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Legislative Council - Fifty-Second Parliament, First Session (52-1)
2011-05-05 Daily Xml
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HEALTH SERVICES CHARITABLE GIFTS BILL

Committee Stage

In committee.

(Continued from 22 March 2011.)

Clause 15.

The Hon. J.A. DARLEY: I move:

Page 7, lines 18 and 19 [clause 15(c)]—Delete 'the Investment Advisory Committee established in Schedule 2 and any other body' and substitute:

any person or body

At the outset, I would like to thank minister Hill, his adviser, Ms Alexandra Keen, and departmental staff, Mr Rob Smetak and Mr Andrew Thompson, for their cooperation in relation to my amendments to this bill. Minister Hill has listened to my concerns, and his staff have worked collaboratively with my office in an effort to reach an acceptable compromise. Again, I am grateful for the minister's support on this issue.

This is one of 10 amendments relating to the proposed establishment of an investment advisory committee. The other amendments are Nos 2, 9, 10, 11, 12, 13, 14, 17 and 21. The first amendment, which is consequential, removes the reference in clause 15(c) to the board consulting with the investment advisory committee when determining investment strategies and provides instead that the board be allowed to consult with any person or body it considers appropriate.

This set of amendments proposes to replace the establishment of the investment advisory committee with the requirement that the board meet on a quarterly basis with a person nominated by the minister, with the agreement of the Treasurer, for the purpose of receiving advice and recommendations on the exercise of the board's functions in relation to its investment portfolio, investment objectives and strategies, and any other related matters.

The board must provide the nominated person with any document as may be required for the purpose of providing that advice. The nominated person referred to in this clause will be an employee of Treasury. There is no obligation on the board to accept the advice of the nominated person. I have consulted at length with the Commissioners of Charitable Funds in relation to these amendments, and it is certainly my understanding, and I think that of the ministers, that they are satisfied that this proposal is preferable to the current provisions in the bill.

As mentioned in my second reading contribution, commissioners generally only ever invest in the top 50 Australian companies and, more particularly, in the top 10 Australian companies. Even this is done only after taking advice from at least two companies specialising in investment advice for non-for-profit organisations. I understand that the government's position is that it would like Treasury to play some role in the provision of financial advice to the commissioners. This amendment achieves that end without the overly cumbersome process involved in establishing an investment advisory committee. I urge all honourable members to support this amendment.

The Hon. G.E. GAGO: This amendment amends clause 15(c). We see it as consequential upon the Hon. Mr Darley's amendments to remove the requirement that the board establish an investment advisory committee. The government supports all of these three amendments, so I will speak generally on all of them.

The government's chief concern in establishing the investment advisory committee was that, with the broadening of the investment powers for the Health Services Charitable Gifts Board, there would be a greater capacity for exposing the charitable assets to investment risks. The government was therefore concerned to have in place a process whereby the government and the public could be assured that the board was cognisant of the risk of its investment decisions it may be exposed to.

The amendments proposed by the Hon. Mr Darley, while removing the requirement for an investment advisory committee, maintains a process for the board, proposed under amendment No. 9, to consult with a person independent of the board who is nominated by the minister, with the agreement of the Treasurer. This addresses the government's concern.

Amendment No. 1 removes the reference to clause 15(c) to the board consulting with the investment advisory committee when determining its investment strategies. As amended, clause 15(c) will allow the board to consult with any person or body it considers appropriate.

The Hon. J.M.A. LENSINK: The Liberal Party supports the Hon. Mr Darley's amendments as well. I indicate that our health spokesperson has been in contact with the honourable member to discuss these matters. I would like to congratulate the Hon. Mr Darley on coming up with a fairly comprehensive set of amendments which will remove references to the Investment Advisory Committee, which I agree is a fairly bizarre structure in modern governance practice. The honourable member clearly has a lot of experience in this area, and has done a significant amount of work to improve this legislation.

I am pleased that the government will also support the amendments. In principle we agree with the honourable member, and I am happy to indicate that the opposition will support all the consequential amendments that relate to this legislation.

Amendment carried.

The Hon. J.A. DARLEY: I move:

Page 7, line 22 [clause 15(d)]—Before 'body' first occurring insert:

person or

This amendment is also consequential, and again relates to the Investment Advisory Committee. It makes it clear that the board can consult with any person or body it considers appropriate on the application of funds rather than having to consult with an investment advisory committee. I ask all honourable members to support this amendment.

