8234 [COUNCIL] APPROPRIATION (CONSOLIDATED FUND) BILL (No. 2) 2000 Second Reading Resumed from 22 June. HON MARK NEVILL (Mining and Pastoral) [10.15 pm]: I draw to the attention of the House the purchase of Roebuck Plains station just south of Broome by the Indigenous Land Corporation in 1999. Great concern and disquiet surrounds the terms of that purchase and the secrecy associated with it. The Roebuck Plains Pastoral Company was owned in recent years by Lord McAlpine and was operated by Roebuck Plains Holdings Pty Ltd. In 1996-97, Kimberley Pastoral Company (Leasing) Pty Ltd leased the property from Roebuck Plains Holdings for $5m for one year. That amount was paid in four quarterly payments of $1.25m. It seems very strange that someone would lease a cattle station for $5m for one year. In truth, it was a blatant and crude mechanism to avoid tax. The lessees were primarily interested in tax avoidance. Roebuck Plains Holdings Pty Ltd, which owned the station, had tax losses of nearly $3m. In 1997, Roebuck Plains station was sold to Birchwood Pastoral Pty Ltd for $1.3m, and it continued to own the station for 18 months. That $1.3m turned into $8.2m in 1999, when the Roebuck Plains station was sold to the ILC. That is a massive jump in value in 18 months. The cattle on the station were not counted before it was purchased. I read in a recent edition of the Broome Advertiser that the manager of the station - Mr Illingworth - said that delayed cattle musters were not unusual. That is absolute rubbish. I have never heard of a station being bought and the cattle being counted afterwards. If that buyer did the mustering, it would be easy to drop off a few hundred head of cattle. In October 1997 there were 11 700 cattle on Roebuck Plains. That was a result of a very accurate count. That means there were between 8 000 and 8 500 adult cattle on that station. In 1999 when the station changed hands, there were said to be 15 000 adult cattle units. If the juveniles were added to that - approximately 3 000 - that would make a total of 18 000 head of cattle. In that case, in 18 months the number of cattle jumped from 11 700 to 18 000. In the dry season of 1998, the owners would have turned off between 2 000 and 3 000 cattle. We also know they purchased 1 000 breeders. If they had a calving rate of 90 per cent, that would have produced 900 calves. That would give an additional 1 900 cattle in total. It is still difficult to work out how that figure of 18 000 head of cattle was reached. It seems the purchase price was based on 15 000 head of adult cattle, or 18 000 head of cattle in total. Some questions need to be asked, particularly when the station was purchased before the cattle were counted. How can that discrepancy be explained? We know the ILC bought Myroodah and Luluigui stations for approximately $2m. Both those properties were in an extremely run-down condition and were worth in the vicinity of $700 000. An investigation of stock waybills should indicate which cattle have been moved into Roebuck Plains from Myroodah and Luluigui. They may have been used to inflate the numbers as they currently stand today. I know a number of cattle have been trucked from Billiluna station to Roebuck Plains, and the Aboriginal community was paid $75 a head for the cattle delivered by the Aboriginal owners at Billiluna. These cattle would be valued at $280 a head at Roebuck Plains. I would like to know who counted the cattle after the purchase of Roebuck Plains by the ILC, and how those cattle were counted. It takes quite some time to count cattle on a station, and if people do not know what they are doing, the same cattle can be counted twice. Taxpayers' money is being spent, and that money is set aside for the benefit of indigenous people. It seems to me it is not being spent very carefully. I am told by experienced cattlemen that the carrying capacity of Roebuck Plains when fully developed is 14 000 cattle. When the last cattle count was done in October 1997, there were 11 700 cattle on the property. The property is breeding country, not fattening country. It is unsuitable for feedlots, and properties in the Kimberley should always be run to their drought potential. We cannot afford to run larger numbers of cattle because they will damage the country. The Roebuck Plains land is unsuitable for fattening cattle, which process must be undertaken near markets. Part of the Indigenous Land Corporation strategy is flawed. No plan for traditional-owner living areas has been included in the purchase arrangement. The management plan contains no jobs or training programs for Aboriginal people; yet this ILC money is supposed to be for the benefit of Aboriginal people. I do not think the purchase complies with the ILC's Act. Section 191D of the Aboriginal and Torres Strait Islander Act