VICfORIA

PARLIAMENTARY DEBATES (HANSARD)

FIFTY-FIRST PARLIAMENT

AUTUMN/SPRING SESSION 1992

Legislati ve Assembly

VOL. 408

[From 27 May 1992 to 10 June 1992] "From 11 August 1992 to 13 August 1992]

MELBOURNE: L. V NORl1:l, GOVERNMENT PRINTER

The Governor His Excellency the Reverend OR JOHN DAVIS McCAUGHEY, AC The Lieutenant-Governor

The Honourable SIR JOHN McINfOSH YOUNG, AC, KCMG The Ministry

[AS FROM 28 JANUARY 1992) Premier ...... The Hon. J. E. Kimer, AM, MP

Deputy Premier, Attorney-General, ...... The Hon.]. H. Kennan, QC, MP Minister for the Arts, and Minister for Major Projects

Minister for Manufacturing and ...... The Hon. O. R White, MLC Industry Development

Minister for Ethnic, Municipal and ...... The Hon. C.]. Hogg, MLC Community Affairs

Minister for Food and Agriculture ...... '. The Hon. 1. M J. Baker, MP

Minister for Tourism, and Minister for ...... The Hon. S. M. Crabb, MP Water Resources

Minister for Finance, and Minister Assisting The Hon.]. O. Harrowfield, MP the Minister for Labour on WorkCare

Minister for Health ...... The Hon. M A. Lyster, MLC

Minister for Planning and Housing ...... The Hon. A. McCutcheon, MP

Minister for Labour, and Minister for ...... The Hon. N. A. Pope, MP School Education

Minister for Conservation and ...... The Hon. B. T. Pullen, MLC Environment

Minister for Employment, Post-Secondary " The Hon. T. W. Roper, MP Education and Training, Minister for Aboriginal Affairs, and Minister for Gaming

Minister for Police and Emergency ...... The Hon. M. J. Sandon, MP Services, and Minister for Corrections

Minister for Community Services '" ...... The Hon. K P. Setches, MP

Treasurer ...... The Hon. A. J. Sheehan, MP

Minister for Transport ...... The Hon. P. C. Spyker, MP

Minister for Consumer Affairs, Minister .... The Hon. T.e. Theophanous, MLC for Small Business, and Minister Assisting the Minister for Manufacturing and Industry Development on Corporatisation

Minister for Sport and Recreation ...... The Hon. N. B. Trezise, MP

Parliamentary Secretary of the Cabinet ..... The Hon. R A. Jolly, MP

FIFrY-FIRST PARLIAMENT-FIRST SESSION

Members of the Legislative Assembly

Member Distnct Party Member District Pa!!}:

Andrian~ulOS, Alex St Albans ALP McGrath, John Francis Warmambool NP Austin, omas Leslie Ripon LP McGrath, WiIliam Desmond Lowan NP Baker, lan Ma1colm John SWlShine ALP McNamara, Patrick John Benalla NP Barker, Mrs Ann Patricia Bentleigh ALP Maciellan, Robert Roy Berwick LP ·"Batchelor, Peter Thomastown ALP Cameron Bildstien, Craig Stephen Mildura LP Mathews, Charles Race Oakleigh ALP Brown, Alan John Gippsland West LP Thorson Cain,John Bundoora ALP ·Mau~han, Noel John Rodney NP Clark, Robert William Balwyn LP Mical ef, Edward J~h Springva1e ALP Co~hill. Or Kenneth Alastair Werribee ALP Napthine. Or Denis VU\Ceflt Portland LP Co e, Neil Donald Melbourne ALP Norris, Terence Richard Dandenong ALP Coleman, Charles Geoffrey Syndal LP Perrin, Oavid John Bulleen LP Cooper, Robert Fitz~rald Momington LP Perton, Victor John Doncaster LP Crabb, Steven Mars 11 Knox ALP Pescott, R~er Bennettswood LP Cunningham, David James Derrimut ALP Plowman, idney James Evel~ LP Delzoppo, John Edward Narracan LP Pope. Neil Albert Mon ulk ALP Dickinson, Harley Rivers South Barwon LP Ray, Mrs Margaret Box Hill ALP I<5J Ehzabeth Dollis, Demetri Richmond ALP Reynolds, Thomas Carter Gisbome LP Elder, Stephen Noel Ballarat North LP Richardson, John In~les Forest Hill LP Emst, Graham Keith Bellarine ALP Roper, Thomas WiJJ&.am Brunswick ALP Evans, Bruce James Gippsland East NP Rowe, BaIT)' John Ea&endon ALP Fordham, Robert Clive Footscray ALP Sandon, Malcolm John Carrum ALP '"Garbutt, Mrs Shenyl Maree Greensborough ALP Seitz, Geote Keilor ALP Gavin, Peter Murra Coburg ALP Sercombe, obert Olarles Niddrie ALP Gude, Phil~ Archiha Id Hawthorn LP Grant Hamilton, eith Graeme Morwell ALP Setches, Mrs lUy Patricia Ringwood ALP Harrowfield, John Dyson Mitcham ALP Sheehan, Anthon~ John Northcote ALP HaTt:ard, Donald Keith Prahran LP Sheehan, Francis atrick Ballarat South ALP He feman, Vincent Patrick, lvanhoe LP Shell, !::J;den Kevin Geelong ALP OAM Simm s, James UoneJ Reservoir ALP Hill, Mrs Jane Margaret Frankston North ALP Smith, Emest Ross Glen Waverley LP Hirsh, Mrs Caroltn Dorothy Wantima ALP Smith, lan Winton Polwuth LP H~ood, Phi lip Warrandyte LP Spyker. Peter Comelis Mentone ALP N ' S~ll, ~Edward HedDr Swan Hill NP Jasper, Kenneth Stephen Murray Valley NP Stoc ale, A Robert Brighton LP John, Michael Bendigo East LP Tanner, Edgar Miles c.UlfieId LP Jolly, Robert Alien Doveton ALP Poruonby Kennan,James Harley, QC Broadmeadows ALP Thomson, Kelvin John Pascoe Vale ALP Kennedy, Andrew David Bendigo West ALP Trezise. Neil Benjamin Geelong North ALP Kennett, Jeffrey Gibb Burwood LP Vaughan. Or Gerald Clayton ALP -·IGlgour, Donald Shecparton NP MarshaU IGrner, Ms Joan Elizabeth, Wil iamstown ALP Wade, Mrs Jan Louise Murray Kew LP AM Wallace, Thomu William G~ South NP Lea, Oavid John Sandringham LP Walsh, Ronald William A Park ALP Leigh, Geof=raeme Malvern LP Weideman, Graeme Franbton South LP ~ton, M' I Andrew Preston ALP Wells, Or Ronald ameli Oromana LP , nnan,. Louis Stuart Benambra LP Herbert = McCutcheon, Andrew StKilda ALP Wilaon, Mrs Janet TUlIU1e Dandenong North ALP McDonaJd, Maxwell John Whittlesea ALP Calder

eEIected 4 March 1989 eeElected 1S April 1989 eeeElected 2 February 1990 eee eE1ected 22 October 1991

FIFTY-FIRST PARLlAMENT-FIRST SESSION Speaker: The Hon. KEN COGHILL Ch.a.lrman of Committee: Mr T. R. NORRIS Temporuy Ch.a.lrmen of Committees: Mr Delzoppo, Mr Emst, Mr Evans, Mrs Garbutt, Mr Jasper, Mr Lieberman, Mr Mdl<>nald, Mr J.F. McGrath, Mrs Ray, Mr Richardson, Mr F. P. Sheehan, Mr Shell, Mr Steggall, and Or Vaughan.

uader of the Labor Party and P~micr: TIle Hon. J. E. KIRNER, AM

Deputy Leader of the Labor Party and Deputy P~m1ft': The Hon. 1- H. KENNAN, QC uader of the Parliamentary liberal Party and uader of the Opposition: The Hon. J. G. KENNETT Deputy Leader of the ParliamentM)' Liberal Party and Deputy Leader of the Opposition: MrP. A.GUDE uader of the National Party: Mr P. J. McNAMARA Deputy Leader of the National Party: Mr W. D. McGRA TH

Heads of Parliamentary Departments Council-Oerk of the Parliaments and Oerk of the Legislative Council: Mr A. V. Bray

Assembly - Clerk of the Legislative Assembly: Mr J. G. Uttle, ].P.

Hansard - Orief Reporter: Mr Eric Woodward

Library -librarian: Mr B. J. Davidson

House - Acting Secretary: Mr W. F. McKelvie

ACCIDENT COMPENSA TION (FURTHER AMENDMENT) BILL

Wednesday, 27 May 1992 ASSEMBLY 1841

be done in good faith, in accordance with any problems of WorkCare. Some looked at the rate of terms, conditions and restrictions on the agent's growth of common-law claims and the massive appointmen t, in the exercise of a power or the increase in legal costs, and some were designed to discharge of a duty of the agent under this Act." make harder the rorting of the system and cut the growth of administrative costs. All those areas are of Amendments agreed to on motion of Mr KENNAN significance to the scheme but they have not been (Attorney-General). addressed by the changes that are before the House. ACCIDENT COMPENSATION Nonetheless, the concerns expressed about the (FURTHER AMENDMENT) BILL changes are Significant. I refer to the Law Institute News, issue No. 11 of Order of the day read for resumption of debate. mid-December 1991. It in many ways outlines the deficiency of the interpretation of section 135(3A). The SPEAKER -Order! As the required The article states: statement of intent has been made pursuant to section 85(5)(c) of the Constitution Act I am of the WorkCare and common-law rights - Full court opinion that the second reading of this Bill requires interprets s.I35(3A). to be passed by an absolute majority. The effect of a recent decision of the appeal division of Second reading the Supreme Court now means that if your client has made a claim under section 98 of the Accident Debate resumed from 6 May; motion of Compensation Act or if your client has a potential Mr HARROWFIELD (Minister for Finance). entitlement to a section 98 claim, it would be prudent to ensure that the client section 98 claim is determined Mr G UDE (Hawthorn) - The Bill seeks to close before his or her common-law claim is heard or is two principal loopholes that have existed in the settled. Accident Compensation Act. The Bill amends the Act so claimants cannot double dip for workers Section 135(4) of the Act provides that where compensation claims and it retrospectively validates common-law claims for non-pecuniary loss proceed to ~e appointment of occupational health and safety judgment or are settled then the claimant cannot Inspectors. therefore pursue a claim under section 98. However, the Supreme Court has interpreted section 135(3A) to The Bill in many ways is a sad reflection on the way mean that a claimant can receive an amount under the government has permitted the WorkCare system section 98 and subsequently receive an award of to evolve and develop and allowed the rorting that damages for non-pecuniary loss without the amount has existed within the system. There have been an received under section 98 being deducted from the untold number of amendments over the years, and award of damages. The only exception would be if the particularly in this House the honourable member amount of damages is greater than the amount of for Brighton and I have been involved in those $176150 less the amount of the section 98 payment in debates. which case he or she would be entitled to the lower amount. It does not come as any surprise that we are faced with yet another piece of legislation that seeks to Accordingly, we suggest that you now ensure that your correct some of the deficiencies pOinted out on a client has a section 98 claim and a common-law claim, number of occasions by the opposition. In many you should have your client section 98 claim ways it is a sad Bill, not so much because of what it determined before the common-law proceedings are does but more because of what it started out to be heard or settled. and the way it has finished up. That is what makes the Bill so Significant. The name of the decision is Metropolitan Transit Authority v. Ivanovski. Honourable members will be aware that there were about 100 amendments to the principal Act that The article continues: were recommended by the Accident Compensation Commission and officers of government to try to The Act will be amended to avoid the effects of the effect change to this legislation. The amendments decision, but until any amendment is made that were proposed started out as a substantial practitioners should be aware of their clients' rights reform package to address the fundamental ACCIDENT COMPENSATION (FURTHER AMENDMENT) BILL

1842 ASSEMBLY Wednesday, 27 May 1992

following the decision which is available on request the Bill is limited in nature. I briefly refer to a from the Law Institute library. facsimile letter from an interested person. It states:

That article clearly sets out the concerns and the On Monday last two men entered my store identifying identified deficiency that have eventuated as a result themselves as WorkCare investigators. They asked if of the matter before the courts whereby we they could discuss one of my ex-employees, Mr John effectively have seen someone gain access to both Moore, of Kelleher Street, Churchill. At this point they spheres of compensation available through the suggested they were investigating a possible WorkCare Accident Compensation Act and the previous fraud and then introduced his name. workers compensation arrangements. They asked if I had in fact employed Mr Moore to It is also significant in the context of this matter that which I said yes, which confirmed his reference to us I draw the attention of the House to the fact that the on last year's tax return. I then pointed out to the Honourable Roger Hallam in the other place, the investigators that I had in fact employed Mr Moore coalition spokesman on WorkCare, last November under the WorkCare rehabilitation program which raised a matter for the attention of the Minister for their own department had requested me to do. I only Consumer affairs representing the Minister for employed him for the duration of the program and Labour in that place concerning what he had terminated due to the lack of sufficient business to described as the indecency of double-dipping of continue his employ. WorkCare claims. It was quite obvious that at this point the investigators He referred to two separate decisions that could cost were somewhat surprised and a little embarrassed. the Accident Compensation Commission tens of They were investigating someone who was working millions of dollars; those decisions were handed under a program their own organisation instigated. down in Victorian tribunals in the week commencing 14 November 1991. Mr Hallam states: I asked how this can happen and their response was that rehabilitation was another section to which they In my view the decisions are contrary to the intention did not have access, that is, the left hand does not know of this Parliament and natural justice. what the right hand is doing.

He then proceeds to discuss some of these matters. The author points out that Mr Moore had possibly He refers to the two decisions, and states: one of the most genuine WorkCare claims he had ever come across. Earlier this week, pursuant to the Workers Compensation Act 1958, the Accident Compensation One of the points made, which the Bill has not Tribunal awarded a $69 250 lump sum to a widow picked up, is that there should be closer interlinking following the work-related death of her husband. That of the components of WorkCare: the Accident is quite proper and I do not raise a question mark Compensation Commission, the Accident against it except that the widow had already received a Compensation Tribunal, the Victorian Accident lump sum of $80 600 under the Accident Compensation Rehabilitation Council, and the Occupational Health Act 1985 for the death of her husband. and Safety AuthOrity. This process of interlinking is important and would be a useful change to the It is clear that the provisions of the legislation when system. Unfortunately that has not occurred. originally introduced into this place were not to facilitate an opportunity for double-dipping, yet this I direct to the attention of the House another matter area has been pointed out as a deficiency in the Act. that will form the end of my introduction of I well recall the early debates, and I know this matter examples of concern. I shall not name the person but was referred to initially by the honourable member I can provide the Minister with the documents that I for Brighton and lately by myself and others who have. This person was receiving WorkCare benefits have had an interest. It seems amazing that it has in May 1989 and then moved to Queensland. He was taken the government since 1985 to bring about a one of the $12 million a year WorkCare beneficiaries change to correct this deficiency in the Act. living in another State. He failed to provide continuing certificates so was taken off WorkCare When one contemplates the sorts of things that have but found time to undertake a course of study at one happened in the WorkCare area it is alarming that of Brisbane's theological colleges because he thought a couple of years in the sunshine might assist him to ACCIDENT COMPENSATION (FURTHER AMENDMENT) BILL

Wednesday, 27 May 1992 ASSEMBLY 1843 rehabilitate. Although he had not produced the forums about the impact and cost of workers required level of certification required, on his compensation in this State. As I see it the problem is eventual return to Melbourne he ultimately obtained that we have missed an opportunity. The a doctor's certificate, presented it to the WorkCare government did not turn out a major refonn Appeals Board and - surprise, surprise - he was package; it produced one that was gutted along the backpaid for his two years holiday in the sun where way. The government has capitulated to the trade he undertook some theological training. This man union influence that it finds itself under. was allowed to continue on WorkCare benefits. I understand something like 60 key reforms were on Mr Micallef - Is he better? offer. Certainly that was evident in the original draft Bill. We now have two minor changes and some Mr GUDE - The honourable member for people would query whether it was worth the effort. Springvale asked whether this man is better. This I believe we should be grateful for small mercies. It gentleman was better a long time ago - and that is is hardly worth the trouble of going through the the point of the scenario. Once again the system has consultative process when this happens, but been rorted. I suggest to the honourable member, in individuals in the workplace, employees, unions, the quietest, nicest way, that he might like to avail employer organisations and individual employers himself of my file to fonn his own views on the have been consulted. The original concept had the matter. support of all the constituent bodies of the Victorian Congress of Employer Associations, the Insurance The Bill is a lost opportunity, an opportunity that Council of Australia Ltd and the Law Institute of had the enthusiastic support of industry, Victoria, but the Bill we now have is negative. particularly the business community. The Bill should also have the support of every employee, The Bill does two things: it closes two loopholes in given that WorkCare represents a major barrier to the legislation relating to double dipping and it employment opportunities. The Victorian WorkCare confirms the validity of the appointment of scheme is marred by deficiencies in provisions inspectors under the Occupational Health and Safety which should have been corrected by this Bill and Act. which have made it one of the most costly compensation schemes in Australia. I turn now to the Occupational Health and Safety Act and the loophole relating to inspectors. I Victorian employers are being placed at a understand that a number of amendments will be comparative disadvantage with their counterparts in moved by both sides of the House when the Bill is other States. Businesses that are competing in a debated in another place. One of those amendments multinational way within Australia and outside - addresses the question of inspector authorisation. especially those in industries with Significant cost Concern was expressed that the original Bill could incentives such as the clothing, textile, footwear, have been interpreted as giving retrospective effect rubber, plastics, cable-making and vehicle industries to the authorisation process and it appears that that and all those areas where large numbers of people is not the right way to go. I understand that that work in the production environment undertaking matter will be dealt by amendment. repetitive-type activities - are disadvantaged because the accident rate seems to be higher than it I am most concerned, as indeed are all honourable might be in other areas. I do not know whether it is members on this side of the House, that the State the result of boredom or neglect, but it happens. could have found itself in the circumstance where many inspectors would have been appointed under Victorian manufacturers are placed at a comparative a series of legislative measures that have been disadvantage especially with those in New South introduced into this House in a manner that Wales. The average premium in Victoria is effectively did not give the inspectors the authority approximately 3 per cent of payroll compared with of office they thought they had. I am concerned, 1.89 per cent on average in New South Wales. It is a members of the business community are concerned, Significant cost component to business. and I understand trade unions are concerned - as all should be -about the matter. I and other members of the coalition are in regular contact with the business community and often I approach the possible circumstance from the speak at business functions. Concern is invariably various positions of those who might be affected. expressed by a number of participants in those Firstly, I take the position of an inspector working in ACCIDENT COMPENSATION (FURTHER AMENDMENT) BILL

1844 ASSEMBLY Wednesday, 27 May 1992 good faith, believing he or she was properly was being brought by OHSA under the OH&S Act 1985 authorised. It should not be for inspectors­ could not commence because - in the magistrates' employees of the Crown - to determine whether view - the informant was not validly appointed as an the Act under which they are appointed gives inspector under that Act and therefore could not bring validity and effect to the authority of the office they the proceedings before the court. hold. They should be able to take that on face value. The issue centres on two things: firstly, a doubt over the If honourable members reflect on the passage of the existence of a head of power under the Public Service occupational health and safety, dangerous goods Act for the Public Service Board (or its delegate, the and workers compensation Bills, all the subject of chief administrator) for "inspectors" to be so appointed; the Accident Compensation (Further Amendment) secondly, the interpretation of the phrase, "subject to Bill, they will realise that each of those pieces of the Public Service Act" which predicates the legislation was rushed through when the appointment of inspectors under legislation government had temporary control of both Houses administered by OHSA. of Parliament on account of the Nunawading Province re-election. Honourable members are The magistrate's ruling does not have any precedent confronted with the ultimate result of the activity of value in other Magistrates Court matters or other a government that hastily whipped through higher courts. It is open to OHSA to appeal the Parliament for ideological reasons legislation that magistrate'S ruling to the Supreme Court. OHSA is was not necessarily in the best interests of the State. currently seeking legal advice on this matter from the Solicitor-General and the Public Service Board. Since that time, the government has continued to allow the process to drift along. I am concerned for Pending receipt of that advice and any action arising inspectors who have acted in good faith and have out of that advice, OHSA maintains that officers of taken matters before Magistrates Courts only to find OHSA should continue to perform their day-to-day that, as a consequence of a technicality, the functions and duties in the normal course. This is the magistrates have not come down in their favour. same position as occurred when the validity of inspector appointments was last challenged in 1990. I am concerned also for employees in the workplace who, having determined that there was a deficiency It continues: in the level of safety, used the appropriate proced~res, perhaps to have improvement notices OHSA will keep you informed ... raised or to take the matter forward, but ultimately found that the situation ended in prosecution and The government has known since as far back as that their best intentions had effectively produced August 1990 that an inspector's actions in the case nothing. involving Grocon Ltd, which cost hundreds of thousands of dollars for just one incident, had been I am concerned also for employers because a overlooked. No attempt has been made until now to number of them have been put to the expense and deal with legislation that will rectify these matters. the discomfort associated with prosecution. Some Obviously there have been hundreds of incidents in have had a plant closed down - illegally, as it turns which inspectors have been involved. They have out - by inspectors who did not have the authority cost employers dearly while this illegality has not to carry out their actions. It is quite clear that a been sorted out. number of companies in this State would have a civil action against the Crown for the activities It is clear that the government agencies concerned undertaken. were sufficiently worried about the strength of their positions that they were not prepared to test the I refer to a letter dated 8 April 1992, Signed by validity of the appointment. It is clear there have Mr Oostermeyer, Chief Executive Officer, been hundreds of inspection activities taking place Occupational Health and Safety AuthOrity, since 1990. It is unforgivable for the government to addressed to Ms Una Marsi, President, OOL/OHSA allow inspectors to be placed in that situation and Section, State Public Services Federation, Victoria. It for it not to have the courage of its convictions to is headed ''Inspector appointments" and says: take the matter to a higher court or alternatively to bring forward the validating legislation that we now On Monday, 6 April 1992, in Melbourne Magistrates see before the House. Having produced the Court, a magistrate ruled that a particular prosecution ACCIDENT COMPENSATION (FURTHER AMENDMENT) BILL

Wednesday, 27 May 1992 ASSEMBLY 1845 legislation it now seeks to give retrospective effect to We envisage changes to the benefits paid with it, which is of considerable concern to the opposition. respect to those special payments available through the table of maims and the like. There will be It is a disappointing Bill. It does not address the improvements for those who are genuinely injured structural problems of WorkCare. It does not deliver in the workplace. That is a very quick pen picture of any hope of improvement in WorkCare premiums some of the changes we propose. or premium outcomes. There is no prospect of administrative costs being addressed. Common-law Finally, in terms of ultimate access to the tribunal, claims have not been slowed down, much less we believe it should form part of the County Court. reversed. An enormous amount of genuine concern After all, the people involved in the Accident is being expressed within the community about the Compensation Tribunal have County Court status. way the legal fraternity, in particular, is accessing They may, therefore, just as well be part of the the WorkCare scheme. One hears many stories about scheme. substantial amounts of money that have been taken out of the system. WorkCare has proven to be an There is a substantial difference, and as a unmitigated disaster. It is a monkey on the back of consequence of the changes that the coalition will Victorian business. It inhibits job opportunities, and bring into effect when there is a change of that comparative disadvantage has resulted in jobs government, Victorian employers will see an being transferred interstate and overseas. average reduction in premiums of approximately 25 per cent over a relatively short period. The Bill suggests that the problems associated with WorkCare are too hard and that the government will This stands in stark contrast to the two pathetic core not run the risk of offending its union affiliates. That amendments offered to us today. Nonetheless, puny is a good reason for saying that the sooner the and insufficient as the Bill is, it will be supported by government goes, the better, because it is not the coalition because it brings about some minor but prepared to take the hard decisions it clearly it overdue reforms. knows must be taken. That is reflected in the draft legislation, and the sooner the government gets out Mr BILDSTIEN (Mildura) - I wholeheartedly of the way and lets the coalition get on with the support the comments of the honourable member urgent task of reforming workers compensation, the for Hawthorn. Because of the late hour I shall not better. revisit any of the argument and comments made by him. However, I want to make some remarks on the The Bill stands in stark contrast to the proposals of legislation. the coalition. We propose to confine the definition of "injury" to the workplace by excising so-called As has been stated, the purpose of the Bill is to close journey accidents - that is, accidents while two loopholes in the Act which have allowed travelling to and from work - from the system to claimants to double dip for workers compensation give effect to the necessary administrative changes. and retrospectively to validate the appointment of That will give private sector insurers access to the Occupational Health and Safety AuthOrity system and will allow rehabilitation programs to be inspectors. During the consultation process the carried out by private sector rehabilitation coalition liaised with the Victorian Congress of organisations rather than operating under the dead Employer Associations, the Insurance Council of hand of government. Australia, the Law Institute of Victoria and others. I circulated a copy of the Bill to a number of In addition, the coalition will propose minor employers and to a newly formed group in my changes to the system by making it mandatory to electorate based in Mildura called the Injured exchange medical evidence, by giving employers Workers Self-help Group. I shall come back to that, direct access to the early phases of disputes over but firstly I should like to acknowledge the need to claims, by putting in place medical panels that will address the abuse of the WorkCare system that has have the power to determine whether somebody been highlighted in recent times. should remain on benefits, partial benefits, or no benefits rather than simply making a A short time ago in the Parliamentary Library I reconunendation that is then overturned by an happened upon a report in the Truth newspaper that appeals board that is sympathetic by virtue of some highlighted a number of abuses of WorkCare and I if not most of the appointments made to it. should like to draw the attention of the House to some of them. The article states: ACCIDENT COMPENSATION (FURTHER AMENDMENT) BILL

1846 ASSEMBLY Wednesday, 27 May 1992

A woman with a boil on her bum tried to sue Sometimes we know we are being ripped off and still WorkCare for $100 000, saying her discomfort was there is nothing we can do about it. caused by her driving to and from work. The woman's case failed, but not before it had cost WorkCare and There must be something that can be done about it. I Victorian employers more than $10 000 in medical and trust that the Minister will take that on board and legal costs. will also take on board some of the revelations this week by the honourable member for Gippsland The report states that this is just one of dozens of West, the shadow Minister for Transport. The outrageous claims being made to the beleaguered honourable member discovered through the use of WorkCare officials and is one of the reasons the freedom of information legislation that more than scheme is in such a financial crisis. The newspaper 7000 WorkCare claims have been made by Public highlights a number of other abuses, and I shall Transport Corporation (PTC) employees since mention them because the Minister needs to address 1 January 1990, which averages out at approximately these problems as a matter of urgency. It shows one claim for each three corporation employees. what a farce the system has become. It is costing employers and taxpayers huge amounts of money. Information obtained by the opposition reveals that The articles goes on to say: WorkCare payments to PTC claimants have totalled nearly $20 million. As the honourable member for A Melbourne car salesman employed in "a nice swmy Lowan has just suggested, the high number and cost showroom" lodged a claim because he said moving in of claims in respect of PTC employees means either and out of the showroom into a cooler area - the car that the corporation is a very unhealthy and yard - made him dizzy. dangerous place to work in or that a large number of employees are rorting the WorkCare system. After two days in the job, he fell into the toilet at home late on a Saturday night. He promptly lodged a claim An examination of the latest business report for which, although rejected, cost thousands of dollars. passenger trains and coach operations reveals more evidence to support the contention that WorkCare It is absolutely disgraceful, but it gets worse. Further abuse is rife in the PTc. The report reveals that the article sta tes: nearly one-third of that department's current WorkCare claimants have each registered five or A young man was smoking illegally in the toilet of more WorkCare claims since 1 September 1985. It is premises used for food preparation. He burned the end no wonder that the Auditor-General's report to of his penis trying to extinguish the cigarette in the Parliament expresses grave concerns about toilet bowl in a hurry when his employer nearly caught WorkCare! him smoking - There is another side to the story. I have received if this were not so serious it would be laughable - written representations on the Bill from Mr John Knight, the President of the Sunraysia Trades and The bum became infected, leaving him unable to work Labour Council. I shall read his comments into the for two weeks. He won his WorkCare claim for two record so that the Minister and the House may note weeks' compensation. them. Mr Knight says:

A doctor's nurse/receptionist claimed on WorkCare for The butchering of workers compensation rights injuries she said had left her unable to work. Because continues on relentlessly with the latest Bill put she had a doctor's certificate backing her claim she was forward by the present government. paid by WorkCare for some months. When WorkCare has instructed it was understood that Investigators discovered she had been working all the workers would continue to be entitled to claim a lump time - for the doctor who was signing her certificates. sum for a disability. In exchange the right to common law was to be restricted to claiming "pain and suffering The article goes on to say that in that last financial only". This meant workers who were seriously injured year the WorkCare claims paid out to 75 000 could not claim for future economic loss and would claimants cost Victorian employers $870 million. An have to rely on receiving weekly payments until they official from WorkCare has been quoted as saying: were 6S years of age. ACCIDENT COMPENSATION (FURTHER AMENDMENT) BILL

Wednesday, 27 May 1992 ASSEMBLY 1847

What happened was that the Accident Compensation assurances that the coalition seeks being met, the Commission interpreted the section, which was poorly coalition will not oppose it. drafted, to mean that workers could not receive both. Thus, if a worker is paid $25 000 for a permanent I direct to the attention of the Minister comments disability to a leg and then sues for damages for pain made to me by Graeme Dowsley, the Chairman of and suffering because of the employer's negligence and the Sunraysia Injured Workers Self-help Group. is awarded $120 000 the accident Compensation Mr Dowsley established the group not just to assist Commission would ask that the sum of $25 000 would injured workers in the district but also to assist in have to be deducted from the $120 000. reducing WorkCare costs. His voluntary work is commendable. He informs me that approximately This was in fact not the understanding. Prior to 66 000 people are receiving WorkCare benefits and WorkCare coming into effect the agreement was that of those approximately 14 000 are long-term provided a worker did not yet get an award for claimants who have been processed by the damages over $140 000 the disability payment could WorkCare Appeals Board. Once every 28 days those not be deducted and it was presumed that an award for 14 000 people are required to visit their doctors to damages over $140 000 would only entitle the worker obtain certificates so that their benefits can continue. to $140 000. Mr Dowsley says that if the 14000 claimants are multiplied by $30, which is the cost of a doctor's However, what eventuated because of the State visit, and then by 12, because they must see their government's incompetence- doctors once a month, the cost to the comnumity is apprOximately $5.4 million a year. I like reading that because this comes from a trades and labour council - Mr Dowsley says that, as the claimants have been processed as long-term claimants, WorkCare should through its Accident Compensation Commission this allow them to visit their doctors once every three interpretation was not followed. There are other months, which would mean an annual cost of interpretations, including dishonest conduct. $1.6 million and a saving of approximately $3 million. I have not examined the proposal in The letter further states: detail, but it has merit and I ask the Minister to take it on board. Fortunately the Supreme Court of Victoria in a decision on 12 November 1991 decided in the case Metropolitan Mr Dowsley has informed me of a person he knows Transit Authority v. Dimilar lvanovski clearly upheld the who has been on WorkCare benefits for 18 months. intention which has been set out. The person visits his doctor once every 28 days and his doctor signs a certificate and prescribes some Accordingly the amendments should be strongly Panadol. The person is not receiving any medical opposed. We might say the amendments are treatment apart from the Panadol to help him sleep. appallingly drafted and do not make sense. I was approached by a constituent who is a One of the new sections 4AA is clearly a reintroduction WorkCare recipient and who was reqUired to of "election". present himself in Melbourne on two consecutive days to see two doctors. Mildura is 550 kilometres ''Election'' was something all the labor firms battled to from Melbourne and the return air fare is $300. My get rid of throughout the 1950s and 1960s and was not constituent suggested to the WorkCare authorities done away with until the West Gate Bridge disaster. that if he had doctors appointments on the Tuesday and Wednesday he could fly to Melbourne on In fact, this amendment is even more severe than the Tuesday morning, stay overnight and return to pre-1970s doctrine of election. Mildura on Wednesday evening. WorkCare said that it could not fund the cost of a motel bed for the Strong opposition should be made to the amendments. Tuesday night and that he had to fly back to Mildura on Tuesday night, return to Melbourne Wednesday The coalition consulted widely on the proposed morning and then fly back to Mildura on legislation and the honourable member for Wednesday night. He spent $600 on airfares in two Hawthorn indicated the deficiencies in it. However, days when probably he could have stayed at the it has some use and for that reason, subject to the Victoria Hotel or some other accommodation on the ACCIDENT COMPENSATION (FURTHER AMENDMENT) BILL

1848 ASSEMBLY Wednesday, 27 May 1992

Tuesday night for $60 and saved WorkCare more have been introduced. There has been great interest than $300. in the Bill.

