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House of Assembly - Fifty-Second Parliament, First Session (52-1)
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HEALTH SERVICES CHARITABLE GIFTS BILL

Second Reading

Second reading debate resumed.

The Hon. J.D. HILL (Kaurna—Minister for Health, Minister for Mental Health and Substance Abuse, Minister for the Southern Suburbs, Minister Assisting the Premier in the Arts) (11:59): I thank members on the opposite side for their support of this important piece of legislation, and I will go through each of the contributions as best I can. I have the advantage of having had a week or so to study the member for Bragg's contribution, so I have more detail there but less in relations to the other members.

I will start by saying that, as the member for Morphett said, this is a pretty old piece of legislation. It was introduced in the 1930s and, as I understand it, it was a rewriting of legislation that was introduced sometime in the 19th century, so it has not really changed a lot in over 100 to 120 years. So it is one of those really nice, quaint pieces of legislation that is still around, and somehow or other it has really not had a proper and very detailed look at.

I have to say, when I first became health minister, I met with the commissioners. The then chair commissioner was the Hon. John Darley, now a member of the other place. He impressed upon me strongly the need to review this legislation and I said that I would do it in the course of my time as minister. It has taken a bit longer, but we have gone through a lot of processes of discussion and consultation. I do thank everybody who has participated in that. The thing that John Darley particularly wanted me to do was to change the investment rules and I will get into that later on in my contribution.

I have provided the member for Bragg with an update on the current assets held by the commissioners, and so, for the benefit of the house, I will just provide that information summary to the chamber. They advise me that on 30 June last year—so the end of the last financial year (I guess these will be the figures in the audited reports eventually)—they had assets which were worth, on my calculations, $85.3 million.

Town Acre 86 was valued at $20.9 million; commercial real estate was valued at $11.2 million; equities, $19.7 million; cash, $32.2 million; and accrued revenues, etc., $1.3 million. My calculation is that that comes to $85.3 million. They also tell me that, on 31 January this year, they had $36.7 million in cash. That is not in addition to the $85.3 million, but it just shows the cash amount has increased by $4.5 million over that time. They also tell me that they are holding assets for the following trust funds:

the Royal Adelaide Hospital General (including funds held on behalf of the Hanson Centre for Cancer Research and the Institute for Medical and Veterinary Science), $81,985,000;

the Royal Adelaide Hospital Glenside campus, $593,000;

the Metropolitan Domiciliary Care Services, $435,000;

Hillcrest Hospital, $75,000;

Port Augusta Hospital and Regional Health Service Incorporated, $39,000;

Port Lincoln Health and Hospital Services Incorporated, $283,000;

Port Pirie Regional Health Services Incorporated, $510,000;

Queen Elizabeth Hospital, $514,000;

Intellectual Disability Council Incorporated, $53,000;

SA Dental Service, $6,000;

the Whyalla Hospital and Health Services Incorporated, $205,000;

Mount Gambier and District Health Services Incorporated, $678,000;

Northern Yorke Peninsula Regional Health Service, $21,000; and

the HG Symonds Bequest (split between the Hillcrest Hospital and Glenside campus), $1,000.

They are the assets that the fund currently has and the purposes for which they are held.

Now I will just go through some of the issues raised by the member for Bragg in her contribution. She made the issue about whether or not we could sell the Citi Centre building. The advice I have, and as I guess she would already understand, DTEI owns the lease and, of course, the lease on the building can be re-leased, which is the technical way it would happen.

The member said that there was a draft bill which was a predecessor to this bill. That previous draft would have required the commissioners to invest their funds through Funds SA. That draft bill that the member refers to was the SA Health and Medical Research Bill 2009 that was released for public consultation. In the end, we decided not to go ahead with that piece of legislation. In fact, we established a SAHMRI under existing legislation, so it is not really a predecessor to this bill. We used the commonwealth Corporations Act 2001, so we did not need to go ahead with that.

It was intended under that legislation to provide that the South Australian Health and Medical Research Fund, which is currently held within the Department of Health, would be managed by the commissioners and invested through Funds SA. It did not make any changes to the investment powers of the commissioners under the current act, so it was a different matter.

As the member for Bragg said, the bill enables the board to apply funds to a body other than the one intended. An example given by the member was:

Where a certain institution is given money to undertake breast cancer research and it is found that the institution does not undertake that research, they need to find somebody else who might be able to carry out the research; it is to facilitate that circumstance.

