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Legislative Council - Fifty-First Parliament, Third Session (51-3)
2009-10-28 Daily Xml
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STATUTORY AUTHORITIES REVIEW COMMITTEE: LAND MANAGEMENT CORPORATION

The Hon. CARMEL ZOLLO (16:24): I move:

That the report of the committee, on an inquiry into the Land Management Corporation, be noted.

The final report is now before us to be noted. The Land Management Corporation, or LMC, as it is generally referred to, is a state government corporation and is responsible for managing South Australia's portfolio of land assets. Its main functions are to acquire, hold, manage, lease and dispose of surplus land. It also manages the sale of surplus government land on behalf of agencies or instrumentalities of the crown. One area on which the committee spent time deliberating, which I will refer to shortly, is the LMC's ability to act as the developer on government land releases.

The Statutory Authorities Review Committee resolved on 26 October 2006 to inquire into and report on the operations of the LMC. From the outset, the committee was clear that it would not examine individual land management cases. Rather, the committee's main focus, in accordance with the terms of reference, was to examine the effectiveness of the LMC as the principal land management agency in South Australia. In examining the LMC, the committee heard from interested stakeholders, who shared their experiences with the LMC.

Since this inquiry commenced some three years ago, the LMC has taken upon itself to implement new strategies to become more efficient at performing its functions. It is also important to note that sections of its charter have been amended since this inquiry commenced. The committee commends the LMC on its initiatives and, as such, finds that only a small number of recommendations are to be made to the minister.

Before proceeding further, I would like to place on the record that I was elected and appointed Presiding Member of this committee some 2½ years into the LMC inquiry. In fact, I was not a member whilst any verbal evidence was provided to the committee. I would therefore like to take this opportunity to thank the other members of the committee, including previous members, for their contribution. First, I thank the previous presiding member, the Hon. Bernard Finnigan. Other former members of this committee who contributed to this inquiry include the Hons Michelle Lensink and Nick Xenophon. I also thank our current members of this committee: the Hons Ian Hunter, Terry Stephens, Rob Lucas and Ann Bressington. I also acknowledge and thank the staff of the Statutory Authorities Review Committee for their contribution and ongoing support.

On behalf of the committee I would also like to take this opportunity to acknowledge and thank the organisations, agencies and individuals who submitted evidence to the committee during this inquiry. The committee heard evidence from a variety of sources and received both written submissions and oral evidence. The committee also wrote to a number of government departments and ministers in order to receive updated information. Through the information provided to it and through its own research, the committee was able to gain a clear understanding of the key issues.

The inquiry into the LMC received 20 written submissions from interested stakeholders. These included developers, industry associations, local businesses, local councils and even the Heart Foundation. Importantly, the inquiry heard from parties who had experienced direct dealings with the LMC. Many witnesses provided the committee with their own suggestions for improving the LMC. Others noted the important role that the LMC has in South Australian land management.

Not surprisingly, a number of private developers who gave evidence before the committee were critical of the LMC's involvement in acting as developer on projects. These private developers believed that in all cases the private sector should be given the opportunity to apply to act as developer via a tender process. However, the committee also heard evidence that the LMC is best placed to develop projects when there is a perceived or actual market failure and where the project is too complex and risky for the private market to deliver the desired outcomes.

Examples of potential market value described by the Urban Development Industry Association include affordability, demonstrating innovative product and fragmented ownership of growth areas. A major part of the evidence focused on a section of the LMC charter which has since been amended. This related to one of the LMC's previous functions to seek to maximise returns for government. A number of developers and industry association representatives stated that this promoted financial benefits for the government over and above providing equity of access to its land programs. The committee would have recommended that this wording be deleted from the LMC charter if it had not already been amended in this way before the completion of the inquiry.

The committee received evidence from a number of local businesses situated at Port Adelaide which were either adjacent to or located on land incorporating the Newport Quays development. The LMC released land on the Port Adelaide waterfront and contracted with the Newport Quays Consortium for its development. Known as the Port Adelaide Waterfront Redevelopment, it is the largest urban project of its kind in South Australia and includes a total of seven precincts to be established over 10 to 15 years.

