Bills

Construction Industry Training Fund (Board) Amendment Bill

Committee Stage

In committee.

(Continued from 28 February 2019.)

Clause 6.

The CHAIR: Honourable members, we are at clause 6, and we are presently considering amendment No. 1 [Franks-1], which has been moved. Minister.

The Hon. S.G. WADE: The ability to progress this amendment might depend on circumstances at the time but, in any event, whilst I did not take the questions on notice last time because I was overly optimistic that we might conclude, minister Pisoni has been very helpful in providing a number of answers. So if it pleases the council, I propose to give a number of answers to questions not taken on notice but nonetheless information relevant to them.

The CHAIR: I cannot see any member objecting, so perhaps we will follow that course.

The Hon. S.G. WADE: The council was last considering this bill on Thursday 28 February. As I mentioned, whilst I was not willing to take questions on notice, the time since then has meant that I have been able to get information from minister Pisoni that might assist the council.

I advise the council that in relation to the question, has Mr Pisoni given any undertakings to employer groups that they will be appointed to the board if this bill passes, the answer is no.

Did minister Pisoni give any undertakings to any member of the Property Council that they would be appointed to the board if this bill passes? The answer is no.

Did minister Pisoni give any undertakings to any member of the Master Builders Association that they would be appointed to the board if this bill passes? The answer is no.

Did minister Pisoni give any undertakings to any member of the Civil Contractors Federation that they would be appointed to the board if this bill passes? The answer is no.

In relation to the question, which unions currently represented on the board did the Minister for Industry and Skills meet with on 21 September, on seeking clarification from the Minister for Industry and Skills I correct the record and advise that on 21 September the minister had two separate meetings, one with the Communications, Electrical and Plumbing Union (CEPU) and another with SA Unions, in which a member of the Australian Manufacturing Workers Union (AMWU) attended unannounced.

The meetings occurred following meeting requests made to his office. At both meetings, training matters were discussed. For the sake of clarity, I am advised that no representative from the CFMEU was in attendance. The minister further confirmed that no meeting request from the CFMEU had been received by his office.

In relation to the question, how will conflicts of interest be managed under the amended legislation, I have been advised that the process will remain as per the current practice. Conflict of interest is addressed in the board charter. At board meetings, conflicts of interest are declared at the outset of the meeting, and if they present during the meeting, members who are conflicted are required to raise the conflict and are excluded from discussion and votes as relevant.

The relevant section of the charter reads:

2.1 Conflict of interest

(a) The board is responsible for establishing a system of identifying, disclosing and managing conflicts of interest that may arise within CITB.

(b) It maintains a conflict of interest register that is updated at each board meeting as and when board members make a new declaration at the meeting.

(c) Board members must:

(i) disclose any personal or business interests that may give rise to actual or perceived conflicts of interest;

(ii) ensure personal or financial interests do not conflict with the member's ability to perform official duties in an impartial manner;

(iii) declare and manage any conflict between personal and public duty;

(iv) advise the presiding member if actual or potential conflicts of interest do arise so that they are managed in the public interest.

(d) CITB staff are obliged to follow CITB's staff code of conduct, and specifically must declare a conflict of interest when participating in decision making where the individual, a family member or a friend has a personal interest in the outcome.

(e) Part 2, section 8, of the Act prescribes both the circumstances and the penalties relating to members' management of conflicts of interest.

The final question, I am advised, was in relation to where details of board members' allowances and expenses will be available. I have been advised that current processes will be maintained. Board members are only entitled to the current prescribed remuneration rate as set by the Department of the Premier and Cabinet.

I have been advised that expense reimbursement occurs only on very rare occasions and, if greater than $100, is recorded in the minutes of the next board meeting and registered accordingly. Board remuneration is captured as an individual line item in the detailed month-end statement of income and expenditure, and is included in the administration expenses in the annual financial statements.

The Hon. C.M. SCRIVEN: My question to the minister relates to the board charter to which he referred: is it envisaged that that board charter will remain in its current form and not have any changes in the foreseeable future?

The Hon. S.G. WADE: I would remind the honourable member of the question that was being posed. The question was: how will conflicts of interest be managed under the amended legislation? The answer I gave from minister Pisoni responded to that question; I can only take it that he expects that the board charter will work in the same way moving forward.

The Hon. C.M. SCRIVEN: Thank you for that clarification. I may need to ask the minister to repeat a little bit of one of his answers from minister Pisoni. In terms of the allowances and expenses, he referred to them only being something that is currently approved by DPC. I just need clarification on that to enable my next question, please.

