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House of Assembly - Fifty-Fifth Parliament, First Session (55-1)
2022-09-08 Daily Xml
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Bills

Local Government (Defaulting Council) Amendment Bill

Second Reading

Adjourned debate on second reading.

(Continued from 7 September 2022.)

Mr HUGHES (Giles) (11:42): I rise in support today of the Local Government (Defaulting Council) Amendment Bill. This is something that is close to my heart, given I represent the unique community of Coober Pedy. As members would be aware, the previous government had moved the council into administration, I think back in January 2019, and it had the full support of the opposition at the time. The process to move the council into administration started under the Weatherill government with the investigation by the Ombudsman and subsequently the Auditor-General. The Ombudsman's findings you would have to describe as damning when he said—

Mr Tarzia interjecting:

Mr HUGHES: Yes. He identified serious failings and irregularities, and he went on to say that it was the most serious example of maladministration that the Ombudsman had seen at the time. So we are talking about a serious set of circumstances that led the Coober Pedy council to be placed into administration. As the local member, I was not pre-empting processes, but much earlier than the proclamation about administration ABC radio asked me a very direct question one day about whether the Coober Pedy council should be sacked. I thought I would give a very straight answer to what was a very straight question. I said, 'Yes, the Coober Pedy council should be sacked.'

Two weeks after that, I was up in Coober Pedy and the council wanted to meet with me. I had a very long meeting with the council, and it was a good meeting. It had a bit of a frosty start maybe, but it was a good meeting because I have always had some real sympathy for the position that the Coober Pedy council, notwithstanding its faults, and the community found themselves in. We are talking about a remote community. We are talking about revolving-door CEOs of variable quality, revolving-door senior officers, a whole bunch of mayors over a relatively short period of time and a very small rate base, so there were a number of things going on in Coober Pedy.

When you look at the socio-economic status of Coober Pedy, it paints a difficult picture. The median weekly income in Coober Pedy is $498 compared with the state median personal income of $734. When you look at household income in Coober Pedy, the median is $764 compared with a median in the state of $1,455. So here we have a combination of a whole set of circumstances: a low rate base, socio-economic disadvantage, revolving-door CEOs and the constant difficulty remote communities have when it comes to getting people of sufficient calibre to assist them to meet the challenges they have.

We ended up appointing Tim Jackson as the administrator. Subsequently, this chamber went into administration for a year, which is what happened under the Local Government Act, and we had to amend that again to extend. What we are doing here is to extend still further. It might not go out to 2026 if we can resolve some of the issues that are faced but, given that sort of picture I have painted of Coober Pedy, we are expecting that remote community, with all these challenges, to do something that other councils throughout the state do not do: not just provide basic municipal services but also provide essential services.

They provide water. The saline water is accessed from an aquifer, pumped to Coober Pedy to a desal plant and then distributed with what might be called a unique distribution system. I think it is a credit to the workforce that they have managed to keep this sort of running over the years, despite the lack of sufficient resources at various times.

The other thing they are expected to do is provide the distribution network for electricity and the retail element of electricity, and there have been failings in both areas. As an electricity retailer, they are not able to smear hardship provisions over a big customer base. There were people in that community on really low incomes often owing up to $10,000 in unpaid electricity tariffs, and you can imagine living in Coober Pedy: heat in summer and very cold in winter, so there are some real challenges.

I have had a very basic line that has pre-empted any government position or any cabinet position. I have had it for a long time now, and they can listen to me or not listen to me: Coober Pedy has to be shrunk. The council has to be shrunk to basic municipal services. The water supply and distribution need to be outsourced, and my preference would be for SA Water to pick up that responsibility because SA Water pick up that responsibility nearly throughout regional South Australia.

There has always been an important principle at work when it comes to the supply of water to regional communities, and that is equitable pricing, so that someone in Ceduna pays the same amount of money for their water as somebody in Adelaide. If SA Water do take over in Coober Pedy, that principle should be applied to Coober Pedy, just as we do with electricity.