The committee also conducted a site visit of this development, albeit before my time as Presiding Member. A number of the local Port Adelaide businesses that had dealt with the LMC in relation to this development explained to the committee the problems they had encountered. However, the committee is pleased to note that, by the end of this inquiry, most of those businesses had resolved any outstanding issues concerning the LMC.

Through correspondence received from minister Paul Caica in the other place, the committee is aware that negotiations with Adelaide Ship Construction International in relation to rent for its 50-year lease has been ongoing and the matter is still currently before the court.

The urban growth boundary was another hot topic for the committee to consider. The urban growth boundary is aimed at controlling urban sprawl and distinguishes between land that is designated to be used for housing, industry and commerce from that which is non-urban. Arguments were put to the committee both for and against the use of an urban growth boundary.

One argument put forward was that the boundary inhibits land affordability. The committee considered growth schemes used in other states, particularly the Victorian model, where rolling land supply is maintained. This comprises up to 25 years of land supplied for future urban growth. The committee was to recommend such a model to be introduced in South Australia. However, as recently noted, the state government's draft 30-Year Plan for Greater Adelaide will ensure a 25 year rolling supply of land if implemented as drafted. It also outlines growth expansion areas that are outside the current urban growth boundary.

The committee's recommendation accords with the proposed scheme outlined in the draft 30-Year Plan for Greater Adelaide. Housing and land affordability were key things that emerged throughout the inquiry and were particularly relevant to the evidence received on South Australia's urban growth boundary, and on LMC land releases.

The committee heard evidence that, on the one hand, if the LMC released more land and sold down its landholdings, housing affordability would significantly benefit. On the other hand, the committee heard that the LMC land releases do not affect housing or land affordability in any way. I note that the LMC accelerated its land release program in 2007 in order to accommodate the demand from unprecedented population growth.

The committee also received evidence that the recent release of the government-owned land by the LMC has been quicker than was the case two years ago. Other conflicted evidence received by the committee included references to, on the one hand, Adelaide being one of the most affordable cities in Australia and, on the other hand, according to a developer, Adelaide being one of the most unaffordable cities in the Western world. It was put to the committee that it would be unfair to blame the LMC and urban growth boundary alone for the increase seen in Adelaide land prices in recent years. The statistical information provided to the committee certainly led me to see that Adelaide is still one of the most affordable cities in Australia to live in.

Other matters raised during this inquiry included the following: the viability of identifying and incorporating heritage icons into new developments; tender processes conducted by the LMC and the criteria that it assesses applications on; LMC involvement in rural development; the LMC's relationship with other agencies; and the connection between the LMC and promoting active living in the community.

Having examined the evidence before it, the Statutory Authorities Review Committee has concluded that the LMC should remain the sole South Australian government land management agency. Arising out of the Port Adelaide Waterfront Redevelopment evidence, the inquiry heard that the LMC is currently only required to identify heritage-listed properties when looking at strategies to preserve such properties into new developments. However, the committee recommends that properties with possible heritage significance be identified and investigated at the initial planning stages of new developments.

Whilst the LMC believes that it works very closely with local government, the committee also recommends that a consultation committee comprising the LMC, Planning SA and the relevant local council meet when a new residential development is formed. This is to aid in greater communication and consultation between agencies, local councils and the LMC, and is vital when the LMC releases residential land in areas that may not have sufficient services already in place. This consultation committee would also be in a position to provide combined comprehensive advice to the local community. Again, I have to say that the LMC believed that it worked very closely with local government in this regard and, no doubt, on the matter of steering committees being formed. I suspect that it is really a matter of communication above all else.

As mentioned earlier, a number of witnesses raised concerns in relation to the LMC acting as sole developer on projects. After careful consideration of the evidence, the committee recommends that the LMC be the sole or major developer in projects where there is a perceived market failure or where it is deemed to be in the interests of the South Australian community.

