Ms O’CONNOR (Hobart) – Mr President, I thank you to the member for Murchison for laying out so clearly some of the history here and the foundation of the bill we’re here debating today. As we’ve been in briefings – and I want to thank the department who gave us the briefings today – and in thinking about this legislation, it is surprising that some of the provisions within this bill are not already long-standing practices of our government businesses and state-owned companies.
As the member for Murchison said, a lot of this comes back to culture. The amendments we debate and will no doubt pass today are not going to do too much to deal with a culture of – this is not uniform across our government businesses and state-owned companies – but there are some notable GBEs where there has been a culture of secrecy and arrogance. Culture and history are deeply connected. It wasn’t that long ago the Hydro Electric Commission effectively ran Tasmania, where it had such a hold on the politics of this state that it was able to effectively direct ministers and governments of the day. It had extraordinary powers, but that cultural problem is not just with Hydro.
When I was in the other place as the member for Clark, we had the same experience that the member for Murchison had trying to get to the bottom of the North Melbourne sponsorship deal with the TT-Line. It was across three years of Estimates and certainly, engagements and GBE hearings, engagements with the then CEO of the TT-Line as well as the shareholder minister. At one period, a shareholder minister who was answering questions here was Mr Ferguson. At another period it was Mr Gutwein.
Despite the fact that we were talking about a government business, that is, a business owned by the people of Tasmania, that had paid a certain sum of money for sponsorship of the North Melbourne football deal we were fobbed off, question after question, year after year, under the dubious umbrella of commercial in confidence. That’s what we were told that Tasmanians couldn’t know what the quantum of sponsorship funding TT-Line had paid to North Melbourne because it was a commercial in confidence issue. Now, whichever way you think about it, it’s really hard to understand how a sponsorship arrangement with an AFL club when there’s a connection between the two entities, which is the GBE and the football club – an exclusive connection presumably – could be a matter of commercial in confidence.
Our questions were treated with disdain. We were made to feel it was almost offensive for us to be asking these questions over and over again, as we did. About the same time, the government had re-signed the Hawthorn sponsorship arrangement. From recall, this was something like $15 million over five years. The government had to be and was open about the level of sponsorship with Hawthorn and yet the TT-Line refused and had to have it extracted from them almost by parliamentary force in the end. Once the figures were released it was sort of a big yawn really and you had to wonder why all the fuss. It was cultural.
Then we had the deeply frustrating unedifying episode during the Tasmanian Forest Agreement process, where Forestry Tasmania then run by Bob Gordon, aided and abetted by former ABC journalist Ken Jefferies, ran constant interference against the Tasmanian Forest Agreement, which was a policy of government. The government of the day had said – we are committed to a process of negotiation, compromise and resolution on native forest logging. Had invited industry and the conservation movement to the table and it felt like every second week, FT would be out there running interference for some of the most obdurate characters in the native forest logging and burning industry, working counter to the policy of the government of the day and unarguably, in my view, working counter to the public interest.
Similarly, at GBE hearings four or five years ago now, when the Greens in the other place were trying to get to the bottom of tokenistic efforts to protect the habitat of the critically endangered Swift parrot. We had officers from Forestry Tasmania, wilfully misleading. I won’t name anyone, but we were repeatedly told the government was listening to the science and it had set aside 10,000 hectares of habitat not to be logged because it was prime Swift parrot breeding and foraging habitat. Well, it turned out because we’ve been provided with factual information, it was only 9300 hectares.
Our government business at an estimates table where you take an oath to tell the truth, added another 700 magical hectares to land that they said they’d set aside to protect the parrot from logging. It was just dishonest.
And again, for a long time here, our Forestry Tasmania, the Forests Corporation, after Hydro’s influence diminished somewhat, Forestry Tasmania became a real heavyweight and able to exert significant influence on the government of the day and its policy.
Another TT-Line issue after the tragic events that saw the deaths of multiple polo ponies on the Spirit of Tasmania, whenever we tried to extract any information out of the senior management of TT‑Line about how those horses died, we were repeatedly shown a brick wall.