The Hon. S.G. WADE: Yes, if I could repeat the relevant sentences—and I appreciate the need to clarify, as I was not able to provide this in advance. I have been advised that current processes will be maintained. Board members are only entitled to the current prescribed remuneration rate as set by the Department of the Premier and Cabinet.

The Hon. C.M. SCRIVEN: The prescribed remuneration rate set by the Department of the Premier and Cabinet: can the minister explain how those amounts are arrived at? I appreciate that this is not necessarily his area of usual jurisdiction but, given that the bill is removing the consultation with the Commissioner for Public Sector Employment, it would be useful for members to understand how the amount that is being outlined is actually arrived at and whether it is binding.

The Hon. S.G. WADE: I am in your hands, Chair, but I wonder if I might answer this question when we go back to the amendment. My understanding is that this is the exact issue that is raised by the Hon. Tammy Franks' amendment, which is the one that is currently before us. I certainly appreciate the need to address that issue, and I will, but I just wonder if we might deal with any other issues that deal with clauses we have done and clauses we are going to do, and then I might address that issue as we go back to the amendment.

The CHAIR: The Hon. Ms Scriven, it is a matter for you and the committee but it seems eminently reasonable.

The Hon. C.M. SCRIVEN: Certainly that is acceptable from the opposition's point of view.

The CHAIR: Perhaps we will proceed with whatever other questions you or any other honourable members have in response to the answers that have been given. The Hon. Ms Franks has moved her amendment and we will probably come back to that. The Hon. Ms Franks may wish to refresh the chamber as to the purpose of the amendment and then the minister can respond. Does that sound like a course of action that we can all agree with?

The Hon. C.M. SCRIVEN: That is certainly acceptable to the opposition, thank you. A further question arising from the responses by minister Pisoni that were given to minister Wade: if expenses are greater than $100—I am clarifying that this is what you said—that would be recorded in the minutes; was that a correct understanding? The minutes, as I understand them, are confidential and therefore not open to any public scrutiny. Can you confirm that if the expenses were $101 or if the expenses were $101,000 that would not be open to public scrutiny because, being recorded in the minutes, it will not result in any opportunity for the public to be aware. Is that correct?

The Hon. S.G. WADE: I am advised that it is not normal practice for this particular board to make its board minutes public, but I would remind the honourable member of another part of my answer which is that board remuneration is captured as an individual line item in the detailed month-end statement of income and expenditure. I expect that that would also not be made public. The answer went on to say that would be included in the administration expenses in the annual financial statements. My understanding is that the annual financial statements would be made public and if you had an extraordinary administrative item one would think that that would draw the notice of both the auditor and members of the public who are interested in CITB.

The Hon. C.M. SCRIVEN: Thank you for that clarification, and I acknowledge that the remuneration would be recorded in those financial statements in that way but expenses specifically would not appear as a separate item. That is my understanding. Can you clarify that, minister?

The Hon. S.G. WADE: I will double-check with my advisers before I answer that but certainly my understanding was that the first part of the statement about the prescribed remuneration is set by DPC, and the second part, in relation to $100 recorded in the minutes, the individual line item in the month-end statement and the administration expenses were all in relation to expenses, not remuneration. However, I will double-check. It is my pleasure to be able to inform the committee that I have not misinformed it, as that is the understanding of my advisers as well.

Far be it from me to spruik the merits of Mr Pangallo's amendment later in the consideration of the committee but if, for example, the minister noticed that there was an extraordinary expenses item in the annual statement, under Mr Pangallo's amendment the minister would be able to require the board to provide him information in relation to that discrepancy, which is not currently the situation.

The Hon. C.M. SCRIVEN: Thank you for that clarification. I think the concerns might not be that the minister would be querying the expense—in fact, quite the opposite—and that it is more appropriate for those who have not been involved in appointing members of the board and perhaps having relationships. For example, just pulling it out of the air, in having the chairman of the fundraising arm of your local branch being appointed to the board, the issue is around potentially questionable deals and questionable arrangements, so it is in the interests of transparency that expenses be able to be identified by those other than the board members, and the minister who has appointed those board members.

The Hon. S.G. WADE: The fact of the matter is that this legislation has a clear opportunity to bring to the attention of any interested stakeholder an issue in relation to expenses because any expense over $100 recorded in the minutes will go into the income and expenditure statement and be reflected in administration expenses. Any member of this chamber, for example, having seen the CITB annual report, may wish to ask questions in this chamber or elsewhere.

The Hon. J.E. HANSON: On this point, I understand—and I may be wrong—that the CITB, while it is not an agency or instrumentality of the Crown, has reporting requirements that are somewhat influenced by Treasury instructions and also the Public Finance and Audit Act. There are various tiers of reporting that come under that. My question is: will you be maintaining your reporting obligations at the current tier, and will that remain at the current tier? From memory, I think tier 2 applies to the CITB.