I have heard numerous examples of this kind. I Recently I had a constituent solicitor come into my assure honourable members that Mr Dowsley has office with an unusual case concerning a local many other examples. It is disturbing when the building trade firm employing 36 employees that article to which I referred suggested that WorkCare was about to be sent to the wall because of lost $870 million last year. When one looks at some WorkCare. The firm was $60 000 in debt to of the examples it is clear why that is the case. WorkCare. The solicitor for the firm tried to negotiate with WorkCare for the amount to be Another matter that should be examined is the repaid but employees of WorkCare were instructed hearing of WorkCare appeals board hearings in not to negotia te in any way. The money had to be country areas. At present if a dispute occurs between paid and they were not prepared to listen to any an employer and employee in Mildura, for example, arguments. They suggested I call WorkCare because that hearing is required to be held in Melbourne. The it had the names of those involved. employer will look at the cost of absenting himself or herself from the business for the day or perhaps About two weeks ago I negotiated with the two days. It will cost the employer about $300 for WorkCare people to interview those involved. They the airfare, the cost of accommodation and meals seemed rather anxious that their names not be and perhaps the cost of employing part-time staff to mentioned in the House. After two days of work at the business while he or she is away. negotiations they telephoned to say they required Invariably the employer decides that the cost of $15000 to payoff the debt. The solicitor said there being away from the business for the day is not was no money in the kitty and that only $10 000 warranted and does not attend the hearing, so only would be available. A reminder of the person's the employee's side of the case is heard. involvement in the WorkCare office enabled the negotiations to come to fruition but only after a There is a strong argument for WorkCare appeals Supreme Court writ had been issued against the board hearings being held on a regular basis in rural company to wind up its affairs unless the money areas - perhaps a rural circuit could be arranged. was paid. When I made it clear that the Bill would That matter should be addressed by the Minister. be debated tonight I was told to inform the House that the Supreme Court writ had been lifted. That Another point made by Mr Dowsley was the huge demonstrates that there is a great deal of interest in cost of claims agents. He infonns me that a claims getting it right. agent charges $82 an hour. If you telephones an agent, the moment you get through to the claims It reminds me of the story of some years ago. agent your number is registered on the computer and you are billed for the time you are spoken to. A Mr Micallef interjected. number of cost-cutting areas can be identified if the government has the will and detennination to tackle Mr E. R. SMITH - The honourable member for some of these issues. Springvale will be very interested in this because he probably has stopped the amendments being made I trust that, while they are not addressed in the before now. legislation, the Minister accepts what I and others have said and will do something about these The story was about a woman who had been situations forthwith. claiming WorkCare benefits for some years as a result of a back injury. As she left home in her car Mr E. R. SMITH (Glen Waverley) - It is she was followed by an inspector who saw her drive significant that at 3.29 a.m. on Thursday the House around for a while and then collect a male. They has a quorum and a number of government went by car into the COWl try, and by that stage the members are ready to contribute to the debate on the inspector had his movie camera operating. Accident Compensation (Further Amendment) Bill. As previous members have said, it is an important The couple went to an isolated spot. Activities Bill that requires accoWltability for the system to occurred there which the House could well imagine. operate properly. No doubt among the 91 The inspector took footage of the people in the car. amendments some form of accountability would Later, when they tried to set off the car became bogged because of the wet conditions. The woman ACCIDENT COMPENSATION (FURTHER AMENDMENT) BILL

Wednesday, 27 May 1992 ASSEMBLY 1849

with the so-called injured back got out and pushed hope the other 91 will be taken up by the coalition the car out of the bog. She then drove the man home policy to make the system accountable. Therefore, and went home herself. although we realise the shortCOmings that have arisen, the coalition does not oppose the one proper The inspector later asked the woman whether she amendment being made by the Bill and only hopes would withdraw the claim and she said, liNo way". that the government will realise the error of its He told her he had filmed her all day and that the ways - and that the media will highlight the footage would be made available to her husband. inadequacies of the system and refer to the very Commonsense prevailed and she withdrew the forceful and workable alternative policy that the claim. My point is that, as the honourable member coalition will implement upon its elevation to for Mildura said, had there been proper government. accountability about the outrageous claims being made - I am quite sure even the honourable I wish the Bill a speedy passage. member for Springvale would agree that he would not want the system rorted even though he may be Debate adjourned on motion of Mr ROPER against accountability being introduced - such (Minister for Employment, Post·Secondary incidents would be prevented. When it is elected to Education and Training). government the coalition will legislate for such accountability; it will ensure that proper Debate adjourned until next day. accountability is enshrined within the WorkCare legislation. House adjourned 3.35 a.m. (Thursday).

As the honourable member for Hawthorn has said, tonight one of 92 amendments is being dealt with. I JOINT SITTING OF THE LEGISLATIVE COUNCIL AND THE LEGISLATIVE ASSEMBLY

1850 ASSEMBLY Wednesday, 27 May 1992

JOINT SITTING OF THE LEGISLATIVE Mr GUDE (Hawthorn) - I second the motion. COUNCIL AND THE LEGISLATIVE ASSEMBLY Motion agreed to.

Wednesday, 27 May 1992 The PRESIDENT - The rules having been adopted, I am now prepared to receive proposals from honourable members with regard to members to be recommended for appointment to the proposed Royal Melbourne Institute of Technology Deakin University coundl.

Royal Melbourne Institute of Technology Mr ROPER (Minister for Employment, Post-Secondary Education and Training) - I Swinburne University of Technology propose:

Honourable members of both Houses assembled at That the Honourable Gerald Barry Ashman, JP, MLC, 6.15p.m. the Honourable David Mylor Evans, MLC, and Mrs Sherryl Maree Garbutt, MP, be recommended for The CLERK - Before proceeding with the appointment as members of the council of the proposed business of this joint sitting it will be necessary to Royal Melbourne Institute of Technology. appoint a President of the joint sitting. They are willing to accept appointment if chosen. Mr ROPER (Minister for Employment, Post-Secondary Education and Training) - I move: Mr GUDE (Hawthorn) - I second the proposal.

That the Honourable Kenneth Alastair CoghiU, MP, The PRESIDENT - Are there any further Speaker of the Legislative Assembly, be appointed proposals? President of this joint sitting. As only three members have been proposed, I Mr GUDE (Hawthorn) - I second the motion. declare that the Honourable Gerald Barry Ashman, JP, MLC, the Honourable David Mylor Motion agreed to. Evans, MLC, and Mrs Sherryl Maree Garbutt, MP, have been chosen to be recommended for The PRESIDENT - I thank honourable appointment to the proposed Royal Melbourne members for the honour that has been bestowed Institute of Technology council. upon me on what will most certainly be an historic occasion. I am now prepared to receive proposals from honourable members with regard to members to be I direct the attention of honourable members to the recommended for appointment to the council of the extracts from the Deakin University Act 1974, the proposed Swinburne University of Technology. Royal Melbourne Institute of Technology Bill and the Swinburne University of Technology Bill, which Mr ROPER (Minister for Employment, have been circulated. It will be noted that the Post-Secondary Education and Training) - I various provisions require that the jOint sitting be propose: conducted in accordance with rules adopted for the purpose by members present at the sitting. The first That Phillip Neville Honeywood, MP, Mrs Carolyn procedure, therefore, will be the adoption of rules. Oorothy Hirsh, MP, and Noel John Maughan, MP, be recommended for appointment as members of the Mr ROPER (Minister for Employment, council of the proposed Swinburne University of Post-Secondary Education and Training) - Technology. Mr President, I desire to submit rules of procedure, which are in the hands of honourable members, and They are willing to accept appointment if chosen. I move: Mr GUDE (Hawthorn) - I second the proposal. That these rules be the rules of procedure for this joint sitting. JOINT SITTING OF THE LEGISLATIVE COUNCIL AND THE LEGISLA TIVE ASSEMBLY

Wednesday, 27 May 1992 ASSEMBLY 1851

The PRESIDENT - Are there any further Bells rung. proposals? Members having assembled in Chamber: As only three members have been proposed I declare that Phillip Neville Honeywood, MP, Mrs Ballot conducted. Carolyn Hirsh, MP, and Noel John Maughan, MP, have been chosen to be recommended for The PRESIDENT - Order! I appoint the appointment as members of the council of the following three members to be scrutineers: proposed Swinburne University of Technology. Mr Cooper, Mrs Hogg and Mr Mackenzie. The scrutineers and one of the Clerks will repair to count I am now prepared to receive proposals from the votes. I ask honourable members to remain in honourable members with regard to members to be their places until the scrutineers and the Clerk have recommended for appointment to the council of left the Chamber. When I have received the Deakin University. scrutineers' report I shall resume the Chair and cause the bells to be nmg. Mr ROPER (Minister for Employment, Post-Secondary Education and Training) - The Sitting suspended 6.32 p.m. until 6.43 p.m. various parties have agreed on the nominations and therefore I propose: Bells rung.

That Stephen Noel Elder, MP, the Honourable David Members having reassembled in Chamber: Emest Henshaw, MBE, MLC, and John Francis McGrath, MP, be recommended for appointment as The PRESIDENT - Order! I have received the members of the council of Deakin University. scrutineers' report, and the result of the ballot is:

They are willing to accept the appointment if chosen. Number of ballot papers counted: 96.

Mr GUDE (Hawthorn) - I second the proposal. Votes received:

The PRESIDENT -Are there any further Mr Dickinson 14 proposals? MrElder 92 Mr DICKINSON (South Barwon) - I propose: Mr Henshaw 83 That Harley Rivers Dickinson, KStJ, MP, be recommended for appointment as a member of the MrMcGrath 93 council of Deakin University. Informal 6 He is willing to accept the appointment if chosen. I therefore declare Stephen Noel Elder, MP, the Hon. R. A. MACKENZIE (Geelong) - I second Honourable David Ernest Henshaw, MBE, MLC, the proposal. and John Francis McGrath, MP, as chosen to be recommended for appointment to the council of The PRESIDENT - Are there any further Deakin University. proposals? There being no further business, I declare the joint As more than the required numbers of members sitting closed. have been proposed, I direct that a ballot be conducted. I ask the Clerk to ring the bells for Proceedings tenninated 6.45 p.m. 2 minutes. JOINT SITfING OF THE LEGISLATIVE COUNCIL AND mE LEGISLATIVE ASSEMBLY

1852 ASSEMBLY Wednesday, 27 May 1992 QUESTIONS WITHOUT NOTICE

Thursday t 28 May 1992 ASSEMBLY 1853

Thursday, 28 May 1992 been operating for only a few months? Was the work put out to public tender? How does the Premier explain this $100 000 extortionate misuse of public funds for the production of a simple, 6O-second television commercial which was filmed The SPEAKER (Hon. Ken Coghill) took the chair at at 1 Treasury Place and which took less than half of 10.34 a.m. and read the prayer. a day to film?

Honourable members interjecting. QUESTIONS WITHOUT NOTICE The SPEAKER - Order! It is out of order to make imputations and put argument in questions. I BA YSIDE PROJECT ask the honourable member to rephrase his question.

Mr KENNETT (Leader of the Opposition) - I Mr McNAMARA - How does the Premier explain this $100 000 expenditure of public funds, ask the Premier to confirm that last November the and will she explain why a commercial that took Deputy Premier signed an agreement to provide a only half a day to film was so expensive? government guarantee for a $12 million-plus capitalised interest loan to the Bayside project Ms KIRNER (Premier) - It is very interesting developer and whether it was entered into with that from day to day on this matter the Leader of the Cabinet's authority. National Party, both inside and outside the House, goes from one extravagant claim to another. Ms ~IRNER (Premier) - In November last year the Cabmet approved the signing of heads of Honourable members interjecting. agreement with Sandridge City Development Company Pty Ltd on certain conditions. On Tuesday The SPEAKER - Order! I ask the Premier to those conditions were spelt out very clearly, I thought, by the Deputy Premier in this House. I pause. I remind honourable members on my left that have previously said that no guarantee would be by di~rup~g proceedings they are simply delaying question time and the opportunity to ask further finalised unless it was in the public interest. The questions. matter has not yet been concluded because the conditions placed on those heads of agreement have Ms KIRNER - On the first day, the charge made not been fulfilled by the Sandridge company. both in one of our newspapers and in this House GAMING MACHINE was illegality. The opposition knows quite well that ADVERTISEMENTS there was nothing illegal about this issue. When it obtains legal advice, other than from a certain writer in the it will understand that that is the Mr McNAMARA (Leader of the National Herald-Sun, Party) - I refer the Premier to the letter she sent to position. The charge of illegality will be ruled out of order, and the opposition knows it. me yesterday saying that the cost to the public of her television self-promotion campaign was $261 250, On the matter of an information program on gaming including a massive $100000 in production costs for machines in Victoria, both in terms of jobs and in the commercial. terms of entertainment -- Mr Perton - What? Honourable members interjecting. Mr McNAMARA - A massive $100 000. The SPEAKER - Order! I ask the Leader of the Honourable members interjecting. OppOSition, the Deputy Leader of the Opposition and the Leader of the National Party to remain silent so that the Premier can give her reply without The SPEAKER - Order! Honourable members interruption. are simply wasting the opportunity of question time, and I ask them to remain silent. Ms KIRNER - The honourable member for Hawthorn was getting a bit worried about those Mr McNAMARA - How was the agency, descriptions at the time. I think we should be careful Republic Advertising, selected, given that it had QUESTIONS WITHOUT NOTICE

1854 ASSEMBLY Thursday, 28 May 1992 of the way we describe the position's of member's Ms KIRNER - We all know what the on the opposition side of the House. honourable member's former partner in the knitting machine industry said about him. He said it was like In terms of the information program on the working with a roller coaster. And that is indeed introduction of gaming machines in Victoria, the what the people of Victoria think about the roller creation of jobs, increased dollars for Victoria, coaster-- improved recreational facilities and community funds for assisting local communities as well as Mr DELZOPPO (Narracan) - On a point of helping people who may become addicted to order, Sir, I suggest that question time is an gambling, my part of that information program, opportunity to get information for the House, not an working with the independent Victorian Gaming opportunity to attack the Leader of the Opposition. Commission's part of that program, is a very small On the question of relevance -- contribution to what will be a $5 billion industry for Victoria, an industry Victorians see as a major social Honourable members interjecting. change - one they have wanted and we have had the courage to introduce. The SPEAKER - Order! It is impossible for the Chair to hear the honourable member. I ask TEXTILE, CLOTHING AND FOOTWEAR honourable members to remain silent. INDUSTRY Mr DELZOPPO - On the question of relevance, Mr KENNEDY (Bendigo West) - I ask the I ask that the Premier be brought back to order. Premier to advise the House what action the government is currently taking to deal with the The SPEAKER - Order! I uphold the point of impact the restructuring of the textile, clothing and order, but I also point out to the honourable member footwear industry is having on communities in for Narracan that the Premier was responding to an Victoria's provincial centres. interjection from the Leader of the Opposition. I ask the Leader of the Opposition to remain silent, and I Ms KIRNER (Premier) - As honourable ask the Premier not to respond to interjections. members would be aware, 50 000 people are employed in the textile, clothing and footwear (TCF) Mr Kennett interjected. industry in Victoria, and many of them are employed in the nine important regional centres. I The SPEAKER - Order! I warn the Leader of the will be very pleased, therefore, to be part of a Opposition. He is well aware of the provisions of meeting today chaired by the Honourable David Standing Orders. I ask him to remain silent, and I White, Minister for Manufacturing and Industry ask the Premier to ignore interjections. Development, that will bring those regional centres together to discuss the future of the TCF industry Ms KIRNER (Premier) - Thank you, and to add to our task force plans for the industry. I Mr Speaker, I will try to ignore interjections. I will be am also pleased that an honourable member for pleased to have honourable members opposite as Ballarat Province, the Honourable Dick de Fegely, well as members from this side of the House at and some members of this House intend to come to today'S meeting on the TCF industry. I am also the task force meeting. pleased that the Minister responsible for manufacturing in South Australia, Mr Lynn Arnold, That is in strong contrast, I have to say, to position and my Minister, the Honourable David White, have adopted by the Leader of the Opposition on the met on this issue. Our task forces are about to meet textile, clothing and footwear industry because he and we will be bringing together industry leaders, has been strangely quiet on TCF in the past few the union movement and members of the opposition months. Indeed, so was the Leader of the National who, unlike the Leader of the Opposition, are Party until sugar became a tariff issue; then he made interested in the government's TCF policy and a lot of noise. Then, when the rain came down on the Victorians. In bringing those people together we will National Party in Queensland because Or Hewson seek to come up with a plan for the TCF industry rejected its position on sugar tariffs, the Leader of and take it to Canberra. the Opposition went very quiet. In terms of what is happening here -- Mr Kennett interjected.

Mr Kennett interjected. QUESTIONS WITHOUT NOTICE

Thursday, 28 May 1992 ASSEMBLY 1855

Ms KIRNER - I think I heard the Leader of the Bayside project and ask: is it not a fact that the Opposition say, "We will all be in it". Minister entered into an agreement last November to provide a government guarantee of some millions Mr Kennett - Look forward to it. of dollars for this project, binding the people of Victoria; why has he misled the House; and has he Ms KIRNER - Isn't that interesting? entered into any other secret agreements?

Mr Perton - What time? Mr KENNAN (Minister for Major Projects) - I answered this question clearly the other day, but I Ms KIRNER - Isn't it interesting that when the will repeat the answer. As I said publicly, it is true Leader of the Opposition has finally been exposed that the government entered into heads of he again shows his opportunism. He is in it for a agreement last November. On the face of them those minute. That is his view: in it for a minute! heads of agreement are not legally binding and create no legal obligation. Mr LIEBERMAN (Benambra) - On a point of order, Mr Speaker, the Premier is obviously Honourable members interjecting. debating the matter. Instead of apologising for not having invited opposition members to the meeting, Mr KENNAN - You might regret that but that is the Premier is debating the issue. I ask that she be the fact of the matter. However frustrating one brought back to the question. might find that, it is the fact. The heads of agreement made it clear that they do not create legal relations The SPEAKER - Order! Again the Premier between the parties, and the pre-existing agreements seems to have been responding to interjections. I between the parties remained on foot. As with any uphold the point of order and ask the Premier to other heads of agreement, their purpose was to lead round off her reply. to a detailed, formal, definitive agreement which, had it been arrived at, would have superseded the Ms KIRNER (Premier) - The challenge for all of underlying previous agreements the parties had us in Victoria is to have a clear policy on the TCF entered into. industry involving the quotas issue, support for just-in-time manufacturing, a resolution of the issues I said, as I have said consistently -- affecting Australia and New Zealand because of the European Community, training, and niche Honourable members interjecting. industries for fashion and any other major industries where goods can be exported. All of those matters Mr KENNAN - It is interesting that opposition will be part of our TCF plan that will be taken by the members want to ask questions, but when they Premier of South Australia, John Bannon, and me to don't get the answers that suit them they don't want Canberra. to hear. Opposition members have been enthusiastic supporters of this project. Only 12 months ago the I am delighted that the Deputy Leader of the honourable member for Doncaster stated the National Party had the guts to stand up to opposition's position clearly: Or Hewson and to tell me yesterday that he would like to attend the meeting, unlike the Leader of the The Bayside project has received the support of the Opposition, who when I raised the issue in the coalition parties since it was first proposed in or around House asked me across the table when the meeting 1984 or 1985 ... was because he might like to come. It would be terrific if the free market ideologues of the The development is unique in terms of what it will do opposition would stand up to Dr Hewson, come to for Victoria. the meeting and support the government's policy on TCF. In June 1991 the Leader of the Opposition in the Upper House said: BA YSIDE PROJECf The Liberal and National parties support the Mr GUDE (Hawthorn) - I refer the Minister for development of the Bayside area. Major Projects to his repeated clear assurances in this House that no government guarantees have The Deputy Leader of the National Party in been provided to assist in the development of the November 1989 said: QUESTIONS WITHOUT NOTICE

1856 ASSEMBLY Thursday, 28 May 1992

The honourable members for Bendigo East and Ivanhoe the land and that we would participate in any have demonstrated the importance of the proposed surplus proceeds, so that we would get back any legislation for this development. From the National extra money we put in, and we would also get back Party perspective, the measure has city ramifications. up to $10 million of the money previously put in. All of those matters have been repeatedly emphasised in One can go on and on. In 1988 the honourable continuing negotiations between the company and member for Ivanhoe said: the government since November.

The opposition is excited about the project and I look The company terminated on or about 7 April, at a forward to the steady growth of the area. time when those issues had not been finally addressed and when no development agreement The former Leader of the National Party said: had been agreed on because those issues had not been finally addressed. Indeed, we were not happy I cannot remember hearing the opposition with the cash flow information that was provided to complimenting the government for some years, but us only a few days prior to 7 November. In any when a good project is being developed it is only right event, the company said that it was having some and proper it should get support. difficulty in obtaining lender satisfaction in relation to the guarantee. We would have been absolutely Mr Baxter said in the Upper House: irresponsible, having gone ahead with this project so warmly endorsed by the opposition over a period of The National Party supports the Bill and wishes the years, if we had said that it was all too hard, that we project well. It is an extraordinary concept in its would be like the opposition and walk away, and dimension and planning: it takes a piece of land which that we would not try any more. is in decay; it takes a part of Port Phillip Bay as it presently exists and a part of the bay to be filled in, The fact of the matter is that it is a prime site that thus providing Melbourne with another grand remains in government ownership. We have a great development. asset of prime land and we were anxious to explore every reasonable way to get that project going on the They are all words from the opposition. Last basis that, at the end of the day, on completion there November the site was cleaned up. By October some would be no further net cost to government. We 43 hectares, involving the consolidation of some 50 would have been irresponsible not to consider it, but titles, had been cleaned up and we were faced with a it was always on condition that we were satisfied situation with this prime site - this tremendously that the company funding and equity and the cash exciting concept that the opposition talked about so flows were satisfactory so that we would be assured repeatedly and supported so enthusiastically on that there would be no further net cost to three occasions when Bills were brought before the government, and, indeed, we would get back some House - where the market had changed. The of the money that had previously been spent. project could not proceed at the pace the opposition and the government had hoped in the previous The opposition are saying to the people of this State years that it would, so it was to go ahead as a staged that they did support this project - as the development. honourable member for Doncaster said - from 1984-85 for six or seven years or so, but when the The company also thought it would have difficulty market got a bit tough or the going got a bit tough in getting funding unless the project went ahead as a they would just walk away from it. That has not staged development with the first stage to be the been our position. We have been prepared creation of residential lots around roads and canals. consistently to explore prudent means of making it We said we had to be assured that the equity and go. funding positions of the company were secure because, as honourable members opposite would be If that does not happen, we still own the land. We aware, over time, through no fault of the company's have no legal relationships requiring us to sell that but because of some of the shareholding, the land to anybody; it is in our control; it remains in company had gone into receivership. That was an public control; and we can go ahead on the basis that important issue. we think is appropriate.

We also said that the terms of any guarantee we Honourable Members - Hear, hear! might provide would be secured by mortgages over QUESTIONS WITHOUT NOTICE

Thursday, 28 May 1992 ASSEMBLY 1857

CHILD-CARE FUNDING family day care in Victoria costs about $100 per child per week; that will go up to $115 per child per week. Mrs GARBUIT (Greensborough) - Will the Minister for Community Services advise the House Not only that, but because the oppositions's of the implications for the provision of child-care of proposal requires the tax be gathered on all sorts of recent funding arrangements agreed with the activities and all sorts of services and goods within a Commonwealth government? child-care centre or a preschool, it will cost $8700 per annum for every 35-place child-care centre. Parents Mrs SETCHES (Minister for Community have to meet the extra tax and administrative costs, Services) - I thank the honourable member for her and it will mean a 57 per cent increase in their question and her interest in this matter. All workload. government members are interested in the provision of child-care in Victoria. We are talking about parents who wish to drop their kids off and have them cared for at an affordable Under the 1992-96 Commonwealth-State cooperative price. This incredible imposition and increase in cost child-care arrangements it is proposed that over the will hit parents right across Victoria, and then the next four years almost 11 000 new places will be pressure will come on. Opposition members will see created in Victoria - that is, preschool child-care the parents of every child in child-care centres in places as well as school-age child-care places. their electorates paying an extra $19.50 per week per child. Ms Kimer interjected. The government is committed to providing 11 000 Mrs SETCHES - The Premier is correct, there is more places over the next four years, and we are more and more need for child-care. The Victorian negotiating with the Commonwealth to do it at an government saw the need to enter into discussions affordable price. with the Commonwealth about the provision of places over the next four years. We are currently BA YSIDE PROJECT doing that because we want to use the existing State infrastructure, such as schools, kindergartens or Mr KENNETT (Leader of the Opposition) - I whatever the committees of management require, to direct my question to the Deputy Premier, and I provide child-care in the areas where it is needed. thank him for reminding the House that all parties initially supported the Bayside project but we have At the moment we are delivering more than 100 000 now, as always happens, become concerned about subsidised child-care or preschool places in Victoria the Deputy Premier's gross personal at a cost of $84 million. That amount does not in any mismanagement of the project. Given his statement way consider the private child-care industry in to the House on Tuesday of this week that no Victoria, which is also of Significant size. It is wise at guarantees had been provided, and given that a this stage to look at the cost structures -- director of the company has stated dearly that guarantees had been given, will the Deputy Premier Honourable members interjecting. now stand by the comments he made, as recorded in Hansard, which clearly reveal that he knowingly The SPEAKER - Order! There is too much misled the House? audible conversation. I ask honourable members to lower their voices. The SPEAKER -Order! The latter part of the question is out of order. I ask the honourable Mrs SETCHES - At the moment it costs about member to rephrase his question. $130 a week for a family to send a child for long day care in community-based child-care places in our Mr KENNETT - Will the Deputy Premier neighbourhoods. I do not think many people in this indicate whether he stands behind the answer he House know that under the Federal opposition's gave in this House on Tuesday, 26 May, when he goods and services tax proposal that cost will go up dearly said that no guarantees had been given? to $149.50 per week per child - that is, for every child an additional $19.50 per week. Mr KENNAN (Minister for Major Projects) - I know there have been a couple of late nights and the Family day care has been seen to be not as expensive Leader of the OppOSition may not have had time to and more appropriate to some families. Currently PETITIONS

1858 ASSEMBLY Thursday, 28 May 1992 read the relevant bits of Hansard, so I shall read out Mr KENNAN - The Leader of the OppOSition is what I said: misrepresenting the position and misleading Parliament because he talked about initial support The government is prepared to assist further in this by the opposition. This morning I read excerpts from project by the provision of additional infrastructure Hansard that show continuing, not just initial, and by giving a guarantee for financing, but only on support. When the Leader of the Opposition thinks the basis that it is satisfied with the equity and funding he has a cheap political point to make he does not arrangements and the management structure. Further mind trying to torpedo projects or damage government exposure will be properly secured by confidence in the State. mortgages over the land. At the end of the day not only will government funds be secured but some funding Honourable members interjecting. previously expended will be refunded. Mr KENNAN - We have not started on you! If Therefore I repeat that the government is prepared this sometime -- to assist further in this project by the provision of additional infrastructure and by giving a guarantee Honourable members interjecting. for financing. The SPEAKER - Order! There is far too much Mr Kennett interjected. audible conversation and far too much interjection. I ask honourable members on both sides of the House Mr KENNAN - We have in the Leader of the to remain silent. I ask the Deputy Premier to round OppOSition a person who wants to get out of the off his reply. kitchen when the heat is turned up. Perhaps that is what he ought to do, because I have said Mr KENNAN - This sometime knitting consistently that the government is prepared and manufacturer and advertising agent, who comes in has signalled an intention to assist further in the way here to top up his income with a full-time salary as I have described. No guarantee has been given by Leader of the Opposition, misrepresents the the government, but a preparedness has always been position, cast aspersions and talks about black lists. 1 indicated on certain conditions. suppose you will now blacklist AMP and ANZ because it is politically convenient for you to do so. If the Leader of the OppOSition wants to come in Will you blacklist Elders and Delphin? If you want here and say that the government indicated a to-- preparedness to give a guarantee on certain conditions, and that amounts to the government The SPEAKER - Order! The Deputy Premier actually executing a guarantee, he ought to resign as should address the Chair. Leader of the Opposition. Mr KENNAN - If members of the opposition The Leader of the Opposition is a great wish to continue to misrepresent the pOSition, they businessman. He is the one who comes in here and can do so. It is pretty good coming from the Deputy says what a top businessman he is. He is the one Leader of the Liberal Party - "wimp" is a four-letter who says he is the man of the commercial world and word that does not sit very easily in his mouth! he reels off how many people he employs and how many jobs his frontbench members create by all of PETITIONS their private sector activities. If that is the case, he should ask his former business partners about it. The Clerk - I have received the following petitions for presentation to Parliament: Mr Kennett interjected. Public thoroughfares in North Melbourne Mr KENNAN - It would be hard for you to lose a dollar when you're drawing a salary as Leader of To the Honourable the Speaker and members of the the Opposition and running a business on the side! Legislative Assembly in Parliament assembled:

The SPEAKER - Order! The honourable The humble petition of the Wldersigned citizens of the member for Springvale! There is far too much State of Victoria sheweth that the citizens of North interjection from both sides of the House. Melbourne are gravely concerned with the recent ECONOMIC AND BUDGET REVIEW COMMITTEE

Thursday, 28 May 1992 ASSEMBLY 1859

build-up of traffic in their area due, among other HOUSE COMMITfEE things, to the closure of Swanston Street. Completion of Parliament House Your petitioners therefore pray that an independent consultant be appointed to urgently evaluate the effects Mr NORRIS (Dandenong) presented report of on the community by monitoring volume, type of House Committee on construction program on vehicle, speed, vibration, air and noise pollution and completion of Parliament House, together with potential community health problems in respect of all appendices. public thoroughfares servicing local and through traffic in the area; and that there be extensive community Laid on table. consultation in this matter. Ordered to be printed. And your petitioners, as in duty bound, will ever pray. PAPERS By Mr Cole (516 signatures) Laid on table by Clerk: Human life experimentation Ballarat School of Mines - Report for the year 1991 To the Honourable the Speaker and members of the Legislative Assembly in Parliament assembled: Dandenong College of TAFE - Report for the year 1990

The humble petition of the undersigned citizens of the Footscray College of T AFE - Reports for the years State of Victoria sheweth that from their beginning at 1989 and 1990 (two papers) the initiation of fertilisation, human embryos deserve legal protection from all experimentation which is Goulbourn Valley College of T AFE - Report for the destructive or harmful to them. year 1989

Your petitioners therefore pray that the Legislative Holmesglen College of T AFE - Report for the year Assembly pass legislation to prohibit harmful and 1989 destructive experimentation on human life. Melbourne College of Decoration - Report for the year And your petitioners, as in duty bound, will ever pray. 1990

By Mr J. F. McGrath (2924 signatures) Melbourne College of Printing and Graphic Arts - Report for the year 1989 Laid on table. Newport College of TAFE - Reports for the years 1989 ECONOMIC AND BUDGET REVIEW and 1990 (two papers) COMMITTEE Outer Eastern College of TAFE - Report for the year Estimates Subcommittee 1990

Mr GA VIN (Coburg) presented report of Estimates Prahran College of TAFE - Report for the year 1990 Subcommittee of Economic and Budget Review Committee on funding of the World Congress Victorian College of Agriculture and Horticulture - Centre together with appendices, list of witnesses Report for the year 1990 and minutes of evidence. Victorian Dried Fruits Board -Report for the year 1991 Laid on table. Wangaratta College of T AFE - Report for the year 1990 Ordered that report, appendices and list of witnesses be printed. Wodonga College of T AFE - Report for the year 1990 CHILDREN AND YOUNG PERSONS (FURTHER AMENDMENT) BILL

1860 ASSEMBLY Thursday. 28 May 1992

CHILDREN AND YOUNG PERSONS Mrs WADE (Kew) - Mr Speaker, I do not wish (FURTHER AMENDMENT) BILL to proceed today with Notices of Motion, General Business, No. 8 on the Notice Paper. However, I ask Introduction and first reading that the motion remain on the Notice Paper.

