Dr WOODRUFF – I thank the chair and the CEO in particular for the incredible work you’ve done over the last two years since the Bugg review and everything you have achieved in changing the culture and dramatically turning around the experiences of clients and the most vulnerable Tasmanians. Thank you very much on our behalf, or at least on behalf of myself.
Minister, on 23 September you announced, seemingly out of nowhere, that the Public Trustee would be restructured. A review only occurred after this decision and was constrained in scope to deliver the outcome you wanted and did not speak to a wide range of important stakeholders. The Public Trustee had not been told in advance of your media release, and this report, despite being due on 18 November, was only made public to us about an hour before the meeting. How could this process have been any more bad faith if you had tried? This is such a disgraceful stitch‑up –
CHAIR – Dr Woodruff, if that’s the question then –
Dr WOODRUFF – Do you accept that’s how it seems? I just finished asking the question.
CHAIR – You asked the question and then you continued to speak.
Dr WOODRUFF – The question was: could this process have been any more bad faith if you had tried –
CHAIR – Yes, so now give the Attorney-General a chance to answer the question.
Dr WOODRUFF – Comma, this is such a such a disgraceful stitch-up. Do you accept that this is how it’s seen by the majority of Tasmanians who are coming to understand what’s going on?
Mr BARNETT – No, I don’t accept the characterisation of your question, which was quite lengthy. I don’t agree with how you’ve expressed that and not in any way. The government has always been motivated on doing what’s best for the most vulnerable Tasmanians. We think this report is very useful and constructive. It’s very substantial, it’s comprehensive. It has made two recommendations in terms of options. We’ll consider those very carefully. That’s why I have gained support to respond by 31 March. We’re not going to do a quick fix, as it were. We’re just going to work through this very methodically, thoughtfully, ensuring that vulnerable and the most vulnerable Tasmanians’ interests are put first.
Dr WOODRUFF – I understand, and please correct me if I’m wrong, that in this review process, the key stakeholders who represent the most vulnerable Tasmanians that the Public Trustee provides services for were not asked to provide input into the review. They include the North West Support Services, Speak Out Advocacy, Multicap, Baptcare, TasCOSS, COTA, Tasmanian Legal Aid, Palliative Care, Health Consumers Tasmania and the THS. That is utterly disgraceful, don’t you agree?
Mr BARNETT – I think we’ve had – this is the third review. We’ve had the Bugg review, which you would be aware of, and then we’ve had the earlier review in terms of the economic assessment. The Public Trustee responded to both of those. I’ve made indication in terms of the Public Trustee responding very positively to both of those.
There was a decision back in September that you made reference to, which we thought was the right thing to do, and that was to look at the structure and the government’s objectives at the time. WLF is certainly well credentialled and Alicia Leis is incredibly well credentialled to undertake that review, and was looking at the structure. So, obviously, there’s consultation with the Public Trustee.
With respect to the entities that you referred to, I’m very grateful for their support and advocacy, but in terms of this particular structure, I think the review is very comprehensive. That’s why we’ll need to take more time to deliver on this report and respond by 31 March.
Dr WOODRUFF – Minister, before the Alicia Leis review, in your media release on the 23 September where you announced the restructure of the Public Trustee, you claimed that the Economic Regulator report and the Bugg Review both raised questions ‘about the appropriateness of the government business model for the Public Trustee’. You went on to say, ‘the government will restructure the Public Trustee following recommendations in the report and the independent review’.
Mr BARNETT – Sorry, say that last bit again.
Dr WOODRUFF – You referred to the OTTER report and the Bugg Review. You said they raised questions about the appropriateness of the government business model for the Public Trustee and then you go on to say the government will restructure the Public Trustee following recommendations in the OTTER report and the independent Bugg Review. Do you stand by that as an accurate representation of the findings of the Bugg Review and the OTTER report?
