The President (The Hon. Virginia Chadwick) took the chair at 2.30 p.m.

The President offered the Prayers.

Assent to the following bills reported:

Commonwealth Places (Mirror Taxes Administration) Bill
Legal Profession Amendment Bill
Nurses Amendment (Nurse Practitioners) Bill
Police Service Amendment (Special Risk Benefit) Bill
State Revenue Legislation (Miscellaneous Amendments) Bill
Evidence (Audio and Audio Visual Links) Bill
Industrial Relations Amendment (Unfair Contracts) Bill
Criminal Procedure Legislation Amendment (Bail Agreements) Bill
Bail Amendment Bill
Home Invasion (Occupants Protection) Bill
Olympic Roads and Transport Authority Bill
Tow Truck Industry Bill
Traffic Amendment (Tyre Deflation - Police Pursuits) Bill
Unlawful Gambling Bill
Racing Administration Bill
Gambling (Two-up) Bill
Agriculture Legislation Amendment Bill
Charles Sturt University Amendment Bill
Public Sector Management Amendment (Council on the Cost of Government) Bill

The PRESIDENT: I report the receipt of the following letter from Mr Anthony C. Harris, the Auditor-General of New South Wales, dated 2 November 1998 and addressed to Mr Evans, the Clerk of the Parliaments:

Dear Mr Evans,

Thank you for the issue of the summons of 30 October 1998 that I attend the Legislative Council on 10 November 1998.

I would be pleased to attend to answer such questions as the honourable members ask on the subjects outlined in the summons.

Yours sincerely,

A. C. Harris.

The President tabled, in accordance with section 78(1) of the Independent Commission Against Corruption Act 1988, the report of the commission entitled "Investigation into the Conduct of an Alderman on Fairfield City Council", dated November 1998 and received out of session.

The President announced that, pursuant to section 78(3) of the Act she had authorised that the report be made public.

The PRESIDENT: I announce the death on 9 November 1998 of the Hon. Sir Asher Joel, aged 86 years, a former member of this House. On behalf of the House I have extended to Sir Asher’s family the deep sympathy of the Legislative Council in the loss sustained.

Members and officers of the House stood in their places.

The Hon. Dr Meredith Burgmann, as Chairman, tabled the committee’s ninth report, entitled "Report on Special Report from General Purpose Standing Committee No. 2 concerning a possible contempt", dated November 1998.

Ordered to be printed.

The Hon. M. R. EGAN (Treasurer, Minister for State Development, and Vice-President of the Executive Council) [2.39 p.m.]: I move:

That this bill be now read a second time.

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I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The Government introduced the Residential Tenancies (Social Housing) Amendment Bill 1998 to promote safe, secure and successful social housing tenancies. This bill is about reform - reform which is focused on addressing crime, vandalism and other forms of antisocial behaviour.

Department of Housing tenants are entitled to the quiet enjoyment of their premises. The overwhelming majority are responsible and considerate citizens. The Government has worked hard to provide improved housing services to all public housing tenants against a backdrop of neglect of the assets by past administrations; and a $200 million reduction in Commonwealth funding.

Notwithstanding these difficulties we have improved performance in property maintenance and provision of client services. If this effort is to be sustained and the department is to continue its effort to provide quality services it must operate in a manner that is financially sustainable.

The department cannot afford to support tenants who cause damage to their housing or other property. Vandalism costs the department in excess of $2 million a year, not to mention the significant staff time required to identify perpetrators, attempt to recover costs and take action against offending tenants. Antisocial and criminal behaviour in public housing is also costly for the department. It makes public housing a less desirable place for both applicants and tenants. This, in turn, increases the number of requests for rehousing and increases the rejection of offers for housing in the affected localities. It diverts valuable staff and financial resources away from core housing provision and tenancy management.

Concerted action must be taken to address problems of violence, crime and antisocial behaviour which directly, and indirectly, impact on all public housing tenants. We need a more effective means of addressing these problems, so that all other tenants are able to feel safe and comfortable in their homes. The proposals contained in this bill are part of a wider package of reforms which the Minister announced on 22 September to encourage successful tenancies in public housing.

The package represents a balanced set of measures to make clear the rights and responsibilities of tenants, to encourage tenants to meet those responsibilities, and to enable effective action to be taken when people persistently or seriously breach their tenancy agreements.

The bill responds to concerns about these issues raised by tenants and others. The bill will ensure that when other steps to address these problems have failed the department can take effective action in the Residential Tenancies Tribunal. The main focus of these amendments is to provide guidance to the tribunal in assessing cases involving crime, violence and antisocial behaviour in Department of Housing or other social housing premises. It is not proposed that the amendments will apply to the private sector. Crime, violence and antisocial behaviour are of particular concern to the Department of Housing because of its unique position as a large public housing provider and landlord.

The Department of Housing is the largest landlord in the State, with responsibility for approximately 130,000 tenancies. Its core business is to provide tenancies to those who are most in need in our society. Because of the demand for housing, the department is severely restricted in its ability to rehouse people in alternative accommodation. Relocating tenants to another dwelling if they experience problems with neighbours is costly in terms of staff resources and finances.

In this context, the department has a particular responsibility to act in the interest of tenants. These reforms will assist this task by properly and actively managing instances of antisocial activity, drug trafficking and violence occurring within its tenancies. While the reforms will be of particular importance to the Department of Housing, all social housing providers will have the benefit of their introduction. This will mean that the Aboriginal Housing Office, the Office of Community Housing and local community housing organisations which register to provide housing, will be able to manage their tenancies more effectively. This will also ensure consistency between social housing tenancies.

These proposals have been developed in consultation with tenants and key groups such as Shelter NSW, the Tenants Union and the Residential Tenancies Tribunal. This consultative process will continue through to the drafting of operating instructions to assist staff in implementing the amended provisions effectively and fairly. In addition, a full review of the amendments will take place within two years of their introduction. I would now like to outline the amendments being addressed in the bill. These amendments relate to five main areas.

First, a listing of matters which may be of relevance in considering the "circumstances of the case" is to be included in section 64 of the Act, to provide guidance to the Residential Tenancies Tribunal in assessing an application for an order terminating a tenancy.

This proposal will ensure that the tribunal takes into account the circumstances of all affected parties when considering an application for an order to terminate a tenancy. This amendment will be particularly important in cases involving antisocial behaviour where balanced consideration must be given to the circumstances of the tenant, landlord and any neighbouring residents affected.

Secondly, the tribunal will be required to give particular weight to serious breaches which place persons or property at risk or involve drug trafficking. Where an order terminating a tenancy for a serious breach of this kind is granted by the tribunal, the tribunal will be required to make an order for immediate possession of the premises unless it would be unjust to do so.

The Act will also be amended to specify that the manufacture and/or sale of illegal drugs on common areas and adjoining or adjacent property constitutes a breach of a residential tenancy agreement. This amendment will ensure that serious crimes and other activity which place people at risk are dealt with appropriately. The amendment will also signal that drug trafficking, either from residential premises or on adjoining property, is a serious breach of a tenancy and will be dealt with accordingly. It should be noted that if a breach is to be established under these provisions physical proximity to the tenant’s premises must be demonstrated.

This amendment gives the tribunal the discretion to determine if the evidence provided is sufficient to establish a serious breach. In relation to drug trafficking, it is expected that the tribunal would require a conviction or other evidence sufficient to establish that the breach has occurred.

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The third reform concerns damage to common areas and adjoining or adjacent property. Damage of this kind is to be specified as a breach of a residential tenancy agreement. This will ensure that damage to such areas can be dealt with in the same way as damage to the rental property itself once again. Physical proximity to the tenant’s premises must be shown if a breach is to be established under these provisions.

The next amendment concerns section 73 of the Act, and relates to warrants for possession. It is proposed to amend section 73 to ensure that attempts by a social housing provider to salvage a tenancy do not in themselves prejudice the provider’s right to seek a warrant for possession of premises, if those attempts fail. This amendment is intended to facilitate attempts by the Department of Housing and other social housing providers to salvage a tenancy. At the same time, it is recognised that a tenant may interpret an extended period of delay as an indication that the landlord will not be proceeding with a termination. To address these issues the amendment will require that any delay must be the result of bona fide attempts by the provider to salvage a tenancy.

Finally, the bill will address the definition of rent rebate to be included in the Act to provide a basis upon which the tribunal can consider matters involving rent rebates provided by social housing providers. The tribunal’s power will not, however, extend to inquiring into the granting, cancellation or revocation of a rent subsidy.

This amendment recognises that the vast majority of tenants do not pay a market rent. It makes it clear that there is a system of rent subsidies which apply to the bulk of social housing tenants. In closing, I would like to emphasise that these amendments will provide a balanced approach to addressing the key issues impacting on the quality of life of social housing tenants and the financial sustainability of social housing providers, particularly the Department of Housing. I commend the bill to the House.

The Hon. PATRICIA FORSYTHE [2.40 p.m.]: The Opposition does not oppose the Residential Tenancies Amendment (Social Housing) Bill, but it will take time to determine its effectiveness. It may well be a step forward but it takes a stick approach rather than a carrot approach to solving problems caused by the antisocial behaviour associated with a few public housing tenants. The Government has missed opportunities to strengthen the legislation to rid public housing or social housing, as it is termed in the bill - which is a good term - of people who, as residents or visitors, disrupt the lives of residents of public housing.

This legislation gives a greater right to the public housing landlord than to private housing landlords. The Government missed an opportunity to provide clear guidance to the Residential Tenancies Tribunal that private landlords should have the same rights. Unfortunately, the amendments proposed by the Opposition in the lower House were ruled outside the leave of the bill.

Unacceptable behaviour is a problem not only with public housing; it is a problem across the community. It should not be implied that people residing in public housing behave worse or cause more problems than people in private housing. The bill acknowledges that certain problems in public housing or social housing need to be addressed. The ideal of home ownership is held very high in Australia. While most of us think of it in the conventional terms of somebody having title to a property, people who have lived in the same public housing for many years have the same sense of ownership. They very much believe that it is their own home.

As shadow minister for housing I was pleased to spend time with people in various public housing estates who had a strong sense of pride and ownership in their accommodation. People who have lived for many years in public housing share much the same view as people who own their own home. They have pride in their dwelling. They are concerned about the amenity of the area, the surrounding gardens and the quality of the housing. They have pride in their homes. People who live in public housing are often painted in the media and by some people as not having the same sense of pride as people who own their own homes. Many public housing tenants - because of their pride, dignity and belief in their area - are concerned about the problems caused by other residents. As shadow minister I received letters and distressing phone calls from people concerned about others who had moved to their area and whose behaviour upset their living conditions and the amenity of the area.

We should bear in mind that the bill addresses only the symptoms of the problem, not the underlying causes. Successive governments since the Second World War have adopted public housing policies which have resulted in a social crisis - disaster is perhaps too strong a word - that will not easily be solved. In the 1950s and 1960s, and even into the 1970s, public housing was associated with the working poor. Public housing is now occupied by quite different people. Up to 94 per cent of public housing tenants receive welfare benefits. They include a significant number of aged people. There is also the impact of the post-Richmond era. People who many years ago would have lived in institutions now live in the community, and rightly so, but often without protection and support. I refer particularly to people with mental illness.

This issue was not given sufficient weight in the Minister’s second reading speech. A stronger management system is needed by these people. There are insufficient mental health case workers and community support services. So people who, if adequately supported, could live well in the
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community may disrupt their neighbours with behaviour that is not well controlled. They have rightly been taken out of institutions but they have not been well supported. A person who seriously disrupts the amenity of the neighbourhood, whose behaviour "seriously adversely affects neighbouring residents" may be brought to the attention of the Residential Tenancies Tribunal under new subsection (4)(a) of section 64 of the Residential Tenancies Act.

The Government’s changes to the boarding houses legislation will take out of boarding houses the 310 people who have high support needs and support them in other accommodation in the community. From memory, $14 million is to be spent on improving the amenity of boarding houses for people who are now in them. Spending that money as part of a much broader $66 million package may have opened the door to move some of the tenants causing problems in public housing into boarding houses.

The Government may not have done this openly and transparently and I ask the Minister, in his reply, to give a guarantee that this is not the intention of the Government. Many people who are the source of problems in public housing may need some form of supported accommodation, and many boarding houses do not provide the necessary level of support. However, I am aware that many individuals and tenant associations are grateful that the Government has introduced this bill because it addresses serious problems in public housing and hopefully it will give residents some peace of mind.

The Opposition supports the bill but acknowledges the need for the Residential Tenancies Tribunal to examine all the circumstances of any case, particularly if it involves mental illness. Drug addicts living in public housing cause enormous anxiety to other residents. As shadow minister for housing the most distressing telephone calls I received were from elderly people who had lived in public housing for a long time and were now deeply concerned about drug addicts moving into their area. They were concerned not only about the manufacture and sale of the drugs but about the behavioural problems that surround drug taking. One elderly woman who lived in western Sydney expressed concern about people shooting up drugs and leaving syringes in the stairwell of her building. She regularly telephoned me because the police would not listen to her concerns. Therefore, in Committee the Opposition will move amendments that relate to drug taking.

Antisocial behaviour and all forms of crime and violence should be referred to the Residential Tenancies Tribunal. The Government needs to take a stronger line on the use of drugs because that problem is as significant as the manufacture or sale of drugs. Whereas many years ago public housing tenants were likely to be of the poorer working class, today there is more likelihood of their being social welfare recipients, and this provides a mix for social disaster. People in public housing today are likely to be the young unemployed, people of all ages with mental illness, and the elderly.

One woman who has lived in the same public house for 40 years told me she no longer has pride in her environment because of the nature of the tenants who have moved into the area in recent years. Problems arise wherever there is drug taking or people who are antisocial. Also, the Government has missed the opportunity afforded by this bill to give a clear signal to private landlords. Though the Opposition will move amendments, it believes that this bill is a step in the right direction and will not oppose it.

The Hon. R. S. L. JONES [2.54 p.m.]: The Department of Housing has a special responsibility to house people who are unable or cannot afford to buy or rent in the private housing market. As such it houses some of the most vulnerable and needy citizens in our society. One of the main principles of the provision of public housing is security of housing tenure. Unlike residents in the private rental market, who can be evicted subject to the no-cause provision in section 58 of the Residential Tenancies Act 1987, the Department of Housing must establish under section 57 a breach of the tenancy agreement before commencing proceedings to evict tenants. This distinction is extremely important, given that public housing tenants may not have alternative accommodation should they be evicted.

Once a breach is established by the department the tribunal has to be satisfied that the breach is serious or repeated, or that it is appropriate in the circumstances of the case to terminate the tenancy. Over time there has been a change in the demographics of public housing residents in New South Wales. A study of public housing in south Sydney found that there was an overrepresentation of persons with high support needs, such as people with psychiatric disabilities, the frail elderly and single parents, in some public housing areas. This has occurred at the same time as there has been a reduction in capital spending on public housing, particularly due to the Federal Government State Housing Agreement cuts.

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Public housing tenants have a responsibility to respect the premises in which they reside, as do those in the private rental market, but a small number of tenants do not act in accord with this responsibility. According to the Minister, vandalism costs the Department of Housing some $2 million per year. This figure is not insignificant but some may say that it is a relatively small amount given the fact that the department houses some very difficult people. The bill guides the Residential Tenancies Tribunal in its consideration of applications from the Department of Housing to evict social housing residents. Initially I was concerned that the provisions in the bill were so stringent as to significantly reduce the discretion of the tribunal, as well as give it the opportunity to discriminate against disadvantaged people in housing estates.

Key housing organisations such as the Tenants Union of New South Wales Ltd, Shelter New South Wales Co-operative Ltd and the New South Wales Council of Social Service acknowledge that there are noise and nuisance problems in some housing estates and they are generally supportive of attempts to reform tenancy management within social housing. The Tenants Union is aware of the frustration that neighbours and communities suffer from disruptive tenants, but it is concerned about the possibility of victimisation on housing estates from other tenants and the Department of Housing. It is concerned that the provisions in the bill are likely to make this worse. NCOSS is concerned that the bill may be used to deal with problems that arise as a result of departmental policies and management practices or because of the absence of support and services that should be provided by other departments. It noted:

In our opinion, the eviction of very needy and sometimes difficult people is not the appropriate solution. In particular, we are concerned that the bill . . . could lead to discrimination against families and individuals who are seen as different because of, for example, cultural values, mental health problems or sexual preferences.

The bill allows for the immediate possession of premises if a tenant has breached the tenancy by using the premises for the sale or manufacture of drugs or if it is considered that the nature of the breach subjected persons or the property to unreasonable risk. The bill also makes tenants liable for the actions of visitors who may use common or adjoining property in a manner which is contrary to the lease. New section 23 provides for the use of premises by the tenant and makes the tenant liable for the actions of visitors on common or adjoining property. The effect of this section could be that a tenant and his or her family may be evicted from their home if a visitor sells a joint in the forecourt of a public housing block or if a visitor unintentionally damages common property.

In a meeting with the Minister’s staff I raised concern about the potential effect of this provision on indigenous households, which often have many family and friends visit. My concern was whether an occasional visitor to the property will be classified as an occupier of the premises for the purposes of this section. If the visitor is considered by a neighbour or a client service officer to have unintentionally or intentionally damaged property common to the estate, the tenant and his or her entire family may be evicted from their home. Under section 30 of the Residential Tenancies Act 1987 tenants are already liable for the actions of another person who is lawfully on their premises.

The amendment to this section extends the tenants’ liability outside their home into common and adjacent areas. While it is reasonable for tenants to be liable for the actions of any person who is on their property, it is unnecessarily harsh to make tenants liable for the actions of others when they are out of sight and the tenants may not even be aware of the activities being engaged in by the visitor. In addition, new subsection (4) of section 64 contains a number of broad provisions that the tribunal must take into consideration when deciding whether to evict a tenant. It is so wide that it embraces whether the tenancy has had any adverse effects not just on neighbours but on other people, and whether the behaviour or future behaviour of the tenant would subject the property, neighbours, and other people to unreasonable risk.

I am concerned that adverse effects on neighbouring residents and other persons may become an excuse for the neighbourhood victimisation of, for example, an intellectually disabled resident in order to get him or her off the premises. Also, I am not sure who "other persons" in this section is meant to apply to. Does it mean that the Residential Tenancies Tribunal has to take into consideration the effect of the tenancy on persons walking down the street or past the housing estate? I am concerned that these provisions could become a way of forcing difficult people out of public housing.

Further, there is a provision for the tribunal to consider issues potentially irrelevant to the case at hand, such as the landlord’s responsibility to his other tenants, the history of the tenancy and the demand for the dwelling from other prospective tenants on public housing waiting lists. Redfern Legal Centre opposes the legislation, which it considers gives the Department of Housing an unfair
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advantage. The centre is concerned that the proposals would allow the department to bypass legal channels that any other landlord - and any litigant - would have to comply with. In relation to orders for immediate possession, the centre notes:

It is our experience as tenants’ workers and as tenants’ advocates at the Residential Tenancies Tribunal that the Department of Housing often fails in its attempts to obtain orders for possession due to the lack of evidence, and there should be no laxity in the rules of evidence as this would constitute a very basic denial of natural justice.

The PRESIDENT: Order! According to the resolution of the House of 29 October, business is now interrupted to take evidence from the Auditor-General, in relation to the Appropriation (1997-98 Budget Variations) Bill (No 2) and related matters.

The PRESIDENT: Before proceeding to call Mr Harris I shall indicate to honourable members the procedure I intend to follow for his examination. The Usher of the Black Rod will call and announce Mr Harris at the Bar of the House, and will then conduct him to a table within the Bar of the House. The Clerk of the Parliaments will then administer the oath or affirmation required by law, after which I will ask Mr Harris some introductory questions. The Leader of the Government will be given the first call to ask questions, followed by the Leader of the Opposition. Other members may then seek the call to ask questions.

I intend to allow the member who has the call to ask relevant questions of the witness in an uninterrupted series. There will be no time limit on the asking of questions, and there will be no limit on the number of times that members may seek the call to ask questions. I ask honourable members to extend all courtesies to the Auditor-General during his examination, and I further ask honourable members to enter and leave the Chamber through the members’ lounge while the Auditor-General is present.

Black Rod, admit Mr Anthony Harris, Auditor-General, to a table within the Bar of the House.

Mr Anthony Harris, Auditor-General, having been announced by the Usher of the Black Rod, attended at the Bar of the House and took his place at a table within the Bar of the House.

The PRESIDENT: Mr Clerk, will you please administer the oath or affirmation to Mr Harris.

The affirmation was administered by the Clerk.

The PRESIDENT: What is your full name?

Mr HARRIS: Anthony Clement Harris.

The PRESIDENT: What is your occupation?

Mr HARRIS: Auditor-General, New South Wales.

The PRESIDENT: What is your business address?

Mr HARRIS: 234 Sussex Street, Sydney.

The PRESIDENT: Did you receive a summons from the Clerk of the Parliaments under the Parliamentary Evidence Act 1901?

Mr HARRIS: Yes, Madam President.

The PRESIDENT: Mr Harris, in accordance with the resolution of the Legislative Council of 29 October you have been summoned to attend and give evidence in relation to the Appropriation (1997-98 Budget Variations) Bill (No 2) 1998, and in particular: (i) unauthorised expenditure from the Consolidated Fund on recurrent services and capital works and services for the year 1997-98; (ii) payments made from the "Advance to Treasurer" during 1997-98; (iii) variations on authorised payments from the Consolidated Fund for recurrent payments and capital payments for the year 1997-98; and (iv) related matters. Mr Harris, I will give the Leader of the Government the first call to ask questions, followed by the Leader of the Opposition. Other members will then be given an opportunity to ask questions. I call the Leader of the Government.

The Hon. M. R. EGAN: I will reserve my right to ask questions at a later stage.

The PRESIDENT: I call the Leader of the Opposition.

The Hon. J. P. HANNAFORD: Mr Harris, for the information of the House, could you outline how the moneys and funds that are to be appropriated to the task of government can be legally appropriated from the Consolidated Fund?

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Mr HARRIS: Section 45 of the Constitution Act 1902 says, in effect, that the Consolidated Fund shall be appropriated to such specific purposes as any Act allows or provides. I suppose that is the foundation stone for the annual Appropriation Act, which governments introduce at around budget time to fund the fiscal year’s expenditures for government, recurrent and capital.

The Public Finance and Audit Act also allows an additional source of funds relating to Commonwealth moneys which do not have to be appropriated from the Consolidated Fund. Section 22 of that Act allows the Government, with the prior approval of the Governor, when it has exhausted all appropriations, to spend moneys in anticipation of Parliament’s approval where the exigencies of the State require it. The Government also has sundry moneys available to it that have not been put into the Consolidated Fund because the law allows them to go to a special deposit account run by particular budget-dependent agencies. That gives a brief outline of how the Government obtains moneys for its services.

The Hon. J. P. HANNAFORD: When you say section 45 of the Constitution Act allows for moneys to be appropriated to such specific purposes, have you obtained advice for your auditing purposes as to what is meant by "specific purposes"? Does that term mean actual detailed expenditure that is incurred by departments, or is it a general descriptor?

Mr HARRIS: When the Parliament approved an amendment to the Public Finance and Audit Act in July 1998, I noticed that the amendment withdrew from the pre-existing Act all references to programs, and thus allowed the Appropriation Act, as it then was in July, to appropriate amounts to some 72 government entities. Some of the appropriations were very large. For example, the appropriation to the Department of Education and Training is of the order of $5.5 billion, as is the appropriation to the Department of Health. It seemed to me that, in distinction to prior use practice, the appropriations were so large as to offend section 45 of the Constitution Act, which requires appropriations to be for specific purposes.

I thus wrote to the Crown Solicitor asking him whether the Appropriation Act itself was lawful. In his response the Crown Solicitor put to me that because section 45 of the Constitution Act was not entrenched, the matters in it, especially as they adverted to Parliament, were merely a matter of guidance to Parliament, which Parliament could ignore or set aside as it deemed fit. On this occasion it appears that Parliament has set aside the principle in section 45 of the Constitution Act.

The Hon. J. P. HANNAFORD: Section 45 of the Constitution Act requires that appropriations be made for specific purposes. The 1998 appropriation legislation allows appropriations for general purposes or general descriptors. How does the New South Wales budget financial management system compare with the financial management systems of the budgets of other States and the Commonwealth?

Mr HARRIS: I suppose appropriation of these moneys is the fundamental genesis of Parliament. Parliaments, observing the provisions of the New South Wales Constitution Act, have said that they will only agree to government proposals to spend moneys when there is sufficient detail about the proposal to satisfy the Parliament that those moneys will be spent beforehand. It is thus a little surprising that five appropriations allowed by the Appropriation Act 1998 constitute about 75 per cent of the Government’s appropriations, while the remaining 67 appropriation items constitute the balance of 25 per cent. It appeared to me to again reflect something that I have said before in reports to Parliament: the Government of New South Wales has attained an ascendancy over Parliament which appears to me to be most unusual in Australia.

For example, the first appropriation area in the Commonwealth Appropriation Act will be the Attorney-General’s Department. The last time I looked, there would have been about 50 appropriation items for the Attorney-General’s Department. That Appropriation Act appropriates about $33 billion and provides for sundry other departments of State. We are talking in this State about an Appropriation Act that appropriates some $20 billion.

In that Act the Attorney General’s Department will be the first item, but there will be no more subdivisions while section 45 of the Constitution Act remains set aside. That suggests to me two things: one, that it was the Government’s response so that it would not in the future spend moneys unlawfully, and I think that is a very sound response; two, it is a response that reflects an ascendancy of Government over Parliament which I have seen in other areas.

The Hon. J. P. HANNAFORD: Does the requirement in the New South Wales Constitution Act that appropriations be for specific purposes reflect constitutional provisions in other States?

Mr HARRIS: The short answer is that I do not know the answer. I am aware that the
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Commonwealth upper House takes great pains to ensure that government appropriations are in sufficient detail for it to ensure that the Parliament retains control over the use of public moneys. A good example is Dr Carmen Lawrence’s legal costs. In spite of the fact that the Commonwealth budget might be $140 billion - several times the size of the budget of New South Wales - when the Government agreed with Dr Carmen Lawrence’s lawyers that it would pay all legal bills, it was not able to execute that agreement without the consent of Parliament.

In spite of the large sums of money available to the Government in the Treasurer’s Advance and through the normal and standing appropriation Acts it did not have the power to fulfil that contract, and it had to go to Parliament to seek Parliament’s agreement. It seemed to me that on such a contentious issue that was a reasonable relationship between the Parliament and the Government. In fact, the Parliament did not agree to fulfil all of the obligations that the Government had executed. If that had occurred in New South Wales, not only would Parliament not have been asked, but I doubt that Parliament would have known that the money would have been spent for such a purpose.

The Hon. J. P. HANNAFORD: Why is it necessary in Canberra to obtain approval? Is it a legislative requirement? Why is it a requirement in Canberra and not in New South Wales?

Mr HARRIS: Essentially, because the appropriation items are of such sufficient detail as not to allow unexpended expenditures not fitting within the program to be met from the program. It is also supported by an advance to the Minister of Finance which is constrained in usage in that the Minister may not use it validly for matters that have been foreseen or for matters that can await Parliament’s examination.

The Hon. J. P. HANNAFORD: Are you saying that, under New South Wales appropriation laws, once money is appropriated to a department in a Minister’s portfolio, that Minister is able to spend that money, without oversight, in any way considered appropriate by the Minister or the government of the day, provided that it is lawful expenditure?

Mr HARRIS: Yes, that is correct. Perhaps a good example is the Department of Education and Training which has a recurrent appropriation of some $5 billion. If the Minister thought it warranted, that $5 billion could be spent entirely for secondary schools, entirely for primary schools, entirely for State schools, entirely for private schools or any combination that the Minister would see fit, so long as those spendings related to education and training.

The Hon. J. P. HANNAFORD: I understand that you have determined to qualify the 1997-98 accounts of a large number of budget-dependent government agencies in New South Wales. How many of those agencies will have their accounts qualified?

Mr HARRIS: If the bill that is before the Legislative Council is passed, that Act will make lawful all expenditures which were previously unlawful. Thus, there will be no need for me to issue any qualified opinions with respect to that money. If the Legislative Council does not pass the bill which is before it then I will qualify some 69 budget-dependent agencies because within their expenditure they will have amounts spent which have not been authorised by Parliament.

The Hon. J. P. HANNAFORD: What is the total value of moneys that have been expended not in accordance with the approval of the Parliament?

Mr HARRIS: The bill before this House seeks your agreement to the appropriation, in a retrospective manner, of about $3.8 billion.

The Hon. J. P. HANNAFORD: Are you saying to the House that that $3.8 billion has been expended by the Government without lawful authority?

Mr HARRIS: Yes. That is the Government’s commentary in the Minister’s second reading speech and in the introduction to the bill, and I would not differ from the Government’s conclusion. Some part of the amount was not calculated by the Government. So it may be somewhat more or somewhat less than $3.8 billion, but it is such a large figure that a little less probably does not make much difference.

The Hon. J. P. HANNAFORD: Are you able to assure the House that the $3.8 billion in unauthorised expenditure is the total amount that has been expended by government without authority?

Mr HARRIS: Yes, I can assure the House that the unlawful expenditure which has not already been the subject of retrospective legislation is about $3.8 billion and not much more - I would even say no more. I should hasten to add that the Government introduced two earlier pieces of legislation - one in November 1997, which was passed in December, and one in June 1998, which was passed in July - each of which also sought and obtained
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Parliament’s approval for retrospective and prospective expenditures amounting to about $2 billion. So this is the third piece of legislation dealing with additional appropriations in the 1997-98 year.

The Hon. J. P. HANNAFORD: Have you determined the number of occasions on which there has been unauthorised expenditure, as distinct from estimating the total amount?

