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House of Assembly - Fifty-Fourth Parliament, First Session (54-1)
2019-11-27 Daily Xml
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Auditor-General's Report

Auditor-General's Report

Debate in committee resumed.

The CHAIR: We are on to the examination of the Auditor-General's Report in relation to the Attorney-General. We will now start the clock, and the member for Kaurna has the call.

Mr PICTON: I refer to the Auditor-General's Report for 2019, Part C: Agency Audit Reports, page 48, Attorney-General's Department, Public Trustee, Common Fund Financial Reports. The Attorney-General has previously advised that from 1 July 2019 the Public Trustee will cease to accept any new deposits from private investors, with the service to be fully phased out by 30 June 2021, including current investment clients being forced to remove their money. Has the Attorney-General exercised her power under section 29(1)(b) of the Public Trustee Act, which reads:

(1) The Public Trustee may establish one or more common funds—

(a) for the investment of money comprising or forming part of an estate under the control of the Public Trustee;

(b) for the investment of money on behalf of other classes of persons approved by the Minister. [to change the classes of people who can invest with the Public Trustee.]

The Hon. V.A. CHAPMAN: I think the two questions are: have the two funds been established? And the second question, can I have that again?

Mr PICTON: Has the Attorney-General exercised her power under 29(1)(b) of the Public Trustee Act?

The Hon. V.A. CHAPMAN: In relation to that, can I inquire where that has been referred to in the report?

Mr PICTON: In relation to the Common Fund Financial Reports.

The Hon. V.A. CHAPMAN: I understand that, but I am just looking at page 48 and trying to identify where this is referred to.

Mr PICTON: Well, the whole section in relation to the Common Fund Financial Reports. While that section is not specifically mentioned, I do think it is germane and I am wondering whether you can answer the question.

The Hon. V.A. CHAPMAN: I may, but I do not have the Public Trustee Act in front of me. If the member wants to have anything specific, I am happy for him to identify that. I can confirm that as and from 1 July this year the Public Trustee has ceased to accept new deposits from the following classes of persons: the wills customers of the Public Trustee, beneficiaries of estates and trusts administered by the Public Trustee when funds would be otherwise distributed, the trustee of estates and trusts, the Trustee of Charitable Funds, religious organisations, and trustees of self-managed superannuation funds and staff. That service will be phased out by 30 June 2021.

As to the particular accounts you are referring to, I am not actually sure which ones you are referring to, but I am happy to take it on notice and look at the question later. If you want to identify the operation of certain powers under the Public Trustee Act—I think it was in relation to section 23; is that right?

Mr PICTON: It is section 29(1)(b).

The Hon. V.A. CHAPMAN: Well, if you do not want to indicate what that is—I have read the Public Trustee Act, but I am happy for you to read it out and I will see whether I can answer it.

Mr PICTON: Thank you very much. Have the classes of people changed in relation to the common funds and investors?

The Hon. V.A. CHAPMAN: I do not believe so. Again, I will take that on notice. I think I just read out to you all the classes that have ceased to operate in relation to new deposits. Is that what you are asking? I have identified the ones that are to cease to operate.

Mr PICTON: In relation to the changes of investors that the Attorney-General has outlined, has the Attorney exercised her power under the act to give effect to that decision?

The Hon. V.A. CHAPMAN: Again, if we are referring to the utilisation of section 29, I just refer to my previous answer. We will look at that.

Mr PICTON: You might need to take this question on notice as well. What form did any authorisation take? Was it regulation, was it gazettal, or was it a simple signed instrument?

The Hon. V.A. CHAPMAN: I know I have signed some documents in relation to that. My understanding is that in relation to section 29 that enables me, as the relevant minister, to approve classes of persons who can invest money with the Public Trustee. I have identified to you the ones where the Public Trustee no longer may approve for investment. From what I have indicated as to the previous classes of those that operated that I have approved, you can assume that I have acted to identify that the list I have read out are ones that, as from 1 July this year, the Public Trustee ceased to accept as new deposits.

Mr PICTON: In relation to the common funds, how much did the Public Trustee make from managing those investments?

The Hon. V.A. CHAPMAN: I assume you mean in the financial year to 30 June 2018?

Mr PICTON: Yes.

The Hon. V.A. CHAPMAN: In which case, I will take that on notice and identify that for the committee.

Mr PICTON: What do you predict the value of that class of investment will be as at 30 June 2021?

The Hon. V.A. CHAPMAN: I will have to take that on notice. Just to be clear on what we are taking on notice, they are the remaining investors or the ones that are no longer to apply and will completely cease by 30 June 2021.

Mr PICTON: How much do you predict the Public Trustee will make from managing those investments?