The Hon. S.G. WADE: I am advised that there are no changes to the reporting requirements.

The Hon. J.E. HANSON: For completeness: so the current reporting requirements would remain—if I am correct. I am willing to accept that I might be incorrect about the exact tier, but the current reporting requirements under the Public Finance and Audit Act and Treasury instructions which apply to the CITB now would remain as they are now?

The Hon. S.G. WADE: I have no advice to suggest that there will be a change there.

The Hon. T.A. FRANKS: I rise to remind members that I have moved an amendment at this point, but I also have some questions that relate both to that amendment and the broader issues. I would like to refresh council members' memories that I have moved:

Amendment No 1 [Franks–1]—

Page 3, line 28—After 'approved by the Minister' insert 'which—'

(a) must be the same for each member of the Board (other than the presiding member); and

(b) must not exceed the maximum amounts determined, as at 1 November 2018, by the Minister under this section (as in force on that date).

As we in this chamber now well know, at this section under 'Allowances and expenses' the current bill proposes to:

…delete 'not exceeding amounts determined by the Minister after consultation with the Commissioner for Public Sector Employment'…

Instead, it merely substitutes:

approved by the Minister

The concerns raised with me by stakeholders have been raised in this debate time and time again, and they are concerns about the intent of how this board will be constituted into the future and whether or not we are seeing employees less respected than employer representatives.

One of the rumours has been that some people have been promised additional moneys and that, potentially, board members may be on an upstairs downstairs two-tiered system of different payments. My first question is, noting that the government has previously responded that it finds a cap on these board payments abhorrent: at the moment, there is a cap on these payments, so what is the difference?

The Hon. S.G. WADE: I take it we are moving on to the consideration of amendment No. 1 [Franks-1]. I am not sure when the honourable member wants to raise her other questions.

The Hon. T.A. FRANKS: Chair, I will be raising other questions as well.

The Hon. S.G. WADE: I just wanted to reassert that in relation to questions that were asked of me in relation to minister Pisoni giving undertakings on appointments, he has advised me that no undertakings have been given that people will be appointed to the board if the bill passes. Considering that I do not know if that question was asked about remunerations—

The Hon. T.A. FRANKS: It was in the last lot of debate. The government's response was, 'Why would we cap things? We don't cap things.'

The Hon. S.G. WADE: I was specifically talking about the assertion about promises made about remuneration, but obviously I cannot address that because that question was not asked. Let me turn to the point about the cap. I am certainly happy to address the policy issue raised by your amendment.

This amendment seeks to regulate the remuneration of board members. The amendment proposed by the government's bill was recommended by the Cabinet Office, following advice that the chief executive of the Department of the Premier and Cabinet has been delegated the authority to assess and recommend remuneration for board members of government-appointed part-time boards and committees. I am advised that that change was made in 2016 before this government took office. The consultation with the Commissioner for Public Sector Employment, as prescribed under the current act, is therefore redundant.

In relation to the issues of whether remuneration should be the same for all members and whether they should be subject to a cap, in relation to the effect of paragraph (a), the government's concern is that the requirement to have a uniform rate may have unintended consequences in circumstances where it is necessary to recognise particular skill sets of a board member compared with other board members. As the Minister for Health, I am aware that in some cases on government-appointed boards, highly sought after board members who can bring particular knowledge or expertise, as distinct from other board members, receive differential payments. It is not uncommon, for example, for board members—and employees, for that matter—to receive recruitment and retention bonuses.

The Hon. T.A. FRANKS: How common is it for those bonuses to be afforded to members of boards at differential rates?

The Hon. S.G. WADE: I am not aware of how common it is. Would you like me to give the response on the cap as well? Sorry, I have omitted to do that.

The Hon. T.A. FRANKS: Yes.

The Hon. S.G. WADE: The effect of the amendment in subparagraph (b) that it 'must not exceed the maximum amounts determined, as at 1 November 2018, by the Minister under this section' would be problematic, in the government's view. It would put a cap on the remuneration of board members from 1 November 2018 and legislative amendment would be required in order to change it.

If the government reviews the circular and changes its policy position to increase the current remuneration for part-time board and committee members, the CITB would not be able to be remunerated consistently with the circular and, therefore, fairly compared with other boards and committees. A date-specific legislative requirement of this nature would be inconsistent with every other South Australian government-appointed part-time boards and committees.

The Hon. T.A. FRANKS: I thank the minister for the clarification and also for re-establishing where we are in this particular debate. Will the government consider, if I split my amendment into parts (a) and (b), moved separately, then treating those matters differently?