Mrs SETCHES (Minister for Community Services) Mr PERRIN (Bulleen) - Mr Speaker, I do not introduced a Bill to amend the Children and wish to proceed today with Notices of Motion, Young Persons Act 1989 and certain other Acts and General Business, No. 9 on the Notice Paper. for other purposes. However, I ask that the motion remain on the Notice Paper. Read first time. Or NAPTHINE (Portland) - Mr Speaker, I do BUSINESS OF THE HOUSE not wish to proceed today with Notices of Motion, General Business, No. 10 on the Notice Paper. Mr RICHARDSON (Forest Hill) - Mr Speaker, I However, I ask that the motion remain on the Notice do not wish to proceed today with Notices of Paper. Motion, General Business, No. 1 on the Notice Paper. However, I ask that the motion remain on the Notice Mr STOCKDALE (Brighton) - Mr Speaker, I do Paper. not wish to proceed today with Notices of Motion, General Business, No. 11 on the Notice Paper. Mr STOCKDALE (Brighton) - Mr Speaker, I do However, I ask that the motion remain on the Notice not wish to proceed today with Notices of Motion, Paper. General Business, No. 2 on the Notice Paper. However, I ask that the motion remain on the Notice Or NAPTHINE (Portland) - Mr Speaker, I do Paper. not wish to proceed today with Notices of Motion, General Business, No. 12 on the Notice Paper. Mr COOPER (Mornington) - Mr Speaker, I do However, I ask that the motion remain on the Notice not wish to proceed today with Notices of Motion, Paper. General Business, No. 3 on the Notice Paper. However, I ask that the motion remain on the Notice Mr GUDE (Hawthorn) - Mr Speaker, I do not Paper. wish to proceed today with Notices of Motion, General Business, No. 13 on the Notice Paper. Mr RICHARDSON (Forest Hill) - Mr Speaker, I However, I ask that the motion remain on the Notice do not wish to proceed today with Notices of Paper. Motion, General Business, No. 4 on the Notice Paper. However, I ask that the motion remain on the Notice Mr GUDE (Hawthorn) - Mr Speaker, I do not Paper. wish to proceed today with Notices of Motion, General Business, No. 14 on the Notice Paper. Mr MACLELLAN (Berwick) - Mr Speaker, I do However, I ask that the motion remain on the Notice not wish to proceed today with Notices of Motion, Paper. General Business, No. 5 on the Notice Paper. However, I ask that the motion remain on the Notice Mr KENNElT (Leader of the Opposition) - Mr Paper. Speaker, I do not wish to proceed today with Notices of Motion, General Business, No. 15 on the Mr RICHARDSON (Forest Hill) - Mr Speaker, I Notice Paper. However, I ask that it be removed do not wish to proceed today with Notices of from the Notice Paper. Motion, General Business, No. 6 on the Notice Paper. However, I ask that the motion remain on the Notice Mr KENNElT (Leader of the Opposition) - Mr Paper. Speaker, I do not wish to proceed with Notices of Motion, General Business, No. 16 on the Notice Mr PERRIN (Bulleen) - Mr Speaker, I do not Paper. However, I ask that the motion remain on the wish to proceed today with Notices of Motion, Notice Paper. General Business, No. 7 on the Notice Paper. However, I ask that the motion remain on the Notice Mr GUDE (Hawthorn) - Mr Speaker, I do not Paper. wish to proceed today with Notices of Motion, General Business, No. 17 on the Notice Paper. BUSINESS OF THE HOUSE

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However, I ask that the motion remain on the Notice my name. I reject the misrepresentations and Paper. imputations contained in the motion and, given that it is now the next ma tter to be debated, I ask Mr PLOWMAN (Evelyn) - Mr Speaker, I do not whether I can be allowed to respond. If the wish to proceed today with Notices of Motion, opposition -- General Business, No. 18 on the Notice Paper. However, I ask that the motion remain on the Notice Honourable members interjecting. Paper. The SPEAKER - Order! I ask the honourable Mr ROPER (Minister for Employment, member for Wantirna to pause until the House Post-Secondary Education and Training) - On a comes to order. The honourable member is entitled point of order, Mr Speaker, the honourable to be heard in silence. member's notice of motion contains significant reflections on a member of this House. While the Mrs HIRSH - If the honourable member for motion remains on the Notice Paper undebated, as Evelyn does not wish to proceed with his motion at the honourable member suggests it should, it retains this time, I ask that the motion and the that capacity to reflect on the honourable member misrepresentations and imputations it contains be for Wantima. The House should have the withdrawn and removed from the Notice Paper. If opportunity of making a determination on such that is not to be done, I seek your permission, reflections. The honourable member has an Mr Speaker, to clear my name. obligation, if he makes such imputations against an honourable member, to demonstrate those The SPEAKER - Order! I have heard sufficient imputations and then have the House determine argument to rule on the matter. Notwithstanding the them. arguments that have been put, it is true that motions are the property of the members in whose names It would appear that the honourable member, they stand. The honourable member for Evelyn has having made those imputations, now believes he the right to decide whether he proceeds or not - made an error in so doing and does not wish the and in the latter case, to ask that the motion remain House to have the opportunity of demonstrating on the Notice Paper. I do not uphold the point of that publicly to the honourable member for order. Wantirna. The honourable member should reconsider his decision, given the imputations Mr MICALLEF (Springvale) - On a further point against the honourable member for Wantima, and of order, Mr Speaker, and on the general principle of should proceed with the motion to enable the members being able -- imputations to be properly dismissed. Mr Perton - What's your point of order? Mr PLOWMAN (Evelyn) - On the point of order, Mr Speaker, I should have thought that by The SPEAKER - Order! The honourable now the Leader of the House would have member for Doncaster will allow the point of order understood the Standing Orders, which provide that to be heard if he remains silent. motions remain the property of the members who move them. Mr MICALLEF - On the general principle, if the motion is allowed to stand on the Notice Paper As to the matter of the imputations, if the members may be allowed to malign, misrepresent or honourable member for Wantima is prepared to impugn other members to the extent that we may give an apology to those to whom the motion refers, finish up with a Notice Paper that reads like the I shall be happy to withdraw it from the Notice Toorak Times. Paper. But until that happens the motion will stand and will be debated in due course. I ask you, Sir, to lay down some guidelines concerning the way motions are moved, so that Mrs HIRSH (Wantima) -On the point of order, members' characters cannot be maligned in the way Mr Speaker, I make a strong request that I be given the character of the honourable member for the chance to clear my name. The motion that Wantirna has been maligned by the motion moved contains the allegations made against me has been by the honourable member for Evelyn. on the Notice Paper for a long time, so I have been waiting for some time for the opportunity to clear CURRICULUM IN SECONDARY SCHOOLS

1862 ASSEMBLY Thursday, 28 May 1992

The SPEAKER - Order! The point of order CURRICULUM IN SECONDARY raised by the honourable member for Springvale SCHOOLS does not require an immediate ruling. In general terms, the nature of motions placed on the Notice Mr HAYWARD (Prahran) - I move: Paper is a matter for the members who move them - as is the case with how they are That this House condemns the Victorian goverrunent subsequently dealt with. However, 1 shall give for manipulating curriculum in Victorian secondary further consideration to the point of order raised by schools for political purposes. the honourable member. In addressing this motion it is important to consider Mr JASPER (Murray Valley) -I wish to the curriculum in the world in which we live. I do withdraw from the Notice Paper, Notices of Motion, not believe it is possible to consider the curriculum General Business, No. 20. The Minister for Tourism in isolation away from conditions either in Australia has responded positively to the Legal and or the world generally. The world today is highly Constitutional Committee and a Bill currently before competitive and is in the process of constant and the House will attend to the issues raised in the striking change. Victoria has learnt, to its cost, that it motion. cannot survive in isolation from that competitive world. Ukewise, the curriculum in our schools Mr RICHARDSON (Forest Hill) - 1 do not wish cannot be detached from the process of change in the to proceed at this time with Notices of Motion, world at large. General Business, No. 20, but 1 ask that it remain on the Notice Paper. Much of the change is caused by rapid developments in science and technology that are Mr Micallef interjected. creating an incredible array of new products and processes. For example, because of a special interest Mr RICHARDSON - Grub! in these areas you, Mc Speaker, will be aware that new developments in micro-electronics are creating Mr MICALLEF (Springvale) - On a point of a revolution in product design, production order, Mc Speaker, 1 ask the honourable member for processes, communications and data transfer. Forest Hill to withdraw that statement. Scientific revolutions and breakthroughs are rapidly transformed into products, many with much shorter The SPEAKER - Order! The honourable life cycles. member for Springvale has found the term used by the honourable member for Forest Hill offensive. 1 Keeping up with new scientific discoveries and ask that the honourable member for Forest Hill product development entails greater development withdraw. costs and risks and the need to recover investment in a shorter time. More important than that, however, Mr RICHARDSON (Forest Hill) - 1 withdraw is that it requires a highly educated and skilled work whatever expression the honourable member found force. offensive. For smaller countries such as Australia it is Mr COLEMAN (Syndal) - I do not wish to necessary for our people not only to keep abreast of proceed today with Notices of Motion, General scientific progress but also to seek out and develop Business, No. 21 listed on the Notice Paper. I ask that intelligent niches for products and services. Our best it remain on the Notice Paper. prospects are not in high-volume, mass production-type products but in finding specific Mr GUDE (Hawthorn) - I do not wish to niches we can fill through the use of intelligence, proceed today with Notices of Motion, General expertise and innovation. Therefore a key element Business, No. 22 listed on the Notice Paper. I further for Victoria in this changing world scene is the way do not wish to proceed at this stage with Notices of in which the astounding developments in Motion, General Business, Nos 23 and 24, but I wish communications are shrinking the world and them to remain on the Notice Paper. creating a global marketplace, something which has enormous implications for curriculum and for our schools generally. CURRICULUM IN SECONDARY SCHOOLS

Thursday, 28 May 1992 ASSEMBLY 1863

Real-time collaboration in designing products and at a huge global market. Added to that should be the equipment can now occur simultaneously in the growing middle class in Asia, Latin America, the United Kingdom, the United States of America and, Middle East and Eastern Europe, all of which are potentially, in Australia. Style and taste is moving into the global markets and demanding and homogenising around the world. I shall quote supplying goods beyond national borders. Kenichi Ohmae from his recent book Beyond National Borders -- The World Bank's latest World Development Report contains fascinating data -- Mr POPE (Minister for School Education) - On a point of order, Mr Speaker, it is obvious to anyone Mr POPE (Minister for School Education) -On a watching the honourable member delivering his further point of order, Mr Speaker, it is one thing to speech that he is reading it, and I understand that say that one would like to quote from certain that is not the form of this House. sources, but the honourable member is doing more than simply quoting. It is obvious to anyone in this Mr HAYW ARD (Prahran) - On the point of Chamber that he is reading his speech. In fact, one order, Mr Speaker, I am not reading my speech. I can see it there in front of him printed in bold type. have put many hours of research and preparation He is reading page after page of his speech. I accept into the speech and I have a large amount of data that he may wish to refer to some quotations, but that I wish to put forward. I am not reading my reading his speech word by word is a little beyond speech, but I am certainly referring to notes. If I may, the pale. I shall continue to refer to notes because the information I wish to present to the House is The SPEAKER - Order! I remind the detailed. I want to quote extensively from honourable member for Prahran of my earlier ruling documents I believe are relevant to this important and I ask him to observe the custom and practice of issue. this House that speeches should not be read.

The SPEAKER - Order! The Chair must accept Mr HAYWARD (prahran) - I am not reading the assurance by the honourable member that he is my speech, Mr Speaker, and I welcome your not reading his speech. Obviously he should observing me closely. I wish to quote extensively understand that that should continue to be the case. from documents I have in front of me and at the moment I wish to cite data from the World Bank's Mr HAYWARD - With your indulgence, Sir, I development report. The World Bank's latest World should like to quote from this book, and naturally I Development Report contains fascinating shall need to read. information on growth in per capita real incomes. For example, it took Britain 60 years to double real The SPEAKER - Order! The honourable incomes in its early stage of industrialisation from member is in order in reading quotations. 1870, the United States of America took 50 years from 1840, Japan took 35 years from 1885, Brazil Mr HAYWARD - Mr Ohmae says in his book: took 18 years from 1861 and South Korea took only 11 years from 1966. We are now seeing countries in In advanced industrial countries, consumers' lives, Latin America, and countries in our region, such as lifestyles and aspirations are becoming evermore alike Indonesia, Malaysia and Vietnam, in a phase of as people the world over find the same things accelerated development. We are seeing a rapid interesting or attractive and the same foods tasty. development in new technology, particularly People live in similar residential neighbourhoods, learn electronic-based technology. It is clear that those similar things at school, watch similar programs on countries, and I speak specifically of Indonesia and television and buy the same goods at the supermarket Vietnam, will double their real income standards or department store. This boils down to saying that and their capacity to produce competitive goods in 630 million people - the combined populations of less than 10 years. Japan, with a population of 120 million, the United States of America with a population of 250 million, and Those who have visited Indonesia recently have Western Europe, with a population of 260 million - been amazed by the industrial estates developing comprise a single market with conunon needs. there, which are based on electronic technology. Indonesia is making rapid growth in the technical In other words, because of the homogenisation of education area. Honourable members will be tastes and the shrinking of the world, we are looking amazed to know that the Northern Territory is CURRICULUM IN SECONDARY SCHOOLS

1864 ASSEMBLY Thursday, 28 May 1992 substantially assisting Indonesia in its technical Mr HAYWARD - The issues to which I have education by helping it to establish technical colleges. been referring have been taken up by a group of business leaders who are concerned about the Nations that are showing the greatest growth are curriculum and who are concerned about the using education as the key. They are pursuing political manipulation of the curriculum. They education that values vigour, competition and an expressed their concerns in a manifesto last year. in-depth learning of science - which trains the The business leaders are no doubt familiar to minds of student - as well as a balance between honourable members. They are John Ralph, Michael intellectual development and practical vocational Deely, John Prescott, Will Bailey and others. They skills. That kind of education trains young people to state: make the most of change rather than being frightened of change. It is clear that these global The nature and level of education and training in trends make it ever more important for Australia Australia is poor compared with that in many other and Victoria in particular -- countries with which we compete. Long-run success depends on the quality of our human resources. Mr FORDHAM (Footscray) - On a point of order, I have been listening with interest to the They went on to say that we must upgrade our comments made by the honourable member for investment in Australian people: Prahran. I can understand his concern about this matter, but it would be an appropriate debate under through an even deeper commitment to balanced, but a different heading. The reality is that we are meant performance-oriented education and skills training. to be debating motion No. 25 on the Notice Paper. It is a narrow and specific issue about the action of the The point I make in the context of the political Victorian government in the manipulation of manipulation of curriculum is that education cannot curriculum in Victorian secondary schools for and should not be used for so-called social political purposes. The honourable member for engineering reasons to push particular poli tical Prahran has been speaking now for approximately ideological approaches. Education is, as these 13 minutes and, as I understand it, he has not got prominent business leaders have said, essentially for anywhere near the topic as yet. The time set aside for students. It must be there to help the country and this debate is limited, and I have no doubt that the particularly to help a State such as Victoria at this Minister and other honourable members will be critical time. interested in participating in it. I ask that the honourable member's attention be directed to the Rather than education being used for political topic before the House in the hope that he will begin purposes and so-called social engineering purposes, relating his remarks to it. it must provide students with a basic skills base. It must give students the opportunity of making the Mr HAYWARD (Prahran) - On the point of most of their work and life opportunities. In order, as I made clear from the begirming of my contrast, the Labor Party takes the view that contribution, one cannot see a curriculum in education is a political tool to change the nature of isolation; one has to examine it in terms of what is society. For the Labor Party that may be a perfectly happening in the world and world needs. In that legitimate approach, but the point I have context one clearly sees the problems associated endeavoured to make in my introductory remarks is with the use of an ideological or philosophical base that at this stage of Victoria's development it is vital as a curriculum's driving force. I am drawing closer that students be given skills to enable them to make to the motion but I believe it is essential that this the most of work opportunities and to deal with matter be put in a proper context. change so they can see the opportunities arising out of change and not be concerned about change. That The SPEAKER - Order! The honourable also means that it is necessary to have a flexible member for Prahran has suggested that the education system that is able to respond to the needs educational policies of other countries are induced of individual students rather than the system for poli tical purposes - he quoted cases of responding to a social engineering approach or economic policy purposes - and he indicated that political manipulation. It is sad that, consistent with he intended to relate those policies and political the Labor Party's social engineering approach, its purposes to the Victorian situation. If he is able to so aim is that school teachers and the curriculum relate them he will be in order. At this stage I do not conform to Labor's ideological agenda. uphold the point of order. CURRICULUM IN SECONDARY SCHOOLS

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The worst political manifestation of the curriculum inappropriate for these times and sends students the is the Victorian certificate of education (VCE). By wrong signals. The Premier took up this concept forcing all students into the same mould the VCE when she stated at the primary principals' removes the ability of schools to meet the individual conference at Mannix College on 28 November 1988 needs of students. The VCE treats all students as if that her vision of future education meant "striving they were the same and forces them into the same for equal outcomes". type of education, whereas the changes in the world today indicate a need for a flexible, responsive The ''Manifesto for a Democratic Curriculum" is approach to education. In my opinion the VCE is an very interesting. It makes the point that assessment extremely outdated approach. Time has passed it by. policies are in many ways the keys to understanding It was the grand design for social engineering of a how a modern school curriculum works. The group of people that included the Premier, but since document makes the point that the assessment tha t time the world has changed. process is an integral part of the curriculum and an integral part of attempting to achieve concepts such There has been a variety of reports, the most as equality of outcomes. prominent of which is the Finn report, which clearly shows that the VCE is no longer appropriate to The document argues against the concept of grading students' needs. The present Premier is the great either by letters or by percentage marks and architect of the VCE and is personally committed to suggests that grading must be repudiated in a it. This is revealed in a recent quote from the democratic system to avoid any process that builds Premier that appeared in the Age in November 1990: in failure. The tragedy is that this has created a system in which students are not encouraged to The new Victorian certificate of education represents a succeed. It sends the wrong signals to students. Even watershed in the educational developments which have today students are ungraded. They are never told taken place in Victoria over more than a decade. they have failed; they are told their work is ungraded. This is the wrong approach. We need The VCE actually represents the high-water mark of students to strive to achieve their best. It does not political control of the school curriculum. It is now matter whether students are proficient in all clear that the political manipulation of the subjects. What counts is that every student should curriculum by the Australian Labor Party is likely to strive to do his or her best. do more long-term damage to Victoria than its horrendous financial mismanagement of this State. There are different types of intelligence. A person who has musical talent may not be proficient in Two years later the report of the Task Force on mathematics. It does not matter. The important Pathways in Education and Training, the Deveson thing is for the student to identify his or her report, concluded that not only the content of the particular expertise and strive to do the best he or VCE must be changed but also the composition and she can. Students do not need to be sent the message structure of the Victorian Curriculum and that all they have to do is go through the motions. Assessment Board (VCAB). It is clear from the range They have to be given a clear indication of the of reports, particularly the Deveson report, that the progress they are making. The concept of removing VCE meets the needs of neither the students who assessment from education has served students wish to undertake further educational training nor badly. the students who require vocational or technical education. This shows its greatest manifestation in year 11 of the VCE. Students are denied proper recognition of The derivation and philosophical background of the their efforts. A key element of this is the fact that the VCE is interesting. I am sure all honourable VCE has replaced the different certificates that met members are familiar with the ''Manifesto for a the different needs of students, so that now there is Democratic Curriculum", which promoted for the only one certificate. There is clear evidence that the first time the concept of equal outcomes for students, VCE is not meeting the vocational needs of students. a concept which penneates so much of the VCE. The As part of the whole political philosophy that found ALP thinks this is a perfectly valid concept, but we its manifestation in the Blackburn report, technical think it is totally inappropriate in the world today and high schools were abolished and replaced by and that it is serving students very badly indeed. Of secondary colleges. This destroyed students' options course everybody seeks equality of opportunity for of either an academic or a vocational education. In students, but talk of equality of outcomes is quite the process, quality technical education was CURRICULUM IN SECONDARY SCHOOLS

1866 ASSEMBLY Thursday. 28 May 1992 destroyed. The community is now realising the That comment goes to the heart of the issue - the mistake of this and calling for high-quality technical ability of teachers to teach. Teachers often say that vocational training. Only now is the government they are caught up with managing the VCE, research realising its mistake, the damage it has done and the projects and students' work and cannot impart the fact that the community wants this type of technical foundation knowledge so essential to all students. training to be made available. As Mr Hallpike says so well: A further manifestation of the political philosophy and manipulation of the curriculum that can be It is only research in the proper sense of the term when observed in the paper entitled ''Manifesto for a the researcher has sufficient grounding in a discipline Democratic Curriculum" is the notion that to know what constitutes a valid research topic ... assessment is tied up with curriculum and that those implementing the so-called democratic curriculum It is pointless to be involved in research and do see assessment as the key element of that philosophy. exercises unless that grounding and discipline is present. Mr Hallpike goes on to say: External examinations had previously enabled students, especially those from less affluent areas, to The irony here is that those who designed the VCE compete on equal terms. When I talk to people claimed that the higher school certificate (HSC) which it whom I consider to be traditional Labor people - replaced was elitist as its emphasis was academic. Yet those who live in the less affluent suburbs, who are the models of research underpinning the VCE are an concerned about disadvantaged students from less attempt to simulate what happens either in social affluent areas and who send their children to science departments or at honours and postgraduate government schools - time and again they say that levels at university. the worst thing the Australian Labor Party did in this State was to reduce the reliance on external The first point Mr Hallpike makes is that students examina tions. need essential grounding in disciplines before they can undertake proper research. The second point he The Leader of the Opposition in New South Wales, makes is that the nature of the work the VCE Mr Carr, a very capable politician who has a good imposes on students is an attempt to simulate what understanding of these things, has described happens at honours and postgraduate levels at Victorian education as "trendy nonsense". The move university. against external assessment has acted in a perverse way against the students whom the VCE allegedly Honourable members well know from their own assists. Leaving aside all the problems with the VCE, experiences about the enormous pressures placed on the real tragedy is the perversity of its effect: many students. The pressure is less for the students students from less affluent areas who have access to who are well resourced and advanced in their fewer resources are worse off under the VCE specialities, but for many students, especially those because they no longer have the opportunity of their from less affluent schools and areas, the pressures work being externally assessed in an objective are great. manner. Those students who come from more affluent areas with better resourced schools and The real effect and tragedy of the VCE is that municipal libraries and whose parents can pay for students are no longer competing against each other tutors to assist them with their projects are, on an equal basis. The VCE has practical problems ironically, those who benefit most from the VCE. that must be dealt with, and I shall refer to them shortly. However, the fundamental problem is that Don't take my word for that; take the words of students are disadvantaged because of lack of practising VCE teachers. I refer to resources. Mr Michael Hallpike, a practising VCE teacher at a government school, who states that simply The effects of the reduction of reliance on external collecting the data is not research. He is reported in examinations were predicted more than two years the May issue of Quadrant as saying: ago in an editorial in the Australian of 25 October 1989: It is only research in the proper sense of the term when the researcher has sufficient grounding in a discipline This will have two results. The first is that universities to know what constitutes a valid research topic ... will be forced to devise their own methods of selecting entrants because the State system will no longer CURRICULUM IN SECONDARY SCHOOLS

Thursday, 28 May 1992 ASSEMBLY 1867

intelligibly discriminate between differing levels of socialist analysis. It is one of the worst achievement. manifestations of an attempt by a government at political manipulation of a curriculum. The second is that potential employers will be forced to rely on a school's reputation in judging job applicants. The House will be aware of the absolute and terrible Going to the "right school" will become an essential mismanagement of the situation at the end of 1991 ingredient of success in Victoria. Bright children from when the government decided that Australian poor families will suffer. studies should not be a compulsory subject this year. I hasten to add that it has always been the coalition's lhat sums up the issues. Students who go to policy that Australian studies should not be independent schools because their parents have the compulsory. When in government the coalition resources or because, as happens in many cases, the would have implemented that policy in a sensible parents work at two jobs to obtain the necessary way with proper notice and advice to schools. money are better off than students in government schools because independent schools have the The decision to make Australian studies resources. The reduced external assessment means non-compulsory was made at the end of the school that employers will look beyond the level of year after students and teachers had gone on assessment and inquire which school a student holidays and after the timetable for 1992 had been attended. established; and the last-minute announcement by the government caused enormous problems. Despite I shall now review the practical application of the that extraordinary situation, the percentage of VCE curriculum and I refer firstly to Australian year 11 students enrolled for Australian studies this Studies. lhat subject was a product of the paper year dropped dramatically after the decision was entitled "Manifesto for a Democratic Curriculum", announced. which contains the notion of Australian studies as a compulsory subject. That notion was embodied in Even worse than the government's political the VCE with disastrous results. The saga of manipulation of Australian studies was the way Australian studies is a sad and sorry one for students were prevented from studying other students because they leave school without gaining subjects because of the compulsory nature of a proper understanding of the country's institutions Australian studies: students were precluded from and culture. studying languages and other humanities subjects. For example, in 1989, 12 per cent of year 11 students The compulsory VCE subject of Australian studies studied Australian history but that figure fell to did not have that effect. Ms Kimer wrote-- 6 per cent in 1991.

The ACIlNG SPEAKER (Mr Shell) - Order! When one talks to students and teachers one The honourable member should refer to the Premier understands that the reason for the major decline in by her correct title. the number studying humanities subjects such as history and geography and those subjects which Mr HAYWARD - In May 1984 the Premier gave students a better understanding of Australia's wrote an article for the lilbor Star, a newspaper with background, was because Australian studies became which many honourable members will be familiar. compulsory. The two unfortunate aspects of the The subject was an attempt to indoctrinate students. Australian studies saga were, first, the aspect of She states that it would be a: using the subject to push a politically oriented approach to curriculum; and, secondly, the fact that study of labour; its importance; its contribution; its it was compulsory prevented students from culture; its organisation; its conflict and cooperation studying other subjects, thereby hindering them with capital ... from obtaining a proper understanding of the background of our community. In other words, no suggestion was made that Australian studies was to try to give students a The report of the Deveson task force has recently proper understanding of their country, its been published. It recognised the problem, and at institutions and our culture. paragraph 2.54 it states:

Australian studies as finally presented gave a picture of the Australian community based on a CURRICULUM IN SECONDARY SCHOOLS

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In 1991 the study of history in year 11 was affected by provided material to the Victorian Curriculum and the need to take Australian studies as one of the Assessment Board (VCAB), but essentially the common studies at units 1 and 2. controversy about English surrounds the question of external assessment. The coalition strongly believes It is a well-recognised problem. A demonstration of there should be at least 50 per cent external the fact that Australian studies has failed and did assessment in VCE English, as it believes should be not have support among students is that only 4 per the case in most VCE subjects. Particular controversy cent of students who had been forced to undertake concerns the common assessment task (CAn in the study of that subject in year 11 in 1991 chose to what is called English oral communication. That continue with the subject this year. In other words, controversy is currently raging and we have been despite the fact that the notice about it no longer watching closely VCAB's response to it. In particular being compulsory was late, thereby making it we will be watching to see whether the difficult for students and teachers to reorganise their recommendations of the two Melbourne universities year, and despite the fact that it had been I have mentioned lead to a minimum of 50 per cent compulsory last year, last-minute arrangements and external assessment for English. rescheduling of subjects led to only 4 per cent of students continuing to undertake Australian studies In the same way that the content and assessment of this year. VCE English is flawed because the government has refused to take into account the differing needs and Another key subject in the VCE, and another that abilities of students, likewise there are fundamental has been the subject of political manipulation, has problems with mathematics. Even though the been English. Basic skills in literacy are the number of students studying for the Victorian foundation of all learning. The study of English in certificate of education has increased, the number of years 11 and 12 should not only strengthen the skills students who are choosing to study mathematics that students should have obtained in their earlier and standards have plunged. This is best illustrated years but also should continue the learning process by the fact that often students who go on to so that students will obtain a very clear university to study subjects such as engineering and understanding of our literary and cultural heritage. sciences have to do remedial courses in mathematics.

However, because of the nature of VCE English, this The opposition has been expressing concerns about has not happened. Everyone will be aware of the mathematics for some time. The government took stories concerning the text in VCE English and the some time to act but has finally commissioned a fact that it is possible to study soap operas and review of mathematics. The opposition will carefully comic books. That has led to a lack of appreciation examine the results of the review. The tragedy is that and understanding of the value of our cultural and the government is saying that changes to VCE Year literary heritage. Perhaps the worst aspect of VCE 12 mathematics cannot be implemented before 1994. English is that all students are forced to study the same subjects at the same level whereas, at other One can understand, particularly in the context of times, other options and types of English were the Australian studies disaster, the caution exercised available. The worst manifestation is for students in the timing of its implementation. The real tragedy from a non-English-speaking background. When one is that whole years of students, including this year's listens to the proponents of the VCE one tends to and next year's students, will continue to deal with a think it is aimed at helping those who have some very unsatisfactory mathematics course. That fact particular disadvantage - perhaps those for whom stems from the government's concept that the one English is not their first language. mathematics course should be the same for all students, and from the government's predilection That understanding highlights the hypocrisy of the for not providing students with the types of courses Labor government: it makes claims about social and subjects that best meet their needs. justice for students from non-English speaking backgrounds but at the same time it forces students Students are of different intellects. A student might into identical programs with native English be good at music but not so good at mathematics. speaking students. That does not mean that student is an inferior student, but it does suggest that a range of Enormous controversy surrounds VCE English. The mathematics subjects should be available to students University of Melbourne and Monash University to cater for their interests, whether they be academic have announced a review of the subject and have or vocational. When one visits schools that were CURRICULUM IN SECONDARY SCHOOLS

Thursday, 28 May 1992 ASSEMBLY 1869 formerly tedmical schools one meets students who secondary school. The objective should be that the are interested in a vocational-type of education, and student finishes that course fluent in the language. it is clear that many of them have difficulty in coping with the mathematics course as it is currently A student should be offered high-quality teaching constituted. when learning a language so he or she can become fluent in a language. There are some good language Similar problems exist in science subjects, including teachers in Victorian schools, but there is a serious chemistry and physics. It is disturbing that there has shortage of them. That issue needs to be addressed. been a substantial decrease in the number of Sadly, the Labor Party seems to lack interest in these students who are continuing with VCE chemistry important subjects. It has devoted much time and and physics. At least one Victorian university has effort to promoting its so-called social justice recently expressed grave concerns about the quality framework. There is very little of value for students' and standard of those subjects. These problems exist future lives in that framework. It is hypocritical in throughout various subjects of the VCE and stem the sense that nothing in it has led to improvement from the fundamental approach the government has for students who come from a disadvantaged taken to the VCE in trying to make it all things for all background. students. The most disturbing factor about it is that it has Sadly, in a practical sense, the VCE is meeting the become necessary for teachers who are seeking needs of neither academic students nor vocational promotion to give a commitment to the social justice students. We should understand that the world is a framework. In other words, promotion is not based diverse place and that the needs of students are on such things as quality or standards; there is no diverse. A range of subjects should be offered in concept of the contribution of teachers in the school, areas such as mathematics and English to meet the it is based on their commitment to the government's differing needs of students. ideological approach.

Another key area of concern is languages other than Students are being put at a disadvantage because the English. Because Australian studies was a Labor Party has sought to use education and the compulsory subject, it prevented many students curriculum for social engineering purposes and from learning a language other than English. The purposes other than providing students with the government has talked about making foreign foundation knowledge and the skills needed to deal language subjects compulsory. That is not the with change. We are facing a totally new world, a answer. The key is not just that students go through world in which change is constant, a world that is the motions of learning a language; it is the quality increasingly becoming one world. Sadly, as in so of learning that counts, and students must be many things with this Labor government, the type of motivated to learn a language. In Victorian approach that the Labor Party has adopted in secondary schools 63 per cent of students in year 7 education is an approach that is out of date. That study a language other than English, but by year 10 approach was discarded a decade ago in most this figure has decreased to just 13 per cent. That is growth countries of the world. It is reminiscent of unacceptable in a country such as Australia, which how the Labor Party tried to get involved in private is attempting to become competitive in the business through the VEDC with its wonderful new international marketplace. ideas. The tragedy is that the concept of injecting government moneys into private enterprise was The total teaching time spent on languages other rejected as being useless many years ago in other than English at year 11 level averages less than 5 per countries. The problem is that the Labor government cent. In year 12 the figure is as low as 1 per cent. The is in its dying days. Every day in question time answer is not simply making language study honourable members observe the government's compulsory, it is in providing high-quality language deathly agony because it is out of touch with the study so students will think it is worthwhile. Many needs of Victorians. students think learning a language is not worthwhile because the quality of the teaching that Mr Pope interjected. is available to them is so poor. If one is to learn a foreign language seriously in such a way that one Mr HAYWARD - Again the Minister is can use it later, that learning should begin in attempting to provide misinformation. Time and primary school and continue through all the years of again the coalition has said it will not abolish the VCE. The assessment issue is at the heart of the CURRICULUM IN SECONDARY SCHOOLS

1870 ASSEMBLY Thursday, 28 May 1992 problems with the VCE. The government has A central aspect of the whole procedure relates to introduced an adulterated assessment process that the Labor Party's process of school reorganisation has created enonnous problems. The crux of those known as "district provision". This ideolOgical problems is the fact that students do not receive approach is designed to remove the capacity of worthwhile feedback on their results. This concept schools to specialise in order to meet the needs of of awarding an 5 or an N for their work their students. The quality of the curriculum offered requirements in year 11 has created significant by a school is not determined by the number of problems. It is not necessary to take the opposition's students or the subjects that it offers. In trying to word for it. More than a year ago the report of manipulate the future of schools into its own mould, Associate Professor Jeff Northfield recorded that the Labor Party has forgotten that the skills and students and teachers generally were unhappy with expertise of teachers working as a dedicated team 5 and N grades in year 11. On page 21 of his report are vital in providing quality education. The his conclusion about 5 and N assessments was government has forgotten that quality learning will reinforced: come from allowing schools to develop their own character and their own ideas and build up a team of They [the students] want every kind of feedback to it committed teachers. The whole process of school [their work] - written feedback, verbal feedback and a reorganisation and district provision works against grade. If they do an assignment they want to know that aim. how well they performed. They want to know how to improve next time. They want to know where they The centralisation of decision-making power in the stand in relation to the rest of the class. Students are not Victorian education system has meant that schools convinced they are always getting this feedback. and their communities are not able to make their own decisions or determine their own future. Associate Professor Northfield goes on to record Instead schools, teachers and parents are forced into some of the comments of the students about 5 and N amalgamations that merely serve the government's gradings: political agenda rather than serving the needs of students. The whole process has been rejected by It is so disappointing to get an S when you have given communities. It has created enonnous problems and it your all. heartache in the community.

We find out if it is SIN or if it is a graded. If it is SIN Again, the House does not have to take the we just work to an S and go on with a graded task. coalition's word for it. At a cost to the Victorian taxpayer of $22 000, consultants hired by the There is no motivation to do your best if it only gets an government revealed that there was widespread S. anger in school communities about the changes imposed by the government. The most damning You don't know what your standard is if you only get were the conclusions of teachers involved in the anS. process. I refer the House to page 19 of the report District Provision and School Reorganisation Market Unfortunately they are not isolated comments. The Research Study by Neil Pascoe and Associates: report concludes that those types of comments are made consistently by students. there were some quite marked concerns about the effects that district provision/reorganisation might The government has attempted to ensure that no have on the education systems and individual schools' school is any different from another. The capacities to meet and be sensitive to the needs of fundamental thrust of my comments today is that particular and special needs groups. Those with the government is attempting to force all students particularly low academic resources and skills were into the same mould. It has not provided schools deemed likely to miss out on either special programs or with sufficient diversity for students to develop their special unit provision, particularly where this might own interests and expertise to succeed and make have either a technical or personal skills orientation. their own contributions. Through the VCE the government is attempting to make all students the Those comments highlight four essential issues in same. The VCE meets neither the needs of students my motion: first, that the Labor Party's ideological who are seeking further academic training nor those agenda has prevented schools from meeting the of students seeking vocational-type education. needs of students. That is very much evident in the VCE. This whole reorganisation approach, which is CURRICULUM IN SECONDARY SCHOOLS

Thursday, 28 May 1992 ASSEMBLY 1871 attempting to force schools into one mould, also As a result, they will not get the possible benefit out attempts to undermine the capacity of schools to of the time spent at school and that, of course, develop their character and ethos. In a rapidly aggravates or accentuates any discipline problems changing world it is difficult to predict a change in that exist in schools, not so much because the new and merging opportunities in the future. We students are deliberately seeking to be disruptive must encourage diversity among schools. We must but because they just feel frustrated as a result of the encourage schools to develop their own areas of time not being put to proper use. Another result is a interest and special expertise. high level of truancy in some areas.

