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Legislative Council - Fifty-Fourth Parliament, First Session (54-1)
2018-07-31 Daily Xml
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Bills

South Australian Productivity Commission Bill

Committee Stage

In committee.

(Continued from 26 July 2018.)

Clauses 1 and 2 passed.

Clause 3.

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

Amendment No 1 [Darley–1]—

Page 3, after line 8—Insert:

principles of competitive neutrality has the same meaning as in the Government Business Enterprises (Competition) Act 1996.

I will speak to my amendments Nos 1 and 2 together. These amendments will allow the commission to investigate matters of competitive neutrality on their own initiative. This clause is similar to that which exists in the federal Productivity Commission Act, whereby a person can complain to the commission if they believe there is an issue regarding competitive neutrality, and the commission can decide if they want to investigate the matter.

Competitive neutrality has the same meaning as the Government Business Enterprises (Competition) Act, which essentially outlines that governments should not have a competitive advantage over private businesses who operate in the same market. If the commission believes there is an issue with competitive neutrality, it can investigate this matter on its own will. I understand the government is considering its own amendments, which places similar amendments into the Government Business Enterprises (Competition) Act.

Whilst it is heartening that the government sees merit in this amendment, the main point of contention is that the government's amendment would require the relevant minister to refer the matter to the productivity commission, rather than giving the productivity commission the power to investigate matters on their own motion. I want to make it clear that this is only concerning matters of competitive neutrality.

One of the most glaring examples of where the government was certainly criticised for having a competitive edge from private business is the same market concerns of TAFE SA and private providers. The community would have benefited if an independent body, such as the productivity commission, could have investigated any claims against competitive neutrality.

Whilst the productivity commission did not and still does not exist, given the government's rigorous defence of TAFE SA I very much doubt the minister would have referred the matter to be investigated on their own impetus. It is therefore important that the productivity commission can have a look at such matters themselves, if they believe there is a reason for it, without the need for a referral.

The Hon. R.I. LUCAS: I thank the Hon. Mr Darley for his explanation of the amendment. I think I canvassed briefly at the second reading the government's likely position, and I can confirm that we do have an alternative position to test with the committee in relation to the issue. We acknowledge the issue that the honourable member has raised in relation to competitive neutrality. The point, as I made at the second reading and I highlight now to the committee again, is that we already have an existing statute, which is the Government Business Enterprises (Competition) Act 1996, so it is longstanding, it has been there for 20-plus years. There is an extensive section in that particular piece of legislation outlining how complaints of competitive neutrality should be tackled.

Part 4 of the act is headed 'Principles of competitive neutrality', and there are various clauses. In terms of what those principles are, clause 16. Clause 17 is the complaints process. Clause 18 is the assignment of a commissioner and clause 19 is how a commissioner would investigate the complaints, and then there is some detail further on in the act.

The government's position is that we essentially have an act that provides the opportunity for investigation of competitive neutrality complaints. There is a process for the government of the day to pursue. I must admit that I do not have the answer to this question as to whether perhaps former ministers in the former government, who have had, I guess, 16 years operating under this act, have any experience or knowledge of complaints of competitive neutrality made to the former government under the provisions of this act and whether there is any example where that was not pursued by the former government.

I do not allege that, and I have no knowledge of whether or not that is the case, but if there had been examples (and the Hon. Mr Darley may well have some knowledge of this—I do not know) where complaints under the competitive neutrality provisions were lodged with the former government and a minister decided not to have those particular complaints investigated, then perhaps I could see, or the government could see, that there is a problem with our current process, and therefore we should establish a completely new process to investigate it.

It would be an unusual set of circumstances where, in essence, we would have two statutes applying two different models to investigations of competitive neutrality. We would have one process, if the Hon. Mr Darley's amendments are successful, where a complaint could be lodged with the productivity commission and they could decide whether or not they are going to pursue it under the provisions of the Productivity Commission Act. At the same time, you could have somebody lodging a complaint to the government under the Government Business Enterprises (Competition) Act and a separate process being established under that act. We would have two potential models or processes that might be adopted in relation to the same allegations.

You might have a situation where, for example, there would be plenty of TAFE private providers—individually; they do not have to speak as one—and each individual private training provider could make an allegation of competitive neutrality against TAFE. Under the Hon. Mr Darley's amendment, the productivity commission could follow through each of those particular individual complaints. At the same time, the minister could appoint somebody else under the Government Business Enterprises (Competition) Act as a commissioner to investigate competitive neutrality. Hopefully, you would not have this in a sensible world, but you could have duelling investigations by different commissioners in relation to the same allegations of competitive neutrality.

In the absence of any evidence at this stage that the existing act has not worked as it was intended to work, the government's position is: why provide another mechanism when one already exists? What the government is seeking to do in opposing the Hon. Mr Darley's amendment is to provide an alternative proposition, which essentially says to the committee that they could use the existing Government Business Enterprises (Competition) Act and use the expertise of one of the productivity commissioners to investigate the allegation of competitive neutrality. The productivity commissioner would operate under the Government Business Enterprises (Competition) Act provisions because that clearly outlines how competitive neutrality provisions should be investigated.

I refer members to the detailed explanation of the investigations and the principles behind how competitive neutrality investigations should be undertaken and the processes that have to be adopted there. The honourable member's proposition does not have that sort of detail in relation to how the productivity commission should conduct this competitive neutrality provision. It essentially says that, if there is an allegation, the productivity commission can investigate the competitive neutrality allegation. In the Government Business Enterprises (Competition) Act there are strict requirements on the investigation by the commissioner:

(3) The Commissioner must prepare a report on the outcome…and give a copy of the report to—

(a) the Minister; and

(b) the complainant; and

(c) the government or local government agency alleged to have infringed…

(4) The report must set out or include—

(a) a determination as to whether the grounds of the complaint have been substantiated; and

(b) the Commissioner's reasons for making the determination; and

(c) if the Commissioner finds that the principles of competitive neutrality have been infringed by a government or local government agency—the Commissioner's recommendations in relation to the matter (which may include recommendations for the implementation of policies or practices to avoid further infringement of the same kind).

(5) The Commissioner must also prepare a summary of the contents of a report under this section.

(6) The Minister must ensure that copies of any summary are available for inspection by the public at a place determined by the Minister.

(7) A summary must not disclose confidential information.

There is a whole series of detailed provisions which relate to how a competitive neutrality complaint should be conducted by a commissioner, which is outlined as a protection in the existing act. Obviously, none of that applies to this particular add-on to the productivity commission complaint. So the government is saying: in the absence of evidence that the current system is not working, why not try to acknowledge the issue that the Hon. Mr Darley has introduced? Let's use the best elements of the existing act, which is there, and the resources of the productivity commission in relation to the expertise of the particular productivity commissioner, and have him or her investigate the competitive neutrality complaint.

The final point I would make is in relation to the issue of the complaints. The best example is the one the member has given in relation to private training providers, I assume, making allegations against TAFE SA. Members will be aware and the Hon. Mr Darley will be aware, from various parliamentary inquiries, etc., that there are likely to be any number of complainants in the private training provider market against the operations of TAFE. They do not speak collectively with one united voice. There is a whole series of different ones with slightly different complaints about various operations. It may well be industry sector specific, so that if a particular industry sector has a complaint against one particular college or campus of TAFE, another industry sector will have another, different complaint.

Under this particular model you might have a whole series of separate complaints from private training providers against TAFE, which would need to be investigated by the productivity commission. Under the existing model, these sorts of complaints would go to the government or the minister. Ultimately, the determination would be, if either one of them was significant enough or there were so many of them that the nature of the complaint could be packaged together, to say, 'There is a whole series of complaints from a whole series of private training providers against TAFE SA. We want this particular commissioner to look at the generic set of complaints against TAFE, rather than having to have separate inquiries on every individual private training provider's complaint against TAFE SA.' Again, we think that is a workable model.

I understand that perhaps the member's concern is that the minister and the government might not agree to an investigation of a competitive neutrality complaint. As I said, if there is evidence of that, that under the former government there had been complaints for which they had not initiated action under this particular act, that would be worthwhile information to share with the committee. However, in the absence of that, we think the alternative proposition that we put later in the committee is a better model. For those reasons, we will not be supporting this particular amendment.

