South Australian Productivity Commission Bill

Final Stages

Consideration in committee of the House of Assembly's message (resumed on motion).

Amendments Nos 2, 3, 6 to 16, and 18:

The Hon. R.I. LUCAS: I move:

That the Legislative Council does not insist on its amendments Nos 2, 3, 6 to16, and 18.

At the outset, can I thank honourable members. As the government indicated over the last couple of weeks, this was a priority bill for the government to be ultimately determined one way or another by the parliament before we get up this afternoon. Mr Chairman, as you are aware, the Legislative Council rose before the House of Assembly had finished deliberations, so we did circulate the email last evening, which in essence was the nature of the amendments that were going to be moved.

The message was received earlier this morning and we delayed formal consideration until at least members could have a look at the message and the process that we are to adopt. Members who have been here for a while will be familiar with the process, but I have had a quick word with one or two of the new members just to outline the general process and the options available to the Legislative Council.

This bill started in the House of Assembly and came to the Legislative Council. The Legislative Council amended the bill. It went to the House of Assembly. The House of Assembly has agreed to some of the amendments, which we will discuss at a later stage. There is one particular amendment where it has suggested an amendment in the alternative, but that is in the second package of amendments. This first package of amendments, this first motion that the council has to consider, is whether or not it insists on its position in relation to amendments Nos 2, 3, 6 to16, and 18.

They cover a range of issues, but the substantive issues that the government in the House of Assembly—and I on the government's behalf when we last debated this bill and I now on behalf of the government outline to the Legislative Council—has clearly indicated are that it is just not in a position to accept the amendments that the Legislative Council has made in this particular respect.

I do not propose to go over all of the arguments for and against. There are two key provisions and a couple of other smaller ones as well. But if I can just summarise briefly, the two key ones essentially are: should the parliament have the right, through what in practice would be a motion of non-government members of the Legislative Council, to be able to, in essence, direct inquiries to the productivity commission? I have outlined previously why the government opposes that. I do not propose to go over that detail again.

The second broad area was in relation to whether or not there should be what I colloquially described as United States Senate-style confirmation hearings of productivity commissioners; that is, the Statutory Authorities Review Committee would ultimately have a veto right over who could or could not be appointed as a productivity commissioner. There are a number of other smaller elements but they were the significant major elements.

What the Premier has indicated in another place, and I think in some discussions with a number of people who have spoken to him, is that the government's position is clear on this: if the Legislative Council in its wisdom decides to insist on its amendments then the government will lay the bill aside when it goes back to the House of Assembly. As I think I outlined yesterday in the house, what the government will do is establish the productivity commission but we will do it through an alternative and less publicly-accountable mechanism.

There were a number of alternatives that I flagged yesterday that were open to the government. One was, in essence, a model where the Premier or the Treasurer could appoint individual commissioners. As an example, we have appointed Mr Lew Owens to conduct an inquiry into the regulated asset base of SA Water and water pricing generally. I flagged that the advice I had was that the New South Wales Productivity Commission had been set up as an attached unit of the public sector in New South Wales. We have attached units, a very small number of them, within the public sector in South Australia. The office of the Commissioner for Public Sector Employment became an attached unit as from 1 July, I think.

There is an alternative mechanism, and I am not entirely clear whether New South Wales has used the attached unit model or whether in essence it is just a unit of Treasury. The press statement to which I will refer of 14 May 2018 from the New South Wales Treasurer, Dominic Perrottet, is headlined 'New South Wales Productivity Commissioner Appointed to Drive Economic Reform'. Mr Peter Achterstraat AM has been appointed as the New South Wales inaugural Productivity Commissioner. Without going into his details, he is a former auditor-general and has served in other distinguished positions there.

Essentially, upon reading that particular press release from the Treasurer, he has just been established as a section or a unit within Treasury. He is actually employed under the Treasury portfolio within the fiscal and economic group of Treasury. He will be supported by a secretariat which is embedded within Treasury. I am advised that it is not to be a statutory role but rather an advisory body and it then indicates what his tasks will be. The reporting chain that is listed here is that the Productivity Commissioner will report through the fiscal and economic group deputy secretary to the Treasury secretary and then to the Treasurer. That is the reporting chain.