The Hon. V.A. CHAPMAN: Again, they are all matters that would be in budget papers. What I can make available to the committee, I will. I know that you are asking questions about what I predict. These are matters that have been assessed by the Public Trustee. They have their own financial advisers in relation to those matters, and they have been incorporated in the Public Trustee budget as an estimate in the forward estimates. We will identify what information can be made available to the committee and make the same available.

Mr PICTON: Is it the case that as a result of these changes there will be a gap in the budget of the Public Trustee? If so, what will be the size of that gap?

The Hon. V.A. CHAPMAN: I will just identify the two separate questions. One is that there is an identified gap. Is there going to be one and, if so, what is it? I think that is what you are asking me to identify. Some commentary has been made in the report, but again I think one has to look at what has been forecast as the revenue stream that will apply in the 2019-20 and 2020-21 years, and that information I will make inquiry to provide where it is available.

Mr PICTON: Who will be managing these investments instead of the Public Trustee and is the Public Trustee recommending particular organisations to clients who are exiting?

The Hon. V.A. CHAPMAN: I do not know the answer to that. I have been given some information on it but, to be clear for the committee, we will take that on notice and identify what other options have been given. I would expect, though, that that would be a matter of course for the investor to make that determination. There is certainly no direction by the Public Trustee as to how they might operate in the future.

The whole reason, of course, for phasing this out to 30 June 2021 is to enable the client sufficient time to seek the necessary accounting and taxation advice and arrange for an alternate investor provider. To the best of my knowledge, there is no imposition being placed on investors as to who they might invest with in the future and under what terms.

Mr PICTON: Have you sought any advice regarding the legality of retrospectively removing clients from the Public Trustee investment service and, if so, who provided that advice?

The Hon. V.A. CHAPMAN: I do not accept the assertion of the retrospective removal, but I will say that in relation to the change of the investment arrangements and services that are going to be provided by Public Trustee in the future, they have been within the envelope of advice not only from within Public Trustee but from Treasury and from the Crown Solicitor's Office.

Mr PICTON: In relation to any of that advice that has been provided, was there identified a right to unilaterally dishonour the contracts that were had with the Public Trustee and the clients, or has the opinion neglected that contractual issue altogether?

The Hon. V.A. CHAPMAN: Again, I do not agree with the way the member has described the circumstances of the consequence of this decision. However, the determination, its impact and its legality have been assessed, advice has been received and the decision that has been made is consistent with that being both lawful and obviously able to be undertaken.

Mr PICTON: I refer to Auditor-General's Report, Part C, page 41, Attorney-General's Department, Public Trustee, and the merger of the Public Trustee and the Office of the Public Advocate. The government has announced its intention to merge the Public Trustee with the Office of the Public Advocate and we understand that is subject to legislation. When does the Attorney-General intend to introduce that legislation to the parliament?

The Hon. V.A. CHAPMAN: Rest assured, member for Kaurna, that it will not be next week. Nevertheless, work is being undertaken. The announcement was made in April this year. Obviously, there has been not only the undertaking of work for, and the change of core business to be undertaken by, the Public Trustee that we have already canvassed in the committee today, but also the cessation of the provision of wills for certain members of the current client base or the client base that operated when the announcement was made to a more limited range of persons—for example, concession holders.

After 30 June 2019, a three-month period was provided to clients at the time who had wills that would no longer qualify for work to enable them to make an appointment and have any codicil prepared to update their will. All that work has been undertaken. In the transition and change to the core work of the Public Trustee that has already taken place and that has not required legislative reform, that has gone on.

The actual merger between the Public Trustee and the Public Advocate does require legislation. We are working to ensure that that framework and the new service structure deliver the best possible outcomes, but I can confirm that there is no impact on current customers and clients prior to the passage of legislation.

Mr PICTON: How many staff are currently employed in the Public Trustee and how many staff are currently employed in the Office of the Public Advocate?

The Hon. V.A. CHAPMAN: I have referred to that a few times this year. In relation to the Public Trustee, the number of full-time equivalents as at 30 June 2019 is 176.1. In relation to the Public Advocate, it is quite a number less, but I will just find that for you. Full-time equivalent is 28.3 as at 30 June 2019.

Mr PICTON: Do you consider there are any duplicated roles between the two, and what will the savings be to taxpayers should the merger go ahead?

The Hon. V.A. CHAPMAN: The reforms are not about delivering a budget saving, let me be quite clear about that. It will not result in a reduction in services to clients and, as a consequence, we are not expecting any staff reductions as a result of the merger. What has become apparent, though, is that in the overlap of clients who are both clients of the Public Trustee and clients of the Public Advocate we have something like 700 people who are clients of both.