A related statement suggests that the purpose of the clause is to enable or require the board to give money to a body nominated by the government. The example given by the member, about breast cancer research not being conducted in a certain institution to which money was given, is a good example of the kind of situation these provisions are intended to deal with. The relevant clause, clause 17, avoids having to unnecessarily go to the Supreme Court to seek a variation to a trust, taking up the court's time and costing the board money, which would come out of funds vested in them.

While providing the board with the flexibility to be able to deal with the situation described, clause 17 expressly requires the board to consider the intention of the donor and, as far as reasonably practicable, to give effect to that intent. So, if money is given for a particular purpose, the duty of the board, as trustees, is to ensure that that purpose is honoured to the letter if that is possible; if not, that it is honoured as closely as possible.

I make it plain to the member for Bragg and everybody else who is listening that the bill does not allow the government or any other person or body to direct the board in any way as to the application of the charitable assets vested in it. By way of further example, currently the commissioners hold approximately $70,000 for Hillcrest Hospital for the benefit of mental health patients, but that hospital no longer exists so they have not been able to use those funds. The bill will enable them to use the funds for mental health patients, say, at Glenside Hospital.

Ms Chapman interjecting:

The Hon. J.D. HILL: I hope that was a joke the honourable member was making. It is clearly untrue that they would be able to use it for a purpose other than for mental health. This example was provided by the commissioners after the departmental officers briefed the opposition, as I understand it.

The government has not acted on legal advice, according to the member for Bragg, that the commissioners improperly hold assets for the Hanson trust and the IMVS. The same advice that informed the commissioners that they had erred in holding these funds also advised that they should continue to hold and manage the funds as a constructive trust until the situation was addressed.

This is an important issue. For some years I understand the commission had been receiving money for the Hanson trust, and a number of members on the other side raised concerns held by those people. The advice was that they were not properly set up to hold such funds. That was one of the reasons the Hon. John Darley and others wanted the legislation changed to fix that situation. Our legal advice was that until that occurred they could continue to hold funds in a constructive trust; that is, the law invents the trust that is required. So, the bill does address this issue.

The member for Bragg also says that the disability sector has not been able to access funds held for IDSC or Metro Domiciliary Care. I am advised this is a good example of the problems caused by the restrictions on the commissioners' powers on the application of capital under the current act. The current act prevents the commissioners from applying the capital of a gift except in very limited circumstances.

That was one of the issues with the hydro money they were looking after down in Mount Gambier because, theoretically, I do not think they could have given the capital once it had been accumulated; only the interest. This applies to nearly all other funds vested in them. This limitation on the application of capital is corrected by this bill. The member for Bragg stated that former minister Dr Armitage had the Helpmann Family Foundation named in the schedule of the act. It is unclear what other actions Dr Armitage may have taken that are being referred to, I am advised by the member for Bragg.

For members' information, the Helpmann Family Foundation is not listed in the schedule to the act, and nor could it be, because the foundation is not an institution for the purpose of the act. The Helpmann Family Foundation names the commissioners as co-trustees of that trust; however, the current act does not empower the commissioners to so act.

The commissioners have received legal advice stating that they would be personally responsible for any liability arising from any actions or advice that they gave should they have acted in the capacity of a co-trustee for the Helpmann Family Foundation. The bill remedies this and enables the commissioners to act as a co-trustee or trustee, where they are so named, or asked to act in that capacity. That will actually correct that particular problem.

The member said that the government's agenda is to continue to allow the commissioners to have qualified annual reports by the Auditor-General and to enable the government to get hold of the assets vested in the commissioner. That is not the case. The Auditor-General made the first and so far only qualified report in the 2008-09 annual report in relation to the assets held for Hanson and IMVS. I have talked about those matters previously. There is no mechanism in the bill to allow the government 'to get hold of the $75 million' to quote the member for Bragg. The bill ensures that the board will remain completely independent of government in the management of the charitable assets in the same way that the commissioners are currently.

The member said that the government is using the excuse of modernising the bill as a scheme to access the money held by the commissioners for the government's own purposes. That is just not true. The member for Bragg claimed that the removal of terminology such as 'lunatic' was unnecessary as it was still used in other bills. That may be the case, but I think in the 21st century that is not a term that we currently use in normal discourse, and it is certainly not a term that mental health consumers would want to have used in reference to them. While perhaps the term 'lunatic' would continue to have a legal meaning, lunatic asylum, I am advised, is not only meaningless but is also of course offensive.