If we were to go down another alternative model, which is an attached unit, it may well be that the productivity commissioner would report directly to the Treasurer as opposed to—or potentially reporting to the Premier. For example, the Commissioner for Public Sector Employment does not report through a divisional head of Treasury and through the Under Treasurer to me as the minister responsible for the public sector; she reports as the head of the attached unit of the office of the Commissioner for Public Sector Employment but also separately, as the Commissioner for Public Sector Employment, she reports to me as the Treasurer.

However, the model in New South Wales appears to be that the reporting lines are through, in essence, a divisional head of Treasury—that is the fiscal and economic group deputy secretary, so that is the second rung—and then through that to the Treasury secretary and then ultimately to the Treasury. So there would appear to be a couple of models and New South Wales has adopted that particular model in relation to establishing it, and they are quite happily going about their task of saying, 'Hey, we've got a Productivity Commissioner and that Productivity Commissioner is going to drive productivity reform in New South Wales.'

So that is a model. That is the alternative in the event that the Legislative Council decides to insist on its position. As I said, this bill will be laid aside, but we will proceed as a government with the establishment of a productivity commissioner. The exact model that we will settle on, whether it is an attached unit or whether it is modelled exactly on the New South Wales one, where the person reports through various divisions of Treasury to Treasurer, or various divisions of the Premier's department to the Premier, will be matters that the government will give immediate attention to in relation to the issues.

If I can summarise, my entreaty to members of the Legislative Council is that at least in the process the government has sought to follow to establish its productivity commission, it has opened up significant areas of public accountability and transparency. There have been further elements of accountability added by amendments moved by the Hon. Mr Darley and the Hon. Mr Pangallo, some of which we have agreed in the Legislative Council, and there is an amendment in the alternative to the competitive neutrality position that the Hon. Mr Darley has put, which I would hope he might be comfortable with as well.

The government's original bill, we believe, in terms of transparency and accountability, is certainly much more so than the particular model that is adopted in New South Wales, and we have added additional elements, or are prepared to add additional elements, in terms of some of the amendments moved by the Hon. Mr Pangallo and the Hon. Mr Darley—not all of the amendments, but some of them.

The model that is here would allow accountability and oversight. It does have requirements in relation to public reports—or annual reports, I should say—processes, requirements in terms of the appointment of the productivity commission and all those sorts of things. All those sorts of guidelines and requirements are actually outlined specifically in a piece of legislation, and it is a statutory authority.

Should the Statutory Authorities Review Committee of the Legislative Council, which of course is non-government controlled, undertake or require a review on an ongoing basis, or an occasional or irregular basis, of the operations of the productivity commission, the Statutory Authorities Review Committee will have that oversight, because this will be a statutory authority subject to the ongoing oversight of the Statutory Authorities Review Committee, as that committee would see fit.

There will not be the same capacity, clearly, if the government goes down the alternative path of establishing a productivity commissioner along the model of the New South Wales one, where the person is in essence just attached as a Treasury officer, or a version of that, or a provision such as an attached unit within a government department or agency.

In the end, I guess my plea to members of the Legislative Council is that they do not insist on this package of amendments. I accept their position may well be that they still do not agree with the government's position, and we would understand that. We are not arguing for them—or expecting them, I should say—to say, 'Hey, we don't believe in anything we've said earlier in the week.'

I expect that they would still believe strongly in the point of view they put. If they had their preference, if they were in government, they would have incorporated the legislation this way, but the plea we are putting to them is that in the absence of being able to get exactly what they want, this model, with some of the amendments, in our view, is a more transparent and accountable model, and in our view it is probably closer to what they would want in their ideal world.

It does not deliver what the Legislative Council in the majority expected or wanted, and I accept that, but ultimately we would argue it is preferable to the alternative path that the government would have to go down to establish a productivity commissioner. With those words, we would urge members to not insist on amendments Nos 2, 3, 6 to 16 and 18.