The Hon. K.J. MAHER: I thank the Hon. John Darley for moving this amendment and the government for its view. I think this is the first time we have seen the amendment filed by the government. I wonder if I may indulge in a little bit of fleshing out. Can I ask the government the question of whether we are being asked to not support the Hon. John Darley's amendment in preference of the government's amendment? Is that, in essence, what the government is suggesting?

The Hon. R.I. LUCAS: That is the government's position, but it is entirely the prerogative of the opposition to oppose both amendments. They do not have to—

The Hon. K.J. Maher: I am just asking if that is what the government says.

The Hon. R.I. LUCAS: Yes. The government's position is that we accept the point that the Hon. Mr Darley has raised as being a reasonable point, but that we think there is a better way of going about it, which is our amendment. So the options available to other members are, obviously, to either support Mr Darley or the government's amendment, or indeed to oppose both of them.

The Hon. K.J. MAHER: On that, is it correct that the options that are being laid out are to support one or the other, or both of them? If the Hon. John Darley's two amendments succeed, is the government indicating that the government will not be proceeding with their amendment?

The Hon. R.I. LUCAS: We do not think it would be sensible to have an option where both amendments were passed. So if the Hon. Mr Darley's amendment were to pass, we would not proceed with our particular amendment because we see them as alternative mechanisms to address the problem.

In the event that the committee opposed both amendments, that is, there was no support for them, we would be left with the existing position which is that there is an act and you can investigate competitive neutrality complaints through that act, and it exists. It just would not be linked to the use of a productivity commissioner, which is our alternative mechanism, but it remains law that you can investigate competitive neutrality through the existing act.

The Hon. K.J. MAHER: Again, having only just sighted the government's this morning, I think perhaps it is a procedural question, Mr Chair. The amendments being filed effectively do not amend the bill that we are discussing today, they amend another act of parliament. I assume that is capable under standing orders. For future reference, in terms of filing amendments, is any member capable of filing amendments to a bill that do not in fact amend the act which is the subject of the bill?

The CHAIR: My understanding is that it is a new act that creates a new body, therefore you can insert amendments relating to other acts, as long as it relates.

The Hon. K.J. MAHER: If it was not for the amendment the Hon. John Darley moved that created this, would this amendment have been capable of being moved if we did not already have the amendment?

The CHAIR: My understanding is yes.

The Hon. K.J. MAHER: In the future if there are bills before parliament, anyone is capable of amending a different act other than the bill?

The CHAIR: If it was a bill amending an existing act in a specific way, my understanding is that an instruction would be required. In this case my understanding is, and I have consulted with the Clerk, that it is appropriate in these circumstances. It is probably not appropriate that we then have a more general discussion about what you can and cannot do. Let's leave that on a case by case basis.

The Hon. K.J. MAHER: This is useful, to be clear about how the procedure works.

The CHAIR: Your question is valid. I understand and I have consulted with the Clerk at the committee table that in this case it is appropriate and it is a bill for an act to establish the South Australian Productivity Commission and for other purposes. In this instance, in these circumstances, with this bill, these amendments are within the parameters of the bill and appropriate.

The Hon. K.J. MAHER: I thank you for the guidance. Just so I am clear—and you can correct me if my understanding is wrong—because this is a bill for a brand-new act rather than amending an already existing act, that is why it is capable of being brought in to amend other acts. The difference is that if it was a bill to amend an existing act, it would be an instruction if you were amending a separate act, whereas if it is a brand-new bill that is not amending any other act you are capable of moving amendments for other acts—

The CHAIR: Without creating a binding ruling, you are just about there, with one caveat; that is, if you are having an amending bill, a bill that amends an existing law, there are issues of scope. It is a very narrow scope and it would be difficult for the argument to be raised that you could introduce amendments to other bills, so it is also a case of scope. That is another consideration that the chair would take into account, or the chair acting as President. I think for the benefit of this committee debate, my understanding and the confirmative advice I have received from the Clerk is that these amendments are appropriate in the circumstances.

The Hon. K.J. MAHER: I have one final procedural question: is there a particular standing order that we should be referred to in relation to the capability to amend the distinction that is being drawn today?

The CHAIR: I refer you to standing order 422 for your further consideration.

The Hon. K.J. MAHER: You mentioned the title of the bill. That does not need to be changed; it is capable within the title because of other purposes. Is that the suggestion?

The CHAIR: Yes, that is correct. Another factor that has been drawn to my attention is: should the government amendment be successful, it also makes changes to the long title of the bill.

The Hon. K.J. MAHER: Yes, that is amendment No. 2 [Treasurer–1].

The CHAIR: I suppose the only assistance I can provide you is that in these instances my understanding is that this amendment is appropriate.

The Hon. K.J. MAHER: I thank you, Chair, for giving us the guidance and advice that, as I have said, will provide guidance and advice for future bills where it is not amending other bills.

The CHAIR: I would be the first to let you know if it is inappropriate.

The Hon. K.J. MAHER: I rise to indicate that the opposition will be supporting the Hon. John Darley's amendment in preference to the government amendment. We think that is the most appropriate way to go when discussing issues of competitive neutrality. I understand it is much more in keeping with how the federal Productivity Commission works and operates and can have the ability to canvass issues of competitive neutrality.

We think that is the bill that is before us. That is what is being inserted here and is a much more appropriate mechanism to sort those issues, given that we have heard a lot of debate about this being modelled on a commonwealth model and that is how the commonwealth model works. It is in the productivity commission bill, not in another bill like the Government Business Enterprises (Competition) Act 1996.

I think the Treasurer, in his contribution on this amendment, asked, 'From 16 years in government do you or other former ministers have experience with this working?' I can say that in my, I think, about three years as a minister I cannot remember it ever being discussed, so I cannot attest to it working or not, but to my mind that just makes stronger the argument that we put it in the bill we are discussing rather than a bill we are being asked blindly to decide may or may not work.

For those reasons, the opposition will be supporting the Hon. John Darley's amendment and the subsequent amendment to allow the productivity commission to consider issues of competitive neutrality in the way the Hon. John Darley has suggested.

The Hon. F. PANGALLO: We will be supporting Mr Darley's amendment.

The Hon. T.A. FRANKS: Just for the sake of completeness, now that the amendment has been moved by the Hon. John Darley, the Greens will be supporting the Hon. John Darley's amendment to keep this conversation alive. We understand the government was working with him to get a compromise, but having one on the table, just this morning, certainly we will prefer the Hon. John Darley's over the government's at this stage.

Amendment carried.

The Hon. K.J. MAHER: I move:

Amendment No 1 [Maher–1]—

Page 3, after line 8—Insert:

referring authority, in relation to a matter referred to the Commission for inquiry, means the Minister or a House of Parliament (as the case may be).

The amendment inserts in the interpretation section—of definitions—a new definition of referring authority in relation to a matter referred to the commission for inquiry, which includes not just the minister but a house of parliament, as the case may be. There are further amendments that go to this issue later on.

Quite simply, we think that it should not just be the preserve of the minister of the day, of whatever political persuasion that minister is, to refer things to the productivity commission. I think in my second reading contribution I made quite extensive recall of the various things the federal Productivity Commission has done. Some of them have been very beneficial to the fabric of society, including maternity leave.

Some of them, though, have been very destructive to South Australia, including the federal Productivity Commission's inquiry into the automotive industry, which was used as a reason for withdrawing support for the auto industry, which we know had severe and adverse consequences for South Australia. In addition, the federal Productivity Commission's inquiry into horizontal fiscal equalisation, if enacted, would have dire consequences for South Australia. I think $2 billion was the figure bandied about by the Under Treasurer at a particular forum recently about what the consequences could be for South Australia.

We think it should not just be up to one particular minister of one political party of the day to decide what the productivity commission inquires into, that it should be capable of either house of parliament, by resolution, referring something to the productivity commission to inquire on. That does not mean that either house of parliament will be able to say how they conduct that inquiry exactly, or the outcomes or the conclusions that inquiry will reach. All it does is enable us as elected representatives, elected by the voters of South Australia, to refer something to a body that is charged with giving advice, essentially, on economic policy and macro and micro-economic outcomes.