The Investment Advisory Committee is unnecessary according to the member for Bragg and will in some way enable the government to access funds vested in the board. The bill gives wider investment powers to the board than the commissioners currently have. This is an important point and this is one of the things that the Hon. John Darley put to me. At the moment, people give assets to the commissioners, and if it is real property, they can hold that real property; if it is cash they can hold that cash. They can invest in real property. If they are given shares they can hold those shares for a period of time, I understand, but not indefinitely and they are obliged to sell shares, but they cannot buy shares.

That is a real restriction on them and that is something that they wanted to have changed, so that is one of the things that is corrected by this bill. This bill does give wider investment powers to the board than the commissioners currently have. Given this, it is good public policy to have a body that can provide independent advice to the board that it should consider. This was raised by a number of members: that Treasury officials will sit on an advisory board about how the funds can be invested.

At the moment, we—and when I say 'we', I am talking about the parliament—protect the assets that are provided to the commissioners for investment in funds by restricting what the commissioners can do with those assets. They cannot play the stock market, if you like, under the current arrangements. They are saying, 'Let us be able to speculate in the stock market.' It is inherently a riskier activity than many other ways, so we said, 'Sure, we are prepared to let you do that but we want to put in a safety mechanism which in some way balances that greater freedom.' The safety mechanism we are talking about is an investment advisory committee which would have somebody from Treasury, somebody from the private sector (presumably a stockbroker or somebody with those kinds of skills) and the chair, I think, of the commissioners.

I think that is a balance thing. I understand some people may want to remove that. If that is the case, then what we are saying is that the commissioners, who are not necessarily chosen because they are stockbrokers or investment bankers, would then have that direct responsibility themselves. As I understand it, they would still have the investment responsibility: they would just have to seek advice from this third party, if you like. I think that is a sensible balancing act, and I certainly encourage the opposition to consider the implications of not having it and how we would all feel if, at some future stage, they blew the money in some speculative way. I know they are very cautious people, and I would not want to suggest in any way that the current commissioners would do anything untoward. They are very cautious people.

The Investment Advisory Committee will report through the board's annual report on the performance of the board's investments providing public transparency for performance of these. The independence of the board is preserved since they are not bound to act, as I said, on that advice and the government cannot direct the board through this committee, nor does it seek to. This is really about having a level of scrutiny and some balance so that this greater power that we are proposing to give them is balanced by some external advice. I think that is an eminently sensible thing. It is not a mechanism for Treasury to try to get a hold of the cash. It is not about how the money is spent: it is about how the money is invested.

I now turn to the contribution made by the member for Morphett who is the lead speaker for the opposition. He made much of the research in South Australia, and I agree with him. We have a stunning record of health and medical research in South Australia, and I congratulate those who have contributed over many years.

When I became health minister some five and a bit years ago, one of the first groups I met with was an advisory committee on research matters that had been set up. They told me that things had become somewhat dark in our state, that the share of medical research funds that we were getting through the national bodies—NHMRC and other bodies—had declined some years before that. I think maybe five or 10 years before that, we were getting about 15 or 16 per cent of the national research dollar, so we were getting more than our share as a state, and that was because of the excellence of research programs and researchers in our state.

However, it had declined over time—if not the year I am referring to, which was 2005-06, certainly one of the years that followed. We went below our fair share for the first time ever. So, we were getting more money in cash terms because the pie was growing, but our proportion of the pie was declining. The advisory committee was concerned about that and it wanted some leadership, I think, in terms of addressing the situation. We commissioned a review to look at how to do this—and the member referred to the Shine Young Report.

It is this worth mentioning briefly the leaders of that review. John Shine, who is the Director of the Garvan Institute, which is one of Australia's top research institutes, is a wonderful, very philanthropic human being and a great researcher in his own right. He was essentially the lead researcher on that review. Alan Young, as some members would know, is not only a prominent stockbroker but also the Chair of the Flinders Medical Centre Foundation, so he has an interest in research but he also knows where to get the money from. Alan Young was also a very philanthropic individual, another great South Australian. Together, they had a good business acumen.

Together, those two individuals talked to the research community, to the universities and to us in health and came up with a proposition to improve our capacity to grow our research sector. Essentially, SAHMRI flows from that. It is about collaboration, it is about combining and getting a large enough institution to allow us to compete. We were being beaten in the research dollar race by bigger institutions in the Eastern States in particular. There was no way that smaller institutions in our state—of which we have many—could hope to compete. So, the way of getting there was to muscle-up and create a larger institution, and that is really the thinking behind SAHMRI.

All three universities in South Australia have signed up to it and are partners in it. The health department is a partner. It is an independent institution with its own board, chaired by Raymond Spencer, another outstanding South Australian, a philanthropic person with great business credentials as well. That body has been established. We have now appointed a director, Steven Wesselingh, who is the current Dean of Medicine—I think is the description—at Monash University. He will take up full-time work in October, I think, and that followed an international search.

