curriculum? Will the Minister detail any examples of the Department of School Education entering into joint ventures for the production of such material?
The Hon. VIRGINIA CHADWICK: I thank the Hon. Patricia Forsythe for her question and her interest in the recently developed science and technology syllabus for both secondary and primary schools. The honourable member knows that the Government is committed to the restructuring of the curriculum into key learning areas and acknowledges the importance of science and technology in the curriculum. Our children - more than a million of them in our schools - will be facing a very different world to the one we remember when we left school. Science and technology will play a key role in our everyday lives. If our children are to develop these key skills and be equipped to maximise their participation in this changing society, we must address their needs.
The Hon. Ann Symonds: We must teach them history and philosophy in these difficult times.
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The Hon. VIRGINIA CHADWICK: We do that also. The Hon. Ann Symonds suggests that we should teach history and philosophy. I agree with her. Given that the study of philosophy has been introduced into government schools only this year, it is clear that she had no success introducing that subject into government schools in the 12 years of the previous Labor Government.
The Hon. R. J. Webster: You were a geography teacher, were you not?
The Hon. Ann Symonds: Certainly not. I spit on geography teachers.
The Hon. VIRGINIA CHADWICK: Unlike the Hon. Ann Symonds, I do not spit on anybody and especially not on geography teachers. As was mentioned in the House yesterday, the Government has introduced a new design and technology course for years 7 to 10, which adds to the kindergarten to year 6 science and technology course that was introduced earlier this year. Recently, to assist teachers with this relatively new curriculum development, the department compiled a list of resources that it hopes will help teachers to enrich and enhance this curriculum area. Such matters include broadening the perception of possible resources and outlining the types of resources that are available; providing information about organisations and people who can assist with aspects of science and technology education; providing information about places and venues that can be used for science and technology education; and providing for excursions, accredited performances and the like. The list also includes the more traditional resources of books and other reference material. I thank my colleague the Minister for Planning and Minister for Energy because it has been the electricity supply industry of New South Wales that has worked with the department in a sponsorship arrangement to enable the printing and distribution of this material free of charge to primary schools. It has been a co-operative and collaborative venture, and I thank the electricity supply industry for its support and commitment to science and technology education in our schools.
BLUE-GREEN ALGAE RIVER INFESTATION
The Hon. DELCIA KITE: My question without notice is directed to the Minister for Police and Emergency Services and Vice-President of the Executive Council, representing the Premier, Treasurer and Minister for Ethnic Affairs. Will the task force that has been set up to deal with the effect of algae infestation in the Darling River involve representation from the Aboriginal communities, particularly those in Wilcannia and Collarenebri? Will the Premier instruct the relevant authorities to supply bottled water to pregnant women and babies living in affected areas?
The Hon. E. P. PICKERING: The honourable member has asked a responsible and most important question. I have been privy to briefings by the Department of Emergency Services about the present problem with regard to blue-green algae and other potential problems that will face the community should the drought continue. Communities are facing a real shortage of water. An ongoing, detailed analysis is being conducted, particularly by the Public Works Department, which is doing an excellent job in this regard advising the Government of the potential problems and taking constructive
steps to overcome problems. At present, for example, it is providing temporary pipelines to transport water to particular towns. At a recent meeting I had with the Deputy Premier, Minister for Public Works and Minister for Roads, he specifically identified the
Page 5421
nature of the problems the honourable member alluded to and said that he was conscious of them. On that basis I am more than confident that the Public Works Department has the matter in hand. However, the honourable member's question is sufficiently important and detailed enough for me to draw her concerns to the attention of the Deputy Premier, and I shall do so with some alacrity.
AIR POLLUTION MONITORING NETWORK
The Hon. ELAINE NILE: I direct my question without notice to the Minister for Health and Community Services, representing the Minister for the Environment. Will an air pollution monitoring network that was due to be in place by early 1992 not now be in full use for three years? What action will the Government take to speed up the setting up of this network in view of the serious air pollution problems in the Sydney area with the dramatic increase of asthma attacks in the past few weeks?
The Hon. J. P. HANNAFORD: The question asked by the honourable member is similar to a question asked yesterday by the Hon. Delcia Kite to which I indicated that I would seek an answer. I shall ensure that the honourable member also gets that answer when I receive it.
SOLAR ENERGY TECHNOLOGY
The Hon. Dr MARLENE GOLDSMITH: I ask the Minister for Planning and Minister for Energy whether solar energy technologies have the potential to contribute to the future energy needs of the State and reduce greenhouse gas emissions. What is the Government doing to encourage the development and demonstration of solar energy technologies in New South Wales?
The Hon. R. J. WEBSTER: The honourable member shows a keen and continuing interest in energy conservation and energy efficiency. The Government recognises the importance of encouraging the development of cost-effective solar energy technologies and is providing direct support of research, development and demonstration of prospective technologies through both the Office of Energy and the Electricity Commission. Funds are being provided from the State Energy Research and Development Fund administered by the Office of Energy for a range of solar energy projects. This Government is currently funding projects worth a total of $1.6 million. They include the development of low cost, high efficiency, thin film solar cells by the University of New South Wales. The thin film material has the potential to provide the cost breakthrough considered necessary for the wider application of solar cells for power production and will, if prospects are realised, sustain Australia's world leadership in advanced photovoltaics. There is also scope for the improvement of conventional mono-crystal silicon solar cells in terms of both efficiency and simplified fabrication.
Two projects at the University of New South Wales in these areas - improvements to the laser grooved solar cell and the application of plasma processing to solar cell production - have been exploring the potential of a range of processing techniques. A 20-metre diameter big dish prototype solar thermal concentrator
and power system is being built at the Australian National University as the next stage of the development of the technology pioneered at White Cliffs. This system incorporates
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a range of improvements in solar technology from the White Cliffs experiment and aims to prove the design concept and the greater efficiency of a single large concentrator than multiple smaller dishes. The technology has potential both for generation of electricity and high-temperature steam for industrial use. Joint industry-university development of a sine-wave inverter is also under way to improve the quality of the 240 volt alternating current power supply provided by remote area power systems, which may include photovoltaic or wind energy generators.
The Hon. Judith Walker: Honourable members can tune in at the same time tomorrow to hear about the benefits of wind power.
The Hon. R. J. WEBSTER: I promise to bring a more complete answer to the House on wind power at a later date. At the solar test facility at the University of New South Wales software is also being developed to establish a user friendly means to assess the energy efficiency of solar and heat pump domestic water heaters, which will facilitate energy labelling of these appliances. Meanwhile at the University of Technology research is being supported into the development of innovative natural lighting systems with potential commercial and domestic application. The Electricity Commission of New South Wales is also funding solar energy projects totalling $1.6 million, which include research at the Centre for Photovoltaic Devices, University of New South Wales, including the thin film program and also the investigation of specific applications for photovoltaic technology within the electricity supply network. The intention is to install a demonstration unit within a four-year period.
Potential applications are in areas where there is a need to upgrade heavily loaded lines that are approaching thermal limits; a need to reduce voltage drop at the end of single wire earth return lines or in situations where the use of photovoltaics can offset capital costs of upgrading thermally overloaded transformers. A project is being carried out by the School of Physics, University of Sydney to develop an economic solar thermal energy system for providing domestic hot water, heating and cooking needs. The system will utilise evacuated tube solar collectors with concentrating trough reflectors. Preliminary investigations indicate that with one day's energy storage the system will supply up to 90 per cent of the thermal loads of a household. This high performance is considered achievable because the system can be designed for increased solar collection in winter when the highest thermal loads occur. An existing house at Hurstville in Sydney is being retrofitted to evaluate the system. Data on the present domestic energy use of that household is being collected to assist in the design and application of the technology.
The Hon. Delcia Kite: Save a little.
The Hon. R. J. WEBSTER: Despite the mirth in the House, this is an important issue. This afternoon, together with the Federal Minister for Resources, Mr Griffiths, and the Victorian Minister for the Environment, I launched a program of ceramic cell energy conversion. Honourable members should recognise that this sort of technology, though in its infancy, is vitally important if we are to combat some of the problems that members on the other side of the House consider to be important. I ask honourable members to be patient and not trivialise important information which should, in view of
some of the rubbish spoken by members opposite, be placed on the record. The commission is also considering the establishment of a network of solar radiation
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measurement stations as part of a joint venture with the South Australian and Victorian electricity authorities. The intention is to identify strategic locations in each State at which measurement stations can record the necessary data for quantifying the available resource. The thrust of the funding provided for the technological development of solar energy utilisation is to identify and continue to reduce the current cost of solar energy.
The areas of solar technology receiving most attention are photovoltaic and solar thermal systems as these offer the potential for reductions in costs. Two significant areas of application are the displacement of either grid electricity generated using coal-fired power stations or process steam produced from fossil fuels. The use of solar technology to meet the thermal needs of individual households on a large scale will have a significant impact on the load on the electricity grid. Currently the cost of electricity from solar photovoltaic cells is six to 10 times higher than conventional coal-fired power and from solar thermal is two to six times higher. Funding is being provided to the foremost researchers in these technology areas at the University of New South Wales, the University of Sydney and the Australian National University. The Government views this support as an important investment which will bring significant economic and environmental benefits to New South Wales in the 1990s and beyond.
SCHOOLS ANTI-VIOLENCE PROGRAM
The Hon. P. F. O'GRADY: I ask the Minister for School Education and Youth Affairs a question without notice. Will the Minister confirm that the Department of School Education has prepared a series of six lessons on domestic violence, homophobia and schoolyard violence? In what schools will the program be taught next year?
The Hon. VIRGINIA CHADWICK: As I cannot confirm precisely that the program to which the honourable member refers contains six lessons, as he claimed, I could not tell him authoritatively what schools the program will target next year. I believe the honourable member is generally supportive of efforts being made by officers of the Department of School Education to ensure that matters such as homophobia, violence and disruption related to racial differences or, indeed, any other differences are dealt with and eventually eliminated. Recently I welcomed the opportunity to work with a number of groups within the community to address issues such as homophobia. As a result of the Gulf War, the department has worked closely with the Ethnic Affairs Commission to develop strategies to deal with racism and racial violence in schools. As I am aware of the honourable member's genuine interest in and concern about these issues, I am more than happy to seek a detailed answer to his question as soon as possible. I believe the honourable member and I share a common concern related not merely to the interaction between students within our school system. I am concerned equally about the relationship between students and teachers, and teachers one to the other. Every aspect of that relationship is important in any strategy, lessons or otherwise, that is developed.
BEGA WOMEN'S REFUGE
The Hon. ELISABETH KIRKBY: My question without notice is directed to the Minister for Health and Community Services and relates to a matter I have raised with
him previously. Is it a fact that the Southern Women's Group has been the incorporated body funding the Bega Women's Refuge? Is it also a fact that on 28th March the
Page 5424
Southern Women's Group received a letter from the Bega Women's Refuge saying that the refuge has independently incorporated? Is the Minister aware that the Southern Women's Group bank account was then changed to Bega Womens Refuge Inc. resources account without the knowledge or authority of the Southern Women's Group and bank statements were forwarded to another address? Will the Minister reinstate the funds with the Southern Women's Group for the running of the women's refuge in Bega? Does the Minister share community concern in relation to the need for the refuge for women and children? Does he agree that the Southern Women's Group is now able to take full responsibility for the management and staffing of the refuge?
The DEPUTY-PRESIDENT (The Hon. D. J. Gay): Order! I remind the Hon. Elisabeth Kirkby that questions requiring detailed answers should be placed on notice.
The Hon. J. P. HANNAFORD: The question asked by the Hon. Elisabeth Kirkby relates to an issue which is current in the southern part of the State. There is an ongoing saga between the refuges in that area. I have had a number of investigations carried out as a result of allegation, counter-allegation and counter-counter-allegation. I have now caused an investigation to be made into the adequacy of investigations by the Department of Community Services into the allegations and counter-allegations. To date I have been advised that the refuges are providing a necessary service. I have received a large number of letters relating to the allegations and counter-allegations. I have indicated that when specific allegations with supporting facts are brought to my attention, I will have such allegations investigated. The honourable member has drawn a specific allegation to my attention. I will have that allegation investigated, but, so far as I am concerned, a refuge is needed in the area and a refuge will continue to be provided. If there are management problems, I will ensure that my officers work with the appropriate people in the area to make sure that those problems are resolved.
ILLEGAL CASINOS
The Hon. S. B. MUTCH: Has the Minister for Police and Emergency Services and Vice-President of the Executive Council seen reports today that Sir Laurence Street in his report on casinos has stated that he took evidence that there were 20 illegal casinos operating in the central business district? Can the Minister comment on this?
The Hon. E. P. PICKERING: I am not aware of the source of the advice given to Sir Laurence Street which suggests that there are at least 20 traditional-style illegal casinos operating in the Sydney central business district. The latest advice available to the Commissioner of Police is that there are a total of 129 premises in the Sydney, Newcastle and Wollongong metropolitan areas in which it is suspected that some form of illegal gambling activity may be taking place. This is not a static figure but reflects the assessment of the situation at the end of October 1991. The vast majority of these establishments are in the category of small ethnic coffee shop premises. In most cases the illegal activity relates to card games for small stakes or the operation of prohibited draw card machines. The police gaming squad has reported that there are only a handful of hard core organisations where high stakes gaming would be available. In these cases the operators are more likely to have a history of illegal gaming activities. The police are constantly gathering intelligence and monitoring the relevant areas. During the first
10 months of this year the gaming squad conducted 20 full-scale operations and arrested 518 persons for gaming and other offences.
Page 5425
In addition, 100 prohibited amusement devices were seized. In excess of $90,000 was also seized during the operations. A further 53 persons were arrested in separate operations for offences relating to starting price betting. It is suspected that there are six hard core category premises operating in the Sydney business district, encompassing Kings Cross and Chinatown. The position is continually monitored and operations are carried out based on intelligence available at the time. I am informed that seven successful operations were mounted against these premises over the past 12 months. Apart from the operations conducted by the gaming squad, action is also taken where appropriate to have the Gaming Tribunal declare certain premises common gaming houses, which would effectively ban the use of the premises until the declaration was rescinded by the tribunal. The Commissioner of Police has assured me that the gaming squad will continue to monitor all suspect premises and take appropriate action where illegal gaming activities are detected.
The Hon. Judith Walker: They will just move it somewhere else.
The Hon. E. P. PICKERING: Exactly. I remind honourable members of how the present situation compares with the situation when I used to draw to the attention of the government of the day in this House the fact that between 200 and 300 casinos were openly operating in the Sydney area. The then shadow attorney general, Mr Dowd, and I could openly walk into those establishments at night and come back to this Parliament and identify the establishment by address and ask the government of the day whether the operation was legal or not. In those days I did not get an answer in this House as to whether the operation was legal or not. But when there was sufficient pressure to do something about the situation Premier Wran responded and the Commissioner of Police, Mervyn Wood, said to the Premier, "I do not want to close them down before Christmas because it will put a lot of people out on the street without a job". Those days are well and truly over.
The Hon. P. F. O'Grady: Why have you misled this House?
The Hon. E. P. PICKERING: I have not misled this House. The gaming squad is very capably and ably led by Chief Inspector George Taylforth. Anyone who follows football knows George to be a very tough and honest front-rower. George made history in the last few days. He was at Mollymook with his wife on holidays. Both of them on the same day, on the same golf course, hit a hole in one. That is an indication of just how capable George Taylforth is. He is a gentleman in whom I have the utmost confidence. He has done a great deal to shatter organised crime illegal gambling in this State. I can assure honourable members that whilst there will always be a role for a gaming squad we have come a long way from the days when Labor was in government and there were 300 illegal casinos operating openly in utter defiance of the law.
Reverend the Hon. F. J. Nile: Mr Deputy-President, I have a supplementary question.
The DEPUTY-PRESIDENT (The Hon. D. J. Gay): Order! The President has ruled that supplementary questions are to come only from the member who asked the original question. VOLUNTEER POLICE
The Hon. Dr MEREDITH BURGMANN: Has the attention of the Minister for
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Police and Emergency Services and Vice-President of the Executive Council been drawn to reported statements of the Inspector General of Police, Mr Don Wilson, referred to in the Sunday Telegraph on 24th November, regarding the Minister's proposal for a volunteer police scheme? Is the Minister aware that Mr Wilson is reported to have said, "It does not exactly alarm me to learn that the officers involved voted against the scheme", and, "It tells me that it just won't work"? Having regard to the now apparent opposition to the scheme of the commissioner, the Inspector General and the Police Association, does the Minister intend to pursue the voluntary police scheme?
The Hon. E. P. PICKERING: I am very pleased that the Hon. Dr Meredith Burgmann has raised that question. It is a very important question and, I might add, a very responsible one.
The Hon. Judith Walker: That is a put down.
The Hon. E. P. PICKERING: It is not a put down. I think that in view of the public report it is a most appropriate question for the honourable member to ask and I am frankly amazed that it has not been asked before now.
The Hon. J. P. Hannaford: By a shadow minister.
The Hon. E. P. PICKERING: By a shadow minister. The Inspector General and I are at one on this issue. I have had the benefit of talking to him on many occasions.
The Hon. Dr Meredith Burgmann: It did not look like it in the paper.
The Hon. E. P. PICKERING: Of course not. The Inspector General has advised me that he has been selectively quoted. I might add that shortly after giving his interview he was kind enough to ring my office to say that he had given the interview and to tell me what he said. I wholeheartedly agree with what he said, which is that volunteer policing in this State will not be successful unless the community, the Government and the Police Service support the concept. That would be self-evident to all of us. Unless those three elements support the concept, it will not get off the ground. That applies all over the world. The Inspector General comes from the Royal Canadian Mounted Police, which has made very successful use of the volunteer policing scheme. Therefore, the Inspector General is very supportive of the concept.
However, there is an important difference between the Inspector General's experience and the New South Wales experience. It is that in New South Wales there is a police association, or police union, if you wish to use that term, and in Canada there is not. Obviously the Inspector General has no experience of working with a police union in conjunction with a police service. That is a simple statement of fact. Given that he does not have that experience, obviously he is not able to relate to the New South Wales experience in that regard. He would be the first to admit to that. His basic statement to the effect that unless the Government, the community and the Police Service are behind the proposal it will not get off the ground is spot on.
The Hon. Judith Walker: Why are you going to launch it then?
The Hon. E. P. PICKERING: Do you want to listen? That is exactly why what
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is proposed is a trial of that system in selected areas around the State to determine whether those conditions are in place, whether the Police Service, the community and the Government think the proposal is worth while. Let us realise that in England today there are 16,000 volunteer police operating a system that has continued for 130 years. Any reasonable person would agree that on that basis alone, despite the fact that the scheme operates in many other countries - and I instance Canada - the scheme is worthy of a trial.
The Hon. Judith Walker: That is because British police are not armed.
The Hon. E. P. PICKERING: My dear, in Canada voluntary police are armed.
The Hon. Judith Walker: That is the problem.
The Hon. E. P. PICKERING: I do not agree with that either but that is the situation in Canada.
If honourable members have further questions I suggest they put them on notice.
TOURISM COMMISSION TICKETEK GUARANTEE
The Hon. VIRGINIA CHADWICK: On 25th September the Deputy Leader of the Opposition asked a question about grants to Ticketek. The Minister for State Development and Minister for Tourism has advised me that the Government guarantee between Ticketek and the New South Wales Tourism Commission is no longer operable.
NORTH SHORE SERIAL KILLINGS
The Hon. E. P. PICKERING: Yesterday the Deputy Leader of the Opposition asked me why police had precluded reporters from interviewing the neighbours of Mrs Sinclair on the day of her murder. The answer is as follows:
It is normal procedure for police to seal off the surrounding area where a crime has been committed. In the case of a murder in a suburban home, one of the essential elements of an investigation is to canvass all neighbours in the street as they could be witnesses for the prosecution. On 19th March, 1990, police sealed off Pindari Street, Beauty Point, following the discovery of the murder of Mrs Sinclair. It was important that police interview the neighbours and any other possible witnesses before they were available to the media.
I would point out that the same procedures were applied following the murder of Victor Chang. Police sealed off the whole of Lang Road, Mosman and conducted a door knock to canvass all neighbours and any other witnesses. The arrangements for preservation of a crime scene and the establishment of clearly defined media areas are set out in the Police Service media guidelines. The media are well aware of the procedures and are very helpful in this regard.
______
BOARDING HOUSES AND LODGING HOUSES BILL (No. 2)
In Committee
Consideration resumed from an earlier hour.
Page 5428
The Hon. ELISABETH KIRKBY [5.1]: The amendments that I moved in globo have been canvassed at some length. They have been the subject of considerable discussion, if not argument, with the Minister who has the carriage of the bill. I do not think any useful purpose would be served in continuing the debate. Obviously there is a total difference in philosophy between the Government, the Australian Democrats and the Australian Labor Party on this matter, and therefore I suggest that perhaps the amendments should be put to the vote.
Amendments negatived.
Part 4.
The Hon. ELISABETH KIRKBY [5.3]: I move:
Page 22, clause 50. Omit the clause.
Clause 50 will amend the Landlord and Tenant Rental Bond Act 1977 to exempt boarders and lodgers from the provisions of that Act. This means that the owner will hold the rental bond and not the Rental Bond Board. Therefore, boarders and lodgers will be denied the security enjoyed by other tenants. When I was discussing this amendment with the Minister's advisers, they said that it was not suitable for the rental bonds of boarders and lodgers to be held by the Rental Bond Board and that it would be far easier for boarders and lodgers to get back their bonds if they were held by the landlord. I refute this argument. As I said in the second reading debate, I do not understand the logic of their argument. It is well known that people who wish to reclaim their bonds can do so from the Rental Bond Board on the very same day they make application, if they apply to the board in person. This has been aptly demonstrated, and is the result of long practice. Obviously if they make application in writing the process may take some time.
There was a time when the Rental Bond Board was not working efficiently and people made many complaints about it. The operation of the board has now been streamlined. It works to the satisfaction of both landlords and tenants. Experience shows also that if boarders or lodgers pay their bonds to the landlord, in some cases they may experience extreme difficulty in getting back that money. As I said last night, in many cases it could be their only lump sum which would enable them to pay for alternative accommodation, particularly if they are pensioners or if they are recipients of welfare benefits. In the second reading debate I postulated the case of a person living in rented accommodation and the landlord living in a different town, with the landlord perhaps calling in once or twice a month to see how his lodging-house or boarding-house was being conducted in his absence. Even where the landlord is a live-in proprietor, at the time when the boarder or lodger is leaving he could be away on business in another part
of the city or perhaps have gone away for the weekend with his family. There are a variety of reasons that it would not be possible to obtain that money quickly. The landlord may not be available to hand the money back. He would not have to make himself available during normal office hours in the same way that the Rental Bond Board makes itself available to tenants during office hours.
