Bills

Infrastructure SA Bill

Committee Stage

Debate resumed.

The Hon. R.I. LUCAS: The government, unsurprisingly, opposes this particular amendment. The government's position is that this particular requirement is inconsistent with the treatment that this parliament has outlined for a number of other boards. Typically, only independent officers generally require approval by the Statutory Officers Committee. In particular, this parliament would be familiar with the Electoral Commissioner, the Ombudsman, the Judicial Conduct Commissioner and the Independent Commissioner Against Corruption.

Those sorts of independent statutory officers have a broad role either to hold executive to account or a broad role such as that of the Electoral Commission, where the Electoral Commission is clearly seen as an independent authority with oversight of the whole electoral process. The Independent Commissioner Against Corruption holds not only the executive to account but the parliament and, indeed, lots of other potential individuals as well, public servants and others. That has been the role of the Statutory Officers Committee, and the government thinks that is an appropriate role for the Statutory Officers Committee.

As I said, if we are going to start requiring a whole variety of boards to pass through the process of vetting by the Statutory Officers Committee, then we are opening up a whole new process in relation to an appropriate role for the Statutory Officers Committee. Again, I can only repeat that Infrastructure SA is not a decision-making body. It is an advisory body to the government and, as I said in response to the earlier contribution of the Hon. Mr Parnell, ultimately the government of the day has to be held to account for the final decisions taken.

It cannot say, 'Infrastructure SA made me do it.' It can say that Infrastructure SA recommended it or recommended against it. The government of the day either agrees or disagrees with the recommendations of the independent advisory body, but it has no final decision-making capacity. The ministers of the day have to be accountable for the decisions they take. The notion of the amendment is that this particular board should be treated, and have its appointments conducted, in a completely different way to appointments to all other boards, some with only advisory responsibilities but some who actually have significant powers.

There are a range of boards, such as the boards of ReturnToWorkSA and SA Water, that take significant decisions independently of government that impact in a significant way on a large number of South Australians. If we are going to establish this process for an advisory body that provides advice to government, that these particular people have to be vetted by the Statutory Officers Committee, then one can see similar arguments being mounted in the future whenever other boards, which actually do have the power to take significant decisions, are considered by the parliament.

It was never the approach of the now opposition, the former Labor government over 16 years, that when those particular acts were opened up they said, 'We should have these particular appointments vetted by the Statutory Officers Committee.' It seems a convenient argument for the opposition all of a sudden to say, soon after they arrived in opposition after 16 years in government, 'We now think that we should significantly limit the capacity of the new government to make appointments to an advisory body, such as Infrastructure SA,' when they quite merrily went about their way for 16 years whilst they were in government appointing whoever they wished to however many bodies they wished.

In my particular area, we have been steadily removing so many Labor former members of parliament who have been appointed to chairs of very significant bodies, such as Funds SA and Super SA and various other bodies like that, all over the place. As I said, the former Labor government was quite happily going about its business in terms of appointments to bodies that could make decisions.

In this case, we are talking about appointments to an independent advisory body to government. I think the Premier has demonstrated his bona fides in the first appointment he made to the productivity commission, of someone who has formerly served both Labor and Liberal governments interstate and at the national level. I received a copy of a letter from the current Labor Treasurer in Victoria, congratulating the new productivity commissioner on the work that he had done in Victoria and wishing him well in relation to future endeavours. Tim Pallas sent a copy of the letter to me as the South Australian Treasurer.

I think the new Premier has demonstrated his bona fides in relation to this particular area. Contrary to, I think, the suspicions that there were from the Labor Party that he was just going to appoint cronies and mates to the productivity commission, he has demonstrated through his first appointment that he is actually looking for quality people who can add value in terms of the advice, whether it be with the productivity commission or elsewhere.

I can assure you, knowing who he has in mind in relation to Infrastructure SA, in terms of the chair of the position, that he is looking for quality people who can actually add value to the work that needs to be done. He is not looking to appoint a former Liberal member of parliament to be the chair of Infrastructure SA. He is looking to appoint someone who will add value and merit.

For all those reasons, we think this particular amendment is misguided. It is inconsistent with the approach that the former Labor government adopted over 16 years, and we do not see any merit as to why, now that they are in opposition, they should apply this new standard to the Liberal government.

The Hon. C.M. SCRIVEN: I note that the honourable Treasurer refers to the fact that the Electoral Commission appointees are in fact referred to the Statutory Officers Committee, so there is certainly a precedent. I would argue that there seems to be an inherent contradiction in the honourable Treasurer's argument on this in alleging that various cronies have been appointed in previous years. Surely that is an argument for why there should be better oversight. To then argue that there were cronies in the past but 'we trust the new Premier now' just seems to be a fairly inconsistent and shallow argument. There is a contradiction there.

