SELECT COMMITTEE ON CERTAIN MATTERS RELATING TO HORSE RACING IN SOUTH AUSTRALIA

The PRESIDENT (21:11): I remind members speaking on this matter that a number of court cases are pending and a number of charges could be laid on individuals involved—

The Hon. T.J. STEPHENS: Mr President, are you saying 'could be laid'? Are you saying that I have to worry about charges that might be laid?

The PRESIDENT: Order! The President is talking. I remind members to be very careful.

The Hon. T.J. STEPHENS (21:11): Thanks for your guidance, Mr President; it is always very welcome. I move:

That the interim report of the select committee be noted.

I am pleased to speak on the progress our committee has made to date with its deliberations. The committee has resolved to present an interim report as we would be unable to finalise deliberations before the rising of parliament given the large volume and value of evidence presented thus far. We are still some way off from presenting any conclusions or recommendations. I offer this report as a valuable reference point and an account of the evidence to date.

I know that you, sir, and all committee members share my enthusiasm to report on the committee's progress to this point. This is an important select committee—a good select committee—and I know that those involved in the racing industry and the community in general appreciate the establishment of this committee.

The Hon. R.P. Wortley interjecting:

The Hon. T.J. STEPHENS: Was that an interjection, Mr President?

The PRESIDENT: Order, the Hon. Mr Wortley!

The Hon. T.J. STEPHENS: Thank you; I appreciate your protection, sir. This committee gives people the opportunity to raise their concerns about the racing industry in an open and transparent way. It is an industry—and let us not beat around the bush—which has been dogged by controversy in recent times. It is an industry which had lost the public's confidence to some extent.

The committee was established to inquire into and report upon the sale of Cheltenham Park Racecourse; rezoning of Cheltenham Park Racecourse; the relationship of decisions made in connection with the sale of Cheltenham Park Racecourse with proposals for the redevelopment of Victoria Park; matters of corporate governance within the South Australian Jockey Club up to and including March 2009; the role of Thoroughbred Racing SA in relation to the above matters; matters of corporate governance within Thoroughbred Racing SA up to and including March 2009; and other relevant matters.

In March when the Liberal opposition sought to establish this committee, I made the following comments:

Thoroughbred Racing SA Chair Mr Philip Bentley has confirmed that matters of concern prior to the November 2008 membership issue had been raised in a draft of the Lipman Karas review but had been omitted from the final report. He also confirmed that corporate governance concerns had been raised with him some two years ago. We need to know more about those concerns and Mr Bentley's response to them. In the period 2004 to 2008 key commercial decisions have been made that involve the South Australian Jockey Club, TRSA and the South Australian government. There was also a review of racing commissioned by the Rann government in 2006 and conducted by Mr Philip Bentley where concerns raised were not tested or verified by him.

Decisions made relating to the sale of Cheltenham, the restructure of racing's administration, the proposed and then cancelled development of Victoria Park and the payment of funds to develop Morphettville are all entwined.

I stated that the Lipman Karas review has merely 'opened the door' to the activities of the past five years and went on to say:

The last five years or so has seen racing go from a three-track business to a single track enterprise where major decisions have been driven by and influenced by a small group of people, including racing minister Michael Wright.

In attempting to establish this committee—a move strongly opposed by government members, I might add—I stated that there had been a rather large cloud hanging over racing in this state. The opposition's intention was to move for the establishment of a select committee to provide people with the opportunity to come along and have their say with regard to racing in an open and transparent way. This has been occurring to date, and we have learned a number of things.

One of the most alarming statements made to the committee was that the racing minister was allegedly well aware of the controversial membership drive within the SAJC. Former jockey club chief executive, Mr Steve Ploubidis, appeared before the committee and advised us that he had spoken to the minister at a function three weeks before the election. Mr Ploubidis said:

He asked me if the right people were going to be elected. I mentioned to him that there was a very strong membership drive of young members and that the sponsors were looking at sponsoring those young members. His comment was, 'well, that's what happens in the Labor Party all the time...just make sure they vote.'

The committee has given the opportunity to minister Wright to come along and give his own version of events and respond to these allegations, but he has refused to do so, to date. The minister was quick to publicly deny the allegation but has been unavailable for questioning. Unfortunately, the racing minister does not support our committee and the work we do.

