Wednesday 1 November 2006
GOVERNMENT BUSINESSES SCRUTINY COMMITTEE B 1998 –
Chair’s address followed by Speech by Kerry Finch
Mrs SMITH (Montgomery - Motion) - Mr President, I move -
That this House considers and notes the report of the Legislative Council Government Businesses Scrutiny Committee B.
Mr President, committee B of the government business enterprises scrutiny looked at the TT-Line, Transend and the Public Trustee and, as has happened in the past, members of the committee have taken responsibility to speak about different sections of the report that was tabled in the House. Before that happens, Mr President, I want to make a few overarching comments about the process of GBEs in particular.
I think everyone would accept in this House that there has been concern from time to time that we have some government business enterprises that almost see it as a disturbance of their day to have to come to Parliament and appear before a government business enterprise scrutiny committee and there have been at times attitudes come across that have been far from appropriate. In the years that I have been here an issue certainly has come up significantly often in government business enterprises, and that is the issue of commercial in confidence. When it has been expressed from time to time and there has been a discussion in that committee as to whether or not it is the case, there never has appeared to be any direction as to what processes people can follow if a dispute appears about commercial in confidence.
I recall a couple of examples from the past, Mr President, and one was when in the 2004 GBE process the CEO of the TT-Line was asked for a breakdown of the numbers carried on Spirits I and II on a quarterly basis in the 2002-03 time line. The CEO at that stage commented, 'We are in the realm of commercial in confidence. A lot of people want that information and we are not going to provide the figures'. That was one example and yet, interestingly enough, two years on, the numbers of people travelling on Spirits I, II and III were bandied across the media almost daily for a long period.
Another question that year that we asked was the number of beds used in the Edgewater Motel that is owned by the TT-Line that were private use as against those that were used by staff because it had been purchased in lieu of a hostel arrangement they were looking to build. Again, the issue was, 'No, we're not going to give you any figures. Who gets upset about what we're doing? Some motel up the road' were the words, 'It is commercial in confidence and we can't give you the figures'. Interestingly enough, an innovative member of the committee went to the premises in question, had a look at the premises, asked the question of the manager of the day and was given the figures without any particular worries.
I had a concern and certainly members of my committee had a concern, Mr President, that the issue of commercial in confidence was being utilised by some government businesses who do not think that they should have to appear before a parliamentary committee and yet we have other government business enterprises that love to come along and tell us about their business. They do it with great pride and great dignity because they have an exceptional story to tell. So I am not categorising everyone into the same boat. But in view of the issue of the commercial in confidence and how it was to be dealt with I spent a considerable amount of my personal research money and had a legal paper drawn up by a solicitor I had great confidence in on the issue of commercial in confidence. When he completed the paper and we were satisfied with the process at the end of the day we had a discussion on the utilisation of that paper and he made two comments. He said, 'You now need to decide what you want to do with it. You can either grandstand on the day of the GBEs by tossing it on the table if you so wish, or you can pass it to the minister concerned beforehand so the minister can have that paper and know where the process is'. Even though the media does not understand it, this House is not into the process of grandstanding and trying to get media points when we scrutinise government business enterprises.
Mr Parkinson - Except when it sits in Launceston.
Mrs SMITH - I made the choice to ensure that Minister Cox who was the first minister on our government business enterprise scrutiny committee had a copy of that legal opinion. I received it on the Friday, I gave him access to it on the Monday and I am pleased to say that before we started the process on the Wednesday Minister Cox had a short conversation with me that went: 'We will have no issues that we believe are commercial in confidence; we will answer any question put before us; the only request we may make is whether or not it can go into committee.' Of course the process with GBEs, if you want something to go into committee, is that one member can request that and as such that must happen. I gave the minister an undertaking that if he indicated there were sensitive issues that needed to be in committee I would be that one member who would request that of the committee and put it into that process. So it was pleasing to see that on a legal opinion the minister had access to he quite evidently had taken some advice -
Mr Parkinson - How much did this opinion cost?
Mrs SMITH - Do you really want to know? It cost $5 000.
Mr Parkinson - I thought you might say it was commercial in confidence.
Mrs SMITH - It is not commercial in confidence. It is documented somewhere quite clearly, I might say.
