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Legislative Council - Fifty-First Parliament, Third Session (51-3)
2009-11-18 Daily Xml
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STATUTES AMENDMENT (PUBLIC SECTOR CONSEQUENTIAL AMENDMENTS) BILL

Second Reading

Adjourned debate on second reading.

(Continued from 29 October 2009. Page 3858.)

The Hon. R.I. LUCAS (12:28): I rise to speak to the second reading of the bill. At the outset, I thank the government and its officers for the provision of some answers and information in the briefing that was provided to the opposition.

This is an extraordinarily complicated piece of legislation because it impacts on so many existing statutes. It may well be, when all the detail has been analysed, that it is as the government and its advisers have indicated; that is, it is essentially a technical bill which is just full of consequential amendments from the passage of the public sector reform legislation earlier in the year.

Nevertheless, it is the task of members of this chamber to test the claims being made by the government to the best of our ability in relation to analysing the actual changes and implementation on the existing statutes. Because it does impact on so many pieces of legislation, it is extraordinarily complicated.

I want to ask some further questions and, hopefully, get a response from the minister or the minister's officers this week, in order to give the opposition and any other member interested the opportunity to look at it in detail next week, with the intention—if there is no problem—of ensuring quick passage in the final week of the session. However, if particular issues arise as a result of further analysis, the opposition has reserved its position in relation to moving amendments in the committee stage.

I give that background. My first question is a technical matter. I was trying to track down parliamentary counsel in the minutes before this debate, but I will put the question on the record and I am sure the minister's officers with advice from parliamentary counsel will give me a simple response.

In the advice that the minister's officers provided to me—and I will certainly refer to it during my contribution today—the minister's response, when I asked a series of questions in relation to the honesty and accountability provisions or the conflict of interest provisions as they relate to the public sector, gave some detail and then said:

It was always intended, when the opportunity arose, that the myriad of different provisions across the statute book would be removed, with full reliance placed on those included in the Public Sector Management Act. The opportunity to do so has now arisen, in particular because the honesty and accountability provisions have been elevated to their own special piece of legislation—the public sector honesty and accountability act 1995.

I have a relatively simple question. In looking at the statutes provided to members and the officers in the chamber, we have a copy of the Public Sector Act (which is the new act) and a copy of the Public Sector Management Act, but I could not find a copy of the public sector honesty and accountability act 1995. It may be that it is lodged there somewhere in a different section, but could the minister and his advisers clarify that particular issue? There is confusion about having the Public Sector Act, the Public Sector Management Act, the public sector honesty and accountability act and the Public Corporations Act; I will make some comments about those later.

The first major issue I want to raise is that the title of the legislation is the Statutes Amendment (Public Sector Consequential Amendments) Bill. What we have now established is that, in essence, there are a number of provisions in this bill which are in no way consequential to the reforms that were originally agreed upon by the parliament earlier this year.

As I understand it, the government has taken the opportunity with this bill to clear up other issues which it would argue are minor and technical—and that may be the case—and which either bureaucrats or ministers or others have wanted to clear up over the years and have not got around to doing.

My first request to the minister in her reply or at the start of the committee stage is to specifically list the provisions in this bill which are not consequential on the earlier reforms and which are stand alone provisions, and for each case provide an explanation for that particular change and the reasons that the parliament ought to be supporting them.

I make the comment that there is no reference to this in the minister's second reading explanation. It talks about the five themes of the changes—and I will address those in my comments—but it does not say, 'By the way, there are another half a dozen issues we are tidying up.' I think that, if we are talking about honesty, accountability and transparency and all those wonderful virtues in terms of the public sector, in the second reading contribution the minister should have made it clear that the vast bulk of this is consequential on the earlier reforms, and he should have said, 'By the way, here are these half a dozen other issues, which we do not think are too significant, but you should have been aware of them; they should have been listed and there should have been an explanation in the second reading'.

There has been no reference to those issues in the debate and, unless the question was put to the ministers and unless this chamber had been doing its work, it may well be that the parliament would have been blissfully ignorant of the fact that there are these other changes that have been incorporated into the legislation.

As a result of the discussion I had with one of the minister's officers, I understand that one of the provisions in relation to the Adelaide Festival Centre Trust Act is not strictly consequential on these changes. I understand that one of the provisions in an amendment to the Courts Administration Act is not consequential and, potentially, I think, also clause 77 of the bill in relation to the Courts Administration Act, which is the application of the Public Sector Act and the Superannuation Act. I understand that an amendment to the Equal Opportunity Act is not consequential on the public sector reform provisions that we discussed before, and that has been included in this bill.