Mr HARRIS: No, I cannot do that. For a start we are talking about 67 entities and a large sum of money. We are talking about expenditures which, on many hundreds of occasions, have not been authorised. If we were to undertake the work that the honourable member is asking us to undertake we would have to examine voucher by voucher the expenditures by agencies and the timing of those expenditures verses the remaining appropriation. We have not done that. We have done it on a gross basis, per program, per agency, after the end of the fiscal year.

The Hon. J. P. HANNAFORD: I take it from that statement that you are not able to inform the House as to the nature of the breaches that have occurred?

Mr HARRIS: I can give some indication of the nature of the breaches by stating how some of the unauthorised expenditures occurred. For example, in 1997 when the High Court found that the State had been invalidly collecting revenue which was not within its constitutional powers, the Government agreed to repay some revenues it had at hand that were at issue. To validate that expenditure it introduced the bill relating to the repayment of State taxes - from memory, it amounted to about $282 million - and it made some payments in anticipation of the legislation being enacted by Parliament.

That is one broad area. The second broad area relates to the first budget variations bill. When the Government sold the TAB it sought Parliament’s agreement to make an appropriation from consolidated revenue to the repayment of debt, amounting to about $1.5 billion. That repayment of debt was executed before Parliament passed the legislation.

The bulk of the payments that are being considered now relate to much smaller payments. In essence, they stem from the fact that agencies do not know during the year, on a real-time basis, how much money they are spending on their programs. At the end of the year they sit down, work out how much money they spent, and find that they spent more than was appropriated. They then seek the approval of the Government and/or the Parliament to remedy that matter. I can go into that matter in more detail if honourable members wish. It is a matter of history which is of some relevance to honourable members’ consideration, but it shows that the system of control over parliamentary appropriations is so poor that it does not to enable most agencies to know where they are at any point in time during the year.

The Hon. J. P. HANNAFORD: Are you saying that it is not just a problem with the current Government? Historically, within the administration of New South Wales - and certainly at present - government departments have not had sufficient control over their expenditures, did not know how much they were spending, and did not know what stage they had reached?

Mr HARRIS: I will break that question into two parts: pre-1983, when the Public Finance and Audit Act was passed, and 1983 and beyond. I have done a little work on this issue in an effort to help honourable members and me understand why what I regard as such a basic premise was so thoroughly ignored in New South Wales. It appears that before 1983, and going back a large number of decades, governments typically took very little notice when they expended moneys for which there was no appropriation, in spite of the Constitution Act and in spite of any other Acts that may have suggested that spending moneys that Parliament had not appropriated was unlawful.

This has been the subject of many reports by Auditors-General and many reports by public accounts committees - I think until they got tired. In some senses one might say that, through use and convention, they just stopped talking about it. In 1983 the then Auditor-General saw the Public Finance and Audit Act as allowing a fresh start; as allowing Parliament to play its proper role in the control of taxpayers’ allocations. It thought, and indeed said, that from now on there should not be any problem with unauthorised expenditure. The difficulty was that it continued, in spite of modern legislation, in the main I think because the programs that were devised for agencies - which programs were important for the appropriation items - were not the subject of a responsible officer, and were not capable of being measured sensibly during the year.

For example, the current set of programs for the Police Service will have a policeman in a car and that policeman might be at any one time looking after traffic safety, personal safety, drug- and
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alcohol-related crimes, or property safety, or theft. There are four programs that the police officer can be attending to at any one time, thus the poor accountant cannot measure what the police officer is doing at the time or determine how he is drawing funds from the various buckets called programs. The program structure is so ill-suited to controlling public moneys as to be farcical. Because of that the Police Service could not but expend moneys unlawfully during the year, unless it was a perfect accident and it massively underspent.

The Hon. J. P. HANNAFORD: Earlier you said that in July this year he obtained Crown Solicitor’s advice on the constitutional aspects of the Appropriation bills. Has the Auditor-General sought any other legal opinion from the Crown Solicitor in relation to this unauthorised expenditure and what should be done about it?

Mr HARRIS: Some years ago I invited Treasury to seek an opinion about the way it was managing expenditure under appropriations. I think I invited it to do that twice. I suppose that, fearing an opinion the content of which it might well have known, it did not seek the opinion. In August this year, having advised the Government on several occasions that if I saw unauthorised expenditure again I would take the matter most seriously, I wrote to the Crown Solicitor asking his advice about the use of the Treasurer’s advance after the expiry of the fiscal year; the use of section 22 of the Public Finance and Audit Act in approaching the Government to authorise expenditures after the year which had already been spent; and the use of section 28 of the Appropriation Act which allows underspending in one program’s appropriations and authorises overspending in another program’s appropriations. I wanted to know whether it was lawful to use that facility after the end of the fiscal year.

The Crown Solicitor advised Treasury on those three matters. He said that the use of that facility after the end of the fiscal year was invalid or unlawful. He also advised us of something which we should have known about at the time but did not. He further advised that there were other moneys which had been left with departments at the end of the previous year - Consolidated Fund moneys - which had also been spent without appropriations. I did not include those moneys in my earlier answer about the $3.8 billion. As I sit in this Chamber reflecting on the matter I realise that some hundreds of millions of extra dollars were spent without appropriation quite early in the fiscal year.

The Hon. J. P. HANNAFORD: Did you obtain advice as to what needed to be done to rectify this situation?

Mr HARRIS: No. One does not ask the Crown Solicitor about remedies. One also does not ask the Auditor-General much about remedies. But there are remedies that are available that are fairly simple. I offered to speak with Treasury to find an approach that allows the Parliament sufficient oversight of the Government’s proposals before Parliament consents to them and at the same time allows agencies to live within the appropriations. That offer - which was made socially or informally - has not been taken up. Earlier I alluded to the fact that the Government decided to abolish programs in the hope that the unlawful expenditure would be eliminated.

The Hon. J. P. HANNAFORD: Did you convey to Treasury the Crown Solicitor’s legal advice to you on these matters?

Mr HARRIS: The Crown Solicitor, perhaps noting that the advice was reasonably important, addressed and sent the advice first to Treasury.

The Hon. J. P. HANNAFORD: Was that advice ever conveyed by you to - or drawn to the attention of - either the Premier’s Department or Cabinet Office, so that action could be taken?

Mr HARRIS: I believe that the Premier’s Department knows about this matter and is aware that the Treasurer and Treasury took steps to get rid of programs in an effort to remedy the issue. That probably is not sufficient, given other problems in the structure of control of expenditures, but it is a major contribution. That legal advice will be included in the second volume of my 1998 report to Parliament, which I hope can be tabled when I find out the intention of this House in relation to the bill before it.

The Hon. J. P. HANNAFORD: The Treasurer has told the House that not one additional cent has been appropriated under the variation bill currently before the Parliament. Is that the case?

Mr HARRIS: Probably a more precise way of putting it is to say that the spending under the bill before the House could have occurred had it been spent under other appropriations which were not used in 1997-98. However, we should always remember that two Acts - the No. 1 variation Act and another Act in 1997 - added approximately
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$2 billion of expenditure, some of which was principal debt repayment. Collectively I believe there were appropriations additional to those contained in the Appropriation Act 1997.

The Hon. J. P. HANNAFORD: Are you saying that money was spent on something other than the purpose for which it was allocated by Parliament in its original appropriation bill?

Mr HARRIS: Yes. The money was not used for the purposes appropriated by Parliament; it was used for purposes for which Parliament did not appropriate.

The Hon. J. P. HANNAFORD: Is there a list of all the commitments that Parliament expected the money to be spent on but on which no money was ever spent?

Mr HARRIS: The vast bulk of the expenditures relate to section 24 of the Public Finance and Audit Act, which concerns appropriations made to an entity when its functions are transferred to another entity. In November 1997 the Government decided to change the administrative arrangements relating to the Department of Education and Training and TAFE. Because the Department of Education and Training is such a large department, those administrative arrangements orders disturbed the original Appropriation Act. Section 24 of the Public Finance and Audit Act allows the Treasurer to seek Parliament’s approval to transfer appropriations made to reflect the transfer of functions. That was not done.

Thus, in the bill before the House, the Treasurer is seeking authority for $3.1 billion to allow that earlier expenditure now to occur. In effect, it is a transfer of appropriations from one entity to a new entity. Not listed in the bill is about $226 million worth of recurrent program expenditures which were saved by other programs. The bill does not itemise them. Although the details are available, I have never seen them on a sheet of paper. The bill also itemises $18 million worth of capital program expenditure, which is authorised, as it were, by underspending of $18 million worth of capital expenditure, which the bill itemises. The bill also itemises the use of the Treasurer’s advance, which, while it is an appropriation, is an unbundled appropriation. The bill refers to $85 million and specifies the areas where those advances will go.

The Hon. J. P. HANNAFORD: Do you believe that the appropriations law as it now stands, as a result of the July Act, enables sufficient scrutiny by you of this problem of unauthorised expenditure?

Mr HARRIS: The law and mechanisms are there to allow unauthorised expenditure to be identified and for Parliament to be alerted to the fact. In the past, Parliament has been alerted to unauthorised expenditures. The Public Accounts Committee has written a number of reports about expenditures that it suspected were unauthorised. The difficulty is that no-one took particular notice and it became part of the government ethos that Parliament would see that the pragmatic difficulties about living within appropriations overshadowed any principles about Constitution Acts and requirements for appropriations.

The Hon. J. P. HANNAFORD: The Government took the attitude of spending and fixing any problems afterwards?

Mr HARRIS: Yes, that was essentially the technique used by the Government. After the end of the year the Government would add up its expenditures and say, "We have spent more than Parliament allowed here, so we will use the Treasurer’s advance for that. We have spent more than Parliament allowed there, so we will offset that additional expenditure with underexpenditure in another program. We have a heap of expenditure left over that no-one has authorised, so we will go to the Governor under section 22 of the Public Finance and Audit Act and seek his retrospective approval to expenditures already made." That was the habit for a very long time.

The Hon. J. P. HANNAFORD: It is possible for the Government to spend money that has not been appropriated and try to correct the expenditure subsequently?

Mr HARRIS: Yes. In the Auditor-General’s 1997-98 report approximately $176 million worth of unauthorised expenditure was identified. In the 1996-97 report approximately $350 million worth of unauthorised expenditure was identified. That could be done for each year. The question is: Does Parliament consider the matter important enough to do something about it?

The Hon. J. P. HANNAFORD: Has the amended legislative framework made your job of auditing government finances more difficult?

Mr HARRIS: No, in fact it has probably made it easier. I do not have to worry now about the expenditure of $5.5 billion in education so long as it is spent on education. I do not have to worry about
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the expenditure of $5.7 billion in health so long as it is spent on health. The expenditure can be variously related to health. The difficulty is in trying to work out the powers of government entities. When the appropriations were itemised one could tell what the powers of a department were.

For example, I have an issue before me at the moment as to whether or not the Department of Health can lend money to its health agencies. I would say that the Department of Health probably does not have the legal power to lend moneys to its area health services. Under the new approach I cannot come to that conclusion because it just has this one vast amount and it appears that so long as there is a health tag to the expenditure it can do what it wants. So from one aspect it makes it easier; from another aspect it really opens up the flexibility and powers of government in a way that I have not seen before.

The Hon. J. P. HANNAFORD: To take it a step further, you said that this type of legislation does not apply in other States or the Commonwealth. Are all government departments adopting this new flexibility - if I can use that description - that New South Wales is adopting so that there is no accountability, or is this Government’s approach to flexibility a novel concept?

Mr HARRIS: I am probably much more comfortable talking about the Commonwealth than other States, although I have opined in the past that the powers available to this Government in New South Wales are considerably greater than I have seen elsewhere and are probably more than Parliament intended to give the Government. This further move provides the Government with such flexibility that the Constitution Act seems to have been offended, and Parliament must consider whether it has abdicated from its principal responsibility of considering carefully and controlling the Government’s use of public moneys.

The Hon. J. P. HANNAFORD: Do you take the view that as a result of the legislation Parliament has abdicated its oversight of public expenditure?

Mr HARRIS: There is not much more that would be required. I suppose fundamentally what the Government might want is approval to spend out of consolidated revenue such moneys as it thinks are necessary to meet the exigencies of the State and report to Parliament after the event on the amount and destination of those expenditures. That is complete flexibility, and the kind of flexibility it has now approaches that very closely.

The Hon. J. P. HANNAFORD: Are you able to inform the House who authorised the breaches that have occurred or who, under the Acts, is responsible for any penalties that those breaches might attract?

Mr HARRIS: I suppose it is the nature of rules that the person down the bottom who has executed all of the documents unlawfully is responsible. Officers who authorise expenditure are required by the Treasurer’s direction to ensure, before the expenditure is authorised, that cash is available and appropriation is available. So all the authorising officers in the 67 agencies who signed authorisations would have acted on the basis of assurances that they did not have. However, in my view of life it is not the person who pushes the pen that I worry about; it is the person who pushes the shoulder or guides the arm. So I would look to those who have established the system of control or lack of control, who have authorised this kind of behaviour over a period of time. I would say responsibility falls on them rather than on those poor junior officers who were doing what they were told and did not quite know that what they were doing was improper.

The Hon. J. P. HANNAFORD: Can I take it from what you said that you believe that the responsibility for the breaches falls on the New South Wales Treasury?

Mr HARRIS: Yes. It is easy to say yes to that, and I will say yes. The answer is yes, but we also have to look back and see why the Treasury, of all the agencies - the body that must pay great attention to the use of public moneys - allowed itself to fall into this ethos that fixing it up after the event was seen as perfectly acceptable. So it is not the current officers of Treasury, except that they did not think about it well enough, and it is not necessarily the former officers; it is a very long inheritance. I think it comes from the relationship between the Government and Parliament: the relationship between Government and Parliament is so one-way that officers believe that pragmatic responses are okay and will not be seen by Parliament as a particular problem, even if the law is offended.

The Hon. J. P. HANNAFORD: Are you saying that the concept of penalties for breaches of this legislation is not regarded as a deterrent or an indication that officers accept responsibility for the breaches?

Mr HARRIS: On one occasion, which has been referred to in this House, a former Treasurer from the other place did not provide me with public
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accounts by the due date. It was only when I thought it was a matter of some moment that Treasury or the Treasurer, or both, came to the view that it was a possible crime and should be treated quite seriously. In the main I would think that most officers who sign vouchers stating that funds are available and appropriations are available probably do not even know the concept of appropriations and probably do not understand the traditional relationship between a Parliament and its Executive going back hundreds of years.

The Hon. J. P. HANNAFORD: What occurred on the occasion to which you referred, when that former Treasurer became aware of a criminal offence? Were any of Treasury’s practices changed?

Mr HARRIS: The Government sought and obtained Parliament’s retrospective blessing to the late provision of the public accounts. It also sought and obtained Parliament’s agreement to a timetable that reflected the difficulties Treasury was having in providing public accounts to Parliament on a due date. We now have a timetable that calls for them to be provided at the end of December rather than the end of September, with the hope and expectation that that will be wound back - next year in fact. So there was a response on that occasion, a response that I did not see when I brought it to Treasury’s attention and asked it to obtain legal opinions, and when I brought to its attention several issues that led me to believe that the system of controls was inadequate, which the Crown Solicitor has now confirmed.

The Hon. J. P. HANNAFORD: In 1994, when this problem first arose, it was dealt with with some urgency?

Mr HARRIS: It was a different problem. One deals with appropriation and one deals with reporting. When the then Treasurer failed to meet the provisions of the Public Finance and Audit Act, the Act was amended to remedy the matter. When this breach came to heart the Government sought to change the Public Finance and Audit Act to remedy future breaches. I do not believe it has done that successfully; it has done it in a way which appears to me to offend the relationship between Parliament and Government and the Constitution Act.

The Hon. J. P. HANNAFORD: Has the Audit Office previously qualified the annual accounts of any New South Wales Government agency for breaches of section 45 of the Constitution Act or section 12 of the Public Finance and Audit Act?

Mr HARRIS: Section 12 deals with commitments and liabilities. Section 21 is probably the better section to mirror section 45 of the Constitution Act. The short answer is no. This would be the first occasion in modern history that we can identify of a qualification because of unlawful expenditure.

The Hon. J. P. HANNAFORD: Are you able to tell the House on how many occasions you gave the Government written or verbal notice or warnings of your intention to qualify the accounts and asked them to address this issue?

Mr HARRIS: In my reports to Parliament I mentioned the need to address this issue in various aspects on five occasions relating to three years, with increasing volume and severity of expression. I suppose that it is fair to say that it came to a head when I provided the Parliament with my views on the public accounts for 1996-97, which contained $100 million-odd of unauthorised expenditure. I provided Parliament with that advice at the beginning of 1998 - somewhere around May. So in May I was quite conclusive about what I was going to do. In four earlier reports I had asked that this matter be attended to, to a greater or lesser extent.

The Hon. J. P. HANNAFORD: Having formed the view that something needed to be done - apparently you were having difficulty with the Treasury moving on it - did you consider that it was a matter that should be brought directly to the attention of the responsible Minister, the Treasurer or the Premier? If so, what did you do?

Mr HARRIS: That is a very good question. There is a section in the Public Finance and Audit Act which requires me to bring matters to the attention of the Treasurer. I had thought, perhaps unfairly to the Treasurer, that the Treasury would bring this matter to his attention - from the expressions in my reports to Parliament and from the management letters that we wrote to Treasury, which are a lesser document identifying problems that we have seen in our audits. It probably would have been useful for me to have brought the matter to the attention of the Treasurer directly and engaged him in conversation about the matter. I did not do that.

The Hon. J. P. HANNAFORD: You have said that this has been a problem for some time. You were the auditor during the period of at least three years of the coalition Government. Were there similar breaches of the legislation by the previous coalition Government and did you ever bring any of these matters to its attention?

Page 9466

Mr HARRIS: Undoubtedly there would have been breaches by the former Government for the same reasons that there were breaches by this Government, that is, the system established is incapable of adhering to the law. Why did I not bring that to the attention of the previous Government? Because I had come from an environment in which this matter was of such paramount importance that I could not even contemplate that it was an issue, let alone an issue that was fundamental to the whole system. The whole system was established on false premises and it took me some time to work that out. Even as late as, say, August I had not seen fully the problems that had been caused by the system of expenditure control established by the Government.

The Hon. J. P. HANNAFORD: When did you first highlight to the Government these particular problems to require that attention be given to them?

Mr HARRIS: Hesitatingly in volume 1 of 1995, then in volume 3 of 1995, then a little more in volume 3 of 1996, then a lot more in volume 1 of 1997, and then a real trumpet blast in volume 1 of 1998.

The Hon. J. P. HANNAFORD: What changes do you suggest need to be made to the budget process to increase parliamentary scrutiny and to make the Executive more accountable in the way that you have adverted to?

Mr HARRIS: This is a very tough question, which I have thought about. I have already alluded to the fact that the relationship between government and Parliament in New South Wales is such that Parliament has ceded to government powers which most parliaments probably did not intend to cede. For example, the Government declares that it has no obligation to table documents without which the Parliament cannot hold the Government accountable. If this House wishes to have a debate on a matter the Governor, on the advice of the Premier, can prorogue the Parliament beforehand.

This House has no capacity to suggest amendments to appropriations for the ordinary services of government. The definition of "ordinary services of government" is so widely expressed in New South Wales as to encompass most expenditures. Appropriations for Parliament are included in ordinary services of government. So Parliament has no say on its own Appropriation Bill. There are several examples of Parliament appearing to have constrained its powers in dealing with the Government and allowing the Government very broad powers in its dealing with Parliament. That seems to be the kind of ethos that underpins the pragmatic view of the bureaucracy when it deals with appropriations.

The Hon. J. P. HANNAFORD: Have the agencies of government ever obstructed you in any way in obtaining information for your audits and has that arisen from any legislative framework? Why did it occur?

Mr HARRIS: On two occasions that I can recall - one in 1998, I think, and one in 1994 - the Government has not provided me with the legal documents which I wanted to see to determine whether government expenditure had been properly advised by the Government’s legal advisers. In other circumstances the Government has not thwarted my audit but it has elongated it by requiring me to go through a particular process to get access to documents which I believe are relevant to audit. So it is only with respect to access to legal documents with the claim of privilege and Cabinet documents, which documents I believe are relevant to audit, that I have been obstructed or thwarted.

The Hon. J. P. HANNAFORD: What is the process that you have referred to that you have to go through to get documents?

Mr HARRIS: In 1992, I think it was, without my knowing - and I do not think it was directed to me - the Government amended the Public Finance and Audit Act through an amendment to the Ombudsman Act. The amendment made it clear, although I do not know how many people knew about it at the time, that I could not ordinarily have access to legal documents the subject of privilege claims and to Cabinet documents. Without that amendment I think I might have had a much smoother access to those documents because people might not have been aware that I was not perhaps entitled to them. It is that issue which troubles me most because, as I say, on two occasions the Government has refused me access to documents, which has impeded my completion of an audit.

The Hon. J. P. HANNAFORD: Are Auditors-General in other jurisdictions given that unfettered access to documents in order to complete appropriate audits?

Mr HARRIS: By conventional practice or law all other Auditors-General have avoided the problem
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that I have fallen into. Even in Victoria and in the Commonwealth and other States the Auditor-General, by law, has access to Cabinet documents and legal documents if they are necessary for the audit.

The Hon. J. P. HANNAFORD: What has to be done in New South Wales to improve the situation here in future?

Mr HARRIS: Merely providing in New South Wales the measures that are in the Australian Capital Territory, Commonwealth, Victorian and, I understand, the Northern Territory legislation. The broader issue that we have been talking about, this ethos of pragmatism over legality, requires a much more fundamental examination of the relationship between parliament and government.

The Hon. J. P. HANNAFORD: Earlier you commented that you did not think that individual officers were necessarily aware of the requirements of the Appropriation Act. Did I correctly interpret your statement? As a general rule, do you think individual agencies are in fact aware of their requirements under the Appropriation Act?

Mr HARRIS: It appears that the system of controls in New South Wales that allow agencies to meet the legal requirements of Parliament are inadequate. In Canberra I was in charge of the Government’s appropriations and expenditures - the accountant in Canberra - so I was responsible for 100,000,000 cheques and $120 billion worth of expenditure. On one occasion I remember that we spent $1,000 more on an item than Parliament had authorised. Parliament’s query was not about the $1,000, which is not a very large amount as against $120 billion, but rather why it happened: what systems allowed this to happen, because there had to be three mistakes in order that moneys not appropriated by the Parliament could be spent. Conversely, in New South Wales one has to be very lucky to spend moneys within the limits set by the Parliament.

Pursuant to resolution business interrupted.

Suspension of standing and sessional orders, by leave, agreed to.

Motion by the Hon. M. R. Egan agreed to:

That questions be called on at the conclusion of the examination of the Auditor-General today.

[Examination resumed.]

The Hon. J. P. HANNAFORD: Can you outline what should be the responsibility of the Treasurer or the Treasury to ensure that agencies are aware of their obligations under this Act or any other legislative framework?

Mr HARRIS: Agencies have to establish controls over commitments so that they meet section 12 of the Public Finance and Audit Act and do not enter into liabilities that cannot ordinarily be met from appropriation Acts. They also must establish control over appropriation items so that expenditure does not exceed the appropriations allowed for those items. The Treasury must examine the banking arrangements relating to budget dependent agencies to clarify what moneys are in the bank accounts of those agencies and whether those moneys are from the Consolidated Fund or special deposit accounts.

If they are from the Consolidated Fund - as the Crown Solicitor says they are at the end of the year - the agencies must account for those moneys properly and seek appropriations before agencies spend them in the new year. They are three or four suggestions. There is another suggestion. If programs are to be established - and I have suggested that if they are not, the guidelines in the Constitution Act are being overlooked or ignored - they should be established for agencies that have responsibility for the management of moneys. For example, instead of giving money for street safety, it should be given to a responsible area of the Police Service that can monitor the expenditure against appropriations.

The Hon. J. P. HANNAFORD: Who has the primary function of monitoring expenditure of government agencies in accordance with the Appropriation Act?

Mr HARRIS: It should be the person to whom the appropriation has been made: the individual Ministers, who have been given the consent of Parliament to spend money for particular purposes and no more. They should have the principal responsibility. However, Treasury has the
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overarching responsibility of establishing systems, issuing Treasurer’s directions, monitoring that behaviour and ensuring that there is no unlawful expenditure. Therefore, it is an important player in the game as well.

The Hon. J. P. HANNAFORD: Are you saying we are in this situation because Ministers have failed in their primary function of monitoring the expenditure of government agencies?

Mr HARRIS: It has not been my experience that Ministers spend a lot of time monitoring expenditure against appropriations, but they ought to satisfy themselves that their agencies have systems to enable that to happen. Of course, those systems are not there at the moment.

The Hon. J. P. HANNAFORD: Has the Treasurer failed in his primary function to have Treasury monitor those systems and monitor expenditure of government agencies?

Mr HARRIS: I suppose the Treasurer did not understand. He may have been as surprised as I was to learn of such a fundamental flaw in the expenditure control systems. However, the flaw having been pointed out, Treasury and the Treasurer have been trying to respond. They have introduced additional bills and amended the Public Finance and Audit Act to seek to reduce the prospect of further unlawful expenditure. So they have been responding, but perhaps in a way that affects Parliament’s oversight of government.

The Hon. J. P. HANNAFORD: It has been suggested that the breaches that occurred are just technical breaches and therefore should not be taken seriously. Do you regard them as simply technical breaches?

Mr HARRIS: Earlier I referred to an occasion when the Senate was of the view that unlawful expenditure of $1,000 out of $120 billion was not a technical breach. It is not a technical breach because the system allowed it to happen and it should not have, and it is not a technical breach here in New South Wales because we are talking about several billions of dollars. Control over the people’s money is the fundamental reason for Parliament; it was the cause of Parliament’s birth. I suppose it is more for parliamentarians than for me to answer, but I would suggest that this should be a matter of great importance for Parliament, and it is not a technical breach.

The Hon. J. P. HANNAFORD: Does the belief within the administration of government - and this is the inference I got from your advice today - that these are simply technical breaches encourage an environment conducive to the development of what you have described as serious financial mismanagement issues?

Mr HARRIS: It is the victory of pragmatism over principles.

The Hon. J. P. HANNAFORD: Is the Treasury in a position to adequately undertake its core function of ensuring that expenditure by government agencies is in accordance with the legislation? If it is not in that position, what needs to be remedied?

Mr HARRIS: If the appropriations continue not to have programs in them, the bulk of the problem will dissipate. There will be a need to examine how agencies’ bank accounts fit within the control system. That has not yet been done, but those two actions together should enable agencies not to spend more moneys on items than Parliament has authorised.

The Hon. J. P. HANNAFORD: Have you ever prepared a detailed report on what changes are necessary to the legislative framework of government to improve the accountability and transparency of the budget process? If you have ever prepared such a detailed report, to whom was that report submitted?

Mr HARRIS: I did prepare a report to Parliament - I am not clear which report it was but I believe it was in 1995 - on the imbalance of power between the Parliament and the Government in matters relating to appropriations. In 1998 I reported in quite significant detail the kind of breaches of the law that I thought had occurred in 1996-97. I have not prepared, as I suggested earlier in my evidence, a remedy that Treasury might like to contemplate. Auditors-General typically are not invited to propose solutions.

The Hon. J. P. HANNAFORD: But if invited to, you would be in a position to provide a solution to the Parliament and to the community that would ensure the accountability and transparency of the budget process?

Mr HARRIS: I should say that the current head of the department of the Treasury has started to engage in discussions with me about this and related issues and has indicated a willingness to continue those discussions. I have indicated a willingness to participate with him in trying to provide, from my experience, advice that would be helpful to the
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Government, not only in terms of controlling expenditures against appropriations but also in terms of enhancing the capacity of individual agencies to live within their budgets.

The Hon. J. P. HANNAFORD: What was the role of the Council on the Cost of Government in trying to ensure that governments stayed within expenditures, and what was its relationship with you in trying to address these issues?

Mr HARRIS: We have not worked together on either issue. I have not reported in much detail, other than the bare facts, on the Government’s expenditure compared to its budget, and I am not aware that the Council on the Cost of Government has examined system issues relating to controlling expenditure against appropriation. The council has looked at system issues relating to identifying expenditure. When one is aware of what money has been spent on what, one is in a better position to draft remedies for controlling expenditure. I am talking more about systems control issues.

The Hon. J. P. HANNAFORD: In summary, therefore, are you saying that the legislation now before the House is essential in order to be able to legitimise expenditure that has occurred and to allow you to issue unqualified accounts for State expenditure?

Mr HARRIS: Yes, that is precisely the summary.

The Hon. J. P. HANNAFORD: If there were the issue of qualified accounts for the State Government, are you able to inform the House what overall impact that might have on the State’s budget and perhaps even its financial credibility?

Mr HARRIS: If agencies are not able to control their expenditure within a cap, whether that cap be an appropriation by Parliament or a binding target of government, budgetary controls that allow governments to control aggregate expenditure are put at risk. I think that rating agencies would be of the view that retrospective legislation alone will probably not remedy system failures that would ensure budget discipline. It will remedy a breach of law; it will not remedy a system failure. If I were Moody’s, I would be looking to governments to establish the kind of controls over expenditure that one would expect from divisions of BHP, so that expenditure is used for proper purposes. Whether for a governmental discipline or a parliamentary discipline, it appears that the system of controls needs bolstering.

The Hon. J. P. HANNAFORD: When the Government says that not one cent of overexpenditure has occurred under the Government, would it be fair to say that that was more by accident than design?

Mr HARRIS: Yes, I think it was a fortuitous outcome and the result of there having been two earlier additional appropriation bills amounting to nearly $2 billion.

The Hon. M. R. EGAN: I think you mentioned the figure of $3.8 billion of expenditure without appropriation, is that correct?

Mr HARRIS: Yes, it is approximately $3.8 billion.