In the Leader’s second reading speech, I noted quite a bold assertion that these amendments will lead to a certainty that our GBEs and state‑owned companies will make the right decisions. Would it were that simple. These amendments won’t stop bad decisions being made if they’re endorsed by the government of the day. These amendments are not a catch‑all. I acknowledge that there’s a two‑tranche process here, but they don’t address poor decisions, or decisions that are against the state’s interests or the public’s interests, if those decisions are endorsed by a shareholder minister.
I note that the amendments institute a requirement that if two shareholder ministers are the same person, another minister is selected as the second minister, with the exception of TASCORP. I remember when we were in government seeing amusing letters from the premier of the day to the treasurer of the day, when the premier was in fact the treasurer. Then, the treasurer would write back to the premier agreeing to the premier’s request, when they were one and the same person. Of course, some of those situations may be unavoidable, but it’s always better when your premier and treasurer are two distinct people because you do need someone to have a tight rein on finances, but you also need a premier who can push the envelope and argue for funding where it’s needed.
In the amendments, when our ministers issue directions to GBEs and state‑owned companies, the directions have to be tabled unless the board requests otherwise on grounds of damage to the company, provision of unreasonable advantage, prejudicing an investigation or that it would be a breach of confidentiality. In such events, a statement that a direction has been given must still be tabled. The board must advise the shareholder ministers of progress against a direction at set intervals.
There is a requirement in this bill for GBEs and state‑owned companies to develop a statement of corporate intent for each financial year. Again, you would have thought that was just good corporate governance, and it is surprising that this is not already standard practice.
The amendments institute a requirement to make a report to shareholder ministers on the first six months of each financial year. The report must also be published online. This is a very welcome transparency change, although it also has the same exceptions as are listed in respective directions.
There is a requirement to notify shareholder ministers of adverse circumstances. I echo the question put by the member for Murchison about what the threshold is for a GBE to make that notification to shareholder ministers. Without raking over old coals, it’s a matter of some public confusion – it’s certainly confusing to me – that the TasPorts, TT‑Line debacle came to be what it was.
When I say that these issues with GBEs and state‑owned companies are cultural and historical, they’ve been part of the culture and the problem for a very long time. The difference on this occasion, was that a Liberal government minister fell on his sword, was made the fall guy, or was ultimately responsible, which under the Westminster system of government, he of course was. However, it still baffles me that the minister could have an ongoing dialogue with the CEOs of GBEs for which he was responsible and not have been notified earlier that there was what you might call an adverse circumstance relating to the Devonport wharf or a breakdown in relations between the two GBEs. I still don’t know exactly what it was, but every minister has weekly meetings with their departmental secretaries and officers. I’m not sure – because I was never responsible for a government business or state‑owned company – I’m not sure what the timing is on briefings between GBEs and shareholder ministers, but I would be staggered if it was any less than once a month and I would think it would be once a fortnight.
Ms Forrest – PAC was told monthly.
Ms O’CONNOR – You were told monthly? With a GBE that’s not unreasonable. There were many months with briefings between the previous minister and the CEOs of those two GBEs at which this looming problem wasn’t raised, or was raised in such an obtuse way that the minister and his advisers didn’t fully appreciated the extent of the problem. The amendment that will require shareholder ministers to be notified of adverse circumstances will, hopefully, make sure there is not another situation like that again.
The bill institutes a requirement to develop and make public sponsorship frameworks in accordance with the Treasurer’s instructions. I know this came up in the briefing that we had today, but could the Leader for Government Business clarify, on the record, what is likely to be in the Treasurer’s instructions that provides guidance on sponsorship? Will there be an acknowledgement that not all sponsorship is necessarily good sponsorship? That there may be some entities that approach GBE for sponsorship for whom that sponsorship could potentially damage their brand. Can we have an indicator of what is likely to be in the Treasurer’s instructions about protecting GBEs brands, as well as the values and the reputation of our GBEs and state‑owned companies to demonstrate to these organisations and the people of Tasmania that there is an actual benefit or value of this sponsorship arrangement? The classic example is the TT‑Line and North Melbourne Football Club sponsorship arrangement. However, there’s no room for opacity here. We’re talking about publicly owned companies spending public money, for all intents and purposes.
There will also be a prohibition on a person being appointed as a director if they’ve served two terms or previously served as CEO, except in exceptional circumstances. Again, I echo the question put by the member for Murchison and also in the briefing today, can we have some clarity on the record about what those exceptional circumstances might be?