Page 5429
I do not see why boarders and lodgers should be exempt from the provisions of the Act and why they should not have the same security that is enjoyed by other tenants. I realise that philosophical answers have been given by the Government on other occasions to these amendments, and that is why they have taken so long to be dealt with. I do not intend to labour the point unduly. This is my last amendment on this bill and I shall cause the Committee to divide on it, because I believe it is proper to have on the record the fact that many facets of the bill have been devised by people who have no understanding of the problems of ordinary people, particularly those living on low incomes. They seem unable to comprehend the extreme vulnerability of many of these elderly people, whose incomes are limited. Even a small sum of money - and seven days' rent in advance in many cases will be a small sum of money - possibly could be the only capital that they possess, and to them it is not a small sum of money. It may appear to be a small sum of money to the landlord, particularly if he runs several boarding-houses; and he has the use of their money, which he holds in trust in case of damage to the property or default on the rent. It is sensible to provide that the bond money be lodged with the Rental Bond Board. Such protection should be afforded these people. These sorts of people are definitely far more vulnerable than any other form of tenant. I believe it is quite a reasonable request to make of the Government and I hope on this occasion the Government shows a little understanding of the situation in which many people in society find themselves. I commend the amendment.
The Hon. R. D. DYER [5.9]: The Opposition supports strongly the amendment moved by the Hon. Elisabeth Kirkby. I think that both sides of the House would agree that the Rental Bond Board system has worked well in practice for landlords and tenants. Though it now seems to be in the distant past, I recall that when I was a practising solicitor there were endemic problems - never-ending disputes seemingly - between landlords and tenants when leases came to an end and the time came for bonds to be refunded to tenants. There were disputes about the condition of furniture and furnishings in the property at the time the lease was entered into; whether damage occasioned during the term of the lease was the fault of the tenant or whether the property was in a damaged state at the time the lease was entered into. There is now, as it were, a stakeholder - the Rental Bond Board - which holds the bond for the continuance of the lease. That body is responsible for administering the bond and refunding it with interest at the expiration of the lease. Any disputes that occur during the term of the lease are dealt with on a proper basis. It is my belief that the philosophy underlying the provisions of clause 50 is that, in effect, boarders and lodgers are fly-by-night people who do not remain in occupation of premises for very long. Last evening the Hon. J. R. Johnson said that when he was an official of the shop assistants union it was within his knowledge that some people remained in occupation as boarders and lodgers at the same premises virtually during the continuance of their adult lives.
I do not intend to proceed on an anecdotal basis with regard to this matter. I rely on a matter that was referred to in another place by my colleague the honourable member for Heffron, the shadow minister for housing. She referred to a study conducted
in 1987 by the Department of Housing that found that only 26 per cent of boarders and lodgers surveyed in Darlinghurst had lived in their residences for less than six months. The study showed that it was the exception rather than the rule that boarders and lodgers lived in premises for short periods. It might be the common perception that boarders and lodgers reside in premises for short periods, but the reality, which was reflected by the study, is that about 75 per cent of boarders and lodgers reside in the same premises for
Page 5430
periods of six months or longer. The Minister would not be justified in seeking to draw the firm distinction between tenants on the one hand and boarders and lodgers on the other hand, concluding that the latter are transient and the former more permanent in their occupation. With the Hon. Elisabeth Kirkby the Opposition submits that the security and propriety introduced into the administration of rental bonds by the Landlord and Tenant (Rental Bonds) Act 1977 ought to be as available to boarders and lodgers as they are to more traditional tenants. For those brief reasons the Opposition indicates its support for the amendment.
The Hon. J. P. HANNAFORD (Minister for Health and Community Services) [5.14]: The Government does not accept the amendment. The clause as it stands provides that bonds paid by boarders and lodgers are not covered by the rental bonds legislation, thus the bonds do not have to be deposited with the board. The amendment seeks to delete clause 50. The view of the Government is that when boarders and lodgers end an agreement and wish to move premises they do not want to have to go to the Rental Bond Board to retrieve their bonds. The Hon. R. D. Dyer adverted to the transient nature of the tenancies. This would be an unnecessary burden that would delay their relocation. An unnecessary further load would be placed on the Rental Bond Board. The Hon. R. D. Dyer referred, to a large extent, to the Bond Board and era prior to the Rental Tenancies Tribunal. There now exists a Residential Tenancies Tribunal, a standard form of agreement and a condition report. A report on the condition of premises must be completed by both parties before occupation takes place. This is provided also in the proposed standard form of agreement that will be adopted for boarders and lodgers. The elements of disputation that the Hon. R. D. Dyer experienced, and which I too experienced, do not frequently or significantly occur now. The types of situations that others experienced in the past no longer arise.
I shall now address the matters raised by the Hon. Elisabeth Kirkby. Victoria is the only other jurisdiction that has boarding-house legislation, that is, the Rooming Houses Act 1989. That legislation provides for the payment of bonds but does not require the owner to pay bonds to a bond board. Access to the Residential Tenancies Tribunal is regarded as sufficient safeguard for boarders and lodgers, who, as the Hon. Elisabeth Kirkby said, need to have access to money when they move. The honourable member said that the bond money may well be the only capital of the boarder or lodger and, therefore, quick access to it would be essential. Boarders and lodgers need to have their bonds returned to them immediately to enable them to find other accommodation immediately.
The Rental Bond Board has always worked efficiently, but the most helpful initiative has been the Residential Tenancies Act, which provides access to the tribunal to enable people to enforce their rights. That was a significant development. Boarders and lodgers would be disadvantaged if they had to go to the Rental Bond Board to retrieve their money before finding alternative accommodation. Owners are aware that the tribunal can intervene in disputes. A significant difference between traditional leases
and boarding-house agreements is that invariably landlords involved with traditional leases are absent landlords who rely upon the intervention of agents. The owners of boarding-houses are available at all times on the premises. There are no significant difficulties experienced by tenants in traditional leases in securing the return of their bonds from the absent landlord.
Page 5431
The Hon. R. D. Dyer: That does not mean that disputes do not occur.
The Hon. J. P. HANNAFORD: No, but if there is disputation, delays will occur in any event. I am referring to a situation in which there are no disputes, when bonds are returned quickly to allow the tenant to move on. The Government is of the view that no significant benefit will be gained by accepting the amendment. The tribunal provides protection in the event of disputes. Because boarding and lodging premises are occupied by the operator-owner, there is immediate access to the bond - that is in cases where there is no disputation - which is not the situation that prevails with the usual tenancy.
The Hon. ELISABETH KIRKBY [5.18]: At times during this debate I have wondered whether the Minister and his advisers have listened to anything I have said. The Minister has been regurgitating prepared answers that have no relevance to the matters I have raised. Nor do they bear relevance to everyday life experiences. Reference was made to the necessity for boarders and lodgers to have immediate access to bond money. As I said at length earlier in debate on this amendment, though a proprietor may live on the premises, for perfectly legitimate reasons he or she may not be available when a boarder or lodger decides to leave. It may be that the proprietor has had to leave to care for a sick relative, to go to the dentist, or to do a day's shopping. It flies in the face of human experience to suggest that because a proprietor lives on the premises he or she will always be immediately available.
It is ridiculous to pretend that these measures always work in the wonderful clockwork idealistic manner that the Minister's advisers suggest. That thinking is inherent in every clause of the bill. I do not know who thought up and drafted the bill - it may have been the Minister in the other place who has carriage of the proposed legislation - but whoever it was does not know how ordinary people live and has never had to leave home and find other accommodation quickly. Whoever drafted the bill does not know what it is like - and I can inform the House that I do - to have no money other than a small amount to carry over to find the next lodging. The Rental Bond Board is the proper place for bond money to be lodged to protect the interests of people who are in difficult circumstances.
The Hon. J. P. HANNAFORD (Minister for Health and Community Services) [5.21]: It is regrettable that the honourable member uses those examples to support her argument because that demonstrates she does not understand even how the Rental Bond Board system works. The honourable member spoke of bond money not being accessible because a landlord may not be available. The reality is that a person cannot be given bond money by the Rental Bond Board, because of the structure of the legislation, without obtaining a signed document from the landlord. If the landlord cannot be found to sign that document, the bond money cannot be paid by the Rental Bond Board.
The Hon. Elisabeth Kirkby: Do not pretend, as indicated by your previous remarks, that people can get their bond money back immediately. You used the word "immediately".
The Hon. J. P. HANNAFORD: I adhere to that. If a person can ask a landlord, without dispute, to sign a form that enables the Rental Bond Board to release bond money, that person could as easily ask the landlord to sign a cheque to get bond money back more quickly. That is exactly what the Government is adverting to. The system proposed by the Hon. Elisabeth Kirkby does not provide any added benefits.
Page 5432
Question - That the amendment be agreed to - put.
The Committee divided.
Ayes, 17
Dr Burgmann
Ms Burnswoods
Mr Dyer
Mr Egan
Mr Enderbury
Mrs Isaksen
Miss Kirkby
Mrs Kite
Mr Macdonald
Mr Manson
Mr Obeid
Mr O'Grady
Mrs Symonds
Mr Vaughan
Mrs Walker
Tellers,
Mr Kaldis
Mr Shaw
Noes, 18
Mr Bull
Mrs Chadwick
Mr Coleman
Mrs Forsythe
Miss Gardiner
Dr Goldsmith
Mr Hannaford
Mr Jobling
Mr Moppett
Mrs Nile
Revd F. J. Nile
Dr Pezzutti
Mr Pickering
Mr Ryan
Mrs Sham-Ho
Mr Webster
Tellers,
Mr Mutch
Mr Samios
Pairs
Mr Rowland Smith
Mr Willis
Mrs Arena
Mr Johnson
Question so resolved in the negative.
Amendment negatived.
Part agreed to.
Bill reported from Committee with amendments and passed through remaining stages.
NATIONAL PARKS AND WILDLIFE (KARST CONSERVATION) AMENDMENT BILL
Second Reading
The Hon. J. P. HANNAFORD (Minister for Health and Community Services) [5.32]: 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.
It is with great pleasure that I introduce the National Parks and Wildlife (Karst Conservation) Amendment Bill. Karst conservation - the preservation of limestone areas, their formations, their underground riverways, the environment and underground ecosystems that are contained within
Page 5433
them - is an area of conservation little known to the public.
Probably if the ordinary citizens of New South Wales were asked to discuss cave conservation, much comment would be directed at enjoying a tourist oriented visit to the Jenolan Caves Reserve, Wombeyan Caves, the Abercrombie Caves system, other public tourist caves such as Yarrangobilly Caves in the Kosciusko National Park. But few people know that, for example, at Jenolan there are about 25 kilometres of caves and karst areas of significance, of which less than eight kilometres are open to the public, or that at places like Yarrangobilly about four caves are open to the public, yet in that region there are more than 200 wild cave systems of enormous scientific and historical importance. One of the major problems in managing and protecting karst areas is that at present it is impossible to acquire title to a cave without acquiring title to the surface lands above it. Under the common law in New South Wales, with the exception of certain Crown minerals, acquisition of the surface theoretically is acquisition of the subordinate land through to the very centre of the earth.
The proposed legislation - and it is of some legal novelty - is an endeavour to say that we should treat caves as if they were a unit in a hierarchy in a building, for example a flat in a multi-storey block of flats. If one imagines that the flat on the top floor is the surfaced managed area of the land, the middle flat is the cave, and the bottom flat is the earth and material underneath, there is no reason why title to the top flat needs to be obtained to manage, enjoy or control access to that which is underneath it. The purpose of the legislation is to strata title cave systems so that if, as is the case in some areas around Wee Jasper on the south west slopes, benign grazing of the surface areas has little or no impact on the subterranean systems underneath, we can own and manage the caves merely by owning an area around the entrance to them, which gives control over access. Ownership of the volume within which the caves are located, and entering into a conservation agreement with the surface landholder to ensure that pollution entering the catchment of streamways that drain through sink holes and other formations into the cave is managed in an environmentally approved manner, will enable the public to use and enjoy a cave system without altering surface land tenure or management. We can own and manage the cave, yet the tenure of a farmer or forester or the person dwelling on or using the superjacent surface area is not interfered with. Another concept imported by the bill which has not been widely discussed in New South Wales but has not been legislated in Australia is underground wilderness areas. Some of the most magnificent and scientifically significant caves systems are located in Australia. Under the Nullarbor Plain there are enormous underground systems.
The Nullarbor cave systems, which may have World Heritage value quite separate from that of the land area above them, are an example of how the proposed legislation could be applied. I have written to both the South Australian and Western Australian Ministers, who work co-operatively on these matters, to inform them of the nature of the legislation. I had the privilege, with scientists from the New South Wales National Parks and Wildlife Service and the Tasmanian Forestry Commission, to make a series of visits to some of Tasmania's major karst areas of Marracoopa in Northern Tasmania and to make a visit through the Kubla Khan cave system, which at about 2.6 kilometres in length is one of the most significant in Tasmania. At both Jenolan and Yarrangobilly and probably in other significant karst areas in New South Wales, there are cave systems worthy of designation as wilderness areas. Indeed, one most respectable scientific argument suggests that the sub-surface area of Jenolan as a separate management unit, is worthy of wold heritage listing for its karst environmental values.
In the Jenolan Caves area there are fossilised remains of the giant macropods that inhabited New South Wales in millennia past. There are examples unique in the world of multiple laying of the karst formation system, where caves had been cut, closed by the deposition of silted material from the river system brought in from the surface, cut again, re-opened, cut
again and re-opened. In some places in Jenolan there are up to 10 such depositions. Yet at present we understand comparatively little of the geomorphological treasures that exist at Jenolan. The proposed legislation is designed to provide a mechanism of preserving those areas co-operatively through conservation agreements for subterranially strata titled areas, by acquiring the subterranean volume of the cave system within which the karst is located, and to vest its title in the National Parks and Wildlife Service. By that means we can create a subterranean nature reserve or national park or, in very special cases, a subterranean wilderness system.
The proposed legislation is the first in Australia of its nature. It is also, as best I am able to understand, the first time that this system has been tried anywhere in the world for the dedication of cave areas. Caves are an important part of our environment. They are areas of great beauty and
Page 5434
great fragility and, for those of us who enjoy going through them, who enjoy underground abseiling or climbing through the rivers and the passageways of the caves, they are places of great pleasure. I commend this legislation to the House, as we can make a contribution to the caves.
The Hon. DELCIA KITE [5.32]: I support the bill and welcome these amendments to the National Parks and Wildlife Act to make provision for the protection of karst regions. There have been some reservations in the past that a karst conservation region should be declared only when aboveground lands are also protected. I understand that the Minister has stated that priority for acquisition of such areas has been discussed with the National Parks Association. I hope that his statements can be taken as a clear commitment that, when the surface area warrants nature conservation in its own right, strata title of caves systems is not to become an alternative to a nature reservation. I hope that the Minister, acting for the Minister for the Environment, will reassure this House that this legislation is in accordance with the objectives of the Wilderness Act, which may include subterranean lands. It will be necessary in supporting the bill to ensure that no development of surface lands would affect the underground through runoff or siltation from mining. The Opposition supports the bill in principle. However, any possibility of damage to the caves system from sources such as pastoral or agricultural developments must also be assured.
It is naturally of some concern to me that there will be no departures from this protective legislation and that any speculation about potential development of the surface areas of the karst conservation region will be clearly stated by the Minister. Negotiations between affected landowners and the National Parks and Wildlife Service to effect an agreement regarding pastoral or agricultural use of surface areas must be governed by strict adherence to the conservation principles inherent in the wilderness legislation. I hope that no ministerial approval of recommendations following negotiations will be granted as exemptions to the requirements of the legislation even in Orange. The clear definition of a karst region is welcomed. I also welcome the Minister' s statement that the Jenolan Caves, in their own right, for geological reasons, warrant a World Heritage listing of their own. I am sure that the speleological societies with which the Minister has such a close relationship would agree that Jenolan Caves House should also be considered for its heritage value and should have been retained as a public enterprise. Visitors from overseas must be mystified at the manner in which the State of New South Wales under the Greiner Government has placed such historically significant establishments into the hands of private entrepreneurs.
The Hon. J. P. HANNAFORD (Minister for Health and Community Services) [5.35], in reply: In answer to the question asked by the honourable member, I am able to indicate to the House that the Government is committed to implementing this legislation
and also to ensuring that, where appropriate areas need to be protected under the various pieces of environment legislation, that protection will be provided. I commend the bill.
Motion agreed to.
Bill read a second time and passed through remaining stages.
PERPETUITIES (AMENDMENT) BILL
Second Reading
Page 5435
The Hon. R. J. WEBSTER (Minister for Planning and Minister for Energy) [5.37]: 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.
The object of this bill is to rectify an anomaly in the application of the rule against perpetuities as between superannuation funds and pooled superannuation trusts.
The rule against perpetuities was developed by the courts to prevent interests in property from being "tied up" for too long by their owners. Prior to the introduction of the rule, property owners were able to control the future use of their estates by vesting their property in ongoing trusts.
The rule was therefore designed to prevent interests that were to arise in the future from arising at too remote a time.
Its original purpose was to ensure that property holdings could be freely dealt with and to that extent it represented a victory by the courts over owners of large estates seeking to prevent disposal of these properties.
Over the years, however, the rule frequently operated to bring about results which could not be justified, and from time to time therefore its application has had to be modified.
Following a major review by the New South Wales Law Reform Commission in 1983 the Government of the day resolved to effect a general reform of this area of the law. The vehicle for change was the Perpetuities Act 1984 one of the provisions of which, section 13, exempted superannuation funds from compliance with the rule.
The main reasons for the exemption were to allow superannuation funds to be indefinitely continuing and so to maximise the benefits built up by the fund, and to allow new members to be admitted from time to time.
However, superannuation funds do not carry out all their investment activities directly. Many are now pooling much of their funds into entities known as "pooled superannuation trusts" which then invest the pooled funds and obtain the higher rate of return available to investments of large amounts.
Pooled superannuation trusts are usually established as a unit trust with units being allocated to the unitholders in proportion to the amounts contributed by them. In addition to superannuation funds, other unit holders include approved deposit funds and other pooled superannuation trusts.
At the time of enactment of the Perpetuities Act in 1984 legal opinion was to the effect that pooled superannuation trusts did not fall foul of the rule against perpetuities and hence they were not expressly mentioned in the legislation.
Doubts subsequently arose, however, as to whether that opinion was correct and further advice was sought, this time from eminent Queens Counsel (including the Solicitor General).
The Solicitor General advised that it was clearly appropriate to amend section 13 of the Perpetuities Act 1984 to exempt pooled superannuation trusts from the rule against perpetuities.
Obviously, in this important matter there can be no room for uncertainty hence the need for this bill which will dispel any lingering doubt as to the efficacy of these trusts.
It is inconsistent that superannuation funds are exempt from the rule against perpetuities but that pooled superannuation trusts, which largely exist in order to invest the moneys held by superannuation funds, are not exempt from the rule. The reasons previously referred to for exempting superannuation funds from the rule are equally applicable to pooled superannuation trusts.
Page 5436
I commend the bill.
Debate adjourned on motion by the Hon. Ann Symonds.
CORPORATIONS (NEW SOUTH WALES) AMENDMENT BILL
Second Reading
The Hon. E. P. PICKERING (Minister for Police and Emergency Services and Vice-President of the Executive Council) [5.40]: 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.
As honourable members are aware, the new national corporations scheme was established last year. This bill, a uniform State bill, amends the New South Wales corporations legislation in consequence of amendments made by the Commonwealth Corporations Legislation Amendment Act. The corporations scheme provides for the Corporations Law of the Commonwealth to be applied in the States and the Northern Territory.
The Corporations (New South Wales) Act 1990 applies the Corporations Law as the law in New South Wales and allows amendments made to the substantive provisions of the Corporations Law to automatically become part of New South Wales law.
The Commonwealth Corporations Legislation Amendment Act amends the corporations legislation to update the Corporations Law and provide for some matters which were overlooked in its rushed introduction. In particular, the Commonwealth Act amends the corporations legislation in relation to:
i) The winding up of the National Companies and Securities Commission;
ii) The conferment of jurisdiction under the Corporations Law on the Family Court of Australia;
iii) The reform of the regulation of insider trading;
iv) The consolidation of the accounts of groups of companies;
v) The moratorium on the Australian company number (ACN) and the Australian registered body number (ARBN); and
vi) A number of technical and clarifying amendments.
The amendments in this bill implement the non-substantive or machinery amendments made by the Commonwealth Act.
Most of the provisions of this bill relate to the conferment of jurisdiction on the Family Court with respect to civil matters arising under the Corporations Law of New South Wales, and to the winding up of the National Companies and Securities Commission.
Schedule 1(1)(B) to (11) of the bill deals with the conferment of cross-vested jurisdiction under the Corporations Law on the Family Court. Before the commencement of the Corporations Law, the Family Courts had jurisdiction to deal with matters under the co-operatives companies and securities legislation by virtue of the general scheme for the cross-vesting of jurisdiction of Australian courts.
Page 5437
However, the corporations legislation excluded the general cross-vesting scheme and replaced it with a special regime for the vesting and cross-vesting of jurisdiction between the Federal Court and the State and Territory courts on Corporations Law matters.
This bill, together with the complementary legislation of the Commonwealth and the other States, gives the Family Courts the same status under the Corporations Law as they had under the former Companies and Securities Code, and allows them to deal with issues arising under the Corporations Law in relation to matters before them.
Clauses 4 and 5 of the bill facilitate the winding up of the National Companies and Securities Commission by repealing the National Companies and Securities Commission (State Provisions) Act 1981. The functions of the NCSC have now, after an orderly transfer of responsibilities, been assumed by the Australian Securities Commission and so the NCSC is to be abolished.
The remaining amendments in the bill are of a minor machinery nature and implement those made by the Commonwealth Act.
I commend the bill.
The Hon. ANN SYMONDS [5.40]: The Opposition has carefully considered these measures and supports the bill before the House.
The Hon. E. P. PICKERING (Minister for Police and Emergency Services and Vice-President of the Executive Council) [5.41], in reply: I thank the Opposition for its generous support of the legislation. I commend the bill.
Motion agreed to.
Bill read a second time and passed through remaining stages.
INDEPENDENT COMMISSION AGAINST CORRUPTION (AMENDMENT) BILL
Second Reading
The Hon. E. P. PICKERING (Minister for Police and Emergency Services and Vice-President of the Executive Council) [5.42]: 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.
The principal object of this bill is to give effect to the recommendations of the parliamentary joint committee regarding public and private hearings of the Independent Commission Against Corruption. The bill also makes a number of minor miscellaneous amendments to the bill to address procedural problems that have emerged since the ICAC commenced operation.