Mr BARNETT – Well, they made a number of recommendations that reflected on the role and responsibilities of the Public Trustee. Obviously, the Economic Regulator’s focused, in particular, on, you know, operational matters, but also different aspects of the Public Trustee. We’ve taken on board both those reports, but also the Public Trustee’s response. I’ve made it very clear that I’m very grateful for the work of the Public Trustee, but that’s why we’ve commissioned the WLF report and the terms of reference is clear.
Dr WOODRUFF – Your comment was about the GBE model that they were talking about.
CHAIR – Dr Woodruff.
Mr BARNETT – Well, that’s what we are concerned about, the GBE model, and we want to put the interests of vulnerable Tasmanians first. And that’s why we do recommend going away from the GBE model and supporting a statutory authority, either stand alone or within government, and that’s the response. But we need time to review that and to prepare ourselves to implement that and that’s why we take until 31 March to respond. So, we’re not going to do a quick, knee-jerk response, we’re going to take a measured, sensible approach and obviously we’ll consult with the Public Trustee as we progress through to 31 March.
Dr WOODRUFF – Recommendation 6.1 of the Bugg Review said:
The Attorney-General and the Treasurer retain the existing GBE model for the Public Trustee and use the performance framework in the Government Business Enterprises Act 1995 to improve service delivery to its CSO clients and represented persons.
Can you explain for us how, in the context of that recommendation, the comments you made in your media release on the 23 September were misleading? You’ve used the recommendations from the Bugg Review as a justification for why this Public Trustee should be privatised.
Mr BARNETT – Yes, I think you’re referring to the media list in September rather than my media release of today.
Dr WOODRUFF – I said 23 September.
Mr BARNETT – That’s fine. And my response that I’ve just provided just a few moments ago is that the Bugg Report had many recommendations and the government’s acted on those and it was with respect to a whole range of activities, roles and responsibilities of the Public Trustee. On the back of that, the Economic Regulator then undertook its report and delivered that in February this year.
Dr WOODRUFF – To the question, which was about your statement on 23 September where you used the Bugg Review as a justification as for why it was appropriate to restructure the Public Trustee and that is not what the Bugg Review recommended. They recommended to retain the existing GBE model, not what you’re saying. Can you see that you are misleading in what you said?
Mr BARNETT – No, I don’t accept that. At the time, I took both reports on board and their full range of recommendations and then designed the terms of reference with it based on advice, obviously from the Department of Justice and indeed Treasury. Those terms of reference were drafted to respond to both those reports and the Public Trustee’s response to those reports, so we’re all doing this on the basis of getting the best response for the most vulnerable Tasmanians. That’s been the objective all along.
Dr WOODRUFF – Minister, nothing you said just then is credible or stacks up. All the evidence is that Damien Bugg did a massive, extensive review, widely consulted with people, and on the back of that, the Public Trustee has turned around an incredible Titanic and made Herculean changes, for which we are all so grateful, in one of the hardest areas. Neither the Bugg review or the Office of the Economic Regulator recommended going down the path of saying that the GBE structure was inappropriate. All it needed was a tweak and your government is in the process of doing a GBE review tweak. Why are you taking such a political fight? Take political fights on planning and forestry, but don’t take a political fight on the Public Trustee. Don’t not consult. Why have you not consulted all the key stakeholders and done a narrow scope review that has been designed from the beginning to get the outcome you want, which is a Treasury money, bean-counter argument to vulnerable Tasmanians? Why have you taken a political approach to this?
Mr BARNETT – Thank you for the question but I don’t agree with the foundation of the question and a number of the characterisations within it. First of all, we’ve increased the community service obligations for the Public Trustee. In terms of arguments and in terms of the finances, we’re providing the support that’s necessary to support the most vulnerable Tasmanians. Secondly, it’s been driven by the best interests of the most vulnerable Tasmanians and I think we’re delivering on that. This report is very comprehensive, it’s very thoughtful and it delivers those two options in terms of a statutory office within government or standalone. It does not recommend a government business enterprise.