Secondly, the evidence I have brought forward The report states also that there exists a popular today demonstrates the falsity of the Labor Party's belief among many teachers and other staff within claim that it is concerned for the interests of students schools that this policy is merely an overt attempt to from disadvantaged backgrounds. The tragedy is cut costs. That may be one of the most unfortunate that what has occurred is not what was originally aspects of the whole reorganisation process - that it intended for the VCE. The VCE has worked against is perceived as simply a cost-cutting measure. I the interests of students who come from less well reiterate: it is not perceived to have been introduced resourced schools. It might work well for students to serve an educational purpose, it is perceived as who have significant resources but it is not so good being merely a cost-cutting measure. The situation is for students who have limited access to resources. very sad indeed. The whole reorganisation approach will work against the interests of those students. The report states further that there is a perception among the wider community, including parents and Thirdly, just as with the VCE, school reorganisation educationalists, that change in local school provision will entrench disadvantage in schools. Fourthly, the is another assault on local educational assets. That is report from which I have quoted concludes that a way of undermining local community schools with either technical or personal skills involvement in schools. The report makes the orientation will suffer under district provision. All observation that there is a sense of -- honourable members know of the work done in these types of schools - I have visited many of Mr POPE (Minister for School Education) - them. They have a special approach to technical or Mr Acting Speaker, on a point of order, all personal skills and have helped particular honourable members will be aware that the custom students - that is, those at risk or in other need. If and practice of the House in respect of Notices of such schools are forced into the reorganisation the Motion is that the debate concludes at 1 o'clock. special areas of interest and expertise will be lost. Custom and practice is also that a speaker from each The real tragedy is that the accumulated expertise side of the House actually has the opportunity of and experience will go by the board. A danger exists engaging in the debate. The honourable member for that many students, because of the ideological Prahran has now been speaking since about 11.15 approach taken by the Labor Party, as manifested in a.m., and even if he were to conclude immediately, I so many ways, will be relegated to the educational would be left with only 25 minutes in which to scrap heap. Currently evidence exists of an refute a number of the issues he has put. I ask for an unfortunate deterioration in the attitude of senior indication from the honourable member that I will students in some schools. They are students who do be given an opportunity to refute those issues. not really want to be there; they are there only because there is nothing else for them to do or Mr HAYWARD (prahran) - On the point of nowhere else for them to go. They are, in fact, the order, a short time ago the Minister for School victims of the recession and its consequent high Education leaned across the table and asked whether unemployment rate. I was rounding off or coming to the conclusion of my remarks. I said that I was. I am now about to The schools are not meeting the needs of the summarise and bring my remarks to conclusion. students. It is essential that students feel that what they are doing at school is worth doing. One cannot The ACTING SPEAKER - Order! There is no expect a quality effort from students or that they will point of order. perform to their utmost ability in schools unless they feel that what they are doing is worthwhile. Sadly, Mr HAYWARD - In conclusion, I have pointed because of the approach of the government, students out that in the future Victorians will compete in a often feel that they are just filling in time at school. world that will be dominated by continual change. CURmCULUM IN SECONDARY SCHOOLS

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We must assist students to gain the benefits of new The debate is a disgrace in a number of respects. opporhmities for work emerging from change. Firstly, it is a disgrace because time and again honourable members will have heard from students My concluding points are that if all students are to and teachers and through various media outlets benefit from change each student must be given the about the need to remove the political rhetoric from opporhmity of gaining foundation knowledge and the debate on the VCE. But the honourable member basic skills that can be developed to a high level. for Prahran goes back to political rhetoric and Rather than being frightened by change, students continues with his political grandstanding. Indeed, should be encouraged to be excited by it. In other recently someone in education circles said that the words, they should not see change as something to honourable member for Prahran has gone feral on be frightened of but should be encouraged to see it education! Today's debate demonstrates the truth of as exciting and something from which they can that statement. benefit. It is hard to know where to start in refuting the Sadly, the Victorian secondary school curriculum points put forward by the honourable member, but I does not encourage students to work to their best shall attempt to do so. I refer to the position of the capacity. The VCE does not allow for flexibility and opposition parties on the VCE, which leaves one does not meet the needs of students. The schools wondering exactly how they will approach it if - reorganisa tion program has removed the heaven forbid - they ever win government in this opportunity for schools to respond to the needs of State. The honourable member said that the students. A coalition government will provide opposition will not be abandoning the VCE and that students with the opporhmity of gaining an time has passed the VCE by! His remarks can be education that will prepare them for their future life linked with the comment of the Leader of the and work. Opposition, who only some three weeks ago said on Radio 3AW that "the VCE will not be dumped My fundamental contention in conclusion is that the straight off". One wonders why it is not made clear Labor Party has used the curriculum in Victorian that the opposition wishes to dump the VCE. That is secondary schools for political purposes, and in so obviously the position, and although the shadow doing has damaged the future work and life Minister for education is too frightened to state it, prospects of many students. the Leader of the Opposition does not mind saying it. One wonders, in fact, whether the honourable Mr POPE (Minister for School Education) - The member for Prahran has actually read the Deveson motion is: report or the Northfield report because the Deveson committee, according to the honourable member for That this House condemns the Victorian government Prahran, was damning of the VCE. However, what it for manipulating curriculum in Victorian secondary does say is: schools for political purposes. The VCE provides the curriculum framework within As I said, the honourable member for Prahran has which the key challenges facing the delivery of been speaking since 11.15 a.m., but all honourable post-compulsory scheduling can be tackled. The members have heard has been a diatribe on issues challenges are to develop and deliver education within that have nothing at all to do with the motion. Then that framework. the honourable member got down to the crux of his speech, the Victorian certificate of education (VCE), Indeed, most of what the Deveson report says is and spent some 15 to 20 minutes on Australian already in train in the education system in Victoria. studies. Notices of Motion, General Business, No. 26 was also Notice of the motion was first given on 9 October placed on the Notice Paper by the honourable 1991, prior to the decision not to make Australian member for Prahran. It is about district provision studies compulsory having been made. It appears and school reorganisation policies, which he says are that the honourable member for Prahran has had the destroying schools and everything else. He speech stuck away in his office since 9 October 1991 obviously decided to lump that in with his diatribe and did not have the wit to change it, apart from on the VCE. some small comment on Australian studies no longer being compulsory. On the issue of senior campuses the Deveson report recommends senior colleges for years 11 and 12 CURRICULUM IN SECONDARY SCHOOLS

Thursday. 28 May 1992 ASSEMBLY 1873 throughout Victoria, and that is happening. We are political point-scoring in an election year added to the providing a comprehensive curriculum and giving inevitable stress felt by students trying to cope with students the ability to pick and choose among the 44 such a fundamental change. studies operating within the VCE. It is unfortunate that the honourable member for Prahran has quoted I totally and wholeheartedly agree with that selectively, as he does with any report, be it the Finn editorial, and what we hear today is exactly what it report, the Mayer report or the Carmichael report. said should not happen - political point-scoring on Each of those reports says Victoria is leading the the VCE and comments such as "students being way in the direction we are taking. relegated to the scrap heap" and suggestions that they are "a lost generation". The opposition stands The honourable member also quoted selectively condemned for what it is trying to do to education in from the Northfield report. On Friday, 14 February Victoria in an area that is highly regarded 1992, the Age ran an editorial using Professor throughout Australia. Northfield's report, which is the only comprehensive and independent report on the VCE. We heard nonsense about the New South Wales The Age article states: system and how it is going down the right track, but yesterday's Sydney Morning Herald, under the The most persuasive argument for the new Victorian heading ''Pupils drop out sooner in New South certificate of education lies in the record 86 per cent Wales, says study" says that the retention rate in year 12 retention rate. With 110 000 students now New South Wales is 61.4 per cent. If that is an taking part in the two-year VCE program that example of where a Liberal government - if one concludes Victoria's 13 years of schooling, it would ever comes to power - would lead us, heaven help have been unfair and unwise to continue offering us! secondary education designed primarily for the academic minority planning to undertake university The first 20 minutes of the honourable member's courses. What was needed was a new system that speech was spent on what is happening overseas would open the way to a wide range of academic and and lifting skill bases, and he then told us that vocational courses, as well as providing employers following New South Wales is the way to go -with with some guidance as to the capacity of students to a 61.4 per cent retention rate! learn. Despite teething troubles the VCE appears, on balance, to be settling down well. The three-year Mr Elder - What's that got to do with the price Monash University study into its introduction, reported of eggs in China? yesterday, revealed widespread acceptance among students and teachers. Professor Jeff Northfield's Mr POPE - That is a typical comment from a sensible report leaves little room for doubt that the VCE member of the opposition who believes there is a is, and should be, here to stay. problem with a retention rate of 86 per cent. We are proud of that retention rate. It has increased year The editorial further states: after year since 1982, not just in the past 18 months.

Since its introduction, the VCE has been modified to The motion says that the Victorian government is make it more acceptable to important educational and manipulating the curriculum in Victorian secondary ideological constituencies. The changes have made schools for political purposes, and the honourable subject choices more flexible and satisfied reasonable member for Prahran talked about the VCE in demands that external written examinations should particular. The requirements for the VCE are set have a significant role in assessments. Concerns remain down by the Victorian Curriculum and Assessment about the quality of the English course and the work Board, as everyone would be aware, so let us load in some of the mathematics units. The need for examine this "political manipulation". Who is further modifications will doubtless appear as the performing it, given that the work requirements are school year progresses, and the reassuring indications set by VCAB? Who are these terrible people? They are that the VCAB will respond to justified concerns. are representatives of the State and Catholic school The good news from the Monash report is that, in spite systems, the Association of Independent Schools and of some problems, the VCE is making education a the Technical and Further Education Board. The meaningful challenge for the highly disparate mass VCAB comprises representatives of: the Victorian constituency of senior students now completing their Vice-Chancellors Committee; the Victorian secondary education. While education will always be a Conference of Principals; the Victorian Council of valid topic for political debate, it would be a tragedy if School Organisations; the Victorian Federation of CURRICULUM IN SECONDARY SCHOOLS

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State Schools Parents Clubs; the Victorian Secondary I remind all honourable members that this is the first Teachers Association; the Federated Teachers Union full year of implementation of the VCE and of Victoria; the Victorian Association of Teachers in obviously there are some bugs. Those bugs are being Independent Schools; the Incorporated Association dealt with through an appropriate process. Even so, of Registered Teachers; the Staff Association of conservative educationalists throughout Australia Ca tholic Secondary Schools; the Victorian Congress are applauding the VCE. Lachlan Chip man, who is of Employer Associations; and three elected not known for his support of the Labor Party in members from the political sphere - namely, Australia but rather for his conservative views on Mr David Lea, the Liberal member for Sandringham, education, said in a speech last year that if the VCE the Honourable David Evans, one of the National is Mickey Mouse he is Goofy. Lach1an Chip man Party members for North Eastern Province in made it clear that he strongly supports the VCE. another place, and the Labor member for Bentleigh. They are the people who set the work requirements The honourable member for Prahran mentioned a for the VCE and who determine the curriculum. number of employers. Employer organisations have According to the honourable member for Prahran, issued a booklet entitled The VCE and the Workforce, they are manipulating the curriculum in schools for an employer's guide to the VCE, which has been political purposes. I would be interested to hear their endorsed by the Victorian Employers Chamber of responses to the diatribe we heard from the Commerce and Industry and by the Australian honourable member for Prahran and the allegations Chamber of Manufactures. Those bodies have issued implied in the motion. the guide to all employers to ensure that they understand the VCE. The guide supports the VCE. We heard a good deal of talk from the honourable Employers say that they would like certain issues member about maths. As he well knows, this area dealt with, and we are dealing with those issues. It is has been worked on by Professor Mack and his nonsense to say that the employers oppose the VCE. committee. The recommendations of the Mack committee went to VCAB and all of them were Unfortunately the honourable member for Prahran accepted. Some of them were implemented this year keeps getting external assessments and external and some will be implemented in 1993 and 1994 to examinations mixed up. Today he said that the ensure tertiary entrance in 1995. That matter has removal of external examinations should not have already been dealt with. occurred. The honourable member knows that external examinations still exist and that there are The verification issues have also already been external assessments for almost every unit that is handled by Or Vivian Eyers, and those operating in the 44 studies. recommendations have been picked up by VCAB and the government. We now have a situation where The inference in the honourable member's position students doing their common assessment tasks early on manipulation is that for various reasons all the in the year will receive their results in August and representatives on VCAB are manipulating students. September and will have a clear understanding of That is nonsense! I have received a letter from where they are going with their Victorian certificate Mr Peter Fry, the Principal of Hamilton Secondary of education well before the results are posted in College, which says: January. Please find enclosed a pamphlet recently mailed to our We heard a lot of nonsense concerning English. As school. As it was not accompanied by any the honourable member for Prahran knows, the task documentation that might have attempted to provide force that has been set up will soon report to the some educational justification for its being mailed to us Victorian Curriculum and Assessment Board and I can only assume that it is blatant political me on the vexed questions of English and external propaganda. Perhaps it was envisaged that I would examinations. The decision by VCAB will be dealt circulate it to staff or students or put it on the parents' with as is deemed necessary and after consideration newsletter. of the arguments put forward. I wish to register a strong protest at this apparent The honourable member for Prahran spoke about attempt to use schools as a medium for the teacher workloads. Michael Norman is already dissemination of partisan political material. Such action working to overcome any problems in that area. is quite inappropriate and in my mind at least casts significant doubt on the judgment and sense of PERSONAL EXPLANATION

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propriety of those responsible for mailing the how the honourable member equates the latter document. statement with what he said about soft options. The honourable member for Prahran would not know I would appreciate you raising the matter in the about year 11 grades because he does not get around appropriate forum. to too many schools. Most schools give their own grades for year 11 students. Time and again we have The pamphlet Mr Fry received was a copy of the heard nonsense from honourable members opposite Liberal Party's State Report, which was obviously about what is occurring in education, and each time sent by the Liberal Party office or by the office of the the things they raise are refuted. Leader of the Opposition. What more blatant manipulation of schools could there be than this Australian studies and the Deveson report are also action that has been decried by the Principal of at issue. The Deveson report recommended Hamilton Secondary College, who registered his compulsory study of work in years 9 and 10. The strong protest to me and asked me to raise the issue honourable member neglected to mention that the in the appropriate forum? In view of the nonsense Deveson report supports what we are doing by uttered about political manipulation by the combining voca tional and academic issues in one honourable member for Prahran, I consider the certificate and supports the VCE. appropriate forum to be this House today. The honourable member for Prahran also said it is An honourable member interjected. atrocious that students are studying comic books. I presume he was talking about The Way the Wind Mr POPE - Mr Peter Fry. We are obviously Blows. Students no longer study those comic books. looking at a black list again. I will pass that They were introduced well before 1982 under a interjection on to Mr Fry. previous administration. But the honourable member for Prahran still trotted out those bits and I turn to resources. The honourable member talked pieces of nonsense, and did it in a speech that he about the fact that students with access to tutors will probably did not write because he had to read it. be better off than those who do not have such access. What does that have to do with the VCE? Although I His motion first appeared on the Notice Paper on agree that access to tutors is a matter that is Thursday, 10 October 1991, and it is clear that he did determined to some extent by affluence, students not have the wit to change his written speech completing post-compulsory schooling in Victoria because he spent a lot of time talking about have always used tutors. The use of tutors is not a Australian studies being compulsory. It is a shame new phenomenon that came about as a result of the that the honourable member has denigrated each VCE. and every member of the Victorian Curriculum and Assessment Board. He said that the board set the I have been left with only 25 minutes in this 2-hour curriculum on the basis of political manipulation. I debate because the honourable member for Prahran am sure that when his speech reaches the members obviously realised that everything he said could be of the board they will feel the same as I do: totally refuted. I now intend to refute some of the things he ashamed at the political grandstanding and rhetoric said. The honourable member claimed that we have on an issue that is vital to the State and to the moved away from physics and chemistry. He is country. wrong again. There have been increases of 22 per cent and 10 per cent respectively in those areas, yet The SPEAKER - Order! The time appointed the honourable member blatantly said there had under Sessional Orders for me to interrupt business been decreases. Not only have there been increases has now arrived. The Minister may continue his in those areas but there has also been an increase in remarks when this matter is next before the Chair. the number of female students studying those subjects. It is to be applauded that females are taking Debate interrupted. up studies in those areas - it is a vast change! Sitting suspended at 1 p.m. until 2.3 p.m. The honourable member for Prahran was talking nonsense about soft options being taken up by VCE PERSONAL EXPLANATION students. He then contradicted himself by saying that we are working students into the ground and Mr NORRIS (Dandenong) - I desire to make a that student workloads are too heavy. I do not know personal explanation. During the grievance debate LOY Y ANG B BILL

1876 ASSEMBLY Thursday, 28 May 1992 on Thursday, 21 May, in answer to an interjection the process by which the Bill has been introduced or from the honourable member for Portland, I stated necessarily the terms of the sale. that the television production Chances had received funding support from Film Victoria. The coalition would have favoured a 100 per cent privatisation of the power station, a favoured I have since been informed by Film Victoria that that position of both the State Electricity Commission information is incorrect. I withdraw my remarks and (SEC) and, I understand, Originally of the Cabinet apologise unreservedly to members for having before it was overturned by caucus. For a misled the House, and I apologise also to Film government so ideologically split and driven and so Victoria, an organisation for which I have the opposed to privatisation, one must examine the highest regard, an organisation that has done so reasons why caucus has allowed itself to much to reinstate Victoria as the film and television momentarily shed its ideological purity. It must hurt capital of Australia under the expert guidance of its honourable members like the honourable members chairperson, John Howie, and its chief executive for Springvale, Thomastown and Richmond, and in officer, Jennifer Hooks. particular the honourable member for Morwell, to have meekly gone along with what in their eyes I apologise to GTV9 and the Beyond International would be the dreaded curse of privatisation. They Group, the producers of Chances, for any had no alternative; there was no other way to fund inconvenience my remarks may have caused them. the completion of the power station.

LOY YANG B BILL After careful deliberations by the government and the caucus, the people who are so strongly Second reading ideologically opposed to the idea were dragged into the realisation that there was no alternative way of Debate resumed from 19 May; motion of funding the power station. With 98 per cent of Mr A. J. SHEEHAN (Treasurer). contracts for the building of the power station already committed, there would have been a greater Mr PLOWMAN (Evelyn) - The Loy Yang B Bill cost in mothballing the station in its present form is a major step in privatisation; it is the sale of a large than in continuing and completing it. It is a fact that slice of our newest, most efficient and technically the issue had become a giant albatross around the state-of-the-art power station in the Latrobe Valley; necks of the anti-privatisers in the government and it is a sale of 40 per cent to private enterprise - we the Trades Hall Council. assume, to Mission Energy, although that decision has not been finally determined by the government. Why has the government been forced to face up to this problem, this dilemma? Because the problem is It is important to identify who Mission Energy is. It of its own making. In simple terms, it is as a result of is an American company linked through a holding a decade of indulgence by the government in a State company with Edison Electric tight Co. in the where finances have been appallingly managed and United States of America, which is listed on the where for a decade we have been living beyond our stock exchanges of New York, London and Tokyo. means. The result is that Victoria is bankrupt and The holding company, SCEcorp, has headquarters in cannot afford to borrow funds under global limits to Rosemead, California. It is primarily an energy complete the $3 billion power station deal or to pay services company with consolidated assets of for it. The funds needed under global State $US17 billion or $A23 billion. It has shareholders' borrowings to enable the State Electricity funds exceeding $US6 billion or $A8 billion; and a Commission to complete the deal would amount to current stock market capitalisation of $US9 billion or approximately $400 million a year for the next four $A12 billion. It employs more than 19 200 people. years. That is the sum that would have had to be Clearly, it is a substantial company with significant dedicated to the project to allow the SEC to complete financial backing, involvement and experience in the LoyYangB. production of electricity from coal. Because the State has lived beyond its means for the The coalition applauds this major step towards past 10 years the government could not find the privatisation by a left wing government but, money to finance this vital infrastructure project. although the coalition applauds the introduction of That is why the government had no alternative but the Bill and will not oppose it, it does not endorse to sell a 40 per cent interest in the Loy Yang B power station. The deal has some striking similarities to the LOY Y ANG B BILL

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State Bank Victoria deal. The coalition has of upgrading the grid between Victoria and New discovered that, on closer examination, the South Wales and buying very competitively priced government found it had no alternative other than to electricity from that State. New South Wales has an proceed with the deal proposed in the Bill. excess generating capacity of 50 per cent, and when the new Mount Piper station comes on line, that The ideological hang-ups of the government have State will have even more excess electricity to sell. cost the State dearly. Had the government proposed to fully privatise the power station, which the I shall sum up the situation by quoting from an coalition would have applauded, the transaction address by the Premier of New South Wales, would have been infinitely less complex. If the MrGreiner: government had proposed to sell 100 per cent of Loy Yang B, the tax implications would have been Negotiations for a contract of supply commenced in absolutely clear, instead of which the implications of 1985- the deal have required a great deal of investigation and expensive advice. The legal and financial that is, supply between New South Wales and frameworks would have been simpler; and we Victoria - would not have been faced with yet another government creation - other government bodies, or on the basis of shared net benefits to both States. These OGBs - which has increased the complexity of the later developed into commercial negotiations, with a transaction. draft supply contract prepared.

The complexity of the process has added to the It became obvious that the SECV was intent on expensiveness of the deal. The eight bidders for the building Loy Yang units 1 and 2 when it withdrew a 40 per cent purchase of Loy Yang B, including the previous offer and attempted to gain supply from New two major bidders, Mission Energy and Southern South Wales at significantly less than the commercially Electric International Inc. - Southern, although not negotiated rate. the favoured bidder, was the most favoured of the remaining six - have spent approximately Following the SECV decision to proceed with $30 million putting together their bids. By 30 June construction at Loy Yang, the SECV entered into a this year the SEC will have spent $20 million on the power purchase contract in August 1990 with our deal; and the legal, tax, accounting and other electricity commission - specialist advice from merchant banks will have cost the government at least $20 million. That adds up to that is, the New South Wales electricity a staggering $70 million, a great deal of which could commission - have been saved if the government had been prepared to fully privatise the power station. at virtually the same price as the one previously negotiated commercially. Given the unnecessary amount of money spent because of the complexity of the deal, and given the ... the price offered to Victoria in these negotiations savings that could have been made if Loy Yang B prior to the time the Loy Yang B contracts were let had had been fully privatised, one can only express been substantially lower than 5.4 cents per kilowatt sympathy for those people in the community who hour- argue that the money would have been better spent on badly needed community projects such as roads, that is expressed in terms of the cost of the tariff over hospi tals and schools. 3Oyears-

Not only is the process a creature of the government the fixed price being negotiated between the SECV and but the decision to build the power station was the Mission Energy for electricity from Loy Yang B. government's and the government's alone. The government decided to build the power station for In other words, we had and we have electricity to sell political reasons - to keep faith with the Latrobe to Victoria, and we are and were prepared to sell it at Valley Trades and Labour Council and to hold onto an acceptable price that would have actually resulted in the seat of Morwell, for which I am sure the the reduction of electricity prices for the people of honourable member for Morwell will be extremely Melbourne, the people of Victoria and for companies grateful. Because of those political considerations the that are investing in Victoria. Now, basically what's government decided against the then cheaper option happening in this deal is the people of Victoria are yet LOY Y ANG B BILL

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again being asked to pay through the nose to cover up I shall give a brief definition of the bodies co~cerned. the failures of the Labor government. They are adequately defined in clause 23, which includes a reference to a body as: Those remarks show that a cheaper alternative was (a) all the shares in which are owned by or on behalf of available. But the government decided to take the the State, whether directly or indirectly; and much more expensive decision of building Loy Yang B to try to hold onto the seat. ~f Morwel~. In (b) that is declared by the Minister administering that other words, the decision was pohtically motivated Act- to help the then honourable member for Morwell that is, the VicFin Act - hold onto his seat and to help the Cain government hang onto office after the 1985 State electio~. The. by notice published in the Government Gazette to be a current transaction has been driven by the financIal public authority for the purposes of that Act. profligacy of the Labor government over the past decade. The 11 per cent of the OGB involvement in this joint venture would be financed by Mission Energy by an The deal has two components. The first is a financial additional borrowing of $330 million in which the deal to raise money outside global limits set by the OGB participant could be involved in either equity Australian Loan Council. The second involves the or debt. No detail is provided in the Bill and the management contract for the successful bidder, government and its advisers are yet .t~ decide ~n the which we assume will be Mission Energy, although details regarding who the CX;B partiCIpants WIll be the government has not yet announced the decision. or the nature and extent of their participation in dollar terms. During the Committee stages the It is abundantly clear that the Bill and the agreement opposition will introduce amendments to make it in the schedule are designed to give financial necessary for the government to identify who are the comfort to the bankers who will finance the deal. other government bodies and what is the nature and The government decided to sell 40 per cent of ~e . degree of their involvement. station to the private sector because the tax advIce It received said that if the operator of the station were Some concern was expressed that some of the OGBs to attract tax benefits - in other words, if the deal may not wish to have their investments listed or was to be attractive to private sector involvement­ publicised. However, participants in a the State Electricity Commission would have to be superannuation fund of one of the government seen not to have effective control of the station. In bodies have the right to know that their other words, the tax advice received by the superannuation funds are being inve~ted ~ this sort government said that if 40 per cent of the station of deal, and it is only proper that the ldentity of the were sold and the operator's management OGBs and the extent of their involvement be made agreement were a stand-alone agreement, the SEC public. would be seen to be removed from effective control of the station. The opposition has a number of broad concerns about the deal. Firstly, the fact that only 40 per cent Because there was some doubt about the tax of Loy Yang B is for sale runs against the desire of situation, it was thought that to be absolutely sure the SEC for 100 per cent of the station to be sold, and that the SEC would not be seen to have effective I understand that was the original decision of control it should be given a less than 50 per cent Cabinet. This would have resulted in a much less involvement in the station. The government was complex and less expensive process. unable to convince its caucus to involve itself in any further privatisation of Loy Yang and therefore Secondly, the deal is entirely debt-funded; no equity decided to create an CX;B, or other government is initially brought into the deal by Mission Energy. body. That is a creature whereby public bodies have Every cent that it puts in will be borrowed. As has the opportunity to be involved in 11 p~r cent.of the been said, it is so well secured that it is the best deal transaction, in other words, those pubhc bodIes may in town. That deal will mean that Mission Energy participate up to an 11 per cent share in either debt will have to borrow in the finance market at or equity in the CX;B section of the joint ve~ture significantly higher rates than the SEC and.that will which will finance and run this power station. increase the ultimate cost of the power station. The third concern is that the deal provides an open-ended Treasury guarantee to secure the cash LOY YANG B BILL

Thursday, 28 May 1992 ASSEMBLY 1879 flow of Mission Energy for the comfort of the acquisition or construction of infrastructure projects, banking syndicate. in fact limits the use of infrastructure bonds to construction only and not the acquisition of The next concern is that the banks have demanded infrastructure projects in the State. an extraordinary degree of security and bear absolutely no risk. I suppose it is a reaction of the In rei a tion to the bids of the last two major banks to their own folly of the 1980s and their policy contenders, Southern Electric and Mission Energy, encouraged by the Hawke-Keating government to the bid by Southern Electrics had a considerable spend up big today and let tomorrow look after amount going in its favour but it relied heavily on itself. It may also be a reflection of the banks' the apparent nature of the infrastructure bond concern and their attitude towards the credit assistance offered by the Prime Minister's statement. worthiness of this government. The Mission Energy bid relied much less heavily on the infrastructure bonds and the assistance gained The opposition is concerned at the 100 per cent take from them. or pay contract for 35 years, which again is to provide a guarantee to the banks and, to a lesser It is perhaps fortunate that the decision was made in extent, to guarantee Mission Energy's cash flow and favour of Mission Energy because if the government its return on its investment. The 35-year take or pay had chosen Southern Electrics on the assumption contract leaves the State taxpayers exposed to that its bid would be enhanced by the assistance of presently unforeseen consequences such as the infrastructure bonds, it would have been sorely technological change, which could dramatically alter disappointed in relation to the Bill currently before the whole business of power generation and the House of Representatives. transmission over the next 10 to 30 years. The opposition does supports a number of features No-one can foresee what environmental restrictions of the deal and believes it is a major step by this might be placed on coal-fired power generation in Labor government towards privatisation. The this State and nation in the future and the project will provide an opportwlity for the government cannot foresee the volatility of the introduction of enlightened management and labour future consumer price index. The future CPI is relations in the Latrobe Valley where current work important to this deal because the escalation of the practices and poor management and labour relations power price is linked to a CPI minus 2 formula. are inhibiting the best use of State-owned infrastructure. The operation of the power station Some of the escalators fed into the computer seem to under a private operator will also provide take little account of the potential volatility of the significant flow-on benefits across the industry, the CPI. When one looks across nine years of figures, the work force and the Latrobe Valley community, projected annual escalators are: 5.7 per cent; 3.5 per estimated by the SEC to be of the order of cent; 5.5 per cent; 5.5 per cent; 5 per cent; 5 per cent;, $300 million over the next eight years. Even if that 5 per cent;, 4.5 per cent; 4 per cent; and 4 per cent. It estimate of the flow-on were cut in half, it would may well be that those projections are extremely still be a significant benefit that would improve the optimistic and we could see a much more volatile SEC's ability to provide cheaper power from its CPI figure over the years to come. I hope for the sake other infrastructure in the State. of this State that this does not eventuate. The point I am making is that this deal leaves taxpayers exposed I mentioned earlier that the SEC would need to to power prices which will fluctuate depending on borrow $400 million for the next four years in order the volatility of the CPI. to complete the power station, but that that borrowing would be at significantly lower rates than Another question that concerns the opposition is the Mission Energy's borrowing will be. Obviously the Prime Minister's much-trumpeted infrastructure total outlay for the power station will be increased bonds announced in the One Nation statement accordingly. In a stand-alone situation that would which were to assist with the financing of the mean a considerable disadvantage to the State, but acquisition or construction of infrastructure projects. even if the benefit were cut in half to $150 million, What concerns the opposition - it should also over eight years there would be a considerable net concern the government - is that the provision benefit for the State. introduced into the House of Representatives, section 159GZZZ2A(1), to enable borrowings to be I hope the SEC's estimate, which I believe has been undertaken for the purpose of financing the done extremely carefully, proves to be correct. A LOY Y ANG B BILL

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$300 million benefit would be significant in the opposition to determine its position one way or the provision of electricity through the SEC system. other.