I note that there has been discussion that, in effect, you cannot trust a house of parliament to refer something, that it would make it unworkable. I would argue against that in the strongest possible terms. That is suggesting that the voters of South Australia get it wrong, that they elect people who cannot be trusted to put something to a productivity commission. In fact, from this chamber there is a very diverse range of views that the South Australian public has chosen to elect to represent them in this house of parliament.

I think it is insulting and demeaning to suggest that you cannot trust a house of parliament, particularly this chamber, to be responsible to put things to a productivity commission. If all these amendments that allow a house of parliament to put something before the productivity commission fail, then there is no way any of us will have any say in what the productivity commission does. It will be on the whim of a minister of a political party of the day.

If you look at the historical make-up of the Legislative Council—and I do not think it is going to change dramatically anytime soon—currently, for something to be referred to the productivity commission from the Legislative Council it requires three different parties, three different groupings within the Legislative Council, to agree to it: the government or the opposition plus the Greens or SA-Best or John Darley. It requires three of those together, three of the five groupings, to form a majority to refer something to the productivity commission.

This is not just on the whim of any single member of parliament. This needs to be something that is considered by a chamber—in this case, for the purposes of where we are now, the Legislative Council—and agreed by the Legislative Council. I do not agree with any proposition that, firstly, the representatives who are elected statewide cannot be trusted to be responsible and to put matters of great state importance to the productivity commission.

However, there is that further check and balance that it is not just on the whim of an individual member, it is by resolution of a house of parliament, and in this chamber it requires three of the five groupings to form together to agree to something. I think that is a second level of check and balance in this that is entirely appropriate.

I am certain there will be things that a government of the day will want to do for which members of this chamber do not have the ability to pay for very expensive and very extensive economic modelling. I know there is a suggestion that of course there could be a select committee instituted to do that, but again that select committee, if you want to understand it using complicated models, would have to get that modelling done.

This bill proposes to set up a body, a South Australian productivity commission, that will have the expertise to do this, and it would make sense that if a majority of those in this chamber—which would also, as it is currently constituted, be a majority of the parties and groupings in the chamber—decided that something was of such sufficient merit that it required further investigation to help us make the decisions we need to make, I think it would be worthy that a house of parliament should be able to refer that.

There will be issues come up from time to time that we will want more guidance on, where we want to better understand the economic nature and effect of the decisions we will make, and I think it is entirely appropriate that with a resolution—that is, a majority of a house of parliament—the parliament should be able to do that.

The Hon. R.I. LUCAS: It will not surprise members to hear that the government is strongly opposed to this amendment. I briefly outlined some concerns at the second reading and I will further elaborate on those now.

From my viewpoint, the interesting issue—after 16 long years in opposition and finally getting onto the government benches—is that with this amendment we see from the Hon. Mr Maher and the Labor Party an unwillingness to accept the fact that they actually lost the last election and are no longer the government. All of a sudden, after 16 years of having run the ship of state, they do not want to see a new government that has a new set of priorities instituting reform programs consistent with what the people of South Australia said they wanted at the time of the election.

All of a sudden we see, whether it be this legislation or in a range of other areas, a program from the opposition that says, 'Look, we were in government and we think now that we're not in government we should take away some of the powers we had for the last 16 years, and control things from the Legislative Council benches.' I am a staunch supporter of the upper house as an appropriate house of review, and I have been for many years, but this whole notion that suddenly we can turn the Legislative Council into an alternative vehicle for government and for making decisions is not one I could defend as an appropriate role for the Legislative Council.

The Hon. Mr Maher refers to the difficult task of convincing three different groups to initiate a productivity commission inquiry. We have seen how relatively simple it is to garner the numbers, whether you are Labor in opposition or Liberal in opposition, for various inquiries through the literally dozens and dozens of select or standing committees that the Legislative Council has initiated over many years. Indeed, that is appropriate. However, in many cases the agreement for a select committee has not necessarily inferred the support of a majority of members for a particular point of view in relation to the subject of a matter for a select committee inquiry.

In many cases members are happy to accept there is a strong view from a number of people that a particular issue should be investigated by a committee, and they are prepared to allow that particular select committee inquiry to go ahead. There have been any number of examples of those over the years where members have stood up and said that something was not a major issue for them but it was obviously a major issue for some other party or group of parties, and they are quite relaxed about supporting the committee of inquiry. As I said, that has occurred whether it has been a Labor or a Liberal government or a Labor or a Liberal opposition. It is just the way of the world in terms of the Legislative Council.

We talked earlier about the need to mirror what is occurring with the federal Productivity Commission in relation to the last amendment. Conveniently, I think that rationale is not referred to in relation to this amendment. If you are talking about the federal Productivity Commission being the model, the federal Productivity Commission certainly does not allow the Senate to initiate any inquiry that the majority of members in the Senate want the Productivity Commission to initiate. The Productivity Commission is something that governments, Labor and Liberal, state and federal, have initiated. They are a vehicle through which governments can make a decision to say that this issue is important enough, in productivity terms, to have investigated.

The Hon. Mr Maher refers to various inquiries where he places his own perspective on them, that this was a good inquiry because he happened to agree with it, but this was a bad one because he happened to disagree with it. Productivity Commission inquiries are there to try to provide fact and evidence for thorny, controversial issues, and the perfect example of that is the horizontal fiscal equalisation (HFE) inquiry. It went off to an inquiry and, ultimately, the federal government and also the federal Labor opposition rejected the recommendations of the inquiry. That does not mean that it was not a meritorious inquiry and, through some fact and evidence, with which governments, federal and state, have strongly disagreed, some state governments agreed in relation to the recommendations of the Productivity Commission.

That will be the same in relation to, I would imagine, a whole range of Productivity Commission inquiries and reports that there have been. But there is no requirement on the government, and that is clearly evidenced by the horizontal fiscal equalisation inquiry, to accept the recommendations. The government must respond to the recommendations of the Productivity Commission and that will be the case in relation to the state productivity commission as well.

It is a vehicle that the government of the day is able to have, from its perspective as a government having been duly elected, important issues that relate to productivity to be investigated. With this particular model, the reason why it is unacceptable to the government is that every second month a majority of members in the Legislative Council could decide that they want to have a productivity commission inquiry into a particular issue of the day. I think a number of areas have been referenced already by members in their contributions as being suitable examples of areas that the productivity commission should be investigating if the Legislative Council had its way.

The Legislative Council has the power to commission whatever inquiry it wishes through select committees and standing committees. It has an existing right and power to undertake those inquiries. The government of the day cannot initiate inquiries unless it gets the support from others in relation to select committee inquiries or standing committee inquiries in the Legislative Council, and that is appropriate. The government of the day, Liberal or Labor, does not have the numbers and it cannot impose its will on the wishes of the Legislative Council.

But the government of the day has actually been elected. Surely, there must be at least some respect for the fact that it has been elected and, therefore, has the prerogative to make some decisions which it believes are in the public interest and some of those decisions are that this is an important issue that relates to productivity in the state whether it is the private sector or whether it is the public sector. Some fact and evidence ought to be provided in relation to that public debate and the productivity commission should be the vehicle through which that fact and evidence is provided.

In essence, we would have a government-initiated productivity commission inquiry queueing up behind a whole series of Legislative Council references where the productivity commission says, 'We hear what you say but we already have four separate references from the Legislative Council which we are working on at the moment. We are happy to do what you want but you are going to have to double the number of commissioners and double the budget and whatever it might happen to be.'

That just has not been the way these bodies have worked. It should not be the way these bodies work. The parliament and the Legislative Council have alternative mechanisms for exploring issues. We oppose this amendment and the consequential amendments in the strongest possible way. This and another package of amendments are amendments which would lead the government to have the view that it would not be able to proceed with the legislation with these sorts of amendments.

The only other point I would make in relation to that—and that would be a sad end point for this whole debate if that was to be the end point of this process—is that in this particular way the productivity commission, if established, would be subject to review by the Statutory Authorities Review Committee of the Legislative Council, which is opposition controlled or non-government controlled, and it would have the capacity to provide oversight.