Secondly, to characterise Infrastructure SA in the same way as some of these other boards again seems rather misleading. Infrastructure SA will be giving advice for an infrastructure plan for 20 years—20 years for the state, many billions upon billions of dollars.

An honourable member interjecting:

The Hon. C.M. SCRIVEN: Indeed. To say, 'Well, a whole variety of boards don't have this'—a whole variety of boards are not having such influence over the future of our state for 20 years or more and over billions upon billions of dollars. Further, these other boards that the honourable Treasurer refers to do not have coercive powers to go into private businesses and demand information. That is a very considerable power.

The Hon. J.E. Hanson: With penalties.

The Hon. C.M. SCRIVEN: With penalties, indeed. Moving next to the arguments of the people in mind and that they are worthy people: that is very good to hear, very comforting to know that only worthy people are envisaged to be recommended to be appointed to this board. But if that is the case, why is there a problem with a 21-day scrutiny by the Statutory Officers Committee?

Twenty-one days is a short period of time. It would ensure that not only is the person a good person who is going to be appointed to the board but they are seen to be a good person. Surely, that can only strengthen the confidence that South Australians and this parliament would have in Infrastructure SA. For all of those reasons, we continue to put forward this amendment.

The Hon. R.I. LUCAS: Just quickly, I again repeat that it is an independent advisory board. Some of these other bodies—the member talked about billions and billions of dollars. Funds SA actually controls $30 billion of funds under management and it makes decisions independent of government. No treasurer can direct in terms of their funding. It is an example of where these other bodies do make significant decisions with billions of dollars, and in that case, $30 billion of funds under management.

The Hon. F. PANGALLO: SA-Best will be opposing this amendment. We feel that it could impact on ISA's independence. It is there to make recommendations, and the government will then look at whether it will follow through with those or not. I think trying to make them accountable in this regard would just not be feasible and would be unworkable, and I don't really think it is the position there for parliament to be able to interfere with it. So we will be opposing it.

The Hon. C.M. Scriven interjecting:

The Hon. F. PANGALLO: They are not making decisions; they are actually making recommendations to the government.

The Hon. J.A. DARLEY: I will not be supporting this amendment.

The Hon. M.C. PARNELL: The numbers seem fairly clear now. I agree and disagree with both the Treasurer and the opposition. I agree with the Treasurer that allowing the Statutory Officers Committee to play a role in the appointment of people is inconsistent with past practice, and I agree with the Treasurer that this is a non decision-making body. However, I agree with the opposition that, unless they are removed at a subsequent time during the committee stage, there are powers which do have criminal penalties attached, which does make them a decision maker in one respect.

I have been looking at the Statutory Officers Committee provisions of the Parliamentary Committees Act just to remind myself. I note that it is, at present, a government dominated committee, so I would have thought that the appointments the government recommends would go through. I cannot see, under the current composition of that committee, that any of the government's nominees would be knocked off.

Having a look at the act, it has a provision for government, opposition, and a crossbench member from both the upper and lower houses. Whilst the committee might have a majority of government members at the moment, or at least three out of the six with a casting vote, that is not enshrined forever. I agree with the Treasurer that it is a convenient argument for the opposition to now suggest expanding the work of the Statutory Officers Committee to include a range of people who have not historically been included.

I think we have all seen that the Labor Party in opposition is a different creature to the Labor Party in government, and they cannot hold their heads high when it comes to the appointment of mates to important positions. I think the Hon. Clare Scriven and I came to the same conclusion when, as she pointed out, the Treasurer is now culling appointments of mates that were made to committees. Well, there is a school of thought which says, 'If you want to prevent the mates being appointed to committees in the first place, then you have a level of scrutiny to try to discourage that practice, and maybe going through a parliamentary committee is the way to do that.'

The Treasurer's final point was effectively saying that after 16 years of Labor putting their mates in, this government is different, and his plea effectively was to 'Give us a chance to show that we are different, and that we appoint quality people who are not just political hacks to these important positions.' But, as I said, enough members have spoken now that it is clear the amendment will not pass.

Amendment negatived; clause passed.

Clause 11.