In the second reading speech we were told that for government businesses putting Tasmanians’ long-term interests first, means that businesses will be:
(7) making the right decisions through corporate governance and competent and accountable boards and senior executives.
We can certainly hope so.
(8) aligning the businesses corporate strategy where appropriate to the strategic interests of the state as outlined by shareholding ministers.
(9) delivering on any community service obligations assigned to it by government.
These are the foundational principles of the governance reforms which, as we know, are a two-tranche reform process that:
(10) ensuring all Government Businesses place the interests of Tasmania first and are accountable for doing so.
I observe there that it’s a very subjective test. What, for example, the Treasurer believes is in the best interests of Tasmania and what any member of this place or any ordinary person on the street believes is in the best interest of Tasmania will vary widely. You can have a very clear, informed and accurate observation about Stadiums Tasmania and the Macquarie Point Development Corporation and whether or not they are placing the interests of Tasmanians first, given the findings of the Tasmanian Planning Commission report about the unaffordability, the unsuitable scale, the costs outweighing the benefits of the proposed Macquarie Point Stadium. However, obviously the Premier holds a different view of where the public interest is served there.
I see these sorts of principles as in some ways just verbiage. Hydro Tasmania has been compelled in the past by government ministers to engage in loss-making power supply contracts. Was that in the best interests of Tasmania? I’m not sure, and we don’t know because there’s no transparency in any substantive way about those contracts.
I would argue that it is not in the best interests of Tasmania for Forestry Tasmania to continue to fell and burn and send off to the chipper, in many instances, our beautiful native forests. It is in the best interests of Tasmania to be open and transparent about the impact of your business, for example, on the climate. You can’t get any information out of Forestry Tasmania about their emissions because they don’t even count the emissions from burning forests, and if they do, they won’t tell us what that information is.
I heard an interesting bit of information not long ago. I understand that people who work for Forestry Tasmania, which is its company name, or Sustainable Timbers Tasmania, if you want to buy the spin, have been given a 5 per cent pay rise, which is well above the pay rise that’s been granted to state servants. If that’s true, is that in the best interests of Tasmania and the Tasmanian people? How do we make them accountable for that?
The other following principle is to improve governance for Government Businesses to ensure its effective, contemporary, fit for purpose, transparent and provides for appropriate oversight. Again, this goes to culture, because there hasn’t been a culture of transparency or openness to oversight from all our Government Businesses and state-owned companies. One of the principles is to expand the range of performance monitoring options available to shareholding ministers. Good. It’s very important that ministers have a line of sight to the performance of the GBEs and state-owned companies for which they’re responsible.
Another underlying principle is incorporating appropriate levers in the governance framework to manage or rectify poor performance of Government Businesses, if required, including in relation to major capital projects. Perhaps, the Leader for Government could – and this is on page 3 of the second reading speech – flesh out what that principle actually means in the real world.
Incorporating appropriate levers in the governance framework to manage or rectify poor performance of Government Businesses including in relation to major capital projects.
If we go back to the TasPorts and TT-Line debacle, does that mean a shareholder minister could, at the point of becoming aware of an adverse set of circumstances, step in and place a stop on those works?
What does that mean? It would be very helpful.
We are quite comfortable supporting this bill, these governance reforms. The only surprise is that it’s taken so long and our minister losing his portfolio. However, the reforms they are overdue.
We look forward to the next set of reforms and just in closing, I want to acknowledge that for all our frustrations as Greens with some of our government businesses and state-owned companies, we recognise and appreciate the enormous economic and social contribution that they’ve made to the state of Tasmania. In some ways it’s a privilege for us to have publicly owned corporations that are working to the benefit of the state. In theory, sometimes and usually in practise, but I think overwhelmingly Tasmanians do appreciate the value that our GBEs and state owned companies bring to the state, which is why when it was announced that there’d be an examination of privatisation options, there was such a visceral public reaction because of the pride that Tasmanians take in these companies and the recognition of their contribution to our wealth and our society.
It is a brave or foolish government that treads carelessly into this space and sends a signal that it might be selling off the family jewels. Obviously, we will also be supporting the next bill when it comes through this place, more likely tomorrow.
With those few words, yes, we are happy to support this bill.