You made a reference to a tweak to the government business enterprise reform. To be clear, the government is updating that. The legislation is 30 years old so it’s way more than a tweak and we’re taking that very seriously. We’re delivering major reform to our government business enterprises. We’re backing business and growing our economy and we’re going to create more jobs, but that will take time. We’re going through a process there. This is a separate process for the Public Trustee and we’ll deliver more into the public arena obviously by 31 March next year but are more than happy to have feedback along the way.
Dr WOODRUFF – To be clear, there are already three reforms underway because there’s also the work of the client reforms that have been done around the disability royal commission. That makes three reforms that the Public Trustee is undertaking and they have said today that any restructure at this point would disrupt the positive momentum of the Public Trustee, destabilise the organisation, jeopardise its performance in the immediate to medium term and directly impact on the recently improved client experience. Can you understand why we are so concerned that you’re taking this step? It seems so reckless and actually heartless, I have to say.
Mr BARNETT – Thank you again for your question but I don’t agree with its premise. The disability royal commission reforms are very important. I know the Minister for Disability Services, Jo Palmer, has that as a top-level priority for her. As a government it is very important. You’ve referred to the Public Trustee’s response today and to some degree, I respectfully disagree with some of those remarks, however my expectation is to work with the Public Trustee and get those thoughts and feedback. I’ve worked constructively with the chair and the board, likewise with the CEO, over a long period of time since I’ve been Attorney‑General. We agree to disagree on some things but we have a very constructive working relationship and I think we are motivated to look after the interests of vulnerable Tasmanians. I know we are.
Dr WOODRUFF – I utterly support what Ms White said. There is going to be such a big fight about this in parliament. I cannot see it passing. Why would you continue at this point? Why not read the room?
Mr BARNETT – Because I think that once you see our response, which is based on independent advice and the –
Dr WOODRUFF – It’s not independent.
CHAIR – Dr Woodruff.
Mr BARNETT – Well, the WLF report is independent.
Dr WOODRUFF – Not with the scope of review. It’s constrained work.
Mr BARNETT – Sorry, Alicia Leis has done an incredible job.
Dr WOODRUFF – She’s done an excellent job within very constrained goalposts.
CHAIR – Dr Woodruff.
Mr BARNETT – I’ve got a very high regard for WLF Accounting. They are a credible, organisational. Alicia Leis is a very credible authority, and I respect that. I hope others around this table and elsewhere would likewise. I hope they read the report, review it. That’s what we’ll be doing. There are two main options. We’ll be looking at that. It does not recommend a government business enterprise.
Dr WOODRUFF – Good summary.
Minister, as part of the restructure that you proposed, the commercial will, estate and trustee services currently provided by the Public Trustee are to be transferred to the private sector –
Mr BARNETT – I didn’t say that.
Dr WOODRUFF – I want to understand what that means. Well, there was – you said the Public Trustee will be restructured, with the commercial real estate and trustee services currently provided to be transferred to the private sector.
Mr BARNETT – What I’ve indicated –
Dr WOODRUFF – Can I ask my question? They’re your words in your media release.
Mr BARNETT – You ask your question and I’ll answer.
Dr WOODRUFF – These services are already commercially offered in Tasmania, so is it your intention to have a provider that selected for a subsidised service?
Mr BARNETT – Thank you for the question. Appreciate the question. So, I won’t be verballed in terms of my response. I have made it clear as to the status quo in terms of the 23 odd 1000 wills that are held by the Public Trustee in terms of the government working through the relevant arrangements for those clients. That will be part of the detailed planning between now and 31 March in terms of the restructure. So, let’s be very clear about that. No decision has been made. There’s no knee-jerk response. Those clients will be kept fully informed in terms of any changes that may or may not occur and any of those changes – I’d expect those changes to be absolutely consistent broadly with this report – that we will only do what’s in their best interests of the vulnerable Tasmanians.