The committee also recommends that greater transparency exist in the sale of LMC land. This can be achieved by the LMC providing clear reasons detailing its choice of selling land to one private enterprise over another. Again, this recommendation arose from evidence received from businesses in relation to the Port Adelaide waterfront redevelopment.

In conclusion, the committee is thankful for the opportunity to inquire into and report on the operations of the Land Management Corporation. The committee found that the LMC should remain as the government land management agency and continue to function according to its charter. With only a small number of recommendations, we hope that the government will look closely at the evidence received by the committee and take on board the committee's recommendations.

The Hon. R.I. LUCAS (16:39): I rise to support the noting of the Statutory Authorities Review Committee report into the Land Management Corporation. In doing so, I congratulate all current and past members of the committee who have soldiered away over the past three years or so in the production of the final report. I also thank, on behalf of all members, I am sure, the staff, who have worked very hard to assist the committee in reaching a conclusion and tabling a report.

The majority of the report has been agreed by all members, and I am not going to repeat many of the comments made by the Hon. Mrs Zollo, the current chair of the committee. The only one I will make reference to is recommendation five, which states:

That the LMC charter be amended to exclude a reference to 'seek to maximise returns from government'.

As the Hon. Mrs Zollo noted, the government did take action on that during the three year period of this review. I think all the evidence that was being taken was leading inevitably to this recommendation. I know the government could see that that was going to be the end result and proceeded to make that decision during the passage of the committee's deliberations, and we certainly support the government's change in that respect.

As I have said, the majority of the recommendations were supported by all members, but there were a number of areas where the Hon. Mr Stephens and I took a strongly divergent view to the other members of the Statutory Authorities Review Committee, and I want to address those issues in my contribution this afternoon.

The first related to the way in which the government treated Adelaide Shipbuilding Construction Industry (ASCI) in South Australia. In the first instance, I want to pay credit to the Hon. Terry Stephens who, within the committee, led the charge to try to get justice for this company, the Glamocak family and their investment in this company and the appalling way in which we believed they had been treated by the government. In speaking to that, I acknowledge that other members of parliament—that is, a former member of this chamber, the Hon. Mr Xenophon (now Senator Xenophon) and, in latter days, the Hon. Mr Darley—have taken up the battle to try to get some justice for the Glamocak family and for ASCI. We note that the majority committee recommendation does not really refer to the problems faced by the company. I guess that recommendation two obliquely refers to it when it states:

That greater transparency exists in the sale of LMC land to private business interests by the LMC providing clear reasons detailing its choice of selling land to one private enterprise over another.

That is an entirely unexceptional recommendation, and we do not have a problem agreeing with it, but we do not believe that it addresses the issue that ASCI was being confronted with. The two recommendations—as I said, led by the Hon. Mr Stephens, and again I pay tribute to him—from the Hon. Mr Stephens and myself state:

We have noted the appalling way in which ASCI have been treated over many years. We believe that ASCI's current deal is unfair and that a new deal should be negotiated at significantly lower annual costs than the last government offer. A new deal should recognise all the improvements ASCI have made to the site. We have been advised that ASCI have spent around $5 million improving the site since 2002.

That is essentially the issue of complaint from ASCI; that is, the deal and the negotiations that have gone on for years and years in relation to its position. We acknowledge that other members of parliament have sought to assist the Glamocak family but, within the committee, it was really left to the Hon. Mr Stephens and myself to continue to try to recognise the plight of this family and the unfair way in which they had been treated by the government. As we speak, the position has still not be resolved, as we understand it.

However, there is a second most unsatisfactory part of the government's treatment of ASCI, and that is mentioned in the second recommendation from the Hon. Mr Stephens and me, as follows:

There was no satisfactory explanation as to why the LMC and other government agencies were prepared to sell government land at the Grand Trunkway to the Samaras engineering business and Calabrese stonemasonry business but were not prepared to sell land to ASCI in the same area. It is noted that the Calabrese business was given preference on the basis that it would increase direct employment in the business from six full-time equivalents to 32. However, as at August 2009, direct employment had actually dropped to three full-time equivalents.