The parliamentary joint committee was set up to provide a mechanism for continuing scrutiny of the ICAC and the exercise of its functions. The bill in adopting the major recommendations of the committee in the report of its inquiry into commission procedures and the rights of witnesses is a tribute to the thoroughness of that inquiry.
Early in 1990 the chairman of the joint committee, Mr Kerr, asked Mr Athol Moffitt, QC for his views on a number of issues concerning the ICAC. Mr Moffitt's document, "Openness and Secrecy in Inquiries into Organised Crime and Corruption: Question of Damage to Reputations" was released as a discussion paper. The joint committee subsequently announced an inquiry into matters
Page 5438
relating to ICAC hearings and the rights of witnesses. Two public hearings were held in October 1990 at which the commissioner, Mr Temby QC, and Mr Moffitt gave evidence. Submissions were also received from witnesses and legal representatives who had appeared at ICAC hearings.
The committee in its first report of its inquiry recognised the importance of public hearings, pointing out that exposure is a key weapon in the secret crime of corruption.
Furthermore, public hearings ensure that the ICAC is publicly accountable and that the way in which it exercises its special powers is open to public scrutiny. The joint committee therefore recommended that the principle of public hearings be adhered to and that the ICAC should continue to hold most of its hearings in public.
However the committee was rightly concerned with the unnecessary damage to reputations which may result from public hearings. Unsupported assertions may be made in the course of an open hearing. They may later appear to be worthless but in the meantime are given sensational media coverage. Evidence undermining what was earlier published about the person is unlikely to repair the damage to the person's reputation. Both the committee and Mr Temby were particularly concerned about the media reporting of closing submissions. There is evidence of a strong tendency to assume that the closing submissions of counsel assisting the commission represent the provisional views of the commission. Thus the committee suggested that specific steps need to be taken to guard against this happening.
The committee considered detailed legislative amendments proposed by Mr Moffitt giving witnesses an express statutory right to apply for a private hearing. However the commission objected to the amendments on the ground that they would inevitably lead to litigation which would delay and frustrate the commission's investigations. Further, there was no need, the commission said, for the right to apply for private hearings to be legislated because the commission already sat in private in response to such applications or on its own initiative.
The Committee accepted the commission's submission and recommended that alternative avenues be explored before Mr Moffitt's proposed amendments were made to the Act. It suggested that the commission amend its document entitled "procedure at public hearings" to note that the commission will hear and consider applications for private hearings. The commission has acted on this recommendation.
The Government is committed to ensuring that the ICAC is able to operate effectively and efficiently and thus supports the approach of the joint committee in wishing to avoid amendments to the ICAC Act in which the likelihood of litigation is inherent.
The ICAC currently creates a strong presumption in favour of public hearings. The commission argued before the joint committee that the Act be amended to give the commission a greater discretion to determine whether to hold a hearing in public or in private. The commission should have regard to the public interest in making a decision. The joint committee agreed with this recommendation and also suggested again that the commission amend its procedural document to set out the grounds on which the commission will consider an application for a private hearing. The commission has implemented that suggestion also.
The bill before the House gives effect to the recommendations of the committee. It ensures that the commission has greater flexibility in determining whether to hold a hearing in public or in private. This does not mean that public hearings will cease to be the norm. Mr Temby QC in his submission to the joint committee indicated that the commission would sit in private only a little more than it does at present. The touchstone for making the decision to sit in private or in public is the public interest and the public interest is usually best served by sitting in public.
The bill avoids attempting to exhaustively list the factors which are relevant to the public interest. This allows the myriad of matters that arise in the course of an inquiry and that may not be foreseeable at its commencement to be balanced in determining whether a hearing or part of a hearing should be held in public or in private.
The bill also expressly authorises the commission to hear closing submissions in private.
These reforms will assist in ensuring that unwarranted damage to reputations is avoided.
Page 5439
Other amendments made by the bill arise out of proposals initially put forward by the joint committee or the commission. On legal advice obtained as a result of a concern of the joint committee, the bill clarifies the right of unincorporated associations such as political parties to appear and be legally represented at commission hearings.
The bill also streamlines the procedure for the transmission of evidence of criminal offences against a law of the Commonwealth or other State to be transmitted to the appropriate authority of the Commonwealth or other State. It allows information about a public authority's performance to be given directly to the public authority as well as to the responsible Minister.
The ICAC Act gives witnesses the right to apply to the Attorney General for financial or legal assistance in respect of their appearance before the commission. Currently the grounds on which the Attorney General may grant assistance are undesirably vague. The bill clarifies those grounds. Thus the Attorney General will be authorised to approve assistance being given having regard to any of the following considerations: the prospect of hardship to the witness if assistance is declined, the significance of the evidence which the witness is likely to give and other matters relevant to the public interest.
The Independent Commission Against Corruption continues to have the Government's strong support. It has proved that it is a strong and independent institution. The bill demonstrates the Government's continuing commitment to ensuring that the commission remains such an institution.
I commend the bill.
The Hon. R. D. DYER [5.43]: The Opposition supports the Independent Commission Against Corruption (Amendment) Bill. Briefly stated, the purpose of the bill is to give effect to recommendations made by the Committee on the Independent Commission Against Corruption, of which I was a member until the last election. That committee conducted an inquiry into the rights of witnesses. Flowing from that inquiry and the committee's resulting recommendations, the Government has decided to amend the principal Act in regard to the circumstances in which the commission should hold private rather than public hearings. At present the principal Act provides for a statutory presumption in favour of the commission holding public hearings. The House will be aware that, as a result of various sensational and well reported inquiries by the Independent Commission Against Corruption, concern arose regarding the extent to which injustice might flow from wide reporting of public hearings before the commission.
The view of the parliamentary committee was that injustice will result from wide reporting. In that regard I instance the North Coast land development inquiry. The parliamentary committee recommended, and the bill provides, that there should be greater flexibility vested in the commission as to whether its inquiries should be held in public or in private. Simply stated, the solution arrived at in the bill is that the commission will have an unfettered discretion whether it will hold a hearing in public or in private. I distinguish that from the present position where, as I said a moment ago, there is a statutory presumption in favour of the holding of public hearings. I believe that in ordinary cases the commission will still favour public hearings. That is well and good. However, it is proper that the commission should have a general discretion in the circumstances of a particular case to hold a private rather than public hearing. The provisions of the bill are not controversial as between the Government and the Opposition. On behalf of the Opposition I am happy to indicate our support for this measure.
The Hon. ELISABETH KIRKBY [5.46]: The Australian Democrats support the Independent Commission Against Corruption (Amendment) Bill which basically
Page 5440
implements the recommendations of the Committee on the Independent Commission Against Corruption regarding public and private hearings of the commission. The proposals in the bill address the tension between the need for public hearings to expose corruption and ensure the accountability of the Independent Commission Against Corruption and the need to protect reputations from unnecessary damage, particularly that caused by unsupported allegations. Although the Independent Commission Against Corruption will continue to hold most of its hearings in public, in accordance with the recommendations of the parliamentary committee and the Independent Commission Against Corruption itself this bill will give the commission greater flexibility in determining whether to hold a hearing in public or in private. The ultimate criterion for deciding whether a hearing should take place in public or in private is whether the public interest will be served by a public hearing. At present under section 31(4) of the Independent Commission Against Corruption Act, the commission may not direct that a private hearing be held unless "it is satisfied that it is desirable to do so in the public interest for reasons connected with the subject-matter of the investigation or the nature of the evidence to be given".
The commission has now amended the document "Procedures at Public Hearings" to indicate that it will hear and consider applications for private hearings. The bill does not specify factors which constitute public interest but leaves those factors to the discretion of the commission. However, the bill expressly provides for the hearing of closing submissions in private. That provision was inserted in the bill in response to concern which has been expressed about media reporting of closing submissions. The minor provisions of the bill will allow unincorporated associations such as political parties to appear and be legally represented at commission hearings and the transmission of evidence of criminal offences to relevant Commonwealth or State authorities. They also clarify the grounds on which the Attorney General may grant legal or financial assistance to those appearing before the Independent Commission Against Corruption. These are valuable amendments which will assist the Independent Commission Against Corruption. The Australian Democrats totally support the Independent Commission Against Corruption and, therefore, I have great pleasure in supporting the legislation.
The Hon. D. J. GAY [5.50]: I speak in support of the bill and as deputy chairman of the Joint Committee on the Independent Commission Against Corruption. The primary aim of the Independent Commission Against Corruption (Amendment) Bill is to enlarge the discretion of the commission to decide whether to hold hearings in private, including closing submissions. Public interest is the determining factor when making these decisions. In October last year the ICAC committee held an inquiry into matters relating to public hearings and the rights of witnesses. The resulting report recognised the importance of public hearings, pointing out that exposure is a key weapon in the fight against the secret crime of corruption. However, damage to reputations sustained during the hearings was also a concern. I know this concern is shared by many members of this House. The Hon. Athol Moffitt, Q.C., supporting the view that inquiries should be conducted in large part in the open, said:
Organised crime and corruption flourishes on secrecy, codes of silence, and on the difficulty of exposing it by open investigation. This is a step towards depriving it of the benefits of secrecy. Openness also aids public confidence in the integrity of the inquiry.
Mr Frank Costigan, Q.C., emphasised the public interest in inquiries into corruption being carried out in public and the risks associated with such inquiries being carried out in private. In his words, "Once you start investigating allegations of public corruption privately then you add the additional smell of cover-up". The ICAC 1990 annual report
Page 5441
states:
Although not a court of law, the Commission is required to act in a fair and just manner . . . These things are best done in the open with the fact or possibility of public scrutiny.
All in all, the arguments for continuing public hearings are impressive. The ICAC creates a strong presumption in favour of open hearings. However, the committee also inquired into the rights of witnesses appearing before the commission. There were claims that reputations had been damaged unfairly in the course of such hearings. The Hon. Athol Moffitt, Q.C. made clear in his discussion paper the risks involved. He stated:
All sorts of flimsy material might appear in the course of an open hearing, it . . . might prove to be worthless, yet it has been given initially in open session, allowing sensational media headlines so there will be irreparable, unjust damage to reputations . . . headlines are likely to be in proportion to the prominence of the person named, and not in accordance with the weight of what is said or revealed. Later revelations will be unlikely to repair the damage.
Articles in the Sun-Herald recently written by John Synott concerning people named by Ian Temby as not co-operating with the Director of Public Prosecutions were accompanied by a photo of the honourable member for Murwillumbah, Don Beck. He was unfairly included in that article because of what I consider to be very lazy journalism.
The Hon. Dr Marlene Goldsmith: Irresponsible.
The Hon. D. J. GAY: Yes. I do not believe many members would have noticed that on the inside page a week or so later there was an apology from the newspaper concerning the matter. It is difficult to repair the damage done by such articles. Articles written by Murray Hogarth about the Hon. Ian Causley -
The Hon. Patricia Forsythe: Absolutely scurrilous.
The Hon. D. J. GAY: Exactly. Substantial damages were awarded in a defamation case because of the articles written by Murray Hogarth and a substantial apology was written in the newspaper. But I wonder how many members of this House noticed that apology tucked away on page 22 of the Tempo section of the Saturday Sydney Morning Herald.
The Hon. Patricia Forsythe: Behind the coloured picture of the football teams.
The Hon. D. J. GAY: Yes. Mr Moffitt added that in his view some reputation-damaging hearsay material has been admitted in various ICAC inquiries and published in the media. Closing submissions were a particular worry in this regard to both the ICAC committee and Mr Temby. People assume that the closing submissions of counsel assisting the commission represent the views of the commission. There was clearly room for improvements to the ICAC Act to take into account the damage to reputations that was being sustained. Legislative amendments were proposed by Mr Moffitt and considered by the committee. One was to give witnesses an express statutory right to apply for a private hearing. However, the commission objected to this amendment on the ground that it would inevitably lead to litigation which would delay and frustrate the commission's investigations.
The commission also said that there was no need for the right to apply for
Page 5442
private hearings to be legislated. The commission already sits in private in response to applications for private hearings or on its own initiative. As a result the committee recommended that alternative avenues be explored before Mr Moffitt's proposed amendments were agreed to. It was suggested that the commission amend its document entitled "Procedure at Public Hearings" to note that the commission will hear and consider applications for private hearings. The commission has since acted on this recommendation. The Independent Commission Against Corruption strongly favours public hearings. It has argued that the Act should be amended to give the commission a greater discretion to determine whether to hold a hearing in public or in private. The commission has regard to the public interest in making this decision. The joint committee agreed with this recommendation and also suggested again that the commission amend its procedural document to set out the grounds on which the commission will consider an application for a private hearing. The commission has implemented that suggestion.
This bill gives effect to the recommendations of the committee in ensuring that the commission has greater flexibility in determining whether to hold a hearing in public or in private. The frequency of public hearings will be only nominally affected. Mr Temby, in his submission to the joint committee, indicated that the commission would sit in private only a little more than it does at present. The main determinant for making the decision to sit in private or in public is the public interest, and history has shown that the public interest usually is best served by sitting in public. The bill avoids attempting to list the factors which are relevant to the public interest. This allows matters that arise in the course of an inquiry to be balanced in determining whether a hearing should be held in public or in private. The bill also expressly authorises the commission to hear closing submissions in private. These reforms will assist in ensuring that unwarranted damage to reputations is avoided in future and that the sad things that happened in the past will not happen again.
Other amendments made by the bill arise out of proposals initially put forward by the joint committee or the commission - on legal advice obtained as a result of concern of the committee or the commission. The bill clarifies the right of unincorporated associations such as political parties to appear and be legally represented at commission hearings. As chairman of a political party I applaud this decision. The bill also streamlines the procedure for evidence of criminal offences against a law of the Commonwealth or other State to be transmitted to the appropriate authority of the Commonwealth or other State. It also allows information about a public authority's performance to be given directly to the public authority as well as to the responsible Minister. The Independent Commission Against Corruption Act gives witnesses the right to apply to the Attorney General for financial or legal assistance in respect of their appearance before the commission.
At present the grounds on which the Attorney General may grant assistance are quite vague. The bill clarifies those grounds. The Attorney General will be authorised to approve assistance being given, having regard to any of the following considerations: the prospect of hardship to the witness if assistance is declined; the significance of the evidence that the witness is likely to give; and any other matters relevant to the public interest. The Independent Commission Against Corruption continues to have the Government's strong support. The Independent Commission Against Corruption has proved that it is a strong and independent institution. The bill demonstrates the Government's continued but not blinkered commitment to ensuring that the commission remains such an institution. I support the bill.
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The Hon. JAN BURNSWOODS [6.1]: As a new member of the Committee on the Independent Commission Against Corruption I support this bill. As has been pointed out, most of the amendments in the bill arose from the activities of the committee, its discussions with the commission and its hearings prior to the last State election - before I became a member of the committee. However, since then the committee has had some discussions about these issues. I wish to reiterate what I believe is the importance of continuing to hold the majority of hearings in public, and ensuring that the Independent Commission Against Corruption is seen to be accountable and that the public is aware of what it is doing. Certainly it is clear that some matters need to be dealt with in private or partly in private session. Concern has been expressed about the damage to witnesses' reputations and the hurt that people may suffer when assertions are made about them that may later be proved to be unfounded, but which may have been widely publicised by the media. Concern was also expressed about the tendency to regard closing submissions as though they have some special standing that ordinary evidence does not have.
A number of minor, but nevertheless important, matters are covered in this amending bill. I draw attention to the proposal that legal or financial assistance may be granted to witnesses after consideration of the prospects of hardship if assistance is declined, the significance of their evidence or any other matter relating to the public interest. Honourable members are aware of the increasing costs of any legal action and the way in which all but the very rich are being forced out of the courts or denied any legal rights that ostensibly they may have. This particular area is of importance, given that people can find themselves appearing before a body such as the Independent Commission Against Corruption but may be unable to afford the necessary legal assistance. On those bases I support the bill.
Reverend the Hon. F. J. NILE [6.3]: On behalf of the Call to Australia group I have much pleasure in supporting the Independent Commission Against Corruption (Amendment) Bill. The object of this bill is to address a number of procedural matters in the Independent Commission Against Corruption Act 1988, and in particular to enlarge the discretion of the commission to decide, in the public interest, to hold hearings in private. When there was controversy about the way in which the media was dealing with persons appearing before the commission, particularly members of Parliament, I raised in this Chamber my concerns about the damage that was being occasioned to the reputation of a number of members of Parliament. Members of Parliament are most vulnerable. Sensational media coverage may not affect a television or radio personality, or someone who wants to sell a product commercially, but I believe my concerns about members of Parliament were justified.
My concerns were not in any way directed to a particular political party. The media coverage was undermining the reputation of members of all political parties and that is why I spoke strongly at that time. I am pleased that the committee shared my view, as I am sure did members of this House, that the legislation should be amended, in co-operation with Independent Commission Against Corruption. The committee was concerned, and rightly so, with the unnecessary damage to a person's reputation which may result through unsupported assertions being made in the course of an open hearing. As honourable members well understand, those assertions may later have been proved to be worthless but the front page headlines would have done the damage. The subsequent printing of the facts does not result in the damage being repaired. The political arena is the most sensitive, because members of Parliament and their political parties depend on
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public support. If the public is confused, disturbed or has a sense of mistrust about particular members and or a party, their electoral support will be affected. It would not be beyond certain people to set up the Independent Commission Against Corruption in some way with the objective of damaging a political person or party. That should not happen but it is not an impossibility in society today.
I am pleased that those concerns have been addressed in this bill which has the support of the commission. Major changes such as those in this amending bill are not possible without a spirit of good will. Though the terminology in the bill is vague, the commission will decide whether hearings should be held in private. In view of the background pertaining to this matter, the commissioner is now clear about that point and the term "in the public interest" is sufficient for him to decide to hold hearings in private in certain circumstances. This is not in any way aimed at protecting members of Parliament necessarily but I believe members of Parliament are vulnerable. Most of the commission's hearings will still be held in public session. Only in certain circumstances will hearings be held in private. As has been said, it is important that private hearings be limited so that the community is made aware of the facts. Private hearings should be held on special occasions and only when the commission determines it is in the public interest. Therefore, I am pleased that the Government has addressed these concerns in the bill.
The Hon. E. P. PICKERING (Minister for Police and Emergency Services and Vice-President of the Executive Council) [6.8], in reply: I thank honourable members for their support of the legislation. Clearly the establishment of the Independent Commission Against Corruption was an important step for New South Wales. I am sure that view is accepted universally. It is not unreasonable, given the nature of the body,
that there ought to be at this time amending legislation to refine the process, a process that has been and will continue to be of great benefit to the State. I was interested to read an article recently in which a commentator argued that New South Wales, which once held the odious title of the corruption State, could now hold its head high. But the author pointed to other States that are now in trouble. I am sure the Independent Commission Against Corruption will continue to allow New South Wales to hold its head high with regard to public corruption. With those few words, I commend the bill.
Motion agreed to.
Bill read second time and passed through remaining stages.
REGULATION REVIEW COMMITTEE
Thirteenth Report
The Hon. S. B. Mutch, on behalf of the Chairman, brought up the Thirteenth Report from the Regulation Review Committee, which drew the attention of the Parliament to the fact that certain requirements of the Subordinate Legislation Act 1989 appear not to have been complied with in connection with the making of a regulation under the National Parks and Wildlife Act 1974.
Ordered to be printed.
PERPETUITIES (AMENDMENT) BILL
Page 5445
Second Reading
Debate resumed from an earlier hour.
The Hon. B. H. VAUGHAN (Deputy Leader of the Opposition) [6.12]: The object of the bill is to amend the Perpetuities Act 1984 to extend exemption from the rule against perpetuities to pooled superannuation trusts. I have in my possession a detailed file about perpetuities. I detested having anything to do with them when I was at law school. The Opposition wholeheartedly and perpetually supports the bill.
The Hon. E. P. PICKERING (Minister for Police and Emergency Services and Vice-President of the Executive Council) [6.12], in reply: I thank the honourable member for his support, and I commend the bill.
Motion agreed to.
Bill read a second time and passed through remaining stages.
ROYAL COMMISSIONS (AMENDMENT) BILL
Second Reading
The Hon. E. P. PICKERING (Minister for Police and Emergency Services and Vice-President of the Executive Council) [6.13]: I move:
That this bill be now read a second time.
I seek leave of the House to have the second reading speech incorporated Hansard.
Leave granted.
The object of this bill is to give a royal commission clear authority to provide information and material to a law enforcement agency where that information or material relates to a breach of a law of NSW or another State or the Commonwealth. The bill also expressly provides that a witness's documents and other property are to be returned to the witness if the commission does not propose to pass them on to another agency.
A royal commissioner may currently disseminate information to appropriate public authorities concerning possible breaches of law. However, there is some doubt about whether that authority extends to handing over documents and other material which a commission has required a witness to produce using its compulsory powers. The amendment made by the bill will make it clear that a commission has that authority where the material relates to possible breaches of the law.
The bill also expressly allows a royal commission in NSW to hand on material and information to other commissions of inquiry whether set up by NSW or another State or the Commonwealth.
Giving royal commissioners a clear power to disseminate material and information which relates to breaches of law will help to ensure that those breaches are brought to the attention of the appropriate authorities and action taken.
Once allegations are made during the course of an inquiry that a witness has breached the law then the witness is alerted to the possibility of proceedings being brought against him or her. If material produced by the witness were returned at the conclusion of an inquiry then there would clearly be a strong incentive for the witness to destroy it. The amendment will ensure that important evidence is safeguarded.
However, where material produced to a commission does not relate to a breach of law
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or where a commission does not propose to pass it on to a law enforcement agency then the bill will require it to be returned to the witness at his or her request.
The amendments are modelled on similar provisions in the Commonwealth Royal Commissions Act.
It should be emphasised, however, that the authority to pass on evidence of breaches of law to appropriate authorities will not affect the rules of evidence relating to the admissibility of that evidence in any subsequent civil or criminal proceedings.
Nor will the protection given by section 17 of the Royal Commissions Act against admission of evidence under objection be affected.
That section provides that where a witness has produced a document to a commission under objection, where he or she could have successfully claimed privilege in court proceedings, that document cannot be admitted into evidence in subsequent proceedings against the witness. The amendments made by the bill do not affect this protection.
The bill will enhance the effectiveness of royal commissions and help to ensure that the resources invested in them are well used.
I commend the bill.
The Hon. R. D. DYER [6.13]: The Opposition supports the Royal Commissions (Amendment) Bill. The purpose of the bill is to give a royal commission clear authority to provide information and material to a law enforcement agency where that information or material relates to a breach of the law, and also to empower the return of documents to witnesses. The amendments contained in the bill are modelled on similar provisions in the Commonwealth Royal Commissions Act. The Opposition will not delay the House with regard to this matter. It is non-contentious and has the full support of the Opposition.