That is a huge cohort of our community who are in need of their financial matters being looked after, which of course are largely looked after by the Public Trustee, and also other advocacy guardianship-like matters, etc., under the Public Advocate. The service as it is currently structured means that those clients, if they want person-to-person service, need to attend two different premises and two different agencies about really similar matters.

A common one, I am told, is when a decision is made perhaps to assist someone who is under the guardianship via the Public Advocate's area of responsibility to change the accommodation for that person and support them into changed accommodation. If they have money already invested and/or an income stream that is being managed by the Public Trustee, they have to go back and forth between the agencies to enable them to, I suppose, ultimately culminate in the acquisition or securing by tenancy of the new accommodation and make the money available for purchase and/or bonds or rent and the like.

So we have a situation where that person, already under some limitations, is required to deal with both these agencies and, quite frankly, they can be in conflict. It may be that the Public Advocate takes the view that they need a new standard, perhaps a more expensive standard of accommodation for their current needs, but the Public Trustee on the other hand, who is the keeper of their money, has a different view.

It is important that the client—and we have some 700 of them in South Australia—is able to go to one agency that has experts managing their funds but also that they have the support and advice of those who might give them that in relation to accommodation. They should be able to sit down and have that dealt with and sorted out in a one-stop shop situation. We can only see a benefit of that.

We still need to have the persons who are going to give advice and support in relation to the accommodation in that example. We still need to have the people who are experts on money, what they are going to need for future requirements and what is suitable and affordable for them to be able to meet and give that advice. We want to offer a better, more comprehensive service in a one-stop shop scenario that will better suit the needs of those we support.

By ensuring that the Public Trustee also refocuses its attention on those most in need in our community, we anticipate that, with no loss of staff—in fact, each will continue in those roles—we will actually provide a better service. As I say, this is not about budget savings; this is about providing a better service for the very people who need it most.

The Hon. A. KOUTSANTONIS: I refer to page 35, expenses, Attorney-General's Department. Has the Attorney-General granted any indemnities for any cabinet minister for any legal action or legal inquiry over the audit period?

The Hon. V.A. CHAPMAN: Page 35 of the Attorney-General's?

The Hon. A. KOUTSANTONIS: Expenses.

The Hon. V.A. CHAPMAN: The reference is at what point on that page?

The Hon. A. KOUTSANTONIS: Expenses. It says, 'Administered expenses decreased by $146 million to $535 million.' Of that $535 million, were any indemnities granted for legal expenses over the audit period?

The Hon. V.A. CHAPMAN: Sorry, the question then is—

The Hon. A. KOUTSANTONIS: Any legal indemnities applied to any—

The Hon. V.A. CHAPMAN: Any legal indemnities applied to whom?

The Hon. A. KOUTSANTONIS: Any public servant.

The Hon. V.A. CHAPMAN: Any public servant? I will make an inquiry about that and let you know.

The Hon. A. KOUTSANTONIS: A follow-up question: can the Attorney-General inform the committee whether or not any cabinet minister requested indemnity over the audit period?

The Hon. V.A. CHAPMAN: Do I assume this is also in relation to legal expenses?

The Hon. A. KOUTSANTONIS: Yes.

The Hon. V.A. CHAPMAN: I will make that inquiry and advise the committee if I am able to.

The Hon. A. KOUTSANTONIS: If I can now turn the Attorney-General's notice to the Independent Commissioner Against Corruption in Report 6, Part C, page 240, functional responsibility:

The activities of both the Commissioner and the OPI are included in the financial report as they constitute a single entity, ICAC, for financial reporting purposes.

I have a letter that the ICAC has put on its website seeking resources from the Treasurer for an evaluation of the Department for Health. Did the Hon. Bruce Lander QC at any time write to the Attorney-General during the audit period seeking extra resources for an inquiry into Health?

The Hon. V.A. CHAPMAN: I will check whether there is any correspondence on that, but it has certainly been raised and the Premier has advised the house accordingly. I think it has been made abundantly clear. The resources that are received by way of public funding to the commissioner for his application are determined by him. For example, he has sought funds for capital upgrades in relation to infrastructure that may be required, subject to legislation that is currently before the house. I think the member for West Torrens has made a powerfully long contribution on that already, and I do not think we have seen the end of it.

For example, the capacity for the ICAC to convene public hearings is a matter proposed to be at the discretion of the commissioner, and certain infrastructure requirements would be made. Those funds have been requested and provided. Budget submissions are put in by this agency, just like any other, and some very substantial ones have been received and acquiesced to.

