STATUTES AMENDMENT (PUBLIC SECTOR CONSEQUENTIAL AMENDMENTS) BILL

Second Reading

Adjourned debate on second reading.

(Continued from 19 November 2009. Page 3943.)

The Hon. G.E. GAGO (Minister for State/Local Government Relations, Minister for the Status of Women, Minister for Consumer Affairs, Minister for Government Enterprises, Minister Assisting the Minister for Transport, Infrastructure and Energy) (15:41): When last we sat, I sought leave to conclude my remarks. I have not received any further questions from honourable members to impede further progress of the debate. Mind you, if there are further questions we can, of course, deal with them during the committee stage. I would like to thank the Hon. Rob Lucas for his detailed analysis and contribution, and I look forward to dealing with the committee stage.

Bill read a second time.

Committee Stage

In committee.

Clause 1.

The Hon. R.I. LUCAS: I thank the minister and her officers for the answers to questions raised in the second reading. Those answers have been included in the minister's reply to the second reading, and I appreciate that and the further information that has been provided by government officers.

Given the structure and outline of the bill, I propose to make some general comments and ask questions at clause 1 and then, subject to that, probably refer to only one or two specific areas (mercifully) out of the 387 clauses in the bill.

The first point is that, in thanking the minister for her responses, I note the concession that the government has made that there are indeed non-consequential amendments included in this legislation, which is the point that I made in the second reading. The government's position, to be fair, is that it believes that they are of no significance but, essentially, that is ultimately a decision for the parliament and its members to take.

Whilst on this occasion in relation to the examples I do not have a different conclusion to the minister's advisers that the amendments are not of any great significance, the important principle remains that, if a bill is described to members in this chamber as being consequential to previous legislation and largely technical in nature, and if there is no reference at all in the second reading explanation of the minister in either the other place or this place that there are indeed a small number of non-consequential amendments, that is unacceptable practice.

It is the members in this chamber who ultimately need to make those judgment calls as to whether they are indeed significant or insignificant and, in the end, whether they agree or disagree. A minister's second reading explanation should explain what is in the bill. If 99 per cent of the bill is a consequential amendment and the government is taking the opportunity to tidy up a number of other matters in the legislation, again that is an entirely acceptable approach for the government to take.

Governments of all persuasions have taken that approach but in my experience have always advised the chamber and members that that is what is in fact going on: 'Ninety-nine per cent of this bill is consequential to the previous legislation; however, we are taking the opportunity to tidy up a number of other issues.' That ought to be described in the second reading explanation for all members. It should not be a requirement of members having to establish that and ascertain that and then bring that to the attention of other members in this chamber.

That is the first point, and I thank the minister for acknowledging that that is indeed the case: that there are amendments in this bill that are in no way directly related to the previous legislation. As I said, the government's position is—and I do not disagree with it on this occasion—that they are not significant issues of dispute but, as I said, ultimately that should be a decision for members to take. It is not a judgment call just for the government of the day to say, 'Well, we don't think it's important; we therefore don't need to draw parliament's attention to these particular issues in the second reading explanation.'

The second issue that the minister has responded to is the changes to the honesty and accountability provisions right throughout the very many clauses in the legislation. In her response, the minister says:

The honourable member questions changes to levels of penalties in relation to the honesty and accountability provisions. The time for debating the levels of penalties applicable for offences relating to disclosures of potential conflicts as compared to offences of acting dishonestly or entering into unauthorised transactions etc. was in 2003 when the Statutes Amendment (Honesty and Accountability in Government) Bill was before the house.

My first question to the minister is: is it not correct that, if this bill is not passed today, if the parliament delays this legislation or defeats it, the existing penalties that remain in very many statutes, such as the WorkCover Corporation legislation, would remain as the penalties would apply to the directors of the board of the WorkCover Corporation?

The Hon. G.E. GAGO: I have been advised that that is so.

The Hon. R.I. LUCAS: I thank the minister for that because that is indeed my view as well. In other words, whilst in 2003 parliament debated a possible and appropriate template that might be applied in relation to honesty and accountability provisions for government corporations and in other statutes as well, ultimately the final decision in relation to the appropriateness of changes can be taken only when you debate the changes to the particular pieces of legislation. Indeed, in this particular bill, the government—and the opposition has supported it—has, for a number of reasons, exempted particular pieces of legislation, such as the Essential Services Commission legislation and a range of other legislation I will not repeat; that is, even though there was this template discussed back in 2003, the government, for its own reasons and, as I understand it, having taken advice from some boards, authorities and others, has decided to exempt certain boards and authorities from these template provisions.

In this legislation, the government is now seeking to apply the template in relation to honesty and accountability to a whole range of other boards and authorities. As the minister has just acknowledged, if this bill was either defeated or amended, the existing penalties would remain.

So, I do not accept the minister's response in the second reading, which was, 'Well, you had the chance to debate this in 2003. You didn't raise any significant objections in 2003, so why on earth do you have the gall to raise an objection when we are debating it in 2009?' As I have said, the simple answer to that is that it is only through this final legislation—the legislation we are debating today—should it be passed, that we actually change the penalties and the honesty and accountability provisions in all these pieces of legislation.