I do recall as a candidate in 2013 for the 2014 election having a very dim view of one of the Labor ministers, Michael O'Brien, who cut the subsidy to remote communities when it came to electricity. The impact that had was dire, so as a newly minted candidate I got Labor to reverse that cut. To add insult to injury—and he is not here now, so I am more at liberty to say this stuff—on radio he said, 'If those people don't want to live there, they don't have to live there.' I said, 'Wow! They could all move to the eastern suburbs with him, to one of the most affluent suburbs.' I have an incredibly strong egalitarian ethos and I think that, irrespective of where you are in country South Australia, you should be treated in an equitable manner.

I was very proud of the fact that we reinstated the full subsidy so that it now matches what was the AGL standing contract. Maybe there are a few nuances that we should address when it comes to that, given the nature of the electricity market and what might be available to consumers in the metropolitan area and other regional communities when it comes to picking and choosing. They are not going to be able to pick and choose, but maybe we should have a look at linking it to what was the AGL standing contract.

Clearly, if we are going to get back to a fully elected council in Coober Pedy, we have to shrink Coober Pedy down to basic municipal services. I know there are a number of options that have been put. The administrator was keen that SA Water buy the water assets, but the state would be acquiring a liability, so I think the council's debt, which is significant, is going to have to be addressed in another way because if SA Water do acquire the assets, and that is not guaranteed, some investment is going to be needed.

As I said, I believe that we should be introducing parity pricing in Coober Pedy so that the people of Coober Pedy pay the same for water as the people in Adelaide. When you consider the figures I talked about—median household incomes and personal incomes—to me it is a no-brainer. Why are we treating such a poor community in this incredibly shoddy way?

I want to sing the praises of the Minister for Local Government because Geoff gave a commitment to me that he would visit Coober Pedy as soon as possible once he was elected to government, and he has done that. He went up there, had a community forum and met with a whole range of people and he is going back again in the near future.

I was up there a few weeks ago and I would like to thank the Serbian Orthodox community and the Greek Orthodox community for their amazing hospitality over a weekend when we celebrated the 30th anniversary of the Serbian underground church. If you get an opportunity to visit it, it is an amazing underground church. Geoff has taken a very active interest in Coober Pedy and hopefully our diaries will align when you are next up there, minister, as that would be a good thing.

Another thing we have done as a government, in recognition of the challenges that Coober Pedy faces, is put together a high-level task force to look at the electricity issues, to look at the water issues and to look at the challenges that Coober Pedy faces so that we can come up with some solutions. As I said, I have been very clear publicly about what direction I think it should go in, but the high-level task force might come up with some other options that make sense as well.

I think this community has been treated unfairly for too long and we do need to address it. As I said, we do not expect any other council in the state to do what this incredibly poor community is expected to do, so it is time for a change. I look forward to the recommendations of the task force. We need to get on with it so that at some point, hopefully before 2026, we can reintroduce fully elected local government in Coober Pedy.

Mr TEAGUE (Heysen) (11:54): For those who are following along in terms of the process of debate in the house, I will make a couple of things clear. To anyone who was following the order of business today, they might be forgiven for thinking that here we are yet again seeing this government come along and introduce and jam legislation through with no notice, like they did yesterday. This is not quite in the same category because it is an hour or two more, I think.

The Hon. J.A.W. Gardner: An extra 16 hours.

Mr TEAGUE: I think there might have been an extra 16, the deputy leader is reminding me. I do not know whether to regard that as an incremental improvement or if it is just more evidence of signs of the times. It might be that is just a corollary to what was really an outrageous situation that we were having to deal with at, as I understand, the Premier's behest yesterday and, certainly, the opportunity for the minister yesterday to hold us to all steps of debate in relation to the plebiscite bill, and somewhat late into the evening, as members will recall, although in the absence, it turns out, of the Premier, who was socialising elsewhere.

The SPEAKER: Member for Heysen, there is a point of order, which I will hear.

The Hon. J.K. SZAKACS: On a point of order, sir, it is unparliamentary to reflect on a member's presence, or absence otherwise, in the chamber.

The SPEAKER: I will listen carefully. I do draw the member's attention to the standing order.