The government is referred to in the Government Business Enterprises (Competition) Act, which is already law. The government, through the example where it appointed Mr Lew Owens as a commissioner to conduct the water pricing inquiry, has considerable powers in the absence of any new statute to appoint commissioners to investigate a whole variety of things. In those circumstances, there is no oversight of the operations of those particular commissions of inquiry by the Statutory Authorities Review Committee of the Legislative Council.

I would urge Legislative Council members to at least bear that in mind when they decide their position in relation to this series of amendments. As I said, from the government's viewpoint, this is integral to the integrity of the government's bill, and this particular series of amendments are amendments that the government is strongly opposed to.

The Hon. K.J. MAHER: I will not speak for very long but in response to the contribution from the Treasurer, I think, and the opposition thinks, it is pretty obvious that if you take the arguments that the Treasurer has made—and he spent much of his contribution on this amendment—that it is important for the government, if they are considering economic reform and the productivity implications, that they have available to them facts and evidence by this body, then equally, and probably more so, I think all those arguments hold true for members of the Legislative Council who are going to be asked to vote on bills that have economic effects and affect productivity.

Particularly probably even more so if you accept the Treasurer's view that the government needs access to it, and with the government already having access to sophisticated analysis within departments and to commissioning independent firms to do that, I think it stands to reason that, for almost everything the Treasurer said, it is even more important that members of this council have access to that as well.

The Hon. F. PANGALLO: I rise to say that I will be supporting the Leader of the Opposition on this matter. I think it makes a lot of sense that the parliament does have a say in some of these inquiries that a productivity commission can look into: matters that require scrutiny and provide insights that can go further than a parliamentary committee can go, and areas in which we can look to make greater efficiencies. We have bills before us at the moment that perhaps a productivity commission could shed a totally different light on, and give us a better overview of how it should work.

They are there to be providing advice to structuring policy, but it concerns me that if the parliament does not have a say, there could be an issue that perhaps the government does not want a productivity commission to have a look at, and this is why it is important to have a productivity commissioner who is quite independent. If the parliament decides, 'No, we think we need to have a look at this particular area or this particular issue,' the government of the day may not want that to happen. As the leader has pointed out, it is the will of the people, and if the people would like to see those answers I think we have an obligation to try to provide a clear answer for them. So, in that regard, I will be supporting the amendment.

The Hon. T.A. FRANKS: The Greens will be supporting the opposition's amendment at this stage. We understand and sympathise with some of the government's contentions. Certainly, we have concerns that the cost associated with too much of a workload for the productivity commission would make that productivity commission unproductive.

The idea of a referral once every two months—that would be six referrals, possibly five, referrals in a year: could the government please provide a bit of an understanding for this council about how many referrals we would expect to see in a year and how the budget will be prioritised?

The Hon. R.I. LUCAS: That is an almost impossible question to answer, but in terms of trying to frame a rough budget for the productivity commission that has been established, and bearing in mind that some inquiries might be quite complicated and quite extensive, and another one might be quite targeted and small, I think on average they have been working on the basis of, maybe, about four inquiries a year. You may well not complete all four of those inquiries in the year; there is nothing that prevents the productivity commission conducting a couple of inquiries at the same time.

As I understand the model, a commissioner could be doing one particular inquiry and another commissioner might be doing another inquiry, so the model is intended to be quite flexible, but again it really depends on how complex an issue it is. If it is quite specific and targeted and they are just looking at it and you can get in and out quickly, then you may be able to get it over and done with relatively quickly. In the rough estimation, as I understand it—it is probably based on the experience of some of the other interstate state-based productivity commissions (and possibly the federal one as well, I am not sure)—that has been the rough order of magnitude.

If you were to add another half a dozen, or five or six, you would be more than doubling the workload, if that was the case. Again, it would depend: if the Legislation Council's reference was a short, targeted, particular inquiry, that might be able to be completed in a short period of time. If it was an enormously complicated and complex one, it might take them a long time. It is impossible to say in relation to the reference—it is a case by case basis, obviously, in terms of how complex it might be.

The Hon. T.A. FRANKS: I thank the Treasurer for that response. In addition to that, why has the government brought a productivity commission bill before the parliament if the government has not anticipated that the parliament would want to have some say in shaping that commission?

The Hon. R.I. LUCAS: I think all the others have been established by statutes. My understanding is—I can take advice on that—that all the other productivity commissions in the state and federal jurisdictions have been established by statute, and they do not have the Senate or appropriate upper house initiating inquiries to the productivity commission.

The established precedent in other jurisdictions has been legislation, establish a productivity commission, the government of the day decides on what the references would be and the Senate or respective state upper houses have not had the capacity to make separate references to the productivity commission. So that has been the model that has been adopted.

It would appear to make sense to establish a body as important, potentially, as the productivity commission by statute so that it has its structure and function governed by a statute that has been approved by the parliament. All the others have not had this particular provision inserted into them which says that the state or federal upper house will be able to dictate inquiries.

The Hon. T.A. FRANKS: Just for the sake of clarity: could the Treasurer clarify whether or not the government actually needs an act of parliament to establish a productivity commission, or could they do it without any legislation passing this parliament?

The Hon. R.I. LUCAS: As I indicated earlier, there are alternative models that the government could adopt if this legislation did not proceed. They are not ideal; they are not recommended. Clearly, the recommended course is what has occurred in the federal jurisdiction and the others; that is, there is a law that governs the procedures and operations. It would mean that it would be subject to the Statutory Authorities Review Committee oversight. As a public corporation it would be subject to—I assume but I would have to check this—the Public Corporations Act. We will need to check that, but a lot of—

The Hon. K.J. Maher: We are the ones who are supposed to be challenging them.

The Hon. R.I. LUCAS: I beg your pardon?

The Hon. K.J. Maher: We are the ones who are supposed to be asking the questions.

The Hon. R.I. LUCAS: I am a member of the Legislative Council, I can ask questions. We can check that as we go through the committee stage. Certainly, most statutory authorities are subject to accountability requirements for the Public Corporations Act. You have specific requirements regarding oversight in relation to the Auditor-General. Although, if the government uses money to appoint a commissioner without an act, such as the Lew Owens appointment, clearly that is public expenditure, which the Auditor-General could oversight anyway. There would be a different auditing oversight.

From my humble viewpoint, it makes common sense, if you are going to go down this path, that the preferred course is to go down the path of a bill that has been approved by the parliament and there are laws which govern the operations of it and there is, therefore, appropriate oversight from other oversight bodies in relation to its operations.

But the answer to your question, I understand, is there are alternative mechanisms, such as the Lew Owens example I gave at the second reading and earlier, and also potentially something called an attached unit, or it is an administrative arm of government, which again would not have the same degree of independence.

On reflection, it is possible that it still could because we are looking at a model—as I understand it, the Commissioner for Public Sector Employment is to be or is now from 1 July an attached unit and that is a sort of independent position. The parliament has a separate act, as you know, or an act that relates to the independence of the Commissioner for Public Sector Employment in relation to certain functions that he or she conducts. There are alternative models that are possible and the government would have to contemplate its position in relation to that.

We think this is the preferred model. Even if members, in the end, would prefer these various amendments to prevail ultimately in the parliament, we think this model is the preferred model to what the government would have as an alternative in terms of conducting productivity commission inquiries.

The Hon. J.A. DARLEY: First of all, can I thank the Leader of the Government for his explanation as to why a house of parliament should not be able to refer a matter to the productivity commission but, on balance, I will be supporting the opposition's amendment.

Ayes 13

Noes 8

Majority 5

AYES
Bonaros, C. Bourke, E.S. Darley, J.A.
Franks, T.A. Hanson, J.E. Hunter, I.K.
Maher, K.J. (teller) Ngo, T.T. Pangallo, F.
Parnell, M.C. Pnevmatikos, I. Scriven, C.M.
Wortley, R.P.
NOES
Dawkins, J.S.L. Hood, D.G.E. Lee, J.S.
Lensink, J.M.A. Lucas, R.I. (teller) Ridgway, D.W.
Stephens, T.J. Wade, S.G.