It was quite evident that the minister had quite appropriately got a legal opinion as well when he got a copy of it and had, I believe, taken an attitude that it had some solid basis and as such attitudes had to change. So we did start the day, Mr President, on what I call an exceptionally good note. We had a process of order of how we would deal with the process. We took the annual report; we took it in the sections of the annual report as it was presented, so as they presented their report we followed it through. The minister and his advisers were well aware of that and we commenced the day working through in a very orderly process.
I am sad to say that after morning tea, Mr President, the orderly process fell over. I think, considering the background of the chairman of TT-Line, he ought to have known, with his cricketing background, that there is always a second innings and you should be very careful how you attempt to manage the first innings.
I make that comment, Mr President, because it is here at this particular time that I want to take my opportunity for a second innings and to make some comment about the process that happened after morning tea. Mr Hall asked a question quite clearly:
'I will lead off with the financials. Obviously, that covers a raft of issues and the first question I have, Minister, is in regard to the Spirit III sale price details. Can you provide a full breakdown of the sale price, all costs associated with the sale, including the broker's fee, and inform the committee how the sale proceeds will be used?'
No big issue with that; a quite clear, appropriate question as the Spirit III had been sold and the information, the Premier had said, was in the public arena, and we wanted it broken down into those particular areas. Unfortunately, at that stage Mr Rogers took the opportunity again to bypass the question, if anyone likes to read Hansard, to spend a considerable amount of time on a diatribe against the member for Rosevears because the member for Rosevears had dared - if my information is correct and I believe it is - after a discussion with the Treasurer, to write to Minister Cox and to make a suggestion about how he believed the sale of the Spirit of Tasmania III could be managed. I think it is anybody's right in Tasmania, not just an elected member but any Tasmanian taxpayer, to write to a minister of the day and state an opinion. Mr Finch showed us a copy of that letter and it was copied to the Treasurer as well. So I think that certainly backed up the conversation the member for Rosevears and the Treasurer had about this and, quite rightly, the Treasurer directed Mr Finch to put it in writing to Minister Cox. That was the process that Mr Finch followed. Minister Cox responded to Mr Finch and explained quite clearly the position of the Government, and the position of the Government and the TT-Line Board was that they would stay with the broker.
That, Mr President, is where the process should have stopped. Unfortunately it did not and I am not blaming Mr Rogers, I might say. I think Mr Rogers was set up by the minister, to put it plainly, because Mr Rogers chose to take Mr Hall's question and to turn it around to get to the member for Rosevears to quote comments in a conversation the member for Rosevears had on the ABC about a process, to quote Mr Clifford who had a different opinion at a previous time about using particular brokerages to sell ships and to read the letter that Mr Finch sent to Mr Cox and to read the response. They will never learn. He then asked a question of the committee and wanted the committee to answer. This is the second time this has happened in the TT-Line process and you get sick and tired of having to remind them that we, the committee, ask the questions and they do the answering. It is unfortunate, Mr President, that this has happened twice.
Whilst he should have known better, I think, as chairman of a significant government business enterprise, I do not believe Mr Rogers is totally to blame because it is quite evident that he had to get the letters that were sent to the minister from the minister. The minister could have made a decision to go nowhere with that process, but he made the decision to hand those letters to Mr Rogers and then to allow him, with no discipline at all, to take the path that he took after morning tea on that day. If that is going to be the attitude of some of our government business enterprises, there is going to be continuing trouble. I think it is sad, having seen the attitude of most of the government business enterprises when they come to our committees and, as I said before, are very proud to talk about their business and how well they have done, that we have still, in the culture of the TT-Line, in its management, in its board and in the minister who has taken over some responsibility, an attitude that they cannot leave one particular issue alone and move on.
So I put on record, Mr President, my concern that Minister Cox chose this path. I say Minister Cox because there is no way Mr Rogers could have gone down this path if he did not have the authority of the minister responsible for the TT-Line to take the path they took at that time. Undoubtedly, in two years the TT-Line will be before a committee of this House again. The TT-Line, its board, its management and its ministers need to learn that we have rights under our act and we will utilise those rights and it is expected, I would think, by the Government and certainly by the community of Tasmania, that we are here to scrutinise those issues.