The Hon. S.G. WADE: I think the answer is no, because we do not like either of them.

The Hon. T.A. FRANKS: In terms of the minister's responses about wanting to reward outstanding performance on a board by the members who are on these various committees and boards, what action is being taken in terms of the abrogation of responsibility of members of the current board by leaking information to the minister, which I understand, under section 9—Members' duties of honesty, care and diligence etc, has penalties ranging between $10,000 and $20,000. Has any action been taken to date and what action will be taken where that has clearly contravened the current act? Indeed, I note particularly section 9(4):

(4) A member of the Board must not, whether within or outside the State, make improper use of his or her position as a member to gain, directly or indirectly, an advantage for himself or herself or for any other person or to cause detriment to the Board.

Maximum penalty: $20,000.

If the minister could answer that, it would be most appreciated.

The Hon. S.G. WADE: My recollection is that, in an earlier set of answers, we explained the provision of information to the minister and I refer the honourable member to those answers. In relation to her interpretation of the word 'recognise' in my earlier answer, that the remuneration can recognise particular skill sets, I understood it to be more in terms of recruitment and retention. Certainly, when I was given that advice, I did not think that the answer was suggesting that there be some sort of reward. This is not a performance bonus; this is, in my view, a recruitment and retention-type issue.

The Hon. C.M. SCRIVEN: The minister has explained his knowledge of differential levels of payment to board members in the health system, and I think it is obvious what that means. Can he explain what types of differential skills might be meriting the differential rates of payment in the building and construction sector?

The Hon. S.G. WADE: I do not have advice on that.

The Hon. C.M. SCRIVEN: So the position of the government is that we may need to offer higher levels of remuneration to different board members, but it is just a general catch-all. I think that is problematic. It is obviously what the government has said, but it is problematic because so much about this bill is pointing to a huge stench. There is a stench over who is appointed under the current act without relevant qualifications and there is a stench over the lack of consultation with stakeholders within the industry and stakeholders on the board.

We have seen that the development of the bill was done by employer groups without any consultation whatsoever with employee groups. One of the answers back today is setting the record straight after it was pointed out by the opposition that the allegations that the minister had met with unions and they did not raise issues about CITB have proved to be wrong because he met only with one union and that was before the introduction of this bill.

While he was off having discussions with employer groups about developing the bill, he met with one of the unions on the board. They had no way of knowing that a bill was in development. Nothing was offered there in terms of consultation. The other unions on the board—in fact, all three—all they received was, after the bill had been introduced, a letter advising of that and saying they could talk to a public servant.

All of this, and this issue around the remuneration and expenses, is certainly very pertinent to the fact that everything will be at the discretion of the minister. Our current minister has shown that he will disregard the law when it comes to appointing someone who does not meet the required experience and expertise under the law. He will now be able to offer different levels of expense payments or remuneration to different board members. All of this is showing that the opportunity for corruption, the opportunity for dodgy deals, is just increased in every aspect of this bill.

For that reason, the amendment of the Hon. Tammy Franks would have some merit in terms of restricting it so that things can be aboveboard and, importantly, be seen to be aboveboard. On that basis, I think there is a lot of merit in the Hon. Ms Franks' amendment.

The Hon. S.G. WADE: The honourable member's logic chain might be credible if it was not based on a fallacy. The fallacy is that the minister appoints board members and their remuneration at his or her sole discretion. My understanding is that all appointments to the CITB would need to go to cabinet. The remuneration would be advised by the Department of the Premier and Cabinet in accordance with the processes of DPC.

If there was any variation that the minister personally sought, it would therefore need to be in the cabinet submission and approved collectively by cabinet. I appreciate that the Labor Party has set itself a goal in terms of filibusters on this and other bills, but a third reading speech like that at a clause I think indicates yet again that this is not working in a constructive way through a bill; this is all about filibuster.

The Hon. J.E. HANSON: My understanding, then, from the answer just given by the minister responsible, is that we are going to have this go past the minister through the cabinet. In terms of the approval of a remuneration, if that is the case, what he is saying is that there will be a cabinet submission required where remuneration is increased. Is that correct?

The Hon. S.G. WADE: Yes; my understanding is that cabinet submissions in relation to appointments need to detail the remuneration intended for the members.

The Hon. J.E. HANSON: Under the current circulars of DPC, about rules where this occurs, my understanding is that, where the minister puts forward that submission, the Department of the Premier and Cabinet has to approve it and then it actually has to go to the Governor to approve the remuneration. Is that correct?