reads - The land acquisition functions of the Indigenous Land Corporation are as follows: (a) to grant interests in land to Aboriginal or Torres Strait Islander Corporations; (b) to acquire by agreement interests in land for the purpose of marking grants; . (c) to make grants of money to Aboriginal or Torres Strait Islander corporations; . That is important. Under subsection (3)(a) the Indigenous Land Corporation must give priority to pursuing a policy of acquiring interests in land and granting the interests to Aboriginal or Torres Strait Islander corporations. Under subsection (3)(b) the grant should be made within a reasonable time after acquisition. No Aboriginal people were consulted prior to the purchase of Roebuck Plains. Nor have Aboriginal corporations been appropriately established to which that land can be transferred. A government valuation of Roebuck Plains was about $3.6m. Experienced cattlemen tell me that the most profit that can be made out of Roebuck Plains is about $300 000 a year - the 15 per cent return on capital. That valuation of $3.6m is reasonable. [Tuesday, 27 June 2000] 8235 It seems to me that Roebuck Plains was not purchased for any valid reason. Expressions of interest in the land should have been sought prior to its being purchased. Aboriginal corporations should have been established in which the land could have been vested. None of that occurred. In fact, the property was purchased shortly before the expiry of the terms of the Chairman of the Indigenous Land Corporation, David Ross, from Alice Springs and the Deputy Chairman, Peter Yu, from Broome. A Roebuck Plains working group for indigenous people was subsequently established. However, I have copies of letters in my possession that suggest very little occurred and that the working group was abandoned some months later. These traditional owners were locked out of negotiations. They felt their heritage was being traded off without their consent. Little progress was made on a draft constitution. Although that working group was abandoned, recent attempts have been made, because of the publicity, to revive it. The next matter I want to talk about is the management agreement for Roebuck Plains station. I understand the manager, John Wilson, wrote the agreement. This agreement with the Great Northern Pastoral Company Pty Ltd is for 15 years. The management experience of the principals is very thin. Mr Vereker is an accountant and Mr McCoy is a solicitor. Both of those men are from Melbourne and have no experience in the pastoral industry. Mr Illingworth has recently become the manager of Roebuck Plains station and prior to that worked on Roebuck under supervision for three or four years. I would not call that a great deal of management experience. The Indigenous Land Corporation should have conducted a proper search for people to manage the station. Part D of the management agreement states - The Manager has particular expertise in relation to the management of cattle breeding and trading operations on pastoral properties in the Kimberleys and is skilled and experienced in activities of a kind necessary to manage such operations upon properties acquired there from time to time by ILC. As I said, I do not believe those three men have that expertise. There are far more competent people who could have undertaken the management of that property. Land Enterprise Australia Pty Ltd is a subsidiary of the ILC. The agreement further states - LEA agrees to engage the Manager to provide certain management services to LEA as administrator of ILC's pastoral assets on the terms and conditions set out in this Agreement. It appears that the managers are guaranteeing themselves. There appears to be no provision in the agreement for checks of their performance. The ILC, having spent such an enormous amount of taxpayers' money on this pastoral lease, should have highly experienced cattlemen or pastoralists on its staff to scrutineer and protect the ILC's asset and its interest in the business. A number of definitions are very poorly worded. I will not read them but they are definitions 1.1.13, 1.1.14 and 1.1.15. The management agreement was vetted by an Australian government solicitor and a private solicitor in Adelaide. Frankly, it is a very inadequate document written to favour the management group and not the ILC. Section 1.1.20 reads - "Improvements" includes installation of and/or repairs to infrastructure, pastoral development and/or rehabilitation and any other works undertaken on the Property with the objective of improving or maintaining the Properties and/or the Herd and/or the profitability of the Operations in accordance with an Operations Program approved by LEA; Who sets up the program and then checks to see that it has been carried out? I can almost guarantee that no-one will.