I understand that an amendment to the Family and Community Services Act similarly might not be consequential. I understand that an amendment to the Motor Vehicles Act which deals with state concession cards might not be a consequential amendment. I understand that an amendment to the Solicitor-General Act (and that is one that I have quickly pulled out) again, as I have said, is not consequential. All that is doing, as I understand it, is in essence removing some outdated provisions—section 4(3): 'The office of Solicitor-General under the Public Service Act, as amended, is, by force of this subsection, abolished', and there is a transitional provision, I think, in section 4(2). Again, my understanding is that it is not a consequential amendment on the passage of the public sector legislation.

Finally, I think there is another example in relation to the Housing Trust, which deals with domestic partners and definitions of spouses and relatives, which is not consequential on the earlier reforms. My first question is for the minister to summarise those amendments that are not consequential and give us an explanation and the reasons why the parliament ought to support them.

From the discussions, a series of the changes in the bill are indeed consequential and technical in nature, and the opposition does not believe that it has any particular concerns about them. However, there are two streams of amendments about which, on the surface, the opposition does have some questions and potentially might have some concerns. They relate to the changes to conflict of interest provisions and immunity provisions as they relate to senior public officers and, in particular, members of boards or directors of boards of government agencies and authorities.

To put it as simply as it has been put to me, as I understand it, the government is saying, 'Look, there is a whole series of different conflict of interest provisions and immunity provisions that have been incorporated in legislation over the years. We believe that there should just be one template'—although the one template does have a number of exemptions, which are outlined in the second reading. However, for everything else, that there is one template; that is, there should be one standard of conflict of interest provision and one standard of immunity provision for all these agencies and senior officers.

There is a superficial logic to that, and one can understand why the government and government bureaucrats might want to see that incorporated in legislation. The question I put to the government advisers was: what in practice does that mean? Clearly, if one is going to impose one template or standard, it would mean that some bodies and officers currently required to abide by a higher standard or potentially be exposed to a stronger penalty for any misdemeanour or offence will have that reduced or weakened because of the imposition of the template or standard. Similarly, I acknowledge that it may well mean that for some, who have either a lower standard or lower expectation currently in existing legislation, the imposition of a template or standard formula may well increase or strengthen the accountability requirement.

The issues of concern to me in looking at this are whether there is any hidden intent of the government in relation to this. Is there some ulterior motive or purpose being served by what on the surface of it is a superficially attractive and plausible argument? To be fair, it would not be the first time that a superficially attractive argument has been used to convince the parliament of the need for change, which may well have served some ulterior motive from a government or minister.

My second series of questions relate to the fact that the government has provided to me as of two weeks ago a summary of the change of the impacts on conflict of interest and immunity provisions of this legislation on the many existing statutes that have these conflict of interest and immunity provisions. I am not sure whether it will be possible, without requiring the minister to read it all into Hansard (which I do not want to happen), to have incorporated into Hansard the detailed reply. If that is not possible, I ask that a copy of that information is tabled in this chamber prior to the committee stage and that a copy of that information is provided by way of written correspondence to all Independent members of the Legislative Council prior to the recommencement of the debate in approximately two weeks.

I know how busy are the officers of Independent members of this chamber, and it may be that either they are not interested or they do not have the time to go through it in detail, but I believe it is important that the information the government has provided to the opposition should be available to those members should they wish to peruse it or potentially pursue one or two issues that may be of particular interest to them.

My second reading contribution is relatively brief. I suspect that, if there is to be a debate, it will be longer in committee, depending on the minister's replies and also on the further work the opposition needs to do in the next two weeks before we finally conclude debate on the legislation. In so doing I will refer to two boards and look at the existing provisions as they relate to conflict of interest and immunity and seek from the government in its reply a specific response as to how the conflict of interest and immunity provisions will be changed by this legislation specifically as it relates to these two boards. It may not surprise members that the first board I refer to is the WorkCover Corporation.

The WorkCover Corporation is a critical board in terms of the operations of the workers compensation scheme here in South Australia. I will not go through the detail of the challenges facing WorkCover at the moment and the fact that there is a separate inquiry. However, as it relates to the conflict of interest and immunity provisions, it has been widely reported that many questions have been raised and, further to that, many allegations made about the activities of one particular board member, Sandra De Poi, in the WorkCover Corporation.