The committee was told that this was an important business that needed precedence over ASCI and others and that it was going to increase employment from six to 32, a five-fold increase in terms of direct employment. Instead of a five-fold increase, the company actually halved the number of full-time equivalent employees, according to the evidence given by the minister's department to the committee. As I said, we were never given a satisfactory explanation.

I can only speak on behalf of the Hon. Mr Stephens and myself, but we found the Glamocaks to have given truthful evidence to the committee. They were honest in their approach to the committee, and the Hon. Mr Stephens and I accepted their argument that they had been trying to get an answer for many years in terms of whether or not they could purchase some of the land on the Grand Trunkway.

They were continually told that there was no land for sale. However, and without going through all the gory detail of their evidence, they subsequently found out that a couple of other businesses—Samaras Engineering and Calabrese Stonemasonry—were, for some strange reason, deemed to be more important or more significant, and were allowed to purchase land in that particular area when they had not been so allowed.

Again, speaking on behalf only of the Hon. Mr Stephens and myself—because this is obviously a minority report, and we accept that it is a minority report of just the two members—we believe there are many other examples where the Glamocak family and ASCI have been treated in an appalling fashion by the government and its agencies. We have not detailed all the information we could have to demonstrate that, but we hope that this minority report at least acknowledges that there are members of parliament who are prepared to continue to support the Glamocak family and ASCI in their ongoing battle with the government for fairness and justice in relation to their particular circumstances.

The second area with which we significantly disagreed was in terms of the whole role of the LMC. Our recommendations were that we believed the involvement of a government-owned entity in the high-risk world of land development was fraught with potential risks for taxpayers. Whilst there has not yet been any large scale financial calamity involving the LMC, there have been warning signs with some of the developments it has undertaken. For example, LMC's much publicised Lochiel Park development still has 34 per cent of total allotments unsold, and the LMC joint venture at Naracoorte has 53 per cent of total allotments unsold. We believe that the primary role of the LMC should remain that of a land bank, and that any possible development role should be considered only in very limited circumstances, such as where there is demonstrated market failure.

Whilst the Lochiel Park and Naracoorte developments are modest in size and scope, the LMC is currently involved in Playford Alive, one of the biggest land developments the state has seen, in the Playford North region. We are talking here about a very significant land development, in the South Australian context. An enormous amount of evidence has been presented to the committee—admittedly, from people within the development industry—expressing concern about the role of LMC as a government-owned entity in the high-risk area of land development.

In the past we have seen a number of land developers lose tens of millions of dollars of their investors' money. Whilst that is sad, in those cases it was the conscious decision of private investors through a private company. What we are talking about here is what was formerly a land bank aggregator now believing that it can carry out developments better than the private sector, and becoming increasingly emboldened to take more and more risks.

As I said, just look at some of their small developments. Many years later 53 per cent of allotments at Naracoorte remain unsold, and the whizz-bang, super eco-friendly Lochiel Park development, about which we hear so much, still has over one-third of allotments unsold. Surely that is a warning sign for the future.

The third area about which we had some significant concerns was the Newport Quays development, and I will read the relevant recommendations from the Hon. Mr Stephens and myself:

6. In November 2007, minister Conlon made the claim in parliament that his legal advice stated that the LMC, under the terms of the project development agreement [PDA], 'owed an obligation' or 'were obliged' to give the disputed contract (remediation project manager) to Newport Quays. In fact, the Auditor-General makes it clear the government legal advice did not state that, but rather that the PDA was 'silent' on the issue.

7. It is clear that minister Conlon's statement to parliament was wrong and that, on this important issue, he misled the house.

8. LMC executives admitted not getting written legal advice on this issue and they claimed they had not taken any notice of the oral advice they received from their lawyers.