Members will get to the issues surrounding the scrutiny of these three enterprises, but I thought it very important that we put on notice, through Hansard, that we have had two episodes of problems in our committee. I was exceptionally disappointed when we started off so well with the TT-Line and their attitude was, quite clearly, very pleasant and very open and prepared to answer the questions we put forward. They chose, when Mr Hall asked a very straightforward, clear question that you would expect to ask about the financials of a government business enterprise and expect to get an answer, to utilise the time, totally outside the strictures of what the question was, to attack a member of this House. I think the issue is serious enough, Mr President, that I felt I had to put it on notice, so government members in this House, some of whom have the responsibility as shareholders of this particular business, will hopefully pass the message back that if that attitude continues with them our attitude as a government business scrutiny committee will harden towards that particular government business enterprise and any other enterprise that wishes to take a very inappropriate path.
I think they should take an example from places like Transend who came in with some very good story after hosting us with some visits to some of the upgrades they are doing and from the Public Trustee who came in with a very good attitude. We have had Forestry and other GBEs that like to come and sell their story. They are not always good stories if they are struggling with the finances. It could have been a lot worse for TT-Line, they should have realised, Mr President. They could have been downstairs being scrutinised where it would have been nothing more than a brawl to see if you could get a headline. It is not something we expect within our committee system in this House. It is most inappropriate of the TT-Line and I hope that the message is clearly delivered to Minister Cox. I am sure that the other shareholder minister has taken note that we are concerned about their attitude. I presume their processes will change and their attitude towards having to come and be scrutinised by committees of this place at particular times. I hope we do not see a repeat of the process that we saw from the TT-Line after morning tea when we scrutinised them.
Ms Forrest - Did you get an answer to the question in the end?
Mrs SMITH - It took quite some time to get to the stage of getting the answers and because of what happened I think all members were not entirely satisfied with the financial answers on that day because it did throw the whole process, a process we had set in place, a process we had been open and honest about. They had an agenda so they were well aware as well how we were going to work through the different aspects of that particular scrutiny process. We had been open, we had been honest, we had been fair and reasonable. We could have played the game in the same way as another place does, Mr President, but we chose not to do that and I was disappointed for myself and for the committee at the attitude taken by the TT-Line.
My only advice for Mr Rogers is that he really needs to chart his own path. He came into this place after the Auditor-General's report and I was very impressed with the way he was up front and honest in taking on those 48 recommendations and telling this House at a briefing how he would be dealing with them. We did not expect what happened at our government business scrutiny process and it is not something that I will expect from TT-Line or any other government business enterprise in the rest of the time I might have in this place, Mr President.
Mr Parkinson - You would prefer him to play with a straight bat.
Mrs SMITH - Absolutely, and to always remember there is another innings.
I will leave it to other members of the committee to make their contributions. They have taken responsibility for different parts of the scrutiny process and they will make their contributions.
GOVERNMENT BUSINESS ENTERPRISES SPEECH
Mr FINCH ( Rosevears) - Mr President, I am going to talk in detail about TT-Line but what I want to do first is speak in reference to our hearing of evidence provided by the Public Trustee.
It is clear that the Launceston office of the Public Trustee has had problems. Most complaints have been in relation to the Launceston office where staffing issues now appear to have been addressed.
Mr Dean - Similar to the university?
Mr FINCH - We are working on that.
The Public Trustee CEO, Mr Peter Maloney, spoke of previous staff instability which seems to have been corrected partly through a reclassification of all positions. Evidence provided on the running of the Public Trustee indicated to me that it is well managed and it is an efficient organisation which does not intend to rest on its laurels. It is clear that its role is ever changing to meet the needs of a changing population and there will be more of that in the future, particularly the forecast increase in financial administration orders partly because of an ageing population.
It is apparent from the evidence, Mr President, that far too many people are dying without leaving a will. This can be a costly business and can result in situations being unfair. There seems to be no easy solution. Many people do not want to face making a will because they do not want to face the fact that they are ultimately going to die. That situation makes the work of the Public Trustee even more important.
One problem which emerged, and it has been a problem for many years, involves intestacies where there is a house involved. The situation concerning a surviving spouse compared to that of the children can be a fraught one. This is expected to be addressed by a foreshadowed administration probate act. Mr President, I would urge the Government to expedite this.