The Hon. S.G. WADE: I do not know whether what I am about to tell you relates specifically to the health portfolio, but in the processes I have been involved in, in the development of cabinet submissions, consultation occurs with DPC, which considers the sort of body that we are involved in. This is an established board, so this is perhaps less relevant to CITB. In a board proposal that I was involved in, DPC was consulted in the development of the cabinet submission.

My understanding is that they have a series of principles against which they can assess what is an appropriate remuneration level for a board of the nature being proposed and that it is then up to the minister, presumably, whether or not they include it in their cabinet submission, but considering DPC will have the opportunity through Cabinet Office to comment on the cabinet submission, the Department of Treasury and Finance will have the opportunity as well. Cabinet would be well aware if the recommendation in the cabinet submission was inconsistent with advice or practice of the government.

The Hon. J.E. HANSON: So I take away from all that that the current process where a cabinet submission—

The Hon. S.G. WADE: It is on the point about Executive Council. Of course, every cabinet submission agreed by cabinet then needs to go to Executive Council so that the remuneration would be in the cabinet submission which Executive Council considers.

The Hon. J.E. HANSON: So where remuneration which is being applied is not recommended by either the CE of the organisation CITB or by DPC—in other words, if it is being set by the minister; and I take your point about there being statutory boards and non-statutory boards, but my understanding is they are both subject to the same rules, where there is some entity of the government being involved, right? So if a decision is made to pay remuneration which, from what you have just said is not in line with what the CE or DPC would normally agree, then a cabinet submission by the minister is required to go to cabinet, whereupon a decision is made. Then, based on current rules, it is approved by the Governor. Is that correct?

The Hon. S.G. WADE: I would respond to that by saying whether it is in accordance with the recommendation of DPC or otherwise, it will be in the cabinet submission. In that regard, the assertion of the opposition that this amendment should be supported because we do not want an individual minister at their own discretion setting remuneration is a fallacy.

The Hon. J.E. HANSON: I appreciate that; however, the approval of remuneration requires a relevant authority to be recognised before any payments can be made. This is how this works. The relevant authority, in the instance where you are not just going to obey whatever the CE or the DPC is going to say, has to be done through the cabinet process. This is what we have set up. This is what would apply to your statutory boards as well, if you choose pay over and above that. So in the case of where remuneration arrangements for boards or committees, including changes to existing arrangements, which is what you are contemplating to occur, is going to occur, then that has to be approved by the relevant authority. In the instance where there is a cabinet submission, the relevant authority becomes the minister, does it not?

The Hon. S.G. WADE: I do not know where the honourable member is getting this term 'relevant authority', and I do not understand the relevance of the question.

The Hon. J.E. HANSON: It is a governance term. You are a minister; you would have people who are being paid remuneration who are on boards. You would know your own submissions; let me look here for exactly what it is called. If you look at your 'Remuneration for government appointed part-time boards and committees' circular, which would be put out by your cabinet, as it was by the previous government's cabinets, you would find that within that there is reference to certain governance terms. One of those governance terms is 'relevant authority'.

Relevant authority applies where you have a decision-making governance entity. When you are talking about governance, there needs to be someone who has ultimate responsibility for what occurs. When you are changing how that is currently structured—e.g. currently they get paid what everyone else gets paid, so the CE would set that or DPC sets that or someone sets that who is just some governing body, they are the relevant authority.

Where you are changing that to say the minister is going to set it, then you are changing who is the relevant authority. This is a governance term. You will find this standardised across the industry. You will find this in your current governance documents you produce now. The relevant authority here I understand to be the minister, because you are saying the minister is going to make the cabinet submission. That is what you previously said in your last answers. Therefore, what I am after you to confirm is that the minister is the relevant authority when he makes that cabinet submission.

The Hon. S.G. WADE: I would remind the council why the government put up this amendment. The government put up this amendment to remove a redundant clause, which is a reference to the Commissioner for Public Employment, because it is no longer the practice of the government that that part of the state government provides the advice on remuneration. In that sense, the legislative change is not seeking to change practice. The act reads:

A member of the Board is entitled to receive allowances and expenses not exceeding amounts determined by the Minister after consultation with the Commissioner for Public Employment.

We are proposing to delete 'after consultation with the Commissioner for Public Employment'. That does not reflect the full practice of the government. As the honourable member's questions refer to, the government practices and policies are also housed in policies of the Department of the Premier and Cabinet and also Treasurer's Instructions.

One of the relevant Department of the Premier and Cabinet's policies that is pertinent is PC016—Remuneration for Government Appointed Part-Time Boards and Committees. Clause 7 of that circular relates to approval of remuneration. Clause 7.1 reads:

Remuneration arrangements for boards and committees, including changes to existing arrangements, must be approved by the relevant authority before any payments to members can be made.