The Hon. K.J. MAHER: I rise to address the amendments and address some of the things that the Treasurer has said to this chamber today. What the Treasurer has said to this chamber today is: if you do what you have insisted on, if you make this bill more transparent and open, we're going to take our bat and ball and go home. The Treasurer has said, by introducing legislation, that this is important enough that it ought to be established by an act of parliament in which the people of South Australia, through their representatives in this chamber, should have a say as to how this works. Then he has turned around and said, 'But, wait, if you make it accountable and transparent, then we don't want you to have any say. It is either exactly our way or the highway.'

We have been given a bill, originally by this government, that had no transparency at all; it had no transparency over the work of the commission, no transparency or accountability in how it was determined who the chair and the commissioners will be, in terms of their pecuniary interests and disclosures and in terms of the work, the reports and the interactions with the minister responsible. There was no transparency in the bill that the government thought was important enough to legislate to create this body.

The bill has come to this council, and we have been told by the Treasurer today that it is not the business of this council to try to improve the bill—it's none of their business. What the government wants happens, or nothing happens at all. I have never seen this before in my admittedly—

Members interjecting:

The Hon. K.J. MAHER: —shorter years in this chamber, Mr Chairman. This is the absolute—

Members interjecting:

The Hon. K.J. MAHER: This is the height of arrogance. 'If you don't accept exactly how we want to do it, then stuff you Legislative Council, we're going to take our bat and ball and do it a completely different way.'

At the end of the day, if the government gets the bill without these very sensible amendments, suggested previously by the Legislative Council, if they get the bill without them in there, then it has the same effect as just establishing it without legislation anyway: it does not have any accountability or transparency.

The Treasurer would have us believe, 'Oh, look, if you don't pass this bill exactly how we want it, if you insist on being a little bit transparent and a little bit accountable, then we're just going to go and establish it, and it's going to be this big secret, and no-one will ever know what it does.'

What the Treasurer does not say, and what he omits to say, is that, if it was established in the way he is suggesting—without legislation—all of the usual provisions and terms of the Auditor-General looking at the expenditure of public funds, committees of this chamber, like the Budget and Finance Committee, the FOI regimes, all the estimates committees, all the usual checks and balances that you see with the expenditure of public funds, will still be there. It is not all or nothing. It is not that you have nothing at all and there is no oversight.

If they take their bat and ball, if they thumb their noses and say, 'Stuff you' to the Legislative Council, there will still be that oversight that exists with the expenditure of any public funds. That is our role. The Legislative Council is, by definition, a house of review. We are doing our job in looking at amendments. We are doing our job in improving a bill. We are doing our job improving a bill to introduce transparency and accountability.

We are looking not to impede the work of commissioners or the commission, but to make what they do more transparent. That is what the public expects of us. I think, quite frankly, that is what the public expects of their government, to be open, accountable and transparent with the way funds are spent.

Nothing in the amendments that the Legislative Council previously agreed to will impede the operation of the productivity commission. In fact, I think there were many contributions that members of the Legislative Council spoke about on the way the scheme will be improved if these amendments are passed. We spoke in the Legislative Council—and many members made contributions—about allowing, by resolution, either chamber of parliament to refer matters to the productivity commission.

We discussed, when it was last in the chamber this week, that that would allow members of this chamber—and it is not on a whim of a single member of this chamber, but it was agitated (and I will not go into it in the same length as we discussed it before)—to move for a matter to be referred to the productivity commission by this chamber, and it requires a majority. It requires three out of the five groupings in here agreeing that it should be referred. It is not on the whim or folly of an individual member, but on not just a majority of the members of the chamber, as it will always be, but, as the chamber is currently constituted (and we have seen a pretty stable history in recent times in South Australian politics in the Legislative Council), there is a diverse range of interests. It is a majority of the groupings in here that would also have to refer something to the productivity commission.

It was discussed by members of this council when it was last here that that would enable much better and more informed decisions to be made by this council when there are very significant pieces of legislation or issues of policy that this chamber is debating. Individual members or individual parties may not have the capacity to do detailed economic modelling or understand the exact nature and consequence of what is being proposed, but this will allow that avenue. If a majority of members of this chamber—and, as it is currently constituted, that requires that a majority of the parties within this chamber agree—they can refer something to the productivity commission.