In evidence in another forum (and I obviously will not read that, but it has been reported publicly), leading figures within the broader labour movement, such as Les Birch and other rehabilitation providers, have made allegations in relation to conflict of interest as it relates to the companies Ms De Poi operates involving rehabilitation.

To be fair, it should be placed on the record that those allegations have been strongly rebutted by the past and I think the present chair of the WorkCover Corporation. So, whilst allegations have been made by Mr Birch and others, the WorkCover Corporation has strongly refuted the allegations.

The Hon. CARMEL ZOLLO: I rise on a point of order, Mr President. As I have been listening to the Hon. Rob Lucas, I have noted that he is referring to matters that are before the Statutory Authorities Review Committee. In referring to those matters, he has just said on the record, 'To be fair,' etc. However, those allegations have also been independently reviewed by another independent body, as well as by the Auditor-General, and refuted as well. I think the point of order is that the Hon. Mr Lucas should not be referring to those matters.

The PRESIDENT: The Hon. Mr Lucas will refrain from referring to matters before the committee that the committee has not reported on.

The Hon. R.I. LUCAS: Mr President, I referred to issues that have been reported publicly. However, the issue to which the Hon. Ms Zollo has just referred has not been reported publicly.

The Hon. Carmel Zollo: But you only refuted some of it.

The Hon. R.I. LUCAS: That is because it has not been reported publicly.

The PRESIDENT: Order!

The Hon. R.I. LUCAS: So, the Hon. Ms Zollo has just breached the particular provision she has accused me of in a shameful—

The PRESIDENT: Order! The Hon. Mr Lucas will continue his remarks, but he will refrain from referring to anything the committee has not reported on.

The Hon. R.I. LUCAS: Or has indeed been reported publicly, Mr President. That is the point I think I raised in relation to the Hon. Ms Zollo's comment. I studiously avoided referring to that matter because it has not been reported publicly in the media. It ill behoves the chair of that committee to breach that particular provision in a quite deliberate way during that point of order.

The Hon. CARMEL ZOLLO: Mr President, the Hon. Rob Lucas referred to a particular person who appeared before our committee.

An honourable member interjecting:

The Hon. CARMEL ZOLLO: Yes, he did. He has referred to evidence presented to our committee.

The Hon. R.I. LUCAS: The Hon. Ms Zollo is squealing like a skewered little animal at the moment, Mr President, because she knows she has breached—

The PRESIDENT: Order! The Hon. Mr Lucas will continue to address the matters within the bill.

The Hon. R.I. LUCAS: The only things I am referring to, Mr President, are matters that have been reported publicly in the Adelaide Advertiser and in other news media in relation to issues that have been raised about the conflict of interest provisions.

The PRESIDENT: I have made it quite clear that there will be no discussion of matters that have not been made public in reports of the committee. Both parties will stick to that, and the Hon. Mr Lucas will confine his remarks to matters relating to the bill.

The Hon. R.I. LUCAS: Mr President, I thank you for your firm admonishment of the contribution of the Hon. Ms Zollo in relation to this—

The Hon. Carmel Zollo interjecting:

The Hon. R.I. LUCAS: Well, it was your point of order. I was happy to proceed.

The PRESIDENT: I have ruled on the point of order raised by the Hon. Ms Zollo.

The Hon. R.I. LUCAS: I thank you for that ruling, Mr President; I hope the Hon. Ms Zollo is suitably chastised.

Members interjecting:

The PRESIDENT: Order!

The Hon. R.I. LUCAS: We certainly strongly support you in terms of that ruling, Mr President.

The PRESIDENT: The Hon. Mr Lucas will get on with his contribution to the bill.

The Hon. R.I. LUCAS: I would be pleased to, but I keep getting these points of order.

The Hon. S.G. Wade: I think she's trying to disrupt his flow.

The Hon. R.I. LUCAS: Exactly. I would happily proceed—

The PRESIDENT: Time is of the essence on a Wednesday, as you well know.

The Hon. R.I. LUCAS: I was trying to be as fair as possible. As has been noted in the Auditor-General's Report in only the past two weeks, the Auditor-General has commented on the conflict of interest provisions in relation to Ms De Poi. On page 1774 of that report he says:

In relation to Ms De Poi, the companies in which she has an interest, De Poi Consulting Pty Ltd and Refining Skills Pty Ltd, have current contracts with WorkCover SA for the provision of rehabilitation services as directed by WorkCover SA's claims agents. The value of the transactions during the year ended 30 June 2009 was $3.1 million ($2.7 million the previous year]).