Clause 7.2 states:

In the case of non-statutory boards, it is the minister who has the authority. For statutory boards, the relevant legislation will specify who has the authority (usually either the minister or the Governor).

I will pause there. I will continue reading the clause. On the honourable member's reference to relevant authority, this act would suggest the relevant authority is indeed the minister. But I stress, this policy goes on to say at clause 7.3:

A Cabinet submission is required where:

the Governor is required to approve remuneration; or

a decision is made to pay remuneration which has not been recommended by the CE, DPC.

The Hon. J.E. HANSON: Therefore, we are continuing to follow that process; is that correct?

The Hon. S.G. WADE: The clause I just referred to, I understand, is the current form of the DPC circular.

The Hon. J.E. HANSON: I think that is confirming that we are going to continue to follow them.

The Hon. S.G. WADE: It is advising the council that I am not the Premier.

The Hon. J.E. HANSON: I think that demeans the chamber, Mr Chair.

The Hon. S.G. Wade: We did have one premier here once.

The Hon. J.E. HANSON: We did, and nothing says we cannot again. For those following at home, the circular that the minister is reading from is PC016—Remuneration for Government Appointed Part-Time Boards and Committees. I have that in front of me, too. Points 6 and 7 both apply as pertinent points, I think, because what we are talking about is a process. The process does not necessarily start at 7.1. The process could start at 7.1, where you are talking about remuneration arrangements, or it could start at point 6, because it says at point 6.1:

The responsible minister or agency CE may request a review of the remuneration paid to existing bodies. A written submission must be made to the CE, DPC, which clearly outlines the basis upon which a review is being sought.

Point 6.2 then outlines:

An increase will generally only be supported where there has been a significant increase in the functions and responsibilities of a board or, in the case of GBEs, a significant change in the financial position of the organisation.

The Hon. Ms Scriven has already asked questions about what might be the reasons where an increase would be sought, so I am not going to go into that, but I do go to whether or not the arrangements around remuneration are going to remain the same as what is outlined in 6 and 7, and whether or not what is currently being proposed—and I do think it is a change of current processes—is to review the existing remuneration or just to apply new approvals. So are you starting at 6 or are you starting at 7, minister?

The Hon. S.G. WADE: I do not want to be sucked in by the member to start speaking on behalf of the Premier, not just the Minister for Industry and Skills, but I would suggest I might be starting at clause 5, which is seeking a remuneration determination. My reading of 6 is that it is more about the changing role and function of an entity, and in clause 5 I might be responding to the individual circumstances of a candidate before me.

Let me make this point: whether it is 5 or 6, what is a recurring feature through this circular is that a number of matters need to be referred to the CE, DPC, in other words the chief executive of the Department of the Premier and Cabinet. In that context, I would bring members back to Approval of remuneration, clause 7, which says in 7.3:

A Cabinet submission is required where…a decision is made to pay remuneration which has not been recommended by the CE, DPC.

Whatever the circumstances are, my understanding of that circular is that if you differ from the advice you get from CE, DPC, you do not have discretion to act on that alone. You need to take it to cabinet. That is my reading.

The Hon. C.M. SCRIVEN: To summarise, the minister can set the remuneration for the board members. If it is above the amount recommended by DPC, he can take that to cabinet to say that it should be much higher. That will then go to be approved by the Governor, but none of that will be publicly known. Is that correct?

The Hon. S.G. WADE: No, the member is not correct. It is currently standard government practice for the Department of the Premier and Cabinet to produce an annual report tabled in parliament disclosing information about all government-appointed boards and committees across South Australia. The report discloses the members of each board and their individual remuneration.

The Hon. C.M. SCRIVEN: In the interests of transparency, would the government support the individual remuneration being included in the Gazette when the members are appointed to the board?

The Hon. S.G. WADE: I do not have any authority to make that sort of undertaking. The member is joining her honourable colleagues' campaign to try to conscript me to be the Premier, and I am going to resist that vehemently.

The Hon. C.M. SCRIVEN: I did not quite hear what that final comment was.

The Hon. S.G. Wade interjecting:

The Hon. C.M. SCRIVEN: So it was not a useful comment—is that what the minister is saying? It does not bear repeating?

The Hon. S.G. WADE: I do not have authority to speak on that.

The Hon. F. PANGALLO: We will not be supporting amendment No. 1 [Franks-1].