What we are creating is a new institution which will be powerful. It will have a new building, as members referred to, adjacent to the new Royal Adelaide Hospital. We are very pleased that the building itself won an architectural award in Europe, the only Australian building to do so this year, I understand, so that is a great achievement. Researchers have said that we need a new building, we need more physical space, we need greater access to funds and we need to be bigger. SAHMRI does all of that.

We are in the process of creating the building and, once researcher Steven Wesselingh comes on board, the advisory committee on research matters (the scientific panel, of which John Hopwood I think is chair—another outstanding South Australian scientist) will determine what the priorities are for the SAHMRI. So I think it is fair to say that there is some nervousness in the research community as to who will be in and who will be out. My guess is the really outstanding researchers should have nothing to worry about because they will definitely be in this institute. That is not to say that other research institutes cannot exist and coexist and that will continue.

I am sorry to go on about research a bit but it is important that people understand this, but SAHMRI will have its own research fund. That is currently growing at the rate of $8 million, $9 million or $10 million a year, largely driven by its share of the commercialisation of the research that Professor John Hopwood has undertaken. He has commercialised treatments and there is a big flow of money coming into our state as a result of that. A share of that money is going into a research fund, which will be applicable to those who are part of SAHMRI. So that will be a discrete fund which will be managed by the trust.

All the other funds managed by the Commissioners of Charitable Funds will be used for the purposes for which they have been donated. If it is to do cancer research in a particular location, that is what will happen. If, over time, say, for example, the Hanson Institute were to become part of SAHMRI, the funds would follow where those researchers would go. That is obviously up to the research team itself and it would be up to SAHMRI, and then it would be up to the commissioners. This is the reality that we are talking about. There is no intention or plan by government to direct the commissioners how to do their job. We trust them to do the right thing in all of the circumstances that they will find in the future.

The member for Morphett made the point about the Auditor-General's consideration of this matter. I agree in part with him that it is a bit frustrating, but there are a lot of audits that need to be done and I suppose the Auditor-General gives priority to the bigger areas of government and some of the small areas just happen to be a bit slower. It does happen from year to year. I am not sure if anything can be done. As I understand it, a lot of the work is done in the private sector, so the point he has made I think is an appropriate one. I guess everyone is busy at this time of year.

There was an issue about Mount Gambier that the member raised. That was the hydrotherapy pool and I think I have already mentioned that. I have talked about the advisory committee: it is about investments, not expenditure.

A number of members raised issues about health advisory councils. There would be some who would say that all donations to hospitals for charitable purposes should be directed through the commission. I guess when the commission was established in 1930, or whenever it was (even earlier than that), it probably did cover the field and, subsequently, other hospitals have been added. I decided that that was not the appropriate way to go. If individual country hospital advisory councils want to be part of it, they can be. They can go into it for a time and leave it for a time. It is really up to them. They can choose.

If a small country hospital had a sum of money—and I have mentioned some of the country hospitals; for example, Mount Gambier has $678,000 held by the trust, and that is appropriate—they might think it is more prudent to have a body that is specially set up to manage those funds (hold them and investment them wisely) rather than try to do it all themselves but, ultimately, that would be up to them. They could put those funds in for a while and, if they reached the volume that allowed them to do whatever the thing is they wanted to do, they could take out the funds and do whatever they wanted to do. I understand that is the way it would work. Whatever assurances members were seeking, I am happy to provide that there is no intention to insist or even encourage the HACs to put their funds in there. It is just something that they can do if they choose to do it.

The member for Stuart made a point, and I think that it was a political point which I need to address politically—and I do not mean to be offensive to him when I do this. The honourable member made the point that donations are now harder to get in the country because we have got rid of boards. He said—and I quote him, I think:

People are concerned money will be spent where we want it rather than where the community wants it.

They were words to that effect. It is true that he said that, but it is not true that we want to direct them where to spend money.

Mr van Holst Pellekaan: It is true that I was told that.

The Hon. J.D. HILL: No, I am not disputing—just to be clear, the honourable member just said that it is true that he had been told that. I am not saying that he is not telling the truth when he says that, but the question has to be asked: why are people in the country worried? Well, the reason they are worried is that the Liberal Party in our state has run a campaign trying to scare the crap out of them over the last two or three years about the government's intentions with respect to country hospitals.