Amendment thus carried; clause as amended passed.

Clause 4 passed.

Clause 5.

The Hon. K.J. MAHER: I move:

Amendment No 2 [Maher–1]—

Page 3, after line 36 [clause 5(2)]—Insert:

(ab) to hold inquiries and report on matters referred, by resolution, by either House of Parliament;

I will not reagitate the issues. This is consequential-ish to the last amendment, in which we decided that either house of parliament could refer a matter to the productivity commission. On inserting that referring authority, this is consequential in that it actually enables it to happen.

The CHAIR: It is not technically consequential, but it is related.

The Hon. K.J. Maher: Consequential-ish.

The CHAIR: It is related; it is not consequential-ish. I am not sure that is a word, Leader of the Opposition. Treasurer.

The Hon. R.I. LUCAS: The government's position is that we oppose this particular amendment. It is related to the earlier issue, so I will not continue the debate and argument. Members will be aware of the government's position. We will oppose it but, should the numbers not be there, we will not divide.

The Hon. F. PANGALLO: We will be supporting the Leader of the Opposition.

The Hon. J.A. DARLEY: For the record, I will be supporting the opposition's amendment.

The Hon. T.A. FRANKS: It is consequential, so the same position applies.

Amendment carried.

The Hon. F. PANGALLO: I move:

Amendment No 1 [Pangallo–1]—

Page 4, lines 3 and 4 [clause 5(2)(d)]—Delete paragraph (d) and substitute:

(d) to conduct, on its own initiative or on the referral of the Minister, research and policy development;

This amendment provides for the productivity commission to conduct research on its own initiative or on the referral of the minister. The federal Productivity Commission is able to conduct research on its own initiative and SA-Best is of the view that a level of independence for the South Australian PC to conduct research on its own initiative should also be provided in this legislation.

The Hon. K.J. MAHER: I rise to indicate that the opposition will be supporting both the Pangallo amendment and the Darley amendment, which comes in right after this.

The Hon. R.I. LUCAS: I rise on behalf of the government to indicate that the government is prepared to support this particular amendment. The motion of the member in relation to allowing the productivity commission to have some greater flexibility in terms of initiating research and policy development is one which was not in the government's original bill, but we think it is a reasonable amendment and we are prepared to support it.

The Hon. K.J. MAHER: I would like some clarification, if I may, to double-check. My reading is that the Darley amendment and the Pangallo amendment are not in competition with each other. As I read it, the Darley amendment refers specifically to competitive neutrality, whereas the Pangallo amendment is broader. We are not being asked to vote on one or the other; we can capably vote on both of these amendments. Is that correct?

The CHAIR: In circumstances such as this it is not appropriate for me to give a ruling, but I can give guidance, and I am advised that they do not necessarily conflict.

The Hon. K.J. MAHER: Thank you.

Amendment carried.

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

Amendment No 2 [Darley–1]—

Page 4, after line 4 [clause 5(2)]—Insert:

(da) to hold inquiries, either on referral by the Minister or on its own initiative, on the implementation of the principles of competitive neutrality in relation to South Australian government businesses and business activities and to report to the Minister on such inquiries;

I have already spoken on this amendment.

The CHAIR: My understanding is this relates to an earlier amendment that the Hon. Mr Darley has moved. Do honourable members wish to make a contribution in relation to this amendment?

The Hon. R.I. LUCAS: We do see this as consequential on the earlier vote. Our position is in opposition, but we acknowledge the fact that we lost the earlier vote.

Amendment carried.

The Hon. R.I. LUCAS: Just on this clause, I have had some further advice in relation to some earlier questions from the Hon. Ms Franks. The advice I have received is that both the federal and Queensland productivity commissions have been established by statute. The New South Wales one, we understand, is established not by statute but by it being an attached unit or some equivalent of the notion of an attached unit in New South Wales. So it does not, on our advice, have its own statute.

Clause as amended passed.

Clauses 6 and 7 passed.

Clause 8.

The Hon. K.J. MAHER: I move:

Amendment No 3 [Maher–1]—

Page 4, line 18 [clause 8(b)]—Delete 'at least 1 and not more than'

This amendment deletes from clause 8(b) the words 'at least 1 and not more than'. As the clause is currently written, the membership of the commission must be, under clause 8(a), the commissioner, appointed by the government as chair, and then under clause 8(b) at least one other commissioner but not more than four. So what we could see happening is the entire commission being constituted just by the commissioner and one other person. The opposition thinks that in the operation of the commission there should be more than just two people running what would be an important decision-making body.

What we are suggesting is removing the 'at least 1 and not more than' to require that the full commission be appointed; then we have a later amendment that will change the quorum so that instead of the quorum of the commission being just one person it will be two plus the chair. That brings it into line with our view that you should not be able to have a commission of just two but, once it is established, you should appoint the commission in its entirety, so you have your total of five—the commissioner and four others—rather than the legislation as it stands which could allow the commission to be just two people.

The Hon. R.I. LUCAS: The government opposes this amendment. The government structure for the productivity commission is to try to be as lean and mean as possible; that is, to be cost-effective. So the model that we are envisaging is a model which will allow as few as two commissioners. It may well be that, at any point in time if there are only one or two inquiries that have to be conducted, one or two commissioners will be more than enough. If we actually have five commissioners being employed, and the government has only referred one or two inquiries to them, we will have well-paid commissioners, I would imagine, sitting around twiddling their thumbs and not being productively engaged, which would obviously be anathema to a productivity commission.

I guess under the opposition's alternative view of the world, where any number of Legislative Council initiated inquiries could be referred to the productivity commission, you might need five, or even more, productivity commissioners to undertake the work, but under the government's model we are actually envisaging a flexible arrangement. It should be nimble and it should be agile. If we require up to five because of the amount of work, then that should be the case. If for a period of time we only require two or three, then there should only be two or three.

This would add significant costs to the operation of the productivity commission. Indeed, all of the opposition amendments would add significant costs to the productivity commission. They are costs which have not been budgeted for, I can assure the Leader of the Opposition, in relation to the operations of the productivity commission, which means if this were to prevail the productivity commission would be limited significantly by its allowable budget and may well report that it has been unable to do the work to the level that it requires.

We certainly do not have the capacity or the flexibility, in the current state of financial circumstances that the new government has inherited, to give significantly increased budget allocations to a productivity commission to appoint any number of commissioners even if they are not actually required, or indeed to conduct a whole series of investigations and inquiries that the majority of the Legislative Council has deemed appropriate.

The Hon. K.J. MAHER: In response to the Treasurer's submissions, that would hold true, except that, as part B will still say, it would be four additional commissioners either part time or full time. I think the Treasurer has predicated what he said on appointing only full-time commissioners and having commissioners sitting around twiddling their thumbs because they are appointed full time with nothing to do. There is still the flexibility that a commissioner could be appointed part time and the government could decide what that part time means, so that it is not having someone sitting around twiddling their thumbs if they are appointed part time.

The opposition believes if this bill passes then it is a very important mechanism that is going to be used, and the way the commission operates, the methodology it uses, should not be up to just one commissioner and another person. We think it should be more and wider than that, and that is why we think it should be all five, including the chair, appointed once. If there is not the workload for them, if there is a flexibility to make one, or two or three of the commissioners part time, as the government of the day sees fit, at least when the commission is establishing how it works and its methodology, there will be a wider range of commissioners making that input than just the commissioner and one other person.

The Hon. R.I. LUCAS: I think that is a novel way of approaching the interpretation of the opposition's amendments in relation to this. Under the quorum arrangements it would still be the case that for any decision a majority would have to be there, so despite the notion that you could appoint three of them for one day a year or something, part time or whatever it is, and have two full-time commissioners, you are going to actually have to have a quorum of them there for any decisions, under the opposition's alternative model. This is not the government's model but the opposition's alternative model, and I think there are subsequent amendments that further expand on the opposition's attempts to govern how the productivity commission should make its decisions and peer review, as I understand it, and a variety of the other things that would need to be done.