The Hon. M. R. EGAN: You concede, do you not, that that $3.8 billion is not in excess of the total amounts appropriated by Parliament for spending in respect of the 1997-98 year?

Mr HARRIS: It is probably more like $3.4 billion than $3.8 billion. If we are talking about this bill alone, the expenditure that this bill seeks to authorise could have occurred under idle appropriations or unused appropriations existing at the end of 1997-98.

The Hon. M. R. EGAN: In other words, the total amount comes within the total amount that was appropriated by the Parliament in respect of the 1997-98 year?

Mr HARRIS: Looking at this bill alone and not its two predecessors, that would be correct, yes.

The Hon. M. R. EGAN: Would you concede that some $3.126 billion of that $3.4 billion related to transfers under section 24 of the Public Finance and Audit Act?

Mr HARRIS: Yes. In earlier answers I indicated that about $3.1 billion related to the establishment of new agencies in the education portfolio, and that section 24 procedures were not followed during 1997-98, thus requiring the appropriations to be revisited in this bill.

The Hon. M. R. EGAN: Of that $3.126 billion, the largest amount related to the merger of various departments to form a new Department of Education and Training. In other words, there were appropriations for those various agencies, but there was not an appropriation for the combined agency?

Page 9470

Mr HARRIS: That is correct. Section 24 provides a remedy for the Government when it changes the administration arrangements and wishes to put to Parliament a proposal that the appropriations can be transferred to the new programs in the new entity.

The Hon. M. R. EGAN: So there was some procedure that in your view was not correctly completed?

Mr HARRIS: Yes, there was in my view a procedure that was not completed as the law required, thus requiring this bill to remedy the matter.

The Hon. M. R. EGAN: Of the other amounts that are included in that $3.4 billion, there are payments, are there not, of $85.032 million charged against the Treasurer’s Advance?

Mr HARRIS: Yes, $85 million goes to the Treasurer’s Advance, which had not been used to that extent at the end of the fiscal year.

The Hon. M. R. EGAN: It is not as though there was the Treasurer’s Advance of $100 million, which at the end of the year had been exhausted and another $85 million was spent from it?

Mr HARRIS: No, it is not as if the Treasurer’s Advance had been exhausted. On 19 June you advised the estimates committee that you had not spent any of the advance.

The Hon. M. R. EGAN: Was the other amount of $17.82 million approved by me for capital payments on the basis of offsetting savings under other programs?

Mr HARRIS: The bill seeks to authorise the spending of $18 million on capital projects in lieu of an appropriation equivalent to that which remained unspent at the end of the fiscal year.

The Hon. M. R. EGAN: The first question asked of you by the Leader of the Opposition related to the historical background. I shall read to you a letter from the Crown Solicitor and ask whether you think it also constitutes part of the historical background. The letter, which is dated 10 September, from the Crown Solicitor to Mr Neale, the Acting Secretary of Treasury, reads:

The practice of spending in anticipation of parliamentary approval was discussed in the 1978-79 report of the Auditor-General. It was recognised that -

and I am now quoting from the report -

while the incurring of expenditure "unauthorised in suspense" is contrary to the provisions of the Audit Act . . . and the Appropriation Act . . . the principle has become entrenched in Parliamentary practice in this State. Over a long period successive governments have incurred expenditures from the Consolidated Fund without Parliamentary appropriation but in the anticipation that Parliament’s approval would subsequently be obtained. Successive Parliaments have, in effect, endorsed this approach by continuing to grant retrospective authority for the payments so incurred.

Would you agree that would form part of the historical background of this issue and, indeed, it is that historical background with which you are taking issue?

Mr HARRIS: In an answer to a similar question I pointed out that I wished to distinguish pre 1982-83 from post 1982-83. I agree that for 80 years there was, although railed against by sundry people including Auditors-General, a practice of government incurring what was euphemistically called "unauthorised expenditure in suspense", which some others might say could be called unlawful expenditure unauthorised by Parliament.

The Hon. M. R. EGAN: You would be aware that prior to 1994 I was Chairman of the Public Accounts Committee?

Mr HARRIS: Yes, and having read several reports from that period -

The Hon. M. R. EGAN: And a good chairman, too, I might say.

Mr HARRIS: There have been a large number of good reports from the Public Accounts Committee, of which the Treasurer was the author of many. I presume some of them would have been disappointed at the use of expenditure not authorised by the Parliament.

The Hon. M. R. EGAN: Indeed. In fact, I used to haul public servants before the committee each and every year to examine them over unauthorised expenditure.

The PRESIDENT: Is the Leader of the Government asking a question?

The Hon. M. R. EGAN: It is a pertinent question. That is quite right, is it not?

Mr HARRIS: I am sure it is.

The Hon. M. R. EGAN: When I was Chairman of the Public Accounts Committee the Public Finance and Audit Act provided that each
Page 9471
year, as a matter of course, the Public Accounts Committee would examine unauthorised expenditure.

Mr HARRIS: That was so from 1902, but it does not continue under the provisions of the current Act, perhaps because there was no expectation that there would be unauthorised expenditure after 1982-83.

The Hon. M. R. EGAN: We knew in 1983, did we not?

Mr HARRIS: In 1983 the then Auditor-General believed that the 1983 Public Finance and Audit Act would see an end to the problem.

The Hon. M. R. EGAN: Obviously, this is a matter that you regard as very important?

Mr HARRIS: Important enough to qualify 69 agencies if the matter is not remedied.

The Hon. M. R. EGAN: Why was there no mention or concern in the report dealing with 1992 of section 22 approvals that exceeded $70 million, approval for which was not given until 23 September 1993? Were you the Auditor-General at that stage?

Mr HARRIS: Yes, I arrived in September 1992, so the sins of 1991-92 would be visited on me.

The Hon. M. R. EGAN: Why was there no comment in your 1993-94 annual report of overexpenditure of $377.8 million under section 22, approval for which was not given until 30 November 1994, five months after the end of the financial year?

Mr HARRIS: In earlier discussions I tried to suggest that we are not blameless, but that I could not contemplate that a matter so important as fulfilling the Parliament’s intentions with respect to appropriations would be so readily breached under our system. I did not contemplate that it could occur. The office, which understood this much better than I did, was aware that part of the ethos of the State was that pragmatism was more important than principle in this matter.

The Hon. M. R. EGAN: In 1994-95, when there was overexpenditure of $471.5 million under section 22 which was not authorised until a later time, there was still no comment made about possible breaches.

Mr HARRIS: That is when we started to comment, in Volume 1 and Volume 3 1995, Volume 3 1996, Volume 1 1997 and Volume 1 1998 with respect to 1994-95, 1995-96 and 1996-97.

The Hon. M. R. EGAN: You said to the Leader of the Opposition that perhaps you should have communicated with me about these matters.

Mr HARRIS: Certainly in retrospect, communicating the matters in the reports to Parliament seems not to have had the effect it may have had had I reported directly to you.

The Hon. M. R. EGAN: There is a statutory responsibility on you under the Public Finance and Audit Act to communicate with the Treasurer about all matters that arise under this Act or the prescribed requirements and that, in the opinion of the Auditor-General, are sufficiently significant to have brought to the Treasurer’s attention, is there not?

Mr HARRIS: As I said, it would have been better for me to have communicated with you directly rather than to Parliament generally and to your department in the management letters.

The Hon. M. R. EGAN: You made a number of references to section 45 of the New South Wales Constitution Act 1902, which refers to appropriation for specific purposes. Were you suggesting that the amendments to the Public Finance and Audit Act that were enacted by the Parliament in July this year were somehow contrary to either the letter or the spirit of the provision?

Mr HARRIS: Yes.

The Hon. M. R. EGAN: Because that amendment to the Public Finance and Audit Act no longer provides for appropriations to be made to programs?

Mr HARRIS: In essence, yes, because appropriation items in the Appropriation Act 1998 are so large as to offend the need for specificity mentioned in section 45 of the Constitution Act.

The Hon. M. R. EGAN: But the appropriations now made under the Public Finance and Audit Act are to specific agencies, are they not?

Mr HARRIS: Yes, they are. There could be one appropriation item of $22 billion to the Treasury for the purposes of government, and that would be to a specific agency as well.

The Hon. M. R. EGAN: But in fact they are made to 74 budget-dependent agencies?

Page 9472

Mr HARRIS: I counted 72, but I will not argue about two.

The Hon. M. R. EGAN: I will concede 72. The bulk of the total appropriations are made to a few of the big agencies?

Mr HARRIS: Five appropriation items constitute 75 per cent of the total appropriations.

The Hon. M. R. EGAN: And that is because 5 per cent of the agencies constitute 75 per cent of the spending?

Mr HARRIS: So long as they live within the appropriation items, yes.

The Hon. M. R. EGAN: But the Health Department spends something like $6 or $7 billion a year and the Department of Education and Training spends something like $6 or $7 billion a year. When section 45 of the Constitution Act was inserted - which I suspect was before my birth - there were no programs?

Mr HARRIS: There would have been line items. In our research -

The Hon. M. R. EGAN: There were no programs.

The Hon. R. T. M. Bull: On a point of order. Mr Harris should be allowed to answer questions in full before being interrupted by the next question.

The Hon. M. R. EGAN: I am happy to do that.

The PRESIDENT: In my introductory remarks I asked members to extend all courtesies to the Auditor-General, and I am sure the Treasurer will heed my request.

The Hon. M. R. EGAN: I had said that when section 45 of the Constitution Act became the law in New South Wales there was no program budgeting, and I think you said that there was line item budgeting.

Mr HARRIS: Yes, we did some research and asked that question of the Crown Solicitor. We identified, for example, that in the 1960s there was an appropriation to teacher training. Associated with that appropriation would have been several other appropriations that were tied by Parliament in such a way that the Government could not expend those moneys other than on the matters addressed in the Appropriation Act at the time. So in the 1960s there was a range of issues that could have constituted programs, but that would not have occurred in 1902. In 1902 the Government would have required specificity in line items.

The Hon. M. R. EGAN: You also gave as an example the attempt on the part of the Federal Labor Government to pay the legal expenses of Carmen Lawrence. You suggested that, whereas in the Federal Parliament such an attempt could be thwarted if there was no appropriation for it, in New South Wales it could not be thwarted?

Mr HARRIS: Yes. I have not seen in several years in New South Wales any debate about the power to spend moneys other than at budget time, which the Government has sought. In any event, such a debate, as it relates to detailed estimates and working papers, would not bind the Government. What binds the Government is the Act itself.

The Hon. M. R. EGAN: In other words, the appropriations in the Appropriation Act are the control mechanism, and the programs in the budget papers are, if you like, the accountability or reporting mechanism?

Mr HARRIS: I see the programs as control mechanisms under former Appropriation Acts because the Appropriation Acts required that no moneys would be spent on the programs in excess of those in the budget estimates. That provision was in the Appropriation Act itself.

The Hon. M. R. EGAN: But at some stage you suggested - from memory I think it was in one of your annual reports - that interprogram transfers would obviate the need for section 22 approvals? From my recollection of reading that report, you were suggesting that favourably?

Mr HARRIS: Yes, there was a time when I spoke about not being advised of interprogram transfers; and I wondered why, if the law was not going to be followed, there need be that law.

The Hon. M. R. EGAN: But I think on another occasion you offered a view on - and I thought you were encouraging - the use of interprogram transfers to obviate the need for section 22 approvals?

Mr HARRIS: Anything would be better than section 22 approvals, which is a particularly luxurious power that the Government enjoys.

The Hon. M. R. EGAN: There has been no change to the Public Finance and Audit Act or any
Page 9473
of the other relevant legislation in the past few years that would have altered the situation if the Carmen Lawrence case had arisen in New South Wales?

Mr HARRIS: Yes, that is right. The flexibility available to the Government under the Public Finance and Audit Act as it existed in 1997-98 was large. It is now larger.

The Hon. M. R. EGAN: Is the Auditor-General aware that, whereas now we make appropriations to some 72 budget-dependent agencies, in Victoria - though I do not want to use Victoria as a role model - there are nine appropriations to nine agencies?

Mr HARRIS: I have tried not to venture into Victoria or Queensland.

The Hon. M. R. EGAN: In those States they virtually chopped off the head of the Auditor-General!

Mr HARRIS: They did indeed, sir.

The Hon. M. R. EGAN: We will not do it here; I assure you. In relation to the amendments to the Public Finance and Audit Act that were enacted in July this year you suggested, or perhaps you made a more general comment, that Parliament had given more powers to the Government than it had intended?

Mr HARRIS: I think it was a more general question that, over time, Parliament might look back and wonder why - when it had the responsibility to hold the Government accountable to legislate on moneys and on specifics - it had ceded so much power to the Government.

The Hon. M. R. EGAN: I seem to remember your suggesting - if not today, on some other occasion - that when the Parliament was dealing with amendments to the Public Finance and Audit Act in July it was unaware of the effect of the legislation.

Mr HARRIS: I looked carefully at the second reading speeches. One comprised two sentences and the other was two or three sentences. There was no reference in them to the relationship between the amendments being sought by the Government and the Constitution Act. I then looked at all the speeches in the debate and again found no mention of the relationship between the proposed amendments and the Constitution Act. In its explanatory memoranda the bill does not address the matter. So I ventured the view before the Public Accounts Committee - and there was no demur - that members might not know the full implications of the proposed amendments.

The Hon. M. R. EGAN: You are not suggesting that the members of Parliament who participated in that debate would know the difference between an agency and program?

Mr HARRIS: There was no mention of the matter in the second reading debate.

The Hon. M. R. EGAN: But it was in the bill.

Mr HARRIS: It was in the bill.

The Hon. M. R. EGAN: Is it possible that those who spoke in the debate - both in this House and in the other House and irrespective of whether they were Government, Opposition or crossbench members - supported the change or saw it as a matter of no great moment?

The Hon. Franca Arena: Or did not know what they were doing.

The Hon. M. R. EGAN: The Hon. Franca Arena would be aware that that happens in the case of a lot of honourable members.

Mr HARRIS: Yes, it is a possible outcome that honourable members knew what was happening and accepted it. The interesting issue for me is that even on reading the document carefully one would have found it difficult to understand the intent and purposes of the bill. The purpose was, "to replace references to the budget sector with references to the general government sector and to make miscellaneous amendments". Miscellaneous amendments included deletion of the program structure.

The Hon. M. R. EGAN: That is a very important point that would be quite clear to anyone reading the bill.

Mr HARRIS: I have tested this hypothesis with about 10 members of Parliament, none of whom suggested to me an awareness of the relationship between the proposed amendments and the consequences of section 45 of the Constitution Act.

The Hon. M. R. EGAN: Section 45, which simply says there shall be appropriations for specific purposes, has nothing to do with it. An agency appropriation is for a specific purpose in the same way that a program appropriation is for a specific purpose.

Page 9474

Mr HARRIS: I am not a lawyer, and I typically lose legal arguments even with non-lawyers. If that argument were right, a one-line appropriation of $22 billion to the Treasury could be regarded as being for a specific purpose.

The Hon. M. R. EGAN: Appropriations are made to agencies. Unless New South Wales has only one agency there will continue to be more than one appropriation.

Mr HARRIS: The question then is not so much about the number of agencies. If 72 agencies each received $1 and a seventy-third agency received $22 billion, one might say that the $22 billion was not for a specific purpose. It is true that the Crown Solicitor has not had to opine on whether an appropriation of several billion dollars is regarded as being for a specific purpose. I am as much at a loss as others. However, I would say confidently that a single line appropriation of $7 billion for health is not much more specific than $22 billion for Treasury.

The Hon. M. R. EGAN: It is not as though the $7 billion appropriation to health is to hide an appropriation for the Police Service, courts administration or the Audit Office. It is not as though an arbitrary agency is created to hide the distribution of the total appropriation to the various agencies in the State.

Mr HARRIS: Previously we would have known how much money was appropriated by Parliament for primary education in State schools. Parliament no longer has that control. Similarly, appropriations for non-State schools is not a matter for Parliament. They are a matter for the Government to decide as the year progresses and as it sees fit. Whether an appropriation of $7 billion is specific is probably a matter of law. But it is also probably a matter that members of Parliament could judge better than the Auditor-General.

The Hon. M. R. EGAN: You mentioned earlier an amendment to the Ombudsman Act which altered the powers of the Auditor-General to obtain certain documents. Was that amendment made to the Ombudsman Act when the previous Government was in office?

Mr HARRIS: Yes. It was made in 1994, 1993, or 1992.

The Hon. M. R. EGAN: Have you in recent weeks had any discussions on these issues with Opposition members or crossbenchers?

Mr HARRIS: I certainly have had a briefing with the crossbenchers at their request to discuss this bill. I would typically raise this matter with any member who wishes to listen, but I am not sure whether I raised it with the crossbenchers on that occasion.

The Hon. M. R. EGAN: I understand that one of the agencies that incurred an unauthorised expenditure in 1997-98 is the Legislative Council.

Mr HARRIS: I think it is the Legislature.

The Hon. M. R. EGAN: In that case, Madam President and the Clerk are unnecessarily dobbing themselves in. Has the Crown Solicitor’s Office incurred an unauthorised expenditure?

Mr HARRIS: The Crown Solicitor’s Office is part of the Attorney General’s Department, and the Attorney General’s Department would have sinned. Any agency that had more than one program and any agency with only one program that overspent would have breached the law.

The Hon. M. R. EGAN: Was the Office of the Director of Public Prosecutions one of the offenders?

Mr HARRIS: It may be easier to name the three agencies that did not offend. One of them is the Electoral Office, and I will take the other two on notice.

The Hon. M. R. EGAN: I assume the Auditor-General’s office was one of the two agencies?

Mr HARRIS: Happily the Audit Office is not a budget-dependent agency on this matter, or it would have sinned as well.

The Hon. FRANCA ARENA: Mr Harris, would unauthorised expenditure in private enterprise constitute criminal behaviour? If so, why should it be different for the Government?

Mr HARRIS: It is probably different for the Government because it is more important that government expenditure of people’s money be approved by Parliament than that company expenditure be approved. As I understand the matter, it is a crime for the Government to spend money that has not been appropriated by Parliament. It is probably not a crime in private enterprise, depending on the circumstances, if a matter went over budget but was within the approving officer’s delegation.

Page 9475

The Hon. R. S. L. JONES: When were you first aware of the impact of the amendment to the Public Finance and Audit Act that was passed in July to remove "budget sector" and to insert instead "general government sector"?

Mr HARRIS: It would have been well after the legislation was passed. Typically auditors have their eyes at the distant past rather than the approximate past. I do not automatically get copies of bills and I did not see the bill during the debate on it. So I would have become aware of the amendment when the law had been enacted.

The Hon. R. S. L. JONES: When approximately would that have been?

Mr HARRIS: The law would have been enacted about 14 July.

The Hon. R. S. L. JONES: You were not aware of the new provision until some time after that?

Mr HARRIS: I was not aware of it until the end of July or early August.

The Hon. R. S. L. JONES: Were you consulted on the legislation?

Mr HARRIS: I do not get consulted about legislation.

The Hon. R. S. L. JONES: Do you think -

Mr HARRIS: I am sorry, I was not consulted on this legislation. If a change is significant, such as the major reform that is coming up, I am highly involved and consulted. On this amendment I was not consulted or advised.

The Hon. R. S. L. JONES: Should the Government have consulted with you?

Mr HARRIS: I am a very slow thinker and had I been consulted I probably would not have been able to respond within the time the Government wanted to pass the law. Had I been consulted and allowed time to think about it I would have come to the same conclusion that I am discussing today - that as a matter of principle it seems to offend the relationship between the Government and Parliament - and then consider it backwards.

The Hon. R. S. L. JONES: Does it matter that the Parliament did not reject the legislation in July, given that this House has almost no control over program expenditure anyway?

Mr HARRIS: That is part of the ennui in the system. Although the Senate does not have significant power over recurrent government expenditures, it does have a few powers that have been used from time to time. The lack of power of this House over a bill for the ordinary services of government creates an ennui about the monitoring capacity of the reviewing House.

The Hon. R. S. L. JONES: Do you think the section 22 provisions of the Public Finance and Audit Act should be removed or amended, and, if so, in what way?

Mr HARRIS: We have advised the Government, and I think the Government is reasonably receptive to the advice, that it ought to be tightened quite considerably and the Government can then rely on additional appropriation bills being put to Parliament to justify spending outside the very much tighter provisions of section 22. The Government has responded positively to date on that issue.

The Hon. Dr A. CHESTERFIELD-EVANS: Mr Harris, you partly answered this question in reply to Mr Hannaford. I understand you are saying that it is difficult and very time consuming for you to follow the spending of appropriations by programs. Could you outline what management steps you would recommend to keep track of these moneys, how this could be expressed progressively in real time, and to what extent could the information be made available, first, to Parliament and, second, to the people without compromising the efficient working of the State?

Mr HARRIS: Unless the program structure we now have is identical to the agency it will not necessarily have anyone responsible for the program. We have a program in the Health Department called emergency departments, for example. No-one in the Health Department is responsible for the running of all emergency departments. Each hospital is responsible for its own emergency department. So making an appropriation to all emergency departments together when no-one is responsible for all of them together seems to me to be silly. If no-one is responsible for the expenditure, no-one will monitor the expenditure and no-one will ensure that the expenditure meets the appropriation requirements of Parliament.

So the programs really have to be devised so that there is a responsible entity or person in charge of each of them. The Parliament can then make an appropriation for a program confident that the system will ensure that the expenditure is monitored because there is a responsibility structure. So, you
Page 9476
would not have emergency departments; you might have the New England health service because that is a responsible entity and it can match expenditure against appropriations within its system.

The Hon. Dr A. CHESTERFIELD-EVANS: And the other two parts of the question: Can you express that progressively in real time so that one can see halfway through the year how a program is going?

Mr HARRIS: Yes, without a doubt. We are not talking about rocket science here. This is reasonably basic accounting - no, this is basic accounting.

The Hon. Dr A. CHESTERFIELD-EVANS: Can this be made available to the Parliament and possibly even to the people in real time or is that really asking for too much interference and would it be against the workings of the State?

Mr HARRIS: Yes, in theory it can. There is nothing to suggest that the computerised system which tracks that cannot be put on to a read-only facility. There is nothing that suggests that cannot be done - I will stop there.

The Hon. Dr A. CHESTERFIELD-EVANS: Could that be against the State’s interests in any way? Is there any foreign power or financial entity that could gain from that knowledge, against the welfare of the people?

Mr HARRIS: The price of stocks is instantaneously available from the stock market, so there is no problem about putting down the instantaneous expenditures of Government.

The Hon. Dr A. CHESTERFIELD-EVANS: Could I take that one step further and ask to what extent is it possible to make contracts and expenditures on public works publicly available without damaging the interests of the State; and to what extent is transparency possible in public financial affairs? At present we are told that everything is commercially in confidence, and that suggests to me that if the State were making a mistake in its dealings with the private sector, that mistake would be buried and we could keep on making the same mistake more or less forever. So to what extent can you make all things transparent and how do practices in New South Wales and Australia compare with the best practice around the world in this aspect?

Mr HARRIS: Other jurisdictions, including those as commercially aggressive as the United States of America, see no problem in making executed contracts between the Government and the private sector available within hours of their execution. The United States is not the only jurisdiction: New Zealand and a number of European countries make such contracts available, and they do not seem to collapse in a welter of commercial in-confidence claims. In its budgetary documentation the Government provides a wealth of information already. I suppose the issue that concerns me is not the information before or after the event, but what role the Parliament had in providing consent to the proposals of Government.

The Hon. Dr A. CHESTERFIELD-EVANS: If we were to get a bad deal, for example, with the Port Macquarie hospital and were not aware that the deal was bad, and if we are trying to develop a culture in which in order to comply with the Hilmer report the public sector has to deal with the private sector, we need the relevant people to gain expertise in these matters, but that will not happen if they are not aware that their contracts are bad. If contracts are never made available we will not be able to progress, so there must be an upside. Is this significant and what are we doing about that?

Mr HARRIS: Making information available more broadly constitutes adding a couple of auditors-general. If the Government tabled all executed contracts, and made them and sundry information available as a matter of course, that would be adding a few auditors-general to the armoury of accountable responsible Government because people who have an interest in the matter would review that documentation and advise people of its flaws or its strengths.

The Hon. Dr A. CHESTERFIELD-EVANS: Would seeking to have one point to deal retrospectively with the overspending of appropriations inhibit your ability to effectively audit the management and use of public moneys by Government agencies?

Mr HARRIS: I would rather have retrospective legislation than invalid legislation, and I would rather that the Government had no need for the retrospective legislation that it has, so I suppose the answer is that it would have been better to have valid approval for the $3.4 billion plus the expenditure authorised by the earlier Acts before they were authorised.

The Hon. I. M. MACDONALD: Mr Harris, you have made several statements about there being a one-way street between Government and Parliament. You have made statements about
Page 9477
inadequate controls, about Parliament not having the full level of responsibility in relation to appropriations and so on and so forth. Are you aware of the estimates committees of this Chamber?

Mr HARRIS: I am well aware of the estimates committees of this House.

The Hon. I. M. MACDONALD: Then you have probably had a good look at the 540-page Hansard volume of the 1998 estimates committees hearings?

Mr HARRIS: I have. My officers and I attend the estimates committees.

The Hon. I. M. MACDONALD: If you look at any area of the hearings of these estimates committees, which are of course elected by this House, you will find, in very great detail, explanations of virtually every line in the budget.

Mr HARRIS: That is emphatically correct.

The Hon. I. M. MACDONALD: And you will have seen at the end of each committee hearing that the committee resolves that the amount be recommended for program areas within the specific portfolio.

Mr HARRIS: That is correct.

The Hon. I. M. MACDONALD: And that resolution is then presented to this Chamber?

Mr HARRIS: That is correct.

The Hon. I. M. MACDONALD: Do you not think in reality that the budget presented to this State receives considerable scrutiny by members of this Chamber through the process of the estimates committees?

Mr HARRIS: That is correct.

The Hon. I. M. MACDONALD: You said there are 72 items and the estimates committees deal in considerable detail with virtually every one the items.

Mr HARRIS: Yes, but you also have to know that the Government need not adhere to any of its plans presented to the Chamber when the appropriation bill is passed. It can depart from all of those plans.

The Hon. I. M. MACDONALD: I am not disputing that it has that right. In fact, for many years it has had that right. Is not that so?

Mr HARRIS: No. It has had the right to shift money from one program to another program under controlled circumstances.

The Hon. I. M. MACDONALD: I can follow that point but I am referring to your points about the Parliament not having proper scrutiny of this entire area.

Mr HARRIS: No, I was not talking about scrutiny; I was talking about control. There is a difference between scrutiny and control. There is a growing tradition of this Chamber scrutinising the plans of the Government before the passage of the Appropriation Bill, but after the passage of the Appropriation Bill the Government may do what it wishes, notwithstanding what it planned or what it told the Chamber.

The Hon. I. M. MACDONALD: It can change according to circumstances. The Government can alter its direction on certain matters.

Mr HARRIS: Yes, reasonably or unreasonably.

The Hon. I. M. MACDONALD: If something occurs in that area it can then be referred back to the Parliament as a political question and debated or it could become a public issue, in effect.

Mr HARRIS: There would be more debate if there were more points of control over government expenditure.

The Hon. I. M. MACDONALD: The budget contains estimates for the previous year, the actual expenditure and projections for the following year.

Mr HARRIS: Yes. The actuals are not audited and there is a good deal of information in the budget papers that is not audited.

The Hon. I. M. MACDONALD: You are aware that many members take the opportunity in the estimates committees to review line by line any alterations that occur in various items. For instance, Madam President may ask a question of Mr Whelan about changes in expenditure for police from the estimates from the previous year compared with the actuals and ask for a detailed account of the changes.

Mr HARRIS: Yes, you certainly can bring the Government to account after the expenditure has been made about the judgments that the Government executed.

Reverend the Hon. F. J. NILE: On page 11 of your 1998 report to Parliament you make a reference to public sector accountants, saying:

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A brief survey by The Audit Office in 1995-96 showed that for the budget sector only 63% of accountants involved in the preparation of financial statements were members of the two main professional accounting bodies.

Is the lack of qualified persons in this accounting area one of the causes of overspending by departments? Which government departments have the bulk of the non-qualified persons? Is the Government forced to balance the books with the extra allocations because of the inefficiency or lack of qualifications of these people?

Mr HARRIS: It is probably true to say that the comment about the lack of qualifications does not impact closely on the matter we are discussing. The complexity of government accounting has significantly increased in recent years but the issue that we are talking about is not a complex matter and does not require, as I suggested earlier, rocket science to fix.

The Government has responded to that observation by requiring that people who are closely connected with financial accounting in departments have to improve their skills. The fundamental flaw probably relates to the fact that the public service and the Government do not relate to Parliament very closely. They are not called to account very closely and the development of the estimates committees in the upper House helps. Retrospective legislation has certainly helped to bring to their mind that when Parliament says something it actually means it.

Reverend the Hon. F. J. NILE: On page 14 of the same report you comment under the heading "Summary of Audit Results":

The major concern with the current practice is that some of the required authorisations are not obtained until after expenditure has been incurred.

Have you made any assessment of the impact on the people of this State of not incurring the expenditure above the appropriation? Would it mean that police would not be paid or that hospitals would be closed down?

Mr HARRIS: The dilemma posed is not a real dilemma. It is not a matter of spending unlawfully or not spending; it is a matter of obtaining Parliament’s approval for the changed circumstances in a timely way. The appropriation aspects of the break-up and re-amalgamation of the Department of Education and Training, as it now is, are not being addressed until today, in November 1998, even though the administrative change occurred in November or December 1997. If the Government is aware, as it ought to be, that it is going to make these large administrative changes in, say, December 1997, it can use section 24 powers of the Public Finance and Audit Act to obtain the necessary appropriations to reflect that changed administrative arrangement. So it is not a matter of not spending and thus failing the people of this State or spending invalidly; it is a matter of seeking Parliament’s approval at the appropriate time.