The Hon. E. P. PICKERING (Minister for Police and Emergency Services and Vice-President of the Executive Council) [6.14], in reply: I thank the Opposition for its support of the legislation, which I commend to the House.
Motion agreed to.
Bill read a second time.
Third Reading
The Hon. E. P. PICKERING (Minister for Police and Emergency Services and Vice-President of the Executive Council) [6.15]: I move:
That this bill be now read a third time.
The Hon. ELISABETH KIRKBY [6.15]: The Australian Democrats support the Royal Commissions (Amendment) Bill, which will allow a royal commission to pass on information or furnish material obtained in the course of its inquiry to another commission of inquiry if it is relevant to that commission's terms of reference, or to a law enforcement agency, if it relates or may relate to a breach of the law. Previously there has been doubt about whether a royal commission may hand over documents and other material to other commissions of inquiry and law enforcement agencies. This bill will remove that doubt and will ensure that breaches of the law are brought to the attention of the relevant authorities and that important evidence is not destroyed by
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witnesses. The other provision of the bill will ensure that documents and other material held by a royal commission will be returned to the rightful person when the documents and material are no longer reasonably required, unless needed by another commission of inquiry, law enforcement agency, or dealt with according to the law. It is reassuring to know that the rules of evidence relating to the admissibility of evidence passed on from a royal commission will not be affected by the provisions of this bill. Furthermore, section 17 of the Royal Commissions Act provides that where a witness has provided a document under objection, and in relation to which privilege could have been claimed successfully in court proceedings, the document cannot be admitted into evidence in subsequent proceedings against the witness. It is appropriate that this important provision should be incorporated in the legislation. I support the bill.
Reverend the Hon. F. J. NILE [6.17]: I place on record the support of Call to Australia for the Royal Commissions (Amendment) Bill. I support any action by the Government that facilitates inquiry into illegal activity and that will enable a royal commission to pass on information to law enforcement agencies. The initiative will help to bring to justice those who break the law. Recently an important person whose name escapes me said that as a result of the efforts of the Greiner Government there are fewer allegations of corruption in New South Wales. That fact should be placed on the record.
Motion agreed to.
Bill read a third time.
STATUTE LAW (MISCELLANEOUS PROVISIONS) BILL (No. 2)
Second Reading
The Hon. E. P. PICKERING (Minister for Police and Emergency Services and Vice-President of the Executive Council) [6.18]: I move:
That this bill be now read a second time.
I seek the leave of the House to have the second reading speech incorporated in Hansard.
Leave granted.
Since the statute law revision program was instituted in 1984 there have been fifteen Statute Law (Miscellaneous Provisions) Bills. The present bill is the second such bill for this year and follows the bill introduced in the autumn sitting.
The present bill is similar to its predecessors in that it provides for amendments to Acts that are of such a minor nature that separate legislation is not warranted, and repeals legislation that has become obsolete.
The provisions contained in schedule 1 to the bill make minor policy changes of a non-contentious nature to existing Acts. Schedule 2 to the bill implements minor technical changes that the Parliamentary Counsel has identified as appropriate. Some amendments are corrections of minor errors and others are corrections of terminology.
Schedule 3 contains repeals of a number of amending Acts which are now no longer necessary as the amendments have been incorporated in reprints of the relevant principal Act.
The schedule also contains repeals of superfluous uncommenced provisions and repeals
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of other obsolete Acts. For example, the Land Aggregation Tax Act 1971 and the Land Aggregation Tax Management Act 1971 are repealed because they are no longer of public utility. These Acts were intended to discourage undue aggregation of certain freehold land used for primary production in certain circumstances by imposing an aggregation tax on owners of such land. The tax has never been levied nor the substantive provisions of the Act brought into operation. The existence of the legislation has caused unnecessary concern to purchasers of land who have assumed that the Acts may affect their interests.
Schedule 4 contains savings clauses for the repealed Acts, transitional provisions and a power to make regulations for appropriate transitional matters if necessary.
The bill follows the precedent set by previous statute law revision bills in providing for the repeal of a number of uncommenced provisions in Acts. Uncommenced provisions may be very misleading to the public.
The statute law revision program has enjoyed support from all members of the House. Both the former Labor Government (which initiated the program) and the present Government (which expanded it) have recognised that amendments of the type included in the program may more efficiently and economically be dealt with in a single bill.
In the past, the parliamentary procedures for dealing with statute law bills have involved a lengthy second reading speech and often considerable debate of the proposed amendments, sometimes brought about by simple misunderstandings of the impact of particular measures.
As the statute law revision program should only encompass items of a minor and non-controversial nature, the merits of handling the bills in this way are questionable. In particular, the traditional procedures are unnecessarily time-consuming and deal inefficiently with members' concerns.
The Government has therefore given some consideration to ways in which the procedures for dealing with statute law bills might be improved.
Representatives of the Independents and the Opposition have been consulted on the Government's recommendations for change.
As an alternative to the approach taken in the past, I do not propose on this occasion to detail each and every provision of the bill. The bill itself contains detailed explanatory notes after each amendment. Given the nature and number of the proposed amendments, it would not be possible in the context of a second reading speech to add in any meaningful way to this material.
Honourable members are invited to review the proposed amendments, together with the explanatory material provided. For the assistance of members, I have arranged for Government officers to be available to answer any questions in relation to the bill.
Honourable members should, in the first instance, consult with my office regarding any concerns they may wish to raise. In this way, queries relating to specific proposals may be dealt with promptly and, I trust, clarified to the satisfaction of individual members.
The present bill will be the first to be handled along these lines. The new procedures should greatly assist members' scrutiny of the bill, make more effective use of Parliament's time and expedite the passage of the legislation.
If, after examining these measures, honourable members believe they have identified matters which do not fit within the statute law reform process, or if we are unable to clarify, through the procedures I have outlined, any matters of concern raised by members, then I think it would be appropriate for the Government to consider deferring those items, rather than trying to proceed with them in any form of controversial circumstance.
I commend the bill.
The Hon. B. H. VAUGHAN (Deputy Leader of the Opposition) [6.19]: The alternative government supports the Statute Law (Miscellaneous Provisions) Bill (No. 2).
Page 5449
I draw to the attention of the Leader of the House the reference to a particular Act on page 11 of the bill.
The Hon. ELISABETH KIRKBY [6.20]: Last night I received a copy of the Statute Law (Miscellaneous Provisions) Bill (No. 2) and immediately decided I or someone else should go through it with a fine toothcomb. This sort of legislation needs to be examined with care because it is easy for the Government to pull a fast one and slip something through. I am happy to say that on this occasion I cannot find much to criticise. However, I have one question to ask the Minister in relation to an amendment to section 7C of the Irrigation Act 1912, alteration of number of water rights, dealt with on page 26 of the bill. The proposed amendment seeks to remove the need for notification of an alteration in the number of water rights by omitting from section 7C the words "by notification in the Gazette". That amendment could alarm many landholders and especially those in the far west of this State who are affected by the terrible problem of algal bloom.
At present the Water Administration Ministerial Corporation may, with the consent of the occupier of the land concerned, alter the number of water rights. However, the neighbours of a landholder who has received increased water rights, without public notification, may have no knowledge of that alteration. Changes in the amount of water allowed to one landholder could have significant impact, especially during drought, on neighbouring landholders. The explanatory note on page 26 of the
bill states that the amendment removes the need for such alteration to be notified in the Government Gazette. Other landholders, however, may not learn of such a change to a neighbour's water rights. Is it possible for the Government to explain, to reassure me and to place on record whether this proposed amendment will have an untoward effect in particular on landholders in the far west of the State who are totally dependent on water supplied under the Irrigation Act - water that is in woefully short supply and some of it polluted?
The Hon. E. P. PICKERING (Minister for Police and Emergency Services and Vice-President of the Executive Council) [6.25], in reply: The Hon. Elisabeth Kirkby knows that it is not possible to have advisers available for bills such as this because they cover so many jurisdictions. I am sure the honourable member will take my word that I am happy to give her an answer to her question on the third reading at a later hour of the sitting. In those circumstances I thank all honourable members for supporting the bill.
Motion agreed to.
Bill read a second time.
PARLIAMENTARY COMMITTEES ENABLING BILL
Second Reading
The Hon. E. P. PICKERING (Minister for Police and Emergency Services and Vice-President of the Executive Council) [6.26]: I move:
Page 5450
That this bill be now read a second time.
I seek leave to have the second reading speech incorporated in Hansard.
Leave granted.
It is the Government's intention, after the conclusion of the present sittings, that Parliament be prorogued and that a new session of Parliament be opened in February, 1992.
The object of the Bill is to ensure that the Parliamentary Committees continue to function following prorogation.
There are 11 Committees included in the Bill. The Bill will alleviate the need for their re-appointment after the prorogation of the current Session of Parliament.
The Committees referred to are: the House and Library Committees of each House; the Printing Committee of the Legislative Council; the Standing Orders and Procedure Committee of the Legislative Assembly and the Standing Orders Committee of the Legislative Council; the Joint Select Committee upon the Process and Funding of the Electoral System; the Joint Select Committee upon the Constitution (Fixed Term Parliaments) Bills; the Legislation Committee of the Legislative Assembly upon the Defamation Bill; and the Legislation Committee of the Legislative Assembly upon the National Parks and Wildlife (Aboriginal Ownership) Amendment Bill (No. 2) and cognate Bill.
A clause has also been included in the Bill which will enable any further Legislation Committees which are formed by the Legislative Assembly prior to the conclusion of the current Session to function after prorogation.
I commend the bill to the House.
The Hon. R. D. DYER [6.27]: The Opposition has great pleasure in supporting the Parliamentary Committees Enabling Bill.
The Hon. E. P. PICKERING (Minister for Police and Emergency Services and Vice-President of the Executive Council) [6.28], in reply: I commend the bill.
Motion agreed to.
Bill read a second time and passed through remaining stages.
[The Deputy-President (The Hon. D. J. Gay) left the chair at 6.25 p.m. The House resumed at 8.30 p.m.]
EXOTIC DISEASES OF ANIMALS BILL
Bill received and read a first time.
Suspension of certain standing orders agreed to.
BILL RETURNED
The following bill was returned from the Legislative Assembly without amendment:
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Police Service (Inspector General) Bill
HUNTER WATER BOARD (CORPORATISATION) BILL
Second Reading
The Hon. J. P. HANNAFORD (Minister for Health and Community Services) [8.32]: 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.
The purpose of this Bill is to provide for the Corporatisation of the Hunter Water Board, a statutory authority which provides water and wastewater services to a population of approximately 418,000 in the Lower Hunter Region. The Hunter Water Board has been an industry leader in price and organisational reform over the last decade and will be the first of the so-called natural monopolies in this State to be corporatised. Utilities of its type represent a very significant part of the public sector. The Hunter Water Board controls assets with a replacement value of $1.5 Billion and employs in excess of 1,000 people. Australia-
wide the water industry utilises more than $80 Billion worth of assets and forms a vital part of our social and economic infrastructure.
As a result of its natural monopoly characteristics, this corporatisation represents a unique challenge to the process of reform of Government Trading Enterprises. It is a challenge that provides opportunity for gain to the consumers and taxpayers of the Hunter and New South Wales. The Government, in preparing this Legislation, has been mindful of the challenges faced.
The process of public sector reform is now universally recognised as fundamental to good economic and social management. This Government has led the way in corporatisation in Australia and this Bill is part of an on-going program of micro-economic reform within the New South Wales Public Sector. The concept of Corporatisation is now widely accepted across the political spectrum in Australia. There have been a series of major corporatisations of Commonwealth Authorities undertaken by the Federal Labor Government - including Australian Airlines, the Overseas Telecommunications Commission and the Australian National Line.
Mr President, in considering an organisation for corporatisation, four main principles must be met. These are:
* Managers must have clear and non-conflicting objectives.
* The Government Trading Enterprises must be placed on a level playing field with private organisations (that is with no disadvantages or advantages deriving from their Government status).
* Managers must have the authority to manage.
* Rewards and sanctions must be based on performance.
In the case of natural monopolies such as the water industry, a fifth fundamental principle must be added - the Government must accept its responsibility to provide appropriate regulation of monopoly power. This Bill ensures that all these principles are met and that the benefit of more efficient service provision can be attained while retaining ownership in public hands.
In the remainder of this Speech I will set out the details of the proposed arrangements
Page 5452
which enable the above principles to be fulfilled.
Corporatisation is not Privatisation. The State Owned Corporations Act provides that the Corporation cannot be sold to private hands without specific reference to Parliament and passage of Legislation. Under the State Owned Corporations Act the people of New South Wales are represented by five shareholders, each one of whom is a Cabinet Minister. Two of these shareholders, the Premier and the Minister for Housing, are the voting shareholders and it is their responsibility to appoint the Board and monitor the performance of the Board.
It is important to emphasise that the act of corporatisation does not in any way represent a diminution of the social and other obligations of Government.
On the contrary, it ensures that these obligations are appropriately identified and provided for, while at the same time ensuring the community is not burdened by inefficient service provision. Historically, the management objectives of public utilities have been blurred by a combination of commercial objectives and social objectives. The latter have often in reality been political objectives hidden under the guise of a social agenda.
Similarly, there will be continued protection of the natural environment. Water authorities have traditionally managed water from its harvesting through to its ultimate disposal in the ocean or to watercourses. It is a fundamental component of the Hunter Water Board's corporatisation that water resource management and effluent disposal standards not be compromised.
The Corporation will continue to be subjected to vigorous State Pollution Control Commission licensing conditions for each of its disposal points. Water resource management and catchment management functions will be vested in the Department of Water Resources on behalf of the community. Ownership of water resources will therefore be retained by the Crown and not transferred to the Hunter Water Corporation. This reflects a fundamental objective of corporatisation, that social and other responsibilities are undertaken by the arms of Government whose specific function it is to perform those services, while the corporatised entity gets on with the task of providing efficient services for the benefit of consumers and taxpayers.
Traditionally, these roles and others have been blurred in a range of instructions and objectives which Governments have imposed on water authorities. There has been no requirement in the past to be explicit about these instructions or objectives or to identify the costs of them. Under corporatisation such objectives will be pursued but they will have to be explicitly identified and funded by the Government. This funding will take place either through the Hunter Water Corporation receiving community service payments for activities which would not be undertaken in the normal course of business, or through direct provision funded from the budgets of Government departments.
The most important example of a community service payment will be the on-going provision by the State for pensioner concessions which are presently funded by the Hunter Water Board.
$6M will be set aside to enable continuation of these payments annually.
Mr. President, it is no coincidence that the Hunter Water Board is among the first of the monopoly infrastructure agencies to be corporatised. For over 10 years the Board has been pursuing a vigorous agenda of commercialisation of its pricing structures and service delivery methods. The Hunter Water Board was recognised nationally as a leader in the adoption of user pays pricing for water in 1982. This move clearly established the Hunter Water Board's customer focus and broke with the public sector traditions of simply collecting income by way of taxes. From this solid basis of pricing reform the Hunter Water Board has continually sought to clearly establish itself as a leading agent for reforms in the public sector.
The Board of Directors has evolved from being based on local Government representation to its present composition where membership is based on business acumen and capacity to contribute to the financial, human resource and environmental issues which are central to running a modern water utility. A number of steps have already been taken in anticipation of corporatisation. There has been extensive exposure of service provision to market pressures, major multi-skilling of the workforce, extensive flattening of the management structure and adoption of commercial accounting
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and management practices. In addition, in the lead up to corporatisation, there has been widespread examination of the roles historically acquired by the Board and careful consideration of those functions which should be carried over to corporatisation.
The Hunter Water Board is in a position where it has capitalised on the opportunities for improved efficiency in its structure as a statutory authority and is now ready to take the next step to corporatisation. In this sense, corporatisation is not as radical a step as may be first thought. However, the Government's move to corporatise the Hunter Water Board, and thus give it greater autonomy, is a reflection of the track record of, and the Government's confidence in, the Hunter Board.
Mr President, I would like now to turn to the ways in which this Bill provides for water and wastewater services to be supplied to the Hunter Region - particularly, the all-important questions of consumer protection, environmental protection and protection of the interests of the people of New South Wales as owners.
There are five key instruments which this Bill draws upon to establish the operating environment of the Hunter Water Corporation. These are:
* Environmental Licences issued by the State Pollution Control Commission;
* Licences to extract water issued by the Department of Water Resources; and
* the Statement of Corporate Intent.
The first four instruments set out the rules and regulations under which the Corporation will operate. The fifth, that is the Statement of Corporate Intent, sets out the ways in which the Corporation will run as a business within the constraints of the regulatory rules.
The cornerstone of the Bill is the issuing by the Government of a three year Operating Licence to the Hunter Water Corporation which will define the terms and conditions under which the Corporation can provide water services to the Lower Hunter Region. Most importantly, it sets out limits on price increases such that the average residential customer will not face increases greater than CPI for constant consumption. It also specifies water quality and service continuity standards which the Corporation must meet. These standards are based on the National Health and Medical Research Council guidelines and will be subject to independent audits, the results of which will be made public. It is critical to ensure that the Corporation does not have the capacity to exploit its monopoly power to the detriment of its consumers either by unduly raising charges or by eroding the quality of service. The legislation provides for fines of up to $150,000 for breaches of these standards.
The licence also provides for independent annual audits of performance against the criteria set out in the licence. There will also be an annual audit of the Corporation's performance against its environmental plan.
A draft of this Licence, along with drafts of the Customer Contract and the other key instruments has been made available to all Members of Parliament to ensure that there is maximum Parliamentary scrutiny of the arrangements being entered into.
The Bill also provides for the obligations of the Hunter Water Corporation to its customers to be specified in a Customer Contract which will exist between the HWC and property owners in the area. Previously, the obligations of the Board to its customers have had limited legal standing. However, under this arrangement customers will know what they are entitled to receive and will have legal recourse in the event of the Board not meeting these requirements. This creation of a more level playing field will not only impose more contractual discipline on the Hunter Water Corporation but will also enable the HWC to negotiate the terms of service delivery for specific customers as long as mutually agreed arrangements can be entered into.
Mr President, we all recognise that the environment must be protected. With respect to
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environmental protection, the Hunter Water Corporation will be subject to the full force of the law currently applicable to the Hunter Water Board, especially requirements of the State Pollution Control Commission or its successor, the Environment Protection Authority. As there is an existing framework for regulation of discharges of effluent to the environment, this framework has been used to regulate the operations of the Hunter Water Board. The Hunter Water Corporation will continue to be required to obtain separate licences from the State Pollution Control Commission. The existing sanctions for the breach of these licences under the Environmental Offences and Penalties Act would apply.
However, in addition, the Government has the power to revoke the Hunter Water Corporation's Operating Licence where the Hunter Water Corporation breaches its Licence from the State Pollution Control Commission. As the State Pollution Control Commission can only grant annual licences, a Memorandum of Understanding has been reached between
the Hunter Water Corporation and the State Pollution Control Commission as to the framework in which emission standards are likely to apply in the longer term. This provides
greater certainty for the Hunter Water Corporation's operations, particularly its capital expenditure budgets.
It is obviously necessary to provide a water authority with appropriate access to raw water. Licences issued by the Department of Water Resources under its water legislation will be the primary mechanism for permitting the Hunter Water Corporation access to water.
There is a strong public interest in the manner in which water resources and catchments are managed, including the way in which land use is controlled. Because it is not desirable that this regulatory function be performed by the Hunter Water Corporation, the Department of Water Resources will take over the regulatory and enforcement functions currently performed by the Hunter Water Board. However, in recognition of the Hunter Water Board's extensive expertise in the management of its catchments and supply areas, agreement has been reached between the Department of Water Resources and the Hunter Water Board for the Hunter Water Corporation to have an active role in day to day management of these catchments. This Agreement is also available to all Members of Parliament.
Within the arrangements specified in the four documents outlined above, the Corporation will seek to maximise its returns to the people of the Hunter and New South Wales. This basic objective is set out in the Statement of Corporate Intent, a draft of which has also been made available to Members of Parliament. In order to ensure that non-commercial activities are subject to full public scrutiny, the Statement of Corporate Intent sets out the community service payments which the State will provide to the Hunter Water Corporation annually. Any subsequent direction by the Government to the Hunter Water Corporation to engage in non-commercial activities will be recorded annually and specific provision made for funding through a community service payment.
Mr President, a fundamental objective of corporatisation is to ensure that the corporatised entities do not receive benefits not available to other sections of the economy. Accordingly, arrangements have been reached for the payment of tax equivalents to the people of New South Wales by the Corporation. The Commonwealth has agreed to continue to exempt the Hunter Water Corporation from taxes it would otherwise be liable for so as to avoid double taxation. In addition, a dividend regime has been established under which dividends will be determined on the aftertax surplus of the corporation. As with other companies, the Board of the Corporation will recommend dividends to shareholders - ie the people of New South Wales - annually. While the Sydney Water Board will not, at this stage be subject to taxes, its dividends are determined on a pre-tax basis. Accordingly, Hunter Water Corporation customers will not be disadvantaged vis a vis Sydney Water Board customers.
Special powers previously vested in the Hunter Water Board which would have given the Corporation unreasonable privilege have been removed. For example, as I have just outlined, the responsibility for regulation of catchments on behalf of the community will be handed over to the Department of Water Resources. The Department of Water Resources will issue a Licence to the Hunter Water Corporation to allow it to extract water. This arrangement will ensure that the Corporation has to compete on the same terms as other water users.
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The instruments of regulation identified above are, at first glance, quite complex. However, it should be borne in mind that all the issues covered have, in the past, been the subject of unspecified and non-public consideration. Likewise prices have been influenced by the political process and investments, employment conditions, etc have been similarly influenced.
The fundamental objective of corporatisation is to ensure that the community can see how the Hunter Water Corporation is to be regulated, can understand the privileges and obligations it has, and in turn the Corporation's Board can be quite clear about its obligations and objectives. In the past these obligations and privileges have not been clearly specified.
As this is the first of the natural monopolies in the State to be corporatised, provision has been made for the initial Operating Licence to run for a period of three years.
This will enable a review of the arrangements to be undertaken prior to the end of this period. The Government will then be better placed to determine the terms and conditions of a longer term Operating Licence or, alternatively, to roll over the licence established under this Bill.
By its very nature, the provision of water services requires that some operational rights be conferred on the holder of the Operative Licence. For example, the Hunter Water Board's sewer mains generally run under the private land and it is essential for operational and public health reasons that ready access is available to these mains to allow for emergency maintenance. Such rights of entry are clearly specified in the Legislation and are subject to monitoring by the Government to ensure they are not abused. In addition, it is necessary to vest ownership of assets in the Hunter Water Corporation to give it the incentive to apply proper stewardship to them and to give these assets the protection of the law to enable the Hunter Water Corporation to prevent them being damaged by third parties.