The Hon. C.M. SCRIVEN: I move:

Amendment No 3 [Scriven–1]—

Page 6, line 17 [clause 11(1)]—Delete '5' and substitute '3'

This amendment simply seeks to ensure that a nominated member's term of appointment to the board does not exceed three years rather than the current five specified in the bill. I understand that the government will be supporting this amendment, so I will speak very briefly. It is simply around making sure that there is accountability on this occasion. It would therefore be consistent with the membership of the federal body, Infrastructure Australia, whose members are only appointed for three years. I will not speak further unless there is any other opposition to this amendment.

The Hon. R.I. LUCAS: I am advised the government is pleased to support this amendment. It makes it more consistent with lots of other appointments and, therefore, we will not oppose the amendment.

Amendment carried.

The Hon. C.M. SCRIVEN: I move:

Amendment No 4 [Scriven–1]—

Page 6, after line 19—After subclause (1) insert:

(1a) An appointed member must not engage, without the approval of the Governor, in any other remunerated employment.

(1b) An approval under subsection (1a) must be published in the Gazette.

Amendment No. 4 is in regard to remunerated employment that might be undertaken by a board member of Infrastructure SA, and moves that such employment—not that it should not be allowed—simply should be public, so that it should be providing that transparency about other work that a nominated member might be engaged in. As we alluded to earlier in this contribution, the government has stated it wants appointees to this board to have 'qualifications, knowledge, expertise and experience in infrastructure planning, funding delivery, management and other relevant areas of expertise'.

It would seem quite likely that people with that kind of background and expertise, may well have gained their experiences within businesses that will have close interactions with governments, that might indeed be tendering for work on approved projects, that might have a strong interest in particular types of projects being progressed. In such situations, surely transparency must be absolutely paramount. To have any confidence in Infrastructure SA as an independent body, then surely any other work that is being undertaken by a board member should be clearly not a conflict of interest, and conflicts of interest have to be open and able to be seen at any time. So, again, these are projects with impacts worth billions of dollars that might be recommended by this board and plans that span 20 years.

Given the importance of the role of members of Infrastructure SA and the capacity for conflicts of interest, it again seems eminently reasonable to have openness around any other employment that a board member might be undertaking. I emphasise again that it does not mean that they cannot do it; it just means that it needs to be on the public record so that, if there is any perceived conflict, then that is clear.

I know that members will have a concern that perhaps the public might perceive a conflict of interest when it does not exist, but surely that is all the more reason for it to simply be approved. If that employment has been approved and published in the Gazette, it is clear to all that this person is totally above board and there are no issues around what they are recommending within their role as part of the Infrastructure SA board and the employment that they are receiving remuneration for. It is about ensuring that openness and transparency occurs, that there is total fairness and transparency and there are not only no conflicts of interest but also no perceived conflicts of interest.

The Hon. R.I. LUCAS: The government strongly opposes this particular amendment, both in principle but also in terms of the practical nature of how it might operate should the amendment actually be successful. The first point I would make is about the principle in relation to this; that is, that it is quite clear that, for a body like this, the board appointments are likely to be part-time appointments, not full-time positions. For the sort of quality people that we want, it will be clear that they will have to have expertise, because we talked about it in a previous clause in relation to a whole variety of infrastructure planning-related areas of expertise.

There are existing provisions that would be required, such as the Public Sector (Honesty and Accountability) Act 1995, that would apply to such board appointments—as they apply to other board appointments as well. There are very strict requirements in terms of managing conflicts of interest which exist. The interesting question for the honourable member to respond to is: why would we require a board member of an advisory body to go through this process of publicly revealing every other remunerated business or employment that they have entered into or are involved with, when we do not require the same thing of members of the Funds SA board or the SA Water board?

Again, I return to Funds SA: there is a body that is managing up to $30 billion in assets. The treasurer of the day cannot dictate the investment decisions of Funds SA. The sorts of people who are on the Funds SA board—or some of the people who are on the Funds SA board—have undoubted expertise in terms of funds management experience: financial planning and financial management expertise. They are the sorts of people you would wish to have on a Funds SA board, I would hope, in the interests of public servants, and indeed members of parliament, who rely on the investment returns of Funds SA.

We do not require—and Labor, who were in power for the last 16 years and for 30 of the last 40 years, or something, have never required—that this sort of management of potential conflicts of interest should be processed in the way that the honourable member is requiring potential appointments to this particular board to be appointed. It essentially means that the requirements that exist for everybody else in terms of managing conflicts—namely, the Public Sector (Honesty and Accountability) Act, which places very strict requirements in terms of management of conflicts of interest on board positions, as it does in terms of the public sector generally—are not deemed to be sufficient for new members of an advisory body that does not make any final decisions in relation to infrastructure investment.