Reverend the Hon. F. J. NILE: Where does the blame lie in that case? Should the Minister in charge of the education department have anticipated this or does the blame rest on the shoulders of the Treasurer?

Mr HARRIS: In that matter I understand that the department brought the issue to the attention of the Treasury quite early in the piece but it was not acted upon then. Nor was it acted upon in the remainder of the 1997-98 fiscal year.

Reverend the Hon. F. J. NILE: On page 14 of the report you also state:

Of concern was that the largest amount for 1996-97 was for Crown Transactions, $118 million ($36 million in 1995-96) which is administered by the Treasury.

In your opinion what is the explanation for this overspending in the area of Crown transactions?

Mr HARRIS: I have said with respect to these explanations that I do not understand, and cannot determine from the explanations given, whether they were necessary expenditures to be incurred at the time. I do not speak alone: the sentiment has been expressed several times by the Public Accounts Committee, that the Government does not provide sufficient information to determine whether the use of section 22 was justified. That part of the report to Parliament provided Parliament with the same information that I get, although I can ask for more. Initially you get information which you cannot understand or interpret.

Reverend the Hon. F. J. NILE: The use of that device of Crown transactions through the Treasury conceals what ministry or department of the Government was involved.

Mr HARRIS: It conceals the purpose of the expenditure. It does not say why we had to use section 22 to make the payment; it merely says "Crown Transaction $130 million-odd". That does not explain why there had to be an urgent use of section 22.

Reverend the Hon. F. J. NILE: And we cannot relate it back to heath, education or some other -

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Mr HARRIS: It would have nothing to do with health or education; it would have been a matter to do with Treasury’s financing arrangements.

Reverend the Hon. F. J. NILE: And there is a question mark as to what it actually was?

Mr HARRIS: What it actually was is a question mark to me today.

Reverend the Hon. F. J. NILE: You may not be able to do this before the House today but it would help all members, particularly crossbench members involved with budget estimates, if you could make some recommendations on how we can carry out our investigations with greater expertise and skill than perhaps in the past. We have problems in going through the budget papers. You have indicated that the preparation of the budget papers has made it even more difficult for us to work out individual items, whether money has been spent for primary school education, high school education, et cetera. It would help us if you would make such recommendations. It may take you some time to do that. We would appreciate that help.

Mr HARRIS: I would be happy to respond to any invitation from members.

The Hon. Dr B. P. V. PEZZUTTI: I made inquiries of the Audit Office about the 1997-98 budget papers in which the health budget has programs such as 48.3 "Acute Health Services" broken down to line items such as overnight acute inpatient services, mental health services and so on. The initial budget from the previous year is compared with the net cost of service and in many cases they rarely match. There is an underspending on rehabilitation and extended care services of some $20 million yet there is an overexpenditure on mental health services. Are you suggesting there should be more clarity of line item expenditure?

Mr HARRIS: Yes. We do not actually manage overnight public hospital accommodation; we manage hospitals. We respond to patients who come in, whether they are day patients, overnight patients or emergency only patients, but we manage hospitals. However, we have a program structure that pretends that we manage emergency departments as a group and we do not. We appropriate money to emergency departments as a group but we do not manage that money at all. Money is given to hospitals, which then spend that money on patients as they come through the door. That money is spent not on managing bits of hospitals but on managing the hospital as a whole. Certainly no-one manages different bits of the hospital as a program.

That is the point I was trying to make. It would be like saying to Sutton Motors, if it had 100 branches, "Here is the money for the used tyres, here is the money for the oil" instead of saying, "Here is the money for this branch and here is the money for that branch." Because no-one is managing used tyres the relationship between expenditure and appropriations is not managed.

The Hon. Dr B. P. V. PEZZUTTI: Once the health appropriation is broken up into estimated areas of annual expenditure, it is broken up again for area health services, and once more for facilities to provide the care. When mental health problems arise the Government can stipulate that money is to be spent on mental services alone, or that money is not to be interfered with by being suborned to other programs. Yet how do members of Parliament, or even the Minister for Health, make sure that the hundreds of millions of dollars allocated for mental services pass through the various necessary tiers and are allocated accordingly? When I asked the director-general whether money for mental health services is being allocated to other services he said no and that if there is evidence of that he will prosecute. How can we be assured that the money is being spent in the way the Government intended?

Mr HARRIS: That is the nub of the problem. As I said, the sergeant in the car going down Willoughby Road can be doing one of five programs one minute, another the next minute, another the third minute and yet another the fourth minute. The allocation of program level expenditure for the Police Service is ascertained after the event; it is not managed in real time. If appropriations for mental health are to be managed appropriately, a structure must be established in the Department of Health for someone to be in charge of mental health and to have a delegation to spend the money. That person ekes that money out to the mental health departments of the various hospitals. However, I do not think that is the way the Department of Health manages its appropriations.

The Hon. Dr B. P. V. PEZZUTTI: We read annual reports that have been released at annual general meetings. Those reports often contain large figures, but how can we be sure that the stated figures were actually spent? How can accumulated spendings, which have been audited separately and independently, add up to what is to be found in the audit report?

Mr HARRIS: The audited spending on mental health in each facility ought to add up to the total program, but I make the point that the appropriation is an accident. It is done on the basis of what happened last year. Last year a certain amount was
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spent on mental health so this year that amount will be allocated for mental health, plus or minus a bit. If a hospital is inundated with a problem, the hospital will use the money for that problem.

The Hon. Dr B. P. V. PEZZUTTI: Your report on health may not be germane to this inquiry and if so please do not answer this question. In reading the budget papers delivered by the Treasurer each year I have great difficulty understanding the extent of the indebtedness of each area health service. You also have been concerned about the level of area health services indebtedness, have you not?

Mr HARRIS: Again this year we will make that matter obvious for members of Parliament and we will do that for most area health services where it is an issue. However, if the honourable member wants me to visit him to help him go through particular financial statements, I shall endeavour to do that.

The Hon. Dr B. P. V. PEZZUTTI: I ask the question because most of these special loans were advanced by Treasury halfway through the year to ensure that area health services were able to pay their debts within 45 days. In terms of this inquiry about lawful and appropriated expenditure, how does one account for that expenditure, or have the area health services just simply overspent and been bailed out by the Treasurer?

Mr HARRIS: There are probably three or four problems with that question. First, we do not know that the area health services have the power to borrow as they have been doing; second, we do not know whether the Department of Health has the power to make the loans which it has made; and, third, the source of the loans is an appropriation of some sort which has not been specifically authorised. However, in essence an area health service is obliged in its annual report to indicate the timing of its accounts payable. We make sure that we cover that in our report, knowing that the Parliament regards this as a matter of interest, and that will be with the Parliament in about a month.

The Hon. Dr B. P. V. PEZZUTTI: Are you indicating that these advances or loans that are arranged and which have a schedule of repayments are not in any way proper or that the legal basis for them is in any way questionable?

Mr HARRIS: Our view is that the area health services have borrowed moneys without the lawful authority of the Treasurer. Our view is that the Department of Health may not have the power to have lent the moneys. It is good to ask what was the source of the appropriations which enable the Department of Health to make these loans and under what heading do they make these loans to the area health services, but the effectiveness of their use should be apparent because the data will be in the annual report of the area health service and in volume 3 of my report to the Parliament in December.

The Hon. J. P. HANNAFORD: I want to go back to an answer you gave earlier in relation to the $3.1 billion education department expenditure. Did I understand you to say that the Treasury knew before the end of the fiscal year of the need to get an approval in relation to the education transfer of funds but that nothing was done about that?

Mr HARRIS: When I asked my officer - who is the person in charge of the audit for the Department of Education and Training - why this matter was a matter for October 1998, he advised me that the Department of Education and Training had brought the matter to the attention of the Treasury at about the time of the restructuring of the department, which occurred towards the end of 1997.

The Hon. J. P. HANNAFORD: Do I understand you to say that, Treasury having known towards the end of 1997 that the law required an approval for this transfer, that could have been done by way of a section 24 application?

Mr HARRIS: Yes. Section 24 of the Public Finance and Audit Act allows the Treasurer to seek the Parliament’s approval to transfer appropriations when the functions to which they related have been transferred.

The Hon. J. P. HANNAFORD: As I understand section 24, that section would have required the Treasurer to table in the Legislative Assembly a notice to the effect that such a change in lawful expenditure was required. I understand that the Parliament would then have had six days to disallow that expenditure and therefore have some control over the expenditure?

Mr HARRIS: That is my general understanding of section 24.

The Hon. J. P. HANNAFORD: In relation to all the other items of expenditure the subject of this legislation, had Treasury been informed before the end of the fiscal year that such unauthorised expenditure required approval, section 24 could have been used before the end of the fiscal year to deal with all of those other items of expenditure?

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Mr HARRIS: Section 24 was applicable to the education portfolio and to the changes to the Valuer-General’s administrative arrangements. All of the rest of the issues the subject of this bill relate to other mechanisms either in the Appropriation Act or in the Public Finance and Audit Act. However, the Treasury was aware from my report at the beginning of the calendar year that if it repeated what it did last year, in my view what it would be doing would be unlawful. Treasury was advised of that at the beginning of 1998.

The Hon. J. P. HANNAFORD: So the legal mechanism was there for Treasury to deal with this issue. Had it done so, at least $3.1 billion of appropriation under this legislation would have been unnecessary?

Mr HARRIS: Yes, that is right. It may have been difficult for the Treasury, because of other issues that we have discussed, to avoid coming to you for some approval, but the mechanism was clearly there for $3.1 billion.

The Hon. J. P. HANNAFORD: In relation to the issue of breaches of the Act, whose responsibility is it to pursue breaches and to pursue prosecutions?

Mr HARRIS: I believe that the Director of Public Prosecutions would have the primary responsibility to ascertain whether he would wish to pursue a prosecution under the Act.

The Hon. J. P. HANNAFORD: Whose responsibility is it, though, to refer these breaches to the Director of Public Prosecutions for prosecution and thus trigger investigative action?

Mr HARRIS: I do not know the answer to that. It would be surprising to me if the Director of Public Prosecutions or his staff were not dimly aware of this matter already.

The Hon. J. P. HANNAFORD: Are you aware of advice from the Director of Public Prosecutions that the DPP takes the view that because these are not indictable matters, the police alone should be investigating and prosecuting such offences? In view of that advice, are the police the appropriate agencies to be pursuing these sorts of prosecutions?

Mr HARRIS: I think that perhaps all the players, that is, all the public servants and public officers, are acting in anticipation that you will make lawful, retrospectively, that which was unlawful, and thus remedy the matter. Certainly I am acting on that basis as I draft my report to Parliament. I am not acting on it in a formal way, but I am preparing my report on that basis, and I presume that the law enforcement agencies would not wish to pursue a matter anticipating your action one way or the other.

The Hon. J. P. HANNAFORD: Assuming that these items are validated this year but there are breaches in subsequent years, notwithstanding this ordeal that we are going through, is it appropriate that no-one should be given the responsibility of triggering a report to the Director of Public Prosecutions or some other prosecution agency to pursue prosecutions? Is it appropriate that the Auditor-General should be given responsibility for identifying these breaches and referring them to the appropriate agency for prosecution?

Mr HARRIS: If the New South Wales Parliament indicated its gross displeasure at breaches of law and wanted to take action if those breaches continued, I, the Independent Commission Against Corruption or others would take a lead from that parliamentary position.

The Hon. J. P. HANNAFORD: If this bill were not passed, what would be the consequence?

Mr HARRIS: I suppose the consequence would appear to be that there has been a breach of the law, which, if proven, would be a crime under the Public Finance and Audit Act. We had a discussion earlier as to whether the person who signs the voucher or the person who pushes the arm would be responsible. I am not sure of the answer to that.

The Hon. J. P. HANNAFORD: Should these breaches be regarded as a crime, or should that part of the Act that now constitutes the breaches as a crime be repealed?

Mr HARRIS: That is an interesting question. It is disappointing to me that, having been advised of the legal problems, the remedies chosen were not adequate to meet those problems. It is also true that it was not done in opposition to parliamentary views or positions and it was not done out of crass ignorance. Nevertheless, one would hope that if Parliament indicated that it regarded this as a serious matter, there would be no further breaches other than incidental, non-systemic and accidental breaches, and the Parliament could view those rather less seriously than a systemic, persistent breach. A systemic, persistent breach would, I think, be rather serious.

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The Hon. J. P. HANNAFORD: No doubt you have looked at similar provisions in other jurisdictions where criminal penalties also exist for non-compliance with the law. Are the penalties in other jurisdictions comparable with penalties here? Should we have penalties, and should those penalties be increased?

Mr HARRIS: I am not familiar enough with those jurisdictions to provide an educated answer to that question.

The Hon. J. P. HANNAFORD: You answered a number of questions from the Treasurer about the second reading speech which was delivered in July this year. I assume that you have read the second reading speech that led to the bill coming before the Parliament this year, as well as the other debates. Is there anything in the second reading speech to suggest that the Parliament was moving from a change of program appropriations to agency funding, which would clearly indicate that a substantial accounting change was taking place in the accounts of the New South Wales Government?

Mr HARRIS: The second reading speeches were unusually unhelpful in trying to determine the content of the bills, perhaps because the bills were moved as part of and cognate with the Budget Speech. But it was disappointing to see that there was no reference anywhere in Ministers’ speeches to a matter which, in some views, could be regarded as reasonably important.

The Hon. J. P. HANNAFORD: Why has $85 million been approved to go to the Treasurer’s Advance, and what is the consequence of such an advance?

Mr HARRIS: It has been typical of Treasury at the end of the year to match overexpenditures with available appropriations that have not been drawn upon. The use of the Treasurer’s Advance in this way is consistent with that, except that the Government has not appreciated that approving expenditures against appropriations after the fiscal year has ended involves a breach of the law. In some senses it is mimicking what the Government would have done as its usual practice, but seeking Parliament’s approval to do so on this occasion, and there is a benefit in that.

The Hon. J. P. HANNAFORD: What is the Treasurer’s Advance used for? You indicated that there are no line item allocations or appropriations for expenditure in that area. What ills does the Treasurer’s Advance cover?

Mr HARRIS: It is an appropriated amount which, in this jurisdiction, can be spent on recurrent matters at the Treasurer’s wish. It has no further limitations other than that it be used before the end of the fiscal year and that it be used for any recurrent purpose that falls within the power of the State.

The Hon. J. P. HANNAFORD: Would you like to draw the attention of the House to any other matters that would help us achieve a better understanding of the state of the accounts, that might suggest to the House that there are areas for appropriate change and matters the Parliament should address?

Mr HARRIS: The last thing I would say is that there can be a concert of interest in the Government wishing to increase control over expenditure and Parliament wishing to increase control over expenditure, because Parliament can thus effect its historic obligation and at the same time Government can better control the spending of its agencies. The proposal to have a more effective, detailed management of appropriations can be in the interests of both Parliament and the Government. The solution we have at the moment might arguably be in the interests of neither.

The PRESIDENT: Thank you, Mr Harris, for attending to give evidence. There being no further questions, you are excused from attendance at the House and you may now withdraw.

Mr Harris withdrew.

[The President left the chair at 5.35 p.m. The House resumed at 5.55 p.m.]

The Hon. R. T. M. BULL: I address my question without notice to the Minister for Public Works and Services, representing the Minister for Agriculture, and Minister for Land and Water Conservation. During a recent outbreak of the exotic Newcastle disease did one producer at Rylstone have his farm totally cleaned and sanitised by the Department of Agriculture at the department’s expense, while another producer in Blacktown had to complete the disinfection work and foot the bill himself because the department aborted midway the sanitation process, leaving exposed an estimated 1,000 tonnes of potentially infected chicken litter? Does the Government consider this to be equitable treatment of affected producers?

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The Hon. R. D. DYER: On previous occasions in this House I, on behalf of the Minister for Agriculture, addressed the general question of the recent outbreak of Newcastle disease and the measures being taken by the Department of Agriculture in relation to that outbreak. However, I will obtain a specific response from my colleague regarding the matters now raised by the Hon. R. T. M. Bull as a matter of urgency and I will convey that response to the honourable member.

The Hon. J. R. JOHNSON: My question without notice is directed to the Minister for Fair Trading. Will the Minister inform me and the House of recent examples of assistance given by his department to aggrieved customers and/or clients of providers in certain commercial fields of enterprise?

The Hon. J. W. SHAW: I am informed that the Department of Fair Trading received 782,000 consumer inquiries last financial year, which is obviously a high rate of inquiries. In the overwhelming majority of cases the Department of Fair Trading was able to assist with information, advice or practical assistance. Often the public and honourable members hear little about the grass-roots help which Fair Trading is able to give. Equally, the assistance given to traders is not always highlighted. That is unfortunate. Recently I asked my department to provide a regular account of smaller consumer and trader victories. I am pleased to be able to relate some of these case histories to the House, as they will inform honourable members of the breadth of Fair Trading services and the good work done by its staff.

In one recent example, two people travelling by passenger bus from Port Macquarie to Sydney found that their bus leaked directly onto them when it suddenly began to rain. Instead of travelling in comfort, the pair were obliged to put on raincoats and sit on weatherproof plastic for the whole of the six-hour trip, which began at 3.00 a.m. A neighbouring passenger made the journey holding an umbrella over his head inside the bus. When passengers complained to Fair Trading at Port Macquarie the bus company apologised, but offered nothing else.

However, Fair Trading staff prevailed on the bus company to do the right thing and a full refund was forthcoming, as it should have been. In another example, an artist from Gloucester near Newcastle was owed money for his art by a gallery owner in Katoomba, a considerable distance from the artist’s home. With the assistance of the Newcastle Fair Trading office the matter was listed for hearing before the Consumer Claims Tribunal. However, an agreement was reached and money was paid to the artist before the hearing date.

The purchase of computers results in a large number of consumer complaints. One complaint came from a young western Sydney man who is deaf, has little speech and very little movement. This young man joined a TAFE computer class, which gave him a new lease of life. However, he purchased a computer from Empire Computers, a notorious trader which subsequently went into liquidation. The man’s computer was being held by a courier company which had not received payment for earlier deliveries and was refusing to deliver any more.

Fair Trading staff negotiated with the courier company and got the man his computer. Fair Trading staff were later sent a thank-you note, which included a picture of the happy young man with his new computer system. In Armidale, an Aboriginal family was sold an unroadworthy car. Armidale Fair Trading got full redress for those consumers when the car dealer finally repaired all the faults.

In the Riverina, Fair Trading staff were checking that petrol pumps were giving fair measure to consumers. They advised a petrol station owner that his pumps were inaccurate, but he was not short-changing consumers, he was hurting himself. His pumps were giving consumers 5 per cent more petrol than they paid for. The service station owner was informed of the problem and, as one might imagine, he quickly rectified it.

The New South Wales Volunteer Bush Fire Brigades recently held its annual gathering in Dubbo, with fire brigades from New South Wales, Victoria and New Zealand attending. A new web site was to be launched that day, but the fire brigade group which owned the web site found that it was not an incorporated association as it was obliged to be. It took Fair Trading staff just two hours to remedy this situation, and to save face for this organisation. It was a good effort on behalf of a worthy cause.

Finally, Newcastle Fair Trading staff met with five Hunter Valley councils to improve their understanding of owner-builder issues. The councils were pleased when Fair Trading staff offered to hold a program of owner-builder seminars, substantially increasing the knowledge of this issue in the Hunter region. There are a large number of similar stories
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from my Department of Fair Trading. Some good results are being obtained. Fair Trading is helping both consumers and traders. The department plays a crucial part in maintaining the image of New South Wales as an orderly, fair marketplace, which operates according to the law.

I urge all honourable members to make more use of my department when the public comes to them with fair trading problems. Fair Trading can make life easier for consumers and traders in many important ways. It is important to give proper credit to the staff of a department like this who are doing good work and are achieving practical results for the consumers of New South Wales.

The Hon. J. M. SAMIOS: My question without notice is directed to the Treasurer, Minister for State Development, and Vice-President of the Executive Council. Was the ratings agency Moody’s made aware of the $1 billion plus Integral Energy bid for CitiPower in Victoria? Does the Treasurer reject the rumours that the full purchase price of more than $1 billion would be carried on the New South Wales balance sheet? If the Treasurer rejects the rumour, how many hundreds of millions of dollars extra risk will New South Wales taxpayers carry if the bid proceeds?

The Hon. M. R. EGAN: As I pointed out to the House on two previous occasions, Integral Energy Australia has made an indicative bid, not a binding bid, for the purchase of CitiPower. As I also pointed out to the House on those two previous occasions, Integral Energy would need my approval to make a binding bid, and I have not yet considered that. I thank the Hon. J. M. Samios for raising the question of Moody’s credit rating. I am sure that honourable members will be delighted with the glowing AAA rating that New South Wales has received. In its report Moody’s Investors Service said:

These ratings are the highest among Australian states and reflect the state’s sound fiscal policy and budgetary position, the modest debt burden, and the strength and diversity of the economy.

Moody’s further said:

New South Wales enjoys a comparatively high degree of fiscal flexibility and economic resilience. Fiscal trends exhibit a generally improving trend over the past several years.

It continued:

The state’s debt burden is modest by international standards, and should continue to show a gradual decline over the medium term.

Moody’s said further:

The state’s favourable debt ratios are expected to continue their downward trajectory. The pace of decline in the stock of debt outstanding will be determined by the state’s success in achieving increasing surpluses. Debt is forecast to fall by A$1.7 billion over the next three years reducing net debt of the public sector from 9.9% to 7.1% of GSP by 2001.

I will distribute a copy of Moody’s report to every honourable member. Not many of them would remotely understand it, but that will not deter me from circulating it. Their reading of it might begin their education. When I distribute the copies I will ask honourable members to pay particular attention to the table on page 7 of Moody’s analysis under the heading "Financial Operations". That table provides the figures for the underlying surplus or deficit for the total consolidated government sector - the budget sector and the Government’s business enterprises - over the past six years plus this year’s projection.

For the year 1993, under Mr Fahey and Mr Collins, the table shows a deficit of $668 million. For the following year, under Mr Fahey and Mr Collins, it shows a deficit of $457 million. For the following year, 1995, again under Mr Fahey and Mr Collins, the table shows a deficit of $291 million. The combined surpluses under the Carr Government are: $359 million in 1996, $1,292 million in 1997 and an estimate of $121 million for 1998, which, I am proud to say, will be exceeded. Every year that this Government has been in office the result of the financial operations of the total government sector has been a surplus. In each of four years we have managed a surplus, an achievement which the coalition was only able to manage in one year out of seven. We inherited from the coalition a mountain of debt, which we are getting rid of at an enormous rate.

The Hon. J. M. SAMIOS: I ask a supplementary question. Does the Minister’s reply about the Integral Energy bid for CitiPower in Victoria mean that he is now trying to socialise what he once tried to privatise?

The Hon. M. R. EGAN: The Hon. J. M. Samios should refer to my initial answer and to two previous answers that I gave, one to the Leader of the Opposition and one to him. In fairness to the honourable member, it is certainly not a question that an intelligent man like him would have drafted.

The Hon. DOROTHY ISAKSEN: My question without notice is directed to the Treasurer, representing the Minister for Roads. Will the
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Treasurer advise the House on the steps the Government is taking to improve the operation of Spit Bridge?

The Hon. M. R. EGAN: I thank the Hon. Dorothy Isaksen for her confidence in my familiarity with details about the operation of the Spit Bridge. Indeed, it is a subject about which I know a great deal. Honourable members would be aware that on 19 October a problem occurred on the Spit Bridge because of the failure of the lift span to close. That matter was raised on another occasion in the House by, I think, the Hon. Elaine Nile. The Roads and Traffic Authority has advised that prior to that incident the Spit Bridge had not malfunctioned in over 10 years. I am advised that an electrical fault in a control relay disrupted power supply to the motor of the primary drive system. Traffic was delayed for approximately one hour whilst the problem was being fixed. A mechanical problem with the backup motor contributed to the delay. The bridge is subject to regular electrical and mechanical maintenance, including testing of the motors at least three times a month.

Following the incident on 19 October the Roads and Traffic Authority conducted an investigation into the mechanics of the bridge. It was established that the stand-by motor, the stand-by generator and the operator’s console should be upgraded. The RTA has therefore commenced a range of improvements to upgrade the operating systems on the bridge, including replacing the stand-by motor, which in the event of mains electricity supply failure is used to drive the opening span; replacing the stand-by generator, which in the event of mains electricity supply failure provides power to bridge lighting and bridge controls; upgrading electrical components; and replacing the operator’s controls to improve efficiency and reliability.

I am advised that the need to upgrade the stand-by motor was identified earlier this year and action to replace the motor had commenced. The replacement motors are expected to be installed before Christmas - a Christmas present for residents of that part of Sydney. The upgrading of the operator’s control console is expected to be completed by March next year. The total cost of the upgrade program is approximately $100,000. The installation of the new equipment will not affect the day-to-day operation of the bridge. The Government is aware of the importance of the Spit Bridge to traffic flow on the peninsula and is committed to improving the reliability of the bridge systems.

The Hon. Franca Arena made an interjection about tunnels. There are no plans to put a tunnel under the waterway at the Spit, but the possibility of having tunnels anywhere will be significantly enhanced by the very impressive new technology of one of the 54 companies that are part of the Australian Technology Showcase. This company has devised a diamond head for a mechanical pick which will slash not only the cost of mining but the cost and the time taken to dig all sorts of underground tunnels, including road tunnels. This invention by a small Australian company has the potential to earn tens of millions, if not hundreds of millions, of dollars in foreign exchange for Australia over the next few years.

This is only one example of the magnificent leading edge, world-beating technologies of the companies accredited under the Australian Technology Showcase. The showcase is one of my proudest achievements. It is a fantastic program which is not only giving a boost to the 54 companies so far accredited - many hundreds will be accredited before the Olympics - but also giving industry and commerce throughout Australia a worldwide reputation that will stand this country in great stead in the decades to come. I thank the Hon. Dorothy Isaksen for her important question.

The Hon. D. J. GAY: My question is to the Treasurer, Minister for State Development, and Vice-President of the Executive Council in his capacity as Minister for State Development. Can the Minister explain why certain landholders in the Monaro electorate are receiving letters that are not on official letterhead requesting access to their land from persons who are apparently members of a regional forest mapping project being conducted by the New South Wales Department of Urban Affairs and Planning with the support of the New South Wales National Parks and Wildlife Service? Can the Minister further explain why aerial photography and mapping of such areas will occur? Is it because the euphemistically titled forest agreement for south-east New South Wales will cripple forestry and render it unsustainable, forcing the Government to access other forestry sources in a backhanded way of guaranteeing supply?

The Hon. M. R. EGAN: I thank the Hon. D. J. Gay for his question. He has furnished me with a copy of a letter which, as he points out, is not on a letterhead, but which purports to be from a comprehensive regional assessment aerial photographic interpretation unit in the southern region. The letter in part states:

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The mapping process involves the interpretation and mapping of discrete forest types from aerial photography. This process is supported by field checking trips which require mappers to visit the area being mapped to confirm species classifications completed using the photography in the office. The field checking phase is therefore critical to the reliability of the mapping.

I am not conversant or familiar in any way with this issue, but I agree that if the letter is official it should be on the appropriate letterhead.

The Hon. D. J. Gay: You can understand why the farmers are concerned.

The Hon. M. R. EGAN: Yes.

The Hon. D. J. Gay: They should ignore it.

The Hon. M. R. EGAN: If an official body is corresponding with anyone in the State it should be on its official letterhead. I will bring this letter to the attention of the appropriate Minister. I assume it is a genuine letter, but I do not know.

The Hon. D. J. Gay: We hope so, but no-one knows.

The Hon. M. R. EGAN: I take the Hon. D. J. Gay’s point and I will bring the matter to the attention of my colleague.

The Hon. R. S. L. JONES: I ask the Treasurer, representing the Premier, whether Boral has threatened to close three mills in and around the electorate of the Minister for Regional Development, and Minister for Rural Affairs in order to blackmail the Premier into breaking his promise to stop the logging of old growth forests in north-eastern New South Wales. Does the Premier intend to cave in to this blackmail or will he stick to his promise to save some of the richest wildlife forests in the world? Is the Premier aware that breaking his long-held promise would cause a huge backlash in the conservation movement and among the majority of people in middle Australia who want these forests conserved? If the Premier breaks his promise to save the old growth forests by caving in to blackmail would it not ruin his reputation as a conservation-minded Premier and destroy his legacy?

The Hon. M. R. EGAN: There can be no doubts about this Government’s commitment to the conservation movement, and, for that matter, to a viable timber industry. Honourable members need only look at the package of measures announced for the south-east forest to see not only that we are providing additional jobs in that area, but, indeed, that the area to be included in the national park is, from memory, some 11,000 hectares more than the Government committed itself to. That has to be a fantastic conservation achievement of the Carr Government. I do not know whether the honourable member’s question was a flight of fancy, but I will certainly refer the matter to my colleague for a detailed response.

The Hon. A. B. KELLY: My question without notice is to the Treasurer, Minister for State Development, and Vice-President of the Executive Council. Will the Minister inform the House what the Government is doing to encourage small businesses in regional New South Wales to participate in the Australian Technology Showcase?

The Hon. M. R. EGAN: There is, as there should be in this House, a great deal of interest in the Australian Technology Showcase. Only last week I was joined by radio commentator Alan Jones and country singer Troy Cassar-Daly to launch the New South Wales Government’s campaign to recruit regional businesses into the Australian Technology Showcase. The showcase is aimed at increasing Australia’s high technology exports by $200 million a year. This new export promotion campaign is part of our jobs plan.