I would like to summarise where the community gains from this initiative.
First, customers are protected by the requirement in the Licence that charges for comparable services are not raised by more than CPI. Second, the environment is protected by the rigid provisions of the Licences granted by the State Pollution Control Commission. Third, the general community will benefit from more efficient service provisions arising from a clearer commercial focus for Board management and a distancing of the political process from the all important capital decisions which have to be made in future years. Fourth, the community will also benefit from returns earned by the Corporation as a result of cost reductions and profits generated on the asset base employed. Some of these profits will accrue to Hunter Water Corporation's customers as retained earnings to be re-invested in assets for service provision. The community at large will benefit from the balance of the profits which will be paid to the Government as dividends on the recommendation of the Board of Directors.
Fifth, the staff of the Corporation will benefit from a more commercial operating environment with a more flexible incentive structure. Corporation is not an instrument to erode employment conditions. Existing award provisions and entitlements will be carried over to the new organisation. However, corporatisation will provide the focus to pursue more flexible staffing arrangements which will contribute to efficiency improvements and further the professional opportunities of the Corporation's staff. The opportunity to further expand the sale of expert service into the marketplace is a specific area which will enhance these professional opportunities.
The experience of recent years in both the public and private sectors has established the need for full accountability of corporations.
There is a fundamental obligation of Government to ensure that in return for the management autonomy created by corporatisation, there are appropriate levels of accountability. I would like to conclude by emphasising these accountability instruments.
The rights of consumers will be protected by the conditions of their contract with the Corporation which will be legally enforceable in the event of the Corporation breaching its obligations to supply. The Operating Licence provides for fines of up to $150,000 for breach of service standards. Consumer rights and the rights of the people of New South Wales as shareholders will be further protected by the capacity of the Government to penalise and/or replace some or all of the Board in the event of licence conditions or commercial performance not being adhered to. In addition, the full force of the Corporations Law, with its corresponding penalties, will be
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applicable to the Corporation.
The Government has established a Government Trading Enterprise Monitoring Unit within Treasury whose function it is to monitor the performance of Government agencies to ensure shareholder interests and thus, the interest of the citizens of New South Wales are protected. The resources of the Government Trading Enterprise Monitoring Unit are to be supplemented, where necessary, by consultant evaluation of the performance of trading enterprises. The Government, in its capacity as licensor, will be arranging for periodic audits of service quality to be undertaken independently of the Corporation. Ultimately, there is greater accountability to Parliament. As I have already mentioned, drafts of the Operating Licence, Statement of Corporate Intent and Customer Contract are available and the State Owned Corporations' Act requires half-yearly reports to Parliament from the Corporation.
Finally, the Hunter Water Corporation will continue to hold regular meetings of its Consultative Forum which provides an open and public forum for direct feedback from customers and community interests.
I mentioned at the start of this Speech that there were five clear principles which must be established in order to corporatise an agency such as the Hunter Water Board.
* The first of these was that managers have clear and non-conflicting objectives. The regulatory regime which has been established and the draft Statement of Corporate Intent establish clear guidelines and objectives for the Hunter Water Corporation to supply water services to the Lower Hunter Region. Non-commercial objectives are to be facilitated directly by Government funding.
* The second objective is that Government Trading Enterprises must be placed on an equal footing with private organisations. The arrangements that have been reached with respect to removal of regulatory functions and tax and other privileges meet this objective.
* The third principle was that managers must have the authority to manage. Under the arrangements I have outlined, the Board of the Hunter Water corporation is free to pursue its objectives in the Statement of Corporate Intent subject to the constraints in its Act and its Operating Licence. Day to day Ministerial control will be removed and managers will have authority to manage free of political and day to day bureaucratic intervention.
* The fourth principle was that rewards and sanctions must be based on performance. As I have outlined, the Hunter Water Corporation is subject to strict sanctions for breach of its Operating or State Pollution Control Commission Licences. With respect to its commercial functions, the Board is subject to sanction by shareholders and ultimate dismissal if their commercial performance is inadequate.
* The fifth and perhaps most important principle is the adequate regulation of monopoly power. The provisions of the Operating Licence I have outlined above, in combination with the legally enforceable Customer Contract, ensure that this condition will be met.
I am strongly of the view that this Legislation provides unequivocal benefits to the people of New South Wales, especially those in the Hunter. It is consistent with the thrust of public sector reform initiated by the Greiner Government, accepted by the Commonwealth Government and publicly supported by the Opposition.
The Hon. P. F. O'GRADY [8.33]: The Opposition supports the bill, with some reservations. A lengthy debate took place in the other place about a number of provisions of the bill to which the Opposition has drafted various amendments that it will move in Committee. The House should recognise that the bill is important and that it has consequences for public authorities across New South Wales. It relates to the way in which the Government is going about the corporatisation of the Hunter Water Board, and it may be that this piece of legislation is the forerunner of various pieces of legislation that the Government will introduce to corporatise government authorities in New South Wales. One of the biggest concerns the Opposition has about the bill is the accountability
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of the Hunter Water Board as it relates to the Government. The Opposition feels that the
board should be accountable to the Minister of the day - at this stage the Minister for Housing, who has responsibility for the water boards. The Opposition is very much of the view that the State Owned Corporations Act 1989 allows the objectives of the bill to be adhered to without going the full way towards the corporatisation that the Government seeks.
The Opposition is of the view that the Government is proceeding with something it does not need to do that will ensure the misuse of public funds and the waste of money and the time and energy of the Hunter Water Board management and employees. It is concerned that the corporatisation is a vehicle for the privatisation of that organisation. The Opposition, as it did in the other place, will seek to move amendments in Committee to provide safeguards to protect the public interest in relation to the Hunter Water Board so as to ensure that it is more difficult for the Government to convert the Hunter Water Board to a private company. The Opposition does not believe that the Government has demonstrated the necessity to convert the organisation to a corporation. The Opposition does not oppose the basis of the bill; it opposes the way the Government is going about the corporatisation and the extent of it.
The Hunter Water Board has been a testing area both under the former administration and under this administration for trying out new ways of dealing with things. The former Labor administration bore the brunt of the reaction from the electors of the Hunter in 1988 for, in part, introducing the charging policies of the Wran administration, if my memory serves me correctly, just after the 1984 election. The people of the Hunter were the guinea-pigs in a trial scheme that has no doubt been successful in delaying the construction of further dams and reducing water consumption. The Labor Government of the time did not have the guts to trial the same scheme in Sydney. It did it in the Hunter, and the people of the Hunter clearly and soundly rejected the water charging policies that the Wran Government implemented. The corporatisation of the Hunter Water Board is exactly the same issue. The people of the Hunter are being used once again as the guinea-pigs in an experiment. No comparisons can be made between the Hunter Water Board corporatisation and those of GIO Australia, the State Bank or other commercial-type organisations because the Hunter Water Board is a monopoly. It supplies water - a substance that is much needed by every person who lives in New South Wales. It is the obligation of State governments to provide basic services such as water, electricity, hospitals and schools. There is no requirement for the Hunter Water Board to be corporatised, as the Government is proposing, because it operates a monopoly and provides a basic requirement, that being water. I note that the Minister in the other place introduced an amendment to his own piece of legislation concerning freedom of information, which the Opposition criticised in the second reading debate and also in the negotiations and discussions conducted between the Hunter Water Board and Opposition members. The Opposition is pleased that the Minister has moved amendments that will allow the provisions of the Freedom of Information Act to apply to the Hunter Water Corporation.
The Opposition is concerned also about the pegging of increases in charges to the consumer price index. In the other House the Minister stated that it was unnecessary for that commitment to be contained in the bill. In its corporatisation summary, the Hunter Water Board has stated that, given constant usage, any increase in total charges
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to the average residential consumer for water, sewerage and drainage services in the 1992, 1993 and 1994 financial years must not exceed those of the previous year plus any
consumer price index increase. An average residential consumer will be a customer whose water service is controlled by a 20 millimetre water meter, whose residence is connected to a sewer main and whose annual consumption of water falls within the range of 40,000 kilolitres to 50,000 kilolitres. The Opposition believes that if the Government is serious about pegging increases in charges to the consumer price index for the next three years, it should have no problem in accepting the amendment to be moved by the Opposition.
The corporation will have five shareholders, two of whom will be voting shareholders. One voting shareholder will be the Minister for Housing, who at this time is the Minister responsible for the New South Wales water boards. The Premier, Treasurer and Minister for Ethnic Affairs will also be a voting shareholder. The three non-voting shareholders will be the Minister for School Education and Youth Affairs, presumably because of her connection with the Hunter area; the Minister for Natural Resources; and the Minister for Sport, Recreation and Racing and Minister Assisting the Premier, George Souris. One assumes that is because he is the member for Upper Hunter. The Opposition is concerned that the requirement under the annual reports legislation to report to the Parliament will be removed.
The Hon. Patricia Forsythe: That was clarified in the lower House.
The Hon. P. F. O'GRADY: Indeed it was clarified in the lower House. Nevertheless, the Hon. Patricia Forsythe will not and cannot avoid the fact that the corporation will no longer have to report on the use of consultants or other personnel. Though she may not be concerned about that, I can assure her that the people of the Hunter region and the people of New South Wales generally are very concerned about the enormous waste that has occurred as a result of the use of consultants by the Greiner Government since 1988. More than anyone who parades as a person concerned about the people of the Upper Hunter, the Hon. Patricia Forsythe should be demonstrating a concern about the real cost of supplying water to the people of the Hunter area. She should accept and support the amendments proposed by the Opposition in the lower House which the Opposition will again propose in this House.
As I said earlier, the people of the Hunter region will be able to gain information under the provisions of the Freedom of Information Act as a result of amendments moved by the Minister in the lower House. The union movement is concerned that corporatisation may lead to privatisation. That is one of the reasons the Opposition will move various amendments. The Opposition accepts that the legislation is good in parts. It recognises that the State Owned Corporations Act allows various things to occur. If the two were combined, better legislation would result. The debate in the lower House was vigorous and ranged over a variety of issues. Opposition members from the Hunter region demonstrated clearly their concern that the Hunter area was being used as a guinea-pig to trial a proposal the Government may wish to expand to other areas of the State. There is no reason why people in the Hunter region should be singled out any more than the people of Sydney for an experiment on the corporatisation of water services. If it is good enough for one, it is good enough for all. I urge the Government to consider the amendments to be moved by the Opposition and to ensure that the Hunter Water Board continues to meet the needs and challenges of the Hunter region and will
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do what is in the best interests of all, not merely in the interests of the people who may pick up the tab at a later date.
The Hon. PATRICIA FORSYTHE [8.45]: It is with pride that I support this move to corporatise the Hunter Water Board. In so doing, I should like to focus my remarks on the impact of the legislation on the people of the Hunter region, perhaps knowing that members on this side of the House have the real knowledge of the Hunter area. The Hunter Water Board is an important entity in the Hunter Valley. It has operated for approximately 100 years. It controls assets worth $1.5 billion and employs more than 1,000 people. It is financially strong and will cope with the demands of asset replacement which are likely in a city with a history as long as that of Newcastle. Those demands have been exacerbated by the tragic 1989 earthquake. The board has spent an additional $1 million per annum since the earthquake to repair sewer and water pipe breaks. The Hunter Water Board is already an industry leader. It has, for instance, sold water treatment technology to the Sydney Water Board and computer hardware to Tasmania. It has also invested extensively in environmental protection measures such as secondary treatment of sewage and ocean outfalls, which have avoided the undesirable environmental impacts which are all too apparent in the Sydney region. Similarly, it has engaged in an extensive program of water filtration. As a result water quality in the region does not have the problems which are representative of other large cities of Australia.
The legislation will ensure that the Hunter Water Board is given clear commercial goals and earns appropriate returns on its assets. The Hunter Water Board should be given the opportunity to set goals appropriate to the Hunter Valley rather than merely being required to fall in line with some unspecified agenda of the Government. To assume that the bill is in some way ideologically driven to the extent that it is only about setting the board free of its obligations is to misrepresent the philosophy of the bill. The bill sets limits on charges. It also sets standards of quality of service, including water quality, water pressure and service continuity. In speeches in the other Chamber Opposition members from the Hunter region made a litany of complaints about problems faced by the Hunter Water Board. These problems included such things as the dezincification of poor quality brass fittings. As I read these speeches, I was struck by the fact that, despite the high esteem in which the management is held, the present system is not perfect. Yet the Opposition lacks the vision to grasp a new approach. The bill seeks to guarantee quality of service for consumers. The Opposition should acknowledge this, broaden its vision and demonstrate its claimed belief in the Hunter area and its people.
I said in my opening remarks that I support this bill with a sense of pride. Indeed, far from seeing this, as some members of the Opposition in the other place have done, as some experiment being perpetrated on the Hunter - a not unusual occurrence - I see this as a recognition of the moves already taken by the Water Board to be an efficient manager. However, I believe that this move to establish a Hunter Water Corporation will enable the board to take its achievements further without in any way being detrimental to the community. People of the Hunter region are justifiably concerned to ensure that they are not disadvantaged by initiatives of this type. It is true that this legislation provides for tax equivalents to be paid by the Hunter Water Board. However, these equivalents will generally be offset by payment of community service obligations. In addition, provision for tax payments and the payment of dividends will be subject to the tax law and the Corporations Law respectively.
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A rational framework has been created to determine community services payments, dividends and taxes, giving the people of the Hunter greater protection than would otherwise have been the case - a fact the Opposition seems to have continually overlooked. In addition, the hardship fund which provides relief for those unable to pay their bills will be maintained by the Hunter Water Corporation. So the good citizen that the Hunter Water Board has been will be maintained. Fundamental to the legislation is the fact that in the delivery of services the standards of the services will not be compromised. The corporation will remain subject to, for instance, State Pollution Control Commission licensing conditions. Thus, in relation to the board's two key obligations, the bill will ensure that the corporation meets its obligations in terms of consumer protection and environmental protection. Under the legislation the corporation will be issued with a three-year operating licence by the Government. I am fascinated that at the heart of the Opposition's objections to this bill is how the bill relates to the accountability of the proposed corporation to the Government. I would have thought that members of the Opposition - at least those who claim to represent people in the Hunter - would be wholeheartedly behind this bill on the basis that the Hunter has not always been well served by government.
The Hon. P. F. O'Grady: They got rid of you on 25th March. They wiped you out.
The Hon. PATRICIA FORSYTHE: I was in the Hunter. Of course, one could not debate any bill on the Hunter Water Board without recalling the way in which those opposite treated the people of the Hunter when they were in government when the new system of charging was introduced in 1982. A look through the newspapers of that time should refresh the memories of honourable members opposite about how they allowed the Hunter to be treated. It was not so much the new system that was introduced; it was how it was done. The Newcastle Herald on 30th June 1982 carried the headline "Water Users are in the Dark". The Hon. Elisabeth Kirkby was quick to leap to the defence of the local community as it struggled to come to grips with the new system but members of the Government then were remarkably silent. In fact, the system has turned out to be a most efficient system of charging for water consumption, such that it has proved possible to delay indefinitely the construction of Tillegra dam and as a result the average family in Newcastle has saved an estimated $100 a year in water bills over the past 10 years.
So long as the Hunter stands alone with this method of charging suspicion of government will remain. The Wran Labor Government commenced the process of commercialisation of the Hunter Water Board with the introduction of user-pays pricing. But it was no more than a vast experiment, with the Hunter, as usual, being seen as a submissive guinea pig. The Hon. P. F. O'Grady recognised this. I see this legislation as being very different; it is not a fluky experiment but a genuine attempt to move forward and to acknowledge a trend that is worldwide - not to have a blinkered vision, not to be conservative but to accept progress. I well recall on many occasions in Newcastle Australian Labor Party members referring to those of us in the Liberal Party as the conservatives. Yet first on the Industrial Relations Bill and now on this bill the real conservatives are being identified.
The Hunter Water Board is in a good position to capitalise on the greater autonomy provided by corporatisation to achieve further savings for the local community. The decision to corporatise the Hunter Water Board and place responsibility for its operations in local hands is a reflection of the Government's confidence in the board and
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its management and it will be warmly welcomed in the region as a sign that Macquarie
Street is prepared to give the people of the Hunter the autonomy they have earned. As I listened to the debate on this bill in the other place I was struck by the lack of vision of members of the Opposition. They virtually all said they supported corporatisation yet they nit-picked their way through the bill on issues such as plumbers' licences, the standard of pipes and so on.
Where is the vision that was evident when the Hunter sewerage project was conceived by the Labor Government? The Hunter sewerage project has resulted in the biggest contribution that the State Government has made to the operation of the Hunter Water Board over the last 100 years and this year $18 million will be paid by the Government and matched by the Hunter Water Board, to the benefit of consumers and the environment. Total payments under the project will eventually reach $310 million from the Government and the board, and the arrangement reached will not be undermined by corporatisation. Where is the faith of Opposition members in the valley, its people, the Hunter Water Board, its management and its workers? They have no faith. They worry about the loss of ministerial control when probably everyone else in the Hunter of any other political persuasion would be applauding such a move.
The Minister will still have a very important role in the corporation. In particular, he will be a voting shareholder. The corporation will also, of course, retain its accountability. The State Owned Corporations Act ensures that. The board's annual report, environmental audits and the operating audit and the Freedom of Information Act are all examples of how its operations will be open to scrutiny by the public, the Parliament and the Government. In addition, and for the first time in Australia, there will be a customer contract so that the corporation's customers will know exactly what services the corporation will deliver and the quality of that service. All Opposition members say they have faith in the management of the Hunter Water Board but the nature of their opposition to this proposal does not demonstrate that. Corporatisation will give the corporation scope to expand its level of activities outside its traditional service provision. The Hunter Water Corporation will inherit a skilled work force whose ideas and proven products will be increasingly in demand throughout the water industry and elsewhere. I look forward to the creation of the Hunter Water Corporation not only as a recognition of the achievement of the Hunter Water Board but also as an example of the faith this Government has in the Hunter.
The Hon. J. F. RYAN [8.58]: Over the past few years Australians increasingly have come to realise that the performance of our economy is inadequate. The Commonwealth Government has passed on a heavy burden of economic adjustment to the States through reductions in States grants at the same time as the narrow State tax bases have suffered substantial reductions in growth. As economic times have toughened it has become increasingly necessary to maintain high levels of basic services for the people of this State. The easiest solution to these difficulties is to spend more money by borrowing more at the expense of future generations. However, such a financially irresponsible approach is not acceptable to this Government. Accordingly, a range of other initiatives has been developed. These initiatives go to the very heart of good government and require a persistent and sustained approach to improve the efficiency of the public and private sectors.
This Government has an enviable record of achievement in reforming public
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trading enterprises which provide services to the public of New South Wales. These
achievements have been recognised by many independent commentators. And they are supported by facts. Honourable members might remember that in the middle of the year the Premier announced a mini-budget. Barely an editorial in the country did not recognise that the public of New South Wales owed a great deal to the stewardship of this Government and to the manner in which it had managed the Government trading enterprises. I could cite many sources that endorse this point but I will chose just one. I ask honourable members to consider the comments made by Alan Mitchell in the Sydney Morning Herald, a newspaper which hardly supports the Government overwhelmingly. When comparing New South Wales with Victoria he said:
Victoria has a huge debt burden now, and it will get a lot bigger . . . Compare that with New South Wales, which has kept its debts down and which is a result of the spending cuts, tax increases and asset sales foreshadowed this week, shall substantially reduce the debt burden on the Budget over the next three years. Provided the New South Wales Governments' big trading enterprises such as Elcom and the Water Board are properly managed, and their borrowing kept in check, the Government can come out of the next three years in reasonable shape. And New South Wales taxpayers . . . should be grateful . . .
Indeed, the New South Wales taxpayers have a great deal to be grateful for in the manner in which this Government has managed government trading enterprises. This type of management benefits both small and large business. It is to the benefit of Labor's traditional constituency in the Hunter, because those people will soon reap the benefits from efficiently managed enterprises. They will not have to labour under the burden of debt and interest payments. They will be able to enjoy the additional services that the Government will be able to provide by not wasting money on bad management and interest payments.
The Hon. Elisabeth Kirkby: It is wasting money on the Eastern Creek Raceway.
The Hon. J. F. RYAN: The Hon. Elisabeth Kirkby mentions the Eastern Creek Raceway. That is an investment that the Government has made for the people of western Sydney. That enterprise is being reasonably managed. Perhaps the only mistake the Government made was to promote the fact that the Eastern Creek Raceway could have been funded solely by private enterprise. I believe that the Eastern Creek Raceway, which has been cheaper to build and which has involved less in interest payments than Darling Harbour, will eventually trade its way into profit. It is an asset to the people of New South Wales which will generate $13 million worth of business in western Sydney. While speaking of western Sydney I should acknowledge the presence in the gallery of people from the electorate of Smithfield, including Alderman Bob Robertson of Fairfield City Council. He understands the value of good management and how a facility such as Eastern Creek Raceway will benefit the people he serves.
The Hunter Water Board (Corporatisation) Bill is the latest in a series of reforms of public sector investment and employment involving the important water industry. The purpose of the bill is to corporatise the Hunter Water Board and place it in a position in which it will achieve improvements and efficiency, which will benefit its own customers in the Hunter region and the people of New South Wales in general. This legislation is an important step in a range of actions that have been taken to prevent the public sector from being an undue drain on the community. The water industry is a particularly heavy consumer of the nations capital resources. The Hunter Water Board employs more than $1 billion worth of assets. This investment of scarce capital must be managed in such
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a way that the social returns to the community are maximised. To put it in colloquial
terms, it is a matter of getting the greatest bang for the taxpayers' buck. This is particularly the case in an era in which increased demands for environmental protection must be met.
A further fundamental challenge must also be addressed. Many of the assets employed by the water industry were installed early this century, during periods of rapid expansion and in the next 20 years will have to be replaced. It is particularly important that water utilities are given a clear commercial focus and managed in such a way that an appropriate return can be earned on assets and proper provision made for the replacement of services, without placing undue burdens on future generations. It is simply not tenable to hope for the best and to rely on higher levels of borrowings in the future. The international economy does not owe Australia a living and will not make high levels of additional borrowings available without exacting its price. It is in this broader context that the corporatisation of the Hunter Water Board must be viewed. The bill provides for a clear set of commercial objectives for the appointed board and its management. The assets that the board employs must be utilised efficiently, subject to the constraints of the operating licence and the customer contract, for which the bill also provides. One of the most important considerations to people living in the Hunter is that their water bills do not increase at a rate greater than the increase in the cost of living. The operating licence provides for a capping any increase to water rates to the consumer price index. As a result of the corporatisation of the Hunter Water Board savings will be made through its efficient management, not by leeching the ratepayers who live in the Hunter region. That can only be to their benefit.