The SEC estimates that if the power station were Despite that assurance we do not have all details of completed and financed by the SEC, on the cost of the contracts. The Bill provides extremely scant funds borrowed it would take $90 million for the details upon which to consider what this deal is Mission deal to break even. However, if the power really about. The Bill contains eight agreements; it station were completed by the SEC funded and gives the definitions of the agreements but it does managed by Mission Energy there would be a not give any details of what is in them. During the significant flow-on benefit to the community, over Committee stage the opposition will move and above the $90 million required for a break even amendments to ensure that at least the principal on finance charges. details - without disclosing commercially sensitive information - are appended to the agreements so The next point of support for the deal is that it will that somebody reading the Bill, which will become provide an opportunity for some SEC debt to be an Act in due course, will know what the retired. With a debt of $9.1 billion that is extremely agreements are all about. important! The deal will reduce the debt of the SEC as well as the overall debt of the State. Another major contention with the Bill is that Parliament is required to approve an approximation With regard to labour relations, I am pleased to see of an incomplete State agreement, which is included that Mr Kelty has given an assurance that he in Schedule 1, where even the names of the supports the greenfield site for the development at participants involved in the agreement are absent. In Loy Yang B, the single union coverage, the other words the agreement with which the multi-skilling of the work force and the agreement government is asking Parliament to agree is an that most maintenance will be done in-house with absolute shell. The opposition will be insisting­ major maintenance and refitting being contracted and it has the agreement of the Minister in another out. However, perhaps most importantly for the place - that before the Bill passes through both work force, Mission will provide an attractive salary Houses of Parliament the first schedule to the Bill, package and an enlightened management-labour which is the nub of the agreement involved in this relationship, which will benefit power station deal, will be complete, that it will be detailed and management and the work force. that it will contain the names of the people participating in the deal. The opposition will principally deal with the detail of the Bill during the Committee stage when it will The government has rushed the Bill to Parliament so introduce a number of amendments. However, I that the deal will be stitched up by 30 June, and shall express some major concerns about the Bill at because of that the government has introduced an this stage. The first concern is the haste with which incomplete Bill. No Parliament should be asked to the Bill has been presented to Parliament. In give approval to any deal, let alone an agreement of conjunction with all its advisers -legal, tax, such enormous magnitude as this, when the accounting, merchant banking, the two major documentation is incomplete. There is no detail bidders and finally Mission Energy - the about SEC debt retirement or the stamp duty government has taken almost 12 months to bring the payable, both of which are matters of extreme project to this point. As I mentioned earlier it has importance. My colleagues the honourable members probably already cost something in the order of for Brighton and Balwyn and I will address those $70 million. To expect the opposition and Parliament matters during the Committee stage. to properly consider and debate such a major Bill in nine days poses an impossible task. There is no guarantee that the Bill or the agreement will not inhibit future industry restructure. I have The second point of contention is an assurance from had discussions with the government on this matter the Premier, and I shall quote an answer she gave and it accepts that there is bound to be restructure of during question time to the honourable member for the industry in the future, although there will Brighton: probably be some argument about what restructure is appropriate and what form of restructure will take All details of the contract will be finally put before this place. The opposition wants a guarantee that the Bill House and legislation will be in place for the and agreement will not inhibit future restructure of LOY Y ANG B BILL

Thursday, 28 May 1992 ASSEMBLY 1881 the industry, which is most important for the rest of the State. Mission Energy and Southern Electrics, Victoria's infrastructure. their merchant banks and their legal representatives, helped the coalition to Wlderstand their points of The Bill provides exemption from the Freedom of view and we were able to put our points of view Information Act for this project. The opposition about why we believe this deal has its strengths and totally rejects that proposal and will move an weaknesses and where we would like to see it go in amendment to that effect in the Committee stage. the future. Any commercially sensitive information regarding the project will automatically be excluded from FoI, Price Waterhouse was given minor funding by the in any case. It is Wlacceptable that any peripheral Minister to do a summary report for the coalition, issues, which are not subject to commercial apart from the SEC, on this substantial deal. I confidentiality, should not be available to members acknowledge the work done by Peter Kettle of Price of Parliament and to the community so that they can Waterhouse. One member of the SEC, Ian Stirling, obtain details about the project. had the invidious task of being seconded to the coalition by the SEC to give us an objective view of The Bill provides that only one House need the deal and to follow up the numerous requests we authorise variations to the agreement. If there are had on its construction and financing, so that we any variations to the agreement and that varied would feel that at least we had some insight into it. agreement is brought to Parliament for ratification, Mr Stirling conducted his briefings extraordinarily either House should have the ability to accept or well. Without the services of these bodies and deny that variation or make changes. The coalition departmental officers over the eight months it would will also move amendments during the Committee have been impossible for the coalition to address the stage on that matter. extraordinary complexity of this large transaction. It was a lesson on how legislation of this nature can be The schedule providing for the agreement is the best handled when there is goodwill between the most important part of the Bill. It is incomplete and government and the opposition parties, perhaps not inaccurate and must still be negotiated by the with regard to the outcome, but at least in giving all government. The coalition objects to the fact that the parties the opportunity of being properly briefed. government has introduced the Bill and has expected Parliament to give its stamp of approval to The only exception to the situation was when the a document that is extraordinarily incomplete. These head of Treasury, Bob Smith, Wldertook to answer matters will be dealt with in more detail during the various questions at the departmental briefings, but Committee stage. we have not seen him since. When a permanent head gives an Wldertaking to answer questions, he The opposition appreciates the agreement by the should be prepared to provide that information. Minister for Manufacturing and Industry Development in another place to a proposal put to The building of Loy Yang B power station, and now him in October last year by the Chief General this extraordinary part-privatisation deal, are both Manager of the State Electricity Commission, direct decisions of the government. If in time the Mr George Bates, that the coalition should be fully process falls apart and the government's decisions to briefed at each stage of the proceedings by the SEC build the station now and part-privatise, rather than Loy Yang B task force. I acknowledge that during privatising it 100 per cent, are fOWld wanting, and if the briefing period many thorough, competent, and we find that the power prices are significantly to the in many cases of neceSSity, confidential, briefings detriment of Victorians, this will be part of the were provided to the honourable members for legacy that the ALP has imposed on Victoria over Brighton, Polwarth, Hawthorn and me by the task the past 10 years and it will be listed with the force, particularly the head of the task force, Or Peter government's record on Wlemployment, James. Briefings were also provided by Nick Wlprecedented bad financial management, the AIcoa Johnson, CS First Boston, and at a later time the power deal and the loss of the State Bank. Chairman of the SEC, Jim Smith, who also briefed us in great detail, as did all of the eight bidders who In government the coalition will work to make this gave the coalition an opportunity to view their ALP privatisation deal successful because we intentions for future investments. believe it is a step in the right direction. We believe it is the only alternative left to Victoria to complete I hope the bidders who were unsuccessful come and to manage the power station. We will work in back to Victoria in the future and help us develop government to obtain the cheapest energy for LOY Y ANG B BILL

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Victorian consumers because people from both 10 years has been interesting to watch. After all this parties, and recently even the Prime Minister, have time, with its taxes, charges, borrowing powers, said that Victoria is the manufacturing State of the Loan Council limits and government grants, this nation. If our energy charges and electricity costs are government still runs out of money. The socialist left not competitive, both with interstate electricity costs government has had to introduce a privatisation and overseas electricity costs, our economy and our deal to bring about the partial sale of Loy Yang B. It standard of living, as well as our ability to employ as must be a big blow to the ideologues on the other many young and older people, will be severely side of the House, and I hope people will realise that impaired in the future. the government has been forced to move down the privatisation path that the opposition parties have The coalition will work in government to turn the been advocating for some time. State around from the results of a decade of indulgence by this government to the next decade, We have had the luxury of being able to examine the when it will heal those wounds. We will move to an various options for the management and funding of era of responsible management and growth when the State's future infrastructure. We do not oppose Victorians can once again be proud of their State. the legislation but we are wary and nervous about it and today we are being asked to agree to a deal that It is the opposition's hope that the Bill before the has been entered into by a government negotiating House will be the first step towards the from a very weak position. That worries me. Had privatisation - or privatisation where necessary the government been negotiating from a stronger rather than the wholesale sale - of the State's position the legislation would be different. Since the infrastructure, that the community benefit can be beginning it seems that the decision making on the shown and that it will lead towards the State's Loy Yang B power station has been a little flawed, a recovery. The coalition will use its best endeavours little different, a little uncertain. In 1984-85 when it to achieve that result in the future. was decided to go ahead with the Loy Yang B units 1 and 2 the decision was predicated on a load Mr STEGGALL (Swan Hill) - I congratulate the forecast of annual growth of 3.5 to 5 per cent in honourable member for Evelyn on outlining the deal Victoria. At the time the government believed, on in the Bill before the House. I also congratulate him advice from the State Electricity Commission, that and those who have worked very hard in trying to Victoria was going to be short of power in 1991 or unscramble this comp .::ated and strange measure. 1992. The predictions did not come true. There was a On nine days notice Parliament is being asked to growth of 2 per cent for a while; now it is down to agree to one of the biggest financial deals in the 1 per cent, which reflects the economic downturn. world and to commit the State and future generations to rather high energy costs. We are From the first day the project was not secure and going to ensure through this deal that Victoria will from then the government has had to work out how have a good supply of energy, and through the to fund the Loy Yang B power station. It knows that agreements involved we will tackle the issue of for four years it must borrow $400 million a year creating competition between States in power within its global limits to complete it, and it has pricing. We have many chadenges ahead of us to known that for many years. It cannot have been that make sure Victoria has a power generation system much of a surprise. It is not a new figure and yet the that will be able to compete and produce jobs for realisation became public only in the past year or so generations to come. Until now we have not done when the backbench members of the government well. Unemployment is very severe and if we get realised that their dream of socialism would not be this deal wrong it will be all the more difficult to able to deliver the completion of Loy Yang B. Now overcome the State's employment needs. we have a strange mixture. It is a 40 per cent sale to, it is assumed, Mission Energy, an 11 per cent sale to It is strange to think that after 10 years of socialist some groups known as other government bodies or left government we are actually debating a OCBs and a 49 per cent holding with the SEC. It is a privatisation Bill-although admittedly it is only a partial sell-off or privatisation, and the legislation partial privatisation deal. We had a total sets out the powers to allow the government to make privatisation deal with State Bank Victoria but it was those decisions and enter into those agreements. not of great reward for Victoria. The way the ideologues of the left have had to manoeuvre to face The agreement at the back of the Bill sets out all the the reality of where the State is going and the other agreements that make up the whole operation. expense of its stewardship of Victoria over the past There are several points we should appreciate, and LOY Y ANG B BILL

Thursday, 28 May 1992 ASSEMBLY 1883 people have to understand that the decision to build The power supply agreement stipulates that the SEC Loy Yang B has been made. It is up for grabs and it will purchase 100 per cent of the power generated must be completed. The project is 98 per cent from Loy Yang B. Mission Energy has the right to completed in its forward contracts and our ability to sell privately some 20 per cent of the production change that in any way, shape or form is zero. capacity of Loy Yang B but, as the honourable member for Evelyn said, the power tariff is higher The legislation will enable the project financiers to than other tariffs so the ability to sell 20 per cent of satisfy themselves that the project will survive and the base load production will be difficult. That repay the debt and also that the risk allocation is aspect of the agreement may have little commercial such that they have protection from events beyond value. The SEC is forced to take all the power that is their control. That is achieved by government generated by Loy Yang B. That is being forced upon guarantees. The Bill is really about comfort the commission and the government because they requirements not for Mission Energy but for the are negotiating from a position of weakness. financiers. The agreement is such that we are not all that sure what it means. The agreement is in two The State agreement contains the coal supply parts: a financial agreement that provides financial agreement, which is an important part of the total comfort and guarantees for the financiers of the operation of the project because 24 per cent of the project and an operational agreement. Either running costs will comprise the coal component. The agreement can stand on its own and is not miscellaneous services agreement stipulates that the necessarily dependent on the other. The operational SEC is to supply or provide certain services and agreement is presumably with Mission Energy, but supplies to the participants in connection with the the coalition and the community have not yet been power station. The coalition anticipates that its told that that is so. amendments will incorporate the principles of those agreements as an appendix to the Bill so that The State Electricity Commission of Victoria hopes Parliament knows the exact nature of them. to achieve $300 million in savings from more efficient work practices and private operator The shadow Treasurer, the honourable member for improvements. That says something about the work Brighton, will give an expose of the types of forward practices in this State and in the nation. If Australia liabilities that a coalition government will be faced is to have a future it must improve its productivity with later this year. The coalition does not know and work practices. I hope the State Electricity who the other government bodies (OGBs) are, but Commission and the joint venturers can achieve the they will borrow or will have borrowed on their restructuring of work practices when completing behalf the equivalent of $340 million between now Loy Yang B 1 power station because those more and 1996 when the OGBs will have to supply efficient practices will flow on to other stations $100 million of equity as part of the agreement. The opera ted by the SEC. OCBs will have 11 per cent equity in the project and will operate equally with Mission Energy, although Schedule 1 sets out the State agreement, which Mission will control 40 per cent of the equity. contains seven contracts. The joint venture agreement is an unincorporated agreement between The government will guarantee the debt of the the SEC, presumably Mission Energy, and other OCBs. It is only fair that Parliament is informed of government bodies. It establishes the partnership what agencies are involved in the guarantee that will run the project. agreement. The taxpayers of Victoria will be forced to stand behind the financial agreement, but they are The sale of assets agreement authorises the being kept in the dark. acquisition of the power, the site, the buildings, the plant and so on. Because Loy Yang B 1 is not The project agreement is for 30 years, which is a long complete the State Agreement must contain a time. The generating plants will emit carbon dioxide completion of construction agreement. That from the use of brown coal and I do not know if stipulates the completion dates for unit 1 as emission standards in the year 2010 or 2020 will be July 1993 and unit 2 as July 1996. Because the the same as they are now. Our children may ask operation is privately managed - the coalition whether the emission standards are strict enough. assumes it will be managed by Mission Energy - The agreement will continue until the year 2022. Let the operations and maintenance agreements us hope we get it right and that the joint venture guarantee the operation of equipment and other takes a lot of notice of decisions made here today; things associated with the project. also, that the government provides at least the LOY Y ANG B BILL

1884 ASSEMBLY Thursday, 28 May 1992 minimum amount of infonnation as outlined by the about the tariffs and rules, and how the values will honourable member for Evelyn in his contribution appreciate due to changes in the consumer price today. index and variations to the agreement.

Parliament should correctly see that the funds for Parliament needs to be convinced that the Freedom the sale of Loy Yang B go to the retirement of SECV of Information Act should not apply to the Bill, as debt. The government has SECV and other debt the honourable member for Evelyn mentioned. We coming out of its ears! There are problems in are not convinced that the Freedom of Infonnation funding the construction of Loy Yang B because of Act is not suitable; perhaps the clause removing the the past debt structures of the Cain and Kirner FoI provisions should be deleted to allow the Act to governments - and that debt definitely cannot travel on its own. We may suggest that in the full increase further! The funds should be used to write knowledge that within months we will be the off SECV debt. government administering this agreement.

Parliament should clearly understand the degree of I have arrived at four simple points regarding State State support. I hope the Treasurer returns to this support. This may be taking simplicity to an extreme Chamber during today's debate to discuss and fully but I put State support in these words: an obligation explain the extent of the State support so that on the State of Victoria to assist the participants to honourable members can understand and decide procure permits, goods and services for the project whether they should lend any support. and for the life of the project; to make representations to the Commonwealth and local Parliament should be satisfied that the project will government; and the State is not to discriminate not inhibit future SECV policy actions. Everyone against the power station compared with the knows about the mess the government finds itself in; remainder of the power generation industry. We it has come to this policy direction that is different need to understand how that will be worked and from its own philosophy and ideology. The manoeuvred, and how it will stand up in later years opposition has a different policy and ideology from so that the State will not discriminate against the that which the socialists have put in place. power station in any of its dealings, whether it be in the provision of any services or in the imposition of I hope we will not agree to anything today that will taxes; anything the State wants to do to another inhibit the ability of future governments to move power station to assist it in the future must not and manoeuvre, and to provide top-class and discriminate against Loy Yang B's operations. reasonably priced power to Victoria for the next 30 years. In my simplistic tenns State support requires the State to stand behind the SECV; if it is unable to Parliament also needs clarification of the other meet its contractual obligations, the State of Victoria government bodies that will provide funds under will pick up those obligations. We now enter that the agreement, so that the $220 million attacks the area of virtually open-ended cheques. I understand debt. It may agree to the forward liabilities of the that we are being asked to go into that scene but I government bodies; if government bodies have am unsure whether too many people will realise investment funds, who are they? Let us be sure that how important the failure of the financial we are not creating a debt and that the venture management of the government has become in includes investment. placing us in this position. What we are being asked to agree to would not nonnally be agreed to if we Parliament needs to understand and agree, or had a government that had operated and managed disagree, on the method of varying the State its finances better and planned for its huge Loy agreement. The agreement will be negotiated or Yang B borrowings, about which it has known for debated for the next few hours; everything can be many years. changed. We must understand and either accept or reject various clauses. I hope the government One other area I wish to travel concerns local Ministers or the backbenchers, or at least someone government issues involved in this deal. The Sta te from opposite, will outline how the procedures will agreement - and agreements within the State operate. Parliament needs to understand how the agreement because of this legislation - will be put tariff is set and varied; it must understand the into effect. This Bill, when enacted, can override or guarantees because they are severe. We may not be change any other Act. For example, the maximum able to change them but at least we should know period for the holding of a ground water licence is LOY Y ANG B BILL

Thursday, 28 May 1992 ASSEMBLY 1885

15 years under the Water Act but that provision will When I first received this letter I thought it was a be extended by this agreement to 30 years. The me-too letter because three councils are mentioned agreement will override existing provisions. in the Bill and I thought the Shire of Rosedale was saying it would like to be involved as well. It is not A dilemma involves the strange joint venture that sort of letter at all, which is why I am quoting between a private operator, Mission Energy, and from it. It continues: government bodies. Mission Energy will hold a 40 per cent shareholding in an unincorporated There is no reason why the Shire of Traralgon cannot venture, with 11 per cent being held by other be the recipient of the rates that are due from the now government business enterprises - but we do not privatised Loy Yang B project. The Shire of Rosedale is know who or what they are! The SECV will be also concerned that the State government has seen fit to involved in a partnership. interfere with the municipal rating process and believes that this threatens the integrity of the municipal rating The Local Government Act cannot be expected to system and future opportunities for municipalities to cover the area of rates because that is a cocktail or a enter into arrangements with large-scale investments shandy no-one thought about. Perhaps it is a good within their boundaries. job no-one thought about it, because to attempt to write a piece of legislation to cover that would be It would be nice to get a response from the Minister time not well spent. in this House on some of these issues. At the moment the government is so far beyond being able Yesterday I received a letter from Mr Peter to reasonably and properly respond to the types of Tatterson, Secretary of the Shire of Rosedale. I do not issues that are raised that I do not expect to hear it, often quote letters when I address Parliament but I but we live in hope. The letter continues: shall refer to this letter because it encapsulates the concerns of local government about the sale of Loy The provisions of clause 25 have not been justified, at Yang B. Mr Tatterson expresses concern about the least in the public arena, and in the absence of any financial arrangements, the $3 billion that is required justification, the clause should not be allowed to up front, and all the open-ended State support and proceed. varying agreements - this cocktail of confusion. Local government rates did not rate highly in the Normally I would agree with that because it is a fair opposition's consideration. He states in his letter: and reasonable request but, unfortunately, the agreement will override the power of the Local The council believes that it is totally inappropriate that Government Act. It would not be too much to ask the traditional exemption of Crown Land from the the government to answer that question in this rating provisions of the Local Government Act be afternoon's debate and give the reasons why local extended to a privatised Loy Yang B. The fact that this government is being treated differently. On action has been taken in respect of the first privatised Tuesday, 19 May this year, the Treasurer said in his public enterprise in Victoria is significant and this second-reading speech: council would be most concerned if the traditional rights of the Crown were to be extended to all The Bill authorises the Minister for Manufacturing and privatised business, government business enterprises. Industry Development to enter into on behalf of the State a contract with the new owners of the power Tha t is an interesting point, and it is the first time it station, under which the State will undertake to do and has been put forward. The Local Government Act provide certain things and the owners will likewise be will be overridden by the agreement, so many local required to meet certain obligations. government functions will be run over. The agreement will be able to overrun other laws in the That sums up the lack of hard information and State of Victoria. That is what makes it necessary for knowledge that we have on this. The opposition us to understand what it is we are doing. The letter accepts there is a need for this type of operation to continues: be put into place and that there is some confusion about the detail. It is not happy with it, nor does it There are no reasons that justify the Loy Yang B project endorse this approach, but it appreciates that being any different from any other major development because of the financial mess that Victoria is in this in Victoria. is what happens when you are a weak negotiator in an agreement. LOY Y ANG B BILL

1886 ASSEMBLY Thursday, 28 May 1992

The Bill seeks to confinn that the State Electricity will not be disadvantaged because of this type of Commission has power to complete the transaction project in the future. contemplated and do all the things that the SEC will or might need to do when the power station is We wish the Bill well. We are very anxious about the operating under new ownership. That sums it up, it deal but appreciate that this is the type of medicine is an open-ended show. The Bill seeks to achieve a the State of Victoria will have to take while it is in number of other miscellaneous changes and I shall such a bad economic shape. Those who presented mention some of them. the Bill today should hang their heads in shame over what they have done. The Bill puts in place a confinnation of the process followed by the SEC to establish an appropriate title Mr HAMILTON (Morwell) - I support the Bill for the power station site and to establish certain and claim some ownership of it. Although my heart easements. It prevents any mineral exploration and sometimes bleeds on my sleeve, I hope this does not has a flexible approach to achieving compliance with turn into a bleeding hearts debate. My position on relevant building control standards. It seems we can the sale of the Loy Yang B power station is well always change things when we need to. It allows for known, but it is important that Parliament an extension of the term of the necessary water recognises that, before a decision was made, there licence in accordance with the Water Act and the was lengthy and detailed discussion involving a avoidance of an anomaly that requires the continued number of alternatives. payment of the energy consumption levy on gas consumed by the SEC. In yesterday's Age newspaper there were two important articles on Loy Yang B. Claude Forell, in It refers to the capacity of VicFin, soon to become the the first article, said that change in government Treasury Corporation of Victoria, to fund trading enterprises - which is an expression I do government-related participants if needed. That is not like - is inevitable. I agree with that statement. where we run straight back into the situation of Loy Many changes are taking place and have become Yang B being funded by the government if required. inevitable as a result of Australia becoming very We are much in the dark as to who they are and much part of the world economic scene. The second what role they will play, particularly between now article, by John Marsden, which appeared in the and 1996. The Treasurer could be required to find business section of the Age, claimed some wisdom in $100 million of equity in that time. That is one of hindsight by suggesting that there were alternatives those time-bombs sitting in front of us. to the way the transaction has been conducted. Honourable members can all be very wise in An explanation from the government on those hindsight. The argument was one that members of points would be much appreciated. The government the caucus committee, including myself, who has been forced into these actions through its own discussed this over some 18 months and 32 meetings incompetence, short-sightedness and inability to could understand. He said that the $1400 million take the right and proper course, which probably that was the reported price for the sale of Loy would have been to privatise the whole of Loy Yang B could have been borrowed under the global Yang B. This Bill has come before Parliament borrowing arrangements, had the Federal because of the government's inability to do that; government not reduced the level of borrowings for however, because of the State politics that are Victoria and the other States. Perhaps it is behind the decision, the opposi tion will not oppose coincidental that the amounts were the same. the Bill. I am proud of my ideological belief that public It will not endorse the agreement or the State utilities delivering essential services should not be support for it and say that the government has done privatised. I make no apologies for my stand and I a great job. The government got Victoria into this am sure most people are aware of my position. By mess and this is the only way that the politics of the the same token, the Labor Party was faced with a State of Victoria - until such time as there is an difficult problem. The Loy Yang B power station was election - will get us out of it. The comfort that is under construction and the government had being sought by the financiers will be delivered by insufficient revenue to keep it going. At that stage this Parliament. I hope and trust - and we are all about 800 workers were involved in building the acting on trust - the future will allow us to enter power station. The State Electricity Commission, into agreements that will result in the economic supported by the government, made a commitment supply of power needs for this State, and that we that the power station would be built. Few members LOY Y ANG B BILL

Thursday, 28 May 1992 ASSEMBLY 1887 of Parliament representing electorates where major different set of rating agreements in the local construction jobs were under threat would be government area. prepared to put those jobs at risk. At that stage the construction of Loy Yang B1 was nearing completion At various times municipalities raise the issue­ and Loy Yang B2 had not commenced. and this has been debated in the Latrobe Valley for at least 20 years - of having a larger municipality. Although honourable members have their own The problem of rates for a partly or completely personal views, they have an even greater obligation privatised power station could be resolved by to represent their electorates and to do what they having a Latrobe Valley municipality. It has been can to ensure the well-being of the people who live argued that the power station might be the impetus and work in their areas. Loy Yang B is now in the to cause local councils to get together and final phase of discussion with the introduction of the amalgamate into one strong residential council. Bill in Parliament. Honourable members opposite may laugh, but that The only expressions of concern that have been is an ongoing argument. There would be some great made to me about the Bill relate to clause 25, which advantages in the Latrobe Valley having one single deals with rates that will be payable to local local government authority. In many cases it would municipalities as part of the partial private allow the authority to present a far stronger ownership of the Loy Yang B power station. This argument and would allow the voice of the Latrobe issue has engendered significant discussion among Valley to be heard as an important area of Victoria. local councils. As there are four councils in my The Latrobe Valley has a larger population than electorate I shall refer to the position taken by each both Ballarat and Bendigo. Its economic importance council and comment on each of them. to Victoria is greater than either Ballarat or Bendigo, despite those cities being mentioned regularly in a The Shire of Traralgon, which is the smallest of the number of government dispatches as being four municipalities in the Loy Yang B area, claimed important provincial centres in Victoria. The Latrobe that under the Local Government Act it should be Valley is certainly the second largest provincial entitled to all of the rates applying to the power centre outside Melbourne. The argument about Loy station. The shire indicated publicly that it was Yang B has tested the mechanisms and processes prepared to discuss with other municipalities how existing within the Labor Party and the union the rates could be distributed across other movement. municipalities. There is no secret about it and it should be put quite The City of Morwell, which is the largest clearly on the record that the Labor Party was muniCipality, after some debate and some to-ing and founded on the union movement. The union fro-ing supported the position of a different rating movement is still a large and important - in my agreement from that nonnally associated with opinion, the most important - part of the Labor industry in the municipality. The city supported the Party. No apology is made for that. If at any time Shire of Traralgon's position that the rates from Loy any Labor member of Parliament stands and Yang B should be paid to the Shire of Traralgon. apologises for the Labor Party's association with the union movement, that member should perhaps The Shire of Rosedale adopted a similar position, examine his or her commitment, because over the claiming that the Bill should not be setting any past 100 years the association has been something of precedent. The City of Traralgon, the second largest which members of the Labor Party have been proud. municipality in the electorate, gave strong support for the position outlined in clause 25 which provides I shall not take the full time allotted to me because of for a special arrangement to be made for this the risk of later hearing the Leader of the House tell enterprise. The base position is the one alluded to by me that we could all have gone home half an hour the honourable member for Evelyn who said that the earlier if I had shut up! However, I consider it Loy Yang B power station is not completely important to put my thoughts about Loy Yang B on privatised. It has a 40 per cent private investment the record. I do so because recently I heard one of interest and another 60 per cent held by a rather the most upsetting statements I have ever heard complex arrangement of State ownership. I certainly made by a member of Parliament. All members of agree with that description. Because of the Parliament should be making much more noise complexity of the ownership arrangements for Loy about it than they have been making. I refer to the Yang B there is a valid argument for establishing a statement by Dr Terry Metherell, a fonner member LOY Y ANG B BILL

1888 ASSEMBLY Thursday, 28 May 1992 of the New South Wales Parliament, who was was a law unto itself. I was surprised to learn that quoted as having said - I hope not literally - that members of the local community believed the SEC part of the armoury of being a politician was telling did not always do what Sir Henry wanted it to do, lies. His remark is a sad commentary on all of us. I given that I knew Sir Henry in my previous resent it. I think if any of us are reduced to telling profession and had experienced his toughness on a lies about our position or why or how we went number of occasions. Subsequent Premiers of about making decisions it is a very sad day. I want Victoria have been Sir Rupert Hamer, Mr John Cain, to put it on the record that I hope no honourable and now Ms Joan Kimer, but I often have the same member in this place lies as part of his or her feeling, that the SEC is still like a very difficult child political armoury. If we cannot be honest with to deal with. ourselves and the people we represent, we should not be in the job. As I said, I consider it important to There are many times when I would love to have, for put my remarks on the record. I hope that I have the just a week, the influence attributed to me by the support of every honourable member in this House honourable member for Evelyn in his remarks. and the Upper House in making those remarks Perhaps then we would see some changes! But that about the politicians of Victoria. might be wishful thinking.

I should be less than honest if I did not say that I am Mr STOCKDALE (Brighton) - The Loy Yang B sad that we have to sell 40 per cent of the Loy Bill evokes distinctly mixed feelings on my part. The Yang B power station. The saving grace - and Bill should mark the beginning of Victoria's maybe I am rationalising - is that 60 per cent preparation for the 21st century, but unfortunately ownership will be retained and out of that 60 per the Bill and the deal it represents graphically cent of the profits of Loy Yang B will be coming back illustrate the limitations of ALP ideology, anchored to the people of Victoria, which is pretty important. as it is in the 19th and early 20th centuries, limited If Loy Yang B is profitable -and goodness knows, by values and assumptions that have not only been Mission Energy have screwed us hard enough to proven erroneous but have been cast aside in most ensure they make a profit - the people of Victoria of the rest of the world, even - and perhaps most should share in the profit. The people of the Latrobe importantly - in Eastern Europe, where people Valley certainly appreciate the possibility of that tried communism and have now rejected it. ALP result being achieved. ideology reflects many of the same values and assumptions that underpin communist philosophy. No doubt can exist that the people in my electorate It is a sad thing that I must recognise that the were very sad to learn of the fact that we were previous speaker, the honourable member for forced into the position of having to sell part of Loy Morwell, has the defence that all must recognise: Yang B in order to complete its construction. The that he sincerely holds to values and a philosophy people of the Latrobe Valley have a sense of that have been proven to be not only ineffective but ownership in the State Electricity Commission. One inadequate in delivering an even basically cannot live in or drive into or through the valley satisfactory standard of living to a developed without being aware of the SEC and its influence on country. the community. The SEC is part of the reason for the existence of the Latrobe Valley in its current form. The Bill could not be more important for the future Certainly without the brown coal and the SEC's of our State. Much of the economic strength of the work in Victoria it is probable that the second largest State has been built on low cost energy. The tragedy provincial centre in Victoria would not be located in is that over the past decade, with ten years of Labor the Latrobe Valley. Everyone recognises the Party bungling and mismanagement, we have importance of the SEC; everyone has a strong sense sacrificed our position as a low cost producer of of ownership in the SEC; and everyone will be most energy and have become one of the high cost States disappointed that part of the ownership must be in energy prices. In addition, we suffer because of sold. Today is a pretty sad day, not just for those cross-subsidies against industry and therefore who are members of the union movement or against jobs in our State in an area on which much of members of the Labor Party, but also for members of the economic strength of our State has been based. the general community. We have lost ground not only against the rest of I first went to the Latrobe Valley in 1968, when Sir Australia but also against other countries that Henry Bolte was the Premier of the State. At the time depend on oil-fired industry and fuels other than the feeling in the Latrobe Valley was that the SEC coal, particularly brown coal, where over recent LOY YANG B BILL

Thursday. 28 May 1992 ASSEMBLY 1889 years energy prices have fallen in absolute terms. hands around in a direct sense. Therefore, this We have lost ground against the rest of Australia matter is being rushed through with indecent haste and we have lost ground against the countries with and with a lack of attention to detail, at least in which we compete for export markets. terms of timeliness, that the deal warrants.

Under the Labor government we have squandered We are talking about a set of transactions involving much of the strength we had in low cost energy. We $3 billion and involving the largest single asset in have squandered what Sir Henry Bolte - to whom the largest single business in this State­ the previous speaker referred - used to bring new commitments that will extend and bind the SEC for investment and new employment opportunities to at least 30 years. The Victorian people will be bound Victoria. by the government, and indeed in practical terms it may bind us for the whole of the useful life of this At the outset I said that I have mixed feelings about power station, even beyond the 30 years, by virtue of the Bill. Against the background of the loss and the inertia the government will establish in limitation of opportunities the Bill represents, relationships set up by these deals. recognition must be given to the fact that it represents also some very important advantages and The Bill does nothing more than empower the some advances that the incoming coalition government to carry out the transactions. government will be able to build upon. In particular, Unfortunately, it involves a large measure of erosion the Bill represents the introduction of competition, of the sovereignty of the Victorian Parliament, but albeit limited competition, into the electricity essentially the Parliament is being asked to put its industry. I shall say something about that later. faith in the executive government to carry out the deals in the interests of Victorians, because Recognition must be given also to the fact that the Parliament will not ratify the agreements. government's deal and the Bill are driven not by a commitment to building economic strength in our Even with the amendments proposed by the State, not by a recognition of the need to introduce honourable member for Evelyn, the reality is that the competition to an industry that is a monopoly, but executive government and the SEC, but principally by financial crisis and the fact that Labor has so the executive government, will finally determine the eroded the capacities of our State that the only way substantive form of the transactions that we are the power station can be completed is to sell a 40 per today taking a step towards empowering the cent interest in it. The first preference of the SEC's government to complete. board and management was to sell the entire power station to get really effective competitive diSCipline In particular, the Bill is necessary only because the on the remainder of the system. We are faced with a deal to be carried through and its proposed terms set of provisions that represent a 40 per cent require the taxpayer to stand behind it. It requires minority interest equity participation by a private State support to satisfy Mission Energy, and in sector investor. We are fortunate that the particular Mission Energy's bankers, that the State government has grasped the nettle and introduced a Electricity Commission will be able to carry out the private operator. Again, I shall say something about obligations that it undertakes under the various that later. proposed agreements. Therefore, we are invited by the Bill to authorise the government to safeguard the Later I will deal in some detail with the nature of the interests of the people of Victoria, and I must say transactions that underpin the Bill, but firstly I refer that I for one have grave reservations about putting to the Bill itself because it demonstrates some of the my faith in this Treasurer and this government. shortCOmings. Their track record, disclosed today, for example, in the details of the Sandridge development deals, and The government is driven not only by the financial the sordid dealings of the Attorney-General, crisis it has created and its destruction of the State's disclosed also in the scandalous financial capacity to fund large capital investment, but also by arrangements and mismanagement of the World its immediate budgetary crisis. It has been desperate Congress Centre, only further amplify the fact that to have the Loy Yang deal completed before 30 June the government has demonstrated over 10 years that because it sees that as giving it advantages in terms it cannot be trusted to safeguard the interests of the of the dividends it can extract from the State people of Victoria. Electricity Commission or, even more directly, the amount of money it can get the Treasurer's sticky LOY Y ANG B BILL

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I have mixed feelings about the Bill, but it does venture. Secondly, there is a joint venture agreement involve some important opportunities and potential spelling out the rights and obligations between benefits, and it represents a substantial step forward Mission Energy, the SECV and the other government in the public sector for a Labor government and the bodies involved in the project. Thirdly, there is a set trade union movement to recognise the need for the of contracts for the sale of the asset, the power introduction of private enterprise competition into station itself. Fourth - and this is particularly key industries that have hitherto been government important - there is an operation and management monopolies. contract.