The other point I would make is in terms of the practicality of the provision that the member has drafted. In essence, the member is saying that the Infrastructure SA board member, before they engage in any other remunerated employment, would have to get the approval of the Governor. In strict terms, this means that it has to go through a cabinet process: you have to go through a cabinet meeting, the 10-day rule and get it approved. If the cabinet approves it, then get the Governor to come in to the Executive Council and sign off on it. That, in practical terms, is what is being said here.

For example, if a board member had a background in consultancy in the infrastructure planning area, when one looks at this, every time that particular person engaged in a contract of employment with ABC Pty Ltd or XYZ Pty Ltd or whatever it is—that is, a different contract of employment, their broad position as an adviser, corporate adviser or strategic adviser or consultant, whatever you want to call him or her—I am assuming that the impact of the honourable member's amendment would be that for each of those she would be requiring that that particular person would have to dolly along to the cabinet office, have a cabinet submission done, have cabinet approve it and then have the Governor and Executive Council sign off on it, that Mr Smith has just been engaged by ABC Pty Ltd in relation to infrastructure planning.

Then, the next week, when he or she takes on a job with XYZ Pty Ltd, you would have to go through the same process again. I assume you would then have to have some process when he or she concludes work for ABC Pty Ltd to take that off the record or something or remove it so that there is not this constant list of people this person happens to be working for a period of time.

The principle is wrong and we are arguing against the principle, but in practical terms how you would actually make this work. The reality is that some people are going to say that quality people you might want to put on the board are just going to say, 'Give me a break.' You do not require this of Funds SA or SA Water. It is not required in any other state or jurisdiction but, because a disgruntled former Labor government party that has been in government for 16 years and all of a sudden finds itself in opposition, has decided to impose this particular restriction, quality people are just going to say, 'Give me a break. I am not going to accept an appointment here in South Australia.'

If that is the intention of the opposition—they just want to drive quality people away from being appointed through this particular provision—if this amendment got up, that would be the potential ultimate result. We oppose it in principle but we also oppose, in practical terms, how this amendment would actually operate.

The Hon. M.C. PARNELL: Just to assist the chamber, I think the Treasurer has got the question right and it is what we have been debating in previous amendments. What we are debating now is this question of how to manage conflict of interest. It seems to me that there are two opinions before us. The Labor Party has a three-pronged proposal for managing conflict of interest: the first was parliamentary scrutiny of appointments, which has gone; the second one we are dealing with now is no outside work without getting approval first; and the third one that we will get to shortly is disclosure of interests. They are the three prongs that the Labor Party is saying are needed to ensure that conflict of interest is managed.

The government, on the other hand, are pointing out that there are existing mechanisms. They particularly point to the Public Sector (Honesty and Accountability) Act as being sufficient. I think where we are in agreement is that what you do not want on the board of Infrastructure SA is the executive of the concrete company who is forever recommending large concrete projects for which that person is likely to be the chief tenderer or at least have an interest in. It is pretty clear that we are trying to avoid that sort of stuff. The question before us is the mechanism as to how we do it.

I will be very interested to hear the debate about disclosure of interest, which we will get to next, but in terms of this idea that someone without the approval of the Governor cannot undertake any other work, and if the positions are, as the Treasurer has pointed out, very likely to be part-time, effectively every member of this board will have to get permission to do any other paid work. I think the Treasurer is right in that that is too onerous. If the objective of the exercise is removing conflict of interest, then let's have a good look at the opposition's next amendment, which is about disclosure of interests, and let us look also at what the government says the effectiveness of the Public Sector (Honesty and Accountability) Act would be in relation to these people. The Greens will not be supporting this amendment.

The Hon. F. PANGALLO: SA-Best will not be supporting this amendment. To reiterate what the Hon. Mark Parnell said in relation to the make up of the ISA, there are three ex officio members who have been touted for it from the Department of the Premier and Cabinet, I believe, DPTI and Treasury and Finance. Again, it becomes quite onerous that they then have to go through that process, so we will be opposing it.

The Hon. J.A. DARLEY: I agree with the government's position on this one, and will be opposing the amendment.

The Hon. C.M. SCRIVEN: I would like to point out that the Treasurer keeps referring to Infrastructure SA as though it were like any other board in the state, as though this is just, 'Move along, nothing to see here, it can be like this one, it can be like that one, we don't need any extra scrutiny.' I suggest that if the Treasurer is concerned about Funds SA maybe he should be flagging changes to its accountability as well.

This is a unique body. It is going to have not just advisory powers but also coercive powers, and penalties will be able to be applied to those who do not follow directions in terms of the coercive powers. It is a different body; it is making recommendations for 20 years or more—

An honourable member: Of capital investment.