Certainly, I think a reading of the opposition's total package in relation to this would lead one to believe that the opposition is looking at full-time work for five commissioners, and that is an expensive model. As I said, that is not a model we are budgeting for and one that we will not be in a position to budget for should that be the model that prevails.

The Hon. K.J. MAHER: If the government has in mind what the budget is, how many commissioners are budgeted for? How do they envisage, in their budget, how many commissioners are being paid for?

The Hon. R.I. LUCAS: My understanding is that the indicative budget that has been worked through is about $2½ million.

The Hon. K.J. MAHER: Correct me if I have this wrong, but I think the Treasurer is saying that they do not have the budget for five full-time commissioners. Given the budget they are putting up, can the Treasurer advise how many they are intending to appoint?

The Hon. R.I. LUCAS: My advice is that it is the government's intention, for this particular budget year in the early years of the productivity commission, to look at maybe two or three commissioners being appointed, not the full complement of five—

The Hon. K.J. Maher: In addition to the chair or—

The Hon. R.I. LUCAS: In total, including the chair. So not the full complement of five commissioners full time, which is—

The Hon. K.J. Maher: Two or three?

The Hon. R.I. LUCAS: I just said two or three, I should not have to repeat it. Two or three, including the commissioner, at this stage, not the full complement of five commissioners that is potentially the upper limit of the legislation.

The Hon. K.J. MAHER: Is it possible that commissioners, particularly ones you do not think you will necessarily have leading inquiries initially but ones who may attend meetings to get a fuller input into how they will conduct inquiries, could be appointed as we see some board members appointed, remunerated, for attending meetings on an hourly rate instead of a full-time retainer? Is that possible?

The Hon. R.I. LUCAS: I do not know whether it is possible. It is certainly not what the government is proposing and is not what the government is going to do. If the member's question is that in the event we appoint two or three people, commissioners, to do some work are we going to appoint commissioners four or five for a sort of training program to sit in on meetings, etc., that is not the government's intention.

As I said, the government's intention, at least in the early stages, is to look at two or three commissioners to start a small number of inquiries. It would then make judgements as we see the productivity commission complete its first tasks, take advice from the initial chair of the productivity commission, whoever he or she might be, and then make decisions. We would then have to adjust the budget accordingly, if that were required.

The Hon. K.J. MAHER: It is the opposition's view that if it is, in all likelihood, two or three in total, if it is just two commissioners, that is a very narrow base from which to seek views and see how the commission will work. We think it is much more appropriate that it be wider.

I think most of us recognise that if this bill succeeds it will be very important, a mechanism that will be used in an important way to inform debate, and to have just two people guiding it is, we think, a much too narrow view. We encourage the government to look at its ability, as the workload ramps up and down, to appoint part-time commissioners but certainly to have those available to give guidance about how the commission will work rather than just restrict it, as the government has said is its intention, to possibly just two people.

The Hon. F. PANGALLO: We will be supporting the government on that.

The Hon. T.A. FRANKS: For the sake of clarity, the Greens are supporting the government on this position. We think this is trying to assume far too many hypotheticals and variables.

Amendment negatived.

The Hon. K.J. MAHER: I move:

Amendment No 4 [Maher–1]—

Page 4, after line 19—Insert:

(2) A person may only be appointed as a Commissioner if, following referral by the Minister of the proposed appointment to the Statutory Authorities Review Committee established under the Parliamentary Committees Act 1991—

(a) the appointment has been approved by the Committee; or

(b) the Committee has not, within 21 days of the referral, or such longer period as is allowed by the Minister, notified the Minister in writing that it does not approve the appointment.

This is a second amendment that makes sure that the parliament the South Australian people have voted for has a role in the committee. Again, I think it has been stated already today in the debate how critical the appointment of the commissioners is in shaping the work that the commission does.

This amendment would allow a committee of the parliament, the Statutory Authorities Review Committee established under the Parliamentary Committees Act, to have a role in the process as it would allow the committee to effectively approve the nominee. It will not be the committee running a recruitment process or selecting someone. It will merely be the committee approving the nomination as a commissioner of the productivity commission. If the government of the day is proposing an appointment to a commissioner, we think it is only reasonable that that commissioner have abilities and is able to carry out their functions in such a manner that a majority on a parliamentary committee that is made up of elected representatives thinks is appropriate.

The Hon. R.I. LUCAS: This amendment, again, is an indication of what I said earlier. This is a clear indication of a political party that has not recognised the realities of what occurred on 17 March. That is, after 16 years of government they were turfed out of office because the people did not want them anymore and they said they wanted a new government with a new reform program. Now we have a situation where the Australian Labor Party, through the Leader of the Opposition in this chamber, wants to now dictate the appointment of persons to key bodies such as the productivity commission.

We are going to have potentially the extraordinary situation of the introduction of the Legislative Council equivalent of confirmation hearings that we see in the United States Senate. One could imagine, with the current powers of the Statutory Authorities Review Committee, they could require a commissioner to come down and give public evidence. They could trawl through the background of particular commissioners. They could seek to damage the reputation of people who have put themselves up for an important position as a productivity commissioner and subject themselves to a confirmation-type hearing by the Statutory Authorities Review Committee. That is what the Leader of the Opposition and the Australian Labor Party are asking the parliament to now introduce.

We have any number of important people in very critical positions that governments of the day have appointed. We have people who are appointed to the South Australian Employment Tribunal and to the courts who make critical life and death decisions. We have critical people who are appointed to run a $30 billion funds management industry, Funds SA, on behalf of the superannuation investments of South Australians. Under the former government, we had an economic development board where a couple of the members of that particular board were helping to make decisions of executive committees of cabinet.

We have any number of important boards, authorities and positions, which governments of the day, because they have been elected, through their cabinet process, have actually won the right to make the decisions as to who should be appointed to those particular positions. The Liberal opposition accepted the sad reality, over the 16 years the Labor Party were elected to government, that they had the power and authority to make these decisions. We could have bellyached as much as we liked about a particular appointment but, ultimately, we accepted that they were the government of the day and they could make those particular decisions.

We did not impose, through legislative amendment of the Legislative Council, requirements that were going to subject good, honest South Australians or Australians who were prepared to put their names up for these sorts of positions in the public interest to confirmation-style hearings in the Legislative Council. The day we end up with United States Senate-style confirmation hearings, with or without the persons being required to be in attendance—and, as we know, the parliament has the power to compel the attendance of citizens, South Australian citizens at least, to attend before parliamentary committees.

Given the approach that the Leader of the Opposition and his members have adopted, it is quite clear that they would have no compunction at all in demanding the attendance of a potential nominee to appear before a parliamentary committee to answer a series of questions or allegations that the Australian Labor Party, or members of that particular committee, might want to make about that particular person's history.

To have that sort of situation for the first time ever being imposed in our process in South Australia is just anathema to me personally but also to the government in terms of proper process and proper governance. Let's accept the reality that governments are elected every four years and, for the period of the four years, they have an entitlement, rightly or wrongly, to make appointments and they will have to be answerable to them, as indeed the Australian—

The Hon. R.P. Wortley: There's a new government in town and you want high-calibre people.

The Hon. R.I. LUCAS: The Labor government had to be answerable, and if the opposition wanted to criticise the fact that Kevin Foley had been appointed the chairman of Funds SA, that Annette Hurley had been appointed the chair of Super SA or that Bronwyn Pike had been appointed the chair of Renewal SA, the opposition of the day had a forum in the parliament to bellyache about that and to complain about it. However, it was not the position of the opposition-controlled Legislative Council to, in essence, say to the government of the day, 'We're going to prevent you from appointing the people that you want to appoint to important positions,' such as, in this case, the productivity commission.

To have a set of circumstances which, for the very first time, are going to be set up by the opposition in South Australia is absolutely unacceptable to the government, it is absolutely unacceptable to me and we will trenchantly oppose this particular provision and the related provisions, and we would urge crossbenchers to think again in relation to this particular amendment.