I apologise, Madam Deputy Speaker, for using language which might offend the dignity of the house, but that is the reality of it. If you have your local members saying that the government's intentions are to do disastrous things to your hospital, is it a wonder that people suddenly develop this attitude? Madam Deputy Speaker, I know that this is not the place to debate country health, but can I say to the member for Stuart that I am happy to have a Legislative Council committee—indeed, I would have been happy for one in this house, too—to investigate issues to do with country health.

I would say to him—in parenthesis—that I would want to ensure that the terms of reference did not contain argument, as they currently do in the Hon. Michelle Lensink's propositions, and make the assumptions that she wants to prove in the investigation in the language that she uses. However, if we can come up with a neutral form of words I would be happy to support it, because it is my view that we have a very good story to tell; and I think it is important that members of the Liberal Party actually go out there and find out what is really happening rather than what they think is happening, or rather what they have told themselves we are intending to do.

The reality is that we have put more services into country hospitals and we want to put more services into country hospitals. Members opposite might think that, because we are the Labor Party and we have mostly metropolitan seats, we do not care about people who live in the country. I can assure members that that is not the case.

The point that one of the members made—I think it was the member for Hammond—is true: country hospitals provide services to all South Australians, not just people who live in the particular community; and it is absolutely important that we have a network of hospital services across our state that can provide citizens with the level of service they need.

The point that the member for Hammond made is that we just assume, I think he was suggesting, that country hospitals are for country people and that we spend all our money on city hospitals. Well, I would say to him that the reverse is also true: city hospitals are used by country people. In fact, if anyone in the country has a major health need they go to a city hospital—500 or so patients a day on average are in a city hospital from the country.

Our hospital system should not be divided. It is a united, integrated system, and what we want to do is to make sure that we have the very best standard wherever you happen to be in the state. You cannot have brain surgery at every hospital and you cannot have intensive care at every hospital, but you can have a range of services applied across our state to make sure that people can get better attention. I could go on at great length.

I would welcome a proper inquiry which is neutral in its language, rather than the member for Stuart trying to make an argument by way of motion. I would welcome a discussion about country health, and I would be happy to talk to him about appropriate terms of reference. I have asked my colleagues in the upper house to speak to the Hon. Michelle Lensink about that. That is the political point I make.

The member for Stuart also raised an issue with the St John Ambulance. He came to see me after he had sat down to say that inadvertently he said 'St John Ambulance'. He meant the South Australian Ambulance Service, the state ambulance service, because the state service has been divorced from St John for almost 20 years now, I think. I assume he was talking about the fact that, in country South Australia, many of the ambulance services are provided by volunteers. I think that was the point he was making. I said to him privately, and I will say it publicly, that if he has particular issues and examples that he would like me to follow up then I am happy to do so. I am just not aware of the general issue that he was talking about.

All I would say is that the ambulance service is an integrated service. Professional and volunteer ambulance officers work side by side. Our intention, of course, is to make sure that we have a service which is capable of providing what is required in country South Australia, backed up by MedSTAR, the Flying Doctor Service and other services.

On the point of donations to country hospitals, I do know, anecdotally, as well, that donations have been difficult right across the board over the last year or so. Arts organisations, which I am responsible for, have had similar problems. So, the economy, despite the good year that people are having in the country, I think it is on the top of several not so good years. Hopefully, a bit of positive action on the part of the member and some good crops this year should see that turn around.

The member for Hammond raised the issue of the Hanson Institute, the RAH and the university. The point I would make, and I think I have already referred to it, is that what is donated for particular functions will continue to be provided for those functions. There is nothing we will do about that.

There were a few political points made by others which I will not address at this stage; I may at some other stage. That concludes the remarks that I would make. This is about modernising the Public Charities Funds Act. It changes the language but also changes some of the powers. It creates a contemporary framework for the provision of charitable funds.

I join with at least one member on the other side, but I am sure that the sentiment would be shared by all members, in thanking all of those South Australians who have chosen, from time to time, to give money to the hospital system. It is something that people do value very strongly and they do like to contribute.

I know that if you have had a family member who has been helped, or even who has died, in a hospital or allied health institution, it does give you a particular affinity with and affection for that place and you do want to help them where you can. So, I thank all of those donors and I thank the opposition for indicating its support for the legislation. I understand that we will now go into committee.

I would also thank the public servants who have assisted me with this legislation: Andrew Thompson and Rob Smetak and also Mark Emery and Aimee Travers, parliamentary counsel, for their assistance.

Bill read a second time.

Committee Stage

In committee.

Clause 1.