We want to ensure that quality services and the appropriate cost to the Tasmanian community is available. You’ve said yourself in your question the private sector already provides some of those, which it does. So, I have every expectation that the private sector would have an ability to step in where appropriate, depending on the plans and processes between now and 31 March
Dr WOODRUFF – To the question, are you considering – are you talking about a provider being selected to provide a government subsidised service?
Mr BARNETT – We have received the report in recent days. The government has provided a response –
Dr WOODRUFF – I thought it was due on 18 November? When did you actually receive it?
Mr BARNETT – I read it on Friday night.
Dr WOODRUFF – When did the government actually receive the report?
Mr BARNETT – Very shortly, I think it was Friday, from memory.
Dr WOODRUFF – So why did you only release it to the committee an hour ago , like that is so bad faith.
Mr BARNETT – Because the government – with the greatest respect, I have worked very hard to get this report released into the public arena so this committee could have it. You asked, through – the honourable member asked me last week. I said I’d use my best endeavours. I have done that.
I’ve got the report out in advance of this committee hearing some hours ago and with the government’s initial response and as considered accordingly by the government. So, I’m pleased. I’ve tried very hard to get it to this committee before this hearing today. You would not be in a very happy position if it wasn’t available. And I have delivered in accordance with my commitment to Ms Johnston last week and the parliament.
Dr WOODRUFF – My question is to the Chair, Ms Taylor. After 23 September, I believe as a response to the minister’s announcement that the Public Trustee will be – services will be provided to the private sector. I understand that you undertook a Public Trustee restructure survey. Do you want to speak to that? Is that the case? Was there a survey undertaken of clients?
Ms TAYLOR – We’ve had a whole range of surveys undertaken with clients, yes.
Dr WOODRUFF – In relation to the restructure proposed?
Mr KENNEDY – Yes, we have regular surveys that we’re doing all the time with our clients. This one’s obviously a sensitive one because we don’t want to – whilst there’s a lot of review and decisions still to be made, we didn’t want to cause concern with our client base. It’s really important that we understand level of awareness, if there are any concerns to help inform future communications with our clients. We are talking about a very small number – 50 in each segment. We don’t have the results yet, but it’ll help us get an understanding of how our clients are feeling and whether they’re even aware of the decision.
Dr WOODRUFF – Will you be providing that to the minister and making that publicly available?
Mr KENNEDY – Yes, full transparency.
Dr WOODRUFF – Following on from Ms White’s questions, none of what we’ve heard makes sense to us. I want to dig into what I think the real issue is, which is the money. I suppose it’s a fair assessment to say those of us on this side of the table think this is a Treasury-inspired restructure. The Bugg review recommendation 4.3 says:
The Attorney-General and Treasurer fully fund the Public Trustee’s net avoidable costs of service provision in the next CSO agreement, with funding escalation to reflect demand growth.
You only supported that in principle. You fully funded the Public Trustee for the 2022-23 budget, and then you said:
An ongoing funding will be reviewed in the context of implementation of review recommendations.
With the hindsight of where we are today, I can see that what you were doing was already setting the scene for a move to privatising then.
I would like some clarity on the CSO obligations. I’ve heard the Premier say that there’s been a 75 per cent increase in the CSO. I can also see, on page 46 of the annual report, that the CSO received this year was $3.389 million. Chair, I understood – and I’m not sure if you can confirm that the actual quantum of community service obligation provided by the Public Trustee in that year was close to $6.8 million. Can you please talk about that? Can you also talk about why the government has, I think, not funded at least 50 per cent of the community service obligation, if that is true?
Ms TAYLOR – There has been a shortfall in the community service obligations for many years now. That resulted in ongoing deficits at the Public Trustee. So, we have made representation to the government over several years, and you could see that the Bugg review also picked up that view. Also, if we grew the commercial services of the Public Trustee, that lessens our reliance on the CSO obligations, and we can subsidise it, defrays the cost of the CSO obligations if we can then subsidise that with commercial activity. But that’s a bit of an aside.