The New South Wales Government’s $6 million showcase program will bring the best new Australian technologies to the attention of the world in the lead-up to the Sydney Olympics. The showcase will use international trade shows, trade missions, an Internet site and export grants to help local companies crack new export markets. This is more than an image-building exercise, although that is a vital part of the showcase. We are also looking for real tangible economic gains. If through the showcase we can help to increase high technology exports by just 1 per cent, $200 million a year in overseas sales and thousands of new jobs will be generated.

The New South Wales Government wants regional companies and communities to share in the potential boom. Television and newspaper advertisements promoting the showcase will run in regional media throughout November. Information seminars for small businesses wanting to become involved in the showcase will be held across New South Wales to coincide with the advertising campaign.

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One seminar has already been held in Albury and to date others have been planned for Newcastle, Bathurst and greater western Sydney. The television advertisements, presented by Troy Cassar-Daly, feature two regional technologies - the Solar Sailor solar-powered boat and Technico’s seed potatoes.

The Hon. Franca Arena: What about the tunnel technology?

The Hon. M. R. EGAN: That is another one, the diamond-head pick.

The Hon. D. J. Gay: What about at Crookwell?

The Hon. M. R. EGAN: At Paddys River.

The Hon. D. J. Gay: A good company.

The Hon. M. R. EGAN: A fabulous company. I will not tell the House about Technico as I have on a previous occasion in response, again, to an interjection from the Hon. D. J. Gay. However, I have not spoken to the House before about the Solar Sailor. It was the product that we used for the launch at Cockle Bay, which is between Darling Harbour and the Sydney central business district. At the moment it is only a prototype. By the time of the Sydney Olympics it is confidently expected that there will be a 100-person solar ferry on the harbour displaying this world-class technology to people from all over the world.

The company that makes the Solar Sailor has applied for a grant under one of the Commonwealth Government’s greenhouse programs. I hope it is successful. A ferry capable of carrying up to 300 people and powered by the sun would be not only a great advertisement for Australian technology but also potentially, over time, would make a significant contribution to Australia and the rest of the world meeting the greenhouse challenge.

All technologies promoted in the showcase are chosen by the New South Wales Innovation Council. At the launch of the campaign at Cockle Bay last Thursday 17 new technologies for the showcase were announced. One of them involved Agrowplow, a company enticed to Wellington a few years ago by the Hon. A. B. Kelly. I commend him for that; it showed great foresight. This brings the number of innovative New South Wales technologies now in the showcase to 54 - and 12 of them are from regional New South Wales.

The innovations include a new piano with a clarity of tone unmatched in the world, quick-cook and fat-free potato chips, a synthetic timber and many other products and ideas. People have heard of the Steinway and the other two well-known grand pianos. The Stewart concert grand piano is not made in Sydney, Melbourne or Adelaide; it is made in Newcastle by a business concern associated with the musical faculty of the University of Newcastle. By all accounts, it is the best piano in the world today. It annoys me when concert venues in Sydney, Melbourne or Adelaide spend money on an inferior foreign variety of piano when a better Australian made variety is available.

The Hon. D. J. Gay: You xenophobe.

The Hon. M. R. EGAN: I would be happy to buy the foreign variety if it were better than the Australian variety but the foreign varieties are not better. The one made in Newcastle is the best in the world. It is the only technological advance in piano making in 200 years. On Sunday I went to the Eugene Goossens hall at the ABC to hear the piano being played. Anyone who has not heard it should. It is a fabulous instrument. The quality of the sound has not been heard before. It is one of the products in the Australian technology showcase campaign.

The Solar Sailor is from Ulladulla. The boat has wings to harness the wind and capture the energy of the sun as a power source. It is hoped to develop the prototype into a solar-powered ferry. We are aiming for 200 technologies to be in the showcase by the time of the Sydney Olympics. If the program is taken up by the other States we may be able to showcase 600 technologies by the time of the Olympic Games.

The Hon. D. J. Gay: Did you give them any money?

The Hon. M. R. EGAN: They all have an offer of up to $20,000 in dollar-for-dollar assistance which can be used for export promotion. But by far the biggest assistance that the program can give the companies is simply accreditation in the program and all the showcase activities which will occur over the next few years.

The Hon. PATRICIA FORSYTHE: My question is to the Treasurer, Minister for State Development, and Vice-President of the Executive
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Council. It follows his answer to the question asked by the Hon. A. B. Kelly. Why did he tell radio 2BL listeners last Thursday morning on the James Valentine program that people would be surprised to know that in Newcastle the world’s best concert piano is produced, better than a Steinway? He referred moments ago to the piano being better than any inferior foreign product. Did he say "you would be surprised" because he was surprised? Is he aware of the strong cultural tradition of Newcastle? Does he suffer from some cultural cringe when it comes to Newcastle?

The Hon. M. R. EGAN: The only person who could ask a question like that is someone who has not been listening to me in this House over the past four years. The point I was making is that Newcastle has a sophisticated, diverse, mature economy, which is contrary to popular perception. If the honourable member had been listening to me for four years she would have known that was precisely my meaning. That was a very silly question from a very silly member.

Reverend the Hon. F. J. NILE: I ask the Attorney General, Minister for Industrial Relations, and Minister for Fair Trading, representing the Minister for Education and Training, and Minister Assisting the Premier on Youth Affairs: Is it a fact that a number of parents who home school their children have been waiting since early this year for new registration certificates to continue to home school their children? Does the Minister agree that the Act requires the Minister to "as soon as practicable . . . obtain advice on the application from an authorised person" regarding the application from a parent to home school a child?

Can the Minister ascertain whether any home schooling parents have been denied registration on the grounds of non-compliance with ministerial guidelines or the home schooling regulation recently disallowed? Does the Minister agree that it is unlawful for the Board of Studies or the Department of Education and Training to insist on compliance with the ministerial guidelines enshrined in the home schooling regulation since that regulation was recently disallowed in this Parliament? Since the disallowance was agreed to by the House, how and when will consultation occur with concerned home schoolers?

The Hon. J. W. SHAW: I will refer the question to the Minister for Education and Training, and Minister Assisting the Premier on Youth Affairs and obtain a response.

The Hon. B. H. VAUGHAN: I direct my question to the Minister for Public Works and Services. What progress is being made on the construction of Sandon Public School, near Armidale? How many jobs are being created as a result of that project?

The Hon. R. D. DYER: I thank the Hon. B. H. Vaughan for the obvious interest he takes in construction activities in the northern part of the State, especially Sandon Public School near Armidale. The House would be aware of the prolonged wet weather in the north of the State which has delayed a great many construction projects in the region. I am pleased to report that, despite this wet weather, work at Sandon Public School has caught up with the original construction schedule and the project is once again on time and will allow students to begin moving into new premises next month.

The Department of Public Works and Services and the main contractor, Waller Constructions Pty Ltd, have done an excellent job in accelerating the construction program to meet the deadlines. The new school consists of six new home bases, two special education units, an administration block, library, school hall and a covered outdoor learning area. The home bases are made up of adjoining rooms for teaching and practical activities. Four of the home bases are nearing completion, along with the games court and outdoor learning area. The playground areas have also been prepared and turfed. These facilities will soon be completed for student use, and the remaining facilities will be finished early next year to allow the school transfer to be completed.

The Sandon school project is worth $3 million and has provided a significant boost to the Armidale economy. Local businesses have been instrumental in supplying services to the site and they will have employed 60 people by the completion of the construction phase. Armidale firms have picked up subcontract work for surveying, earthworks, concreting, bricklaying, painting and steel supply, to name a few. These government projects are important not just for the essential services they provide for the community but also for the long-term viability of local businesses involved in their construction and operation.

The Sandon school project provides a long-term solution to primary school needs for the Armidale community. It is yet another demonstration of the Carr Government’s commitment to providing job opportunities in the north of the State. I notice
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that earlier this week the Leader of the National Party, the Hon. Ian Armstrong, was racing about claiming that the Government was not spending money on services in the country. Projects such as this clearly demonstrate the inaccuracy of Mr Armstrong’s claim. For the benefit of National Party members from the north of the State, I draw their attention to the fact that this Government is constructing seven new country hospitals and innumerable country schools -

The Hon. Dr B. P. V. Pezzutti: Where? Name one of the country hospitals you have built.

The Hon. R. D. DYER: Broken Hill is one.

The Hon. Dr B. P. V. Pezzutti: That is not in the north of the State, you great dill. Name one in the north of the State.

The Hon. R. D. DYER: Extensive additions have been done, for example, to Ballina District Hospital -

The Hon. Dr B. P. V. Pezzutti: It is finished.

The Hon. R. D. DYER: Finished, but done under this Government. Coffs Harbour hospital is another project in the north of the State which this Government will be constructing. The Government is erecting two new juvenile justice centres, one at Grafton and one at Dubbo, and a range of other coastal and other infrastructure projects, with a record project load for public works and services of more than $100 million for the north coast in this year alone.

This is a far greater level of service provision than the coalition ever provided during its seven years in office. It contrasts sharply with the sorry history of school and hospital closures overseen by honourable members opposite during the economic rationalist Greiner and Fahey years. It is ironic that former Premier John Fahey is now a member of the Federal Government, which is pursuing the same path of education and health cutbacks as he followed when he was in State Government. Everywhere John Fahey goes, cuts to essential services are sure to follow. Honourable members opposite should reflect on their own actions before they make claims about this Government’s activity in rural New South Wales.

The Hon. Dr B. P. V. PEZZUTTI: My question without notice is to the Attorney General, representing the Minister for Police.

The Hon. M. R. Egan: You never ask me a question.

The Hon. Dr B. P. V. PEZZUTTI: Because I get better answers from the Attorney General, who cares and who knows what he is talking about. Is the Minister aware that Bonalbo, a town on the Northern Rivers, west of the range, is without a permanent police presence? Is the Minister aware also that residents of Bonalbo have been told by the New South Wales Police Service that a replacement for the previous permanent policeman is not expected until next year? What will the Minister do about this blatant disregard for a regional community?

The Hon. J. W. SHAW: Despite the complimentary preamble to the question of the Hon. Dr B. P. V. Pezzutti, I am not precisely aware of the police presence in the location that he specified but I will refer the question to the Minister for Police and obtain a reply.

The Hon. I. COHEN: I ask the Treasurer, Minister for State Development, and Vice-President of the Executive Council, representing the Premier, a question without notice. On 27 December 1994 the then Leader of the Opposition, Bob Carr, announced his package of reforms to protect old-growth forests and timber industry jobs and said:

The choice is now very clear. NSW will lose its Old Growth forests if Mr Fahey is returned or the forests will be saved by a Carr Labor Government.

Given that on 4 January 1995 Bob Carr repeated his commitment to save the State’s ancient forests by saying, "The choice is clear. Old-growth forests and jobs will be saved," will the Government honour its promise to protect all old-growth forests on public land in the north-east? Will the Carr Government fulfil its commitment to the national reserve criteria for the reservation of old-growth forests?

The Hon. M. R. EGAN: As honourable members will no doubt be aware, at some time in the near future the Government will be making an announcement about those forests. We do not hear much from honourable members about the south-east forests or about jobs. As I pointed out earlier, the Government has dedicated 11,000 more hectares to national park than it promised, so honourable members will just have to wait for announcements that the Government will make in due course.

The Hon. I. COHEN: I ask a supplementary question. In view of the Treasurer’s reply and his
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reference to south-east forests, is he aware that some 20 per cent of the old growth of south-east forests is to be destroyed, mainly for the woodchipping industry?

The Hon. M. R. EGAN: Is the Hon. I. Cohen aware that the Government has more than fulfilled its commitment to south-east forests?

The Hon. A. B. MANSON: My question is to the Treasurer, and Minister for State Development. Will the Minister inform the House what the Government is doing to assist small manufacturers in New South Wales?

The Hon. J. F. Ryan: Charging them all land tax and more in workers compensation.

The Hon. M. R. EGAN: Talking about land tax, the Hon. J. F. Ryan should visit his mate State of Victoria, where the marginal rate of land tax is 5 per cent, not 1.85 per cent or 1.65 per cent as it is in New South Wales. No wonder New South Wales has more than 40 per cent of the new offices, new shops, new factories and other new business premises being established in Australia. Businesses are being attracted to New South Wales because it is the State in which to do business and has a Government that is hospitable to new business. It was the Greiner Government that doubled financial institutions duty and increased payroll tax from 6 per cent to 7 per cent.

The Hon. J. F. Ryan has the audacity now to complain about Greiner Government tax rates yet he supported them when they were introduced. Small to medium manufacturers in New South Wales now have a one-stop-shop for information on innovation, training and consulting with the opening of the Australian Manufacturing Centre at the Australian Technology Park in Sydney. Madam President, I am pleased that you are talking to the Hon. J. M. Samios because some interesting things are happening with the Liberal Party leadership in this House.

We all know about the moves by Kerry Chikarovski. But the Hon. J. M. Samios, whose rightful position is that of Deputy Leader of the Liberal Party in this House, has been touting himself around the State as the Leader of the New South Wales Liberal Party. I have a document from the Australian Vietnam human rights committee which talks about a forum to be hosted by "the Hon. James Samios, MLC, Leader of the Liberal Party in New South Wales". The Hon. J. M. Samios should stop misrepresenting his position. However, I acknowledge that the Hon. J. M. Samios would make a better leader of the Liberal Party in this House, and indeed a better leader of the Liberal Party in the lower House, than the two incumbents in those positions. I thank the Hon. Dr Meredith Burgmann for supplying me with that information.

New South Wales is home to more than 28,800 small manufacturing businesses, exporting some $7.65 billion worth of goods a year. It is the second-largest employment sector in New South Wales, accounting for 365,000 jobs. Today, manufacturing is more than the traditional image of pig iron, smelters, leather tanning, sawmilling or red steel being belted into cars or parts. Today’s manufacturers are taking these raw materials and producing a more value-added, complex product. That is why the Australian Manufacturing Centre at the Australian Technology Park at Eveleigh is so important.

The New South Wales Government worked closely with the manufacturing industry in developing the concept for the centre. Through the centre, small manufacturers will be electronically linked, via interactive video, to resources of other centres of expertise around Australia. An interactive link has already been established with the Industrial Research Institute at Swinburne University in Melbourne, the Queensland Manufacturing Institute, the South Australian Centre for Manufacturing, and the newly established Photonics Rapid Engineering Development Centre. A link is being planned with Cranfield University in the United Kingdom. This effectively creates an Australian manufacturing network based in Sydney.

The centre has established four industry focus groups to develop projects for an industry sector. Those industries include metal and machine manufacturers, information technology and telecommunications, the pharmaceutical industry and the red meat industry. Food manufacturers are being approached to establish another group in response to the growth in processed food exports. The centre was established with Federal Government and New South Wales Government funding. The State Government has made a commitment over four years to support the operations of the centre. The centre has been established with the ultimate aim of becoming self-funding. The Australian Manufacturing Centre will improve New South Wales manufacturing competitiveness and serve as the hub of innovation and resources for the Australian manufacturing industry.

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The Hon. J. F. RYAN: I ask the Attorney General, Minister for Industrial Relations, and Minister for Fair Trading, representing the Minister for Education and Training, a question without notice. Is it a fact that the Board of Studies is still requiring home schooling parents to substantially meet the provisions of the home schooling regulation which was disallowed by the Legislative Council on 20 October? What correspondence has the Board of Studies had with parents who have been denied registration because they have not complied with the provisions of the regulation, to inform them that the regulation no longer applies?

The Hon. J. W. SHAW: A question substantially similar to that now asked by the Hon. J. F. Ryan about the regime governing home schooling was asked earlier in question time. I give the same reply that I gave at that time: I will refer the question to the Minister for Education and Training and obtain a reply.

The Hon. HELEN SHAM-HO: My question without notice is addressed to the Attorney General, representing the Minister for Local Government. Is the Minister aware of the group named Canterbury Residents Against Night Racing? Is the Minister also aware that the president of that group, Mr Phil Tzavellas, is calling for a full judicial inquiry into Canterbury City Council’s handling of the night racing development application at Canterbury racecourse, as the group considers that the process of the development application involves legal breaches of the processing of a commercial development application and is a total denial of natural justice to residents who will be severely affected by the proposal? Will the Minister institute such a judicial inquiry and, if not, why not?

The Hon. J. W. SHAW: I undertake to refer the Hon. Helen Sham-Ho’s question to the Minister for Local Government to obtain a response.

The Hon. Dr MEREDITH BURGMANN: My question without notice is directed to the Attorney General, Minister for Industrial Relations, and Minister for Fair Trading. Will the Attorney General advise the House what action is being taken to improve the position of Aboriginal people involved in the criminal justice system?

The Hon. J. W. SHAW: I am sure all members of this House would acknowledge the problem arising from the overrepresentation of Aboriginal people in our criminal justice system. Of course, it is easier to acknowledge the problem than to provide solutions; that is a more difficult task. As a proportion of our prison population, obviously Aboriginal people are disproportionately represented. I am therefore pleased to inform the House of the establishment of a new, reconstructed Aboriginal Justice Advisory Council - AJAC - which replaces the former Aboriginal Justice Advisory Committee.

The focus of the new council is community representation involvement with government agencies in developing practical and, where necessary, local strategies to improve the interaction between Aboriginal people and the criminal justice system. The new structure comprises six community representatives, a chairperson and executive officer, and provides for the direct involvement of Aboriginal people in the development of policies and programs in the criminal justice system. AJAC is funded from joint contributions of the Attorney General’s Department, the New South Wales Police Service, the Department of Corrective Services, the Department of Juvenile Justice, and the Aboriginal and Torres Strait Islander Commission. The AJAC executive unit is based in my department.

The State council will be supported by six regional councils. Those regional councils will be made up of regional managers of criminal justice agencies, as well as four representatives of Aboriginal communities in that region. Nominations are currently being sought from interested people to sit as community representatives on regional councils. Advertisements have been placed in regional and local newspapers and information packages sent to more than 550 Aboriginal organisations. Staff from the executive unit will conduct information campaigns in regional centres over the coming weeks. The regional councils will be able to examine issues relevant to local communities, and develop and monitor programs relating to specific issues affecting their local areas. Regional councils will also have a role in resolving disputes between Aboriginal communities and criminal justice agencies.

At its first meeting on 22-23 September the new AJAC identified a number of priority issues, which include development of information strategies to inform the Aboriginal community of the existence and role of the AJAC, implementation of the Young Offenders Act, crime prevention, diversion options for the 18-to-25-year age group, the Children
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(Protection and Parental Responsibility) Act, recommendations of the "Bringing them home" report and the Royal Commission into Aboriginal Deaths in Custody, and women’s issues. The council is actively involved in monitoring the effects on Aboriginal people of the new Young Offenders Act and it participates in the Juvenile Crime Prevention Advisory Committee.

The next AJAC meeting is scheduled for 27 November, when the council will discuss, among other things, crime prevention in Aboriginal communities, sentencing alternatives, and the mental health needs of Aboriginal juveniles in custody. The council is also working with the Department of Corrective Services to develop a set of protocols for government agencies to use when dealing with Aboriginal communities and in funding Aboriginal organisations. The council is in consultation with the Commonwealth Department of Employment, Education, Training and Youth Affairs to develop a career development strategy for Aboriginal staff across criminal justice agencies.

Workshops are being held between that department and Aboriginal officers from criminal justice agencies to develop the strategy. So we have a revamped and improved Aboriginal Justice Advisory Committee which is more representative of Aboriginal communities, better resourced, more active within the Attorney General’s department, with enhanced liaison between the various agencies concerned with the administration of the criminal justice system. I believe that is a good thing for New South Wales.

The Hon. J. H. JOBLING: My question is to the Attorney General, Minister for Industrial Relations, and Minister for Fair Trading, representing the Minister for the Environment. Further to my previous questions about the pollution levels emanating from the burning of soil, coal tar and waste oil at Liddell power station, will the Minister confirm that the State’s Environment Protection Authority is negotiating with Macquarie Generation to carry out detailed tests on pollution levels following a great deal of community concern about the pollution?

The Hon. J. W. SHAW: I thank the honourable member for his question. I will refer it to the Minister for the Environment for a response.

The Hon. Dr A. CHESTERFIELD-EVANS: My question is directed to the Treasurer, representing the Premier. In relation to the commitment that the Labor Party gave to the people of New South Wales before the 1995 State election about a moratorium on the construction of new ocean outfalls, why has the Government offered to subsidise Coffs Harbour City Council to the tune of $45 million to help defray the cost of its proposed $225 million sewerage strategy which, interestingly enough, includes a $12 million deep sea release point, or ocean outfall? If the Government is committed to environmentally sustainable development, why will this ocean outfall discharge treated effluent adjacent to the Solitary Islands Marine Park?

The Hon. M. R. EGAN: I will refer the question to my colleague the Premier for a response.

The Hon. FRANCA ARENA: I ask the Treasurer, Minister for State Development, and Vice-President of the Executive Council whether an Italian-Australian Business Leaders Forum took place at Parliament House yesterday, attended by many local business people and at least 50 business people who came from Italy especially for the forum, people from Rome, Milan and my home town, Genoa. Was the purpose of such a forum to strengthen the bilateral relationship between Australia and Italy in the trade, culture and science sectors? Will the Minister inform the House what the State Government is doing to strengthen such a relationship by offering favourable terms to new ventures? Will he inform the House about the rate of trade between Italy and New South Wales?

The Hon. Dr B. P. V. Pezzutti: He wouldn’t have a clue.

The Hon. M. R. EGAN: I certainly would, because it is an important matter.

The Hon. Dr B. P. V. Pezzutti: You never go to Italy. Bob Carr goes to Italy. He told me last night.

The Hon. M. R. EGAN: Someone with the name of Tutti-Frutti Pezzutti should be aware of the importance of the matter.

The Hon. Dr B. P. V. Pezzutti: You never go to Italy. Why don’t you go?

The Hon. M. R. EGAN: I do.

The Hon. R. T. M. Bull: Which is your favourite city?

The Hon. M. R. EGAN: It is a toss-up between Naples, a fabulous city, and Siena, a
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magnificent city. I was in Siena on the same day that the Pope and Mother Teresa were due to be there. When they found out I was there both of them stayed away. The Italian-Australian Business Leaders Forum was held in Parliament House yesterday, Monday, 9 November. It was officially opened by the Premier, who also attended a reception for the Italian Industrial Collaboration Convention held at Government House last night.

The Hon. Dr B. P. V. Pezzutti: You didn’t go. You weren’t there. I was there. Franca was there. You weren’t there.

The Hon. M. R. EGAN: No, I was not. I commend the honourable member. Unfortunately, I had other official engagements last night. It is just over one year since the first meeting in Rome of the Business Leaders Forum, which was jointly opened by the Italian Minister for Overseas Trade, Dr Fantozzi, and the Australian Deputy Prime Minister, Tim Fischer - who, even though he is on the other side of the political fence, is one of the greatest Australians alive today. The establishment of the forum was a clear signal that both the Italian and Australian business communities wished to strengthen commercial links and business relationships.

The convention meeting in Sydney had two aims: first, to consolidate and build on the activities initiated last year in Rome; and, second, to provide Italian convention members with a first-hand look at the benefits and opportunities of establishing business in this State. The convention was attended by a delegation of Italian representatives of about 40 business and industry associations. The convention meeting was followed by a workshop that focused on investment opportunities in Australia. In spite of the size of Italy’s economy, which is the third largest in Europe, after Germany and France, so far Italian companies have not been as active in establishing in Australia as have firms from other countries.

Only three of the 260 multinational companies that have established regional headquarters in New South Wales are Italian companies - Parmalat, Telecom Italia and Olivetti. Italy’s trade activities have been dominated by its membership of the European Union. However, the importance of the Asia-Pacific markets should not be overlooked. The Italian convention delegates have been encouraged to recognise the economic advantages of Australia and, in particular, New South Wales. The New South Wales Government’s long-term AAA credit rating has just been confirmed, as honourable members would be aware.

With the uncertainty of the Asian economies and the lower Australian dollar, the Government recognises the opportunity to promote New South Wales as a safe base in the region for European investment. Australia is making some inroads in non-traditional exports to Italy, such as fast ferries, motor vehicle parts, processed food and wine but, obviously, there are many other areas of economic co-operation that can be developed through the convention. The delegates have been made aware of the services available through the Department of State and Regional Development to assist companies interested in establishing here.

In fact, the investment director of the department accepted an invitation to address this morning’s session to further enforce the attractiveness of New South Wales as an investment location. Among the initiatives available is assistance through the regional headquarters program to encourage global companies to establish regional headquarters or regional operating centres in New South Wales. As well, the Government may consider providing limited tax concessions and other incentives for firms establishing these types of operations.

However, these arrangements are assessed on a case-by-case and commercial-in-confidence basis. As for the rate of trade, New South Wales imports some $1.1 billion worth of commodities from Italy, which represents 2.9 per cent of our total imports. The major import is general industrial machinery and equipment. In regard to exports from New South Wales, our major export commodity is textile fibres and associated products, which represents $323 million per year out of a total of $484 million per year, which represents 2.5 per cent of New South Wales total exports.

The existing cultural ties between Australia and Italy provide a solid foundation to build our relationship and increase the flow of business activity. I am sure that this week’s forum has provided a significant boost to the business relationship between Italy and Australia and, in particular, New South Wales. I absolutely assure members of the House, particularly the Hon. Dr B. P. V. Pezzutti and the Hon. Franca Arena, that I will do everything in my power to get back to Italy as soon as I possibly can.

If honourable members have further questions, I suggest they put them on notice.

The Hon. J. W. SHAW: On 20 October the Hon. Dr A. Chesterfield-Evans asked a question
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about assistance for homeless people. The Minister for Local Government has supplied the following response:

The Government shares the concerns of those local councils and organisations that have expressed views about the wellbeing of the homeless in our community. Offences of loitering, vagrancy, begging, not having visible means of support, and the like, were once dealt with by summary offences legislation. More enlightened attitudes and better solutions to the problems of homelessness have meant changes to omit these offences. Where specific problem areas have been identified, legislation has been passed or amended, for example, the Intoxicated Persons Act, Prostitution Act, Disorderly Houses Act, Police Offences Act, alcohol-free zones under the Local Government Act, Parental Responsibility Act, Charitable Fundraising Act et cetera.

The Government, local councils and private welfare agencies already work extremely hard to address the social and community needs of the homeless. Despite the services available, it would seem there will always be some homeless people who will choose not to accept assistance but instead live independently. Although homelessness and begging are certainly practices to be discouraged, they are not against the law if no inconvenience, annoyance or obstruction is caused. If a person verbally abuses or physically assaults another person that would certainly be a matter for the Police. It is not appropriate that local councils be generally responsible for regulating social behaviour of this nature.

However, if particular trouble spots are identified that are public places then a council can erect notices under the Local Government Act prohibiting certain activities, for example, camping. Alcohol-free zones can be established. Littering is an offence under the Environmental Offences and Penalties Act. But generally, it is considered inappropriate for council employees to have power to move on or apprehend homeless persons. The police and welfare agencies are the appropriate organisations to deal with social behavioural matters of this kind. It is, of course, open to any council to donate funds to assist welfare agencies if there is an identifiable problem in the community.

Other measures that councils may take involve the exercise of their building and planning functions so as to ensure adequate low-cost accommodation is provided in areas of greatest need. The Government has extended rating relief to owners of boarding houses to assist in ensuring a sufficient stock of this low-cost housing is retained. All councils have been notified of these measures. Where councils and other organisations have made specific representations to me on this issue, I have responded in similar terms to the above. The Department of Community Services is the agency primarily responsible for the provision of funding programs for hostels and proclaimed places. Public hospitals and mental health are matters for the Health Department. It is considered that the problems identified can be adequately addressed by the various government and non-government agencies utilising the range of measures already in place.

The Hon. J. W. SHAW: On 15 October the Hon. D. J. Gay asked me a question about Queanbeyan Council. The Minister for Local Government has provided the following answer:

I had the Department of Local Government make inquiries about this matter. Queanbeyan City Council has advised the department that the documents in question were the mayor’s copies of what were mainly old business papers, all at least two years old, and some as old as six or seven years. Some of the documents comprised public documents such as LGSA circulars, draft management plans and the like. None of the documents were council’s own file copies or originals of council records. The quantity of documents was relatively small, filling only one 120-litre bin.

The mayor has assured the department that to the best of his knowledge none of the documents that came from him were confidential documents, contrary to some reports that suggested otherwise. The department has also been assured that council’s normal practices and procedures for the retention and, when and where appropriate, disposal of its records follow specific procedures. The documents in this case are stated to be the mayor’s copies of documents. The quantities appear to be small and they were disposed of in this instance as landfill at council’s sewerage works. In the absence of any other evidence I see no reason to make any further inquiry.

The Hon. J. W. SHAW: On 14 October the Hon. I. Cohen asked me a question about Byron Shire Council. The Minister for Local Government has provided the following response:

The use of restricted funds by the council occurred over a period of time and was the result of poor financial management and reporting practices. I expect that the final report of the financial oversight panel, which I initiated, will be finalised very soon and that it will answer questions regarding responsibility and the action taken to rectify it.

The Hon. J. W. SHAW: On 28 October the Hon. Elaine Nile asked a question about bushfires. The Minister for Emergency Services has provided the following response:

No. Bushfire management in New South Wales is under the control of the most professional, best trained and well-equipped force of the Rural Fire Service and local government employees and volunteers in Australia. Under the Carr Government record levels of funding have been injected into the Rural Fire Service. In the life of the Government there has been an additional 90% funding provided to bushfire protection over the level given by the Fahey-Collins Government. This Government has allocated more than 1,000 additional tankers - more than half of them brand new, the rest reconditioned - at a total cost of some $80 million. Commissioner Koperberg is widely respected as a competent manager and inspiring leader of the Rural Fire Service. He has been responsible for the modernisation of the service, and the implementation of the landmark Rural Fire Service Act.