Ms CHAPMAN: As the minister is aware, this is a complete new bill to replace, in total, the Public Charities Funds Act, which is to be repealed. I am assuming that the title is being amended to accommodate the fact that not only is this to establish a new structure, under which there will be considerably greater investment powers and new rules to apply to their role, but the definition of who they are going to be receiving moneys for and who they can apply it to will be substantially expanded.

They are moving from an institution scheduled basis, with the supplement of proclamation, to health services as defined under the Health Care Act 2008. I just want to ask some questions about that, assuming, minister, that that is the case, that the health services, which later on is defined as being as per the meaning in the Health Care Act, is quite extensive. I will just refer to that. That is set out in section 3 of the Health Care Act 2008. It provides:

health service means—

(a) a service associated with:

(i) the promotion of health and well-being; or

(ii) the prevention of disease, illness or injury; or

(iii) intervention to address or manage disease, illness or injury; or

(iv) the management or treatment of disease, illness or injury; or

(v) rehabilitation or on-going care for persons who have suffered a disease, illness or injury; or

(b) a paramedical or ambulance service; or

(c) a residential aged care service; or

(ca) a research, pathology or diagnostic service associated with veterinary science; or

(d) a service brought within the ambit of this definition by the regulations, but does not include a service excluded from the ambit of this definition by the regulations;

I think on anyone's assessment, minister, that is just about anything that is in that list, plus anything that you has minister might regulate to be a service. It seems to me that apart from the fact that quite commonly our hospitals, as we have formerly known them, are now places of multiple services of health and, therefore, it is not unreasonable that they have moved away from simply acute care clinical, but that they provide a broader number of services within those facilities.

If that were the definition that we are expanding from, that would be a logical extension of what the commissioners currently do, or what will now be board members. This, in fact, goes to anything that is even associated with the provision of services, including educational work. On my assessment, minister, just about all of those lead back to your department; that is, the health department, whether it is in public health provision, that is, for the protection against disease, contamination, etc., or whether it is in the provision of treatment services, but particularly in educational services, your department, is in control.

Why is it necessary for us to have the health service definition under the Health Care Act to so broadly incorporate this, which will now include all of your department's organisation, its regional bodies, Pathology SA, for example, which has taken over the Institute of Medical and Veterinary Science areas of responsibility, and the like?

The Hon. J.D. HILL: I thank the member for her point. I think history explains why we have moved on. I suppose in the 1930s—in fact, the first minister for health was appointed in the 1930s—the Hon. somebody Ritchie, a former conservative member.

Ms Chapman: Lyell McEwin?

The Hon. J.D. HILL: No, he was the second. He was health minister from 1939 until 1965, which is a record I intend to not beat. I am not sure what is his name is, but he was the first health minister, appointed in the mid-thirties. Before then, government interest in health was probably minimal. There would have been a few hospitals. They were set up by charitable groups and they operated on that basis.

This legislation creates an opportunity for people who want to give money to a hospital to have that looked after in a particular way. So, hospitals were the beginning, the middle and the end of health care. Well, we have moved on a long way since then. If somebody, for example, now wanted to give money to Breast Screen SA for a particular purpose—they might want to buy a bit of machinery or undertake a bit of research—it is arguable that that is not a hospital in a technical sense because it is part of the Adelaide Health Service and the Adelaide Health Service has been declared as a hospital; it is covered in that way. The Dental Service is a similar service. We now have GP Plus healthcare centres, which are subacute and primary healthcare services, and people might want to give donations to those kinds of entities. The member says that they are in the government remit; of course, hospitals are too. That is the reality.

This is about public healthcare services. If someone wants to donate to the IMVS for a particular reason, that is one of the problems with the existing bill; people have been donating to the IMVS or the Hanson Institute not improperly, as such, but the commissioners have been holding onto that money yet not according to the legislative framework. This will allow them to do that. It is really accepting the reality that we now live in, that health services are delivered not just from public hospitals but from a whole range of services. The application of those funds, though, would be by the mechanisms that are established under this bill.

The CHAIR: The minister may wish to know that the former member to whom he was referring was the Hon. Sir George Ritchie.

Ms CHAPMAN: Do you agree, minister, that health services as now defined are all under your control?

The Hon. J.D. HILL: Health services are under the government's control. I am not sure what point the member is making, because the hospitals that are covered by the current legislation are, too. We are just extending the range of services. Individual services would have to be proclaimed under clause 4(1), I think. For example, we might proclaim—and I am sure we would—SA Pathology or IMVS as a service to which people might want to give money. They do currently, but technically we should not be holding money for that particular group. So, it is to allow that kind of donating to occur.