Just to turn now to the GBEs in general terms, it is understandable, Mr President, that there are some continuing misconceptions about government business enterprise hearings demonstrated both in the media and among the general public. After all, GBEs are relatively new and subject to government Media Office spin. This year's hearings received a mixed response in the press, some of it misconstrued and some of it the product of journalists who seem to have been bored by the process.
Mrs Smith - They don't know what the process is and they don't understand our House.
Mr FINCH - However the work of this House was well recognised by the Mercury in an editorial soon after the GBE hearings and I would like to quote from four paragraphs towards the conclusion of that editorial:
'Because of the smaller lower House and therefore the greater pressure on all members and ministers in particular, the Council's importance as a House of review has been considerably enhanced.
Its committees serve a useful function, something that even its harshest critics would acknowledge. Today with the complexity of government business carried by a small executive arm that function is even more vital to the interests of Tasmanians.
The upper House has responded to the concerns of the electorate, particularly in keeping an eye on the Lennon Government during its horror run since the election.
Given the Government's performance there is certain to be more opportunities for independent-minded MLCs to flex their muscles.'
While members are probably familiar with those words, they do bear repeating.
Mrs Jamieson - They do indeed.
Ms Forrest - Say it again now, off you go.
Mr FINCH - Read Hansard.
The basic role of GBE hearings, Mr President, is obviously to bring out in public facts about the running of the GBEs that would not come to light in the normal course of events. To be successful in that there needs to be consultation and some coordination of lines of questioning. I believe in this respect that our 2006 hearings were a considerable improvement on previous years.
Mr Parkinson - Except they were a bit late.
Mr FINCH - That is right, and we have some way to go, and obviously unimpeded preparation time is essential. At this stage, too, I would like to thank the Chair of Committee B, the honourable member for Montgomery, for the way that she conducted the business. Certainly a strong and quick-thinking chair is of inestimable benefit in conducting these hearings effectively, particularly in some of the situations we found ourselves.
Mr President, I have not always had a smooth run with the GBE hearings and there sometimes seems to be a tendency to play the man rather than the ball. This year's hearing on the TT-Line was a case in question.
Mr Dean - They didn't let you down.
Mr FINCH - No. Before this year's hearing I was deliberately given hints from several sources which I interpreted as an attempt to intimidate me on the issue of the TT-Line's buying and selling processes. I felt further intimidated during the hearings themselves, as I will detail shortly.
I would like to suggest at this stage, Mr President, that the Chairman of the TT-Line might attempt to bully his commercial competition rather than Tasmanian taxpayers through me. As we heard detailed by the chair, when committee B reached item 4, financials, on 26 July, the honourable member for Rowallan kicked off with a fairly straightforward request for the full breakdown of the final sale price and all costs associated with the sale of Spirit III, including the broker's fee. This, for no apparent reason, released a very confusing and irrelevant response from the TT-Line chairman when he was invited, as the minister put it, to run through the process that occurred and the final outcome. Mr Rogers responded by saying that he wanted to clear up some issues.
The chairman of the TT-Line began with an interview that I did with the ABC's Tim Cox on 6 June this year. I had been asked to appear on the morning program to talk about the buying and selling of the TT-Line ferries, some public concern about that process and suggestions that I had received, or how it could be improved. Management of the TT-Line seemed to take exception to a suggestion by a caller to the program, not prompted by me, that perhaps Bob Clifford of Incat might lend his expertise to a Tasmanian committee to buy and sell ferries. I stress, the suggestion to use Mr Clifford was from a radio caller and my response to that when it was put to me by Tim Cox was, 'Why wouldn't you?'
Mr President, the chairman, Denis Rogers, was adamant that Mr Clifford's expertise would not be called upon and he was at pains to quote a letter from Mr Clifford about that suggestion. It seemed that Mr Clifford was out of Australia for the Tim Cox interview, but he must have been informed about it and found it necessary to write, at some length, ridiculing the suggestion of a Tasmanian committee and praising the expertise of Mason Shipbrokers. One can only surmise as to how Mr Clifford received his information and, more importantly, one can only assume that he must not have been told the context in which my statement was made, and that is sad. I make no suggestion, Mr President, that Mr Clifford was, as they say, put up to it. However, Mr Clifford's views about buying and selling ferries, quoted by Mr Rogers, were very strangely at odds with views that he expressed in a letter e-mailed to me last year. I quoted Mr Clifford's views to the closed Public Accounts Committee hearings last year and I will repeat a summary of Mr Clifford's views here.