We could choose as a parliament to amend the bill to exempt some of these acts, in the same way the government has already chosen to exempt, in certain pieces of legislation, certain bodies because it believes the penalties as it relates to those bodies, even though they do not fit the template, are nevertheless appropriate. That is entirely within the province and power of this chamber if it chooses to go down that path.

So, I point blank reject the government's position that in some way it is inappropriate to raise these issues in 2009—that, indeed, if the opposition had any concern about these issues, it should have raised them back in 2003. Of course, in 2003 we would not at that stage have known. I am sure that, if we had asked the questions of the minister at the time, 'To which statutes will you apply the template, to which ones will you not be applying the template and which ones will you be exempting?', we would have received the response from the minister, on advice from the officers, 'Well, at this stage, we don't know,' because, clearly, it has taken six years for parliamentary counsel and government advisers to go through the statutes and prepare this legislation, which is the follow-up legislation to the 2003 legislation.

So, if we had asked the questions in 2003, I am sure we would have received that advice, and one could have understood that response at that time. Again, I repeat that we reject the contention that, in some way, these issues should not be raised in 2009 and that they should have been raised years ago when these issues were first raised.

The significant issues I want to raise to highlight the general principles and about which I want to ask some questions relate to the WorkCover Corporation Act (and I referred to those in the second reading), and that is one of the very last clauses of the bill. I propose to make a few more general comments, and then I am happy for us to move through to the WorkCover Corporation section.

In summary, as I understand the government's advice (and we will explore this in detail when we get to the WorkCover Corporation), what we are being told is that, in relation to the current and future board members of WorkCover, the government has decided to do two things. One is to remove the possibility of a prison term for various offences, which exists at the moment, and the second is to provide WorkCover Board members with greater protection against being sued. Obviously, both those decisions provide greater protection to both current and future members of the WorkCover Board, and I will have some questions for the minister on that when we move to the particular clause.

Clause passed.

Clauses 2 to 370 passed.

Clause 371.

The Hon. R.I. LUCAS: I note that there are many other provisions where I could repeat this debate but, for the benefit of the committee and the expedition of the consideration of legislation this week, I do not intend to repeat the debate in all the provisions. However, the Motor Accident Commission has similar provisions, and there are others that have similar provisions as well.

My first question to the minister is: why does the government believe that the current penalty for WorkCover Board members in relation to conflict issues, which includes a term of imprisonment, is no longer appropriate?

The Hon. G.E. GAGO: The government believes that the standard reached on honesty and accountability provisions during the 2003 debate is the proper standard that should apply right throughout government, and that it should also apply to the WorkCover Board. There is no reason for that being dealt with differently.

The Hon. R.I. LUCAS: Again, without repeating my second reading contribution I did highlight that evidence has been taken in other fora of the parliament regarding allegations of conflict of interest in relation to a member of the current WorkCover Board. I hasten to say that the WorkCover Corporation and, as I understand it, the government reject those particular allegations. Nevertheless, the WorkCover Corporation is a significant body that, at the moment, presides over an unfunded liability of $1.1 billion. That has increased from just over $55 million in, about, 2001, and there are other significant issues which, obviously, now is not the time to debate. It has been involved in significant issues and contracts involving many tens of millions of dollars, whether they relate to claims management, legal advisers, actuarial advisers, rehabilitation service providers and a range of other contracts—as I say, up to the size of some tens of millions of dollars.

The government has chosen to exempt a number of other bodies and authorities from this template, and the minister says that that is appropriate. Can the minister explain why those other bodies were deemed appropriate for exemption and not the WorkCover Corporation, given its size and significance?

The Hon. G.E. GAGO: I have been advised, in relation to your concerns, that the WorkCover Board is a significant body and therefore somehow there is an implied statement that it should be treated differently. There are many other significant bodies, boards and authorities that perform very important functions in our community; in fact, I would hazard a guess and say that they are all extremely important.

In relation to your issue of exemptions, I have been informed that the real issue is that there are no other boards or authorities that have an imprisonment penalty for breaches in respect of honesty and accountability. So, we are simply applying the same standard across all of our boards that, as I said, I believe, all perform very critical and important functions for our community.

The Hon. R.I. LUCAS: The second aspect of the honesty and accountability provisions that I raised was the issue relating to immunity. The minister's response was:

The immunity provision for members of WorkCover is in the form that refers to an honest act or admission, but not extending to culpable negligence.

The response refers to the Motor Accident Commission and then states:

Both of these approaches leave the member open to being sued personally by a person who suffers loss.

So, the minister is advising that under the current accountability arrangements a WorkCover Board member is currently open to being sued personally by a person who suffers loss. Can the minister explain why the government believes that that accountability measure, which obviously is significant in relation to a person who serves on the WorkCover Board, is no longer appropriate under the accountability arrangements that the government seeks to impose?