Commissioner Koperberg of the Rural Fire Service has investigated allegations of poor management of the Hervey Ranges bushfire. He visited the central region of the State - Condobolin, Orange and Young - and assured volunteer firefighters that the issues causing concern would be addressed. The commissioner’s declaration of a section 44 situation in this bushfire was an appropriate action. This

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declaration allowed him to effectively take charge of the firefighting operation by appointing an incident controller.

In this case, the commissioner appointed a National Parks and Wildlife Service ranger as the incident controller. Significantly, this action was taken in response to a recommendation from the executive of the local bushfire management committee. Commissioner Koperberg has issued a clear instruction to Rural Fire Service personnel to the effect that local persons must be included in every incident management team. In the context of the Hervey Range fires, the two deputies to the incident controller were locals, including the fire control officer for the Cabonne Council.

Yes. Commissioner Koperberg conducted an official inquiry into the bushfire of 18 October in the Blue Mountains in and around Springwood, which found that there was a connection between hazard reduction operations carried out the day before and the fire. All members should join in congratulating the volunteers who fought the fire so effectively, together with a number of units from the New South Wales Fire Brigades. More than 400 volunteers were involved in the operation, together with Fire Brigades staff from as far away as Neutral Bay.

Almost 80 tankers and other firefighting vehicles were deployed in a matter of hours. This was yet another demonstration of the commitment of firefighters across the State to assist each other. Both the Minister for Emergency Services and Commissioner Koperberg were present at Sunday’s fire. The commissioner took command of the operation, and they were both active in conveying support for affected residents and the volunteers who worked tirelessly in oppressive conditions to stop the fire from threatening life and property.

Hazard reduction operations have been hampered by one of the wettest winters on record. This has made it necessary to conduct limited controlled burning in spring, rather than winter. The Blue Mountains is well resourced for bush fire fighting. In the past four years, more than $5 million has been allocated to the Blue Mountains City Council for fire fighting - $1.6 million more than was allocated in the life of the previous Government. In the past four years the council has been supplied with 12 new tankers. This funding supports almost 1,600 volunteers in 25 brigades.

Yes. Under the Carr Government the Rural Fire Service has undertaken a massive fuel reduction campaign consistent with Coroner Hiatt’s findings on the 1994 bushfire emergency. In the past three years, over 1.8 million hectares of land has been hazard reduced by the Rural Fire Service and other agencies. In 1997-98 alone, more than 661,000 hectares were involved in hazard reduction operations. This means that 1.8 million hectares of bushfire danger has been significantly reduced for the people of New South Wales.

This unprecedented statistic is based on the most up-to-date information provided by Commissioner Koperberg, and is fully supported by the report on "Law, Order and Public Safety" by the Council on the Cost of Government. This effort puts the record of the Fahey-Collins Government to shame. In the first three years of our term we have conducted hazard reduction operations on more than 1.57 million more hectares than in the last three years of the coalition Government, which only managed less than 245,000 hectares.

This Government’s record in hazard reduction is the result of careful and considered planning through local bushfire management committees. It is the result of careful consideration being put into the manner in which hazard reduction should take place. The Government put in place the Rural Fires Act in 1997, and as a result processes and systems for hazard reduction operations have been considerably improved by requiring the establishment of rolling five-year hazard reduction plans for all areas subject to bushfire risk.

These recognise that hazard reduction to reduce the amount of bushfire fuel is an integral part of responsible management of our environment. New South Wales firefighters are well equipped to not only fight bushfires but also prevent them through managed hazard reduction. They carry out these tasks voluntarily and with the greatest sense of community service and dedication. The combination of more funding, more equipment and skilled volunteers, backed up by appropriate bushfire management practices means better protection for the people of New South Wales who live in areas affected by bushfires.

Questions without notice concluded.

[The President left the chair at 6.58 p.m. The House resumed at 8.30 p.m.]

Debate resumed from an earlier hour.

The Hon. R. S. L. JONES [8.30 p.m.]: The comments of the Redfern Legal Centre suggest that the provisions in the bill have been introduced to facilitate the Department of Housing achieving successful outcomes at the tribunal in cases that have not been adequately prepared or in which a tenant proves difficult to remove from a premises. While I acknowledge that a small number of public housing tenants may vandalise their homes and sell drugs from those homes, I would be extremely disappointed if this bill, when enacted, is used to remove any undeserving person from his or her home. I was going to move an amendment in Committee which sought to ensure that families are not evicted from their homes because of a minor act of criminality committed by a visitor. However, after discussion with ministerial advisers, I am reasonably comfortable that vulnerable people will not be victimised by the provisions in the bill.

According to a briefing note provided by the Minister’s office, the Department of Housing typically undertakes the following steps before seeking an order from the tribunal terminating a tenancy. The client service officer responsible will visit or write to the tenant involved to raise, and attempt to rectify, any breach of the tenancy agreement. There will be follow-up visits and correspondence will be issued if problems persist. A compliance order will be sought from the
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Residential Tenancies Tribunal to require the tenant to comply with the tenancy agreement and, if breaches continue, the tenant will be given a minimum of 14 days notice of the termination of the tenancy on the grounds of the breach. The briefing note also states:

It is only in cases involving the most serious breaches of the type that place others at risk that the Department will seek an order for termination without undertaking these steps.

My overall impression of these processes is that the department will attempt to resolve the majority of cases by notification and conciliation prior to attempting to evict tenants. The ministerial advisers also pointed out that if the tribunal does not consider that the complaints made against the tenant are reasonable, or it determines that they are trivial or vexatious, it can reject the application. I trust that these provisions will not reduce the ability of the tribunal to exercise this discretion. I support the bill.

The Hon. I. COHEN [8.34 p.m.]: The Greens have serious concerns about the Residential Tenancies Amendment (Social Housing) Bill. We believe that it has been too widely drafted. According to the ministerial briefing note, the main purpose of the bill is:

to provide guidance to the Residential Tenancies Tribunal in assessing cases involving crime, violence and antisocial behaviour relating to residential tenancy.

A number of community groups working in the social housing area have concerns about the bill. The following issues were raised in a briefing note from the Tenants Union:

Although the Tenants’ Union of NSW has been engaged in fruitful discussions with the Department of Housing in relation to the Social Housing Bill we still have some major concerns. We believe these amendments if enacted would widen the potential scope for abuse of tenants on the margin of losing their housing. It must be remembered that public and community housing tenants are some of the most disadvantaged groups within our community.

The Tenants’ Union recognises that noise and nuisance problems do arise on public housing estates. As a provider of tenancy advice to thousands of tenants each year, we are aware of the frustrations caused by disruptive tenants on neighbours and communities. We are also concerned that victimisation can take place on housing estates from both other tenants and the Department of Housing. We believe the provisions in this bill could potentially make these situations worse.

The Greens agree with the point made by the Tenants Union that problems experienced by the department with regard to noise, nuisance and drug dealing on housing estates can be dealt with effectively under existing legislation such as the Crimes Act and the current tenancy laws. The union states that the problems experienced by the department with regard to managing difficult tenants have little to do with current laws and more to do with a lack of positive strategies, poor case preparation and the inadequate presenting of evidence before the tribunal.

The union is concerned that if the bill is passed it would place an unfair onus on the tenant in relation to the behaviour and actions of other occupants on, in or around the housing estate; it would lead to a narrowing of interpretation of section 64, thus leading to a loss of the tribunal’s power to exercise its discretion in instances of termination; and it would lead to a widening of the scope for the victimisation of tenants, particularly those with psychiatric problems or different cultural habits, and an increase in the powers of the registrar to issues orders for immediate possession without checks and balances. I received another letter from the Inner Sydney Tenants Service in which the issue of evidence is discussed in more detail. The letter states:

It is our experience, as tenants workers and as tenants advocates at the Residential Tenancies Tribunal, that the Department of Housing often fails in its attempts to obtain orders for possession due to lack of evidence.

The letter also states:

We oppose changes which would give an unfair advantage to the Department of Housing and are concerned with proposals that would allow them to by-pass legal channels that any other landlord and in fact any other litigant, would have to comply with.

On the issue of adequate powers under current legislation, the letter states:

The Residential Tenancies Act currently allows for the termination of tenancies where a breach has occurred. There is a very definite process which must be complied with and very clear guidelines as to what constitutes a breach of the agreement. There are provisions for immediate termination in cases of harm to a person and damage to the premises. The Act also very clearly states that any illegal activity is grounds for termination.

The Council of Social Service of New South Wales, in a letter to my office, makes the following points:

Public and community housing tenants are among the most needy people in the community. Very often their needs extend beyond the financial subsidy provided by public and community housing. We are aware that many problems occur because of the inappropriate allocation of housing and the absence of specialist support services to needy individuals and families.

NCOSS is concerned that the provisions in this Bill may be used to deal with problems that arise as a result of

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departmental policies and management practices or because of the absence of services and supports that should be provided by other departments.

In our opinion the eviction of very needy and sometimes difficult people is not the appropriate solution. In particular we are concerned that the Bill, if enacted, could lead to discrimination against families and individuals who are seen as different because of, for example cultural values, mental health problems or sexual preferences.

Social housing is the last chance that many people have of being housed. If they are evicted from social housing they face an uncertain future - trying to rent again in the private market, staying with friends and/or family, or perhaps homelessness. The Greens are concerned that this bill may lead to many more social housing tenants being evicted and having nowhere else to go. A number of issues are raised in a letter dated 19 October 1998 from Shelter. On the issue of the matters taken to constitute a breach of a residential tenancy agreement, Shelter states:

The question is not whether people who damage property intentionally should be penalised, it is whether they should be dealt with under the Crimes Act or under the Residential Tenancies Act. Shelter NSW considers that if a tenant damages a property that is not his/her residence or common area that person should be tried under the Crimes Act, not under the Residential Tenancies Act.

The Greens agree with that sentiment. The Greens will oppose any Opposition amendments to further toughen the bill. The Opposition amendments are a law and order bidding war campaign. If they are passed it will be at the expense of social housing tenants, who are the most vulnerable and needy in our society. We object strongly to such people being used for political point scoring in the lead-up to the March 1999 State election.

The Opposition amendments moved in the lower House extend the coverage of the bill to private tenants; extend the definition of a breach of a tenancy agreement to include storage, possession and use of drugs in a residence; include breaches involving threats of violence to persons which ensure immediate eviction; and remove the tribunal’s discretion in ruling on certain cases which involve orders of possession being made against tenants. The Greens are pleased that the Opposition will not move most of those amendments in the upper House, as they are totally inappropriate. A media release from the Council of Social Service of New South Wales - NCOSS - under the hand of Gary Moore and dated 22 October states:

The Council of Social Service of NSW (NCOSS) has reacted with dismay at the "Get Tough" bidding war being waged by the State Government and the Opposition against troublesome public housing tenants . . .

NCOSS recognises that vandalism, anti-social behaviour and other criminal activities do affect public housing estates. However, the Bill, as drafted, has broader implications than those specific problems it purports to solve.

The media release continues:

The Bill would give the Residential Tenancies Tribunal the power to terminate the tenancy of a troublesome public tenant, not only if neighbouring residents complained, but also if any other person was concerned at the tenant’s behaviour.

The term other person is too broad and ill-defined and could lead to arbitrary and unfair action.

NCOSS further states:

The Bill should only focus on tenants who intentionally cause damage, not on general negligence. It will hold tenants accountable for actions which are not their own . . .

Problems experienced with drug dealing on housing estates should be dealt with under the current criminal law. Any problems regarding the enforcement of these laws should be taken up with the police rather than being dealt with by the Tribunal.

The document concludes:

NCOSS has called on both sides of NSW politics to stop chest beating, tone down this Bill and look for real, long term solutions to the problems public housing tenants face.

The Greens have a great deal of difficulty with this bill. We are concerned, as are many people who work in the social service sector, that this bill will target a very vulnerable section of the community.

The Hon. Dr A. CHESTERFIELD-EVANS [8.43 p.m.]: The Residential Tenancies Amendment (Social Housing) Bill introduces major changes to the way in which evictions are handled in the public housing sector. The reason for the changes is unfortunately obvious. It is part of the law and order campaign, which is becoming a significant issue for both major parties in the lead-up to the election. The Department of Housing, the largest provider of public housing in New South Wales, manages more than 130,000 dwellings. Almost half the properties are over 20 years old and approximately 26,000 of them are located in large estates. Also, 90,000 households are on the department’s waiting list.

The general opinion of the key consumer groups - the Tenants Union, Shelter and NCOSS - is that these reforms are unnecessary, are already catered for in the criminal law or existing terms of tenancy, and will unfairly target and disadvantage some residents. The Government will say that it is restoring law and order to the housing estates by evicting troublemakers and drug takers. Five main areas are covered by the bill. First, amendments to
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section 64 provide that matters to be considered by the tribunal when deciding whether to evict someone will include the effect of antisocial behaviour on neighbouring residents.

Second, the tribunal will be required to give particular weight to serious breaches of the tenancy agreement that place persons or property at risk or involve drug trafficking. Third, the bill allows the tribunal to take into account damage to common areas or adjacent property, not necessarily being public housing property. Fourth, the amendment to section 73 concerns the execution of warrants of possession, that is, taking back property after eviction. This amendment makes it clear that attempts by the social housing provider to salvage a tenancy do not prejudice the provider’s right to seek a warrant for possession of the premises if those attempts fail. Fifth, the bill will define a rent rebate for the purposes of tribunal proceedings.

The Australian Democrats believe that New South Wales already has more than enough laws - particularly with the raft of law and order legislation that has passed through this House in the past 12 months - to deal with the problems that this bill seeks to address. The reality is that the laws are not being enforced. Increasingly we are being asked to tighten up the laws. The law states that people cannot carry guns, but because people carry knives we tighten up the law. We are always tightening up the laws, but no-one looks at fixing the framework in which the problems arise. An overall strategy is required to address the social problems. The gulf between rich and poor is getting wider, unemployment is increasing, there are fewer jobs for our youth and there is rising anger in the community. Those problems are not overcome by introducing tougher legislation to lengthen the gaol terms of those who commit crimes.

That is the position that honourable members are increasingly asked to take. Each small tightening of laws makes a wall of legislation that is directed against those who are at the losing end of a social trend. Social problems are not given anywhere near the same amount of attention as the law and order debate in this House. I have done a great deal of work in welfare housing areas as an after-hours doctor and I have seen many problems in those areas.

I have also worked in the United Kingdom, where generations of families who live in welfare housing suburbs, which sometimes extend for miles, have not had a job. The situation in the United Kingdom, particularly in the north, is considerably worse than it is in Australia. Some common areas in the housing estates in Britain have been destroyed by gangs and graffitists. I do not believe that the situation is as bad here, but there is a danger that it could be if the social trends are not addressed. Any member who believes that law and order will fix these problems is following a foolish model.

Another problem with the bill relates to single mothers, young women who have perhaps chosen the wrong partners. Some have children to different fathers or have rough and tough boyfriends. When those single mothers move into public housing accommodation their de facto husbands, who come and go and do as they like, terrorise them and often other residents as well. Under this bill it would appear that, because nothing can be done about the boyfriend, the single mother and her children will be evicted. That undesirable result highlights the absurdity of this tough line. It would be extremely unfair to punish people by the law and also by losing their homes.

I do not suggest that wrongdoers should not be punished, and I certainly do not say that there are no problems in public housing estates. But an increasing number of our fellow citizens have no job and no money. If they are expelled from public housing, where do they go? If they cannot afford private housing they will go onto the streets. If they have no money a little stealing will supplement their non-existent income. They say that they are frustrated and angry with their situation and will take it out on somebody else. They ask themselves whether they are different from mainstream society, whether they are mad, or just a little odd. They must feel resentful when they turn on the television and see that with the click of a finger or a credit card the whole world could be theirs.

In regard to housing policy, in January this year the Auditor-General published a performance audit report on the decision to demolish the Villawood housing estate. The report provided a valuable collection of data and observations that went well beyond Villawood. The most telling statistics showed that the incidence of crime, vandalism and rent arrears in the Villawood estate were not the highest; the same problems in differing degrees were spread across the whole public housing sector. The problems are not confined to the city. Country areas have the same problems and the same complaints, mainly from quieter, older residents. It would appear that the Department of Housing needs to improve its act. Residents, and in particular older residents who have less chance of changing their financial circumstances in the future, should have the right to sleep soundly in their beds at night without fear of intimidation or harassment.

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The Real Estate Institute of New South Wales argues that making it easier to get rid of disruptive tenants in public housing will disadvantage private landlords. This will happen in two ways. Disruptive tenants will be harder to evict from private rental accommodation, and because the disruptive tenants from public housing will come to the private market the problem will be compounded even further. However, the argument has some merit. Public housing has a number of different characteristics. It is less flexible. If a tenant in a private block of flats was being disruptive and moved out or was evicted, he or she could move to another block anywhere within his or her budget. Public housing tenants can apply to be moved elsewhere, but the chances are slim. They are at the mercy of a slow-moving bureaucracy and a lack of finance within the sector, which leaves them with very little choice.

The Opposition has moved in the lower House to extend the provisions of the bill to the private rental market. The Opposition amendments in the other place also extend the definition of drug-related activity that would lead to eviction from manufacture and sale to use, possession and storage. If that were the case, public housing tenants would be more disadvantaged than those who rent privately, as tenancy applications do not state that tenants will be evicted if they have convictions for possession of drugs. It could even lead to the ridiculous situation in which a person could be forced out of public housing for possessing a joint of marijuana, a drug that is widely used and relatively harmless in terms of damage to other citizens in housing estates.

We are concerned about this bill and using law and order to try to fix, if that is the word, social problems. We do not believe it would achieve its goal. If as much effort were put into social problems as is put into the law and order debate the country would be considerably better off.

The Hon. HELEN SHAM-HO [8.52 p.m.]: I support the Residential Tenancies Amendment (Social Housing) Bill, the object of which is to amend the Residential Tenancies Act 1987 in so far as that Act applies to social housing tenancies. When viewed in the context of the wider package of social housing reforms, the bill aims to clarify the rights and responsibilities of tenants and enable effective action to be taken when people persistently or seriously breach their tenancy agreements. I particularly support those provisions of the bill that respond to concerns raised by public housing tenants. Public and community housing tenants are among the most disadvantaged people in the community. They should not be expected to live in an environment in which crimes such as drug trafficking and serious property damage by neighbouring tenants is tolerated.

The Department of Housing must be able to deal effectively with such breaches of tenancy agreements, thereby providing safe and secure living environments free from crime, harassment and intimidation. While I support the objectives of this bill, I have a number of concerns - some of which have been raised by other honourable members. The bill provides that in cases in which the breach of the residential tenancy agreement subjects persons or property to unreasonable risk or involves the use of the residential property or adjoining or adjacent property for the manufacture or sale of prohibited drugs, the tenancy termination will usually be accompanied by an order that will require the tenant to immediately surrender the premises.

The Government is obviously seeking to rightfully acknowledge that breaches which place persons or property at risk or involve drug trafficking are very serious matters and should be effectively dealt with, and I agree with that. However, if the word "selling" were replaced with "trafficking", that would stress the seriousness of the breach. I will not move an amendment to that effect, but I would welcome some clarification as to whether the Government considers the two terms to be synonymous. My other concern relates to a problem that was brought to my attention by the New South Wales Council of Social Service.

The council is concerned that, by inserting a check list of matters to be taken into account by the Residential Tenancies Tribunal in assessing an application for an order terminating a tenancy, the bill gives the tribunal a scope of consideration which is too broad and unjust to the tenant. The check list includes a number of considerations which appear to be outside the ambit of the proper role of the tribunal. In particular, new subsection (4)(f) of section 64 requires the tribunal to consider "the demand for the dwelling from other prospective tenants eligible to be provided with social housing premises". It is not the role of the tribunal to make decisions in relation to competing needs for housing and to determine whether a tenant is more or less deserving than other applicants.

Rather, it is the proper role of the tribunal to consider the relevant facts relating to the actions of a particular tenant and the consequences of those actions. I believe the Hon. I. Cohen will move an amendment in Committee to remove subsection (4)(f), and I will certainly support that amendment. Some disquiet has been expressed that the bill
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makes a tenant responsible for activities carried on in his or her residence by other occupants. It is contended that it is unfair to make a tenant responsible for the behaviour of an occupant regardless of whether the behaviour is intentional or negligent when the tenant has consented only to that person's occupation. However, it is axiomatic that a tenant should be made responsible for his or her premises regardless of who is actually occupying it at any given time.

A tenant should not be relieved of the consequences of property damage or the sale of drugs on his or her premises simply because it was done by another occupant. Responsibility has to be placed somewhere for such destructive practices and it is an accepted fact of life that the person with the legal status of tenant must take overall responsibility for what occurs on the premises. It has also been argued that the amendments could result in the immediate eviction of an entire family from their home because of a son or daughter smoking marijuana without the knowledge of his or her parents. However, the bill refers only to the sale of drugs, not their possession or use, and its intention is to deal effectively with serious drug criminals and not small-time users.

Furthermore, the amendment to subsection (4)(f) provides that the tribunal is not to make an order for immediate possession if "the tribunal considers that it would be unjust to do so". Finally, I express my opposition to the coalition’s proposed amendment. In particular, its attempt to broaden the scope of the bill to include within section 23 of the Act not only the selling of drugs but their "storage, possession and use" would effectively water down one of the central objectives of the bill, which is to create a special category of particularly serious breaches which place persons or property at risk or involve drug trafficking and to prescribe effective action for such breaches. Nothing would be served by allowing an immediate order of possession to be issued in the case of the storage, possession and use of drugs, and in many instances such action would be highly counterproductive. I support the bill.

Reverend the Hon. F. J. NILE [9.00 p.m.]: The Christian Democratic Party supports the Residential Tenancies Amendment (Social Housing) Bill. The Residential Tenancies Tribunal will be established under its own legislation, its procedures will be improved and it will be renamed the Residential Tribunal. Restructuring the tribunal was a major recommendation of an independent review which was conducted last year of all the tribunals in the fair trading portfolio: the Commercial Tribunal, the Consumer Claims Tribunal, the Building Disputes Tribunal and the Motor Vehicle Repair Disputes Committee. They are now to be amalgamated into a single Fair Trading Tribunal, which is the subject of a separate bill. However, the review found that the volume of applications - 37,000 according to one report - and the very nature of the jurisdiction in the residential area, including traditional tenancy disputes as well as strata, retirement village and mobile home matters, would more appropriately fit within a separate tribunal structure.

The Residential Tribunal may operate through specialist divisions and conduct hearings with varying degrees of formality. It may also use a wide range of alternative dispute resolution mechanisms, including mediation and conciliation. More flexible procedures will enable hearings to be tailored to the type of matter in dispute. Previous speakers have expressed concern about some aspects, as have some submissions we have received. The Tenants Union of New South Wales stated on 28 October 1998 that the bill risks a serious denial of natural justice to parties before the Residential Tribunal. It stated that, while the bill directs the tribunal to conduct proceedings along the lines of natural justice, there is an anomalous provision which jeopardises this. The provision allows the tribunal to admit confidential evidence during a hearing without allowing a party to the proceedings to hear or see that evidence - a clear denial of natural justice.

It also claimed that drafting errors in the bill would make the tribunal unworkable and that compulsory mediation may result in orders that either or both landlord and tenant find unworkable. The Tenants Union’s detailed submission on the bill raises a number of concerns about new subsection (2) of section 23, which relates to the use of premises by the tenant, and changes to section 44 relating to rental subsidies. The Tenants Union believes that the Act may continue to provide for tribunal determination of the amount of rent payable by a tenant, including any amount of rent subsidy. Only then can the tribunal determine whether or not the tenant is in arrears of rent and therefore in breach of the tenancy agreement. This is especially important as arrears may result in the termination of the tenancy. The proposed amendment to section 44 of the Act provides that a cancellation or reduction of rent rebate is not a rent increase. This in itself is not controversial. However the statement in the explanatory note that "It is made clear, as a consequence, that the Tribunal has no jurisdiction to adjudicate disputes that are essentially just disputes about rental subsidies" is inconsistent with the amendments proposed.

Page 9501

The Tenants Union also has concerns about sections 64 and 73. The Council of Social Service of New South Wales expressed some concerns about section 64, which deals with the termination of an order for possession. It states that section 64 places an onus of proof on the tenant for actions not necessarily of the tenant's own doing and requires that the tribunal consider the impacts on other persons as well as on neighbouring residents. The term "other persons" is too broad and ill-defined and potentially leads to arbitrary and unfair action.

Other matters are also of concern. The Australian Democrats in particular are critical of the bill as being a law and order, heavy-handed approach, but we must always have a balance between the perpetrator and the victim. The bill rightly puts focus on the victims, people who live in the area and who are being affected by the behaviour of other people making their lives unlivable and affecting the quality of life of the whole community. We saw at Villawood how the area can become a ghetto.

Finally the Government had to bulldoze the whole place because nothing more could be done. We do not want a repeat of that. There should be a reversal of the decline in the quality of life of people living in the type of accommodation the bill covers. It is described as "social housing", which covers housing commission accommodation and other types of accommodation that people need. They may not want to use that type of accommodation but their income does not allow them to live in other types of accommodation.

The social housing providers under the bill are the New South Wales Land and Housing Corporation, the New South Wales Department of Housing, the Office of Community Housing of the Department of Urban Affairs and Planning, the Aboriginal Housing Office, and an organisation at the time being registered with the Office of Community Housing or under part 5 of the Aboriginal Housing Act 1998, or an organisation prescribed by the regulations.

For various reasons the tenants may have economic problems or be in a disadvantaged situation but they should still have a high quality of life and be able to live in safe, comfortable accommodation and surroundings. The bill is designed to achieve this. I do not see it as a law and order bill but as one trying to allow people to have as good a quality of life as can be provided. A family came to see me seeking help.

A working-class husband, his wife and five children - he was unskilled and had a low income - needed to move into a larger housing commission house, one with three bedrooms. They were told that such housing was not available because preference was being given to sole parents and others. So they were discriminated against because they were a traditional intact family. The wife was very upset at not being able to get any better accommodation and she was asked whether there was any possibility of her leaving her husband, with the children, and being a sole parent so that she would have higher priority for accommodation.

I was very angry when she told me that that sort of pressure is being put on people to break up the family unit. The couple loved each other and their children and they would not go along with such a proposal. I have been seeking to get the Family Impact Commission Bill through this House. Under that bill we would not ignore other needs but would focus on traditional families, to support them and help them to remain intact so that fewer people will need social welfare and community services and so on; they will be able to cope with life themselves. This bill is in line with that desire and we support it. The Opposition has made the controversial amendment to add possession of drugs as a factor for the tribunal to consider. New subsection (6)(a) of section 64 provides that an eviction may be ordered if a breach of the housing agreement:

involves the use of the premises, or any property adjoining or adjacent to the premises (including any property available for use by the tenant in common with others), for the purposes of the manufacture or sale of any prohibited drug within the meaning of the Drug Misuse and Trafficking Act 1985.

That is an improvement and we support it, but the Opposition wishes to take it further by saying that the possession and use of drugs constitute a breach. People living in social housing should not have to live in an environment in which drugs are being widely used and possessed, thereby putting more pressure on their teenagers to take drugs. The Christian Democratic Party sees value in the tribunal having the power to assess these matters and does not consider that the power would be abused. We also support in principle the measure dealing with violence. The Christian Democratic Party supports the bill and will support the amendments foreshadowed to be moved in Committee.

The Hon. C. J. S. LYNN [9.11 p.m.]: I support the Residential Tenancies Amendment (Social Housing) Bill. The objects of the bill are to make further provision with respect to the class of
Page 9502
matters that constitute a breach of a residential tenancy agreement; the matters to be taken into consideration by the Residential Tenancies Tribunal when hearing an application for termination of a tenancy by a landlord who is a social housing provider; the powers of the tribunal in cases of actual or apprehended damage to property or threats to persons by tenants; the issue of warrants for possession of premises; and rent increases, in so far as they affect tenants in receipt of rental subsidies.

The Opposition has some concerns with the bill. Finally public housing tenants will have some protection from those unsavoury members of society who also occupy public housing but who insist on making the lives of others uncomfortable. One of the great scourges of society today is the prevalence of drugs. The drug dealing that goes on in many public housing estates is a scandal and it is a disgrace that the Government has taken almost four years to finally do something about it. At last the Government has taken what many would consider to be the obvious step of ensuring that tenants who manufacture and sell drugs can be evicted for that activity. However, it is a shame that the bill does not go far enough. It should also provide that a tenant can be evicted if he or she is storing or using drugs.

The drug culture in so many housing estates, particularly in the south-western area of Sydney where I live, has not been adequately addressed by the Government. It is high time that some strong, positive steps were taken to assist in the fight against drugs and to ensure that those who live in public housing estates can do so without fear that their houses will be robbed to fund an addict’s habit or that their kids will be continually exposed to drugs, thereby creating a mind-set that this type of practice is normal.

It is high time that the Government accepted responsibility for the housing that it supplies to families in need and ensured that the tenants act in a manner that is not disruptive and does not have a negative impact on their neighbours. The right to live in a safe society is a right that should be enjoyed by all members of the community, not just some members. It is disappointing that the Government has failed to pass on these new rights to tenants and owners of private rental properties and has addressed only some aspects of the drug problem in this bill. I understand that, yet again, the coalition will address those failures of the Government.

To suggest that a person will still be able to enjoy the privilege of public housing whilst storing drugs for a dealer is deplorable in the extreme. It is a sad indictment of the Government that this bill has reached the Parliament without these matters being seriously addressed. It is deplorable that drug users, who in many cases feed their habit from the proceeds of crime, are not part of the expanded definitions. This legislation, though good in parts, smacks of political opportunism. This is a bill obviously introduced with an election in sight.