Ms CHAPMAN: I am not sure whether the minister has actually read the 1935 act or the original legislation from the previous century, but I think one of the helpful summaries of this legislation and its history was provided by the Hon. Legh Davis MLC, who was the chair of an inquiry into the review of this act in the late 1990s. He provided a report to the parliament titled 'Review of Commissioners of Charitable Funds: Report of the Statutory Authorities Review Committee' (of which he was chair) dated 22 April 1998.

He covered a number of the things that the minister asserts—I think quite fairly—are to be remedied under this act; namely, the expansion of powers to invest, etc., and to deal with assets (for example, to sell, encumber or sublease and the like). Whilst it is under a structure that I am not overly happy with—and I think I have made that very clear—the expansion of investment powers is something, as the minister also said, that the Hon. John Darley has in more recent years has urged the government to do something about.

There is no issue with me in relation to the expansion of capacity to invest and to apply capital in addition to income. However, one of the things the Hon. Mr Davis said in his report—which is summarised in the preamble to the report, and signed by him—apart from the history of it being established in 1875 and the like, was that:

The Commissioners were originally established because of a concern that donations and bequests would not be managed separately from the operational funds of public hospitals.

He went on to say that since that time hospitals now dealt with multimillions of dollars, but the highlight of that reference is the importance of separating funds that are donated and directed to the application of a specific purpose so that they are independent of those who have operating control of the service. So, my next question is: is it the intention of the health services under your control, such as SA Pathology, to apply for funds from the Commissioners of Charitable Funds, for projects that they propose to undertake?

The Hon. J.D. HILL: I was just getting advice on a broader issue that I think is pertinent to the general question the member was asking. I am aware that there were a couple of select committees or standing committees that looked into this matter, and I think that one or two of them suggested we should get rid of the act altogether. That was my initial starting point when I started looking at this is: do we really need this? I was persuaded, in fact, that it was a good idea to keep it, to be honest. It is a fair question, since I think there has been reasonably bipartisan support to get rid of it altogether; but I was persuaded, and I think it is the right way to go.

The question was really whether IMVS is put on the schedule, if it is put on the schedule (and we could, I assume, do that) and somebody left money to, say, the Hanson Institute for cancer research. The Hanson Institute does not really exist; it is kind of a name, but it is not a legal entity; it is a part of the IMVS as I understand. We have provisions in the bill to deal with this particular issue, but it does not exist as a stand-alone identity; it has marketing identity and a whole range of other things, but it is really just part of SA Pathology now.

So, if somebody left money for the Hanson Institute, for whatever purpose, then of course they would be able to apply to the fund for it. This is really to correct a problem, where technically at the moment that should not be happening. It would be the same with any of the other institutions that we look after within the health portfolio: they cannot ask for money that was given for some other purpose. It is not a bucket of cash that any part of the health department can apply to support itself.

In fact, one of the things I want to do—and the commissioners support this—involves a provision later on in the legislation to allow them to set up an advisory committee on the proper application of requests for expenditure. Mostly what the legislation does is look at how we hold money and how we manage money, but it does not look very much at how we spend money. In fact, what this bill does is remedy the sin the member for Bragg is suggesting that I am trying to commit by using this legislation. What the member is really saying is that I just want to get my hands on the money and prop up the health system—if I can summarise it in a crude way.

That is not the case, but at the moment the hospital says, 'We want a million dollars' worth of this,' and the commissioners essentially have to take the word of the hospital. There is no scrutiny as to whether or not that is a good use of the money as long as it is generally in the area. The current legislation does not prescribe or even assist in any way in how the money should be expended other than for the purposes for which it is granted. Is this a good use or a poor use of it? Value does not come into it. It is in accordance with the gift.

What we want to do is to create a mechanism so that the commissioners can get some good clinical advice about whether it is a worthwhile activity that has been requested, so we are putting some quality control in there—well, the commissioners will put the quality control in, because it will be a committee that advises on that. It will not take away their power—they can still do whatever they like—but it will try and put some scrutiny into it. I hope that helps to explain what we are trying to do. That certainly was not something that was contemplated 100 plus years ago.

Dr McFETRIDGE: On that same point, minister, you are using the IMVS as an example of an organisation to which money can be donated. However, further on in the bill, it talks about a prescribed research body may not be declared as a public health entity. So, how does that fit in where moneys can go in relation to health services?

The Hon. J.D. HILL: Sorry, member for Morphett, we are not quite sure what you mean by that reference.