The Hon. Elisabeth Kirkby: The savings will go straight to consolidated revenue.
The Hon. J. F. RYAN: Some money will indeed go to consolidated revenue, and rightly so. The Hunter Water Board belongs to all taxpayers of New South Wales. It is appropriate that all taxpayers receive benefits in the form of a dividend payment. The corporatisation of the Hunter Water Board will ensure that the management of the Hunter Water Corporation Limited will pay a predictable set of dividends to the people of New South Wales from its profits. We will not have, as has previously been the case, asset raids into the Hunter Water Board. It will be taxed in a predictable manner, similar to the way in which tax is paid by other companies that operate for a profit. There is nothing inappropriate about that. Other provisions in the bill provide protection for consumers. It would be naive to allow a natural monopoly, a water utility, to operate carte blanche in pursuing commercial objectives, whether it be publicly or privately owned. A robust and well-considered regulatory regime is vital to ensuring protection of the broader consumer interests. To that end this legislation provides for an operating licence which specifies precise limits on charges so that average consumers will not face increases greater than the consumer price index in the first three and a half years of its operation.
The licence specifies also for the first time legally enforceable standards of quality of service which must be met by the corporation, and substantial fines are provided for if this quality of service is not met. The performance of the Hunter Water Corporation Limited against standards will be subject to an external audit, such that customers and consumers will be reassured that service quality is maintained. This audit
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will cover water quality, continuity of water and sewerage services, water pressure, et
cetera. Such an external audit has never before been available to consumers: this is a first for Australia. In preparation for this legislation extensive consideration has been given to necessary regulatory instruments. The resultant package has been made available to members of Parliament and for the past 12 months has been subject to extensive evaluation. In addition, the bill provides that the licence will run for a period of three and a half years, with a review to be undertaken in 18 months. This will ensure that any shortcomings in the arrangements can be readily corrected early in the period of the new corporation.
It would be equally naive to corporatise a water authority if substantial opportunities existed for efficiency improvements without taking this step. For the past 10 years the Hunter Water Board has developed a strong track record in the pursuit of reform within its statutory authority framework. The board is renowned for its success in reducing capital cost as a result of the introduction of more rational and efficient charging arrangements, and has pursued also a range of organisational reforms and multiskilling programs which have resulted in substantial cost reductions. The way has now been prepared for the Hunter Water Board to move to the next stage of efficiencies which will be made possible by greater autonomy and commercial focus provided to it following its corporatisation.
The Hon. Elisabeth Kirkby: Privatisation.
The Hon. J. F. RYAN: These efficiencies will be particularly important on the capital side as the board has greater autonomy in managing its substantial asset base, particularly in making decisions about appropriate timing and the replacement of its ageing infrastructure. By way of interjection the Hon. Elisabeth Kirkby said that the Hunter Water Board is being set up for privatisation. Over and over again the Minister in another place said that the purpose of the legislation was corporatisation of the board, not privatisation. Had the Government wanted to privatise the Hunter Water Board, it would have done so. There would be no need to take such action by stealth. The Government is proud of its commitment to private enterprise. Had the Government wanted to privatise the board, it would have done so up front. Nonetheless, though the Government believes that there are good reasons for not privatising the Hunter Water Board at this or any future time, there is no reason that the structure of the board should not be re-organised to improve its efficiency and delivery of service to its customers. That is what this bill is about; there is nothing particularly surreptitious about it. Some time ago, in relation to the privatisation of another enterprise, Senator Graham Richardson said, "There is a lot of religion in that". He was referring to the Commonwealth Bank. There seems to be an enormous amount of religion involved in the Hunter Water Board, but it is important to cut through the false religion with regard to State owned enterprises, some of which have been operating on a corporate basis.
No one would suggest that Telecom or Australia Post should be nationalised. They provide an important service to every member of the community. No one would suggest that they should not operate efficiently to return a profit to the community. That is what the Government has in mind for the Hunter Water Corporation. I have outlined how the interests of consumers are protected through the provisions of the operating licence. It is of equal importance that the people of New South Wales - not unions or even the people of the Hunter region - be protected. To this end the new corporation's
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statement of corporate intent sets out cost reduction and other commercial targets that will
be achieved. The statement of corporate intent will be tabled in the Parliament annually. The performance of the corporation against this statement of corporate intent will be monitored through the government trading enterprise monitoring unit in the Treasury. To block or interfere with this bill would only be to rob the people of the Hunter region and New South Wales of the many efficiencies and improvements to services. This legislation is an integrated and comprehensive package that will appropriately regulate the impact of the new corporation on the environment and consumers. It will create appropriate incentives for managers to manage. This bill will benefit all parties, and I support it.
The Hon. ELISABETH KIRKBY [9.13]: I remind honourable members that when the coalition came to office the Australian Democrats issued a warning about the Government pursuing its objectives with regard to corporatisation. I congratulate the Hon. J. F. Ryan on his stirring contribution. He referred to the importance of corporatisation to meet the needs of the community. The honourable member was brilliant in his defence of the bill. The provisions of the Water Board (Amendment) Bill 1991 show clearly that, so far as domestic consumers are concerned, the Minister responsible for water resources is eager to privatise water services. The Minister has been reported as saying that the private sector will build, own and operate drinking water treatment plants at Woronora, Avon, Macarthur and Prospect; the sewage transfer tunnel in the Blue Mountains; the grease trap, waste treatment and receival depot at Quakers Hill; and the urban development project at Rouse Hill. The emphasis of the Minister is on privatisation of water resources. The Australian Democrats express particular concern about the corporatisation of a service as essential as water, which is not just another trading enterprise. Though the Australian Democrats support in principle the corporatisation of the Hunter Water Board, we wish to ensure that the board will remain fully accountable to the public it is meant to serve. I refer to the public of the Hunter region, not the public of New South Wales. I am concerned also that future profits of the corporation will be paid into consolidated revenue. Any such profits should be used for the development of projects in the Hunter region. After all, the people of the Hunter will be responsible for that profit.
As I have said on many occasions in this House, those who live in the area in which I live have been waiting for 25 years for the development of the Westlakes sewerage system. However, because the Hunter Water Board believes the scheme will not be profitable, it will not be extended into the Cooranbong-Dora Creek area before the end of the century, despite the fact that residents have paid a levy for almost 20 years. The board claims that it has no money to develop the scheme. This legislation affirms that any profits the new corporation makes will not be spent on expanding the sewerage scheme; they will be paid into consolidated revenue. That will not go down well with the residents of Cooranbong and Dora Creek. I do not expect the scheme to be extended as far up the valley as I live. I acknowledge that we will never be connected to the main sewerage line. But others living in the region are paying almost $200 a month for pump-out services. They are no closer to being connected to the main sewerage scheme today than they were 20 years ago.
The Hon. Patricia Forsythe: Is the present system not adequate for them?
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The Hon. ELISABETH KIRKBY: The new system will not be adequate for them. Profits will not be returned to the Hunter region; they will be paid into consolidated revenue. The legislation will create a split. Previously the objectives of the board were blurred. Now they are split between commercial and social objectives; between the public and the private sector. Under the provisions of the State Owned Corporations Act the Hunter Water Corporation will address the commercial objectives. The public interest will be monitored by five shareholders, each one of them a Minister. There will be no public input or shareholding. The two voting shareholders, the Premier and the Minister for Housing, who also has responsibility now for the provision of water, will appoint the board and monitor its performance. The public will have no input at all in that area. We are told that the non-commercial objectives of the corporation are to be facilitated directly by government funding, but we are not told what these non-commercial objectives are.
The Hon. J. F. Ryan, in his passionate and articulate speech, said that the whole purpose of corporatisation was to improve services to customers. I ask the Minister to explain how services to customers in the Westlakes area of Lake Macquarie, Dora Creek, Cooranbong and the outer regions of Morisset will be improved by corporatisation of the Hunter Water Board. Those customers, residents of those areas, have made strong, vital and informed representations to the Government that have been ignored. They have been told there is no hope of their being connected to the main sewerage service for at least another 10 years. Obviously, corporatisation will not improve services to those customers. The Government speaks of a level playing field, removal of special privileges - which have never been defined - and its belief in user-pays water. The concept of user-pays water has long been employed by the Hunter Water Board and was well established under the previous Labor Government. User-pays water is not an invention of the Government or the Minister.
Introduction of the user-pays concept was bitterly resented by many people in the Newcastle area when suddenly their water rates increased dramatically. They did not like that and objected strongly. Over time they have learnt to live with it, but it is misleading to suggest that the bill will introduce user-pays water. The Hunter Water Board introduced the user-pays concept and created a model for other water boards in New South Wales. The bill aims to fulfil the three goals of consumer protection, environmental protection and protection of the interests of the people of New South Wales through five key instruments: first, an operating licence; second, a customer contract; third, an environmental licence issued by the State Pollution Control Commission; fourth, licences to extract water issued by the Department of Water Resources; and, fifth, a statement of corporate intent. I have serious doubts as to the effectiveness of these instruments in holding the proposed Hunter Water Corporation accountable.
Increases under the operating licence are to be tagged to the consumer price index for three years. That link should be enshrined in the proposed legislation and not based on an assurance by the Minister. Water quality standards are to be based on the guidelines of the National Health and Medical Research Council. Those guidelines fall far short of what has become necessary in other parts of New South Wales at this time. The National Health and Medical Research Council possibly was not geared to understand what was likely to happen with the overuse of chemical fertilisers and pesticides, especially during an extended drought. Water quality for people living in the western areas of New South Wales - and indeed in the Hawkesbury-Nepean area - falls far short
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of the standards based on guidelines issued by the National Health and Medical Research Council. The operating licence will be subject to independent audits.
Another conflict will arise between use of a contract issued to an operating licensee and the concept of direct accountability to Parliament by medium of annual reports. Customers party to contracts will have legal recourse. A supplying authority that does not maintain standards of water quality will be subject to fines of up to $150,000. That provision will be enforced by the Corporations Law. A new Government trading enterprise monitoring unit is to be established within Treasury and two independent audits will be conducted. The Government does not seem to comprehend that the bill substitutes instruments of government accountability with instruments associated solely with the private sector. Under private sector instruments the Hunter Water Corporation will no longer be subject to annual reports.
The bill when originally introduced in another place provided that the corporation would not be subject to freedom of information obligations. I am grateful that that measure has now been amended, though specific State equal employment opportunity policies will not apply. Among the benefits the public are supposed to enjoy from the corporatisation of the Hunter Water Board are more efficient services from a clear commercial focus. The returns earned by the corporation from cost reductions and generated profits will go by way of reinvestment to the customers of the Hunter Water Corporation. The community will receive profits paid to the Government on recommendation of the board of directors, but only if the five Ministers involved decide that is a good idea. Those Ministers, however, at that time may be responding to many other calls on the public purse and may be under extreme pressure at that time to use those profits in other areas of the State.
It is believed that employment will become more flexible but no explanation is offered of how the proposed corporatisation will actually affect the employees of the present Hunter Water Board. As part of the New Right philosophy espoused by the Government, the policy of letting the managers manage removes day-to-day accountability of the board and the employees of the board to the Minister. Emphasis is placed on performance. These provisions may result in higher revenue returns to the board, but will commercial goals override other social objectives in the future operation of the Hunter Water Corporation? Public interest is represented not merely in the amount of future government funding towards pensioner rebates and concessions. The Government soon discovered, after the full user-pays impact was felt in the Hunter region, that so many pensioners and people on social security benefits were living in the area that it was necessary to give them significant concessions to enable them to cope with their problems. That was three or four years ago, long before the current unemployment crisis and well before the current recession had even begun to bite. Those pensioner concessions had to be introduced to avoid unnecessary hardship.
A few moments ago I mentioned my concern about the government-dominated board, because it is clearly stated that the advisory committee shall comprise three persons, one being nominated by the board, one by the Minister and the third by the licensee. Looking through the draft legislation, I became concerned about the water quality provisions in schedule 3. Paragraph 2 states that a minimum level for fluoride is specified in order to meet Government dental health strategies. Its absence has no effect on the wholesomeness of the water being tested. Accordingly where fluoride absence is shown in a sample it will not be considered as contravening the standard.
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However, that totally evades the issue. It is a matter of great concern to many in the community whether the Hunter Water Corporation intends to add fluoride, because many
people are totally opposed to the addition of fluoride to the water supply. It is a matter of great public debate and of division within the scientific community, yet the matter is not addressed. I have discussed corporatisation with the chief executive officer of the Hunter Water Board. When I discussed what would happen to the profits of the board he admitted to me, quite freely, that one of his concerns was that the board would in future be asked to take over responsibility not only for the Hunter region, which would be extended as a geographical area beyond the bounds of greater Newcastle, and the West Lakes and East Lakes areas of Lake Macquarie, further south. He felt the board might be asked to take over responsibility for part of the Central Coast and much north of the Hunter Valley, even beyond Singleton and Muswellbrook. Responsibility for that large geographical area would impose an enormous burden on an authority that had previously looked after a fairly small area.
Problems are being experienced in the Port Stephens area, which is rapidly expanding, as are all New South Wales coastal areas. It has become a useful place to live for people who work in Newcastle and the preferred retirement place for many people who have previously worked in the Newcastle-Cessnock area. Small coastal villages are developing into large residential estates for retired people in exactly the same way as villages on the central North Coast and mid North Coast of New South Wales and the southern area of Queensland, which are amenable, pleasant areas for retirees. I should like to refer to the drainage service charges laid down in part III of the draft legislation for residential land, non-residential land and occupied land. The service charge for unoccupied land classed under category A, part VII, is a reasonable assessed charge of $20, but the service charge for unoccupied land classed under category B, part VII, is 1.90c in the dollar of the assessed annual value. Honourable members will be aware that I have brought this matter to the attention of the House by way of questions and previously on the adjournment as it is a matter of great concern in the Hunter, a concern that I am sure is echoed around New South Wales by people who are being charged for services to unoccupied land that they do not receive. It is a way for the Government to raise revenue.
I should like the Minister in reply to explain clearly the service charge for unoccupied land that has no water laid on and where there is no likelihood that water will be laid on for 10, 15 or more years. That land is classed under category B, part VII, and people can be charged 1.9c in the dollar of the assessed annual value. It is well accepted that the assessed annual value of any piece of property in New South Wales, or in the majority of areas in New South Wales, is based on the latest assessment by the Valuer-General's Department, which was taken at the height of the property boom in late 1987, early 1988 and into 1989. There has been a dramatic falling off in the value of property even within the 150-kilometre radius of Sydney. It is now accepted that people who work in Sydney can live within a 150-kilometre radius and, if they want to kill themselves early, they can drive into Sydney to work every day or, if they are lucky enough to live on a railway line, they can travel to Sydney by State Rail or CityRail. Therefore, the land within that 150-kilometre radius, and certainly in the West Lakes section of Lake Macquarie, is subject to what we now understand to be grossly inflated values. People owning unoccupied land will pay substantial charges of 1.9c in the dollar for services they are not receiving. That is not equitable. The Government should take it into consideration, and I hope the Minister will address my concern in his reply.
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I should make it clear that from the beginning the Australian Democrats were concerned about corporatisation. My colleague the Hon. R. S. L. Jones is not present tonight, nor is the Minister for Planning and Minister for Energy, but I am sure if they were both in the Chamber they would remember the lengthy discussion and confrontation we had before the last State election, when the Australian Democrats were possibly a more powerful force in this Chamber than they are at the moment and were fighting the current Minister for Planning and Minister for Energy about the corporatisation of the Grain Handling Authority, Graincorp. At that time we reached an agreement with the Minister that we would not oppose any further corporatisation measures provided that the Government undertook that there would be an employee representative on the board of every corporate body. The present Hunter Water Board has an employee representative on the board. Having read the Hansard of the debate in another place, I am aware that the Minister has given an unequivocal assurance that after the Hunter Water Board is corporatised there will still be an employee representative on the board.
Under the provisions of the Interpretation Act, I must accept the Minister's firm assurance. However, it would have been in the spirit of corporatisation and in the spirit of the agreement we entered into prior to the last State election if that provision had been entrenched in the legislation. The Australian Democrats firmly believe that if any statutory authority is to be corporatised it is right and proper that an employee representative should be on the board. I cannot resile from that because in my opinion, if not in the opinion of the Minister, the agreement we reached with the Minister was a solemn and important one. We entered into the agreement in good faith and we hope that the Minister gave his assurance in good faith. I shall be extremely concerned if I discover that there will not be an employee representative on the board of the new Hunter Water Corporation. I have already informed the Minister and the Minister's advisers that the Australian Democrats will support the amendments to be moved by the Opposition in Committee.
The Hon. J. P. HANNAFORD (Minister for Health and Community Services) [9.42], in reply: The Opposition and the independent members of the House seem to indicate that they support the legislation. In his contribution the Hon. P. F. O'Grady claimed that the amendment relating to freedom of information and the licensed plumbers' proposal resulted from negotiations with the Opposition. That is not so. Those amendments arose from Government initiatives. The omission of the provision in relation to freedom of information resulted from an oversight by the Parliamentary Counsel when drafting the bill. The Government willingly introduced the freedom of information provisions into the legislation. In her contribution the Hon. Elisabeth Kirkby raised a number of matters. I shall deal with each of them. She referred to the Hunter sewerage project and the continuing provision of services to outlying areas. Those services will continue regardless of corporatisation. She referred also to the accountability of the organisation. Under the provisions of the State Owned Corporations Act, annual reports will still have to be tabled. As honourable members are aware, debate on any report can be initiated in this chamber on what has become almost standard notice.
The Hon. P. F. O'Grady: The bill does not contain the same provisions for the tabling of annual reports.
The Hon. J. P. HANNAFORD: No, I concede that it does not. Parliament will be able to ensure accountability for what has occurred in the corporatised board. Reference was made to the operating licence which regulates standards and prices. That
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is a public document and will be subject to full public scrutiny. Profits were also mentioned. The profits will be shared between consolidated revenue and the local population. The statement of corporate intent provides that approximately half of the profits will be retained for reinvestment by the corporation in the assets which serve the local community. In regard to accountability, I referred a moment ago to the tabling of annual reports. The existing responsibility of the Minister and the Government will continue through the political process. The mechanisms introduced in the legislation will result in increased accountability because of the operating licence, the consumer contract and the annual audit.
The Hon. Elisabeth Kirkby referred also to employment conditions. All employment conditions will be carried over to the new corporation. The position of the work force will therefore not be weakened. She referred also to fluoride. One must ask whether she supports the use of fluoride in the water system. Fluoride is already part of the water system in the Hunter region. There is an established practice of adding fluoride and that practice will be continued. I wondered whether the Hon. Elisabeth Kirkby was a supporter of those minority groups which continue to oppose the introduction of fluoride into reticulated water systems. The Hon. Elisabeth Kirkby referred also to the area to be served by the corporatised board. She would be aware that the bill specifies that the existing boundaries for the Hunter Water Board will be retained. She referred next to service charges. Service charges are based on property values and are applicable only to non-residential land. The honourable member seemed to be referring to charges for drainage services rather than charges for the supply of water and sewerage services. Properties will benefit from drainage services for which that charge is applied. The charge would therefore seem to be appropriate. The licence provides that drainage charges are subject to the consumer price index. I affirm the statement made by the Minister in the other house that the board will include a member drawn from the employees of the corporatised organisation. It is appropriate that the statement made in the other house be affirmed in this house. Having dealt with the issues raised by honourable members, I commend the bill.
Motion agreed to.
Bill read a second time.
In Committee
Parts 1, 2, 3, 4 and 6
Schedule 1
The Hon. P. F. O'GRADY [9.49], by leave: I move the following amendments in globo:
Page 2, clause 3. Omit the definition of "business undertaking" from clause 3(2).
Page 2, clause 3. Omit the definition of "corporation" from clause 3(2), insert instead:
"Corporation" means the Hunter Water Board;
Page 3, clause 3. Omit the definition of "excluded undertaking" from clause 3(2).
Page 3, clause 3. Omit the definition of "Ministerial Corporation" from clause 3(2).
Page 5471
Page 4, clause 4. Omit the section, insert instead:
Hunter Water Board taken to be SOC
4.(1)The provisions of the State Owned Corporations Act 1989 (other than the definitions of "board" and "voting shareholders" in section 3(1) and sections 4-7A, 9(a) and (c), 10, 12, 13, 16(1), 17, 24, 26(1)(a)-(c), (i), (n) and (2), 28, 33(2) and (3), 34-36, Schedule 2 (except clauses 2 and 3 of Part 2) and schedules 3 and 4) apply to the Hunter Water Board and, for the purposes of the applicable provisions, the Hunter Water Board is taken to be a State owned corporation.
(2) In the provisions of the State Owned Corporations Act 1989 that apply to the Hunter Water Board, a reference to:
(a) the "board" is to be read as a reference to the Hunter Water Board; and
(b) "voting shareholders" is to be read as a reference to the Minister.
(3) the State Owned Corporations Act 1989 is, as regards the Hunter Water Board, taken to be altered:
(a) by inserting in section 16(2) after the word "agreed" the word "Government"; and
(b) by omitting from section 26(1)(k) the words "voting shareholders under the memorandum or articles of association of a State owned corporation to the board" and by inserting instead the words "the Minister to the Hunter Water Board"; and
(c) by omitting from section 26(5) the words "material referred to in subsection (1)(i)" and by inserting instead the words "annual report of the Hunter Water Board laid before the Houses of Parliament under the Annual Reports (Statutory Bodies) Act 1984".
Pages 4-6, Part 3. Omit the Part.
Pages 6-7, clause 9-11. Omit the clauses, insert instead:
Continuation of certain provisions
9.(1) Despite section 8 of this Act, Part 2 and section 10 of the Hunter Water Board Act 1988 and Schedules 1, 2, 5 and 6 to that Act continue in force as modified by this section.
(2) For the purposes of sections 7 and 8 of the Hunter Water Board Act 1988, the Hunter Water Board may make recommendations to the Minister concerning persons who may be appointed by the Governor as Managing Director or Deputy Managing Director of the Board.
Certain persons to continue in office
10.(1) A person holding office as a member of the Hunter Water Board immediately before the commencement of section 8 is taken to be a member of the Hunter Water Board for the purposes of this Act and is to hold office for the remainder of the period specified in the instrument of the person's appointment under the Hunter Water Board Act 1988.
(2) The persons holding office as Managing Director and Deputy Managing Director of the Hunter Water Board immediately before the commencement of section 8 are taken to be appointed as Managing Director and Deputy Managing Director respectively for the purposes of this Act.