I would like to comment on that. Our recommendation is that in the future the LMC should, on all major issues, obtain and retain written legal advice. If oral advice is ever provided, then notes should be made and retained of that advice. I would like to further comment on that. We believe it is just extraordinary that a major organisation such as this, with a major contract to develop Newport Quays, should tell us that, on the critical issue of whether or not someone should get a contract, it did not get any written legal advice. That is one thing, but the LMC also told us that it received oral legal advice over the telephone but that no-one within the LMC actually made any notes of that legal advice. That is a deplorable way to run any business, let alone one on behalf of taxpayers; for executives to stand up before a committee and say, 'No, we didn't get any written legal advice. We got something on the telephone, but we didn't make any notes of that oral advice so we can't provide that to the standing committee.' Our recommendations continue:

The LMC confirmed in evidence that they had been breaching Treasurer's Instructions relating to approval and delegations for at least an 18-month period up to December 2007. They also confirm that minister Conlon had known of 'non-compliance' issues since June 2007 and hadn't fixed the problem until December 2007.

11. It is noted that the Premier, Treasurer and former Auditor-General in statements made on the 'Stashed Cash' affair have made it clear that breaches of Treasurer's Instructions were 'unlawful' and had to be treated seriously by the government.

Our final conclusion in this area is:

12. Ultimately, political responsibility for these breaches of Treasurer's Instructions by the LMC rests with minister Conlon.

This area of breaches of Treasurer's Instructions is obviously viewed differently, and conveniently, by this government, depending on whether or not it wants to actually stitch up a particular public servant or employee. In the case of the stashed cash affair, breaches of Treasurer's Instructions were, as I said, claimed by the government and the former auditor-general as being unlawful—I think the description of 'criminal' was used at one stage—and people were pursued, to the extent that disciplinary inquiries into the activities of certain public servants were held. Of course, we still have the flow-on impact before the courts at the moment, where the former CEO, Kate Benton, has taken action against her disengagement from the Public Service—if I can use that phrase—over this particular issue.

In those circumstances, the government believes that breaches of Treasurer's Instructions are unlawful and criminal. However, in this case, it was demonstrated that the LMC had been breaching Treasurer's Instructions for 18 months—and it acknowledged that it had been breaching Treasurer's Instructions in the evidence; this is not a claim. They also confirmed, as I said, that minister Conlon had known of these non-compliance issues for at least six months (from June 2007 to December 2007) and did not do anything about it until December, and that was only after evidence had been taken at the Statutory Authorities Review Committee where these particular issues were raised. Finally, minister Conlon got off his backside and actually did something to resolve the issues.

In this particular set of circumstances—because the buck stops on the desk of minister Conlon—these breaches of Treasurer's Instructions are conveniently ignored and forgotten, and certainly their previous descriptions of being unlawful or criminal are conveniently overlooked by this government, because it does not suit its political purposes.

The final area where our recommendations are significantly different to the majority of the recommendations are in relation to the urban growth boundary and the issue of affordability, which was addressed by the Hon. Mrs Zollo. I will read our recommendations in this area, as follows:

Evidence provided to the committee demonstrated there had been a significant increase in land prices in South Australia over the last 10 years whilst at the same time the cost of constructing a house has not risen appreciably.

Even the LMC has now acknowledged mistakes it has made in the release of land to the market.

The LMC website states:

...in 2007, it became apparent that LMC's land release program of past years had underestimated demand from unprecedented population growth and had also been delayed because of difficulties with the rezoning of the land.

That came from the LMC's own website. So, here is the LMC acknowledging that it had made mistakes in relation to the land release program. It had underestimated the demand from the community and there had been significant delays because of difficulties with the rezoning of land. Indeed, this was part of the argument of many of the developers that came before the committee: that the operations and actions of the LMC had had a deleterious effect on affordability in South Australia. My recommendations and those of the Hon. Mr Stephens continue:

14. Whilst we support the government's recent decision of a rolling program of 25 years of land supply, with 15 years zone ready, we believe the success of this program on restraining land prices should be monitored regularly and reported.

We believe there should be an annual report which is released publicly which reports on this target and also on the impact on land prices and affordability.

15. We also recommend that an independent probity auditor be appointed whenever the government and government agencies conduct discussions about potential changes to the UGB.