The Hon. G.E. GAGO: This is consequential.

The Hon. J.M.A. LENSINK: I am happy with that, Mr Chairman.

Amendment carried; clause as amended passed.

Clauses 16 and 17 passed.

Clause 18.

The Hon. J.A. DARLEY: I move:

Page 9, line 2 [clause 18(1)]—Delete 'The' and substitute:

Subject to this Act, the

This is the first of a further set of amendments relating to the application of charitable assets. It is a consequential amendment. It requires the board to apply the charitable assets for the benefit of a public health entity or a prescribed research body subject to the new clause proposed by my amendment No. 5. To put this into context, my amendment No. 5 requires that the board considers the intent of the donor and, as far as is reasonably practicable, give effect to that intent. If the donee remains in existence as a public health entity or a prescribed research body, but the board decides to apply the gift or a portion of the gift to some other public health entity or prescribed research body, the amendment requires that the board first consult with the donee.

For example, if a bequest is made to the Royal Adelaide Hospital but the board considers that the intent of the bequest would best be achieved if the gift were applied to some other hospital or research body—say, The Queen Elizabeth Hospital or the South Australian Health and Medical Research Institute—then the board could only apply that gift to that body after consulting with the RAH. It is envisaged that this might occur when, for instance, a specific area of research shifts from one public health entity or research body to another.

This amendment addresses concerns raised with my office in relation to the application of charitable assets. It ensures that a donee is appropriately consulted in relation to any changes to the application of charitable assets. I ask all honourable members to support this amendment.

The Hon. G.E. GAGO: The government supports this series of amendments. This amendment No. 3 amends clause 18(1) and is consequential upon the Hon. Mr Darley's amendment No. 5, which requires the board to consult with the donee of the gift if the board decides to apply a portion of the gift to a public health entity or prescribed research body other than the donee.

The government is concerned to have in place mechanisms in the bill that would provide for the Health Services Charitable Gifts Board to have the discretion to apply a gift in a way that can best achieve the intended purpose of the donor. This includes a capacity to apply a gift to a public health entity or prescribed research body other than the one that may have been specified by the donor. To ensure that the board acts properly, it is required to consider the donor's intent, where practicable, and give effect to that intent.

The amendments proposed by the Hon. Mr Darley to require the board to consult with the intended public health entity or prescribed research body (the donee) is a refinement of these provisions. The government is of the view that the need to consult with the relevant entity or body would have been required by the board when it was considering the intent of the contended donor. Nevertheless, making this explicit in the bill will remove any doubts about the process the board must undertake in this regard. The amendment and the reporting requirements are consistent with the government's view and, therefore, we are pleased to support it.

The CHAIR: The Hon. Ms Lensink, are you happy with that?

The Hon. J.M.A. LENSINK: Yes, Mr Chairman.

The CHAIR: I will ask the Hon. Mr Darley to move the other two amendments (Nos 4 and 5), because we can put them all together.

The Hon. J.A. DARLEY: I move:

Page 9, line 4 [clause 18(2)]—Delete a 'public health entity' and substitute:

an entity or body (the donee)

For the reasons just outlined I ask honourable members to support this amendment. I move:

Page 9, lines 11 to 16 [clause 18(3)]—Delete subclause (3) and substitute:

(3) In managing and applying a portion of the charitable assets attributable to a particular donor, the Board—

(a) must consider the intent, as far as it may be reasonably ascertained, of the donor; and

(b) so far as is reasonably practicable, must apply the portion in a manner that the Board considers is most likely to achieve the intention of the donor; and

(c) if the donee remains in existence at the relevant time as a public health entity or prescribed research body—may only apply the portion to some other public health entity or prescribed research body if the Board first consults the donee in such manner as the Board thinks fit.

As previously outlined, this amendment requires that the board considers the intent of the donor and, as far as is reasonably practicable, give effect to that intent. If the donee remains in existence as a public health entity or a prescribed research body, but the board decides to apply a gift or a portion of a gift to some other public health entity or prescribed research body, the amendment requires that the board first consult with the donee. Again, for the reasons already outlined, I ask honourable members to support this amendment.