(3) A person holding office as a member of the Hunter Water Board Consultative Forum immediately before the commencement of section 8 is taken to be a member of the Hunter Water Board Consultative Forum for the purposes of this Act and is to hold office for the remainder of the period specified in the instrument of the person's appointment under the Hunter Water Board Act 1988.
Duties of members of Hunter Water Board
11. The members of the Hunter Water Board are subject to the same duties as are imposed on directors by Part 3.2 of the Corporations Law and, in particular, the duties imposed by section
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232 of that Law.
Pages 31-32, clauses 63-65 as printed. Omit the clauses.
Pages 32-33, clause 67 as printed. Omit the clause.
Page 34, clause 70 as printed. Omit the clause.
Pages 37-46, Schedule 1. Omit the Schedule.
I shall speak in particular on amendment No. 5, which is the crux of the difference of opinion between the Opposition and the Government. The other amendments are consequential.
The Hon. Patricia Forsythe: It depends on whether you believe in corporatisation or not, I suppose.
The Hon. P. F. O'GRADY: That is right. That is why amendment No. 5 is the crux of the issue at hand. As I have already stated, the Opposition is not opposed to the principle of corporatisation; what it is opposed to is the Hunter Water Board being converted to a public company with a share base, changing its name and breaking up its assets and liabilities between the proposed company and the proposed ministerial corporation. Accordingly, the Opposition proposes that a number of sections of the State Owned Corporations Act should not apply. These relate to the establishment of a public company, references to the status of a public company not representing the State, references to directors of public companies, procedures relating to the establishment of taxation of a company, non-application of a government guarantee, not requiring the board to be subject to the Annual Reports (Statutory Bodies) Act and the Public Finance and Audit Act, and staff employment provisions. We also would require the application of State equal employment opportunity law and the provisions of a number of other State Acts such as those concerning the Government and Related Employees Appeal Tribunal and Independent Commission Against Corruption.
The Opposition supports the improved commercialisation of the Hunter Water Board. That is why we are keen to see the board scheduled under the State Owned Corporations Act and a number of accountability and commercial provisions apply to the board in a more formal sense. This is why we strongly support the application of the State Owned Corporations Act in respect of arrangements for non-commercial activities, dividends, payments of income tax equivalents, guaranteed fees, subsidiary company procedures, procedures in relation to assets and sales, statements of corporate intent, reports, providing information to the Parliament on adherence to social responsibility and so on. These are all aspects which should be imposed on the board. Our goal is to achieve improved accountability and commercialisation of the organisation, not create a body which weakens the principle of ministerial responsibility, which conversion to a public company would do.
As I said in the second reading debate, the key issue is that we are dealing with an organisation which deals with the supply of water. It is a monopoly. It should not be seen in the same light as the State Bank or the GIO. It should be seen as something
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which provides a service. It is not in competition with anyone else. The supply of water should remain in the public sector. In creating a corporation the Government walks down the path of wasting money because of the cost involved in the process. The people who gain out of the move are not consumers but lawyers, accountants and public relations people, et cetera. I urge the Committee to accept the Australian Labor Party amendments.
The Hon. J. P. HANNAFORD (Minister for Health and Community Services) [9.53]: The most important amendment is the second one, which specifies that the term corporation means the Hunter Water Board. This goes to the heart of the bill as, in combination with amendments Nos 5, 6, 7, 11, 12, 13 and 14, it imposes the Australian Labor Party's notion of corporatisation. To debate this amendment it is necessary to comment on the broader thrust of these amendments. They are not appropriate for the following reasons. The amendments largely seek to retain the existing Hunter Water Board. They serve to water down the State Owned Corporations Act and continue government power to impose dividends and reduce the accountability of the board. The State Owned Corporations Act is the established legal framework already adopted by Parliament as the vehicle for corporatisation. It is not appropriate to vary its application in an ad hoc manner.
The amendments seek to define directors' duties similar to those in the Corporations Law but do not then provide any sanctions, leaving the directors in a position of less autonomy and less accountability. A clear inconsistency is established between the board members' duties to act as directed by the Minister and their notional obligations to behave as if they were subject to the Corporations Law. Similarly, confusion is created as to whether directions of the Minister are to be subject to section 11 of the State Owned Corporations Act, which deals with community service obligation payments. How would the board respond if it were directed to engage in a non- commercial activity which is not funded by a CSO payment? The concept is inconsistent with the Government's corporatisation policy. It jeopardises the autonomy of the organisation and blocks the accountability provided by the Corporations Law.
Previously I have referred to the need for the corporatised body to have clear objectives, authority to operate and a rewards and sanctions system. These amendments undermine each of these criteria. In addition, under amendment No. 5 - the Hon. P. F. O'Grady referred to it as being the key - instruments of bureaucratic control such as the Government and Related Employees Appeal Tribunal Act would be applied to undermine the scope for autonomous and efficient management. Other anomalies would be created. For example, the Hunter Water Board would be subject to the provisions of the Public Finance and Audit Act, which relates to dividends amongst other things. This would undermined the autonomy created in the State Owned Corporations Act and the Hunter Water Corporation's statement of corporation intent with respect to the determination of dividends.
A further anomaly is created by the attempt to alter the established corporatisation framework in that the amendments remove the requirement for the board to have a memorandum and articles of association. However, the amendments at the same time seek to retain the mandatory State owned corporation requirement for the board to have provisions in its articles relating to dividends and subsidiaries. This is a nonsense. Under the Opposition's amendment the board has no articles. The Opposition's proposal is an unworkable model. In effect, it is a two-legged stool. Other
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difficulties are created by amendment No. 7, which provides that the Minister rather than the board shall appoint the chief executive officer. The upshot is blurring of the roles of accountability of the chief executive officer, the Minister and the board. The ability of the board to make recommendations on the appointment of a chief executive officer does not assist since the Minister is responsible for the appointment. Furthermore, the existing board and senior management are entrenched under the Opposition's proposal so that there is no opportunity for the Government to assess the suitability of existing board members to undertake the new responsibilities that come with corporatisation.
Amendment No. 5 has the effect of shifting the corporation from the Government model to the Labor Party model. Amendment No. 6 provides for omission of clauses 5 to 7. Once again, this relates to the creation of the Labor Party's model of corporatisation and should be opposed for that reason. Amendment No. 7 provides for the omission of clauses 9 to 11 and replacement with the words contained in amendment No. 7, which provides for the existing board and senior officers to retain office and the Minister rather than the board to approve the appointment of the chief executive officer. Amendments Nos 10 to 14, which are being dealt with in globo, are consequential to the earlier amendments. I think it is appropriate that today we should be dealing with the issue of corporatisation. The honourable member is seeking to impose the Labor Party's approach to corporatisation. In the past 24 hours we saw the clearest model of Labor's corporatisation and its use of political influence to ensure that the corporatised body is nothing more than the arm of the Labor Party's whim. We saw this in the way the Federal Government dealt with the amalgamation of Telecom and OTC in what was to be the largest demonstration of government corporatisation in this country.
In the past 24 hours the Labor Party has used its political position to influence decisions made by its model corporatised organisation. We have seen the way in which the Labor Party seeks to abuse its political position by exercising its influence over a corporatised model. If the Labor Party's model were to be adopted in the corporatisation of the Hunter Water Board, we would see the same political influence being sought to be used and abused, as the Labor Party is so often wont to do. It is appropriate that today the Sydney Morning Herald published an article under the heading, "Cabinet backs Vic HQ for Telecom". The article is an example of the Labor Party's approach to corporatisation. It reads:
Telecom's head office is almost certain to remain in Melbourne after Federal Cabinet this week intervened to give "strong support" for the soon-to-be-merged Telecom and OTC headquarters staying in that city.
In an extraordinary decision, Cabinet on Monday agreed formally to express its "strong disposition" towards Melbourne as the headquarters for the Australian Overseas Telecommunications Corporation (AOTC).
But it stopped short of formally directing the new Telecom-OTC board.
"While the board was aware of the Cabinet's view, the expression of support for Melbourne was not a directive to the board", the Minister for Communications, Mr Beazley, said.
"The ultimate decision was properly won for the board in keeping with the commercial basis on which AOTC had been established."
The Cabinet decision was made without any formal analysis or documentation on what would be the best location.
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It also appears to be contrary to the Government's oft-stated policy of leaving the board and executives of statutory authorities to make what they consider to be the best commercial decisions, with any political pressure coming by way of formal direction . . .
This followed a view among members of the interim board that given that most of Telecom's major customers were in Sydney, Telecom-OTC should base its corporate head office also in Sydney.
The board wanted to make a corporate decision, a decision which it would have been statutorily obliged to make under the Corporations Law of this country. Having made the decision to come to Sydney, the Federal Government stepped in and made a decision, not a direction as the shareholder. What did an influential member of the Labor movement have to say about that? According to the article Ms Kirner, the Labor Premier of Victoria, said yesterday the new board would be "very sensible" to follow Federal Cabinet's preference. It is not often that the Sydney Morning Herald, having reported on a government decision, decides to comment on that decision and to do it in juxtaposition to the report on that matter. Today's Sydney Morning Herald carried another article headed "Parochial decision has ring of hypocrisy", and that is exactly what we are seeing from the Opposition's amendments to this bill. In part the article reads:
The Cabinet's decision this week to lean on Telecom-OTC to stay in Melbourne is crude parochialism, bad policymaking and rank hypocrisy. On the same day as it was appointing a new board -
That is what the Opposition would seek to do when appointing the new chief executive officer:
- to take Telecom-OTC into the brave new world of competition, the Cabinet sent a sharp reminder of what life under government ownership really means. The decision leaves the new board with the option of either submitting meekly to the whims of the Cabinet or rolling its shareholder. No prizes for guessing what the board will do . . . The decision is in conflict with every statement made over the last four years about how the Government is to run its own businesses. Since 1988 ministers have boasted about how they are letting the managers manage getting politics out of government business and giving boards independence to make commercial decisions. It represents a return to the old-fashioned pork barrelling which for years left Australia with one of the worst performing government businesses in the OECD.
That is on the public record on a day when we are determining what to do with a corporatised model under State legislation. The Labor Party wants to introduce into this State its version of corporatisation. Today's newspapers illustrate clearly what the Labor Party would do with its version of corporatisation. It is an indictment of the Australian Democrats that they have said they will support these amendments. By supporting the amendments they are doing exactly what the newspapers have said that the Labor Party is doing under its corporatised model, and that is returning to old-fashioned pork-barrelling, which for years left Australia with one of the worst performing government businesses in the Organisation for Economic Co-operation and Development. The Australian Democrats, by supporting the Labor approach to corporatisation, want to subject the Hunter Water Board to that same pork-barrelling. The Hon. Elisabeth Kirkby
is a resident of the Hunter region. She knows about Labor Party pork-barrelling in respect of corporations in that area.
The Hon. P. F. O'GRADY [10.6]: Tonight the Minister has shown that he is short on any arguments for rejecting the Opposition's amendments. He has advanced a purely ideological reason for opposing our amendments. He has said that the Liberal
Page 5476
Party, the party of so-called free spirit, free independence and private enterprise, has the right to determine the way in which corporatisation should occur, and the views of other political parties have no relevance. The Opposition seeks to provide something for the people of the Hunter, because they are the people being used as the guinea pigs. Though the Government may not be concerned about the people of the Hunter, because it was annihilated on 25th May when all the so-called Independents -
The Hon. Patricia Forsythe: The seat of Maitland looks fairly safe.
The Hon. P. F. O'GRADY: The silence of the honourable member for Maitland on this matter has been extraordinary. The honourable member for Maitland, the only Liberal Party member in the Hunter, will have to face the electorate on this issue. The electorate well knows the experience of Sydney-based decisions and the effect that those decisions have had on their water charges and water service.
The Hon. Patricia Forsythe: That is precisely why the Hunter Water Board should be corporatised.
The Hon. P. F. O'GRADY: Why? Tell me.
The TEMPORARY CHAIRMAN (The Hon. Beryl Evans): Order! The honourable member should address the Chair and not speak across the Chamber.
The Hon. P. F. O'GRADY: The honourable member interjected and said that is why we need to corporatise the Hunter Water Board. At present the board provides a monopoly service to the people of the Hunter for the supply of water. A corporation will supply a monopoly water supply to the people of the Hunter. The Opposition is seeking to insert into the legislation a number of amendments which would ensure that the Hunter Water Board supplies a service to the people of the Hunter of which they can be proud, and which will serve them in the best possible way. The Minister of the day responsible for the Water Board will have to make decisions. After all, Ministers get paid to make decisions. I realise that nowadays, though Ministers are provided with a motor vehicle and advisers, they do not have to make decisions. That philosophy is espoused particularly by the Liberal Party. It does not like to have to make decisions. The Government would prefer to have corporations that are not responsible to anyone make the decisions. It will not accept an amendment to include a consumer price index base in the legislation. Clearly the Minister has rejected the amendment on the basis that it is a Labor Party model and not a Liberal Party model. Subsection (1) of section 11 of the State Owned Corporations Act provides:
If a Minister wishes a State owned corporation to perform activities, or to cease to perform activities, or not to perform activities, in circumstances where the board considers that it is not in the commercial interests of the corporation to do so, that Minister with the
approval of the Treasurer may, by written notice to the board, direct the corporation to do so in accordance with any requirements set out or referred to in the notice.
Subsection (3) provides:
The corporation is entitled to be reimbursed, from money advanced by the Treasurer or appropriated by Parliament for the purpose, amounts equal to:
Page 5477
(a) The net cost of performing any such activities, including the cost of capital; and
(b) The net cost of complying with a direction to cease to perform or not to perform any such activities.
The Labor Party does not resile from the provisions of section 11 of the State Owned Corporations Act. The Opposition supports that section. If a decision is made in Cabinet or by a Minister about the financial base of an organisation, the organisation is entitled to be reimbursed by Treasury. The Minister has not advanced any cohesive argument to support his rejection of the Opposition's amendment. He has advanced a philosophical and ideological argument. One honourable member hit the nail on the head when he said that the legislation will set the trend worldwide. I remind the Committee of the shambles of the water supply system in Great Britain.
The Hon. ELISABETH KIRKBY [10.12]: I do not wish to become involved in an ideological battle between Labor and Liberal philosophies. This is not the forum for such a debate. However, I fail to understand why the Minister has castigated the Opposition by saying that the Government is endeavouring to let the managers manage and to remove government control. The Minister in the other place said in his second reading speech:
Any subsequent direction by the Government to the Hunter Water Corporation to engage in non-commercial activities will be recorded annually and specific provisions made for funding through a community service payment.
He did not suggest that the Government would no longer be involved. He has laid down guidelines under which the Government will be involved. The Minister said further in his second reading speech:
Non-commercial objectives -
And I asked the Minister in this place what those non-commercial objectives are:
- are to be facilitated directly by Government funding.
This will not be an autonomous, independent corporation; it will still be subject to government control; two of its three shareholders will be Ministers of the Government. It matters little who the licensee will be.
The Hon. Dr B. P. V. Pezzutti: The Government is providing most of the money.
The Hon. ELISABETH KIRKBY: The taxpayers and the ratepayers will put in the money.
The Hon. Dr B. P. V. Pezzutti: They have not put it in yet.
The Hon. ELISABETH KIRKBY: Yes, they have. The Hon. Dr B. P. V. Pezzutti should be careful. The Hunter Water Board was the first organisation of its type to move towards a user-pays system. Why is the Government seeking to change the way it operates with this legislation? In the past few years under the new management the Hunter Water Board has become singularly more efficient than any other statutory authority in New South Wales. It has worked satisfactorily under the new structure with a user-pays component. Why does the Government now seek to change
Page 5478
it? The Government wants to change it to rake off some of the profits the organisation is making and put it into consolidated revenue. Earlier the Minister made a derogatory statement about the Australian Democrats being well aware of the pork-barrelling policies of the previous Labor Government with regard to the Hunter region. I lived in the Hunter region during the Labor administration. Regrettably no pork-barrelling policies were implemented during that time. At that time the Labor Government of the day, not the Labor Opposition of today, took the region too much for granted. It believed that there was no possibility it would lose control of voters in that area. It did not provide funds to the extent required. The Hunter region is faced with a similar dilemma today: the Liberal Government will not provide funding. Regrettably the Hunter did not get the necessary funding from the previous Labor Government 10 to 15 years ago.
I do not understand the attitude of the Minister. Government control will not be removed by this model of corporatisation. To pretend that it will is to mislead the public. I ask the Minister again what non-commercial activities the Government will fund directly. I should also like an answer from the Minister to the question I asked of the Chief Executive Officer of the Hunter Water Board. Given the pressing need to introduce catchment management programs into the Hunter, will the profits of the new corporation be directed towards developing such programs? The Chief Executive Officer said that the profits would not be used for that purpose. When the Hunter task force was in existence a briefing was held about the necessity for catchment management programs. That was the last briefing attended by the former Labor members of the region. Proper catchment management programs are essential, but how will they be funded? According to Mr Paul Broad they will not be funded from the profits of the new corporation.
The Minister said in his second reading speech that specific provision will be made for funding through a community service payment. People living in the area will be charged a user-pays fee - which may or may not be capped - and also a further community service payment if they live in an area that requires the development of catchment management programs. Where will the profits of the new corporation go? The homes of many residents of the area are not connected to the main sewerage line, despite their having paid a levy for many years. Many are not in a position to continue to pay increased user-pays charges for their water in addition to a sewerage charge. The catchment management programs, which no one denies are essential, will not be funded from the profits of the corporation. They will not be funded by the State Government. The profits will be paid into consolidated revenue. According to the Minister the programs will be funded through an additional community services payment. The people of the region are paying through the nose.
The Hon. J. P. HANNAFORD (Minister for Health and Community Services) [10.20]: I regret that the Hon. Elisabeth Kirkby has raised matters in a way that reflects her fundamental lack of understanding of the purposes of the proposed legislation. The non-commercial objectives to which she referred are clearly defined by section 11 of the
State Owned Corporations Act. The honourable member referred to community service obligations but it appears she does not understand them. Under section 11 of the State Owned Corporations Act any shortfall between the full cost of a service provided and the revenue earned will be returned to the corporation. If the Government determines in the total community interest that a particular service should be provided, the Government is obliged to pay moneys to the corporation to ensure the obligation can be met. Illustrations of that are those matters to which the honourable member referred. Total
Page 5479
catchment management is of total statewide interest and is a State obligation. If the Government imposes on the corporation an obligation to participate in a statewide total catchment program, consolidated revenue must pay for that program participation. If the Government imposes on the corporation a social obligation to take part in chemical collection campaigns which may be politically motivated but are of statewide social importance, the corporation has to be paid for its participation.
If the Government wants the authority to participate in investment to provide services at a loss to outlying areas, the Government will be obliged to make funds available from consolidated revenue. The corporation will be obliged to observe the Corporations Law. Directors of the corporation will have the same obligations as other directors to act in the interests of the corporation. If those directors, acting in the interests of the corporation, form a view that services to outlying areas are not financially viable and should not be provided, yet a political decision is made that those services should be provided for State or regional interest, the Government will be obliged to provide funds for that work from consolidated revenue. If the Government were to decide that various classes of pensioners should be given a financial benefit through reduced rates, the Government will be obliged to identify the level of subsidy and remunerate the corporation for income lost through a statewide decision benefiting the citizens of this State, of which the people of the Hunter are part.
The Government must be transparent under community service obligations about how subsidies are to be paid. For political or statewide community reasons the Government may impose an obligation on a corporation to undertake acts which the directors of the corporation may not think are in the interests of the corporation or part of the corporation's role. The Water Board may not normally be expected to participate in chemical collection campaigns, but if the Government makes a decision that it should so participate, the Government should pay. The Hon. Elisabeth Kirkby was critical of community service payments and sought to suggest that those payments would be a charge on customers and consumers in that region. That is not so. Those payments are made out of consolidated revenue because the Government has formed the view that such community benefits should be provided by the authority. The Government, being the shareholder of the organisation, is able to force that view upon the organisation. The board directors, however, are under a statutory obligation imposed by the Federal Corporations Law to act in the corporate interests of the company and not solely on the basis of what the politicians, the shareholders, might want.
Those obligations bring clear political transparency to the management of such organisations. On a number of occasions the Hon. Elisabeth Kirkby suggested that these obligations will lead to additional costs being borne by the ratepayers in the area. This corporatisation process will reduce, not increase, the cost burden because the Government is forced by this process to be transparent. Any government of the day will be forced to be transparent when it seeks to increase political manipulation of the manner
in which funds are used. The honourable member expressed concern and was critical about the use of dividends. It would be easier to return bigger dividends to State revenue, if the Government wanted to do that, under the present model because the Government controls it. Under the Government's corporatisation model - though not under the Labor Party model - dividends can be returned only under the terms determined by the statutory board, which must act in the corporate interests of the organisation. The board, not the Government, determines dividends. In that way assets and income as well
Page 5480
as profits derived by the board are further removed from political manipulation.
The Hon. ELISABETH KIRKBY [10.28]: I thank the Minister for his long and detailed explanation. The briefings that I attended were addressed by senior officers of the present Hunter Water Board and by members of the Opposition, in particular the honourable member for Wallsend, the honourable member for Waratah and other Labor members from that area. It is a great pity that when we were discussing problems and were being shown many slides demonstrating the need for a total catchment management plan the fact that the money would be provided by the Government was never clearly stated. Last week I spoke to the Chief Executive Officer of the Hunter District Water Board. I asked him, with particular reference to the Minister's second reading speech, about non-commercial activities and whether it would be possible for the profits they hoped would be generated from the new corporatisation structure to pay for the total management plan. He told me that it would not and said that money would in fact be raised from ratepayers in the area. I believe I am perfectly entitled to accept his word.
We were frequently briefed by the Hunter Water Board during the period of the Hunter District task force about many problems including the building of ocean outfalls, water and sewerage problems, and the fact that much of the infrastructure of drainage, sewerage and water supply in that area is as antiquated as in many areas of Sydney, and a great deal of money must be generated for its modernisation. I asked those questions because it seemed proper that if the user-pays philosophy that had been in existence for some time in the Hunter area generated a profit that profit should be ploughed back into providing services for the people in the region who had paid the money. However, the Minister has now given me a different explanation, which I shall be happy to pass on to my constituents living in that area.
Question - That the amendments be agreed to - put.
The Committee divided.