We also learnt during the very same meeting when Mr Ploubidis appeared that, according to Mr Ploubidis, TRSA chair Philip Bentley knew about the membership drive. Mr Ploubidis informed the committee that Mr Bentley was aware of the 'strategy to increase membership' and gave his 'total support going forward. He took a keen interest in it,' he said.

At that point I would like to read a letter which was sent to the committee and which was received and published. It says:

Dear Mr Stephens,

I request that the following statement(s) is added to my evidence as given on 23^rd October 2009.

In relation to your question 'Was minister Wright aware of the membership drive that you people had embarked upon?' (Ref 654) I wish to add the following:

After advising the Minister of the membership drive on Melbourne Cup Day, I distinctly recall telling Bentley (on the same day) that I had a discussion with the Minister regarding the up and coming election, and that during this discussion I told the Minister about the young members drive and the fact that they were being paid for by sponsors.

Bentley was surprised that I had told the Minister and I distinctly and precisely recall him (Bentley) saying, 'you didn't, did you?' I responded by stating that I did not think it was anything to hide and therefore nothing wrong with my comments.

Upon reflection, it appears that Bentley was annoyed that I had this conversation with the Minister because it linked Bentley with what the SAJC was doing (membership drive). Now that the Minister knew it also exposed Bentley that he was party to the strategy, by simply being aware of it and condoning it by not taking any action!

During the course of being interviewed by Lipman Karas, I recall making a statement that Philip Bentley and a high profile government member (Michael Wright) were aware of the strategy to increase membership, particularly young membership.

However, given the focus on this strategy by Lipman Karas and their intensive investigation, the detail attributed in the Lipman Karas report pertaining to this matter (and the previous Supreme Court action instigated by Spear) I was most surprised that in the final Lipman Karas report, that there was no mention of this evidence forwarded by myself.

In fact, I believe that it was also omitted from the transcript.

Lipman focused on all parties involved in the membership drive, commented on their involvement, but failed to make mention of Bentley or the high profile government official.

I was very annoyed and indeed suspicious when I read the report that this was not included.

I was also surprised that the Independent Gambling Authority (Mr Chappell) came out strongly in the media defending Philip Bentley and accepting Bentley's rebuttal of my statement. Mr Chappell's stance clearly was based on the fact that Bentley had told him that he was not aware of the membership drive, and refuted the fact that I had discussions with him, both in Adelaide and Japan regarding the membership strategy.

Again I found it unacceptable that just because Bentley had advised the IGA of my comments earlier, and proceeded to deny my claim, the IGA (Chappell), which its main focus is probity, simply accepted his rebuttal without questioning me on this issue at all.

When I was summonsed to give evidence to the IGA (18 May 2009), I, under oath stated that Bentley was aware of the membership strategy. The IGA Board, immediately, without any discussion, dismissed my comments as a, and I quote 'a smoke screen.'

Again I found this total disregard of my evidence to be rather odd and again led me to believe that the whole issue regarding the affairs of the SAJC, the investigation by Lipman Karas and the final outcome was indeed suspicious and this outcome in itself requires investigating.

Yours sincerely, Steve Ploubidis.

What is just as disturbing as Mr Ploubidis' allegations about the racing minister and Mr Bentley is that Mr Ploubidis has alleged that Mr Bentley allowed Mr Ploubidis to work on the Bentley report into racing prior to its release. Mr Ploubidis revealed, 'There wouldn't be a day that went past without us strategising.' Mr Ploubidis went on to say that 'he emailed me a marked up version of his report before it was released and given to the minister'.

On 9 September this year, former TRSA chief financial officer, Mr Steven McGregor, also backed up this claim in his evidence to the committee. This is a report for which Mr Bentley was paid more than $100,000 and the same report which recommended a truly independent board, and yet Mr Bentley, a close friend of the Premier, ended up as chairman. Mr Steven McGregor also told the committee that he was also surprised by this move, just as many people in the industry were. Mr McGregor said:

...from a corporate governance perspective, it didn't read well to have an author of an independent report who recommended a change in board members would then get a job on the board—

and then be the chairman no less. Mr Ploubidis also detailed that Mr Bentley potentially discussed cabinet submissions with him. He said:

What I did have was a document, a briefing paper that was prepared by Philip Bentley which I had a reasonable amount of input into. If it is a briefing paper I assume it goes to senior Government Ministers about where we go with the issue of Cheltenham, Victoria Park and the future of racing.