The Bill essentially facilitates a series of deals, but it Fifth, there is a power supply contract, a take-or-pay goes too far in eroding accountability; and the agreement, subsisting as we understand it for 30 amendments outlined by the honourable member years at a defined price and defined pricing for Evelyn are directed essentially at clawing back adjustment mechanism under which the SEC, some of the accountability to Parliament in the guaranteed by the government, is obliged to take or process. They require, for example, that the precise pay for 100 per cent of the power stations output, form of the State agreement be determined and with Mission Energy having an option, if the endorsed by the Parliament, in effect, before the Bill opportunity arises, to sell 20 per cent of the output is allowed to pass through the final stages. Other elsewhere. Sixth, there are agreements for amendments proposed by the honourable member miscellaneous services under which the SEC for Evelyn requiring disclosure of some of the other provides such things as water supply and ash details that are essential to a proper understanding disposal. Seventh, there is the coal supply agreement of the deal will restrict the power of the government under which the SEC agrees to supply coal, and the to introduce substantive new terms after the Bill has basis upon which the price of coal will be been passed. Therefore Parliament is performing the determined: we have been assured that the price of role it ought to perform, albeit to a limited extent, coal to Loy Yang B is to be the same as the price of given the nature of the deal and the way it is being coal to Loy Yang A, but we understand that both rushed through Parliament by the government. prices have been adjusted so that there is, in effect, a further hidden subSidy to the joint venture in the The essential nature of the arrangement is not form of the coal price. Finally there is the State limited to the Bill and the State agreement. There are agreement exhibited in its present form in a series of agreements outside the State agreement Schedule 1 to the Bill. about which Parliament has precious little information. Indeed, in the form of final contracts I want to deal with a series of issues, but I am afraid those agreements do not exist at present. The there is not time to deal with all the hedgehog of government is seeking legislative authority for spikes raised by the Bill and the transactions to agreements that have not yet been reduced to formal which it relates. First I must comment on the haste legal form. We are asked to put our trust in a and uncertainty surrounding the whole matter. As summary - in effect, heads of agreement - recently as only a few days ago, at our most recent outlining the general thrust of those agreements, briefing, the SEC, the other advisers and the without having an opportunity to examine the government's task force were not able to tell us the actual draft of the obligations the people of this State final form of absolutely critical considerations in are taking on for 30 years. these transactions. We were told the final form of State support had not then been determined. The As a matter of practicality we have been offered power tariff, although tentatively agreed, was still access to what is known as 'The Gold Book" - the pOSSibly subject to negotiation, particularly in summary of the heads of agreement reached relation to a trade-off between asset price and the between the parties - but so onerous has been the power tariff; and a whole host of other absolutely timetable for the conduct of this matter that there vital details had not yet been determined or were not has been no practical opportunity to take up that available for disclosure to the opposition parties. offer; and so far as I am aware no member of the opposition has seen any of those details to date. I for one cannot accept that it is necessary to have a deal of this importance and magnitude, with the Our understanding is that, firstly, there is to be an enduring implications for the people of Victoria, agreement as to the construction of the power rushed through Parliament with the indecent haste station and completion of the construction under being displayed today. I cannot accept that there is which the SEC will act as an agent for the joint anything magical about 30 June, particularly if, as LOY Y ANG B BILL

Thursday, 28 May 1992 ASSEMBLY 1891 we understand it, the government is prepared to the ground for a single-issue campaign revolving accept our amendment in relation to the SEC around a scare campaign based on privatisation retaining the proceeds of the sale for reduction of its because this Bill and the transactions to which it own debt. I can see no need for the deal to be relates represent the introduction of privatisation finalised to any particular time line and, given those into the biggest monopoly industry in the hands of factors, it is far more important to get it right and to government in this State. be sure it is right than it is to have the deal completed by 30 June. The opposition welcomes that because it makes non-controversial in the political sense the concept I am concerned about the haste and uncertainty of using privatisation to capture the benefits of flowing from the pressure under which all of the competition in Victoria's electricity industry and of people involved here have been working. Despite restoring the efficiency of our electricity industry as the excellence and frankness of the briefings we part of the vital economic base of Victoria. have had from officers of the State Electricity Commission of Victoria and the various advisers I wish now to deal with the question of Mission who were involved it was clear to all of us that those Energy as an operator and owner of Loy Yang B. The people were not given an adequate opportunity of opposition believes that the dual capacity of Mission carrying out their tasks with the full professionalism Energy as operator and owner, although it will be of which they are capable. That unfortunately goes only a 40 per cent equity participation, is as much for the public sector people who were tremendously important for the long-term involved as for the private sector advisers. opportunities that the Bill and the deal open up.

Secondly, I am concerned about the fact that the The opposition sees tremendous advantages to be whole matter is being driven almost exclusively gained from greater private sector involvement in from within the government by the need to raise the Victoria's energy industries and in many of the funds to complete the power station. The essential industries in which government organisations genesis of this arrangement, as the honourable dominate or constitute a monopoly. I turn to some of member for Morwell said, is that the government those advantages. has so bankrupted Victoria it simply cannot guarantee that it would be able to fund the Firstly, it represents the introduction of competition, completion of the construction of the station without albeit limited competition, into what has hitherto a transaction of this kind. been a totally vertically integrated government monopoly. Apart from the existence of a few Thirdly, I am particularly concerned about the municipal electrical undertakings the Victorian absence of any logical conceptual framework for the electricity industry has been a totally vertically electricity industry or for government monopoly integrated government monopoly. This Bill breaks businesses that has been so amply demonstrated that mould and legitimises the opposition's policy of during the course of the development of these using various forms of contracting-out and transactions. The government has not given any privatisation to introduce competitive diSCipline, thought to the long-term implications of this sale or private equity and accountability to private capital to the long-term structure of the electricity industry markets into the electricity industry. in Victoria, let alone in Australia with the development of a national electricity grid. It is ad Secondly, the introduction of private equity hockery taken to a level that is unusual even for this enhances the accountability of this major economic government. activity to capital markets. While the SEC's access to and interface with capital markets is underpinned The government has not turned its mind to the by the guarantee of the Victorian government and long-term future of the electricity industry in therefore of Victorian taxpayers there is an artificial Victoria. That is in stark contrast to the attitude of interference with accountability to capital markets. the coalition. The coalition has not only considered To the extent that Mission represents the the long-term future of the industry but has made introduction of private equity, the accountability to clear its views publicly. I suppose we must welcome capital markets is enhanced. In addition, it the fact that the government has finally embarked establishes a model that will no doubt be continued on privatisation in an area the Premier has described irrespective of whoever is in government in this as core services. I suppose it amply demonstrates the State, but particularly with the advent in the near hypocrisy of a government that is trying to prepare future of a coalition government. LOY Y ANG B BILL

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Thirdly, it represents a shift of resources from the Sixthly, there is the factor of greater operating government sector to the private sector. To point efficiency. The SEC has valued the flow-on effects of that out is not to say that there are no efficient public greater operating efficiency at $300 million, in enterprises, but on the whole, as I have said present value terms, across the system. It comes previously in this House, the public sector has immediately from reductions in maruting and the demonstrated an abysmal performance compared elimination of over-manning. The SEC has with the private sector in terms of return on suggested that manning levels likely to be achieved investment. under Mission's management will be substantially below those that the SEC would have to employ. The Australian Bureau of Statistics publishes figures on return on capital, which is a very broad measure The deal is predicated on a level of availability for of the effectiveness of the use of resources. Over the the plant which far exceeds that which the SEC has past 15 years public trading corporations have come to expect, and the SEC fully expects spin-off produced an average return of 1.6 per cent benefits in terms of improved availability across the compared with a return of 14.9 per cent for private whole of the system through the flow-on effects of trading corporations. As a community we simply having Mission as the operator of Loy Yang. cannot afford to have major industries like electricity tied up in a sector of our economy that produces A higher availability factor represents a very such an abysmally low return compared to that substantial reduction in the cost of capital and an which is available in competitive private enterprise. increase in the rate of return on the community's This shift of resources offers important benefits in resources. The deal assumes dramatic improvements rebuilding the strength of the Victorian economy. in work practices and greater flexibility and adaptability over time as competitive private Fourthly, there is the question of construction costs. enterprise is freed from some of the constraints tha t There is much literature available to demonstrate the public sector has been proved in practice to be that the public sector tends to spend more and take subject to, allowing an opportunity of greater longer to build capital infrastructure. Indeed, in the advantages in the future as technolOgical change is present case we do not have to argue about it at a more rapidly taken up and used in the system. theoretical level because the SEC has conceded that the cost of construction of the power station as an The opposition believes it is important that Mission SEC project is something like $125 million, give or Energy is to be the operator of the power station on take $15 million - that is, between $110 million and behalf of the jOint venture and that it will be an $140 million - above best practice were the private equity participant, albeit limited to 40 per cent. sector to construct the station. We are principally concerned about the take-or-pay Others have gone further. It has been suggested that contract; we are particularly concerned about the the private sector would have constructed the tariff, which as it presently stands reflects the higher station for something like 50 to 60 per cent of the cost of construction, including the premium the SEC cost of the public sector construction. That has a regards itself as having had to pay through its not number of very important implications but, in being able employ the best practices in the particular, it would represent a far better return on construction of the station. We are concerned about the community's resources. the distortion for the industry and for the future development of competition in the industry that Fifthly, various consequences flow from greater comes from having the taxpayer ultimately obliged efficiency in construction, particularly the reduction to buy up to 20 per cent of total output in the present of capital costs. Not only would the absolute level of system, once Loy Yang B comes into operation, at capital be reduced by more effective construction something like 40 per cent above the average cost but because the project would be completed more out of the rest of the system. quickly, so reducing the period during which it is capitalised, the overall financing cost of the project It is not realistic to create such a large divergence in would be substantially reduced if private sector the range of prices in the industry. That is equity were introduced in terms of building, owning destructive of meaningful competition and the and operating the station. That is a very important advisers retained by the government on behalf of the consideration because it is well-known that debt opposition have concurred in that view. Their servicing costs represent something in the vicinity of experience and investigations confinn that it is 50 per cent of the cost of supplying electricity. undesirable in a potentially competitive industry to LOY Y ANG B BILL

Thursday, 28 May 1992 ASSEMBLY 1893 have such a wide divergence as one power station We are particularly concerned that these supplying electricity at 3.3 cents a kilowatt hour amendments should ensure that there is no against Loy Yang B at 6.8 cents a kilowatt hour in inhibition on the introduction of further competition today's values. It would be far more desirable and into the electricity industry as a result of either the would create far more effective competition were actual agreement reached in this case or the nature there to be a narrower band of competitive output of the financing arrangements; that there should be prices. complete flexibility available to the people of Victoria in the next 30 years to expand private We are concerned about the price escalation formula ownership and participation in Loy Yang B and to and about the public misinformation. To those who promote private sector competition throughout the are interested in the deal, there is a widespread electricity industry with, at least in the foreseeable understanding that the power tariff will be adjusted future, the exception of the main high voltage on a formula and that it will move at consumer price transmission system which lOgically, as a necessary index (CPI) minus 2 points. In reality, we have monopoly, needs to be retained in public ownership. discovered in the past few days that that is not the basis of adjustment of the power tariff; the various We are concerned about the necessity for a take or elements of it are subject to formulae, in one case pay contract. One has to ask whether when Toyota geared to 80 per cent initially and later lOO per cent announced it would spend $500 million on building of CPI, and in other cases it relates to input indices. a new plant its bankers required customers to be So there is no necessary correla tion between the signed up to buy cars for the next 30 years before movement of the power tariff that the people will be they would finance that investment. Yet here it is committed to pay and the CPI. being put to the people of Victoria that the only basis on which the banks will back this deal is to The reality is that the correlation between the budget have the taxpayers committed for 30 years. We are of the SEC for the general profile of its costs is not concerned about the artificial stamp duty necessarily the same as the purchase price for the arrangements and committed to -- output of Loy Yang B. We are concerned not only about that impact on the deal but also about the The SPEAKER - Order! The honourable misinformation it represents. We are particularly member's time has expired. concerned that the parties apparently do not propose to take up the capacity of trading off a Mr I. W. SMITH (Polwarth) - The Loy Yang B reduction in the asset price against the lower tariff. Bill is a big deal for the State of Victoria but a very We hope that that is still open. The opposition small enabling Bill, which, when the amendments strongly supports that and will be pressing that fact outlined by the honourable member for Evelyn are in the negotiations. incorporated, the opposition will not oppose.

It is in the interests of all parties, but most I should like to thank those who have assisted the particularly in the interests of the people of Victoria, opposition; they were all mentioned by the that they be committed to a commercial tariff rather honourable member for Evelyn, but I should like to than to one that simply reflects the inflated cost of thank in particular Peter James, with whom we have this power station, given that it was not built on a had most contact. The SEC has at all times been best-practice basis. highly professional and keen to ensure that we had a full grasp of all the factors involved. We are concerned about the erosion of sovereignty that the Bill represents and that the State agreement We might ask ourselves why this Bill is before represents. We are concerned that, on its face, the Parliament. The principal reason is that it is required combined effect of clause 8 of the Bill and the by the bankers to Mission Energy. We were satisfied amendment and variation clause of the State that the SEC, under its Act, had sufficient power to agreement would mean that future amendments to sell the proposed interest in Loy Yang B, but it was the State agreement could allow agreement of the also clear to us that both Mission Energy and its parties to override even the Victorian Constitution. bankers required the enabling legislation to effectively ratify the agreements before they were Without the opposition's amendments, the Bill actually sighted by the Parliament and before they would have the agreement of the parties override all were actually concluded, which is, to say the least, a Victorian law. There is no limitation that would rather odd arrangement. prevent that applying to the Constitution. LOY Y ANG B BILL

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The government finds itself in the position of having with the ideological and philosophical beliefs of the no choice; the opposition finds itself in the position Labor government, it was decided to sell only 40 per of having no choice. It smacks of the same cent of Loy Yang B. Not only was 40 per cent of the conditions we were faced with with State Bank station to be sold but its management was to be Victoria. Anybody approaching the problems that placed in private hands. I cannot see that it makes the government had got itself into with the State any difference whether Mission Energy holds a Bank would have been concerned about the 40 per cent or 100 per cent stake in the power station. prospective loss of a bank that, when the opposition God only knows how the government will justify to was in government, lent people up to 48 per cent of its left wing supporters the decision to put the the home mortgages around the State. It was a bank management of Loy Yang B in private hands. with all the strength that one could want, but ultimately it had to be sold because of the The coalition was impressed by the bid made by incompetent management of this government. Mission Energy. But I remind the Treasurer that the company is owned by Edison Electric Light Co., There are interesting parallels with this legislation. It which is probably the world's largest generator of has been clear for many years that the SEC has electricity from nuclear fuel. This left wing wanted to construct power stations. To some extent government forbids nuclear-powered ships entering the SEC has been driven by engineers who wanted Port Phillip Bay, but when it is broke it drops to its to be way ahead in their ability to supply Victoria knees and does a deal with a company that is owned with electricity. Planning for such major projects by the largest generator of nuclear electricity in the takes a long time. world!

The decision to go ahead with Loy Yang B was taken I notice the Treasurer shaking his head. He will be in 1984. It would come as no surprise to the shaking his head a lot more in the next few months government because it was in government at that when he realises that the deficit will have blown out time, nor would it come as any surprise to the to $2.5 billion and that an early election will have to Australian Loan Council, with which the be called because his government is unable to government has regular contact, that the introduce a credible Budget. requirements to build the station were obvious and able to be scheduled. The Bill is at odds with the ideological and philosophical beliefs of the government - but that is With that knowledge and with that long-term certainly not the case with the coalition. We support planning going back to the granting of the the company, which has been prepared to spend permission to start the power sta tion process in 1984, $20 million on an excellent bid - and as a result it one would have thought that the government would has received a very good deal. There are not too have got its act together a little better, scheduled its many deals around town which are completely borrowings and made the necessary financial underwritten by the government for 30 years and arrangements to enable the SEC to complete the which are predicted to result in pre-tax real rates of project as proposed and as decided upon by the return of between 12 per cent and 15 per cent, which government. is what this deal promises.

The SEC is caught like the government because it Victorian consumers would have received a better was not in a position to negotiate Loan Council deal had the State Electricity Commission completed availabilities. That was the government's problem the construction of Loy Yang B in the shortest and the failure to achieve the right results was its possible time, so aVOiding some $200 million of fault. Having been caught, the SEC now has to wear delay costs that have been added on in an attempt to the problems caused by the ineptitude of the stage manage the finances in line with the government. It knew full well that it would not get allocations made by this inept government. $300 million a year to complete the construction of the Loy Yang B power station. Labor governments in Victoria and Canberra have fluffed significant opportunities to ensure that such Wisely, the SEC approached the government and infrastructure projects are competitive. Over the past recommended that 100 per cent of the power station 10 years some $130 billion has been borrowed be sold so that neither the commission nor the off-shore. Instead of prOviding the necessary government would be saddled with staggering loan taxation incentives or disincentives - or a mixture requirements. Because that proposition was at odds of both - to ensure that that $130 billion was LOY Y ANG B BILL

Thursday, 28 May 1992 ASSEMBLY 1895 channelled into appropriate long-term months the New Zealand economy has actually manufacturing, production and infrastructure made a profit - for the first time in 20 years. projects, which would have decreased the need for imports and increased our exports, thereby adding The State Electricity Commission has made a good to the country's wealth, the government gave no start by reducing its staff from 23 000 to 16000. But consideration at all to where the money would be had the government had any foresight it would have invested. seen that the Federal Labor government's program of eliminating tariffs by the year 2000 would have As a result virtually all of the $130 billion ended up placed enormous strains on Victoria's in paper shuffling schemes and real estate manufacturing industries, particularly the textile, speculation; and it is fair to say that the benefit of clothing and footwear industries. It is ironic that this that inflow of capital has been highly questionable. afternoon the Premier is meeting representatives of A good deal of Australia's productive capacity must those industries to convey promises, not action. now be channelled into serviCing the $130 billion of off-shore borrowing -- One wonders how much better off those industries would be had the government got off its backside The SPEAKER - Order! I suggest that the and introduced micro-economic reforms on our honourable member for Polwarth return to the wharves, in our power industry, our transport matter before the House. industry and the public sector so that the pressures of the market would have been brought to bear, Mr I. W. SMITH - Mr Speaker, that brings me which would have resulted in lower production back to my very point, which is that if the costs for those industries suffering from the government had got off its tail and made the lowering of tariffs. appropriate representations to its Federal colleagues for adequate incentives to ensure that some of that The government failed dismally to recognise the $130 billion was channelled into long-term need for micro-economic reform. It is no surprise infrastructure projects such as Loy Yang B, the State that the industries that were supported by high would not be faced with the take-it-or-leave-it deal it tariffs have now become the meat in the sandwich. has been forced into. On the one hand they are being squeezed by increased costs and charges imposed by the It must be said that the government has no government at levels higher than the rate of bargaining power at all. It has no choice but to sell infla tion, and on the other hand they are suffering off at least 40 per cent of the power station. If from the pressures being brought to bear by the Mission Energy pulls out of the deal tomorrow the reduction in tariffs. government will have to quickly come to some arrangement with Southern Electric International It should not be surprising that the other industries Inc., the other preferred bidder, because the in this State that are so dependent on tariffs now government does not have the loan funds it needs to find themselves in unenviable positions similar to go any further. The project cannot be mothballed those of clothing and textile manufacturers who are because the government has let contracts for 98 per meeting with the Premier this afternoon. I bet none cent of the value of the remaining work to be done. I of them is game to say to the Premier that the am sure the contractors would be less than government has mucked it up. The government has sympathetic if the government pulled the plug on had 10 years to do something and it is only now the project! As I said, the government is not in a starting to realise that opportunities have been position to negotiate. The only choice the missed. It is very hard to turn back the clock and government could make was to decide to whom to begin proper micro-economic reform from a much sell the 40 per cent stake. lower,less tompetitive base.

The importance of micro-economic reform cannot be One of the fundamental problems the opposition overstated. Had the Victorian and Federal Labor will face when it is in government later this year will governments commenced a program of be how to right the wrongs of a decade of lost micro-economic reform, the Sta te would now be opportunity and of policies forced on it by a Federal enjoying the benefits. New Zealand and the United government which, in the euphoria of doing things Kingdom are classic examples of the benefits that that the world's greatest -- flow from micro-economic reform. In the past two LOY YANG B BILL

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The SPEAKER - Order! I understand the How will the legislation benefit micro-economic honourable member is attempting to establish the reform? The answer is that it will not. It just gives context, but I would appreciate it if he would increasing impetus to the need to consider the confine his remarks to the question before the Chair. remaining power generating capacity in the Latrobe Valley and determine what arrangements can be Mr I. W. SMITH - The whole context of my made to introduce more competitive forces. Only in comments, Mr Speaker, is to draw the attention of that way will power be produced in this State more Parliament to the fact that the price of power is efficiently without being subject to the inflationary integral to the health and well-being of our pressures to which I have already alluded. industrial base in Victoria. It is lamentable that opportunities have been lost, and the government The Bill also brings into sharp focus the type of should no longer delay the introduction of real planning the government should have been carrying competition into some of the base industries like the out in preparation for the national grid, which is generation of power. now heralded from Canberra as being part of the One Nation package. The government has done very I shall refer to how this measure introduces little planning to make use of the benefits of excess competition and test it against the need for power capacity in New South Wales. I would not be micro-economic reform and the benefits that might surprised if no Minister of this government had tried flow to industry. I am sure the Treasurer is not to strike a deal with New South Wales on the basis aware of it, but one of the interesting assumptions for the next 10 years that State will produce 40 per that was made in the calculations on price tariffs was cent more power than it needs. The government that inflation would probably exceed 4.5 per cent could have attempted to purchase power at bargain averaged over the 3O-year life of the plant. If basement prices. inflation averaged over the 3O-year life of the plant exceeds 4.5 per cent a year, then the deal the The government should have taken the time to plan government has done will render to the consumers a national power grid instead of constructing of electricity a price component in line with the Loy Yang B. However, the government failed to see consumer price index minus 1 per cent or 2 per cent. what was happening in the neighbouring State of There is some conjecture about that and even to this New South Wales and failed to grasp the day the rules keep changing. opportunity. The government grossly miscalculated the demand for electricity; it estimated that the The nub of the matter is that if inflation is more than demand would increase by 5 per cent a year when 4.5 per cent, the chances are that over the 3O-year the reality is that it increased by only 2 per cent a period consumers will be slightly better off. year over the life of this government. However, the reality will be quite the reverse because the economic pressures being brought to The Premier criticised the opposition for pursuing bear on this na tion by an ever-increasing the benefits of privatisation. She has trumpeted the competitive world will force inflation over that fact that under her government there will be no 30-year period below the 4.5 per cent level. When privatisation of major instrumentalities. What that happens the effective cost of power to the absolute and utter rubbish! The largest deal ever consumer over the next 30 years increases rather done by a government in Australia was the sale of than decreases. State Bank Victoria. The government gave it away; in fact, it had to give it away because it was caught. The contract agreements stipulate that State The government is now trying to flog off the State Electricity Commission and the government, in Insurance Office. Not only that, the government is conjunction with Mission Energy, will supply at also trying to palm off to anyone who wants them least 20 per cent of the power requirements referred nine major buildings in the central business district. to in the Bill and pOSSibly more. I have no doubt that Mission Energy will extract considerably more The SPEAKER - Order! The honourable power from Loy Yang B than would have been the member has made his point and I ask him to return case had the SEC operated it, and it is more than to the Bill. likely that 20 per cent of the power generated under this legislation and its various agreements and Mr I. W. SMITH - Some 40 per cent of the contracts will be charged for at a rate greater than left-wing unions' sacred cow, the SEC, is now sold. the rate of inflation over the 3O-year period. That is In other words, about 9 per cent of the generating the most likely scenario. capacity of the Latrobe Valley will be sold to and LOY Y ANG B BILL

Thursday, 28 May 1992 ASSEMBLY 1897 operated by Mission Energy. That is in spite of the inflation is more likely to be less than 4.5 per cent, fact that only in the past weeks the Premier has been therefore, the cost of power will have a higher rather saying that it was not government policy to privatise than lower inflation component, which is what the major instrumentalities. Clearly, she is totally government is proposing. As with the State Bank the wrong; she is totally misleading the House with her government has failed to plan ahead. It has no absolute hypocrisy. commercial acumen and Parliament finds that just as the State Bank Bill-- In addition, the Premier had the gall to stand in this place about a month ago when answering a question Mrs Wilson interjected. from the honourable member for Evelyn about this Bill and say that all the details of the measure would Mr I. W. SMITH - It is good to see another be before Parliament when it was debated. She left member of the government here. Fancy the second nobody in this House in any doubt that everything biggest deal ever in the history of Victoria being to do with the sale of 40 per cent of Loy Yang B to debated with only two government members in the Mission Energy would be before the Parliament. House! Despite that the House is now debating a Bill, the details of which have not been finalised. This Bill will go through Parliament in such a way that none of us will derive any joy from it because it This is a scanty enabling Bill; it is not Parliament's will bring little or no benefit to the people of ratification of final contractual arrangements. I Victoria. It rescues the government from an support my two colleagues in asking what is so embarrassing shortfall caused by poor planning and sacrosanct about 30 June, particularly now that the the lack of available loan funds. government has agreed to accept one of the amendments the opposition will move during the Or Wells - At what price? Committee stage to allow the SEC to use at least some of the $540 million it will receive from Mission Mr I. W. SMITH - At a very high price. We are Energy to retire some of its debt load. What is so caught. Parliament should not allow itself to be magical about 30 June? Surely it would have been caught in a situation like this, and it is with more beneficial to all parties involved in this reluctance that the opposition says, as it did with the agreement if the agreement had been finalised and State Bank Bill, that it will not oppose it. available to members of Parliament to scrutinise and the Bill passed in full knowledge of what we were Thank goodness an election is in the offing so tha t committing the State to. this type of debacle will not occur again. The cost has been enormous, the Labor government has lost a The key to it is that this agreement does not in any generation of opportunity by its inept management. way impose or bring about micro-economic reform The result of the government trying to pick winners that will be beneficial to consumers. The only benefit and failing in almost all of its deals is an enormous that can be pointed to by the government is the cost to the community. possible flow-on of benefits from the $300 million in improved SEC practices that will be created by This government will go out but, sadly, every man, looking over the fence and competing with Mission. woman and child in this State will have a debt liability of $14000, the highest in Australia. That is a With the number of trips they made to the United legacy the incoming government will find difficult States of America, union and SEC people could have to overcome. However, with better planning, better looked over the fence to see the benefits that would commercial acumen and better policies we will most flow to the SEC; they could have looked at that certainly be able to improve on this appalling base. every year for the past 10 years and then started to implement what they had seen. Due to the lack of Mr CLARK (Balwyn) - I put forward three action in the past one becomes suspicious about the propositions about the Bill: firstly, it is better for capacity and the will of government to take on Parliament to pass the Bill than to defeat it; secondly, board some of the improved work practice systems it is probably better for the State to do the proposed that Mission Energy will implement. deal on Loy Yang B than not to do it, even though the deal appears to fall short of what could have The hypothetical advantages of a $3()() million been achieved had the willingness been there; and micro-economic reform are questionable and can thirdly, the benefits of the deal fall far short of what probably be more than offset by the fact that LOY Y ANG B BILL

1898 ASSEMBLY Thursday, 28 May 1992 could have been achieved by a full competitive government and to restrict the scope of the privatisation of the State Electricity Commission. government to divert the proceeds of sale to its own use. The deal falls short of the advantages of full privatisation because there is still scope for As I said earlier, doing the deal that has been done government pressure to be directed to the with Loy Yang B is probably better than doing management of the power station through the nothing because, even though it does not go as far as so-called other government bodies (OGBs) and full privatisation, at least it provides private sector through the SEC under the joint venture agreement. involvement in the running of the power station. On The deal falls short because even if a contract is for a all available evidence the deal is being done with a high volume of power for a long term, that restricts capable manager who is likely to bring efficiency the competitive selling of electricity by Loy Yang B and experience of world best practice to the and the competitive buying of electricity by the SEC Victorian scene. It is hoped that that experience will or by the private sector and users or distributors. be manifested in the field of industrial relations as much as in every other area. The deal creates only limited competition in the power industry. Certainly there is an incentive for There is a prospect of a greenfield industrial management to perform well because that increases relations agreement which will set a new benchmark the profit margin given the fixed price sale, but there for industrial relations standards in the Latrobe is certainly not the cutthroat pressure that would be Valley. The SEC is confident of getting a flow-on of brought to bear with the real incentives of survival industrial relations benefits throughout the Latrobe in the marketplace if a number of competing Valley, and that will be of benefit to Victoria. generators supplied power into the Victorian electricity grid. One qualification on the proposition that we are better off doing the deal than doing nothing is the Once the opera tors of Loy Yang B meet the required question of whether it would be better to mothball rate of return to pay their bankers at the fixed the second unit of Loy Yang B than to build it. In electricity price they are not under threat of being other words, should we draw any further power driven out of business even though they could make needs from Mount Piper in New South Wales and, more money through doing things better. Therefore, given the excess power capacity in New South the deal falls short of an optimum competitive Wales, could we do a deal below total cost and pressure. therefore below the real cost of power coming out of LoyYangB? The supply of coal has been tied to the power station so there is no freedom for the station to shop around We cannot be 100 per cent confident in the answer to to get the best deal and so far as consumers of the question. One media commentator has suggested electricity are concerned the partial sale of that the unit could be mothballed for a penalty of Loy Yang B does not offer choice to any but a $100 million, on the one hand, and on the other the handful of major consumers, and even that is likely SEC says that 98 per cent of the project is committed to be some time down the track. and therefore, presumably the costs are irreversible.