While these last two recommendations are by a minority (the Hon. Mr Stephens and me), we would hope that the minister is prepared to consider these particular recommendations. As I have said, we did have evidence that sought to remove the urban growth boundary completely. We had evidence from some people who wanted to have the Land Management Corporation sell up all its land, and we obviously considered that, as did the other members of the committee. At this stage, our position is that we are prepared to at least see how the government's recent decision about the 25 year rolling program of land supply with 15 years zone ready will operate and to see whether or not that will have a downward impact in terms of land prices in South Australia.

However, the critical part—and this is what we hope the minister might at least be prepared to consider—is that there ought to be an annual report released publicly which reports on the progress towards this target and the impact on land prices and affordability. There ought to be a record every year that we can all go to to see whether or not this particular target has been met and, more importantly, whether it is having some sort of impact on land prices and affordability, because, obviously, that is the reason for the government's recently announced change.

Our final recommendation that we hoped the minister would consider was an independent probity auditor. I must admit that, as a member of the Statutory Authorities Review Committee, I was not entirely comfortable with the current arrangements and processes engaged by government officers in terms of the discussions regarding current changes to the urban growth boundary. I have no evidence to make any criticism of particular officers and therefore do not do so, and I hasten to point out that fact. When you have a situation where confidential discussions are being undertaken, either with consultants, developers or other people with potential interest in changes to an urban growth boundary, there ought to be some independent probity oversight of that process.

It should not just be a decision of public servants within a department as to who and how they consult. It ought to be monitored in some way so that we can be given, as a parliament and a community, some satisfaction that there has been probity oversight of those particular discussions, and that through those discussions either consultants, developers or interests associated with consultants and developers do not become aware of, through insider knowledge, a potential change or move in the urban growth boundary. Clearly, information that might lead developers who have the financial wherewithal to buy land in particular areas, because they know that is likely to be the next area of the extension of the urban growth boundary, is a significant piece of information for those particular developers or associated interests and could give a financial benefit or advantage to those developers.

As some members in this chamber would know, developers are prepared to bank and invest long term. They are taking decisions now on the basis of long-term land holdings that might eventually be part of an urban growth boundary in 10 or 15 years. The bigger ones are prepared to invest in the future and such information can be a financial benefit to them. We would hope that, even though it is a minority recommendation of the two members of the committee, nevertheless the minister, in his response to the committee's report, as he is required to do (and I guess that he is only required to respond to the majority members' report), would give due consideration to the recommendations included in this minority report from the Hon. Mr Stephens and myself.

The Hon. T.J. STEPHENS (17:03): I wish to make a small contribution about ASCI. I was pleased with the way the Hon. Mr Lucas described our position most eloquently, but I use this opportunity to briefly speak about a situation that has disturbed me greatly. The Glamocak family have been treated appallingly for many years. I have visited their site with the committee, given that I sat through the whole inquiry, and from what I can see they are just a family who have spent their life building a business and have ploughed an enormous amount of money back into their business and their site. They have employed and trained many South Australians on the way through, and all they want is a fair go. Before anyone says that this is just about politics, I say that it is not. We have had some really unusual allies with regard to the Glamocak case. Senator Nick Xenophon was appalled by the treatment he could see. I notice that the Hon. John Darley, who in a previous life was impeccably credentialled to comment on this type of situation, has voiced very publicly his dismay at the way these people have been treated.

I beg and implore the government to stand over the bureaucrats who are getting in the way of what I think is common sense. These people need to have their land valued at unimproved value because, ultimately, they have ploughed in millions of dollars. They have had no grants or government assistance and not put out their hand. They are a hard-working migrant family, having come to this country and done an incredible job. Lesser people would have given up by now and ceased their business and ceased employing people. I simply put those few words on the record and plead with the government not to listen to bureaucrats but to step in and deal with this situation and get a reasonable resolution for these people.