Mr TEAGUE: I am happy to address the point of order in relation to reflection on a member's presence or absence from the chamber. That is certainly not the relevant context here. The presence or absence of the Premier from the state in the course of a sitting day is something quite different from the presence or absence of the Premier from the chamber in the course of a parliamentary sitting day, and that is the relevant sense for the purpose of the standing order.

The electors, indeed all South Australians, are entitled to expect that their members of parliament are in the parliament during the course of the sitting day. Whether or not they are in the chamber is a question for the standing orders. For the Premier to decide to go and socialise in Canberra while he is keeping us all here to jam a bill through the house is a matter of some note; it is somewhat remarkable. That is what we were all here dealing with last evening.

Mr Telfer: We carried that load.

Mr TEAGUE: My colleague the member for Flinders and I, and the Minister for Local Government, were engaged in debate, among others, in the course of that evening's process. I say that because, in order to get to debate that bill and for the government to move a suspension of standing orders necessary to progress, what we saw yesterday was a series of orders of the day that were dealt with by leave so as to introduce into Hansard the second reading explanation and the explanation of clauses. The minister did so and, by leave, those remarks on the second reading, together with the explanation of clauses, may be found by members—although not more widely than that, unfortunately, for the time being—in the confidential and subject to revision first run of Hansard.

For those who are following the debate outside this place, for those reasons there was not the opportunity for them to receive and digest the second reading explanation, as they might have in the ordinary course. That includes the constituents of the member for Giles, who has just made a contribution, and in particular those residents of Coober Pedy affected by all of this. I listened carefully to the member for Giles, and he indeed has a particular and important perspective on the history of these measures.

Not so as to spend time on the technicalities, it is just important, in my view, to make clear that we are here dealing with this bill, albeit in an orderly way to the extent it was not necessary to suspend standing orders to progress debate today. We are at least in circumstances where not very many people have had the opportunity to have heard from the minister about the bill. Not very many—it is limited to those of us in this place, if we have had the chance to read the first draft of Hansard this morning. We are now being expected to deal with the bill more or less straightaway. So that is the way the government is proposing to conduct itself in relation to this particular matter, and there it is.

The context also has in common with the bill that was jammed through yesterday the context of local government elections that are soon on their way, insofar as this bill is going to have an effect on what would otherwise be a sunset on the current administration and stretch it out through the balance of the next term and, as I understand it, preserve the holding pattern until elections due in 2026. But, as the member for Giles says, that provides simply an extension of that window within which to assist Coober Pedy's administration to get the house in order, so to speak. We all hope, I think, that that might be done with expedition.

In my brief time as Minister for Local Government, this was very much a matter of ongoing concern. It is, of course, a set of circumstances, the most timely elucidation of which has just come from the member for Giles. There are all sorts of challenges and problems that are associated with the administration in Coober Pedy. It needs to be brought back on track, and the sooner the better.

There may be an opportunity further to interrogate just exactly where that has come to over the course of the minister's time, but what we are seeing—at least on the face of this bill—is the determination of the government that they have not had enough time and that they are not going to be proposing allowing a return to ordinary elections. So we are going to see this unusual set of circumstances continue at least beyond the otherwise scheduled November elections.

With that context in mind, it is very much a set of circumstances in which the questions we might have, and might have to take the opportunity to ask in the course of this debate, are again jammed into a pretty narrow frame, unfortunately, because of the nature of the scheduling of the debate on the bill. I do not know, but I hope that the member for Giles, as a member of the government side, has had all the opportunity he requires to satisfy himself about the contents, purpose, desirability and so on of the bill at this time. That is of particular importance as the local member, but it extends to all of us, including my colleague the member for Flinders. It is somewhat regrettable that we are therefore having to engage in an interrogation of the current state of affairs within what looks like will be another relatively narrow frame.

With those brief remarks, and hopefully having provided some clarity about the context and timing of the debate for those interested and those who are directly affected, who might otherwise be wondering where this has come from and why we are here today, I look forward to the opportunity to ask any questions that might be possible to be advanced in the course of the further debate. Of course, I join with all members, no doubt, in urging that the administration work be done with professionalism and dedication towards the current and future wellbeing and best interests of all those who call Coober Pedy home.