Ayes, 17
Dr Burgmann
Ms Burnswoods
Mr Dyer
Mr Egan
Mr Enderbury
Mrs Isaksen
Mr Kaldis
Mrs Kite
Mr Macdonald
Mr Manson
Mr Obeid
Mr Shaw
Mrs Symonds
Mr Vaughan
Mrs Walker
Tellers,
Miss Kirkby
Mr O'Grady
Noes, 18
Mr Bull
Mrs Chadwick
Mr Coleman
Miss Gardiner
Dr Goldsmith
Mr Hannaford
Mr Jobling
Mr Moppett
Mr Mutch
Mrs Nile
Revd F. J. Nile
Dr Pezzutti
Page 5481
Mr Samios
Mrs Sham-Ho
Mr Rowland Smith
Mr Webster
Tellers,
Mrs Forsythe
Mr Ryan
Pairs
Mr Pickering
Mr Willis
Mrs Arena
Mr Johnson
Question so resolved in the negative.
Amendments negatived.
The Hon. P. F. O'GRADY [10.38], by leave: I move the following amendments in globo:
Page 21, clause 39. After clause 39 (2), insert:
(3) Despite anything in the operating licence or this Act, on and after the commencement of this Part and until 30 June 1994, no charge, levy or rate referred to in this section that is applicable to residential customers is to be increased by more than the increase in the CPI during the period since the equivalent of the charge, levy or rate was last changed (whether the change was an increase or a decrease) under the Hunter Water Board Act 1988.
(4) No charge, levy or rate is to be increased within 12 months after the charge, levy or rate was last changed (whether that change was an increase or a decrease).
(5) Any increase in a charge, levy or rate in contravention of this Act is invalid, but only to the extent that the increase is greater than the maximum increase that would not be a contravention of this Act.
(6) Nothing in this Act prevents a reduction in any charge, levy or rate.
"CPI" means the Consumer Price Index (All Groups Index) for Sydney published by the Australian Statistician under the Census and Statistics Act 1905 of the Commonwealth or such other index as the Australian Statistician may publish and declare to be in place of that index;
"impose" includes make, fix and levy.
Page 21. After clause 39, insert:
Calculation of rate of increase in CPI
40. (1) For the purposes of this Act, the rate of increase in the CPI during the period since a charge, levy or rate was last changed is to be calculated by determining the percentage rate of increase in the CPI index number during that period.
(2) Because such a period may not correspond to the periods for which CPI index numbers are published and because CPI index numbers are not published immediately after an index period ends, the calculation of the rate of increase during a period is to be made on the basis of the following assumptions:
Page 5482
* the CPI index number at the beginning of the period is that index number for a quarter published by the Australian Statistician most recently before the beginning of that period;
* the CPI index number at the end of the period is the index number for a quarter published by the Australian Statistician most recently before the end of that period.
Time when "change" takes effect
41. The time at which a charge, levy or rate is "changed" is the time when the change takes effect, rather than (for example) the time when the decision for the change is made.
Charges etc. that replace previous charges etc.
42. (1) This section applies to a charge, levy or rate that (strictly speaking) is a new charge, levy or rate and that does not operate to change an existing charge, levy or rate.
(2) If such a new charge, levy or rate is of the same nature as some existing charge, levy or rate and would generally be regarded as changing that existing charge, levy or rate, this Act applies to the new charge, levy or rate as if it did change the existing charge, levy or rate.
Charges etc. imposed according to rate of consumption etc.
43. If a charge, levy or rate is imposed at a particular rate, this Act applies to the rate at which the charge, levy or rate is imposed.
Increases due to increased usage or consumption
44. This Act does not apply to prevent an increase in a charge, levy or rate payable by any particular person to the extent that the increase is attributable to increased consumption or usage by that person of the service to which the charge, levy or rate relates.
Charges with different components
45. If a charge, levy or rate is comprised of 2 or more components, this Act applies to each component of the charge, levy or rate as if each-component were a separate charge, levy or rate.
Notional increases due to increases in land value
46. (1) This section applies for the purpose of determining the permissible level of increase in a charge, levy or rate that is imposed by reference to land value (and applies in addition to the other provisions of this Act).
(2) If land value has increased as a result of a general valuation since the charge, levy or rate was last changed, the charge is to be regarded as having been increased (independently of any actual increase) in proportion to the increase in land value attributable to the general valuation increase.
(3) The notional increase made by subsection (2) is intended to result in a corresponding reduction in the level of actual increase.
(4) This section will require a decrease in the charge if the notional increase under subsection (2) is greater than the permissible level of increase.
These two amendments relate to the increase in cost of the supply of water for the coming three years. The amendments seek to entrench in the legislation the provision of the operating licence. As I understand it, a commitment has been given that for the financial years 1992, 1993 and 1994 the increased cost of water supply charges will match the consumer price index. I could not imagine why the Government would oppose these amendments. They simply seek to insert in the legislation that for the next three years the cost increase be tied to the consumer price index.
Page 5483
The Hon. J. P. HANNAFORD (Minister for Health and Community Services) [10.40]: Amendments 8 and 9 moved by the Labor Party have a twofold effect. First, each component of the Hunter Water Board's charges will be subject to a specific consumer price index cap. Second, the enshrining of price control in legislation rather than the operating licence will restrict future price reform. In regard to the first point, the Opposition's amendment would unduly hinder the pursuit of commercial pricing arrangements. Charges for water and sewerage services are made up of a number of components including a service rental fee, pay for use and, in the case of the non-residential sector, charges based on property values. In the interests of encouraging the efficient use of water and establishing a water utilities asset base, it is desirable to vary the relationship between these charges over time. Scope needs to be provided for the unwinding of existing penalties borne by the industrial and commercial sectors, particularly the small business sector, as a result of the property tax component of the charges. The specific regulation of all components of charges sets in concrete the charging arrangements in existence in 1991. That is commercial and social madness.
The appropriate instrument is the existing operating licence under which a customer's total bill is regulated rather than the component parts of that bill. In respect of enshrining price control in the legislation, it is simply bad government to clog the business of Parliament with specific regulations of that type. At present the consumer is protected by the operating licence and the community is able to see clearly how that protection operates. The Hunter Water Board is Australia's leader in price reform in the water industry. The Hon. Elisabeth Kirkby has referred to that fact and I acknowledge it. However, the board still has an unfinished agenda to get pricing right. The amendments proposed by the Opposition will severely impair further progress on price reform and are therefore rejected.
The Hon. ELISABETH KIRKBY [10.42]: In my contribution to the second reading debate I mentioned the charge to be imposed on non-residential land which is based on a formula of 1.9c in the dollar. The Minister responded to my comments by saying that under the bill that levy will apply to land where drainage work for the benefit of the landowner had been carried out. In the area in which I live, which is Westlakes near Lake Macquarie, many people are paying this charge and to my knowledge no drainage work is being carried out. At present that is not particularly important because of the severe drought. It would be possible to carry out the work but the work would be unnecessary because serious flooding is unlikely. That is one of problems we face. Even though the intention of the Act is that this charge will be levied to pay for capital works carried out by the board, or the corporation as it will become, I can assure the Minister that such charges are being levied and people cannot understand why they are being charged. It is a matter of concern. If that charge is to be levied in the same way as a sewerage levy, which the public does not like but accepts, the reason for the charge should be explained. The public does not like the sewerage levy but accepts it.
At present land values, upon which the levy will be based, are grossly inflated because they were assessed during a land boom. Because of that many ordinary people are experiencing difficulties. They are not receiving any return for their money. I would like the Minister to explain whether the money raised is to be put into a fund for the purpose of carrying out work at some future date. The proceeds of the sewerage levy are treated in that way. If the money is not to be dealt with in that way, why is such a high charge being levied on unoccupied land which cannot be further developed because of building constraints? At present there is certainly no need to carry out drainage works
Page 5484
because there is no water to drain.
The Hon. J. P. HANNAFORD (Minister for Health and Community Services) [10.45]: The charge to which the Hon. Elizabeth Kirkby refers relates to drainage work. When a charge is imposed it must be imposed in the area identified as receiving the benefit of proposed work. That area of benefit is in fact identified as the catchment of a particular area where drainage work is to be carried out. The Hon. Elisabeth Kirkby is no doubt familiar with the provisions of the Local Government Act which impose special rates on properties identified as benefiting from particular work. The bill proposes exactly the same system. The Hon. Elisabeth Kirkby is correct in her assumption that often these charges are imposed to build up a fund to be used for the carrying out of specific work. She referred to sewerage works, to which similar provisions apply. Though no work may be in progress at present, the Hon. Elisabeth Kirkby may be satisfied that works are proposed. If works were not proposed and if the area to benefit from the works was not capable of identification, the charge would not be legally sustainable and would be the subject of challenge in the same way as the special rates under the Local Government Act.
The Hon. P. F. O'GRADY [10.47]: In his response to my remarks the Minister said that there was an unfinished agenda on water pricing policy. I ask the Minister to outline what he meant by that comment.
The Hon. J. P. HANNAFORD (Minister for Health and Community Services) [10.47]: The Hon. Elisabeth Kirkby stated that the Hunter Water Board is a leader in price reform. The Government is seeking to make certain that there is a more efficient water delivery system in the Hunter region. I referred to the board's community service obligations. Policies of the corporate entity which are of political or statewide interest are more transparently identified. Those sorts of obligations should be borne by the community through consolidated revenue. The role of the corporate board should be to deliver the services for which it is established and to levy proper charges for those services. It should not be a repository from which funds can be diverted for other activities. Proper charges are imposed for the service that is delivered. The delivery of that service is targeted towards the purpose for which the corporation has been established. Though there have been significant reform and significant improvements in efficiency and charges in the Hunter region, there are still areas in which full efficiency is not capable of being achieved. This particular corporate model will ensure that the last aim is achieved and a proper pricing and service delivery model is achieved without government interference.
The Hon. P. F. O'GRADY [10.50]: The crucial point about the amendments has been missed by the Minister. He referred to the amendments as representing social madness. He may also have referred to commercial madness. The amendments relate purely and simply to the cost of water for residential properties. This fits in with the description on page 3 of the Hunter Water Board corporatisation summary, draft operating licence and customer contract. It fits in with the concept of residential use of water for the three financial years on the assumption that the range is between 50 kilolitres and 400 kilolitres. The Hunter District Water Board has seen fit to include this point in its draft operating licence. The Opposition goes no further than the draft operating licence on this matter. It clearly says that only in relation to residential water consumption the legislation should include a consumer price index commitment. This is in line with the Opposition's policy on the family relief package.
Page 5485
I address these remarks particularly to both members of the Call to Australia party. The amendments seek to include in legislation a guarantee that water prices in the Hunter will rise only by the rate of increase of the CPI. I recall that the electorate of Wallsend is in the top 10 electorates in its vote for the Call to Australia party. I urge members of that party to consider very carefully the worth of the Opposition's amendments, which merely take on board the commitments the Government made previously by seeking to insert in the legislation that consumers in the Hunter will have water rate increases in accordance with the CPI increase in the coming three financial years. I urge the Committee to accept the amendments.
The Hon. J. P. HANNAFORD (Minister for Health and Community Services) [10.52]: All I can say in reply to the comments just made is that the honourable member does not fully understand commercial operations. The income to be derived from this corporation will come from three sources - charges, levies and rates. The honourable member seeks to impose a consumer price index increase limitation on each of those components. The Government will impose the limit on the final total bill. So it may be possible to have variations in the charge, the levy or the rate. But the final amount to be paid in the bill - which is the important aspect - will be capped. That is why we say that it is commercial madness to broaden the base upon which the charge can be made having regard to proper commercial judgments and seeking to cap each of the components. It is better to look at the end charge. As the honourable member properly pointed out, under the licensing arrangement the Government will cap the end charge, leaving the calculation to proper commercial considerations. This will apply to residential or non-residential properties. The Government believes that is a more commercially appropriate approach.
Question - That the amendments be agreed to - put.
The Committee divided.
Ayes, 17
Ms Burnswoods
Mr Dyer
Mr Egan
Mr Enderbury
Mrs Isaksen
Mr Kaldis
Miss Kirkby
Mrs Kite
Mr Manson
Mr Obeid
Mr O'Grady
Mr Shaw
Mrs Symonds
Mr Vaughan
Mrs Walker
Tellers,
Dr Burgmann
Mr Macdonald
Noes, 18
Mr Bull
Mrs Chadwick
Mr Coleman
Mrs Forsythe
Miss Gardiner
Dr Goldsmith
Mr Hannaford
Mr Jobling
Mr Moppett
Mr Mutch
Mrs Nile
Page 5486
Revd F. J. Nile
Mr Ryan
Mr Samios
Mr Rowland Smith
Mr Webster
Tellers,
Dr Pezzutti
Mrs Sham-Ho
Pairs
Mr Pickering
Mr Willis
Mrs Arena
Mr Johnson
Question so resolved in the negative.
Amendments negatived.
Parts agreed to.
Schedule agreed to.
Bill reported from Committee without amendment and passed through remaining stages.
CHARITABLE FUNDRAISING BILL
COURTS LEGISLATION (CONTEMPT) AMENDMENT BILL
PRISONS (ESCAPE TUNNELS) AMENDMENT BILL
PRISONS (SYRINGE PROHIBITION) AMENDMENT BILL
GOVERNMENT TELECOMMUNICATIONS BILL
Formal stages and first reading agreed to.
Suspension of certain standing orders agreed to.
ADJOURNMENT
The Hon. J. P. HANNAFORD (Minister for Health and Community Services) [11.4]: I move:
That this House do now adjourn.
LOOK AT ME NOW HEADLAND OCEAN OUTFALL
The Hon. JAN BURNSWOODS [11.5]: I regret that the Minister for Police and Emergency Services, given his interest on the previous occasion I spoke on this matter, is not present in the Chamber. Once again, and with great concern, I raise the issue of
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the sewage outfall at Look At Me Now Headland near Coffs Harbour, which is a classic example of proper planning procedures not being put in place, though an area of great environmental significance is involved, including the Solitary Islands. There is widespread community opposition to this construction, yet the Coffs Harbour City Council, which overturned a decision of the previous council not to go ahead with the outfall proposal, is pushing construction along at an alarming pace. Workers are being paid overtime to work into the evening and on Saturdays, though there is overwhelming reason to place an immediate moratorium on construction.
The Moonee Beach Nature Reserve Bill is foreshadowed for introduction in the Legislative Assembly tomorrow. When passed, it will cause the ocean outfall to be abandoned. In addition, an appeal by residents in the Land and Environment Court is to be heard on Friday. So why is the National Party dominated council going against the tide with the ocean outfall? It is a system that has not worked in Sydney, and will not work in Coffs Harbour. As recently as last month the Minister for the Environment admitted that the community-favoured Willis Creek option is environmentally acceptable and could go ahead. Yet the Deputy Premier, Minister for Public Works and Minister for Roads will allow funding only to cover an environmentally disastrous ocean outfall. What is going on in Coffs Harbour? Clearly the Look At Me Now Headland option is favoured by the Government - or more specifically Wal Murray and his National Party cronies, because they think it can be put in place quicker than any other option. Once in place their developer friends will be able to fast track through the council their grandiose plans to turn Coffs Harbour into the Gold Coast of New South Wales.
The public may not be aware, but the council, Wal Murray and the National Party are aware that a development company, which owns massive slices of land around Coffs Harbour, is advertising already that it will begin building 500 condominiums next year for sale to Japanese buyers. A translation of the Japanese glossy brochure states that its business outline is "Development and operation of golf courses, development and operation of holiday home resorts, development and sale of condominiums, development and operation of resort hotels, development and operation of fun parks". According to the development company, most constructions will either be complete or in the process of completion next year, despite the fact that no steps have been taken to submit the necessary rezoning and or development applications. The key point is: nothing of the magnitude planned by this development company could even be considered in such a small time frame without the ocean outfall.
Perhaps the Minister for Planning and Minister for Energy will inform the public of the big plan for Coffs Harbour. Residents of the area are being arrested each day while trying to save their environment, and simultaneously are being subjected to unnecessarily brutal police tactics. As of yesterday 230 people had been arrested, of which 90 per cent are residents of Emerald Beach and 98 per cent are Coffs Harbour residents. Grandmothers have been arrested for resisting arrest and inciting unlawful assembly - despite the fact that they were merely sitting at the protest site with other women. On one day at Coffs Harbour police station nine residents were subjected to illegal strip searches. On the same day a group of arrested women were confronted by an officer wearing a rubber glove who threatened to search them internally.
The Minister for Police and Emergency Services has done nothing to stop this harassment, except to cancel a planned visit to Coffs Harbour last weekend. One wonders what he had to fear. He would have done better to watch the actions of the
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police officers he so blindly supports. The Minister may be interested to know that at least 25 residents decided at a meeting last night to take legal action against police officers for wrongful arrest. As the Government is starving funds to the Ombudsman, the residents are left with little option but to wear the high cost of such legal action. It is likely that more residents will take action if they can find the funds to do so. Once again I call on the Minister for Police and Emergency Services and the Greiner-Murray Government to put a halt to construction work on the Look At Me Now Headland ocean outfall so that the range of wastewater options can be properly considered. At a time of environmental disaster from toxic algae on so many of our waterways in New South Wales it is more important than ever to make sane and long-sighted decisions.
BOURKE LAW AND ORDER
The Hon. D. F. MOPPETT [11.10]: I wish to bring to the attention of honourable members the detail of incidents that constitute grave miscarriages of natural justice, although in each case the letter of the law was followed. Though the incidents took place in the township of Bourke, they would be of interest to the residents of many townships throughout rural New South Wales. Mention has been made in the Federal Parliament of one of the incidents. I shall avoid using names lest I inadvertently identify the juvenile involved in one of the incidents. A businessman in the township of Bourke has, for a considerable period, been the victim of property break-ins, petty robberies and vandalism. Consequently he has suffered financially and has become quite anxious. He spent $6,000 to erect a security fence around his premises. That had the salutary effect of reducing the number of break-ins from two or three a week to one a month. Recently his premises were broken into again and some cash and the keys to one of his motor vehicles were stolen. Exasperated, the businessman, acting on advice given to him, tracked down an alleged culprit who, when confronted, admitted his involvement in the offence and agreed, after consultation with his uncle, to accompany the businessman back to his premises.
The alleged culprit agreed, by way of reparation, to make some attempt to clean up the premises. He authenticated his involvement in the break-in by retrieving the missing keys from a nearby tree. The mother of this 11-year-old child agreed with the procedure that was adopted. The businessman involved provided the child with breakfast. Subsequently the police agreed that the action taken by the businessman was fair and reasonable. However, on the insistence subsequently of the Aboriginal Legal Service the businessman against whom the offences were committed was charged with kidnapping and assault. Fortunately the extremely serious charge of kidnapping was dropped. The assault charge, however, was proceeded with. The businessman has suffered the indignity of having a criminal charge preferred and proved against him. He has outlaid of the order of $20,000 in legal fees and fines. He is a sadder but much wiser man.
The other incident involved an individual whose clothing was stolen frequently from his clothesline. When he saw some of his clothing being worn around the streets by a juvenile, he made an attempt to recover his property and to admonish the individual concerned. He recovered his clothing and offered the person some advice. Subsequently this man also was charged with assault. To date no action has been taken against the juveniles involved. I do not necessarily have any argument about that - there may be a better way to deal with them - but it is ridiculous that individuals who have had indignities and crimes committed against them should, because of the over zealous activities of local legal aid officers, become the victims of prosecution. Confidence in the administration
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of law in the region is low. This matter should be of concern to all citizens of New South Wales.
PINDARI DAM ENLARGEMENT
The Hon. ELISABETH KIRKBY [11.15]: The Government seems hellbent on proceeding with an eightfold enlargement of Pindari Dam to increase cotton production in spite of the disastrous condition of the Barwon and Darling rivers and frequent assertions that cottongrowing may be a major contributor to that problem. Given that neither of the two environmental impact statements for this proposal assessed explicitly the impact of the proposed enlargement on the water quality of the Barwon and Darling rivers, how can the Government claim that the proposal will not exacerbate the problems? The Government may be committing far more money to make the Darling River more toxic than to controlling the causes of the algal blooms. Construction of the enlargement has not commenced and should be delayed until any possible impacts on people and ecosystems downstream of the border rivers cottongrowing area has been assessed. Apparently the Minister for Natural Resources intends to announce the successful construction tenderer at a ceremony to commence the construction this Saturday, 7th December. I urge the Minister to postpone the ceremony, lest it be regarded by people along the Darling River as their death blow. They have cause for concern.
The supplementary environmental impact statement states that the average area of cotton irrigation between Boggabilla and Mungindi is expected to increase by 14,000 hectares, or more than 50 per cent, thereby taking an additional 75,000 megalitres per annum from the Macintyre-Barwon-Darling river system and decreasing the average flow at Mungindi by 9 per cent. This could bring total extraction from the river at Mungindi to an average of 370,000 megalitres, or 44 per cent of its average flow. How much worse will it be in a dry year when the dams trap all storm runoff from half the catchment and irrigators are allowed to pump into their massive on-farm storages all but a few thousand megalitres from any rise in the river level following storms in undammed tributaries? The Department of Water Resources intends, apparently, to allow the construction of such on-farm storages to continue unchecked until their combined capacity in the Macintyre Valley alone is five times the present capacity of Pindari Dam. Already the frequency of freshes in the Barwon River at Brewarrina, sufficient to allow fish to migrate over weirs and to flush the river, has been reduced by 35 per cent. No wonder the water quality has become foul. The Pindari proposal will make this a 40 per cent reduction in the frequency of flushing. But the proposed enlargement will not prevent the severe floods that wash nutrient-enriched soil from cotton and other farms into the river.
The supplementary environmental impact statement states that there will be a $1.7 million reduction in the value of cotton production by farmers along the Darling River, but there is no proposal to compensate them. There is no estimate of the cost of lost production from pastures in the flood plains that will be flooded less extensively or less often. I understand that the Mid-Darling Water Users Association heard of the exhibition of the supplementary environmental impact statement only one day before the exhibition closed and that its request for a late submission to be considered was refused. The Government is proceeding to ignore the plight of people dependent on the Barwon and Darling rivers by proceeding with this scheme to subsidise the cottongrowers in the electorate of the Deputy Premier without even pausing to assess the possibility of exacerbating water quality problems in the Darling. The environmental impact statements
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concede that the proposal will increase salinity in the Murray River and that groundwater under the irrigation area is extremely saline and could already be starting to rise. However, the proposed groundwater monitoring is grossly inadequate; there is only one monitoring bore every 20 kilometres. The irrigators will pay only $37.5 million, 20 per cent to 25 per cent of the capital and interest cost, leaving taxpayers to find about $120 million. Whatever happened to the Government's user-pays policy? The Government of the United States of America virtually stopped subsidising new irrigation dams many years ago. This Government should do the same. The money would be far better spent, if we can afford it, on improved catchment and river management so that existing rural production can be maintained.
The DEPUTY-PRESIDENT (The Hon. D. J. Gay): Order! The honourable member has exhausted her time for speaking.
Motion agreed to.
House adjourned at 11.20 p.m.