It sets a very dangerous precedent. If it ultimately passes the parliament at the end of this week, what will be the difference whenever any other appointment or act comes about regarding an important board like Funds SA or ReturnToWorkSA, or an economic development board, or a range of other important bodies where it might be argued that appointments need to be made, for the opposition to say, 'We are now going to require the non-government parties of a parliamentary committee in the Legislative Council to confirm or otherwise the suitability of this particular person for appointment to this particular committee'? It is a dangerous precedent and one which I would urge members to think very seriously about before they go down this slippery path.

The Hon. K.J. MAHER: I thank the Treasurer for his contribution. I would like to take issue with a couple of things that he said in his contribution though. This is not a Senate-style confirmation hearing of the whole of the Legislative Council; this is approval of a parliamentary committee. The Treasurer referred regularly to the entitlement of a new government. I do not think that is how many people see it: as an entitlement to do whatever you please, that an election entitles you to do absolutely everything and that you should not be fettered in how you go about doing what you do.

I think people reasonably expect that in parliament, when we make laws, we make sure there are checks and balances in place, that we do not just say, 'There's a new government and they have an absolute entitlement.' I think the Treasurer might reflect on his choice of language in using the phrase 'entitlement' in relation to a new government. We just do not agree that there is some sort of unfettered, absolute entitlement to do whatever you want just because you are in government.

The Treasurer talked about this being a case of the Labor Party not realising that we are in opposition. We absolutely do realise that, and that is why we are trying to improve legislation that is put forward. This is not about whether the Labor Party or the Liberal Party is in government; this is making sure that there is some scrutiny over what occurs.

The Hon. R.I. Lucas: Why didn't you do it when you were in government then?

The Hon. K.J. MAHER: The Treasurer interjects, 'Why didn't you do it while you were in government?' We did not establish a productivity commission—it is pretty simple. We did not establish a productivity commission, and I think that there are huge differences, huge distinctions, that can be drawn between this and some of the other red herrings that the Treasurer has thrown up. This is, by the Treasurer's own admission, a body they are intending to use to justify economic policy. This is very different to most of the red herrings the Treasurer has raised in other areas.

This is not intended, is not drafted and cannot be seen as a US Senate-style confirmation of the whole of the Legislative Council. This is simply giving a committee of the parliament, which is not solely populated by members of the opposition but includes Independent non-Labor or Liberal members of parliament, a say in what, by the Treasurer's own admission, is a very important role of government that will guide them on policies and the productivity of this state.

I take issue with the Treasurer's view that a new government has some sort of absolute entitlement. This is a very reasonable check and balance to make sure that such a good, honest person, as the Treasurer keeps referring to, who puts themselves forward, is approved, given, by his own admission, how important it is to sit on the productivity commission.

The Hon. R.I. LUCAS: It is interesting to note the sophistry of the language used by the Leader of the Opposition. He is unable to deny the fact that this will be a United States Senate-style confirmation hearing. The Leader of the Opposition says—and this is where the sophistry comes in—'It won't be the Legislative Council as a whole.' No-one has suggested that is the case. It will be an opposition-controlled Legislative Council committee—

The Hon. K.J. Maher: That's insulting the crossbenchers.

The Hon. R.I. LUCAS: No, I am insulting the Leader of the Opposition. Let me be quite clear, for fear that the Leader of the Opposition misunderstands who I am insulting. I am insulting the Leader of the Opposition because he is leading the charge in relation to this particular issue.

The Leader of the Opposition seeks to deflect the argument in relation to this to say that it will not be a Senate-style confirmation hearing. Indeed, it will. The only difference will be that, instead of being 21 members on the full floor of the Legislative Council—and, to be fair, my recollection of the Senate-style hearings is that they tend to be done by committees anyway in terms of confirmation hearings, if I remember some of the documentaries and movies that I have seen over the years in relation to Senate confirmation hearings.

The Hon. K.J. Maher: Episode 9, season 2 of The West Wing.

The Hon. R.I. LUCAS: Yes, indeed. My recollection, which I will correct if it is inaccurate, is that some, if not all, of the confirmation hearings are conducted by Senate committees. If that is the case, it will be exactly the case that we are talking about here, albeit that the Senate committees that I recall seeing in the United States Senate do have more than five members. They tend to have a semicircle of members sitting at the top desk, pitching questions at the nominee.

Putting that matter to the side for the moment, the reality is, whether it is five, 21 or 15, it is exactly the same process; that is, the Leader of the Opposition would be able to conduct public hearings, would be able to require the attendance of a nominee for this particular position to attend and would require that particular person to answer all sorts of questions in relation to his or her background and suitability, from the Leader of the Opposition's viewpoint, in relation to being appointed.

The other point I make, which is again not soundly based by fact or evidence from the Leader of the Opposition's argument, is that he says that this is a very important body, unlike some of the other bodies, which he infers were red herrings. It is a different body. This body has no power other than to, through force of its public argument and fact and evidence, recommend to the government of the day, and indeed to the parliament, proposed courses of action that improve productivity.

The other bodies to which I refer in some cases have very real power. The funds management body, Funds SA, makes final and lasting decisions in relation to the investment of $30 billion of funds under their particular control and management. The Economic Development Board, through at least two of its members being on the executive committee of cabinet, had clearly significant influence in terms of the decisions of the former Labor cabinet, even though in other areas they too were an advisory body and did not have statutory power.

In many other areas, whether it is ReturnToWorkSA or a range of other bodies, those boards and people who either chair those particular boards or sit on the boards have power in relation to the issues that are within their control. It is not just an issue of recommending to the government a particular policy view. It is making the decision in relation to funds management or ReturnToWorkSA or a variety of other government boards and authorities to which they have been commissioned.

So the two arguments used by the Leader of the Opposition are easily blown out of the water through the mere rational argument and, clearly, looking simply at the facts and evidence that relate to the two claims made by the Leader of the Opposition.

The Hon. K.J. MAHER: I think this will be my last contribution and I do not think this point turns on whether people support this or not. Calling it US Senate-style confirmations, I think the Treasurer is probably both wrong and right. My recollection of how most US Senate confirmations work is it does, indeed, go to a committee at first instance which makes a recommendation and then to the whole of the Senate. Therefore, the Treasurer might be partly right and partly wrong in that it goes to the whole Senate. That is not what we are suggesting here. We are not suggesting that it goes—like a US Senate-style confirmation, if my memory is correct—to the whole of the Legislative Council for a vote; it is the committee that does that. That is correct. That is an important difference.

Quite simply, I think there is a very fundamental and different viewpoint here. The Treasurer thinks that a government has an absolute entitlement to do as they please. The opposition's view and the amendments being put up is: let's have a role for the parliament, including not just the opposition but any crossbenchers who may sit on particular committees from time to time. In his own words: it is the absolute entitlement of a government. The opposition's view is: let the parliament be involved sometimes.

The Hon. J.A. DARLEY: As a member of the Statutory Officers Committee for the last ten years, the sorts of positions that the Statutory Officers Committee preside over are the ICAC Commissioner, the Electoral Commissioner and the Ombudsman. As such, I will not be supporting the opposition's amendment.

The Hon. F. PANGALLO: I will be supporting the opposition.

The Hon. T.A. FRANKS: The Greens are somewhat concerned that there is the potential for some overreach but, at this stage, we believe the precedent has been set in terms of committee involvement in the appointment of important positions. If the government has concerns that that will be politicised, we are certainly open to hearing how those concerns could be addressed. However, at this point, we will support the opposition's amendment.

Ayes 12

Noes 9

Majority 3

AYES
Bonaros, C. Bourke, E.S. Franks, T.A.
Hanson, J.E. Hunter, I.K. Maher, K.J. (teller)
Ngo, T.T. Pangallo, F. Parnell, M.C.
Pnevmatikos, I. Scriven, C.M. Wortley, R.P.
NOES
Darley, J.A. Dawkins, J.S.L. Hood, D.G.E.
Lee, J.S. Lensink, J.M.A. Lucas, R.I. (teller)
Ridgway, D.W. Stephens, T.J. Wade, S.G.

Clause 9.