The Hon. CARMEL ZOLLO (17:05): Before noting this report, I place on the record that certainly the committee was not provided with any evidence or information that any losses had occurred in relation to projects run by the Land Management Corporation. Indeed, the two examples the Hon. Rob Lucas gave in relation to Lochiel Park and Playford Alive certainly were very good examples of projects in which the Land Management Corporation should be involved in relation to affordability and the fragmented ownership of growth areas, and Lochiel Park, with the green village, demonstrated innovative product.

Both the Hons Rob Lucas and Terry Stephens referred to Adelaide Ship Construction International. In my contribution a few minutes ago I placed on record that ASCI is currently before the court with the state government in relation to its 50-year lease and it would not be appropriate for me or any of us to say anything further. There was some accusation that we had not really dealt with that issue, but the committee did not make any other recommendation because, on the one hand, it had received information from ASCI that it had approached LMC in relation to the purchase of land while, on the other hand, LMC gave evidence to the committee that there was no evidence or recollection of that at all. That is going by my recollection of the evidence that was provided to the committee.

Also, I should place on the record that ASCI is located at Moorhouse Road, Gillman which, obviously, is waterfront land. The land mentioned related to other companies, namely, Samaras and the Calabrese group—I am not certain whether it is known as 'the group'. The land that was sold to those two firms is on the Grand Trunkway, which, of course, is not waterfront land. It would be my understanding, just reading between the lines, that ASCI may well have become caught up in a change in government policy in relation to the sale of land in the Port of Adelaide, that is, that the government was no longer selling land on the waterfront, in particular within 200 metres of the high waterfront extending from Outer Harbor to Gillman.

Also, and I think the Hon. Rob Lucas would agree, there has been a longstanding unwritten policy of both his government (the former Liberal government) and the Labor government not to sell waterfront land in the Port of Adelaide. Indeed, I understand that, when it sold Ports Corp to Flinders Ports in 2001, the Liberal government did not sell freehold land to Flinders Ports in the Port of Adelaide nor, I understand, in the regional ports, either. Instead, it opted for long-term leases, and it would be my understanding that ASCI has a long-term lease as well.

Therefore, the approach taken in relation to the sale of land by the LMC, and now Defence SA, has been consistent with the policy of the former Liberal government, as well as a more formal decision taken some time in July 2003, that no disposal of government-owned waterfront land in Port Adelaide would occur. The Hon. Rob Lucas raised quite a few issues, but, of course, it is protocol for the chair to table the minority report attached to our own report, and I have done that. I did read the minority report, one recommendation of which related to the Treasurer's Instructions.

I understand that the previous Treasurer's Instruction under which the LMC was working had been superseded by a new one, and obviously it took some time before the due processes took place prior to that information being provided to minister Conlon. Again, from the evidence that was provided to the committee in relation to the remediation of land and the evidence that minister Conlon is purported to have provided to his chamber, I understand that evidence from the LMC in November 2007 does apparently accord with what minister Conlon is alleged to have said in the chamber.

The committee then went on to receive further evidence from the LMC in December 2007, which explained exactly the advice that was received by the LMC; and, based on that legal advice, the LMC interpreted the project development agreement as entitling Newport Quays to be appointed as the remediation manager. In that regard, the Crown Solicitor's Office advice does support the LMC's interpretation. The LMC's interpretation of the remediation clause in the PDA, based upon the legal advice the LMC obtained from Thomson Playford, was specifically confirmed by the legal advice provided by the Crown Solicitor's Office in writing on 20 November 2007. In his evidence to the committee, Mr Gibbons said:

In summary, based on the legal advice that LMC has obtained from Thomson Playford and LMC's interpretation of the definition of 'remediation works contractor' contained within the PDA, LMC came to the conclusion that the appointment of the remediation project manager was a class of remediation works contractor for the purposes of the PDA. I note that the Auditor-General in his report has arrived at a different interpretation of the remediation clauses of the PDA. In this regard, the Crown Solicitor's Office advice supports LMC's interpretation.

Other issues were also raised by the Hon. Rob Lucas, but, as is protocol, I will leave that to the minister in the other place to provide a formal response.

Motion carried.

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