The people of New South Wales need to be reminded that the Government has been in office for almost four years and has only now decided to do something about this problem. For four years it has squandered the opportunity to address this scourge on the rest of law-abiding society and has neglected the very people it was elected to represent. The Government needs to be held accountable for its lack of commitment to the people of New South Wales and it will be ultimately held accountable on 27 March next year. The coalition welcomes this bill, which has been a long time coming. Unfortunately it is deficient because it does not address the more serious issues of drug dealing in public housing.

The Hon. R. D. DYER (Minister for Public Works and Services) [9.16 p.m.], in reply: I thank all honourable members who spoke in this debate. I would like to thank also all the individuals and organisations who have had input into the development of the bill, including the Residential Tenancies Tribunal, tenants, and peak tenancy groups. The Government has proposed a much-needed package of reforms to promote safe, stable and successful public housing tenancies. The Government believes this package responds to issues of concern brought forward by tenants and others.

The bill targets crime, violence and antisocial behaviour caused by a minority of tenants in Department of Housing and other social housing premises. These are matters which lead to considerable anxiety and fear among neighbouring residents and result in considerable cost to the department and to others. The bill will ensure that fair and effective action can be taken in such cases. It is important that the introduction of the bill be viewed against the policy framework guiding the operations of the Department of Housing and other social housing providers.

The good neighbour policy of the Department of Housing that was introduced in 1996 by my colleague the Minister of Housing emphasises the department’s focus on providing early notification of breaches, working with tenants to address problems and ensuring that adequate warnings are given prior
Page 9503
to pursuing tribunal action. An agreement of rights and responsibilities will be introduced to make clear the rights and responsibilities of all parties. The bill is seen by the Government as a necessary complement to the initiatives that I have just mentioned. With those few words I commend the bill to the House.

Motion agreed to.

Bill read a second time.

Schedule 1

The Hon. PATRICIA FORSYTHE [9.20 p.m.], by leave: I move Opposition amendments Nos 1 and 2 in globo:

No. 1 Page 4, schedule 1, line 8. Insert ", storage, possession, use" after "manufacture".

No. 2 Page 5, schedule 1, line 28. Insert ", storage, possession, use" after "manufacture".

The Minister for Public Works and Services referred in his reply to the rights and responsibilities of tenants, and the Opposition believes that the Government is on the right path in that respect. The bill is about the rights and responsibilities of tenants, but it is also about the amenity of all the people who live in a social housing complex and suffer the impacts of drug use.

The Government got it half right. The bill refers to the manufacture or sale of any prohibited drug. The Opposition contends that the bill should be extended to encompass all aspects of prohibited drugs - in other words, the storage, possession and use of drugs. Undoubtedly, over the years all members would have received a lot of correspondence from people living in various forms of social housing complaining about other residents or visitors who, by virtue of their drug habits, create difficulties. Their problem relates not only to drugs being stored, manufactured or even sold at the premises - and the Opposition regards drug trafficking as a particularly serious offence - but to all activities relating to the use of prohibited drugs.

In my second reading speech I recounted that when I was shadow minister for housing a woman contacted me absolutely distraught about another tenant in her block who was apparently addicted to heroin and was engaging, with his friends, in shooting-up drugs in the stairwells. Her life had been made a misery by virtue of the abuse she received. In that instance the problem stemmed not from the manufacture or sale of the prohibited drug but from all the activities surrounding drug use - in other words, the storage, possession and use of the drug, and the people who came to share in the drug taking.

As I say, the problem with drugs goes beyond their manufacture and sale. The tribunal should take account of all the circumstances of a case when considering whether a person is creating difficulties and impacting on the rights of other tenants. The tribunal should consider all aspects of drug use and the entire circumstances of the case, including the history of the tenant over a period of time. It is simply not good enough to talk about the manufacture or sale of prohibited drugs. The Opposition does not advocate the eviction of a family because a 14-year-old member of the family smokes marijuana on the side; we are not that hard-hearted. However, we believe that all aspects of prohibited drug use should be encompassed in the bill. If we are to solve problems with regard to drug taking, we must take a stronger stand at all levels. The Government has simply not gone far enough.

The message the coalition has received from talking to many tenants and reading their letters is that the problem does not relate to a person manufacturing or selling drugs but to the whole aspect of drug use. I am surprised that the Government has not received the same message. After all, many of the people who write to the Opposition would also write to the Government. Perhaps the Opposition has taken more notice; perhaps we have been listening to what people have said. Many elderly people are absolutely distraught by these sorts of activities, and that is not to say that only young people take drugs. Many 70-year-old and 80-year-old people who reside in public housing are absolutely distraught by these sorts of activities; drug use is outside their culture and understanding. With regard to their rights and enjoyment of housing amenities, as I said in the second reading debate, many of these people take as much pride in their housing as do people who own their homes; they spend time in their gardens and regard their home as their very own. We should be considerate of those people.

The Hon. R. D. DYER (Minister for Public Works and Services) [9.26 p.m.]: The intended purpose or effect of Opposition amendments Nos 1 and 2 is to extend the bill to make it a breach of a tenancy agreement to possess drugs on adjoining or adjacent areas, and to provide that storage, possession and use of drugs in the residential premises and on adjoining and adjacent areas constitutes a serious breach. The Government
Page 9504
opposes the amendments. In its view, the amendments undermine the intent of the bill, which is to ensure that the most serious offences, particularly those with significant adverse impacts on others, are dealt with seriously. The amendments will also ensure that when terminating a tenancy for a serious breach, the tribunal responds with an order for immediate possession, unless it would be unjust in the circumstances.

The storage, possession or use of illegal drugs in the residential premises already amounts to a breach of a tenancy agreement by virtue of section 23(a) of the Residential Tenancies Act. The Government’s proposals will not change this, but, rather, seek to differentiate and give emphasis to serious breaches that have a greater adverse impact on others. As responsible landlords, the Department of Housing and other social housing providers should be focusing their attention on matters that have the most serious impact on tenants. It is not the role, nor within the power, of the Department of Housing and other social housing providers to attempt to police the possession and use of drugs. Nor could such activities, particularly when taking place on adjoining premises, be reasonably said to amount to a serious breach of a tenancy agreement, as is proposed by the Opposition in these amendments.

The purpose of the Government’s bill is to address instances of crime, violence and antisocial behaviour that impact adversely on neighbouring residents, not to take the place of the Crimes Act in addressing issues such as personal drug use. By classifying drug possession as a serious breach, the Opposition’s amendments will effectively water down the provisions of the bill, and will seek to give special weight to very serious breaches that have significant impacts on adjoining tenants. For those reasons the Government opposes the amendments.

The Hon. I. COHEN [9.29 p.m.]: The Greens strongly oppose the two amendments moved by the Opposition. Whilst I feel uncomfortable with much of the legislation put forward by the Government, as I said strongly in my second reading speech, giving the tribunal the power to evict a family from its home on the ground of mere possession or use of a drug by any member of the family is extremely draconian and unhealthy, and would potentially victimise people.

Honourable members have to face facts regardless of their views on drug use and abuse, which I have never supported in the House. The law victimises many people, particularly those on housing estates who may use a bit of pot, have a bit in storage or have possession of it. I can understand the Government targeting those who manufacture and distribute drugs, but will we have a witch-hunt for every person in a housing estate who might smoke a joint? These are chest-beating amendments in preparation for the next election. They go too far. They are an abuse of human rights.

The Hon. Dr A. CHESTERFIELD-EVANS [9.31 p.m.]: The amendments extend the definition of a breach to include the storage, possession and use of drugs in a residence. When will people realise that a punitive legal model will not solve the drug problem? The noble experiment in the United States of America to ban alcohol led to a rise in crime rates and far more corruption. Gangs got a hold on American society that they never had before. We now have a different drug but the same social phenomenon, the same incredible rhetoric and, as the bill shows, more and more restrictive legislation.

When will people realise we need a medical model rather than a punitive legal model if we are ever going to be successful in overcoming the drug problem? Unfortunately, it is a conceptual step that the major parties seem unable to take. Shelter, a group that gives housing support, believes that if a tenant is found in possession of illegal drugs, that person should be dealt with under the Drug Misuse and Trafficking Act. The Democrats certainly support such an approach as a sensible way of dealing with the problem.

That is why the law exists, but that is not to say that the legal model is the way to deal with drug problems. If tenants are evicted from their houses they will be penalised twice. Even conventional political wisdom dictates that that is not the approach to take. We do not support the amendments. In fact, the approach of the Government and the Parliament to debate on punitive models is nothing more than flogging a dead horse. It will not work. We are in the middle of major social problems and we have to start addressing them.

The Hon. J. F. RYAN [9.33 p.m.]: I would like to draw the attention of honourable members to a couple of points that have been overlooked. Anyone using a prohibited substance is breaking the law. Our proposal is that any person who deteriorates the social fabric of his neighbourhood by breaking the law will face the risk of removal from his public house.

[Interruption]

Page 9505

Honourable members interject about the effect on whole families. New subsection (6)(b) of section 64 states:

(b) subjects persons or property to unreasonable risk,

unless the Tribunal considers that it would be unjust to do so.

The amendments are subject to the capacity of the Residential Tenancies Tribunal to consider whether it would be unjust to remove a tenant from his house. For example, if a person were threatened with losing his tenancy because some member of his family was smoking marijuana on the premises without his knowledge, the Residential Tenancies Tribunal would consider that. I have received quite a deal of correspondence from many of my constituents in Claymore, Ambarvale, Lethbridge Park, Miller and other parts of western Sydney that I know well.

One of the most common complaints is that people want to leave the area because they are concerned about lawless behaviour in their neighbourhood. I am prepared to stand up for people who want a public housing tenancy in which their environment is not constantly deteriorated by people who wish to be lawless. It is not an offence that equates to violence, which is something the Opposition will seek to address in a later amendment. Up to 20 per cent of my submissions are from people living in housing commission premises who want to move out of the district because of their concern about people who live lawlessly.

By too tightly framing reasons for which the Residential Tenancies Tribunal might terminate a tenancy, the Government has not allowed the chairman of the tribunal to take a wider brief and decide whether the neighbourhood might be better off without some person living in a particular house. The Opposition argues that drug use alone is not reason enough to evict a person from his tenancy, but that the Residential Tenancies Tribunal should have the widest possible scope to investigate matters that the whole neighbourhood might want to bring to its attention.

Some people in the neighbourhood might be a real problem. They might put the community at risk. Children and parents might have to mix with them. The tenants might want the option to have them moved on. I would have difficulty supporting a view that the mere use of illegal drugs in a household was reason enough for a person to be moved on. But new subsection (6)(b) of section 64 is qualified by the words "unless the Tribunal considers that it would be unjust to do so". I would be surprised if the tribunal regarded as unjust most of the arguments made by the crossbenchers.

The amendments are not about punishing people but about cleaning up neighbourhoods and making them fit places for law-abiding people to live. Honourable members must bear in mind that people who use marijuana or heroin and deteriorate the neighbourhood by either the people they bring into their houses or the practices they carry out from them are irrefutably and undeniably acting illegally. I am prepared to support legislation that provides a tribunal with a broad scope to consider whether a person in a public house who acts illegally is fit to live in a neighbourhood. I defend the amendments, and urge honourable members to support them.

The Hon. R. S. L. JONES [9.40 p.m.]: I oppose the rather silly and unnecessary amendments moved by the Opposition, which will affect about one in three people in Housing Commission homes. Many people, especially those in lower socioeconomic groups, use various kinds of drugs, in particular, marijuana. Members of the Opposition have to remember that these residences shelter a lot of people who have problems. People who are unable to buy their own homes or pay market rents often have real problems; many of them were either sexually abused or beaten when they were children. As a result of this mistreatment they end up at the lower end of the socioeconomic scale. Because they are unable to pay higher rents they often resort to drugs to cover their pain and misery. Unfortunately, a high proportion of people at the lower end of the socioeconomic scale who have been abused as children resort to drugs.

If every Housing Commission resident who uses drugs were thrown out, quite a few of these houses would be empty and a number of people would be on the streets. Michael Photios, the honourable member for Ermington in the other place, recently made an extraordinarily outrageous speech. I, like Michael, enjoy an occasional glass of wine. It appears that on the day Michael made his speech he had dined quite well. Dr Macdonald said, "What you are saying is disgraceful." What Michael Photios said in his speech was disgraceful. He referred to a drug-free zone and he referred also to sanctions -

The CHAIRMAN: Order! As a member of the Standing Committee on Parliamentary Privilege and Ethics, the honourable member should be aware of the convention relating to casting aspersions on members of the other place. I ask the member to be careful about the comments he is making.

Page 9506

Reverend the Hon. F. J. Nile: He might have smoked pot before becoming a member.

The Hon. R. S. L. JONES: He might have smoked pot before he became chairman of the Young Liberals, but I am sure he will not admit that as he wants to be Premier one day. Michael Photios made one of the most outrageous and extreme speeches in his life. Some of the stuff he was talking about was absolute rubbish. He said, "The people of New South Wales want drug-free public housing premises and that is what the coalition will give them." What a load of rubbish! Of course the coalition will not do that. It would have to evict a large number of housing tenants and put them out on the streets. Where would they go then? It is absolute nonsense. In the lead-up to the next election the coalition will try to get tougher on drugs and we will see more of these silly amendments.

Reverend the Hon. F. J. NILE [9.43 p.m.]: The Christian Democratic Party supports the amendments moved by the Opposition. This legislation will enable residents who are distressed at the obvious use and possession of drugs in their neighbourhood to complain about that use. Residents have a right to complain about such drug use to the Residential Tenancies Tribunal. The tribunal must consider complaints of this nature, but it is not forced to act upon them. Some honourable members referred to the fact that the tribunal has to consider each case fairly and other honourable members said that matters such as these should be handled by the police. We all know that very little or no action is taken by the police in relation to marijuana use.

No-one is charged for being in possession of marijuana. When complaints are made the police say, "We are too busy to do anything about it." The police have been discouraged to such an extent by the pro-marijuana lobby in this State that they do not see any point in pursuing these matters. That is why people are openly selling marijuana in Nimbin and in Martin Place and other places in the city. It has made a joke of our drug laws. Unfortunately, the marijuana use is no longer pursued by the police, but it has to be pursued by housing estate residents. Surely those residents have some rights? It might be a deterrent to some families if they thought that this legislation could affect their accommodation. Parents might exercise more control over teenagers using, possessing or storing marijuana in these estates. The legislation might have some positive value for families affected by this problem and it might lend support to parents facing these problems.

The Hon. M. J. GALLACHER [9.45 p.m.]: About a month ago I attended a public meeting at Wyong Shire Council to address a number of law and order issues. People raised concerns about the Pacific Delmar housing estate, which is located in the west Bateau Bay area. After the meeting I spoke to a number of people who had raised concerns. Basically, many people were of the view that the Housing Commission estate should be bulldozed and that they should start again. I asked each person to whom I had an opportunity to speak whether he or she lived in, or knew someone from, that area. They had no knowledge of the area other than what they had read or heard about it.

A week and a half later I started doorknocking in the Pacific Delmar public housing estate and left people in that area with a questionnaire. I asked them to identify what the problems were and to state what they believed needed to be done. Overwhelmingly, they said that the biggest problem in the area was drugs. When I doorknocked in that area I had with me Phil Walker, a man who would be considered to be a drug expert. Honourable members will hear a lot more about Phil Walker.

The Hon. R. D. Dyer: On a point of order. It is well recognised that during the Committee stage of a bill a member should address the merits of amendments moved. The Hon. M. J. Gallacher is giving the Committee anecdotal material that, admittedly, would have been relevant in the second reading debate. However, he has not come close to saying anything about the amendments that the Committee is now considering. I respectfully ask you, Mr Chairman, to ask the honourable member to direct his remarks to the amendments moved by the Hon. Patricia Forsythe.

The Hon. M. J. GALLACHER: On the point of order. I am talking about community concern relating to the drug problems in the area. That is what these amendments are about. A fair bit of flexibility has been given to honourable members when debating this matter. I am talking about what the community believes to be a problem in the area. The Opposition has moved amendments to address those problems.

The CHAIRMAN: Order! I uphold the point of order. The member must address the amendments before the Committee.

The Hon. M. J. GALLACHER: If the Minister had given me an opportunity to clarify this matter he would have known where I was coming from. Overwhelmingly, the concerns of people in this area relate to the issues referred to in these amendments. I place on record the concerns of people living in the Pacific Delmar estate.
Page 9507
Obviously, the Government is not interested in their views. A large number of people who have written to me have expressed concern about what is going on in that estate. The amendments that have been moved will satisfy those concerns. Honourable members should be aware that people in housing estates all over New South Wales are calling out for help. This is our chance to do something for them.

Question - That the amendments be agreed to - put.

The Committee divided.

Mr Bull Mr Ryan
Mrs Forsythe Mr Samios
Mr Gallacher Mr Rowland Smith
Mr Hannaford Mr Willis
Mr Kersten
Mr Lynn Tellers,
Mrs Nile Mr Jobling
Rev. Nile Mr Moppett Noes, 20

Mrs Arena Mr Obeid
Dr Burgmann Mr Primrose
Ms Burnswoods Ms Saffin
Dr Chesterfield-Evans Mrs Sham-Ho
Mr Cohen Mr Shaw
Mr Corbett Mr Tingle
Mr Dyer Mr Vaughan
Mr Egan
Mr Jones Tellers,
Mr Kelly Mrs Isaksen
Mr Macdonald Mr Manson
Miss Gardiner Mr Johnson
Dr Goldsmith Mr Kaldis
Dr Pezzutti Ms Tebbutt

Question so resolved in the negative.

Amendments negatived.

The Hon. I. COHEN [9.56 p.m.]: I move the Greens amendment:

No. 1 Page 5, schedule 1[4], lines 13-15. Omit all words on those lines.

Section 64 of the Residential Tenancies Act currently requires the tribunal to consider the circumstances of a case when assessing an application for an order to terminate a tenancy. In the bill new subsection (4) of section 64 provides a series of factors which have to be taken into consideration by the tribunal when deciding whether to terminate a residential tenancy agreement with social housing tenants. One of the factors for consideration is the demand for dwellings from prospective tenants who are eligible to be provided with social housing premises.

The Greens consider that is an inappropriate factor for consideration by the tribunal. The purpose of the Residential Tenancies Act is to govern the relationship between the tenant and the landlord. It is not, nor should it be, the role of the tribunal to make decisions about competing needs for housing, such as whether a tenant is more or less deserving of housing than an applicant. The amendment deletes this inappropriate factor. I commend the amendment to the Committee.

The Hon. M. R. EGAN (Treasurer, Minister for State Development, and Vice-President of the Executive Council) [9.58 p.m.]: The Government supports the amendment moved by the Hon. I. Cohen.

The Hon. R. S. L. JONES [9.58 p.m.]: I support the amendment moved by the Hon. I. Cohen. New subsection (4) of section 64, to which the Hon. I. Cohen refers, would have the effect of removing many public housing tenants because much needier people require accommodation. It is nonsense to include that as a factor to be considered by the tribunal. The amendment is a worthy one.

The Hon. PATRICIA FORSYTHE [9.59 p.m.]: The comment from the Hon. R. S. L. Jones is rather weak. I think he has misread the bill. I have some sympathy for the amendment moved by the Hon. I. Cohen. Demand for a dwelling from prospective tenants as a factor to be considered by the tribunal when examining whether a tenancy should be terminated is an extraordinary inclusion in the bill. I am pleased that the amendment is to be accepted by the Government. That provision seems to be entirely outside the spirit of the bill.

If the Government is serious about addressing social housing problems, it must accept that the issue is not about demand for housing. A 10-year waiting list to access public housing would be grounds to terminate the tenancy of a troublesome tenant on the northern beaches but a troublesome tenant living in a country town would be allowed to stay. That would be an extraordinary ground for the tribunal to deliberate upon. Commonsense has prevailed. I am pleased to hear the Government has accepted the amendment.

Page 9508

The Hon. I. Cohen: Does that mean the Opposition has?

The Hon. PATRICIA FORSYTHE: Absolutely.

Amendment agreed to.

The Hon. PATRICIA FORSYTHE [10.00 p.m.], by leave: I move Opposition amendments Nos 3 and 4 in globo:

No. 3 Page 5, schedule 1, line 31. Insert "or" after "risk,".

No. 4 Page 5, schedule 1. Insert after line 31:

(c) involves threats of violence to persons,

The purpose of amendment No. 4 is to insert new paragraph (c) into new subsection (6) of section 64, thus adding the phrase "involves threats of violence to persons". It is simply another ground upon which a tenancy could be terminated immediately. We agree with the rider underneath that an order has effect "unless the tribunal considers that it would be unjust to do so".

When I was shadow Minister a person telephoned my office at least once a day, if not more often. I have not sought permission from him otherwise I would have named him in this debate, but I am prepared to say he lives in the Millers Point area. He was consistently harassed by a neighbour and at one point had taken out an apprehended violence order. He was regularly subjected to threats of violence. These amendments would have enabled him to seek redress. He had lived in his unit for a number of years and as I understand it had spent thousands of dollars of his own money on improvements. As a consequence of his neighbours’ actions his life had been made a misery. He had been to the tribunal but he seemed incapable of persuading it to understand his particular needs.

If the Government is serious about trying to improve conditions for people living in social housing it should strengthen the bill by adding new paragraph (c). It improves the bill. When I read the lower House debate I was surprised at what the Government said in opposing these amendments. The Minister gave no reason for it; he merely said the Government opposed the amendments. The Government’s case would be strengthened if it offered reasons for that opposition. The Government has an attitude to Opposition amendments, and threatens crossbench members who seek to improve legislation. This process is about improving legislation. The Opposition is serious about supporting the Government’s intentions in the legislation but believes that new paragraph (c) will strengthen the Act. It is for that reason that I move these amendments.

The Hon. Dr A. CHESTERFIELD-EVANS [10.03 p.m.]: It is not a pretty experience to be threatened, especially near your own house. However, I am informed that amendment No. 3 is already covered by section 68 of the Residential Tenancies Act, which provides that the tribunal can terminate a tenancy if the tenant has caused or is likely to cause property damage or injury to the landlord, his agent or persons in adjoining properties. Amendment No. 4 has the effect of removing the tribunal’s discretion whether to evict a tenant when a matter is proved under section 68. The amendment removes that discretion and gives tenants who have had a bit to drink, made a threat but then felt differently about it the next morning a chance to redeem themselves. The amendment is already covered by existing legislation, is nothing more than sabre rattling and grandstanding prior to an election, and is unnecessary. We do not support it.

The Hon. M. R. EGAN (Treasurer, Minister for State Development, and Vice-President of the Executive Council) [10.05 p.m.]: The Government opposes these amendments as they cut across the intent of the bill to emphasise serious breaches that place persons at risk. I am informed that section 23(c) makes it a term of every tenancy agreement that the tenant shall not interfere, or cause or permit any interference, with the reasonable peace, comfort or privacy of the tenant. This provision means that it is already a breach of a tenancy agreement to make threats against neighbours.

Again, the amendments appear to overlook the objects of the bill to ensure that most offences are dealt with very seriously. Threats that are considered by the tribunal to be of the type that place persons or property at risk will be covered by new subsections (4)(b) and (6) of section 64. Threats that are minor or insubstantial will be dealt with as if considered appropriate in the view of the tribunal having regard to section 23(c). The Opposition amendments will lead to an unnecessary watering down of the Government’s bill, which seeks to give special weight to very serious breaches that have significant impacts on adjoining residents. The amendment will act to divert valuable housing resources away from areas of greatest need. The Government opposes the amendments.

Amendments negatived.

Schedule as amended agreed to.

Bill reported from Committee with an amendment and passed through remaining stages.

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Bills received and, by leave, read a first time.

Suspension of standing orders agreed to.

The Hon. M. R. EGAN (Treasurer, Minister for State Development, and Vice-President of the Executive Council), on behalf of the Hon. R. D. Dyer, [10.12 p.m.]: I move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

At the outset, let me place this legislation in its fundamental context. This legislation is a manifestation of the New South Wales Government’s efforts to work towards finding practical solutions to what is possibly the most comprehensive business and environmental challenge facing the world today, that is, global climate change.

As this Parliament knows, last December in Kyoto, Japan, the world’s developed countries agreed to do something never done before. They decided to start a process to create a new market for trading in greenhouse gas emissions to reduce greenhouse gases and arrest global warming. The Kyoto targets, when ratified, will bind the world’s developed countries to meeting specific greenhouse emission targets.

The goal is, and has to be, to solve the climate change problem in ways that allow maximum flexibility, stimulate innovation and avoid measures which are unnecessarily costly in economic and community terms. I believe we must find workable solutions to climate change which involves industrialised countries leading, and developing countries making an equitable contribution to the climate change solution.

For our part, the New South Wales Government is leading the way nationally and internationally to find new and innovative solutions to climate change, particularly in the area of carbon sinks and planted forests, or plantations as they are better known. These initiatives are providing for new, environmentally beneficial investment opportunities which in turn will place New South Wales and Australia as a world leader in the rapidly emerging carbon business.

I am pleased that the first carbon trades in Australia were in New South Wales between State Forests and two of our electricity generators, Pacific Power and Delta Electricity. That said, the New South Wales Government is continuing its leadership in greenhouse issues and I am pleased to introduce into the House the Carbon Rights Legislation Amendment Bill 1998.

This is a world first as it is a bill for an Act to amend certain laws and to recognise in law the rights associated with carbon sequestered from the atmosphere by trees and forests. Let me now turn to the objectives of the bill. The objects of the bill are to amend the Conveyancing Act 1919:

(i) to recognise that rights associated with carbon sequestered from the atmosphere by trees and forests may be a kind of forestry right and can be the subject of certain forestry covenants, and

(ii) to make it clear that an obligation in respect of the vesting of ownership of trees on land that is the subject of a forestry right may constitute a forestry covenant, and

(iii) to clarify the elements of the existing definition of forestry right by making it clear that a forestry right exists if an interest in land entitles its holder to enter the land and to establish, maintain and harvest (or to just maintain and harvest) a crop of trees on the land even if no entitlement is also conferred to construct and use buildings, works and other facilities on the land, and

(iv) to provide for matters of a savings or transitional nature.

This legislative amendment is one of the steps in the process of addressing the introduction of emissions trading internationally. The State is developing a range of mechanisms to meet its greenhouse commitments, including energy-efficiency measures and products for the market such as Green Energy. The New South Wales Government is also working to finalise details for carbon trading arrangements. The bill is one of the important elements to the total policy picture.

Carbon trading, if adopted internationally, holds tremendous potential for New South Wales. Policy and legislative development at this stage will position the State to take advantage of this emerging market, predicted in some circles to be worth many millions of dollars to the New South Wales economy alone.

The bill amends the Forestry Act 1916 so that, when a broader emissions trading market emerges, the Forestry Commission will be able to acquire and trade in such rights. It will also allow the Forestry Commission to provide various services to investors and incorporate a corporation - whether by joining with any other person or otherwise - to assist it in exercising its functions.

In relation to the Electricity (Pacific Power) Act 1950 and Energy Services Corporations Act 1995, the bill will make similar provisions for electricity generators and distributors. The power conferred by the omnibus bill recognises carbon as an entity and is an important step to enable carbon trading and carbon forestry investments to occur in New South Wales.

The bill will also facilitate the ability of the Sydney Futures Exchange to position itself as the hub for emissions trading in the Australasian region. The bill will have significant positive effects for regional New South Wales. By providing the power

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for carbon related forestry investments, State Forests will be in a position to expand its planted forest programs in regional Australia. This, in turn, will create more economic activity and more jobs in regional communities which have the capacity to grow planted forests for their wood and carbon sequestration values. We should not underestimate the positive effect of this bill for regional Australia.

With this bill I believe we are entering an exciting new era. We need to continue to seek out innovative ways to solve climate change. This bill does that in a way which is positive from an economic, environmental, community and regional development perspective. I commend the bill to the House.

The Hon. D. F. MOPPETT [10.13 p.m.]: On the surface one might regard the Carbon Rights Legislation Amendment Bill as innocuous, but that would be to greatly underestimate its significance. It is set in disingenuously simple terms but it deals with issues that arise from one of the most complex and serious matters facing human society today. It has led to intense speculation about what solutions will finally be adopted by the world community, and certainly by the Australian Government, in dealing with this very complex issue. This bill is an attempt to respond to that speculation.

At times such as this I am reminded of a comment that was made by the great American economist John Kenneth Galbraith. When in Australia on one occasion he was asked to comment about a wide range of speculation about the future for the Australian economy. He replied in these three very pithy sentences: "Something will happen. Anything can happen. But most things that are predicted don’t happen." I have always borne that in mind.

In looking at the background of this bill, all the material that has been published and discussed about the greenhouse gas effect on global warming, I am very circumspect about the final outcome. Madam President, I am reminded, as I am sure you are, on occasions such as this of the grim predictions that are described today as Malthusian, the theories of Thomas Malthus, a philosopher of two centuries ago. He saw the only controls on population growth as being pestilence, disease and starvation. He thought of these as rigid mechanical rules: the eighteenth century growth of population would be bridled only by the natural catastrophes which he saw all around him.

On other occasions I have spoken about a prediction which was made in the early nineteenth century when hansom cabs were becoming popular in London. I am reminded of the recent protests from taxi drivers in New South Wales. A person who regarded himself as a great prophet was so concerned about the increase in the number of horses to pull the cabs that he made calculations and extrapolations about the amount of excreta on the streets of London from the horses. He predicted that by the end of the century the dome of St Paul’s would be covered in horse manure, which would uniformly blanket London as a result of the dreadful development of hansom cabs! Of course, that did not happen: steps were taken to avoid the catastrophes.

The Hon. I. Cohen: It ended up in the river.