The Hon. C.M. SCRIVEN: Of capital investment, it is making recommendations involving billions upon billions of dollars of capital investment, so it is a unique body and cannot be compared in the same way to some of the other bodies, as the Treasurer is seeking to do.

Finally, to suggest that transparency will drive good people away from South Australia is, I think, offensive in the extreme to the many, many people who will be attracted to contributing to this body in ways that best meet their capacity and experience. Transparency for most people, good governance for most people, is an attraction and certainly not a deterrent.

The Hon. F. PANGALLO: I imagine the Hon. Clare Scriven, when she talks about the coercive powers, is referring to the fact that it can look into the financial situation of proposed construction companies—which I actually think is a good thing. I can think of many companies over the years that have conducted work for the government that subsequently went under, leaving many workers without their entitlements or wages.

It is important that we know that any construction company engaged in work for the government is able to carry out that work and do it in a way that is financially viable. I think it is good that it has those coercive powers; it needs to be able to determine if those companies are going to be financially viable in order to carry out that work.

The Hon. C.M. SCRIVEN: In response to the Hon. Mr Pangallo's statement, we need to realise that without this amendment, or at least similar amendments that we will be discussing later, someone on the board who is working on behalf of a competitor could arrange for that competitor's business to provide information. There is potentially a real conflict that exists there, so it is even more important that if someone on the board is doing any remunerated work that it be transparent so that those things cannot occur.

If I were on the board and was doing work for Mr Jones' company, in my position on the board I cannot say that I will go into Mr Smith's company, who is a competitor of Mr Jones, and find out all their financial information, which would obviously expose their competitive advantages or weaknesses.

The Hon. F. PANGALLO: That is why we have ICAC.

Amendment negatived; clause as amended passed.

Clauses 12 to 16 passed.

New clause 16A.

The Hon. C.M. SCRIVEN: I move:

Amendment No 5 [Scriven–1]—

Page 8, after line 11—After clause 16 insert:

16A—Disclosure of interests

An appointed member must disclose their interests in accordance with Schedule 1.

This amendment seeks a disclosure of interests for those appointed to the board of Infrastructure SA. I again come to the rhetoric around the establishment of this body. Apparently, it is about transparency and accountability. All members of federal parliament, state parliament and local government are required to disclose their interests in a similar way to that proposed in this amendment. Some of those members are dealing with annual budgets that are a fraction of the amount involved in the infrastructure projects this board will be recommending.

We require an extensive disclosure of interests for members of the District Council of Grant, which has a population of 6,000-odd. We require an extensive disclosure of interests for members of the Wattle Range Council and any of the other rural councils, which have very small budgets and very small populations. However, we are saying that we do not need to have a similar disclosure of interests for members of a board that will be making decisions worth billions of dollars in capital investment over 20 years—recommendations in terms of the plan. We are saying we do not want to have a similar disclosure of interests as we require from members of local government.

Noting that the previous two amendments, which were also around accountability and transparency, have not been supported, it seems this amendment is even more important. Why would we accept less transparency from members dealing with decisions that potentially have a far-reaching impact on our state than we would for a member of a local council? This disclosure must be made to the minister and then to the parliament.

It is a necessary amendment, given the importance of the role and the capacity for conflicts. Given that members of the chamber have not supported the previous amendments, here is an opportunity to ensure that the level of disclosure required for members of this board is at least the same as that which is required for a member of a small regional council, other councils and state and federal parliament.

The CHAIR: Before the Treasurer rises, for the benefit of honourable members, the Hon. Ms Scriven is seeking to insert this amendment and it refers to schedule 1. The current bill as tabled by the government does not have a schedule. A further amendment—No. 28 [Scriven–1]—inserts the schedule. At this point, honourable members may wish to address the schedule as well. If honourable members vote for this amendment, they need to be aware that they are also potentially voting for the Hon. Ms Scriven's schedule. I understand the Hon. Mr Parnell also has an unrelated schedule.

The Hon. C.M. SCRIVEN: Amendment 28 is the schedule and, of course, is consequential to this amendment, if it passes. I will just mention that the schedule, 'Disclosure of interests', is modelled on the same disclosure of interests required for members of this place. Again, it has extreme similarities to that required by members of local government and federal government.

The CHAIR: By way of further clarification, it would be appropriate at this time for honourable members to address to the Hon. Ms Scriven any concerns that they have with the contents of the schedule. We can have that substantive debate at this point in time ahead of it being formally moved later.