Mr FULBROOK (Playford) (12:07): I rise in support of this bill. For the benefit of the member for Flinders, I can inform him that Coober Pedy is a beautiful spot, which I have visited on numerous occasions, and I do hope this is a situation we can fix expeditiously.

As the minister outlined in the house yesterday, this bill will extend the period of administration for the District Council of Coober Pedy until the local government periodic elections, expected to be held in 2026. It will also cause the periodic election for the council, for which voting closes on November 2022, to cease to be held.

To understand why this is necessary it is worth considering why the District Council of Coober Pedy was placed into administration on 24 January 2019, when the Governor issued a proclamation declaring the District Council of Coober Pedy to be a defaulting council pursuant to section 273(5) of the act, and appointed Mr Tim Jackson as the council's administrator. While I was not in the house at the time, members may recall that the declaration for the district council as a defaulting council was made in response to a report from the Ombudsman released in July 2018. This found that the council's management of a power-purchasing agreement with EDL (the power generation for the town) was the most serious case of maladministration that he had seen.

This report invited the then minister to consider exercising his powers under section 273(2)(c) of the Local Government Act to recommend to the Governor that the council be declared a defaulting council. The Ombudsman's report was further supported by an examination of the council by the Auditor-General, released in December 2018. The examination revealed longstanding and systemic issues with the council's financial governance and administration. These issues with respect to the council's administration have become clearer over the past few years. In summary they are:

no controls over council expenditure over the three major functions it delivers: municipal services, water and electricity retail services;

a high cost for water services, which is exacerbated by the very poor state of the water distribution network and which has a history of serious water leakages; and

difficulties in attracting and retaining senior council staff.

An example of this is that in the two years prior to being placed into administration council had engaged five chief executive officers on a permanent or acting basis. Both the Ombudsman and the Auditor-General commented on the difficulty of attracting and retaining skilled and experienced staff to Coober Pedy and the impact this has on the council and the Coober Pedy community. This has continued over the period of the administration.

We should also not overlook the lengthy history of mismanagement of the essential services the council is responsible for. While this is best evidenced by the 2018 Ombudsman's report I referred to earlier, a separate 2021 report also found that council had historically poor practices in recovering unpaid electricity debt. Significant debts held by the council to the Local Government Finance Authority of around $8 million meant that the council has been unable to access financing options to resolve significant issues, including necessary investments in its water assets. Additionally, the council continues to have significant arrears of around $2 million with the town's electricity generator.

As the minister explained, Mr Jackson has made significant improvements to council's financial governance and general administration, and for that he should be congratulated. However, there remain significant concerns about whether council is ready to have an elected-member body returned at the 2022 periodic local elections this November.

I am aware that work will continue to find a solution that will work for Coober Pedy. It will take time, and it is very important that one of our most remote communities be supported through the development of considered and appropriate local governance and services that best suits its needs.

The extension of the administration is intended to allow for this. I know that the local government minister has committed to visiting Coober Pedy regularly to provide the community with support as it works through this process, and I know that he will prioritise taking the views of the local community back to the cabinet table. I commend the bill to members.

Mr TELFER (Flinders) (12:12): I rise to speak on the Local Government (Defaulting Council) Amendment Bill. As already mentioned, obviously I have not had significant time to consider this bill. It was introduced to the parliament only this week—indeed, only yesterday. Once again, there has not been an opportunity for a thorough consultation process for the opposition to form a formal position on this bill.

The challenges that face the Coober Pedy council and community have been recognised for a long time and have already been spoken about by some of my learned colleagues here in this place. We are talking about a community that is incredibly isolated, and thus arrangements have developed that are unique to their council. Coober Pedy is a town that is located over 800 kilometres north of Adelaide in northern South Australia, which is a beautiful part of the state. Although the community of Coober Pedy may be small, it is incredibly diverse and has incredible ethnic diversity.