I interpose here that that is a 15 per cent increase in contract value in the past 12 months to Ms De Poi's companies. The Auditor-General continues:

The terms and conditions of the transactions were no more favourable than those available, or which might reasonably be expected to be available, on similar transactions to non-Board member related entities on an arm's length basis.

So, the issue has been considered; the Auditor-General has reported on the issue in those particular terms. When one looks at the current WorkCover Corporation Act as it relates to these conflict of interest provisions, section 8 relates to disclosure of interest and section 9 relates to members' duty of honesty, care and diligence. This consequential amendment deletes all those provisions, that is, the current disclosure of interest provisions and the current members' duty of honesty, care and diligence provisions. It also deletes section 10(2), (3) and (4), which are key provisions relating to the immunity of members. As I said, it seeks to impose a template or a standard that applies to other sections of the public sector.

The current disclosure of interest provisions require that a board member must, as soon as he or she becomes aware of the interest, disclose its nature. The new standard provision is different, requiring it 'as soon as reasonably practicable'. I seek an explanation from the government regarding that particular change. It appears that the existing WorkCover Corporation provision is a tougher and more restrictive requirement on disclosure—that is, as soon as you become aware of it you must do it—whereas the new provision requires it 'as soon as reasonably practicable'.

A more significant issue is that, in relation to a disclosure of interest offence by a board member, currently there is provision in the penalty not only for a fine but also for division 5 imprisonment. That is, an offence by a WorkCover board member on a conflict of interest provision, as I read it, currently has a significant penalty in terms of a period of imprisonment. My understanding is that, as it relates to WorkCover, the government has reduced the penalty on a board member found guilty of a conflict of interest provision.

My question to the government is, therefore: is that correct? What is the government's explanation, in a body as critical as WorkCover, for reducing the penalty; in particular, in reducing the potential deterrent effect of a term of imprisonment for a board member who is found guilty of a conflict of interest in relation to his or her activities?

In relation to the general standard or template that the government is imposing, I also have the following question: is it correct that the government, in relation to honesty provisions—that is, if a member of a general board (not just WorkCover) in essence does not act honestly—has retained the penalty of a fine and a prison term? If that is correct, why is it that the government—and let us look again at WorkCover—would retain the deterrent effect of a prison term for someone who was found not to have acted honestly but, in relation to someone who has a significant conflict of interest in relation to that board member's activities, has decided that it will remove the deterrent effect of a prison term? I put that general question but also, specifically, as to why it would be removed in relation to the WorkCover board.

Similarly, in 10(3) of the WorkCover Corporations Act (the immunity provision) it states that the immunity conferred by subsection (2) does not extend to culpable negligence. As I understand it (if I have correctly understood the complex new provisions that have been incorporated), an alternative drafting of clauses as they relate to culpable negligence will now apply to the WorkCover board as they would apply to other boards.

If that is correct, can the government and its advisers indicate whether the new drafting, as it relates to culpable negligence, is tougher, harder or stronger as it relates to the actions of board members or has it weakened the immunity provision as it relates to this issue of culpable negligence?

There are a number of other provisions in the current WorkCover disclosure of interests—members' duty of honesty, care and diligence, and validity of acts and immunity of members clauses—which are being removed. I specifically ask the government whether, in its response, it will compare the existing requirements and penalties on board members with those clauses that exist in 8, 9 and most of 10, and compare them to the new provisions as they will relate to the WorkCover board.

Without going through the detail, given the time, I also ask those questions in relation to the Motor Accident Commission because there are some similar issues that can be raised. Again, will the government look at the existing provisions for board members in the Motor Accident Commission and whether the new provisions are, as I said, tougher, stronger or harder on them or the reverse? So, I would like a specific comparison of the requirements under the existing legislation of the MAC and the new requirements of the legislation.

I seek an early response from the government, and the reason I do that is that I think that will assist me and anyone else who wants to go through this task over the next week or so in comparing whether or not the standard template that the government wants to impose does, in fact, have some unfortunate side-effects and that perhaps, in some cases, we should not be weakening our expectations for some of the board members—for example, in WorkCover or other corporations.

Subject to receiving those responses from the government the opposition, as it has indicated, is reserving its position in relation to potentially moving amendments. If the government's explanation is one with which we can agree, we would certainly see an expedited committee stage of the bill.

Debate adjourned on motion of Hon. B.V. Finnigan.


[Sitting suspended from 13:00 to 14:18]


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