This is not a bar that will be jumped over on the whim of every single Legislative Councillor; it will require a majority of people here to do that. Unlike the government, which obviously has a disdain and does not trust the judgement of a majority of members here, I do trust them. This chamber was elected to represent the diversity of views of the South Australian population.

The Hon. J.S.L. Dawkins: This is laughable, compared to where you used to sit.

The Hon. K.J. MAHER: The Hon. John Dawkins interjects. He does not think this chamber is reflective of the population. He interjects and takes issue with this.

Members interjecting:

The Hon. K.J. MAHER: Unlike some interjecting, I do actually have faith that this will be used responsibly, and it is a self-regulating responsibility. If this power is not used responsibly, voters will have their say at the next election, if people do that. In relation to members of this chamber being able to refer a matter to the productivity commission, the chamber, together with all other parties, thought that was incredibly important.

The other argument that was used was that it might not have the budget to do it. The Hon. Rob Lucas, as Treasurer, spoke last time very flimsily about what a budget may or may not be. He spoke in very general terms that, 'We can only appoint around half or may be fewer of the commissioners because we don't have enough of a budget yet.' If it is not worth doing properly then maybe it is not worth doing it all and maybe it should not be established by legislation or even outside legislation.

The Hon. Rob Lucas said, 'We will do half an effort if we don't get this legislation up. We won't have enough budget to do it properly.' If you do not have enough budget and if you do not have the will to actually have legislation, as the government thought was important, maybe the honourable member may reflect about whether it is worth doing at all.

This council saw fit to pass further amendments in relation to the appointment of members of the committee. It allowed the members of the committee who were proposed to go before a committee of parliament. Again, as the Hon. Rob Lucas would have us believe, this is not some glitzy Senate-style confirmation hearing where eventually the decision is made on the floor of the whole of the Senate. We are not proposing that this decision is made on the whole of the floor of the Legislative Council; we are suggesting it is done by a committee of the parliament. We think that is the appropriate way to do it.

Finally, in relation to a disclosure regime, that the government would oppose this is the most remarkable part of all. Honourable members will remember when we recently considered the health boards bill that the health minister had before this chamber. The opposition put up quite a detailed package for disclosure and publication of the interests of members of health boards. That went back to the House of Assembly and the House of Assembly put something else in its place, which was a lesser regime that was easier to be complied with administratively. The Liberal government of the day put in place that lesser regime for the health boards bill. That bill came back here and the council agreed that the lesser regime was a good middle ground and that it ought to be adopted.

What we have is the same regime for this—the same regime that the government themselves put forward for the health boards bill but, when it comes to the productivity commission, they no longer agree with their own proposition. What we have in here with the disclosure regime is the same regime that the government themselves put forward as a compromise to come back to this chamber for the health boards bill. There is absolutely no logical reason that the government should be opposing it for this bill, given this disclosure regime was their idea, and not for a bill from 20 years ago when they were last in government. This was their idea for a bill that they put up just in the last couple of sitting weeks.

We just do not agree that it is a good idea to put threats onto the Legislative Councillors, who are doing their job, that if you do not pass it exactly how we want it, we will take our bat and ball, thumb our nose at you and say, 'Stuff you, Legislative Council! We are just not going to have legislation at all.' In fact, in relation to the bill, if they did that—if they had no legislation at all—it would have almost the same effect as their legislation now, which is not transparent, is not accountable, and we will be left with the usual forms of accountability with no legislation, being things like the Auditor-General, the estimates committees, and committees of parliament to oversee it.

If we, as the Legislative Council, give into threats like, 'If you don't do exactly what we want, then we are going to withdraw legislation,' so early in the term of government, it will send a message to the government that this is acceptable behaviour and that the Legislative Council can be bullied, and the Legislative Council ought not bother putting up amendments. The opposition will be insisting on the amendments that the Legislative Council made—the sensible amendments that the Legislative Council made—to improve the accountability and transparency in the bill. If it is the government's contention that, 'If you don't do exactly what we say, you can't have any legislation,' it is probably as bad, as weak and as non-transparent as having their legislation anyway.

Progress reported; committee to sit again.

Sitting suspended from 13.02 to 14.15.