The council has local government authority for Coober Pedy and its surrounding area and, in addition to the regular functions that a normal local government authority may have to undertake, the council itself provides essential services to the people of their communities, such as electricity and water retail services to the district. The council is responsible for the sale and supply of those services, and it also is responsible for the connection of their customers to the electricity and water supply and the maintenance of those connections, as well as the bills to their customers for their electricity and water usage.

We have already spoken in this place about the findings of the Ombudsman, which concluded that the council inappropriately managed electricity and water accounts and debts in a manner that was unjust, unreasonable, wrong and contrary to law. The Ombudsman found that it was apparent that the council had been unable for quite some time to manage its electricity and water retail services in a way that was financially viable, giving the council itself an added burden and thus leading to it being put into administration.

The Ombudsman report also found that the payment of debts for essential services in Coober Pedy had in fact been propped up by a native title fund, with many community members otherwise not in a position to contribute financially to their electricity debt. The subsidy program in place, which has already been mentioned in this place, the Remote Areas Energy Supply Scheme, was also found to be clearly not sufficient to bridge the gap between the cost of distributing electricity and water to Coober Pedy residents and then collecting the revenue for these services.

In light of all those details, it was the recommendation from the Ombudsman that alternative options for electricity and water supply to Coober Pedy be considered and that the state government reviews whether there are alternative options for the supply of electricity and water in Coober Pedy that would place less of an administrative and financial burden on the council.

These challenges went even further back to 2015, when the arrangements for the retailer were put in place by the Labor government at that time. The details around those arrangements, too, have had plenty of discussion in the time after that, both privately and publicly. I do not want to look back for too long because these issues have been well ventilated both in the community and in this place.

An administrator was put in place during the previous term of the government in 2019 to manage and deal with this situation, and I certainly supported that. This bill was to extend an administrator at this point and, in reality, we may not have any choice. On behalf of the opposition I would like to personally commend Tim Jackson and his work as the administrator since being appointed in 2019 and his attempts to continue to engage with the community throughout that time using community-wide surveys and the like. He has put in efforts to try to make sure that the community is engaged with the process even though he is a government-appointed administrator.

The challenges at Coober Pedy are understood. The minister has received the advice from the administrator about what he believes are the best arrangements which should be developed. I hope the minister recognises his responsibility and also has the capacity to obviously help influence his Labor cabinet colleagues to act, such as the energy minister and the water minister.

Coober Pedy does need a sustainable, long-term solution in place and also to have that expedited, to have it in place as quickly as possible so that there is an opportunity to have the community members of Coober Pedy have their democratic representatives back in place on their council. We need to make sure that Coober Pedy has every opportunity to thrive into the future and have that community leadership put in place. As I said, I hope that process is done thoroughly, appropriately, sustainably and also in an expedient manner.

The Hon. G.G. BROCK (Stuart—Minister for Local Government, Minister for Regional Roads, Minister for Veterans Affairs) (12:18): I thank all the speakers on this bill: the member for Giles, the member for Heysen and also the member for Playford and the member for Flinders. First-up, I just want to clarify a couple of things. It has been brought to my attention and I was asked if there were any briefings offered to the opposition in this regard. On 15 August, I personally approached the shadow minister, the member for Flinders, and asked him if he wanted a briefing. I explained that I could not give him the bill until I introduced it to the parliament, which I did. I have email copies of that.

When I gave my second reading speech on Wednesday, I personally went across to the other side to the member and asked him if he wanted a briefing on the amalgamation bill that went through yesterday and he said yes. I said that at the same time we would give him another briefing on the Coober Pedy issue. My information is that we did have that opportunity and a meeting was arranged and the member for Heysen was there and also the member for—

Members interjecting:

The Hon. G.G. BROCK: Excuse me, the bill was going to be on the plebiscite and there was also the opportunity to have a briefing on the Coober Pedy bill. The bells rang and both members had to come back to the parliament. My information is that the member for Heysen came back for further dialogue and the member for Flinders did not.