Mr Clifford said that I was right to question whether the State Government received good value when it bought Spirits I and II because their owners were, as he put it, 'On the skids at the time.' He said he knew many in the marine industry who believe that the price was extraordinarily generous. He also noted that the ships suffered mechanically and structurally, through their early life, with the heavy emphasis on shipyard faults. Mr Clifford was concerned about the ongoing capital cost to the Tasmanian people. He spoke of a 300 per cent increase in capital cost, a similar increase in crew cost and a massive increase in fuel costs, probably in the order of 400 to 500 per cent.
Mr Parkinson - It's funny how they made good profits, isn't it?
Mr FINCH - Very prophetic, Mr President. I cannot help thinking that if Mr Clifford was a racehorse and not a ship builder, one could say that he had been nobbled between writing that letter and the views quoted at the GBE hearings this year by Mr Rogers. At those hearings, Mr Rogers was indeed in a letter- quoting mood. He next quoted a private letter from me to the minister and also Mr Cox's reply. Before reading my letter, Mr Rogers said, and I quote from the Hansard:
'I propose to read them. I again have sought and obtained permission to do so.'
Mr President, Mr Rogers certainly did not seek permission from the writer of the letter to read it before the hearing and one wonders whose permission he did seek.
Mrs Smith - The person he wrote the letters to?
Mr FINCH - I point out at this stage, as mentioned by the chair of our committee, that I sent the letter to the minister on the advice of the Treasurer, who suggested that I put any perceived public concerns about the ferry-selling process to the minister. The minister's reply to me, dated 21 June, seemed to deliberately misconstrue my letter. For example, he spoke of 'your disquiet over the method of handling the sale of the Spirit III.' I had been at pains in my letter to emphasise public disquiet and public concerns over the buying and selling of our ferries. Much of the letter then was a justification for the decision to sell Spirit III which I had in no way questioned. The minister, Mr Cox, referred to my questions about the purchase of Spirit I and Spirit II to the GBE hearings previously, and he went on:
'It is also true that the Public Accounts Committee investigated your claims. What you do not state is the Public Accounts Committee found the claims were not substantiated.'
This is, of course, not the case, Mr President, and the record needs to be put straight now. What the Public Accounts Committee concluded was, and I quote:
'After full consideration the committee has no further role in the matter of the purchase of Spirits I and II as raised by Mr Finch.'
Therefore again my statements have been misconstrued and one can only ask the question, why? After fully quoting the minister's letter in reply to mine, Mr Rogers took the unusual step of putting a question to the minister through the chair and I believe that created an historical precedent. It had never happened before, and the chair hopes it will not happen again.
Mr Rogers wanted to ask Mr Cox if I had reported and provided any evidence of hidden commissions to the Tasmanian police, a question to which Mr Rogers already knew the answer was negative. This seems to be a response to a generalised statement in my letter that some brokers had been known to ask for a ship to be prepared for sale with a list of work involving hidden commissions. My generalised statement went no further than that, but seems to have hit a nerve.
I am happy to report that after 15 minutes of irrelevance, the member for Rowallan did finally receive a response to his request for a breakdown on the selling price and costs. Let us hope that it will be some time before the TT-Line is involved in the next buying and selling round. As political commentator, Richard Herr, has said:
'This year's GBE hearings as in previous years has produced as much heat as light.'
That is not our fault, Mr President. We concentrated on obtaining light not heat. As one school motto in the south of the State says: 'Light come visit me.' Well, let us not stub it out with petty games. I would like to stress that it is Tasmanian taxpayers who should and do drive the GBE scrutiny process . They come to us with their questions and concerns and we put them to the relevant people. It is and should be a bottom-up process.
Mr President, not withstanding some tangential activities like the one that I have outlined involving the TT-Line, it is clear that the GBE hearings are establishing themselves as an important part of the role of this House. I am sure we would all support a vote of thanks to the Premier who, as Deputy Premier in 1988, expanded the scrutiny of government business enterprises to the Legislative Council.