Dr McFETRIDGE: The member for Bragg was talking about the ramifications of changing the name of the act, under clause 1, to Health Services Charitable Gifts Act. Later on in the bill (and perhaps we might wait until we get to that clause), under clause 4—Public health entity, I refer to subclause (2).

The Hon. J.D. HILL: I follow what you are saying, but shall we deal with it when we get to it? The basic thing is that we will proclaim SAHMRI, and that will be a prescribed research institution; so it will be outside of the provisions. We will be setting up a separate fund for SAHMRI, and the commissioners will look after that fund. It will be managed by the same people, but it will be a separate trust fund, which has its own dynamic. It will be managed by the commissioners under a trust. So, that is what that refers to.

Ms CHAPMAN: I would like to clarify something, and I am happy to take it as a supplementary. The Health Services Charitable Gifts Act short title is what we are still considering. Minister, you mentioned that you did consider whether you would abolish the act completely. I think we do need to know why you moved away from that and, having moved away from it, why you did not go to a model that every other institution has, and that is the powers and obligations under the Trustee Act, including the obligation to go to the Supreme Court, although the Attorney-General could make those decisions, as you know, under that act.

The Hon. J.D. HILL: That is a reasonable question. When I said that it was my initial predisposition, that is what I had heard put before. So, I said, 'Oh, well, let's have a look at it. It's an old bit of legislation, do we really need it?' What would have happened, of course, is that those funds would have had to go somewhere else. Most of the funds—95 per cent of the funds—are held for the Royal Adelaide Hospital, so we could have transferred the management of those funds to the Royal Adelaide Hospital. There is no Royal Adelaide Hospital foundation, although there might be a smaller one. The Queen Elizabeth Hospital and the Women's and Children's Hospital have a foundation, so we could have established something like that, which could have held onto the funds.

To be honest, what persuaded me against it was talking to the commissioners. They go through the processes they go through and the kind of scrutiny they give to the management of the funds, and I was persuaded that it was a good model and it seemed to work. I was not convinced that some of the individual foundations were operating at a level I thought was professional; in fact, I had some serious questions about at least one or perhaps a couple of those foundations. However, I do know that this trust reports annually to parliament, it has a whole range of processes of scrutiny and I think it operates in a very good way, and I was persuaded that the improvements the commissioners wanted would make it work even better. I did not have a strong position; it was just my initial thought, 'Oh, yes, that makes sense. It's old legislation; do we need it?' But, in the end, I was persuaded.

Ms CHAPMAN: I can ask this on another general clause, but I did indicate in my second reading that I had been advised by your department, because there is provision in this bill to enable foundations and auxiliaries to come in, as to why they were not consulted at all about this bill, so I ask you that question. You are giving them an option to come into this structure, so why were they not consulted about that opportunity, if you want to describe it as that?

The Hon. J.D. HILL: This is about donations directly to hospitals, not to foundations. As I mentioned, there are a number of foundations (Queen Elizabeth foundation, Women's and Children's foundation and so on) which exist, if you like, in competition with this. We do not control some of those foundations, and do not see inside them, other than whatever the law says in terms of annual reports, in the same way that we see inside this organisation.

Some of those organisations would like us to transfer the money to them, to be perfectly frank, because every organisation likes to have as much as it can. However, it is not about them: it is about this particular organisation. It is not about those foundations, and it should not have any impact on them one way or the other. I have just been told that there is a provision in the bill which allows me to exempt those foundations. The point is that the bill is specifically worded in such a way that the impact on those foundations should not be affected by the operations of this legislation which, I think, is the practice currently.

Ms CHAPMAN: There are two areas: one is the example you used of The Queen Elizabeth Hospital Foundation, which currently has its own autonomy and may not ever want to join your proposal and may wish to maintain its independence; and then we have the Royal Adelaide Hospital Ladies' Auxiliary, which currently has to put its money in with the charitable trust but may not want to do that in the future. My understanding is that your bill is going to relax that so they do not have to but, in addition to that, it is going to give those who are not in it an option to come into it and have the new board look after their funds. So, it puzzled me as to why, in the establishment of this act where it does affect them—you may say not adversely—and there will be a procedure for them to adopt, they were not consulted. They were not even asked, as I understand.

The Hon. J.D. HILL: All I can say is that if they feel that they should have been consulted, I apologise to them, but the advice I have is that it does not affect them in practice. I invite anybody who wants to have discussions about it with us between houses to do so. We are happy to talk to them if they have some issues. If you know people who are particularly aggrieved I am happy to meet with them.

Progress reported; committee to sit again.


[Sitting suspended from 12:59 to 14:00]


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