The Hon. K.J. MAHER: I move:

Amendment No 5 [Maher–1]—

Page 4, lines 21 to 23 [clause 9(1)]—Delete subclause (1) and substitute:

(1) The persons appointed as Commissioners must have qualifications, knowledge and expertise as follows:

(a) at least 1 Commissioner must have extensive skills and experience in commerce, economics, law or public administration;

(b) at least 1 Commissioner must have extensive skills and experience in applying the principles of ecologically sustainable development and environmental conservation;

(c) at least 1 Commissioner must have extensive skills and experience in dealing with the social effects of economic adjustment and social welfare service delivery;

(d) at least 1 Commissioner must have extensive skills and experience acquired in working in Australian industry.

This inserts into the legislation some of the different skills needed for commissioners. I might ask the Treasurer, who can perhaps get some advice from parliamentary counsel: is it still capable of this continuing the legislation? That is, we have decided against the opposition's early amendments to require to have a full complement of commissioners. Can you still have this and, in effect, this being if there were more commissioners appointed these are the skills they have to have? In parliamentary counsel's advice, is this consequential on that amendment failing that this renders—given the last amendment failed?

The CHAIR: You can ask through—otherwise you can speak to parliamentary counsel.

The Hon. K.J. MAHER: Can the Treasurer give his viewpoint and maybe seek some advice?

The CHAIR: Treasurer, do you wish to make a contribution?

The Hon. R.I. LUCAS: I think the honourable member might like to speak to parliamentary counsel himself and seek his own guidance. I am reluctant to ever say—no, I should not say that. I was criticised previously for saying that I am a non-lawyer. However, I will repeat it: I am not a lawyer but as a non-lawyer I see that there is a problem with the member's current drafting because I think if he wanted to pursue it he would have to amend his amendment in some way.

This seems to infer that we do have five commissioners and in the event that we do not have five commissioners, and the government has indicated that we are going to have two or three, this would require us to appoint commissioners with five separate skill set bases and it would seem to be incompatible with where the committee has arrived at the moment. My suggestion to the honourable member is that it is sort of consequential and therefore should not be pursued. If the bill comes back at some stage then—no, I cannot suggest that because this amendment, I think, should be defeated. Anyway, he has taken his own advice and he can indicate.

The Hon. K.J. MAHER: One way to overcome this is moving that in the event that five commissioners are appointed then this apply. However, given that it was defeated previously, even though I indicated that I would be moving this, I indicate that I am not moving it now.

The CHAIR: Leader of the Opposition, because you actually did move it you will have to seek leave to withdraw.

The Hon. K.J. MAHER: I seek leave to withdraw amendment No. 5 [Maher-1] standing in my name.

Leave granted; amendment withdrawn.

The CHAIR: We now come to amendment No. 6 [Maher-1] to clause 9.

The Hon. K.J. MAHER: I move:

Amendment No 6 [Maher–1]—

Page 4, lines 33 and 34 [clause 9(5)]—Delete subclause (5) and substitute:

(5) A Commissioner must not engage, without the approval of the Governor, in any other remunerated employment.

(5a) An approval under subsection (5) must be published in the Gazette.

This is a pretty simple amendment that goes to greater transparency. It requires simply that a commissioner must not engage, without the approval of the Governor, in any other remunerated employment. That is not to say, and it might not be desirable that they do not, but it just requires approval of the Governor if they do.

The Hon. R.I. LUCAS: The government is opposing this particular amendment. This particular clause, I am advised, was modelled on the equivalent clause in the Essential Services Commission Act. I guess the closest thing we have to the productivity commission and commissioners and the independence is the Essential Services Commissioners. We have had a number of those appointed by the former government and there is no equivalent provision in the Essential Services Commission Act.

I guess I should have used this—I could have used the Essential Services Commission as another example of an important body which actually does make decisions; it does not just recommend to government. The Essential Services Commission makes critical decisions. It could have been another example where you would not want to be having the upper house controlling or dictating the appointment of the Essential Services Commission. That certainly was not the model the former government asked the parliament to adopt in relation to the Essential Services Commission model.

In relation to this particular provision, these are the arrangements that Essential Services Commissioners operate under. I will just check one other thing. The other important distinction, I am advised, is that, under the government's model, we concede the particular position, as I understand it, that the minister is driving at; that is, if a commissioner is undertaking other employment there needs to be the approval of the minister, the representative of the government.

The particular model the Leader of the Opposition is seeking to impose is, in essence, the Governor, which means it would have to go to full cabinet and then be approved by the Governor. The Leader of the Opposition, as a former member of a former government, albeit for a three-year period, as I understand it, will understand the somewhat cumbersome process of having to go through a cabinet process and the Governor approving it for what might be a relatively simple, uncontroversial approval that the minister is quite capable of giving.

Ultimately, the commissioner and the minister are going to have to be answerable and therefore the government is going to have to be answerable anyway for decisions that are taken. All this is imposing is an additional layer where the whole cabinet has to be involved, and it is unlikely that if the minister responsible for the commission—who in this case would be the Premier, is it? Yes; it is highly unlikely, given that the minister is actually the Premier, if the Premier is approving the other remunerated employment arrangement, that the Premier is going to be rolled in cabinet if this additional requirement is provided. All this does is impose an additional layer of red tape and delay which really achieves no good purpose other than it being another amendment that is being moved.

The Hon. K.J. MAHER: I thank the Treasurer for his contribution on the amendment. It is true: it may be that the remunerated employment is minor in nature, but it also may be the case that it could be very, very significant and could in fact be remunerated employment in an area in which a commissioner is conducting an inquiry. All this does is simply require that there is transparency: that the remunerated employment be approved through the approval of the Governor and then that be gazetted. Then people can make their minds up about whether or not there is a conflict.

What has been proposed by the government—the government's don't-let-the-public-know regime, in effect—just requires the relevant minister to make that determination, and the public would have no idea about that other employment that a commissioner may be engaged in that may be absolutely and directly related to something they are inquiring into.

The Hon. R.I. LUCAS: I guess what the minister is saying is that the Premier is potentially likely to approve a commissioner conducting an inquiry into an area where he is separately engaged and has a significant conflict of interest. All I can say is that perhaps his experiences of Labor premiers is different to my experience of Premier Marshall. I can assure the honourable member, if he has such low regard for the capacity of premiers to, in essence, recognise that a particular conflict has existed and therefore should not be approved, that is not going to be the case under the model that is being recommended here.

As I said, again, even if you accept the fact that the premier of the day might be corrupt, the alternative mechanism that you have here is that the premier and the cabinet would actually be approving, knowingly or unknowingly, a conflict of interest position in relation to a commissioner and a particular inquiry that that commissioner is conducting. Again, the provision that is here is exactly the same, I am advised, as the provision in the Essential Services Commission Act, and that has not proved to be a problem since it was established, evidently, in 2002.

The Hon. F. PANGALLO: I will not be supporting the motion from the opposition on this. I will go back to what I said last week. I trust that the government will be making the appropriate appointment, but in the words of Associate Professor Gary Banks, the former head of the federal Productivity Commission, it needs to be appointments of 'competence without conflicts'; I think those were his words. He said:

Choosing the wrong person to head an inquiry—typically a confidant of a minister, or someone who is known for strong opinions on a topic—can be fatal to the inquiry's public credibility.

I trust that the government would be making the right choices there, but we will not be supporting the opposition's amendment.

The Hon. T.A. FRANKS: For the sake of keeping the conversation alive, we will be supporting the opposition's amendment. It might not be the wording that we would wholeheartedly support but, to keep this conversation alive, we will at this stage be supporting it.

The council divided on the amendment:

Ayes 10

Noes 9

Majority 1

AYES
Bourke, E.S. Franks, T.A. Hanson, J.E.
Hunter, I.K. Maher, K.J. (teller) Ngo, T.T.
Parnell, M.C. Pnevmatikos, I. Scriven, C.M.
Wortley, R.P.
NOES
Bonaros, C. Darley, J.A. Dawkins, J.S.L.
Hood, D.G.E. Lee, J.S. Lucas, R.I. (teller)
Pangallo, F. Stephens, T.J. Wade, S.G.

Amendment thus carried; clause as amended passed.

Progress reported; committee to sit again.

Sitting suspended from 13:07 to 14:15.

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