The CHAIR: The honourable minister has already indicated support for the series of amendments, and so has the Hon. Ms Lensink.

Amendments carried; clause as amended passed.

Clause 19 passed.

Clause 20.

The Hon. J.A. DARLEY: I move:

Page 10, line 17 [clause 20(4)]—Delete 'property specified in Schedule 1 clause 2' and substitute:

prescribed property

This amendment is one of five amendments relating to the Hanson Institute (otherwise known as the Hanson Centre for Cancer Research) and the IMVS. The amendment removes the ability of the minister to direct that the board transfer Hanson Institute and IMVS moneys from the charitable assets to a health trust, the terms of which may be determined by the minister. Instead, Hanson and IMVS moneys will continue to vest in the charitable assets and to be used in the usual manner.

The amendment addresses specific concerns that have been raised with my office in relation to moneys that have been donated to or raised through bodies such as the Hanson Institute, particularly in light of the future opening of the South Australian Health Medical Research Institute. This is not a criticism of the new SAHMRI, nor is it intended to suggest that the minister intends to redirect those funds held by Hanson or IMVS to other purposes. The amendment simply seeks to ensure that the funds of those bodies are preserved.

In addition to the Hanson Institute and IMVS, another area of concern raised with my office concerns doctors' private excess earnings. At present the commissioners hold doctors' private excess earnings for the RAH. I am advised that the bill would allow those funds to be transferred to a health trust. However, this is only intended for a very limited purpose of providing a means for those funds to be transferred back to the RAH so that in future they can be administered by the hospital itself rather than the commissioners.

Importantly, it is not intended that the minister will determine how that money is to be dealt with, and those funds will continue to be administered by the commissioners according to present terms until they can be transferred back to the RAH. I understand the minister is willing to provide an undertaking to that effect. If that is the case, I ask all honourable members to support this amendment.

The Hon. G.E. GAGO: These amendments are supported by the government. Amendment No. 6 amends clause 20 and is consequential upon the Hon. Mr Darley's amendments that will ensure that the property held by the Commissioners of Charitable Funds on behalf of the Hanson Institute and IMVS become part of the charitable assets. Currently the bill provides that these funds may be put into a health trust.

The Commissioners of Charitable Funds were not empowered under the Public Charities Funds Act 1935 to hold funds for the Hanson and IMVS. This situation arose because of the complexities in interpreting that act and the historical establishment of the relationship between the Hanson and IMVS and the Royal Adelaide Hospital. The government was to address this by enabling the health services charitable gifts board to properly hold the funds for the Hanson and IMVS as part of a health trust. The amendments proposed by the Hon. Mr Darley provide for the board to properly hold the funds as part of its charitable assets. This is consistent with the government's intent to ensure that the funds for the Hanson and IMVS can be properly held and managed.

Amendment No. 6 amends clause 20 to delete reference to schedule 1, clause 2. Schedule 1, clause 2 identifies the Hanson and IMVS funds as property that may be transferred into a health trust that is deleted by amendment No. 20. I acknowledge the contribution made by the Hon. John Darley to the debate on the bill before the house and the concern he has raised about provisions in the bill that are intended to deal with what can be described as the excess private practice earnings of medical officers engaged by a public hospital. These provisions are continued by amendment No. 8 to this clause.

Included in the bill are provisions that deal with the excess private practice earnings of medical officers who donate a part of their private practice earnings to the Royal Adelaide Hospital, as part of an industrial agreement, under the department's rights of private practice policy. In summary, this policy means that, as part of the rights to private practice in a public hospital, a medical officer can donate an amount of their private practice earnings above an agreed sum to that particular hospital. This is a policy that has worked well for the medical officers at the Royal Adelaide Hospital.

As a donation to the Royal Adelaide Hospital, under the current act, these funds are currently vested in and managed by the Commissioners of Charitable Funds. When the Health Services Charitable Gifts Bill is enacted, it is expected that all metropolitan hospitals will come under the new act, to ensure consistency in this area for all hospitals.

It is proposed that the responsibility for donations that are part of the rights of private practice policy be maintained by the relevant hospital. It is proposed that the existing funds held by the Commissioners for Medical Officers at the Royal Adelaide Hospital will become part of a health trust. Once the amounts and details of all donations are fully determined by the commissioners, the health trust will be wound up and the funds transferred to the Royal Adelaide Hospital for its management.