So, for this budget –
Mr O’BYRNE – Pretty fundamental aside.
Dr WOODRUFF – Yeah. We need this on the record.
Ms TAYLOR – I know, but I wanted to just make that clear around that the services of the Public Trustee are interdependent, you know. We don’t have CSO clients sitting here and, you know, wills and trusts, et cetera, and estates that are separate. It’s all, obviously, around the balance sheet and the investment portfolio that we have around that balance sheet.
Our view is that for this year and next year, we will be fully funded around the CSO agreement. The CSO funding in the forward Estimates is $6.5 million. Because at this stage of the year, we’re just putting in our forward estimates for the financial year, I’m happy to report that they went to Treasury last week. We’re expecting a modest – but about a $500,000 surplus for the Public Trustee at the end of this financial year.
Dr WOODRUFF – Thank you. Just to clarify, the $2.577 million loss recorded for this year –
Ms TAYLOR – Correct.
Dr WOODRUFF – is because you weren’t fully funded for the community service obligations you needed to meet in this year, the actual CSOs you provided?
Ms TAYLOR – Well, that was some of it. Also, we fulfilled our obligations under the Bugg review in terms of reducing caseloads from 150 to 50 – that’s been one of our critical success factors, because the government did accept the report in full and said they would support us around that. We concentrated on clients for the first two years because of the feedback that the community were giving the government and the Public Trustee around the treatment of clients through the Public Trustee. Then, of course, we’ve got a whole range of legacy issues, and finances, and our systems are part of that. So yes, some of that is a shortfall in CSO; some of it is the extra expenditure around our cohort of staff, staffing.
However, as I said, we’ve gone from a $2.5 million deficit in one year, and because of our management and favourable markets and the efficiencies we’ve actually put in place in the Public Trustee over the last couple of years, and this is the board’s area of focus now, not that we’re forgetting clients, but we think it’s best practice that we’ve implemented over the last few years and now we have our next whole set of challenges. From a $2.5 million deficit in one year we will be posting a surplus this financial year. The CSO funding contributes to that and we’re grateful, however a lot of our strategy and the board’s future endeavours around growing the commercial services of the Public Trustee adds to that surplus.
Dr WOODRUFF – Is it then your view that any restructure that’s being proposed would have a pretty devastating impact on the business management side of things that the board is proposing, which is leading it into a more efficient way of operating and better able to bring in some money so that it’s more of an even balance in terms of operating services that can be charged for and services that are provided free for people who need them, or subsidised?
Ms TAYLOR – Yes. I would refer you to our media release we put out today.
Dr WOODRUFF – Yes, it did say that.
Ms TAYLOR – I’m sorry that you don’t have the board’s submission to the review, which I thought you would have, but it’s on our website and goes into some detail. Even the WLF review raises the issue of scale, so that needs to be unpacked because there will be a tipping point where you can’t defray costs because we obviously have some fixed costs, so where scale comes into the equation will be something that needs to be examined. At some point, of course, costs will go up if the scale isn’t there.
Dr WOODRUFF – I’m struggling to understand – minister, correct me if I’m wrong – but Alicia Leis, who did the WLF review, was directed not to talk to the reference group, not to speak with TasCOSS, not to speak with Anglicare, not to speak with Baptcare, not to speak with the community, the health consumers advocate and all the other organisations who would provide such important views on any restructuring of the Public Trustee.
Is that true, and if so, why was that not allowed? Why was she directed not to speak with those people, and indeed not to speak with anyone in the Public Trustee’s staff or clients to seek ‑
Mr BARNETT – Thank you for the question. Just to be clear, my understanding all along was that WLF was able to meet with or consult with the Public Trustee –
Dr WOODRUFF – The board and the CEO, but that’s all. Not the staff or the –
CHAIR – Please, Dr Woodruff.
Mr BARNETT – I’m just making the point that my understanding and clear expectations was that the WLF was entitled to meet with the Public Trustee and I think we really appreciated the involvement, consultation, the feedback from the Public Trustee. But please, I’m more than happy for the chair or the CEO to respond accordingly.