Ayes 9

Noes 10

Majority 1

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

Amendment No 1 [Scriven–3]—

Page 3, after line 28—Clause 6, after its present contents (now to be designated as subclause (1)) insert:

(2) Section 10—after its present contents (now to be designated as subsection (1)) insert:

(2) The allowances and expenses for each member of the Board approved by the Minister under subsection (1) must—

(a) be included in the annual report of the Board prepared under section 17; and

(b) be published on a website maintained by the Board to which the public has access free of charge.

I will refresh the memory of members. This amendment is also to do with allowances and expenses. It would mean that the allowances and expenses for each member of the board approved by the minister, given what just passed, must be included in the annual report of the board prepared under section 17 and be published on a website maintained by the board to which the public has access free of charge.

This goes to the same issues that we have been discussing in terms of transparency and accountability. I note the minister's response in terms of the remuneration being available at the end of each financial year, I think. Perhaps he can just clarify that. This would ensure that it was easily available so that, given there are a number of questions around the transparency and the intent in terms of appointing members to the board who may have a particular will to do the government's or the minister's bidding rather than necessarily in the interests of the entire industry and given that the changes to the composition of the board make that far more likely, it is important that there is increased scrutiny over the expenses and the remuneration.

This would ensure that the allowances and expenses were easily able to be identified and therefore if there were considerable changes anything that was inappropriate or potentially inappropriate—and remembering that we want to ensure that a minister who is doing the right thing is not suspected of doing the wrong thing, so it is about perceptions as well as what is occurring—that this would enable that to happen. For anyone who sincerely supports scrutiny and accountability, the amendment should be supported.

The Hon. S.G. WADE: The government will not be supporting this amendment. The amendment relates to allowances and expenses payable to each member of the board and it would require that all expenses and allowances for each member approved by the minister must be included in the annual report and be published on a website.

The principal of disclosure is supported by the Marshall Liberal government. We continually seek to promote it within government but we see no reason why the current arrangements in relation to board remuneration are not adequate. It is currently standard government practice for the Department of the Premier and Cabinet to produce an annual report tabled in parliament disclosing information about all government-appointed boards and committees across South Australia. The report discloses the members of each board and their individual remuneration.

The report must also detail whether there were any changes to a member's remuneration and who approved it; for example, whether the approval for the change of a member's remuneration was made by the chief executive of DPC or the minister. Whilst there is no legal requirement for this process to occur, I am advised that I have no reason to believe that the government would discontinue this practice as it has been occurring for at least the past 20 years.

The Hon. F. PANGALLO: I concur with the Hon. Clare Scriven that transparency is important, particularly in positions like this, and we will be supporting the amendment.

The Hon. T.A. FRANKS: The Greens are happy to also support the amendment.

Amendment carried; clause as amended passed.

New clause 6A.

The Hon. F. PANGALLO: I move:

Amendment No 2 [Pangallo–1]—

Page 3, after line 28—After clause 6 insert:

6A—Insertion of section 17A

After section 17 insert:

17A—Reports to Minister

If the Minister requests the Board, by written notice, to provide the Minister with a report relating to any matter relevant to the operation of the Board and this Act specified in the notice, the Board must comply with the request and provide a report to the Minister within the period stated in the notice.

In this new clause 6A, which comes after clause 6, the minister can request reports relating to matters relevant to the board's operations. Previous Crown advice is that, within the act's current framework, the minister does not have the authority to require production of board documents. This amendment addresses that by providing more transparency on the board's actions and performance while giving the minister the ability to monitor its effectiveness in carrying out its responsibilities.

It also would give the minister additional oversight over the board, and I imagine would also include audits of expenditure, etc. There are similar provisions in the SACE Board of South Australia Act 1983, and in the Western Australian Building and Construction Industry Training Fund and Levy Collection Act and Tasmania's Building and Construction Industry Training Fund Act, which both contain powers by ministers to give directions.

The Hon. C.M. SCRIVEN: Will this clause include the ability to request the voting record of members of the board on any particular matter or, indeed, all matters?

The Hon. F. PANGALLO: I imagine it would and it would be up to the minister to make that request, I guess, in the event that he does require the production of documents and minutes.

The Hon. C.M. SCRIVEN: Is it envisaged that the request from the minister would only be specific on particular items or that he would be free, for example, to request that all minutes, all paperwork, all documents to do with any board deliberations would be presented to him?

The Hon. F. PANGALLO: It actually gives him broad powers, so I imagine it would.

The Hon. C.M. SCRIVEN: Can the honourable member explain how he would have confidence that, therefore, members of the board might not be influenced by the minister's individual or ideological views, remembering that this board is supposed to be in the interests of the entire industry; it is not a government board that must exclusively implement the government's agenda, whereas being able to see which member has voted on what when the appointments to the board will now be purely at the discretion of the minister raises real concerns about the ability of board members to be both objective and free from any influence?