The terms and conditions of this health trust will only be concerned with the process of the transfer and management of the funds until they are given to the Royal Adelaide Hospital. The terms and conditions will not refer to how these funds may be applied or who will have access to them. This will remain a matter for the Royal Adelaide Hospital, the medical officer and the commissioners.

Future donations to the Royal Adelaide Hospital, or any other hospital where the policy may apply, will be excluded by regulation from becoming part of the charitable assets vested in the health services charitable gifts board. They will be a matter for the hospital and the medical officer to determine. Medical officers will, of course, remain free to make any donation outside of this to a hospital, however these donations will become part of the charitable assets vested in the board.

Amendment carried.

The Hon. J.A. DARLEY: I move:

Page 10, lines 22 to 27 [clause 20(5)]—Delete subclause (5)

Again, this amendment relates to my previous amendment regarding the Hanson Institute and the IMVS. I ask all honourable members to support this amendment. I move:

Page 10, after line 39—After subclause (9) insert:

(10) In this section—

prescribed property means property that—

(a) is prescribed by regulation and was given in a manner prescribed by regulation; and

(b) was held by the Commissioners of Charitable Funds immediately before the commencement of Schedule 3 (and vested in the Board as part of the charitable assets on the commencement of Schedule 3),

but does not include property given (or purportedly given) to or for the benefit of a body specified in Schedule 1 clause 1.

Again, this amendment relates to my previous amendment regarding the Hanson Institute and the IMVS. I ask all honourable members to support the amendment

Amendments carried; clause as amended passed.

Clauses 21 and 22 passed.

New clause 22A.

The Hon. J.A. DARLEY: I move:

Page 11, after line 5—After clause 22 insert:

22A—Board to meet with public sector employee nominated by Minister

(1) The Minister must, with the agreement of the Treasurer, nominate a public sector employee (with expertise, knowledge or experience deemed suitable by the Minister) for the purposes of this section.

(2) The Board must, on a quarterly basis, meet with the person nominated by the Minister for the purpose of receiving advice and recommendations from the nominee on the exercise of the Board's functions in relation to the Board's investment portfolio, investment objective and strategies, and related matters.

(3) For the purposes of a meeting under subsection (2), the Board must provide the nominee with such information or records in the possession or control of the Board as the nominee may require in such manner and form as the nominee may require, by no later than 1 month prior to the meeting.

This amendment replaces the requirement for an investment advisory committee with a requirement that the board meet with a public sector employee for the purpose of obtaining investment advice. As mentioned earlier, the board will be required to meet on a quarterly basis with a person nominated by the minister, with the agreement of the Treasurer, for the purpose of receiving advice and recommendations on the exercise of the board's functions in relation to its investment portfolio, investment objectives and strategies, and any other related matters. This approach is considered more preferable to the current provisions in the bill and I ask all honourable members to support this amendment.

The Hon. G.E. GAGO: The government supports the amendment. It is basically consequential.

New clause inserted.

Clause 23.

The Hon. J.A. DARLEY: I move:

Page 11—

lines 8 to 12 [clause 23(1)]—Delete subclause (1) and substitute:

(1) The Board may, subject to subsection (2), establish committees to provide advice on any matter affecting the administration of this Act as the Board thinks fit.

line 15 [clause 23(2)]—Delete 'under subsection (1)(b)' and substitute:

(and the regulations may make provision in relation to the establishment of the committee and any procedure to be followed by the committee)

line 16 [clause 23(3)]—Delete 'established under subsection (1)(b)'

line 21 [clause 23(4)]—Delete 'established under subsection (1)(b)'

Amendment Nos 10, 11, 12 and 13 all relate to the deletion of the requirement for an investment advisory committee. I will speak to all of those amendments together. All four amendments amend clause 23 of the bill to remove the requirement that the board establish an IAC. I ask all honourable members to support these amendments.

Amendments carried.

The Hon. G.E. GAGO: I believe that all of the amendments of the Hon. John Darley, from 14 through to 21, are substantially consequential amendments and we would be happy to progress them all together.