However, as I said earlier, it is better for Parliament Mr Hamilton - Those commentators do not get to pass the Bill than to defeat it. To defeat it would it right. How often have they got it right over the send an unfortunate signal to the international past 10 years? community which has put much time and effort into exploring the potential for privatisation in Victoria. Mr CLARK - I take up the point made by the The signal that should be given to the international honourable member for Morwell. I am going to community is that Victoria will shortly be a State proceed on the assumption that it is not a feasible that will welcome privatisation and competitive option to not build the station. If it is an option it has pressures. To defeat the Bill now would turn away certainly not received a good airing in the public the opportunity for those far more extensive arena. If my assumption is correct case and it is privatisation moves in the future. necessary to go ahead with at least the first two units of Loy Yang B in some form or other, I believe there However, that is not to say that major amendments is Significant scope to improve the way the deal is should not be made to the Bill in order to restrict the being negotiated by the government. wide discretions that are being given to the LOY Y ANG B BILL

Thursday. 28 May 1992 ASSEMBLY 1899

The obvious option would be a 100 per cent sale of The only difference between the contract and the the project but we do not have that opportunity. later scenario is the volume margin on the take~r-pay contract. There is an option for the sale Mr Hamilton - What happens to the profits of energy to parties other than the SEC and there is when we sold the 60 per cent? the potential for the generation of power above the take~r-pay contract level. There is also the question Mr CLARK - One option is for the proceeds of of the residual value of the power station at the end the sale to be used to reduce debt. We would also of the 3O-year contract period. I suspect in the have a private sector operator free of the pressure of scheme of things they are relatively minor potential government interference and the dictates considerations. If that is the case, one can look at the that pose a risk of hampering the manager under a privatisation as initially an amalgam of two separate 40 per cent sale. We could also do a lot better if we components: firstly, the financing component and, gave more flexibility to the operator of Loy Yang B secondly, the management component. as to the source of the input and the disposal of its output, and gave more flexibility to the SEC as to The management component is unequivocally a where it gets its power. good thing for reasons I outlined earlier - the . industrial relations and management reforms that I come to the most contentious issue and that is the can be brought into Victorian industry. With regard question of the trade~ff between the capital price to the financial component, I believe the question is: for the project and the tariff at which the electricity is what is the cheapest source of money to complete sold to the SEC under the take~r-pay contract. I the project? It is said that Mission Energy requires a have some difficulty in coming to grips with the higher rate of return than does the SEC. The SEC various comparisons that are made between the cost estimates that the difference between the rate of of power to be sold to the SEC under the take-or-pay return of Mission and the SEC amounts to contract and the cost of power that is available from $90 million. The SEC argues tha t this difference can other sources. be made up with the various expected management and industrial relations components. It can be Mr Hamilton - Even the SEC has trouble with argued that the $90 million is the maximum figure. that. It can be also argued that Mission is entitled to expect a high rate of return on its funds over and Mr CLARK - There is a lot of data on the above its risk-free rate. For the government to do historical costs; I am not sure how relevant that is. simple arithmetic and to compare Mission's We also have the great imponderable of whether required rate of return with borrowing a risk-free power obtained from interstate sources would be rate and investing money in its own somewhat risky obtainable only at full cost, that is the cost bearing business, while only requiring the risk-free rate of the weight of depreciation and financing charges, or return, is not a fair comparison. whether we can obtain considerable excess capacity, at a marginal cost below that full cost level. However, it appears to me that Mission Energy will probably labour under the burden of Mr Hamilton interjected. Commonwealth taxation on the earnings it makes on its equity investment, under which the State does The SPEAKER - Order! The honourable not labour. That is an artificial impediment that member for Morwell has had the opportunity to drives up the cost of the private sector equity. It may make his contribution. He should allow the also well be that the cost to Mission of obtaining its honourable member for Balwyn to make his funds from its bankers is higher than the cost to the contribution without interruption. State government of its borrowings. If all those propositions are true - and to a certain extent they Mr CLARK - I do not place a great deal of have to be taken to be assumptions rather than reliance on interstate comparisons. I shall leave it to conclusive propositions -it is likely that, even those with more competence in those figures to adjusting for the element of risk, Mission requires a draw conclusions. With the take-or-pay contract higher rate of return than the rate of return that under this deal there will be an economic effect tha t could reasonably be required by the SEC on is not much different from the economic effect that investment in a project of similar risk. we would have if the SEC remained in passive ownership of the power station and we simply If that is the case, it would be better Simply to lower brought in private management. the sale price and lower the corresponding tariff at LOY Y ANG B BILL

1900 ASSEMBLY Thursday, 28 May 1992 the same rate of return. In fact, taking it to the limit, really is indicated in the opening words of the Bill why have a financing component at all? Why not which, in ''Preamble'' states: simply have a sale price notionally equivalent to zero with a corresponding tariff, so in effect one will It is expedient to enable the State Electricity have all the benefits of private sector management Commission of Victoria to sell a substantial interest in while using a cheaper source of funding? However, the power station known as Loy Yang B near Traralgon. there is one evident and practical reason that prevents this solution, and that is the impecunious Surely there is a better word than "expedient". We state of the government. If the deal were done at a are talking about what amounts to national business. zero price level, it would be impossible for the SEC This particular deal is clearly in the line of half a and the government to generate sufficient funds to dozen deals done by the government which point to complete the Loy Yang B project from internal its economic destruction of Victoria. It has been sources because such a large proportion of the involved in two deals of magnitude. The first was State's global borrowing allocation is required to the State Bank Victoria deal. The government came meet the Budget sector deficit. to the opposition and said, 'There is no choice for the Parliament. We have to sell the State Bank". We In short, the fact that the State is broke is driving us had to sell it for the terms we could get. When it was to make a deal at a higher price and were the State all over Victoria was still left with a debt. better off we could do a deal at a zero level or at a low price. We would also be a lot better off and we The coalition was told the same thing in respect of would have a greater scope to achieve an effective Loy Yang B: we have to sell 40 per cent; we have no privatisation for Loy Yang B if the project were choice. Of course, the Premier promised us and carried out by a competent free-enterprise declared to the world that the opposition would government with sound finances, rather than the have all the figures it needed, stating that there current government with diminished finances. would be no capacity for the opposition to wimp on this and back out, claiming it did not know what Let us hope we will not have to wait too long before was going on. We were told by the Premier that the such a competent free-enterprise government is information would be there and then we would see elected, which will restore the State's finances and whether the government could make a decision. Of which will encourage a far more capable, course, several of us are saying that that is not the far-reaching and more competitive electricity case, that all the information is not there. It is not we industry which will reap the full benefits that are who have wimped out but the Premier. We are available from the private sector, so that government being forced to make a decision because this is the can concentrate on the provision of the services only way Victoria can go and we are being forced to which government must provide. make the decision on the basis of grossly inadequate information. Dr WELLS (Dromana) - The Loy Yang B Bill is the controlling legislation for the largest single deal As a member of the coalition - in my eighth year in ever undertaken by the State in dollar terms and yet Parliament now - I will support my colleagues by it comes to this House in a hurry, nine days from its not opposing the Bill because we have no choice, but introduction, with the serious likelihood that the I protest in the strongest possible terms that I am debate may well be gagged. That is the lesser being forced to not oppose the Bill from a position of indication of the attitude and incapacity of this marked ignorance. For some time I have asked government to deal with the job entrusted to it by during discussions in the coalition party room for the people of Victoria. It is the largest single deal information on the critical questions such as the ever to be presented on behalf of the State. construction of the tariff and I have been told that we simply do not have the information. I know my The greater importance of the situation is that it colleagues worked as hard as they could. If the illustrates the government's incompetence in that information had been there they would have the deal comes to this place only because the obtained it. Now we are at a point where we have to government has no alternative. It is strapped for pass the legislation, but we really do not know what cash; it is virtually bankrupt in terms of dollars, and we are passing. it certainly would be if it were a business enterprise controlled by Corporations Law -in Henry Ford's What is worse, it is almost as sure as it possibly can words, it is bankrupt in that it has no ideas. This be that Labor will no longer be in government by the end of this calendar year. The coalition will be the LOY Y ANG B BILL

Thursday, 28 May 1992 ASSEMBLY 1901 government; it will be the people charged with It is not unique. The same thing happened with cars. administering this deal which is being made on It was touted as possibly happening with the behalf of the people of Victoria for the next 30 years. processing of vegetables. When the businesses have By legislation we are creating a guaranteed deal for broken down and are under the control of the rules private enterprise which guarantees it the sale of its set by the government the overseas companies come product and a return that is quite handsome, and it in and get one union controlling the site and all comes about through a deal which is driven by negotiating conditions that Victorian businesses here the free enterprise system. I will say nothing about have not managed to negotiate. Of course it points to that. I know about the free enterprise world of the fact that in this State and nation we still do not business and I know parties negotiate and scrap acknowledge the true situation that we are part of a over deals until they get them right and haggle until world economy, a world marketplace. If we look at they get the best possible deal. That is fair business the collapse of communism in Eastern Europe, the practice, so long as it is done honourably, and this rest of the Western World, developing Asia and one has been done honourably. even Burma, which is still under totalitarian rule, we see that there is pressure to recognise that one can When dealing with billions of dollars it is not run an economy only by the reality of the dollar desirable for one party to walk in with one hand tied through market trading. That is what has been behind its back. That is what happened here. The wrong here. We ask overseas countries to come here Victorian government virtually had its hands tied and take a 12 or 15 per cent return per annum by the behind its back when trying to negotiate the deal. government guaranteeing a return for taking us off This deal involves almost 25 per cent of the State's the hook if it will save us a few hundred million budget in dollar terms in one year. That gives some dollars towards the budget balance on 30 June. That idea of its magnitude. It is somewhere between 20 is the real Significance of 30 June. It is nothing to do and 25 per cent so it is a big deal indeed. with Mission Energy.

The other parameter of the deal that is acceptable to The government is so desperate for cash that it will the coalition is that it establishes beyond any future pay an extremely high tariff for electricity over the questionable doubt the principle of privatisation of next 30 years. The government may argue that government instrumentalities. We are pleased about current tariff charges are histOrically based, but it that. Australian Bureau of Statistics figures show the should consider new costings in other States that return on capital over the past 15 years as an average have a far lower cost of electricity. annual return on private trading corporations of 14.9 per cent. On public trading enterprises it is If the construction of Loy Yang B were completed by 1.6 per cent, approximately a ninth or a tenth. the SEC it would cost Victorian taxpayers an extra $130 million. That is outrageous. I am not impressed Naturally anyone with any sensitivity towards and by proposed savings in work practices and other experience of the business world would be delighted associated costs of $300 million. It may well cost to think we might get some privatisation into the Victorians much more over the next few decades biggest businesses in Victoria which are usually because of the high tariffs being charged for monopolies and under government protection. electricity. The honourable member for Polwarth outlined other influences that could affect the tariff Another parameter of the Bill that is of great price, including inflation and so on. This is an significance, and one of the reasons why the extremely important agreement and I am conscious coalition supports it -as we believe the of my responsibility as a member of Parliament in government does, although it is speaking no louder voting on the Bill. I understand that the Bill must be than it must in case its union mates hear it more passed, but it is ridiculous that I do not have all the clearly - is that it enables us to bring pressure to relevant information so that I can make an informed bear on electricity generation to achieve reasonable decision. efficiency. What a shame that we have to do it by going to an overseas business and saying, "Come in, I do not care about the agreement date of 30 June run one of our biggest businesses for us and show us because it is designed merely to inject funds into the how we can do it". We hope other employees will government's coffers prior to the end of the financial look over the fence and see what to do. It is year so that it can help balance its books. I want a estimated that we will pick up $300 million a year by guarantee on whether the $300 million will be used them looking over the fence to see what is being to reduce the debt of the SEC. done by an overseas business enterprise in this State. LOY Y ANG B BILL

1902 ASSEMBLY Thursday, 28 May 1992

I am concerned primarily about the cost of the Valley had examined my proposals and would not power. In an article in the Age yesterday, John have a bar of them. Who runs Victoria? The motion Marsden says that the planned sale of Loy Yang B to was withdrawn and the report was amended to Mission Energy is another State Bank Victoria cater for union considerations. disaster. Honourable members may argue with the figures that he provides in his article, but I cannot I am concerned that the government is not prepared dispute them. I do not have the information, but I to accept the coalition's proposed amendments to am one of a small group of Victorians who will offset the capital purchase price against a future approve a 3O-year agreement with a value of more tariff reduction, which would be of benefit to than $3 billion. The Bill will create precedents for Victoria in the long term. I do not share the view tha t other proposed agreements, and a reading of the agreement can be renegotiated after the contracts Mr Marsden's article leaves one with the view that it are signed. I have never known that to occur. I is not a good deal for Victoria. believe the people of Victoria will have to live with the terms of this agreement for the next 30 years. Parliament should prolong the sittings of the sessional period so that all the relevant information I am concerned that the government does not have a can be provided and honourable members can make plan for restructuring the electricity industry. It is up their minds from an informed position. We ask logical to sell the whole of Loy Yang B because it those who vote in our national and State elections to would assist efficiency of production. Australian vote in an informed way, but this Bill has far more Bureau of Statistics figures clearly show that Significance than casting a vote in a State or Federal government enterprises operate at 10 per cent or election. 11 per cent of the efficiency of private enterprise. It is the responsibility of Parliament to ensure that I am concerned about the 80-20 power sale Victorians have the most efficient government agreement. On the one hand the government may enterprises. have to purchase 100 per cent of the power produced by Loy Yang B while, on the other hand, It is disgraceful that government enterprises are so Mission Energy may elect to sell 20 per cent of the inefficient when compared with private enterprises. power to other sources if it receives a higher price It is not bashing the employees to say that public for that electricity. That seems a good deal for agencies should be more efficient. Employees benefit Mission Energy and not necessarily for the State. from the operation of efficient private businesses and I see no reason why they would not benefit if I am not sure who will control the remaining 11 per government enterprises were run more efficiently. cent of the equity in the project; the government is SPC Ltd is a case in point. That company was going not prepared to specify the other government broke and the employees and management pulled bodies. Is the government having difficulty getting together. From that time onwards its productivity agencies to the starting line or do they not have the increased and the firm is now operating properly. money? I am depressed at the agreement and the Bill. I do I am concerned at the lack of a national grid strategy. not know why it is necessary to exempt buildings New South Wales has excess power and even involved in the project from the provisions of the greater potential to produce more electricity. I do not Building Control Act. Clause 22(5) requires both believe the government is making the best possible Houses of Parliament to resolve whether they will decision regarding future power use for Victoria. overrule a Governor in Council variation to the contract. The Natural Resources and Environment Committee inquired into the provision of electricity for Victoria A similar thing occurs in the regulations, where it is from 1995 to the year 2005. On the second last day of proposed that that be the case. Why should the an IS-month inquiry the committee was still enterprise be exempted from local government undecided about recommending the increased use of rates? Small business cannot get that concession. gas turbines for the production of electricity. The Why have clause 31 knock out the freedom of committee was debating a motion that I had put to it information provisions? It is totally unacceptable. regarding that matter and when it resumed the next day it was put to me very clearly that the committee Subclauses (1) to (3) of clause 8 provide for variation would not achieve anything unless my motion was of the agreement by the government without withdrawn because the workers in the Latrobe reference to Parliament. We do not want any of that LOY Y ANG B BILL

Thursday, 28 May 1992 ASSEMBLY 1903 nonsense! The honourable member for Morwell Mr DELZOPPO - Look what time has done! We said, "Goodness knows, Mission Energy has have seen State Bank Victoria given away. Now I am screwed us hard enough". That is not a bad faced with the prospect of supporting a Bill that will, comment about what has happened! under very questionable circumstances, sell part of the SECV. Honourable members know that my I favour the privatisation of the Victorian electricity electorate and the electorate of the honourable industry and I am in favour of that being done member for Morwell cover most of the SEC's under the right conditions. The big problem is that operations in the Latrobe Valley. this government in its last gasp is doing this deal on poor terms for Victorians. Once Parliament rises the We represent the workers and the people who live government will continue to degenerate. It will in tha t area, and they depend on the SEC for their spend whatever money it can lay its hands on. livings. The SEC has had a Big Brother effect on the Farther down the track, in the spring, when we people of the area, but I am appalled that on their reach the election, there is no question that the behalf I am forced to stand up and support the Bill commonsense of Victorians will lead them to in this place today, under circumstances that can be recognise that they have no choice but to change the described only as ridiculous. players opposite, and pull up this noxious process of economic degeneration in Victoria which has Can you imagine having someone sign a contract on occurred over 10 years. As the honourable member your behalf, a contract about which nothing was for Polwarth said, it means we have lost almost a known? You would not know what the price would generation in the process. be, and there would be many loose ends. We have been told about this marvellous golden book - We will be reminded of this for 30 years if things what a misnomer! The golden book will contain all turn bad, and it will not happen as it did with the fine detail of a contract which somewhere down src Ltd - in one gasp. I hope things will turn out the line the government will sign and which will better than they appear. I would be even happier if affect the lives of not only all Victorians but, more 30 June were forgotten and the Premier honoured particularly in my case, the lives of the people I her undertaking and provided the information so represent. It is an absolute disgrace! I never believed that the biggest deal in the history of Victoria could I would be forced into a position where I could not involve us sitting down rationally in this place, oppose legislation because we were committed too discussing the whole matter and voting in an far. It would be a disaster for Victoria if the Bill were informed way, as we were sent here to do by the to be defeated, yet I am screwed! people of Victoria. The word "transient" was used by my good friend Mr DELZOPPO (Narracan) - I have been a the honourable member for Morwell - we have a member of this House since 1982 and have been a great understanding; we talk to each other - but his member during the entire life of this government. government, the opposition and all of Victoria have been screwed because of the poor management of An honourable member interjected. the government. I was appalled to read in one section of the Bill that, in effect, none of the law of Mr DELZOPPO - A long and sad time for me! It Victoria will apply to any of those transactions, and is with some bitterness that I speak on the Bill. I everything from the constitution down is to be reflect on the taunts and gibes I suffered at the hands waived. It is an absolute disgrace. I am put into the of the previous Premier - and, to an extent, the position of approving the waiving of all the laws of current Premier -at question time when the Victoria so that the Bill can be passed. Local Dorothy Dix questions came to the Premier, asking, government has been affected - and I will have ''Will the Premier kindly tell the House the contrast more to say about that shortly. We are forced to between the government's attitude and the support the Bill in a short time with little opposition's attitude on privatisation?" Then the infonna tion! stage was set. The former Premier, John Cain, would march up and down berating the opposition and I challenge the government to guillotine debate on throwing flak this way. I copped it. One day he even the Bill. I believe we should go through it clause by said, ''You fellers over there would even sell the clause by clause because there are many questions State Bank!" that I want answered as, I dare say, does the honourable member for Morwell. We want to know: Dr Napthine -No! How will it affect our constituents? What will be the LOY Y ANG B BILL

1904 ASSEMBLY Thursday, 28 May 1992 price of electricity in the future? What financial load subcontractors. The SEC will deny it, but I have seen will be placed on me, my children, my sufficient evidence of it to convince me that it is the grandchildren and all the other citizens of Victoria in truth. Many government agencies employ the next 30 years? The answers have not been consultants. An example is the Coal Corporation of forthcoming. I know there is pressure that the debate Victoria and its proposed takeover of the briquette should be truncated, and I am very disappointed. I opera tions of the SEC. There will be a change of did not believe I would ever be forced into a culture in the Latrobe Valley with new private situation like this where I have no choice but to management at the Loy Yang power station. support what I believe to be the most disgraceful piece of legislation I have ever seen introduced. That is important, not merely for the operation of that power station because we are locked into a Mr PERTON (Doncaster) - When dealing with power price that is relatively expensive compared the Bill, we are looking at the future. I am not talking with some of the other options, but also because it about the strange dealings and the odd structure of will enable us to compare the operations of other the shareholding that provides for 40 per cent power stations. That change of culture will be quite private ownership, 11 per cent ownership by other extraordinary because the workers in the valley will government agencies, and 49 per cent continuing be forced to compete and operate in an environment ownership by the SEC; I am talking about private where private enterprise may be dominating the enterprise entering and taking up roles that have policy-making structures. A greater challenge to the been unnecessarily filled for many years by the honourable member for Morwell and those who Victorian government. make community decisions in the Morwell area --

For a long time in a number of countries private Mr Micallef - You don't know what a power enterprise has operated the energy generating station looks like! industry. The fact that the two final lead bidders for the contract were American indicates the level of Mr PERT ON - I have visited a number of power expertise in the private ownership, management and stations in the electorate of the honourable member delivery of energy services in that country. for Morwell and other places. The Latrobe Valley will have to cope with the effects of reduced It will mean a new culture for Victoria. The employment. It is disappointing that in the Morwell honourable member for Morwell did not refer as area youth unemployment remains very high, and much as perhaps he should have to the cultural the unemployment rate of the parents and questions that will affect his electorate. I am glad he grandparents of those young unemployed people is has given it a great deal of thought. For too long the also high. The community will have to deal with the workers in his electorate who worked for the State problem of the unemployed and general downsizing. Electricity Commission have operated with insufficient scrutiny and have adopted bizarre work At lunchtime today I met with representatives of the practices. Although the management of the SEC has Royal Melbourne Institute of Technology and the delivered greater efficiency in recent years, it has Preston campus of the Northern Metropolitan done so in a way that perhaps has not been to the College of T AFE and local government best advantage of the people of Victoria. representatives to talk about some of those issues. While many opportunities are arising as a result of I know that SEC management claims to have cut the the entry of Mission Energy into the power costs of manpower and the like, but the sad thing is generating industry of Victoria, nevertheless, there that, like so much downsizing that has occurred in are down sides and negatives that this community Victoria, the people who have been made redundant will have to deal with. I express my concern at the tend to be the people who have the greatest value in provision in the Bill that will exempt the contract the marketplace and are able to obtain employment and all matters associated with it from the in other sectors. I notice that the honourable member operations of the Freedom of Information Act. for Morwell is nodding his head to that. The people who have remained in the SEC are the people who I support the amendment that has been would not have obtained jobs outside. foreshadowed by the honourable member for Evelyn. I hope the government will accept it. The The proof that the people who have gone are the two major organisations in this State that have ones that the SEC needs is in the fact that many of operated without the benefit of the Freedom of them have returned in the guise of consultants and Information Act have been State Bank Victoria and LOY Y ANG B BILL

Thursday, 28 May 1992 ASSEMBLY 1905 its subsidiary, Tricontinental Corporation Ltd. I do socialist and the only reason the government is not need to remind honourable members of how entering into this transaction with the capitalists much money those organisations lost. They were from the United States of America is to receive some beyond scrutiny. Another agreement exempted from cash up front. the Freedom of Information Act was an agreement relating to the Portland Aluminium Smelter. The It is an American corporation that is taking control. representatives of the former Department of While I have no feelings of xenophobia - foreign Industry, Technology and Resources who advised investment can often be a good thing - it is a sad the government are certainly aware of the enormous indictment that no Australian company is in a cost imposed on the Victorian taxpayer. position to become the bidder to take over. While there may be an Australian interest -- In terms of the magnitude of the State loss it is probably a small percentage of what this Mr Micallef - Reg Ansett! government has done to destroy the Victorian economy, nevertheless, it is a significant Mr PERTON - The honourable member for contribution. The second aspect I refer to is the Springvale treats it as a matter of mirth. I regard it as desire of the government to achieve settlement of a sad thing and I should have thought his party this contract by 30 June this year. That is a clear would have regarded it as a sad thing that indication that the contract negotiations have not Australian corporations are not in a position to bid been driven so much by the efficiency and benefits for these sorts of utility contracts around the world that can be derived from private ownership and or to take them up in Australia. management, nor by the general benefits of privatisation and generation of electricity, as by the Mr Micallef interjected. desire of this government to receive a cash injection in order that it can produce an election Budget. Mr PERTON - The honourable member for Springvale talks about superannuation funds. They The honourable member for Morwell rightly pointed are not going to solve the problems of this country, out that he and other members of the Labor Party they will not turn the country around. The managers have many reservations about this Bill and the of superannuation funds are inherently transactions surrounding it. Those reservations are conservative. What is needed are Australian shared by honourable members on this side of the business people, Australian entrepreneurs, House in that the early settlement, the requirement Australian engineers prepared to take on the world. of the cash up front to solve this government's Unless you can get a foothold in your own home Budget problems, indicates the deal may not have base you will not get a foothold anywhere. been the best deal for the State of Victoria, but the best deal that could be cobbled together having The honourable member for Springvale laughs and regard to the government's Budget problems. I pay jokes. That is an indication that the Labor Federal tribute to the honourable member for Morwell and government and this government have actually sold his associates from the left wing of the Labor Party. out the people of Australia. I am not just talking They had their ideological agenda -- about this contract, and I am not being critical of Mission Energy entering into it. Australian Mr Micallef interjected. companies have been so battered and beaten down by the policies of this government through taxation Mr PERTON - I use the expression used by the and the recession - the recession the present Prime honourable member for Narracan, that is, they Minister said we had to have - that nobody is in a managed to screw down the decision makers of the position to take up the fight. Labor Party. They screwed down the Premier so that she had to not only back away from privatisation, Young engineers studying at the Royal Melbourne but has even managed to stand on her head and Institute of Technology, the University of Melbourne avoid the use of the word "corporatisation". I pay and elsewhere ought to be able to become tribute to the honourable members for Morwell and employees of foreign organisations and ultimately Springvale and members of their faction because establish their own businesses that can bid for they have shown that the State Labor government in contracts not only in Australia but also overseas. If Victoria is not the creature of pragmatism it may be we are to be the clever country and to compete in other States. It is still a socialist party that has a overseas Australians must first be able to seek socialist agenda. The Treasurer of this State is a opportunities in Australia. It is a sad indictment that LOY Y ANG B BILL

1906 ASSEMBLY Thursday, 28 May 1992 no Australian company was involved in the Loy government has not been able to fulfil its Yang B process. commitments. The poor state of the government's financial resources will not permit the government Mr Hamilton - We have sold 40 per cent of Loy to complete units B1 and B2. It is important that the Yang B so 60 per cent is still managed by us! people of Victoria are told the truth, but I suspect the government is not making all the information Mr PERTON - The honourable member for available to the public. Morwell shows the benefit of his background in education, but the opportunities for local companies The Loy Yang B Bill has been introduced into the are dismal. In examining the problems relating to Lower House and is being debated today without all foreign ownership in this country we should not be the necessary information. It is a sorry state of affairs prejudiced by ignorant or misinformed people. that honourable members have been told that the Many Australians have expressed concern about the finer details of the sale will be made available later. increased level of foreign investment in this country Later is not good enough. The House is debating the and the diminution of opportunities for young Bill now and all information should be before it. Australians to establish their own businesses, to gain a foothold in the Australian market before taking on The privatisation of Loy Yang B is necessary because the world. When the coalition comes to government of the State Electricity Commission's overwhelming in Victoria and in Australia its taxation policies will debt problems. The commission has a debt in the provide more opportunities for young Australians to vicinity of $9 billion. Some 45 cents in every dollar of accumulate capital and become business people and its revenue goes just to meet the interest charges. entrepreneurs so that they can take up the challenge Based on SEC figures, a level of 40 per cent of privatisation and corporatisation in Victoria. After privatisation will reduce the debt level by gaining experience in this country they can then bid $1.4 billion and will reduce interest costs to about 35 for overseas contracts and compete with the to 37 cents in the $1. That is certainly an Americans, the Canadians, the Germans and the improvement but it would have been a much better Japanese. proposition if the whole power station was sold.

The opposition supports the proposed legislation I express concern about the transfer of ownership of because it has little choice. When the coalition is in the power station within the public sector. The end government the issues of privatisation and result of all that will be that the SEC will retain corporatisation will be considered for the benefit of 49 per cent of the ownership, 40 per cent will go to Victorians not merely as an exercise to defraud the Mission Energy and the remaining 11 per cent will public by cooking up a Budget for the next State be taken over by government authorities. Those election. authorities have not been identified. We do not know who will take up the 11 per cent. The Mr WALLACE (Gippsland South) - The Loy Treasurer said he has received a number of Yang B Bill is an important measure that provides expressions of interest, so perhaps in his response he for a substantial interest in the Loy Yang B power can identify those authorities. station to be sold. The coalition accepts and supports the sale of the power station. In fact, Victoria would The State agreement that will bind the SEC and the be better off if it sold 100 per cent not 40 per cent of government for 30 years includes the jOint venture LoyYang B. agreement; the sale of assets agreement; the completion of construction agreement; the operation The sale of the power station has occurred mainly and maintenance agreement; the power supply because of the broken promises that the government agreement; the coal supply agreement; and the made to the people of the Latrobe Valley before the miscellaneous and services agreement. Honourable 1988 State election. At that time the government said members must be told the details of those it would build four Loy Yang B 500 megawatt units. agreements. The House has not seen them. It is It is important that the people of the Latrobe Valley important that all relevant information be put before and the surrounding area be recognised for their the House before it makes its decision to pass the efforts and hard work over many years in supplying Bill. I understand the opposition has asked for the power to Victorians across the State. Although the agreements but they have not been supplied. I also construction of units B3 and B4 is necessary, since understand that the Minister for Manufacturing and the 1988 election promise the government has had Industry Development said they will be made difficulty in building unit B1. It is a disgrace that the available when the Bill is introduced into the other LOY Y ANG B BILL

Thursday, 28 May 1992 ASSEMBLY 1907 place. That is not good enough. Members of this will flow from it. Many concerns have been House, the House where the Premier sits, should expressed about the matter. Nobody understands have access to all the agreements so that the House the implications of the $570 million deal with can debate the details and understand the full Mission Energy as it relates to the debt of the SEC. significance of the Bill. It is a sorry state of affairs Victorians must be made aware of what will happen that we have reached that stage. to the $570 million. We must be told where it is going, particularly whether it will payoff the debts Greater competition will have Significant economic of the SEC. If that is so, the deal will have enormous advantages for the Victorian economy and will assist benefits for the State of Victoria. However, the the State in being able to sell electricity through the government has not explained where the money will proposed national power grid. The sale of Loy end up although, as I said, all Victori~, especially Yang B is especially important to the Latrobe Valley honourable members, must be informed about that because of the direct and flow-on benefits it will aspect of the deal. produce. Other organisations and businesses will be attracted to the area. Only a few days ago one of the Another aspect of the deal that looks particularly soot-blowing companies moved into Morwell. fishy and is of grave concern is the government's insistence that the Loy Yang B sale hinges on the Mr Perton - What's that? initial $570 million being paid by 30 June. I refer to comments made by John Marsden, a Mr W ALLACE - For the benefit of the Melbourne-based economics consultant, that appear honourable member for Doncaster and other in yesterday'S Age. All honourable members should honourable members who may not be aware, a be concerned about the comments: soot-blowing company is associated with the process of cleaning chimneys. It is an important Across the entire output of Loy Yang B, the cost penalty process that can save $30 million in the SEC's facing Victorian industry and consumers is therefore at operation. A New South Wales company, Diamond least around $100 million each year for the 30 years. Power (Aust.) Pty Ltd, which is well equipped to operate this process, moved its head office from If that is true, careful consideration must be given to Melbourne to Morwell. That is a Significant what he is saying. The article continues: achievement and benefit to the Latrobe Valley. But the penalties are actually worse, increasing over the When the power station is operating more duration of the contract, since while the contract price advantages will flow to the local community. Other is fixed at 5.4 cents, competitive plants in NSW and businesses will be prepared to come into the area potentially in Victoria will be increasing their and the result will be more jobs for local people. productivity. Local contractors will in their turn inject money into the activities of the area. The result will be of Further in the article he says: considerable benefit to the Latrobe Valley and to all of Victoria. The Latrobe Valley in particular and Mrs Kimer should come clean, admit that it is only a Gippsland in general produce an enormous amount financing deal, and seek urgent special approval from of wealth for this State. the Loan Council for $1400 million. Both the Commonwealth and the other States are likely to agree Mission Energy is a big organisation in the United to such a request ... States of America, where it employs some 19000 people. It has put up an attractive proposal, as did The Treasurer must address the matters that have another American company. As the honourable been raised in the article so tha t honourable member for Doncaster said, many local people have members will know whether they are facts. been kicked in the tail so often that they are sick of trying to get up. As a result the government is Many doubts have been expressed about whether encouraging foreign companies to come into the the proposed sale will be in the best interests of Sta te and get things opera ting. A company like Victoria. Obviously the sale comes within the ambit Mission Energy is likely to bring other operations to of this year's Budget and is important for the the area. government's Budget projections. The transaction is being sealed in haste. Honourable members cannot The opposition has reservations about the way the doubt that the government is rushing into government has struck the deal and what benefits something. Here is the biggest deal associated with a LOY Y ANG B BILL

1908 ASSEMBLY Thursday, 28 May 1992 public operation that has ever been undertaken in and the Shire of Traralgon. This is the first time such this State. We must be careful about how we go an arrangement has been entered into and about sealing the deal. The people of Victoria should honourable members should be examining it. The be taken into the confidence of the government. government has not taken the matter into consideration; it has not discussed it with The government obviously has something to hide. representatives of local government, which is most Mission Energy seems to be intent on floating part of unfortunate because they are the people in the hot its purchase on the market, and it has said so in the seat. recent past. The arrangement to float part of the purchase should be explained so that honourable I suppose we can expect the councils to have members know just what is going on. If that is the conflicting views about the matter; and I am arrangement, its impact on financial institutions concerned that they have not been consulted. The should be considered, as should its implications for Victoria Grants Commission should fully examine the stock exchange. If a similar arrangement were to the concept of revenue sharing for local government; be entered into in any other area, very careful that should be one of the commission's guidelines. investigation would be taking place into what is happening. A number of amendments will be introduced by the opposition. The 30 June deadline is critical because The government must explain whether the sale of the government is strapped for cash and in financial part of Loy Yang B will have the effect that the trouble. It is trying to fund the whole operation subsidy trust will be terminated and will transfer the through other means, which is pretty poor. The Bill responsibility for meeting the $250 million a year is a big proposal. We do not understand the whole subsidy to the SEC. One of the major concerns procedure; and it is a sorry state of affairs when we expressed has been that honourable members are are given such a short time to debate the Bill. I hope being asked to pass the Loy Yang B Bill despite not the Treasurer will be able to answer all the questions having much of the essential information available asked of him by the opposition during the to them. As I said, this is one of the biggest Committee stage. transactions ever undertaken in this State. If it were being undertaken in the private sector, it would I hope Loy Yang B proceeds and that we find have been investigated by the stock exchange, the answers to the numerous problems. The first thing Australian Securities Commission and, of course, the we must consider is how the Bill will affect not only Federal Foreign Investment Review Board. Such the people who live in the area but the people who matters must be considered. live elsewhere, because it will affect all of us.