The Hon. F. PANGALLO: I could not answer that at this point because, even though there have been some interim appointments made, there will be other appointments made once the legislation passes. I could not answer for the individual board members about what their ideology is or how they would vote.

The Hon. C.M. SCRIVEN: Thank you for that answer, but I think perhaps the honourable member has misunderstood my question. It is not about the individual members who are currently appointed or who might soon be appointed. It is about the principle of whether members of the Construction Industry Training Board will be able to be independent in their advice, independent in voting on any matter before the board, and not be subject to influence by the minister who will be appointing them.

So if every aspect of the board will be able to be provided to the minister on his request, which could be a blanket request saying, 'For the next four years, I want you to provide every item that comes before you,' there is a real risk that they will not be able to be independent because potentially their appointment will then be subject to that same minister. Essentially, they could get kicked off the board if they do not toe his line.

The Hon. F. PANGALLO: I would expect that their decisions would be independent of the minister. I would not envisage that they would be influenced by the minister.

The Hon. T.A. FRANKS: My questions are to the mover of the amendment. Who has been consulted? What were their positions? Who was in support? Who was opposed? Who was agnostic?

The Hon. F. PANGALLO: Thank you, the Hon. Tammy Franks. We have had extensive consultations with stakeholders from across the industry, so we have had extensive negotiations and discussions with them.

The Hon. T.A. FRANKS: In this extensive consultation, who was in support and who was opposed?

The Hon. F. PANGALLO: Sorry, I did not hear that.

The Hon. T.A. FRANKS: Who supports this amendment and who opposes this amendment from the extensive consultation undertaken with stakeholders?

The Hon. F. PANGALLO: We have spoken to the stakeholders and they support this amendment within the building industry. I have not heard from the unions about this at all. But certainly according to the stakeholders I have spoken to across the whole broad section of the construction industry, they are all quite supportive of it.

The Hon. S.G. WADE: I find it surprising that, on one hand, the opposition wants to argue that accountability and transparency are vital and yet it wants to suggest that somehow the minister responsible to CITB has no right to have a transparent and accountable relationship. There are similar powers in relation to boards and committees right through the legislation and I have never heard it argued that, because a minister has the right to seek information from the board, somehow they are not independent.

The Hon. C.M. SCRIVEN: The track record of the current minister, I think, is what forces questions to be raised around that issue of independence. We need to remember that this is not a government board. This is an industry board. The purpose of the board is to make decisions in the interests of the industry, the whole industry, not simply to implement the agenda of the government of the day. I think that is a point that is constantly being missed in this debate.

This is not a government board. If the minister has pure and unfettered opportunity to appoint whomsoever he or she in the future might wish and then has the opportunity to request every piece of information about how each member has voted, that is far beyond the powers that should be appropriate for a board which is not a government board.

The Hon. S.G. WADE: I would make the point that the honourable member's colleague, the Hon. Mr Hanson, led us into a most interesting consideration of the remuneration and the remuneration processes, which surely make it clear that this is a government board. It is subject to the DPC guidelines, it is subject to Department of Treasury and Finance instructions and it is created by a statute.

It is not some private enterprise union advisory council. This parliament established it and it operates within the framework of the government of South Australia. It was this parliament, through this act, that put a minister over it. It is a government board and in that context—establishing a board or fund that is established by statute and overseen a minister—I think the Hon. Mr Pangallo's amendment is highly appropriate.

The Hon. C.M. SCRIVEN: I draw the minister's attention to section 4(3) of the Construction Industry Training Fund Act 1993:

(3) The Board is not part of the Crown, nor is it an agency or instrumentality of the Crown.

I think I can say that I rest my case.

The Hon. S.G. WADE: I would refer the honourable member to section 11A, which states that the board is a principal adviser to the minister. It is a ministerial advisory board.

The Hon. I.K. Hunter: We are backtracking now.

The Hon. S.G. WADE: No, the fact that it is not a Crown agency is beside the point.

The Hon. I.K. Hunter: You just said it was.

The Hon. S.G. WADE: I did not.

The Hon. I.K. Hunter: You did. The level of this debate is insulting.

The CHAIR: The Hon. Mr Hunter, please. We are in committee. Allow the committee to follow its path.

The Hon. S.G. WADE: The government indicated earlier that if the filibuster was continuing at 12.15, we would seek to adjourn. That is what I seek to do.

The CHAIR: Do not reflect poorly on the operations of the committee, minister.

The Hon. S.G. WADE: Mr Chair, I move:

That progress be reported.

Progress reported; committee to sit again.