The CHAIR: Some are to different clauses. The Hon. Mr Darley can do amendment Nos 14, 15 and 16, which all relate to clause 23.

The Hon. J.A. DARLEY: I move:

Page 11—

After line 21 [clause 23(4)]—Before paragraph (a) insert:

(aa) as prescribed by regulation; or

Line 22 [clause 23(4)(a)]—Before 'as' insert:

insofar as the procedure is not prescribed under paragraph (aa),

Line 23 [clause 23(4)(b)]—After 'is not' insert:

prescribed under paragraph (aa) or

Amendments carried; clause as amended passed.

Clauses 24 to 28 passed.

Clause 29.

The Hon. J.A. DARLEY: I move:

Page 12—

Lines 29 to 31 [clause 29(3)]—Delete subclause (3) and substitute:

(3) The report on the operations of the Board under subsection (1)(a) must include the following:

(a) if the Board has, in the relevant financial year, applied a portion of the charitable assets that is attributable to a gift to or for the benefit of an entity or body to some other entity or body, a statement of reasons for the Board's decision to so apply the portion;

(b) a summary of any advice given, or recommendations made, by the public sector employee under section 22A in the relevant financial year;

(c) any other information prescribed by regulation.

Line 34 [clause 29(5)]—Delete subclause (5)

These amendments are consequential to previous amendments regarding the investment advisory committee. Clause 29 of the bill provides reporting requirements for the board. The board must, on or before 31 October of each year, deliver to the minister reports on the operations of the board and, subject to the regulations, any trust established under section 20 during the financial year ending on the preceding 30 June.

The amendment requires that the report on the operations of the board include a statement of reasons where the board's decision to apply a portion of a charitable asset that is attributable to a gift to or for the benefit of an entity or body to some other entity or body, as well as a summary of any advice given or recommendations made by the nominated person under section 22A. It also provides for the reporting on other information prescribed by regulation.

The purpose of the amendment is to ensure appropriate levels of reporting. Subclause (a) in particular provides for specific reporting by the board where it has decided to apply a portion of a gift to some other entity or body. This provides for a greater level of openness and transparency. I urge all honourable members to support this amendment.

The Hon. G.E. GAGO: Consequential; the government supports this amendment.

Amendments carried; clause as amended passed.

Clauses 30 and 31 passed.

Schedule 1.

The Hon. J.A. DARLEY: I move:

Page 13, line 15 [Schedule 1, heading]—Delete 'and parts of the charitable assets'

Clause 2, page 13, lines 23 to 35—Delete the clause

These amendments are also consequential to previous amendments relating to Hanson and IMVS, and I ask all honourable members to support them.

The Hon. G.E. GAGO: The government supports these amendments.

Amendments carried; schedule as amended passed.

Schedule 2.

The Hon. J.A. DARLEY: I move:

Page 14, line 1 to page 15, line 33—Delete the Schedule

Again, this amendment relates to the deletion of the requirement for an Investment Advisory Committee. It deletes schedule 2 of the bill, which provided for the framework for that committee. I ask all honourable members to support this amendment.

Amendment carried; schedule deleted.

Schedule 3.

The Hon. G.E. GAGO: I move:

Clause 6(1)(b), page 17, lines 1 to 4—Delete paragraph (b) and substitute:

(b) for the benefit of Metropolitan Domiciliary Care, including funds held in the Metropolitan Domiciliary Care fund in the 23 series accounts.

The Commissioners of Charitable Funds recently advised that they incorrectly described the account name in Schedule 3, clause 6(1)(b)(i), the Hampstead Centre Fund (04-40), as being one that is held for the benefit of Metropolitan Domiciliary Care. The fund is in fact a Royal Adelaide Hospital health account for funds for the purpose of research, education, purchasing of equipment and patient amenities. The government therefore moves an amendment to have the reference to the Hampstead Centre fund removed from Schedule 3.

The Hon. J.A. DARLEY: I support the amendment.

Amendment carried; schedule as amended passed.

Title passed.

Bill reported with amendment.

Third Reading

The Hon. G.E. GAGO (Minister for Regional Development, Minister for Public Sector Management, Minister for the Status of Women, Minister for Consumer Affairs, Minister for Government Enterprises, Minister for Gambling) (17:01): I move:

That this bill be now read a third time.

Bill read a third time and passed.

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