The Hon. G.E. GAGO: I have been advised that, under section 74 of the Public Sector Act, which was debated in both houses recently, parliament decided that the immunity relative to official powers and functions that might otherwise lie against an individual lies against the Crown. This does not prejudice the rights of the Crown in respect of an act or omission not in good faith, and the same rationale is being applied to other bodies affected by this consequential amendment, including the WorkCover Board.

I am also advised that significant fines will still be available for conflict of interests offences, and imprisonment will be available for offences of dishonesty. These are sufficient accountability measures for the WorkCover Board, as for most other boards in government. The decision was taken that the right to sue be against the Crown and not against individuals, and the Crown can then take action against the individual.

The Hon. R.I. LUCAS: I thank the minister for that response. If I come back to the summary of the position, I understand that the advice the minister has now confirmed in the committee is that current accountability provisions which apply to WorkCover Board members are that possible imprisonment applies and that they can be sued personally by somebody who suffers loss, and the government has removed both of those or changed both of those current provisions.

I would assume that the individual board members of WorkCover would be delighted by the government's changes, because they significantly reduce the penalties and also reduce the capacity for them to be sued in certain circumstances. My question to the minister is: what consultation was conducted with the WorkCover Corporation board, and what was the response of the WorkCover Board to these changes? As I said, I am assuming they would have jumped in the air with glee over these provisions, but I nevertheless ask the minister to place on the record the WorkCover Corporation board's response.

The Hon. G.E. GAGO: I have been advised that the draft was sent to all agencies, including the WorkCover Board and that the WorkCover Board was consulted in the same way as all other agencies. I am not aware of any specific response from the WorkCover Board.

The Hon. R.I. LUCAS: I do not propose to seek to delay the committee, but I seek an undertaking from the minister responsible for the legislation to correspond with me after passage of the legislation to indicate what the formal response of the WorkCover Board was to the changed provisions. If the minister is prepared to give that undertaking, I am happy not to seek to delay the committee stage.

The Hon. G.E. GAGO: I just need to clarify for the record that the draft was sent to the WorkCover Corporation, not the board, and I am happy to accept the undertaking to follow up on a more formal response if one was received.

The Hon. R.I. LUCAS: I am assuming that, if it was sent to the agency, that means it was sent to the CEO, Julia Davison, and I would imagine a good CEO would bring that to the attention of the board, given that it was reducing the penalty, that is, removing the possibility of imprisonment for a board member, and also it was changing the immunity provisions as they relate to the board members. I would expect that the Chief Executive Officer, Julia Davidson, would or should have raised those issues with the board. In the end it may well be that the response came back via the Chief Executive Officer after consultation with the board, but nevertheless I am happy to accept the minister's undertaking to provide that response after the passage of the legislation.

In the minister's responses she noted, as she did in the second reading, that it was the government's view that the imprisonment penalty should be removed from the conflict provisions, but they have been retained for the honesty provisions. Can the minister explain why the government has kept imprisonment for the honesty provisions but has decided to remove the imprisonment penalty for what are, for some of us, very significant conflict of interest issues as they relate to the WorkCover Corporation?

The Hon. G.E. GAGO: I have been advised that the answer is as I have given, namely, that parliament decided during its debate in 2003 that that was the proper standard and that it should be applied right across government.

The Hon. R.I. LUCAS: The parliament agreed in the end with the position the government put, which I think is what the minister is saying. I am asking, now that I have raised the issue in relation to the WorkCover Corporation, why the government believed, when it introduced the 2003 legislation and why it retains the position now, that a penalty for an offence under the honesty provisions should be a prison term, but an offence against very significant conflict of interest provisions for a WorkCover Board member should not include a prison term.

The Hon. G.E. GAGO: I have been advised that at this point we are not able to expand on that answer any further without revisiting the whole of the 2003 debate. I remind the honourable member that, when the honesty and accountability provisions were being debated in 2003, I understand the opposition was generally supportive of those provisions. However, at the time it expressed clear concern that the provisions might be too draconian and would lead to good people not being prepared to serve on boards. We cannot have it both ways.

The Hon. R.I. LUCAS: One of the great joys of being in the Liberal Party is that you can have it both ways because we are a very broad church and, unlike government members, we are entitled, as we have discovered in recent days in Canberra, to express our individual views on legislation. The minister in response is quoting an opposition member in 2003, which is heartening, but I am actually asking why the government took the policy position in relation to removal of the term and not why an opposition member might have expressed his or her agreement to the issue.

I gather from the minister's response that she, not being the minister responsible, does not have the original reasons as to why the government chose to remove the penalty of imprisonment, and I accept that. If the minister, in the response coming back in relation to the WorkCover Corporation, has any further information to indicate why the government originally in 2003 took the position, rather than why an opposition member may or may not have agreed with it in 2006, I would be pleased to receive it, but I will not delay the proceedings of the committee any further on the issue. I thank the minister for her answers to the questions.

Clause passed.

Remaining clauses (372 to 387) and title passed.

Bill reported without amendment.

Third Reading

Bill read a third time and passed.