The second point, which is your main point – yeah, well, the earlier part of your question related to other entities for which I’m very grateful for their role and advocacy in the community sector. It is very important, but the terms of reference were quite clear in terms of providing what’s best for the most vulnerable and specifically in terms of the structure as to whether obviously the relevance of the GBE structure was a key focus. So, that terms of reference, I think, was reasonably clear and it was a reasonably short, you know, it wasn’t a many, many months. I think it was a reasonably short approach in terms of making that assessment because you’d already had two reviews, you know. The Bugg review, it was very comprehensive, lots of input from all key stakeholders, and then of course the Economic Regulator’s more focused on the financials.
Dr WOODRUFF – Were they told or not? Was she told to not speak to those people?
Mr BARNETT – I don’t know what she was told specifically.
Dr WOODRUFF – Well, would you be concerned if she had been told that?
Mr BARNETT – Well, WLF had a job to do in a short amount of time and that was to respond to the terms of reference. And so that’s –
Dr WOODRUFF – This is a job which is about restructuring –
CHAIR – Dr Woodruff, again, please don’t inter – Dr Woodruff. Allow the minister to finish answering the question and then I’ll move to Ms Johnston.
Mr BARNETT – Look, I’m not advised of any direction from my department. So, that’s all I can advise. There’s a terms of reference that the WLF responded to.
Dr WOODRUFF – Minister, section 7(3) of the GBE Act allows the shareholder minister to request of the Treasurer to exempt a GBE of the requirement to provide a sustainable commercial rate of return. If this is such a problem, that the GBE structure is, as you say, an inappropriate structure – that is not what Damian Bugg found; that is not what the Office of the Economic Regulator found – why haven’t you made such a request? Given it’s a solution to one of the purported justifications you have put up for this restructure, why didn’t you consider doing that?
Mr BARNETT – There’s a range of reasons for the WLF report. I think that was outlined in September, publicly and in other forums. A terms of reference was designed and then settled and agreed to. That report is being delivered today. It’s very comprehensive; it’s thorough. I haven’t got the number of pages in front of me, but it is very lengthy. We’ll just have to read and review and analyse that very carefully.
It does make a recommendation to not support a GBE structure. It does recommend the statutory authority – those two options that I have referred to. It makes a whole range of other reflections and findings as well. All those findings and reflections will need to be considered before we respond by 31 March. If I said we would respond by 31 December, you would say, ‘Oh, that is knee‑jerk; too quick’. We are going to do a measured response. We’ll be very carefully considered. I’ll come back to you and others in the parliament and publicly and outline all the reasons why we have delivered that new structure, with the focus on delivering what’s in the best interests of the most vulnerable Tasmanians.
Dr WOODRUFF – In your 23 September media release, you misused the Bugg review recommendation and the finding of the economic regulator as a justification for restructuring the Public Trustee. You said that there were competing tensions between maximising revenue and protecting the interests of the vulnerable clients of the Public Trustee. This was before the review was done. You made that announcement. You already asserted that there were problems with the GBE structure. You said it then.
Back to my question, the GBE Act provides you, as the shareholder minister, the opportunity to exempt the Public Trustee from what you say is a competing tension. We beg to disagree, but it provides you that option. Why didn’t you take it up?
Mr BARNETT – My point in the September release that you are referring to was that there has been and there is competing tension between the different parts of the Public Trustee.
Dr WOODRUFF – But there’s not a tension; they’re just two different things that are operating, as we’ve heard from the chair.
Mr BARNETT – They’re competing objectives. There’s an overarching objective, which I think we all agree with. In terms of the private sector providing many of those services already, and we’ve already talked about one in two Tasmanians have a will. We need more Tasmanians to step forward and and look after themselves and their families. So, there are – and in terms of those cross subsidies, that’s what I was referring to in the September statement that you’ve referred to.