It has been a journey. When the previous Labor government was in office, issues were identified about Coober Pedy. There is an ongoing issue there and it has been festering for many years. We then had to go through a process. As the shadow minister and members opposite understand, the minister at the time cannot just put a council into administration. It has to go through a process. We were going through that process, but with a change of government and the new minister coming into office in 2018, the new Liberal government then placed the council into administration.

In relation to that, it has been a journey. There are a lot of challenges up there. The water issue has been mentioned. They have to produce their own water and also their own power. They are in an isolated location and it is a big challenge up there. We need to work with them to get on top of this.

It has been asked, 'What is the minister doing now?' I ask, 'What was done in the last four years when they were in administration?' I compliment Tim Jackson, the administrator; he has had a challenging time, but he has done a very good job. There have been slight improvements, but there are still challenges to overcome and we need to identify those challenges. We need to identify the issues with the water and the opportunities going forward. The only way we are going to do that is to work collaboratively.

I would like to know what assistance the Local Government Association gave that council in the last four years. The member for Flinders was the President of the LGA at that particular time. As the member has indicated, we do not want to look behind us. What we have to do now is start looking forward. We have a challenge here.

I have been to Coober Pedy. I said I would go up there. I have spoken to the council, I have spoken to the new CEO, I have spoken to the administrator and I have spoken to various groups. I attended a public meeting in the Greek Club. They are very frustrated people because they have not heard from anyone from any government for 3½ to four years. I did go up there and I took the Ombudsman with me so he could explain the process to those people so they could understand what was going on.

We now have the council elections coming up, but if we do not continue the administration we do not feel that the community is ready to go on to elect a council at this stage. The bill allows the administration to continue up to the November 2026 election. We in this house have to work with the community to make certain we get a solution up there. We need to identify what the issues are, look at how we can fix it all up and then get that council back under elected members very quickly.

The reason for putting the bill through quickly is that people were previously elected at the November 2018 council elections. Going forward, the administration took place in 2019, so the previous government had to terminate that council. I do not want that to happen again. I have made that quite clear in my press release of 15 August. I have also made it quite clear to the people of Coober Pedy that we are going through a challenge here, and I have already indicated to them that we need to get this bill through so that these people do not nominate for council only to have it withdrawn.

My information is there are two people nominated for council under the Electoral Commission. At the moment, we are in the caretaker period. We have personally spoken to those two people and explained the situation that if this bill goes through—and this bill needs to go through, irrespective of any arguments whatsoever. This bill has to go through and then we can explain to those two people that, yes, we appreciate them coming forward as two councillors for this area. We will congratulate them on their commitment to Coober Pedy and their community, but we will then have to cease their nomination and then work with the opposition here. I have indicated that I will work with the shadow minister. We will work with everybody to make certain we get on top of this issue.

We can come in here and bluster about lots of things, but we have to have the concerns of the people of Coober Pedy to make certain about this. Let's get this out of the way and find a solution. It has been stated to me that the government just puts up $20 million or whatever it may be. Does that fix the root cause of the issue? No, it does not. It still has whatever the issue is; we need to identify that. I know the shadow minister said it is a waste of time putting in another task force.

Mr Telfer interjecting:

The Hon. G.G. BROCK: You did not say it in here, but it is on the radio. However, let's move forward. We have the relevant ministers, SA Water and ESCOSA on this committee. We need to identify that, and these are the people we need. We should have done this three or four years ago. Members of parliament here, let's consider the health and wellbeing of the people of Coober Pedy so that we get this bill through. Let's all work together to ensure that we have the best opportunity to get on top of this here for the future security of Coober Pedy.

Coober Pedy is an absolutely brilliant place. It is unique. It is isolated, but it has a lot of history. They have some fantastic people up there and what we need to do is work with them. The current administrator, Tim Jackson, has done a fantastic job. He has indicated that he does not want to continue on, so we are in the process of advertising for another administrator. I, as the minister, will be working very closely with the new CEO, I will also be working very closely with whoever the new administrator is, to ensure that we get the best opportunities. I will also be visiting Coober Pedy on a regular basis, more than I can say for the previous government. The other thing is: let's get this bill out of here and then we can get the legislation through and we can get on with our lives. I commend the bill to the house.

Bill read a second time.

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