Mr Ploubidis also refers to sensitive emails which were confidential in nature and which Mr Bentley used to send to him. Certainly, what we have discovered from Mr Ploubidis's evidence is that he and Mr Bentley enjoyed an extremely close relationship until it all turned sour.

What this committee has discovered, through evidence presented to it, is that Mr Bentley's name has come up quite a lot, and one could say that his expertise within the racing industry has been questioned more than once. On 5 August, Mr John Glatz, Chair of the South Australian Racing Clubs Council, remarked, 'I had met Philip before and I had never had a problem with him but I did check up with lots of racing clubs in Victoria that he had had involvement with and I didn't get a very good report back.'

Mr Bentley's report has also been discussed in detail, and witnesses have expressed serious concerns about the report. Again, on 5 August, Mr Glatz stated that his organisation 'had grave concerns with some of the content of the Bentley report. We believe it was flawed'. Steven McGregor also advised the committee of his concerns with the report when he appeared.

Former prominent Labor MP, Mr Rod Sawford, stated on 4 August that the report was 'perfunctory and at best poorly received (and deservedly so) by the media. It was a disappointing document, it missed the point'. It must be noted that Mr Bentley had also been asked to attend the committee but, to this point, he has not made himself available.

Other evidence we heard as a committee revealed concerns about Mr Bolkus and his role as a lobbyist for the SAJC. Certain witnesses have raised concerns about conflicts of interest affecting Mr Bolkus in his role. Representatives from the Cheltenham Park Residents Association, Mr Rod Sawford, and SAJC Board member, Mr Bill Spear, all expressed their concerns in committee hearings about Mr Bolkus' work. They raised concerns about Mr Bolkus being involved as a lobbyist for the SAJC while he was also Chair of the Stormwater Management Committee.

I have to add that, as a committee member, I was surprised by comments that Mr Bolkus only ever provided verbal reports to the SAJC, even though he was being paid a significant amount of money by the organisation as a so-called success fee. In evidence presented by Mr Ploubidis on 23 October, he stated that Mr Bolkus received a $125,000 success fee. This payment related to Mr Bolkus successfully lobbying for the sale of the Cheltenham Park racecourse.

On 9 September this year, the former financial officer, Mr Steven McGregor, told the committee that he understood that Mr Bolkus gave verbal reports of progress instead of written reports. One would assume that, given the amount of money being paid to Mr Bolkus, it would be expected that detailed written reports would be provided, rather than verbal reports.

As our interim report states, the way the conflict of interest declarations were made by Mr Bolkus, the absence of written reports and the absence of a request for a written report are all matters of corporate governance which therefore relate to the committee's terms of reference. I certainly think that, to date, the establishment of this committee and the work it has undertaken has been more than justified.

I also indicate that Mr Bolkus has been invited to appear before the committee, yet he has not made himself available at this stage.

I would like to thank all the witnesses who freely gave up their time to appear before the committee and those who sent in evidence and submissions. This is a wide-ranging committee. We have heard many different points of view and, at my attendances at race meetings throughout South Australia, I have been thanked for making sure that we are helping to clear the air about racing. We actually have a new committee on board that seems to be working extremely well together, and the future of racing in this state looks very bright to me. This has been a dark period, and I am looking forward to the committee continuing its deliberations in the near future and to working with all members of the committee towards achieving a good goal, that is, for the prosperous future of racing.

The Hon. R.L. BROKENSHIRE (21:25): Mr President, I will be very careful with the few words that I have to say based on your wise counsel. Notwithstanding that, I do want to say a bit. I think it is unfortunate that this committee has had to bring down an interim report. Had we not been going to an election and we were able to get in all the witnesses that the committee believed should come before it, I believe there would have been a very interesting report, indeed.