In relation to that specific one, I refer the member to the Premier's more comprehensive answer on this to the parliament. However, in any event, he has funds available for his investigations. It is entirely up to him as to what he chooses to investigate.

The Hon. A. KOUTSANTONIS: Maybe the Attorney can take my final question on notice. In the letter to the Hon. Stephen Wade MLC, which is public knowledge, it said that the Treasurer advised that the government is not in a position to provide additional funds that would enable him to conduct an evaluation of the practice, policies and procedures of CALHN. He is disappointed that the government was not in a position to provide those resources. Is it the Attorney's suggestion to the ICAC that the ICAC use the unspent funds detailed in the Auditor-General's Report for any subsequent inquiry the ICAC would have into CALHN? Does he need to seek carryover permission from the Attorney-General or is that a matter that is dealt with by the Treasurer?

The Hon. V.A. CHAPMAN: There are several questions there. In relation to whether there is an expectation by me, or presumably by any one else in the government, that the commissioner would have access to unspent moneys that are in his budget, the answer to that in short is no. If we are referring to moneys that have been provided for the purpose of capital infrastructure, then that is what they are earmarked for. They are matters that are negotiated between the commissioner and the Treasurer.

For example, in the event that a bill before this house does not progress or is not passed, there would be negotiations with the commissioner and the Treasurer as to how much of those funds is returned or whether the funds are able to be applied to any other project. In some ways, that is consistent with the capacity of most agencies to be able to say, 'We haven't been able to achieve.' In this case, it would be a matter beyond his control. It would be a matter for the parliament to determine, and then that would be a matter he could discuss with the Treasurer.

Mr PICTON: I will ask one further question on that. In relation to the decision by the government not to provide the additional funding that the ICAC commissioner was seeking in relation to an inquiry into SA Health, the department and CALHN, before the Treasurer sent that letter to the ICAC commissioner rejecting the request, was the Attorney-General involved in discussions with the Treasurer or with the ICAC commissioner?

The Hon. V.A. CHAPMAN: I have regular meetings with the commissioner, as his agency is identified as being delegated to my area of responsibility. As has been made abundantly clear, the Premier advised the house very early in the establishment of the new government that we, as members of the government, had meetings with the commissioner to discuss matters of concern which in his view needed attention and which remain matters that are entirely in his domain to determine whether they should be prioritised for investigation. So there are ongoing discussions.

As a government, we appreciate the advice that is given by the commissioner, because he has been good enough to come to our cabinet to provide advice, as he does to all other agents in government in relation to obligations under his educative jurisdiction. Certainly, from my perspective, I found that very helpful. In addition to that, but separately, it is entirely a matter for him which areas of concern within his jurisdiction he should investigate. In a way, it is similar to what inquests are held by the Coroner in relation to reportable deaths in South Australia: it is entirely at the Coroner's discretion what he or she investigates. Of course, we now have Mr David Whittle in that role.

Commissions are largely granted a level of independence. They vary, of course, in the statutory law that underpins them, but what makes them quite unique is their capacity to deal with individual concerns and to investigate those or not without interruption or interference by any executive direction. Of course, some of those acts have the capacity to direct in certain circumstances. For example, there is a capacity for a direction to the police commissioner, but of course any direction must be tabled in both houses of parliament. They do vary, so I will not go into any other examples.

Mr PICTON: Referring back to page 41 in relation to the merger of the Public Trustee and the Public Advocate, is there any potential for a conflict of interest here in this merged entity? I particularly highlight an example where you could have a situation where staff from the Public Advocate could make a decision that a client should be in residential care and as a result their home or property should be sold, and the Public Trustee would then sell that property and make a significant commission on the sale. Do you accept that there is a potential for conflicts here and how will you manage those conflicts?

The Hon. V.A. CHAPMAN: I think I was trying to illustrate in the example I gave that that is exactly that type of situation, where the Public Trustee in their view in the careful husbandry of the fund to ensure that it is able to be available for their future needs may be inconsistent with advice that is received as to what the requirements are for the particular accommodation of a client of both agencies. That exists already. That is not a new thing.

What we are hoping to achieve here, of course, is the capacity to ensure that we make it easier to navigate, receive and deal with those matters in one entity. That is the objective here. Conflict of interest has been raised as to other aspects of any reform. We have had advice on that and I am quite satisfied that this is a proposal that is actually going to achieve what we want it to—that is, a better service for clients, particularly those who overlap or who in future may overlap, to ensure that provides a consistent service, a high standard of service, which is currently separately provided.

The CHAIR: Having reached the allotted time, I will make my report. The committee has examined ministers on matters contained in the Auditor-General's Report.

Progress reported; committee to sit again.

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