The Hon. D. F. MOPPETT: That is an interesting point. I do not want to digress and it is not my nature to digress in analogies. But, bringing it more up to date, members present would all remember the Treaty of Rome. The leaders of all nations after the Second World War, moving forward in peace to the brave new world, were terribly concerned about the explosion of population in some parts of the world and the slow growth of food resources. They renewed Malthus’s predictions and said that by the end of the century people who had high expectations about what the future held would be tragically disappointed by widespread starvation and pestilence, again arising from the lack of resources. It is almost 50 years after the Treaty of Rome and the producers of food would simply say: What a load of bunkum! The market is so slack, so oversupplied with wheat and other commodities, that farmers are saying, as they always have, that they are struggling to make an income.

The Hon. Janelle Saffin: We still have starvation. We do not give the food to the ones who need it.

The Hon. D. F. MOPPETT: That is a sensible interjection. The only reason there is starvation in the world today is malappropriation of resources. It is not that we do not have the resources, the foodstuffs or the capacity to produce food. Many farmers are bewildered that Australia, in its usual way, in responding to the terrible tragedy in Nicaragua is proposing to send a million dollars in greenbacks. All the other countries offering aid are offering food and materials. While fulfilling their humanitarian aims, at the same time this gives a great boost to their economies. Australians somehow do not seem to be able to embrace that type of duality in foreign aid.

I do not want to continue ad nauseam with historical analogies but another one comes to mind: what was described as the OPEC oil shock. The world economy was turned upside down. We still see the effect of it. "Petrodollars" is a term not used much now. Petrodollars were washing around the
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financial markets of the world distorting the investment schedules of advanced countries. Suddenly the whole focus had changed and Arab countries in particular had a resource that the world felt was drying up.

It was suggested that there would be no more oil. We would all acknowledge that the quantity of oil is finite, but in light of these wonderful predictions by experts we all believed that the products of the petroleum refining industry would no longer be available even to Australians, who had some indigenous oil, let alone to the world. If I remember the predictions correctly, these catastrophic effects were to take place in the late 1990s. We are now in the late 1990s and woolgrowers such as me are almost in penury because the price of oil has never been lower. There is a glut of oil on the world market.

The Hon. B. H. Vaughan: But we are paying outrageous prices at the pumps.

The Hon. D. F. MOPPETT: Absolutely, but I would be digressing and a point of order would be taken if I spoke about petrol pump prices. I point out succinctly that we must be circumspect about these apocryphal predictions that are made by experts.

The Hon. Janelle Saffin: And economists.

The Hon. D. F. MOPPETT: By economists, and some from other disciplines such as environmental groups. Biological and climatological scientists are all making a contribution. I shall refer now to the immediate antecedents to the bill. The significant world conference in 1997 in Kyoto sought to deal with greenhouse gas emissions and the suggestion that because of the growth in the greenhouse gas emissions the world was facing substantial anthropogenic climatic changes. I shall deal with that in detail shortly.

The Hon. M. R. Egan: Don’t go too long, Doug.

The Hon. D. F. MOPPETT: I am sure that at the bottom of this will be the interest of the Treasurer. Those who are driving this issue are not people who want to improve the world and reduce the warming effect, but rather those who believe that if a market can be created for trade there is a buck in it for the New South Wales Treasury.

The Hon. M. R. Egan: I believe both, and it will be good for the world.

The Hon. D. F. MOPPETT: I will come to that in a moment. When we take account of the predictions of climatic change we need to remember that climate changes from season to season - and we all enjoy that - from year to year and from decade to decade. We are all familiar with the El Niño and La Niña effects. We are only now beginning to understand them a little more fully, but they are terribly important. Other changes are regarded as archaeological.

Reverend the Hon. F. J. Nile would be able to speak with greater authority than I about the archaeological records of the biblical flood. There are certainly archaeological records of a major flood in that part of the world, and they are recorded in the cultures of many societies. I have no doubt that these major changes in our climate have been recorded in man’s history, as have the epochal changes: the ice age, with which we are all familiar, and the geological changes.

The Hon. R. S. L. Jones: What about loss of the dinosaurs?

The Hon. D. F. MOPPETT: I will come to that. The geological changes were significant because there was a time in the earth’s history when carbon dioxide levels were sequestered in huge carbon deposits. We all know that Australia was singularly blessed during that period and it is now extracting huge deposits of coal. Millions of years ago carbon dioxide was turned into complex carbohydrates and laid down in deposits of carbon, which are now being recycled and turned back into carbon dioxide. I am not entirely convinced that we are facing this apocryphal event of global warming. However, we certainly need to look at the effects.

At the same time others concerned about climate changes believe that we should be looking at ozone layer depletion. We had to scurry to put away our aerosol sprays and change the airconditioning in our cars. Those who carefully monitor the climate, as I do because it governs my life, would have noticed a recent report which, although not necessarily the end of the story, is an interesting addition to what we have heard about ozone layer depletion. The report suggested that the ozone layer, which is largely over Antarctica, is believed to be merely in one of its natural oscillations; that all the effects attributed to anthropogenic factors were largely exaggerated; and that the ozone layer, which has a hole over the ice caps for natural reasons, expands and contracts over time.

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It was suggested that this happened to be a period of expansion and that it may again contract without any action being taken. I shall not dwell on that because it is not relevant to the bill. If it is true that greenhouse gas emissions have an effect on global warming, the impact on people throughout the world will be serious and will vary greatly from nation to nation. However, without the greenhouse gas effect, life on this planet would cease to exist. We are here because a blanket of greenhouse gases surrounds the planet and maintain the temperature regime.

The Hon. R. S. L. Jones: But not too much.

The Hon. D. F. MOPPETT: But not too much. No-one is predicting that we will become similar to Mars, but we must be serious and responsible about this issue. I am sure that the Hon. R. S. L. Jones would be aware that my approach is serious. I acknowledge the effect it will have on Pacific Islanders because the topography of their land is low. If there is global warming on the scale that is predicted, some of those small islands will be flooded by the sea. On the other hand, it must be acknowledged that in Australia it is likely that the benefits will outweigh the problems.

Areas beyond the Wellington district, in the fertile but at present arid zone around the Coonamble district, may become more fertile and rainfall will increase. It may be a little more virile but the net effect will be that inland Australia will have more rainfall, and who would vote against that? The actual effects are not clearly understood, and there is considerable equivocation in any literature that one reads about the greenhouse effect. Nevertheless, I think all governments, including the Australian Federal Government, believe that something needs to be done. I applaud the stand taken by the Howard Government at the Kyoto conference. If ever there was a case of developed nations shifting the blame for what they have done to the planet onto other countries, this was a prime example. They singled out Australia -

The Hon. D. J. Gay: They all use nuclear power.

The Hon. D. F. MOPPETT: They do. I will be interested to hear whether other members say Australia’s peculiar situation in relation to greenhouse gas emissions and the possible penalties that may be inflicted on Australia could be overcome by introducing uranium-developed energy. I will be interested to find out which resource the Hon. R. S. L. Jones regards as the more dangerous to human civilisation.

The Hon. R. S. L. Jones: I prefer solar.

The Hon. D. F. MOPPETT: I believe the case was strongly argued and soundly based for Australia to, in effect, go against the tide by not accepting what the ABC advocated - that we should cave in to all the foreign States that gathered in Kyoto and insisted we should reduce our greenhouse gas emissions over the discussion period. Through our advocacy, and with some support from the United States of America, it was accepted that Australia should plan for an 8 per cent increase in greenhouse gas emissions over the discussion period, rather than try to decrease our greenhouse gas emissions. It is important to recognise that there are good reasons for that, the first of which is Australia’s population density. The Australian population is widely spread, and of course our transport costs are high, so our fuel usage is great. Therefore, on a per head of population basis we are seen to be pollutants -

The Hon. R. S. L. Jones: That is not the reason.

The Hon. D. F. MOPPETT: It is certainly one of the reasons. Another reason put forward is that because we have an abundance of fossil fuel -

The Hon. R. S. L. Jones: It is because of the increase in population. We have a 30 per cent projected increase in population. That is why we have an increase rather than a decrease.

The Hon. D. F. MOPPETT: Yes. Many other reasons have been put forward. One is that our economy is largely based on agricultural production, which is a significant part of our economy. Whilst that seemed to be a part of the strong criticism of the Australian economy by those attending the conference, it is obvious that it will be a long time before that changes. If it does change, the world will be a lot hungrier. I believe that accommodation was eventually won by strong debate by the Commonwealth Government representatives, who are to be congratulated.

I challenge also the criticism levelled against Australia for its contribution to greenhouse gas emissions through agricultural land clearing. On a number of occasions I have contested the figures that have been quoted, particularly those involved in this greenhouse gas evaluation. I believe no credit has been given for the natural afforestation of large areas of Australia. The Hon. A. B. Kelly, in particular, would be aware that no credit has been given for timber taking over in western division country that was clear and open. There is no talk
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about the net figure of clearing, but simply about what has been projected and extrapolated to be the clearing in Australia. However, whatever it is we must come to grips with it.

The net effect of the Kyoto conference was to create a climate for taxes or penalties on those who emit greenhouse gases, in particular carbon dioxide. A range of other gases are also relevant, of course, but for the purposes of tonight’s debate I shall restrict my comments to carbon dioxide. Of course, something can be done about carbon dioxide emissions in relation to forestry, whereas sulphur dioxide and the other greenhouse gases are not so readily absorbed into trees and sequestrated. As well as taxes and fines there is a system of credits. It is considered that these credits will be transferable and that finally the greenhouse gas response will be netted off so that the value of those credits is established as an asset.

Debate adjourned on motion by the Hon. D. F. Moppett.

The Hon. M. R. EGAN (Treasurer, Minister for State Development, and Vice-President of the Executive Council) [10.37 p.m.]: I move:

That this House do now adjourn.

The Hon. A. B. KELLY [10.37 p.m.]: On 16 October I had the privilege of addressing a gathering at the launch of the Save Our Soils campaign at the Dubbo Western Plains Zoo. The aim of the campaign is to promote the value of soils and the importance of good soil management by raising community awareness. The campaign will focus on the rural farming community, schoolchildren and local councils. What makes this project so promising is that the campaign was generated by field staff of both the Department of Land and Water Conservation, formerly the Soil Conservation Service, and the Department of Agriculture, and was developed in conjunction with farmers and land managers to ensure that the end result was a program specifically tailored to their needs.

The key to the success of the program lies in its co-operative approach to soil protection. A wide range of organisations and individuals have combined their talents and resources to develop and maintain the Save Our Soils program. This is an excellent example of diverse groups working together to achieve important goals in conservation farming. The project involved farmers, New South Wales Agriculture, the Department of Land and Water Conservation, Landcare, the University of Sydney, Charles Sturt University, the University of New England, Sydney Water, the Australia Soil Sciences Society, the Association of Natural Resources and Incitec, to name but a few. Those people believe that while water and native vegetation have received much recent attention, our soils have been left behind and are not receiving the attention they deserve.

The campaign was launched by George Negus and attracted a significant crowd - a sign of the ever-growing support for sustainable farming across the State. It brought to mind the Trees on Farms program started by Jack Hallam about 15 years ago. I was in the crowd at the State launch of the program in Wellington, and I remember cringing, thinking that the farmers and locals in the audience would perceive that Trees on Farms was an unnecessary imposition or incursion on freehold land, that it would be seen as having suspicious socialist undertones. Now, 15 years later, farmers have come a long way. I am not aware of many members of our community, particularly farmers, who have not embraced the culture of planting more trees or protecting their environment. I am sure that this effect will be repeated in the current project.

The Save Our Soils campaign will prove crucial in the future of New South Wales farming. Farmers in this State are facing huge soil problems. Soil acidification affects 17.7 million hectares in New South Wales, with a further five million hectares at risk. Salinity is a major threat. Currently, about 250,000 hectares of land is affected by dry land salinity. A further 260,000 hectares of irrigated land is affected by salinity, water logging and rising watertables. A further five million hectares has the potential to be affected by dry land salinity. Soil structural degradation is more difficult to quantify, but it is thought to affect more than three million hectares of cropping areas in New South Wales.

Structural degradation, including the decline in soil organic matter, is significant in central-western New South Wales. Many of the soils in the central west are poorly structured. They contain excess sodium and low organic matter. Sometimes crusting problems occur on the soil surface. As someone who is seriously involved with heavy plant, particularly of the Caterpillar variety, I was aware that our council and various contractors used to send their oils to Sydney, to Gough and Gilmour, to have them tested once a month as part of a proper management and maintenance program. Our soils are exactly the
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same. They are a major asset. We should monitor them in exactly the same way. They need ongoing maintenance or the whole production will grind to a halt.

SOILpak, which was launched along with the rest of the campaign, will enable farmers to do much of this monitoring and provide them with useful networks for consultation and advice. It will allow people to take control of soil protection at the farm level and diagnose problems on their property. SOILpack is a registered trademark of New South Wales Agriculture, and it is already proving to be an important tool in educating producers and land managers in caring for their soil and extending best soil management practices across the State.

We have to remember that the current low product prices and rising costs make it difficult for farmers to do the right thing by their land. Funds are needed to encourage the sustainable use of farmland, for example, grants to assist farmers to undertake conservation farming practices. The Save Oil Soils campaign will culminate next March. A wide variety of activities are scheduled, including field days, workshops, school involvement and a feature at the Royal Easter Show. I encourage members of this House, particularly those with a rural background, to support the Department of Land and Water Conservation and the Department of Agriculture to promote the campaign.

The Hon. R. B. ROWLAND SMITH [10.42 p.m.]: Sir Asher Joel: 1912-1998. I first met Sir Asher Joel in 1974 when I was elected to this worthy institution. Eight of us shared a small room at the back of the old building, and as I was the youngest I had to answer the telephone. Louis Solomons and Leo Connellan had a room together. Their phones never stopped ringing, and I remember thinking they had an SP business. I found out that they did not. Asher had a great sense of humour. He was a lucid speaker who could talk on any subject. He could pick up a bill, open it, look at the introduction and, without even reading it, speak on it.

His history has been well documented in the Biographical Register of the New South Wales Parliament 1901-1970. What he did in his life was absolutely fantastic, but I remember him best when he joined the army in 1942, then moved to the navy and went on to join General MacArthur’s staff in 1944 and 1945. I am sure that honourable members would have read about his background in today’s newspapers. There is no question that his history was diverse. He was the only Jew to be made a Papal Knight, of which he was very proud. I might have upset the Hon. J. R. Johnson when I wondered whether his funeral would be at St Mary’s Cathedral.

The Hon. M. R. Egan: It would be an honour.

The Hon. R. B. ROWLAND SMITH: The honourable member should talk to his colleague behind him.

The Hon. J. R. Johnson: It would be an honour, but the man was of the Jewish faith and he is going from the Great Synagogue.

The Hon. R. B. ROWLAND SMITH: The honourable member told me he could not be buried from St Mary’s Cathedral because he was a Jew.

The Hon. J. R. Johnson: That is a terrible thing to say!

The Hon. B. H. Vaughan: So was the founder.

The Hon. R. B. ROWLAND SMITH: Of course, he will be buried from the Great Synagogue. Sir Asher Joel joined the Country Party in 1959. He was interested in and involved with country affairs. He had not only the newspaper in Mount Isa but also the radio and television stations. I cannot say a great deal more, other than to remind honourable members of the little ditty he used to recite as we approached the festive season:

Roses are red
Violets are blueish
If it wasn’t for Christmas
You’d all be Jewish.

I am sure that everyone in this House will join me in sending my condolences to Sybil, whom I knew very well, and his family.

The Hon. M. R. EGAN (Treasurer, Minister for State Development, and Vice-President of the Executive Council), by leave: On behalf of the Government I am pleased to join with the remarks of the Hon. R. B. Rowland Smith in relation to the late Sir Asher Joel. I did not know Sir Asher well, but I probably met him a lot longer ago than most other members of this House. Not too many honourable members would be aware that my first association with this Parliament was not in 1978 when I was first elected, but in 1965 when I worked
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as Frank Rossiter’s assistant in the Parliamentary Post Office and then for five or six years after that when, during school and university vacations, I would work for the late Jack Mannix, who was both a Minister and subsequently what we would now call a shadow minister in this Parliament.

I met Sir Asher Joel in about 1965, when I was working in Frank Rossiter’s old post office down the back in the old building. Sir Asher Joel was a very well-known figure around Sydney. He was a famous man. He was one of the big wheels of Sydney. As a 17-year-old I was impressed by what a nice, decent, kind man he was. In 1965 and 1966, when I worked in the post office, I probably met most of the members of Parliament from all sides of the political spectrum. Some were nice people and some were not, but I distinctly remember Sir Asher Joel being a lovely man who took an interest in everyone to whom he spoke.

He was famous for all sorts of things, particularly his superb organisation of big events in Sydney. Unfortunately, my election to the Parliament in 1978 coincided with Sir Asher Joel’s resignation from the Parliament, so I never had the opportunity to get to know him well. But from what I know of him and my experience of him, he was a credit to this Parliament. He was a credit to the Country Party and I am sure the Jewish community in Sydney would be very proud of his tremendous contribution to this country, this State, this city and this Parliament.

The Hon. R. T. M. BULL (Deputy Leader of the Opposition) [10.48 p.m.]: I, too, would like to be associated with the condolences to one of our former colleagues, Sir Asher Joel. Earlier today we stood in our places and remembered his contribution to the Parliament and New South Wales. His career spanned the media, public relations and politics. Sir Asher was known for his organisational skills, especially in relation to protocol, as two of the previous speakers have mentioned. This State owes a great debt of gratitude to Sir Asher Joel.

Sir Asher Joel, an extraordinary individual, served in this Chamber for 20 years, which is quite a feat when we have regard to the short terms that many honourable members serve. Sir Asher Joel made an extraordinary contribution to the Legislative Council, first as an Independent member, but later, after he saw the light, as a member of the Country Party. The National Party is extremely grateful to him as he contributed a lot in his term as a member of Parliament. I, like most honourable members, did not have the opportunity of knowing him when he was a member of the Legislative Council, but I spoke to him on many occasions at National Party upper House reunions. He was always interested in what was going on in the Legislative Council and in politics, and he offered advice to young members, as I was at the time and I hope I still am, about what they should be doing.

The Hon. M. R. Egan: It would have been good advice too.

The Hon. R. T. M. BULL: It was sound advice, which we will surely miss. I join my colleague the Hon. R. B. Rowland Smith and the Leader of the Government in extending sympathy to Sir Asher Joel’s wife, Sybil, his four children and six grandchildren. We thank Sir Asher Joel for his contribution to this Parliament and to New South Wales.

The Hon. I. COHEN [10.52 p.m.]: I place on record some of the absurd statements being made by the forestry division of the Construction, Forestry, Mining and Energy Union - statements that are swaying the Government’s decision to honour its pre-election promise to deliver an adequate and representative forest reserve system for New South Wales. That promise was made not just to the people of New South Wales; it was a promise also to future generations.

The Government made a commitment to the people of New South Wales when it signed the national forest policy statement - a crossroad of issues and ideals in this nation. I acknowledge that, in many instances, might and bullying hold sway. However, it is of great concern that the Government may be missing out on an ideal opportunity to go down in history as a substantially reforming government in the area of conservation. An article in the Northern Star of 7 November states:

The forestry division of the powerful Construction, Forestry, Mining and Energy Union (CFMEU) has threatened to cut its ties with the Labor Party in a row over the New South Wales Forests Agreement.

It is a shame that that union is prepared to use these tactics to get its way on this issue. Michael O’Connor, a leader of that section of the union, said in an article in the Northern Star of 10 November that unless the forestry agreement provided job security for at least 100 years it would not be acceptable to the forestry industry. The article also states:

Mr O’Connor . . . reinforced a CFMEU warning that it would disaffiliate itself from the Australian Labor Party if future jobs were jeopardised by the northern agreement.

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That puts the position of the union well and truly on the line. An article in the Daily Telegraph Mirror of 24 November 1995 states:

The timber unions yesterday declared war on conservationists, smashing an historic peace deal between them.

The breakdown came between the first blockades launched this week in what conservationists claim will be a renewed summer-long campaign of action in the forests.

The timber workers’ union claimed yesterday it would take any action by conservationists "personally" and use force to remove protesters at any further blockades.

"They will know what the trenches are all about when we are finished with them," said the Construction, Forestry, Mining and Energy Union secretary Gavin Hillier.

An article in the Daily Telegraph Mirror of 18 December 1995 states:

In an interview with The Daily Telegraph Mirror on November 23 Mr Hillier warned the unions would take blockades "personally" and use force to remove protesters.

"They will know what the trenches are all about when we are finished with them,", Mr Hillier said.

That is the attitude of the union on an issue that is important to many people in New South Wales. The union might well succeed in this area. The Carr Government must reconsider its position on this issue. It is difficult to describe the magnificence and beauty of our old growth forests - those many thousands of hectares of forests that are in jeopardy at this time. Imagine these statuesque 1,000-year-old trees and the entwining undergrowth that has developed over time in these forests. That might disappear if the unions and industry hold sway over the Labor Government.

The Government is concerned only about the next election; it is not concerned about the next century. It is obvious that this Government is prepared to declare a number of new national parks, but that is not all that is required. A scientifically-driven reserve system must be worked out between various government agencies. The Government should take heed of the statement made by Premier Wran in 1983. He said that his Government would be remembered by future generations as having saved the rainforests. The Carr Government has an opportunity to save the forests, in particular, in northern New South Wales. I hope that the Government’s decision is in accordance with the promises it made before the last State election.

The Hon. B. H. VAUGHAN [10.56 p.m.]: I draw to the attention of the House and the community the fiftieth anniversary of an historic day in the history of the great Australian Labor Party. On 3 November 1948, in room 61 of the Trades Hall, the first provisional meeting of the Youth Council of the Australian Labor Party - which is now known as Young Labor - was held. It was born from an idea of Dick Klugman, subsequently the member for Prospect, and Bill Fisher, subsequently President of the Industrial Court of New South Wales. Present at that meeting 50 years ago were: Frank Miller, J. Delaney, Ann Barnard, D. Klugman, F. Howard, Cecil Lisle, H. Hudson, J. Brassil, Marie Howell, Bill McNamara, Bruce Yuill, Alan Barcan, Bill Fisher and Douglas Sinclair, who for many years was Director of Henry Lawson Labor College. The minutes of that first meeting state:

That this meeting form itself into a provisional Council of ALP Youth for the purpose of considering the draft constitution.

That motion was moved by Mr Yuill and seconded by Mr Miller. The following pro tem officers were elected: President, Bruce Yuill; Vice-President, Mr Miller; and Secretary-Treasurer, Alan Barcan. The chairman stated at that meeting that he was pleased to accept the presidency. He outlined the background leading to the preparation of a draft constitution by a subcommittee. The objects of the provisional council, which were suggested in the constitution, were read out. The following motion was moved by Mr Miller and seconded by Mr Hudson:

That this meeting express its appreciation to Mr Sinclair for his great assistance in getting this present scheme under way.

The following motion was foreshadowed:

That all members of ALP branches under the age of 30 shall constitute the NSW Assembly of Youth.

That was later to be known officially as the Youth Council of the Australian Labor Party. Four or five years later, in 1953, the sixth annual report of the Youth Council of the Australian Labor Party, in which I took part, stated:

Youth Council should be a hot-bed of radical ideas. Secondly, we should do everything in our power to obtain a real understanding with our near Asian neighbours . . . There is no doubt that Labor is facing a supreme test and in this test the Youth Council, although still young, will play its role to the full.

The role of the youth council was not simply political. Regional assemblies ensured the interaction of young members, the chief function of which was to provide cultural, social, sporting and educational activities. All those things were achieved. There were many marriages of ideas in those early years.
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The youth council produced a magazine called "Youth Call". I have one such magazine that features Dr Evatt, a favourite person of people like the Hon. J. R. Johnson and I, who was leader of the Australian Labor Party for a long time.

The establishment of the Youth Council provided a seminal time in the history of the Australian Labor Party, the oldest, most constant and, I think, most successful political party in this country. Many Youth Council members became members of this House, and a great number of people in Federal and State politics today cut their teeth in the organisation. Although I was a latecomer - I did not join until 1951 - I am proud to have been part of this great organisation which has produced abundant fruit for the Australian Labor Party.

The Hon. M. R. Egan: You were an old man when I got there.

The Hon. B. H. VAUGHAN: I am an old man now, but I do not remember the Treasurer being a member of the Youth Council. The Hon. J. R. Johnson, the Treasurer and many other members of Parliament are proud to have belonged to this organisation. I could spend a great deal of time on this subject but my time is limited. Arising from my remarks, in the coming months arrangements will be made to commemorate the establishment of the Youth Council.

The Hon. J. F. RYAN [11.00 p.m.]: Tonight I pay tribute to New Ballet West Incorporated, a wonderful cultural organisation that operates in the Blue Mountains. The concept was developed by Paul Vlasic and Dennis Tilney, who are residents of the Blue Mountains. The aims of this fabulous cultural development - which has sponsored performances not only in the Blue Mountains and Katoomba but also in Penrith, Bathurst and Dubbo - are to try to instil in young people who are not attracted to ballet an appreciation of the art and to give aspiring young ballet dancers an opportunity to perform with professional tutors in a professionally arranged company before audiences.

New Ballet West hopes to open the minds of Australian youth to the beauty of ballet and theatre production rather than being fed their steady diet of crime and violence on television. In an attempt to create a wider exposure and appreciation of classical ballet, New Ballet West encourages school students, the aged, the disadvantaged and the general public to be among the audience of its special performances. The concept also creates opportunities for the development of talented young dancers by professional tutors. The staging of a recent performance of the ballet Giselle at Katoomba High School indicates that the company’s productions are not elitist. Such fantastic productions bring ballet to the people in an effort to popularise classical dance.

New Ballet West, which has been a wonderful development for the Blue Mountains, deserves the support of members of Parliament. I congratulate the artistic director, Mr Vlasic, a professionally trained dancer from London, and the administrator, Mr Tilney, who also has impressive worldwide experience in dance. New Ballet West is a great benefit to the people of western Sydney and I encourage this company in its enterprise.

The Hon. HELEN SHAM-HO [11.04 p.m.]: Earlier this year devastating floods swept across much of central and south-eastern China, affecting an estimated 558 million people, destroying their homes, submerging their farmlands in water and damaging all their crops. There are many sad personal stories, but I will cite one story which demonstrates the hopelessness of millions of people who desperately need urgent help. Farmers in the village of Ban Qiao depend on the crops from their small fields to feed their families. The worst of their nightmares came true when the fruits of their labour were destroyed by natural elements. The food that was supposed to be present on the table to feed their hungry families vanished overnight. Nothing is left. The months ahead are filled with uncertainty, and concerns about survival are even more imminent.

The rains and subsequent flash floods have not only destroyed the farmers’ sole rice crops for the year but also their winter crops of potatoes, vegetables and maize, leaving them with barely any food left for the days ahead. Where some farmers and their families will live has also become a problem. Landslides destroyed many of their homes, leaving nothing but rubble and debris. After surviving the floods, for many the question of how to survive the fast approaching winter is the primary concern. I find this story very moving.

In response to this disaster many organisations, such as Care Australia, World Vision, Community Aid Abroad and International Red Cross, have been actively involved in relief work for the flood victims. Their efforts have been strongly supported in Australia by the Chinese community organising a number of fundraising functions. During a three-
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month period the Sydney Chinese community has raised between $300,000 and $400,000, which was donated to International Red Cross. At the height of the floods Care Australia formed a disaster assessment team and, in conjunction with Chinese authorities, conducted a damage assessment mission in the province of Hubei in central China. From the time of the disaster Care Australia has maintained an office in China to gather information and to co-ordinate relief efforts.

Care Australia’s work has been highly commended by Chinese officials with whom I have spoken. This responsive presence on the ground is one of the reasons that Care Australia’s work has resulted, and will continue to result, in real improvements for those hardest hit by the disaster. It is also one of the reasons I was more than pleased to assist Care Australia in organising a special fundraising dinner to be held on 23 November in Sydney. The money raised from that dinner will be directed to those who are suffering most. The fundraising dinner is to be hosted by Care Australia Chairman, and a former Australian Prime Minister, the Rt Hon. Malcolm Fraser, and will be attended by the Chinese Ambassador, or his representative, and Consul-General. I expect at least 400 or 500 people to attend from all sectors of the Chinese and wider community.

The organisation of this function has been relatively easy compared to the organisation of political functions, and it has been very satisfying to be involved in such a worthwhile and humane cause. Millions of people continue to be displaced by the floods. Outbreaks of disease are still occurring, and medical services are urgently needed. Winter is rapidly approaching and immediate relief measures can only do so much. A great deal of long-term reconstruction work is needed for the millions of people who have been left homeless. Hopefully the
funds raised at the dinner will help Care Australia attain its long-term goals.

The launch of the Care Australia National Chinese Advisory Council will occur during the dinner on 23 November. The establishment of the council is part of Care Australia’s efforts to seek the help of Chinese Australians to make its office in China bigger and more effective, as its operations are relatively small. The role of the council is to provide a real opportunity for directly influencing the use of our resources in China. Care Australia’s objectives and efforts in China are commendable and I will try my best to assist it in its good work.

The Hon. J. R. JOHNSON, by leave: I intend to speak on the death of Sir Asher Joel tomorrow night if time is available. However, during his contribution to the adjournment debate tonight the Hon. R. B. Rowland Smith said that I said Sir Asher Joel could not be buried from St Marys Cathedral because he was a Jew. He did not conclude my statement. I had said that because Sir Asher Joel was Jewish he was being buried from the Great Synagogue. That puts a completely different light on what the Hon. R. B. Rowland Smith said. I have the greatest respect for Sir Asher Joel and I am probably the only member of this House who has a personal gift from Sir Asher, which I wear with great pride. Many years ago Sir Asher gave me a pair of cufflinks with the emblem of this Parliament encrusted in gold. I trust that sets the record straight.

Motion agreed to.