While I know there will be debate on whether or not committees generally should be approved, after the election—and by then I would expect court cases and so on to be finished—this is one committee that should be reconvened for the best long-term interests of the racing industry. All the witnesses and evidence should be put in the public arena through the parliament. I personally admit that I am not into racing at all, but I do come from a background where my father and grandfather were involved in training racehorses, and I know that it makes a significant economic contribution to the state.

I know also that the racing industry has some problems at the moment, but I hope that the new board of the SAJC can improve the economic and growth opportunities for racing. It will have to do a lot of homework on even base management. Some people will not like me saying this with respect to the SAJC, but we have all been to kindergarten AGMs, school AGMs and Neighbourhood Watch AGMs, and their books are better kept and much more transparent than what I have seen in the history of the finances of the SAJC.

The racing industry is always coming to the government of the day wanting more—and I say that with respect not only to this government but also to previous governments. I sat around the cabinet table when it wanted more. This government has also given the industry more. The racing industry needs to clean up its act, and we must assist it in any way we can in the future interests of the industry.

I do not want to talk about individuals and I do not want to cause any concern whatsoever in relation to possible sub judice matters. However, with respect to the Cheltenham Park Residents Association—and this is one area that I can talk about that is not before the court, or pending—one thing that I have seen in the evidence so far that is absolutely clear to me is that the residents of Cheltenham and surrounding areas have been totally done over by the decision to rezone Cheltenham. They wanted that area kept as open space, incorporating a significant stormwater harvesting and recycling project. Clearly, that has not happened. They were let down, and they were misled. They were promised before elections that there was no way whatsoever that Cheltenham would ever be considered to be sold, but what did we see soon after the 2006 election? We saw a total backflip by the government, and we now have a situation where all those fine people, who are extremely limited as it is with respect to open space in the western suburbs, are seeing the Cheltenham Racecourse actually being cut up into housing blocks. Without pre-empting any of the other evidence that may come up in the future, that one group of people who have absolutely been misrepresented and should have been treated better are the residents in Cheltenham and surrounds, and all those people who made those commitments to them have a lot to answer for.

Having said that, this is an interim report, and I believe that this is an area where the parliament, and particularly the upper house, has a role in the future to ensure that we see a sustainable racing industry—a racing industry that can stand on its own two feet—not a racing industry that has to come back to government every few years saying, 'Premier, minister, we need millions of dollars more.' They have to become sustainable. With that, I support the interim report and congratulate the members, particularly the chairman, because the facts of the matter are that it was probably the most difficult committee I have sat on for a chair to manage.

The Hon. R.P. WORTLEY (21:31): As you would realise, Mr President, we opposed the formation of this committee because we believed—and this is how it turned out—that this is just another political witch-hunt in search of sleaze and innuendo. As members would be aware, at no time did the chair have the confidence of the full committee. He had to come to the parliament and beg them to put him in there and pick him for the chair, so he is the only chair I know of in the history of this parliament who has been forced on a select committee as its chair.

I am amazed that he relied on the witness testimony of Mr Ploubidis and Mr Glatz. Both were on different sides of the warring factions in the racing industry and have been involved during one of the biggest declines in the racing industry in the history of this state. Both of those men have used this committee to slander people under parliamentary privilege. Mr Ploubidis had two hours when he slammed and poured mud over every single witness who had given evidence. Mr Ploubidis made those outrageous statements against the minister and Mr Bentley in regard to knowing about the membership. It was obvious that Mr Ploubidis had an axe to grind, and he used the committee to make allegations against a minister of the parliament and Mr Bentley.

At the end of the day, it will be Mr Ploubidis's testimony against that of Mr Bentley and the minister. Both of those people—Mr Bentley and, in particular, the minister—have not given evidence because they have to sit back and wait until all the evidence is given and then give their evidence. We knew that from the very beginning. It was one of the reasons that both the Labor members on the committee opposed the tabling of this summary of evidence and interim report. We knew, and so did the whole committee, that it put the minister, Mr Bentley and Mr Bolkus in a very unfortunate position of having been slandered under parliamentary privilege and not having an opportunity to refute the evidence.

The Hon. T.J. Stephens interjecting:

The Hon. R.P. WORTLEY: I have been asked by the honourable 'Mr Forced Upon Us' chairman of the committee, the Hon. Mr Stephens, whether they have been invited but, as I have stated, why would a minister give evidence rebutting information when there will probably be more evidence? Mr Ploubidis has always said that he wants to come out, and allegations like that from Mr Ploubidis will probably be given again. It is only logical that the minister would wait until the evidence and all the allegations are upfront, and then they will come along and give their rebuttal.

For you to come in here on the last private members' day before an election with all this quite slanderous evidence, evidence that was given under parliamentary privilege, and slander and defame a minister is absolutely disgraceful. It is an abuse of the parliamentary committee system. That is why there is so little respect for these committees, because you constantly abuse it.

Let us look at the history of this committee. First of all they were going to have five members on the committee, but then the Hon. Mr Darley decided he wanted to get on it, and he had the numbers. So what did you do? You decided that you had better increase it to six, but then you found out that you did not have the majority support of the committee to become chairman. So you then came into parliament—and I think this is a precedent—and said 'I don't have the majority support of this committee; I want you to impose me on the committee.'

This has been one of the worst run, most politically biased and partisan committees that this parliament has probably ever seen—or at least this century. It really is a shame that you will stoop to such a low depth, to come in here and malign a minister who has done nothing but help the racing industry and put him in a situation where he cannot defend himself at the time. You come along before an election and use what are probably two of the most unreliable witnesses we have heard up until now as evidence.

I notice that you did not mention Bill Spear. Bill Spear was probably one of the reasons we had this committee; it was he who led the revolt against the SAJC, and the court action, as well as the re-election of a whole new SAJC committee. Yet you mention him very little; you actually based most of your speech on two witnesses who were the most unreliable of the lot. You ought to be ashamed of yourself. I think you have done a shocking job as chairperson, and I think the public and the parliament should treat your evidence with the contempt it deserves.

The Hon. R.D. LAWSON (21:37): What a deplorable contribution we have just heard from the Hon. Russell Wortley. Perhaps he should have read it, as he usually reads his material—although apparently he could not get anyone else to write his speech this evening.

The PRESIDENT: Order! I remind the honourable member that he should stick to the report. Obviously the Hon. Mr. Wortley's speech had some effect on you.

The Hon. R.D. LAWSON: The manner in which he abused the defenceless but distinguished chairman of the committee, who did a sterling job in controlling—

Members interjecting:

The Hon. R.D. LAWSON: He controlled a disruptive minority who did—

The PRESIDENT: I remind the Hon. Mr Lawson that he should be careful, and not mislead the council.

The Hon. R.D. LAWSON: —everything it could to confuse the issues but who were an abject failure in that desire. The public of South Australia saw exactly what the testimony was, because the media were present during a number of the important hearings of this committee.

I am glad that the Hon. Russell Wortley mentioned Mr Bill Spear because it was Mr Spear who shone a spotlight on the way in which business is done in South Australia under the Rann Labor government. It was he who revealed that, unknown to the board of the South Australian Jockey Club, Nick Bolkus had been engaged to secure ministerial approval to a change in the status of the Cheltenham land to enable it to be sold. Mr Bolkus had a couple of meetings with ministers and, would you believe it, as a result of those meetings the necessary decision was made and Mr Bolkus was paid $150,000. What an absolute disgrace!

The Hon. R.P. Wortley: There was nothing but praise for him.

The Hon. R.D. LAWSON: The Hon. Russel Wortley is right when he says that he was an impressive witness. If the chairman failed to mention that in his address this evening, I am very happy to correct the record. The fact is that the government overbore a community group in the form of the Cheltenham Residents Association, admirably supported, I have to say, by a former Labor member of parliament, Rod Sawford, who gave evidence to the committee, important and significant evidence showing that the interests of the community were completely trampled by a government determined to achieve a particular outcome irrespective of the wishes of the local community.

We are seeing it again in relation to the St Clair land. The Labor Party thinks it owns the western suburbs and can do whatever it likes irrespective of the wishes of the local residents. Well, I think it is in for a big surprise in the forthcoming state election.

Like the chairman, I too regret the fact that time did not permit the committee to hear evidence from all of those potential witnesses who might have completed the picture; but we certainly received enough evidence to warrant the findings of this committee that reveal the nasty underside of the Rann Labor government.

Debate adjourned on motion of Hon. B.V. Finnigan.