The SEC will have to pay a certain amount to I will be listening with interest as the Bill is Mission Energy for the power it will provide and discussed clause by clause, because I am seeking some arrangement must be made about the supply many answers. of brown coal. Many aspects of the Bill are still up in the air. Parliament is effectively being asked to pass Mr EV ANS (Gippsland East) - In some respects the Bill and allow the transaction to be completed I echo the comments of the honourable member for not knowing what deal is in place. Narracan. I first visited Yallourn more than 60 years ago when the open cut was a very small hole Some disturbing procedures are provided for in the compared with the massive holes that have been Bill. I am concerned about the reference in clause 31 dug in the Latrobe Valley since then. to the Freedom of Information Act. The provision suggests to me that the government has something As a small boy I was intrigued by the mechanisation to hide. employed at that stage, which had a part to play in the admiration that I, as a Gippslander, had for the Honourable members must try to consider all the role the SEC was playing in the development of the matters that will be affected by the Bill. One that State. concerns the people of Gippsland, particularly those in local government, is the exemption from paying Over the past 31 years I have passed through the municipal rates, as provided by clause 25. Mission Latrobe Valley perhaps a couple of times a week and Energy will be required to make an ex gratia have watched the development of the SEC. I was the payment, to be shared between the three immediate Chairman of the Public Works Committee when the councils, the City of Morwell, the City of Traralgon prospect of developing a new power station at Loy LOY Y ANG B BILL

Thursday, 28 May 1992 ASSEMBLY 1909

Yang was first referred to it, so I have a long for competition. You cannot import electridty, so association with the development of the SEC in the that is obviously an ideal place for a power base and region, albeit at arm's length. an ideal place from which to make demands on the system. If you cut off the power everybody in the One point which concerns me and which has not community soon comes running to their local come out in the debate is the enormity of the members saying, ''Let's sort out this problem". Over situation in which we find ourselves. The Latrobe the years I have said that if the community is to take Valley contains one of the most amazing deposits of on the trade union movement the power industry is brown coal anywhere in the world. If we did not the place to take it on, because everyone suffers know about it and discovered it tomorrow we when it is disrupted. would believe we had found a bonanza. It is all very well to expect a few people in the The SEC has been an effective and efficient community to bear the burden of taking on the organisation, producing electricity and distributing industry, but one of the great things done by the it throughout the State. The commission has Queensland National Party government led by Joh operated as a monopoly, it has an assured market, it Bjelke-Petersen was to take on the electridty unions, has no competitors, and it does not have to export which is one reason why Queensland is not in the anything or compete with exports. Yet despite all of mess Victoria is in. The government is no longer the those advantages, which ought to make it one of the servant of the people. Through the Bill it has become best economic units in the country, it is unlikely to the master of the people. survive because of the situation we have allowed to develop. The government is threatening the House, saying,"Give us a blank cheque so that we can enter That is not the fault of the SEC; it is the fault of the into an agreement with this organisation or the system. I refer to the remarks made by the whole power generation system in this State will honourable member for Morwell, and I begin by come to a standstill. Unless you agree, we will not be paying tribute to him for sitting through the entire able to meet the obligation we have to make this debate; he is the only member of the government country prosper". who has done so. I agree with the comments of my colleagues that this I respect him for that, but I deplored his attitude is a half-baked proposition. A few months ago I had when, with his hand over his heart, he said, ''My the opportunity of talking with a member of union, right or wrong" - that is what he said - Barclay's Bank in London, who had had a great deal "and to hell with everybody else!" He did not say to do with the privatisation of the electridty system the latter, but he may as well have said it because in the United Kingdom. I asked him specific that has been the attitude of the union movement questions about the concept of corporatisation over the past 30 years -''To hell with everyone else. because as a member of the Public Bodies Review So long as you're in the union, you're all right". Committee I had been trying for 12 months to understand what various people meant when they That is the very attitude that has led to the talked about corporatisation. It seems to be some extraordinary situation where a monopoly with sort of compromise between a government-run some of the best resources anywhere in the world is enterprise and a private enterprise, but nobody unable to survive because of the way it has been run seems to know how it is supposed to function. and because of government interference. However, nobody seems able to tell me how it is supposed to function and after 12 months I am On the one hand the government has said, ''We have afraid the Public Bodies Review Committee does not to keep the lid on electricity prices because we seem to have come up with any response to that would become too unpopular if we increased them". matter. But on the other hand the Industrial Relations Commission or its predecessor, the arbitration The gentleman I referred to made it clear to me that commission, has given in to every demand made by he did not believe it was possible to have any sort of the electridty unions. hybrid organisation between private enterprise and government-run organisations. He did not believe The ideal place to gain power in any country is to any system could possibly survive in which a get hold of the resources in that section of government had any veto over commercial decisions. government business where there is no opportunity LOY Y ANG B BILL

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I pointed out to him that one of the major benefits of selling-off of the farm in the early 1970s in Australia our Victorian system was that we had uniform was nothing to what is occurring in Australia today! electricity tariffs across the State. I am apprehensive that this legislation may ultimately lead to a change The Bill is the government selling off the farm. in that situation. I pointed out that it was a political Speakers from the opposition side of the House have decision and questioned whether that sort of expressed their disquiet about the way the Bill has situation could be met in a private enterprise been presented to the House, about the time that has arrangement. He assured me that it not only could been allowed for consideration of the proposal and be met but was being implemented in the northern about the amount of trust we are being asked to put Scottish electricity arrangements. in the government to enable it to complete the agreement. The opposition, however, will not Part of the privatisation deal in northern Scotland is oppose the passage of the Bill because it realises that that the authority provides electric power to the it is necessary and understands the benefits that can Shetland Islands at the same price at which it is flow to the Victorian community from available in Scotland. The gentleman argued that, in corpora tisa tion. establishing circumstances under which government enterprises such as power generation bodies could I agree with the honourable member for Gippsland be privatised, those sorts of arrangements could be East that organisations must be either corporatised embodied in legislation and if private companies or privatised - they are either government took on such arrangements they did so in the full instrumentalities or trading enterprises! I do not see knowledge of the situation. the possibility in the future for a genuinely successful government trading enterprise in As that gentleman said, many requirements with Australia or in the world. Those organisations may which private enterprise organisations must comply be successful in relation to their previous are already laid down by governments. There are all performances but will not be successful relative to sorts of regulations. He said it was no different in genuine privatised trading enterprises. effect from laying down requirements that an instrumentality or organisation should provide I am pleased that the Treasurer is at the table and electric power at uniform tariffs to all its consumers. has listened to the debate. I think he was treated That relieved me of many concerns I had about unjustly this afternoon. The Treasurer should be privatisation, but I admit I am not confident that the paid proper tribute for his part in bringing the Bill current government would make those sorts of before the House. It is known widely in the arrangements. community that the Treasurer was rolled in Cabinet and that the Bill before the House was presented to The honourable member for Narracan reflected my the Labor Party caucus by Cabinet as a lOO per cent anger about our being placed in this situation. sale of Loy Yang B. However, the Treasurer Gippslanders have always had great pride in the convinced the caucus to overturn the Cabinet State Electricity Commission and believe that had it decision. He is an extraordinary person and tribute been properly managed it would not have had a should be paid to his abilities; he should be decision imposed on it from outside and could have acknowledged as not typical of the Labor Ministers continued to serve Victoria for generations to come. I we have seen over the past 10 years. have no doubt this Bill represents the first step down the road to privatisation and that within the The Treasurer does not make extravagant claims. He foreseeable future the SEC will no longer exist and has introduced an important Bill enshrining an our power will be provided by private electricity important principle but he made no mention of that supply organisations. in his speech and treated it as if it were any ordinary Bill. The Treasurer did not blow his own trumpet Mr TANNER (Caulfield) - There is a saying that about his role in bringing the Bill before the House. we live in strange times - strange times indeed! Over the generations people have understood that It is now incumbent on the Treasurer when replying saying to be a truism. Honourable members may to the contributions that have been made today to remember that 20 years ago the Australian Labor answer the queries of honourable members and give Party protested the selling-off of the farm that they an undertaking that during the Committee stage of alleged was then taking place. One can see how the Bill he will make further detailed explanations things have changed in 20 years - the alleged on the concerns that have been raised. LOY Y ANG B BILL

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I remind honourable members of what the Premier equivalent are paid, there is provision for has said on at least two occasions in this House. On guarantee removal and that dividends are 7 April, during question time, the Premier said in determined on an after tax and commercial basis; rela tion to this issue: the revenue base of the Budget is strengthened. I look forward to the debate about some real issues. The government and the Treasurer have been forced into the corporatisation of government trading The Premier said that the opposition had to face up enterprises, much to the embarrassment of their to a proposition that would be spelt out carefully. Labor Party colleagues, because of the current Later during the same question time the Premier financial crisis. This blundering government has said in a similar vein: made numerous mistakes over the past 10 years and the State is almost bankrupt. The government is I look forward not simply to the questions and answers unable to fund the completion of Loy Yang B3 provided in this House ... but also to a proper debate and B4 because of the mismanagement of the State's about the direction of the power industry in Victoria. finances.

It is to the government's discredit that the In the previous Parliament I was a member of the honourable member for Morwell is the only Natural Resources and Environment Committee government member who has spoken during the when it conducted an inquiry into the future power debate. How can Parliament have a debate when generation requirements of Victoria. It concluded only one government member is willing to there were three possible principal options: the contribute to it? I hope the Treasurer and other completion of Loy Yang B3 and 84; the development members of the government will participate in the of a power station sited in Oaklands, New South debate during the Committee stage. Wales, built and operated by Mitsubishi and CRA Ltd; and the extended use of natural gas. Mr Gude interjected. It is appropriate that the honourable member for Mr TANNER - The Deputy Leader of the Footscray is present in the Chamber because when Opposition says by interjection that government he was the Minister for Industry, Technology and members are ashamed. They are certainly Resources he was responsible for signing the heads embarrassed. of agreement for the construction of Loy Yang B3 and 84. The government is divided over its corporatisation and privatisation policies, and by embracing the Mission Energy, an overseas firm, is bailing out the reorganisation of the SEC the government believes it State by agreeing to the $1400 million contract price. has a corporatisation policy. In different The opposition has no qualms about the efficiency or circumstances time would tell whether the integrity of the company that the government has government's proposals would work. However, chosen as a partner in the venture. However, it is time will beat the government because its term of incumbent on Mission Energy to introduce efficient office has almost expired. This disgraced work practices into the operation of the SEC because government is introducing an important reform of those efficiencies will flow on throughout the SEC the public sector in its death throes. and to other public sector agencies.

The Treasurer has said on many occasions that the Victorians live in strange times when a Labor government will introduce major reforms of government is introducing proposed legislation to government trading enterprises. In fact, in a media sell a public utility. It is ironic that it will be an release dated 23 March the Treasurer states: incoming coalition government that will ensure the economic benefits emanating from the agreement ... the reforms would create an environment where: will flow on to all Victorians . a commercial relationship exists between the Mr A. J. SHEEHAN (Treasurer) - I thank (owner) government and the GTE; honourable members for their contributions to a appropriate commercial reporting arrangements Significant debate. such as the business plan process are established; Motion agreed to. the financial arrangements are made consistent with commercial practices so that taxes or BUILDING CONTROL (FURTHER AMENDMENT) BILL

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Read second time. the State. Honourable members will be aware of the honourable member's other responsibilities in Ordered to be committed later this day. respect of subordinate legislation and his regular reports to this House regarding such matters. Message read recommending appropriation. The concern of the Camberwell City Council was Committed. twofold: it was, first, a concern as to the form of the legislation. Form questions are usually easily dealt Committee with. I suggest to the Minister that while the Bill is between here and another place he consider the Clause 1 desirability of an amendment to the local government legislation so that the amendments Progress reported. relating to local laws are enacted in the local government legislation. The Minister might discuss Sitting suspended 6.30 p.m. until 8.3 p.m. that with the Minister for Ethnic, Municipal and Community Affairs in the other place. BUILDING CONTROL (FURTHER AMENDMENT) BILL The argument is that the 210 municipalities, town clerks, shire secretaries and building officers regard Second reading a Local Government Act amendment planted in the Building Control (Further Amendment) Bill to be Debate resumed from 9 April; motion of inappropriate; it should be made in the Local Mr McCUTCHEON (Minister for Planning and Government Act. My suggestion is for the Minister Housing). to examine whether an identical amendment should be made to the Local Government Act to enable Mr MACLELLAN (Berwick) - The opposition those who are concerned to know the powers and supports the Building Control (Further Amendment) responsibilities of and the opportunities for local Bill. The purpose of the Bill is to secure the government in this State have only to turn to the implementation of the Building Code of Australia Local Government Act rather than having to turn to and to ensure that contradictory local laws passed another Act to discover, perhaps too late, that a local by municipal councils are not an effective abatement law has been made which is inconsistent or which of the uniform approach of the building code. attempts to occupy part of the field of building control and is struck down by the Building Control That matter was raised with the opposition by the (Further Amendment) Bill. City of Camberwell at an early stage prior to the introduction of the Bill, in reaction to a circulated Those in the building industry - and that draft. The opposition should put on record its encompasses a vast number of people - and commendation of the process that the Minister has perhaps the local government industry will be been using for the consultation on building code looking to the building control legislation, and those matters. It has been a successful consultation with solely in the local government industry will be both industry and local government, and it has looking to the Local Government Act. It is perhaps answered many of the questions that may otherwise unusual but nevertheless a justifiable approach that have been raised by local government and others in the same amendment should be inserted in both the building industry. I particularly refer to the work pieces of legislation to enable both groups to be alert of Kim Lovegrove. I thank the Minister for the to the implications that are being adopted in this Bill. number of opportunities that he made available to That deals with the form question. the opposition to consult with Mr Lovegrove on building control proposals. The substantive question raised by the City of Camberwell - and consequently upon their raising The Bill relates to the local laws of municipalities, it a number of other municipalities have reiterated the adoption of the Building Code of Australia and their stance on the matter - is that it believes it is Parliamentary scrutiny of building code matters. I inappropriate that local government's ability and have had a private conversation with the honourable general competency to enact local laws should be member for Murray Valley who intends to abated and that there are reasons why they should contribute to the debate and will refer in particular be able to make local laws on building matters that to Parliamentary scrutiny of codes as they apply in are not at the time covered by the building code or BUILDING CONTROL (FURTHER AMENDMENT) BILL

Thursday, 28 May 1992 ASSEMBLY 1913 the regulations made subsequent to the passing of buildings and renovations in various municipalities this legislation. That situation is a significant matter and States. of substance. When I checked with the City of Camberwell to obtain illustrative instances of its The opposition supports the view put by the point, it referred to the desirability of local laws government with some vigour that the code should controlling, say, the erection of high fences on the be adopted in all States and Territories; and from street front of properties. that national approach some economies will be achievable by the building industry. It has been Two issues flow from that: firstly, if it is the safety of reported to me by Victorian builders that if they the construction of the wall or height of the wall, were able to build twice in anyone municipality - obviously that is a building control issue and should in other words, if they could build on lot No. 1 of a be handled as such. Secondly, it can also have subdivision and on Lot No. 200 of a subdivision - another aspect, namely, an aesthetic or town houses that were of exactly the same deSign, without planning aspect. In other words, many going through all the necessary steps demanded muniCipalities, for aesthetic and town planning under the building control regulations, on reasons, do not want streets that are like the Berlin paperwork alone they could save about $5000 on Wall with successive high fences. construction of the second house.

It is the opposition's view that, where councils have The reduction in the paper war involved in the those concerns and where they cannot meet those construction of a house which has already been concerns any longer with local laws, they should approved within a municipality and which is built make amendments to their planning schemes. The as a second example to exactly the same plans and issue of substance is a town planning one and one specifications by the same builder with the same that the opposition concedes ought to be a matter for computations, could lead to a saving of as much as amendment to the relevant town planning scheme, $5000 to the house purchaser. whereas the safety and construction issue of a front fence or of a building should be a building control On the question of affordability those savings are issue. important - they are important because they make affordable housing available to people across When you have that distinction in mind you can see Victoria. We can no longer have separate that the form issue is dealt with perhaps by an regulations, approval systems and variations - and amendment to the Local Government Act mirroring perhaps unnecessary or unwelcome variations - the amendments before the House in the Bill. The increasing by a series of subtle distinctions the cost substance issue is perhaps best handled as a town of the construction of buildings. But, of course, planning issue by the amendment of the town consequent upon that approach there is a need, as I planning scheme relevant to a particular am sure the honourable member for Murray Valley municipality. will make clear, for vigilant Parliamentary scrutiny of the regula tions. The opposition supports the fourth provision and purpose of the legislation, the adoption of the Indeed, clause 5 contains such provisions. I Building Code of Australia. We agree with the compliment the Minister on his second-reading government and other State governments that a speech, which quite appropriately goes into some national building code is appropriate. To put it in detail on those matters; namely, the Building Code colourful terms: it is said that Europe is better able to of Australia and the proposal regarding local laws. bring in one united set of regulations than are the Australian States. Perhaps it is that Europe is further There is also a town planning aspect. I turn briefly to advanced in trying to introduce a national market the subject of a recently released proposal from the approach than we are in some of the areas where we Minister regarding the Victorian code for residential have different rules applying in different States and, development of multi-dwellings. The government's indeed, different rules applying in different approach is to impose from a central decision of the municipal districts. State a residential code throughout the State. Those proposals are welcome on the one hand but, on the The building industry cannot cope any longer with other hand, they are cause for some reservation. the cost increases consequent upon the variation­ and the minute variation on occasions - in the rules The reservation is the result of rules that may not be applying to the construction of new houses, appropriate in some residential areas being imposed BUILDING CONTROL (FURTHER AMENDMENT) BILL

1914 ASSEMBLY Thursday, 28 May 1992 across the board. The coalition believes we should opposition's view that if it is to be renewed it should aim for diversity of style, living standards, and size be clarified to specifically exclude the high costs that of house, and one has only to look at today's Age - are inflicted on multi-unit development. The or perhaps it is more correct to say yesterday construction of inner-suburban housing is seriously morning's Age because honourable members may prejudiced by the excessively high costs inflicted as a have had the privilege of reading that newspaper result of the building industry agreement and the before the House rose at 3.35 a.m. today - but in constant pressure applied by building unions that either today's or yesterday's Age, Mr John Stevens have sought quite artificially and arbitrarily to makes the point that it is his view, although perhaps inflate building costs. it is other than a personal view, that the Victorian code for residential dwellings does not go far We now face the position where the cheapest and enough. It is too concerned with allowing a series of most affordable housing is sprawl housing built on discretionary powers to municipalities. the outskirts of new estates, and the most expensive and up-market housing is renewal housing in Diversity is a better approach and is favoured by the existing areas where we must make every effort to coalition, although apparently it is not an approach use existing infrastructure. The State is broke that is at the centre of the government's attention, because of the mismanagement of the government but diversity of outcome as to the size of the house, and there is no prospect of a Federal government density of housing, affordability of housing and relenting sufficiently to allow the States to borrow price are all important aspects. the funds necessary to establish infrastructure in new areas. Town planning systems across municipalities should allow approved uses that are subject to design or We face the twin pressures of having to make the aesthetic controls, so that a federation-style street most of the infrastructure we have with the building will not be blighted by the erection of a house that industry agreement we have, which frustrates and may not fit the streetscape but at the same time, with stifles development. I put the government on notice a little design care, a higher density may be achieved that it is the opposition's view that that agreement to produce, again, diversity - an opportunity for should not be renewed unless the unions are people in different lifestyles, those who have prepared to concede that lower rates - the sorts of children, and those who no longer have children lower rates that apply to construction by contractors living with them at ho; ,le. It must also be of individual houses on the outskirts of remembered that the size, shape and description of Melbourne - should equally apply to the the traditional family - the husband, wife and three construction of housing undertaken in the settled children - is no longer applicable to the majority of areas of Melbourne and the rest of Victoria. our housing needs. Those diverse outcomes are to be welcomed. The work done in the consultative It does not happen only in Melbourne; the same process by the Minister for Planning and Housing problem applies to a lesser extent in some provincial and his Ministry has been largely successful and cities and townships of the State, although there are welcomed. The opposition welcomes those fewer union influences and perhaps less serious outcomes and that approach, which allows for pressures of high costs. I shall illustrate that point. If diversity. the Urban Land Authority has a building project on the outskirts of Melbourne, perhaps at Hessell Road, By providing where regulations can be made the Bill across the road from my electorate, the cost of laying allows them to occupy the field, to use a legal two bricks together will be approximately 42.5 cents, constitutional phrase. It is appropriate that where but when the same bricklayer lays two bricks on a regulations are made and approved for operation in multi-unit renewal development on an Urban Land Victoria under the Building Code of Australia they Authority project in an inner suburb of Melbourne, should occupy the field and not have to run the say at the corner of Wellington Parade and Punt gamut of inconsistent local laws that might produce Road, under the building industry agreement the a variation leading to additional cost, inconvenience cost will be 66 cents. and doubt in the minds of people who wish to participate in the building and development One has only to consider the cost difference between industry. the 42.5 cents and 66 cents to know why inner city living and renewal housing is the privilege of the The building industry agreement is due for rich, the childless, and those whose children have renegotiation in October this year. It is the grown up. That is why families that are perhaps BUILDING CONTROL (FURTHER AMENDMENT) BILL

Thursday, 28 May 1992 ASSEMBLY 1915 most in need of affordable housing are doomed by I shall provide the House with an illustration. For this government to live on Urban Land Authority instance, many years ago a house would be developments and private estates on the outskirts of constructed to imperial measurements. One can Melbourne. If we look to the Urban Land Authority present a good argument for an exemption to apply by way of an institution or authority that is to allow for imperial measurements to be used if providing the same framework we can see that the rebuilding or renovating rather than imposing a outcomes are vastly different. metric measurement. If you are left with an imperial measurement bath outlet in your bathroom after you A one-bedroom apartment near the corner of Punt have removed a rusty bath it seems sensible that an Road and Wellington Parade costs $120 000 and imperial measurement bath be installed in it rather upwards. For far less than that one can buy a than having to fake it with tiling to meet a regulation. three-bedroom house and land on an estate at Hessell Road in the City of Berwick. That gives some indication to honourable members of the sorts of things that might be done at an Is it any wonder you find the families with children ordinary level. Then again one can say that Wlder living on the sprawled estates on the edge of the building regulations there is a requirement for Melbourne while the retired, childless or couples half-flush toilets, a water conservation measure that whose children have grown up live in apartments is imposed across the board. I can think of a number built as urban renewal projects in the settled areas of of people who gather water from the roofs of their Melbourne? The opposition finds that outcome houses. They do not have access to public water unsatisfactory. The work of the Building Control supplies and water conservation is simply not (Further Amendment) Bill will be frustrated and relevant. If people want to have full-flush toilet offset by the building industry agreement being systems, there should be a ready and low-cost renewed without an agreement from the unions that process of having to have the regulations lifted so they will not press to include within it higher cost that that can be done. If building regulations are rates, urban renewal and residential projects that are imposed without a low-cost exemption process taking advantage of existing infrastructure. being available, far more serious costs may be imposed will I now turn to clause 5 of the Bill, which amends section 27 of the Building Control Act 1981 to For many years exemptions have been allowed, and provide that all amendments to the Building Code of the process has been well handled. With the coming Australia made after this Act comes into operation into operation of the Australian Building will be subject to the scrutiny of Parliament Wlder Regulations that exemption system must be section 32 of the Interpretation of Legislation Act retained; it must be kept at low cost and it must be 1984 and will be liable to disallowance under section kept readily available. In the view of the coalition, 6(2) of the Subordinate Legislation Act 1962. The that is an essential aspect of the outcome of lower amendment makes it clear that any disallowance cost housing, lower cost renovations and better will relate only to the adoption of the provisions of building outcomes. the code by the building regula tions. A whole range of controls including heritage I now refer to the exemptions from the building controls exist in the planning schemes. Those regulations. Victoria has had a long and responsible variations will Wldoubtedly continue for many years tradition where people who seek variations to the Wltil we adopt a metropolitan-wide approach to building regulations have been able to obtain planning rather than a municipality-by-municipality exemptions from the building referees. For many approach. We may never get to unifonn planning years that system has achieved outstanding results, but we can be part of the national building market. and I commend it. No instance comes to mind where We can have the economies of scale that arise from a there has been an unhappy outcome as a result of national building market approach and still have the those exemptions. The exemptions have been opportunity Wlder the building referee exemption responsibly given. They have aided the building system to be able to respond to individual industry and assisted in architectural innovation, challenges involved in building, rebuilding, better design and utilisation of better opportunities renova ting and changing the uses of buildings in both the renovation of existing buildings, the throughout Victoria. conversion of buildings to other uses and the construction of new buildings. The opposition supports the Bill. I am sure the honourable member for Murray Valley will speak on BUILDING CONTROL (FURTHER AMENDMENT) BILL

1916 ASSEMBLY Thursday. 28 May 1992 the last clause and other matters arising from the the same work merely because it is being done on a legislation. Clause 5 and the provisions enabling site that is within settled urban areas and is a people to be exempted from the regulations should renewal project involving more than one residential be sufficient to create a workable situation for the unit. industry. Regardless of whether a project involves The concerns of the municipalities who have dual-occupancy, medium-density or high-density supported the views of the City of Camberwell can housing, there is simply no reason why the rates of be accommodated by speedier amendment to payment for bricklaying, plumbing, tiling, electrical planning schemes in order to take up aspects which work and a thousand other inputs into the building might be described as design matters, that is, local operation should be paid for at the same rates that laws or rules governing the height of fences and might apply to a high-rise building, if such housing other issues appropriate to the legislation. were still being constructed.

We can meet the objective of having building Fortunately, the government seems to have run out industry legislation to which the building industry of puff in respect of the cranes of Melbourne, which itself can turn with confidence as a guide for them in were either related to the hot flushes of the former their work. By adopting an amendment I suggested Minister for Planning and Environment, who can in my earlier remarks, we could achieve a local now be described as the former Treasurer and government law which is comprehensive and useful current Leader of the House. Every time he saw a to municipal government and those who work crane in Melbourne he seemed to get a hot flush and within it. approved yet another permit The former Premier saw the cranes as phallic symbols and used to boast The coalition believes this legislation is worthwhile, about the large number of them on the city skyline. that the consultations which have led to it have been It turns out that they were building high-rise office useful and well handled, and that Mr Kim buildings that Melbourne did not need. The former Lovegrove has done an excellent job of consulting Premier used to point to the cranes as if they were with industry, community groups and the complete and utter answer to the challenge of municipalities. The seminars he has conducted have town planning in the central business district. been first class. I express my personal appreciation to the Minister for his willingness to allow Almost 25 per cent of the high-rise office buildings Mr Lovegrove to consult with the opposition both in in Melbourne are empty as a result of the respect of this legislation and the approach which misjudgment of this government and its simple has been adopted. I inform the Minister that the failure to warn industry and investors of the opposition supports the Bill. There is bipartisan responsibility they have to their shareholders, their support for the general thrust of the building control superannuation fund members or their life insurance legislation and the direction in which it is going at a policy holders. The money that was ploughed into national level. those unnecessary metropolitan buildings was desperately needed for infrastructure for affordable The exemption from building regulations where housing in provincial, country and metropolitan they are obviously producing nonsensical outcomes Victoria. is an additional strength which the opposition believes Victoria should retain and improve. That The issue is less pressing in country areas because system will create a responsive building industry the building industry is more dependent on and and regulation process that allows for innovation, makes greater use of contractors who do the work architectural design and the production of for competitive and reasonable rates of pay. As one affordable housing. moves closer to the city the influence of the unions, which have been denounced as a result of an If the building industry agreement is simply inquiry in New South Wales, increases and the cost renewed without being changed, we will do no more pressures are greater. It is cheaper to build a than extend for four years to come the cost penalties three-bedroom house on the very outskirts of that are preventing the renewal of housing within Melbourne than it is to take a site within the settled settled areas, particularly settled areas of Melbourne. area of Melbourne where the infrastructure already We would be rewarding unnecessarily and exists and try to provide a diversity of housing inappropriately aggressive unions that are fuelled lifestyles. by their desire to receive higher rates of payment for BUILDING CONTROL (FURTHER AMENDMENT) BILL

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There are many opportunities for renewal within excessive building rates paid under the building existing and settled Melbourne; there are industry agreement. Until that arrangement is opportunities for renewal in our provincial cities stopped Victorians will not get the outcomes they which will simply not be taken up if that building deserve. The coalition government will seek to industry agreement is allowed to counterbalance the balance the books and will push for more building positive provisions of this legislation. Until we get a renewal within inner city areas, especially with the sensible union and until we get a sensible industrial many outdated, closed and empty factories that atmosphere nothing will change. I look forward to could be renewed. The Building Control (Further the honourable member for Hawthorn producing a Amendment) Bill should be directed towards sensible industrial atmosphere in Victoria so that we renewing former industrial areas of Melbourne that will no longer depend on ripping up the fannlands are now empty. of Berwick and Werribee, going beyond Craigieburn and heading towards the infamous Mount Ridley, I turn now to the performance of the government in which I daresay will be rezoned residential within the building and construction area. The government the lifetime of this government, in other words the invested some $50 million of public funds in the next 20 weeks. Bayside project. Today the Minister for Major Projects apologised to the House by saying there The government preaches fine words about a return was no contractual arrangement between the to residential use of the inner areas of Melbourne, Bayside project developer and the government. In but the results are empty city buildings where lights other words, we now have one of the most are being turned on and off on vast numbers of expensive vacant sites within the metropolitan area. floors that are unoccupied for any useful purpose. That $50 million could have prOVided an electric At the same time there are further extensions into train line to Sydenham or Cranbourne or to a dozen the outskirts of Melbourne and houses and buildings communities to allow them to have job are being erected in Werribee, Sydenham, opportunities, affordable housing and so on. Cranbourne and Berwick. The fastest growing areas Unfortunately the government squandered the of Melbourne are not within the existing opportunity; it squandered the money; and it infrastructure. Under this government they have squandered its responsibility to control and work been in the farther reaches of Melbourne. The same towards the proper outcomes. Too late the is also true to a lesser extent in provincial cities. government is adopting the opposition's approach by introducing this Bill. In the dying days of the The rhetoric of the government is not matched by its government, in the last weeks of the Minister's performance. The coalition believes the key issues career-- that face us in the planning, building and building control areas have been ignored by the government. Mr Kennett - His Parliamentary career! The government has failed the test completely. The former Premier, John Cain, boasted about the cranes Mr MACLELLAN - Yes, his colleagues will not on the skyline and was responsible for the crisis of give him a seat. Unfortunately, they could not or confidence in the City of Melbourne. The would not find him a seat because of factionalism Department of Planning and Housing has failed to and divisions within the government. The Minister be accountable for public moneys and has has been outmanoeuvred by his former Ministerial squandered the funds that ought to have been adviser, who will be standing for the seat of Albert invested in infrastructure for young couples who Park at the next election. The Minister will not be on want to marry, build homes and have children. the opposition benches to continue the work that he Those young families will regret the past 10 years of initiated in Parliament. Perhaps he could have Labor government as they commute from Werribee, supported the work of the incoming coalition Sydenham, Cranbourne and Berwick to jobs within government by trying to find low-cost hOUSing, the metropolitan area. Why has that occurred? more affordable housing and better public transport Because the government has not stood up to the instead of squandering the money on the fantasy unions. projects on which the government has spent thousands of millions of dollars without bringing One has only to read the reports in New South about the outcomes the community deserves. Wales to recognise that when the Builders Labourers Federation was clobbered - and that is one good The Bill is a welcome approach but it is too little, too thing the government did - the other building late. It merely follows the disastrous pattern that the unions became new monsters tha t were fed by the government set itself when it decided to become BUILDING CONTROL (FURTHER AMENDMENT) BILL

1918 ASSEMBLY Thursday, 28 May 1992 involved in the VEDC, the Victorian Investment resolved through regulations or amendments to Acts Corporation, Tricontinental, State Bank Victoria and of Parliament. In the building industry several now the sale of Loy Yang B. The government is so significant issues where there is a need to achieve broke and so bereft of opportunities to provide the unifonnity have been brought to my attention. For housing, the jobs and the public transport that instance, a company building removable homes in Victorians deserve that it has had to sell public Yarrawonga for both Victoria and New South Wales assets. As the Minister commits political suicide by has had trouble in the past with lack of unifonnity in falling on the sword of the socialist left because its building regulations between the two States. The members cannot or will not find him a seat, the company makes WorkCare and superannuation government falls as well. The Minister and many of payments in Victoria where it is situated, but when his colleagues will not be here after the next election it transports its removable homes into New South because they do not deserve to be here. Wales it pays another set of fees because of the different method of calculating WorkCare and The coalition welcomes the Bill because it is another superannuation payments within the two States. opportunity to say that the government has failed badly in meeting the needs of Victorians. Another classic example that was recently brought to my attention was of a plumber operating a Mr JASPER (Murray Valley) - I support the business in Albury. He was registered in New South honourable member for Berwick in his comments on Wales and his apprentices were being trained in the Building Control (Further Amendment) Bill. Albury, and he had difficulties operating in Victoria. Although this is a small Bill it contains important For instance when working for the Victorian provisions. The honourable member referred to the Department of Planning and Housing he must pay coalition's attitude to various aspects of the WorkCare benefits for his apprentices when they are proposed legislation. One major aspect clarifies the working on the Victorian side as well as on the New role of the Building Control Act 1981. South Wales side.

In his second-reading speech the Minister for A rebate for WorkCare is provided by the Victorian Planning and Housing said the Bill will achieve government for companies employing apprentices national unifonnity in building regulation and codes working within Victoria. However, because this throughout Australia. He also said the action that plumber is registered in New South Wales he is has been taken in Victoria over a long period has led required to make WorkCare payments for all his towards achieving unifonnity. The Minister referred staff including the apprentices in both Victoria and to the introduction of the Building Control Act 1981 New South Wales and is not able to receive the and the Victoria Building Regulations 1983. Over the rebate for the WorkCare payments for his years building codes have been developed apprentices. That is a typical example of the sorts of throughout Australia but often without the anomalies tha t need to be addressed. unifonnity to ensure that there is appropriate and improved activity in the building industry I welcome the actions that have been taken by throughout Australia. governments in recent years in arranging Ministerial meetings throughout Australia. There are meetings As a member of Parliament who lives along the of Attorneys-General, of health Ministers and of Victorian-New South Wales border I am well aware those involved with the planning and housing of the Significant number of border anomalies industry and the aim is to achieve unifonnity between the two States. In a debate earlier this between the States and the Commonwealth. I sessional period I paid tribute to a former Premier, welcome the Bill because it seeks to provide Sir Rupert Hamer, and to the action he took in 1979 unifonnity in all aspects of the building code when he formed the Victoria-New South Wales throughout Australia. Border Anomalies Committee with the New South Wales government. I explained how over a long Unifonnity in all aspects of living in Australia is period that committee worked to achieve unifonnity needed, especially in areas that border two States, across the border. Since 1979 a significant number of such as in my electorate of Murray Valley. Clauses 3 anomalies have been brought to the attention of the and 4 of the Bill relate to uniformity and the two governments and many have been remedied. adoption of the Building Code of Australia. The second-reading notes provided by the Minister state: Some anomalies have been remedied by action taken by both governments, and often the issues have been BUILDING CONTROL (FURTHER AMENDMENT) BILL

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The Building Code of Australia is a technical document Late last year a plant safety package was developed developed and maintained by the Australian Uniform by the Department of Labour, which produced its Building Regulations Coordinating Council (AUBRCC) own codes of practice and regulations applying to under the authority of a formal agreement between the the building and construction industry. At the same State, Territory and Commonwealth governments. time the government was seeking to produce regulations and codes of practice for the industry. He goes on to say that the intergovernment Many aspects of the government's regulations have agreement provided by the Commonwealth is been deemed by the industry to be draconian but at seeking a tmiform code of practice. least they are subject to review by the subordinate legislation subcommittee. The codes of practice I have been deeply involved in regulation review would not have been scrutinised by the since I entered Parliament in 1976. All regulations subcommittee. produced by the government need to be appropriately reviewed. Bills are put before We must be vigilant to ensure that governments of Parliament for debate, and if they are passed by both all persuasions are not allowed to produce codes of Houses they become Acts tmder which the practice or Orders in Cotmcil tha t are not reviewed government formulates regulations. However, in by the subordinate legislation subcommittee, which recent times governments of all persuasions are is the only body responsible to Parliament for bypassing the Parliamentary system. Bills coming reviewing the actions of governments of all political before Parliament have extensive regulation-making persuasions. powers and this takes away from Parliament much of the debate, development and control of Currently Bills that are passed by Parliament regulations made as a consequence of those Bills. provide extensive regulation-making powers to the executive government and those regulations come We must be vigilant in ensuring that regulations are tmder the scrutiny and review of the Subordinate reviewed frequently. The Subordinate Legislation Legislation Subcommittee of the Legal and Subcommittee of the Legal and Constitutional Constitutional Committee. I strongly support such a Committee was set up to ensure that regulations practice. However, governments are seeking to meet the provisions contained in Acts of Parliament. bypass the system with the development of codes of It is tmforttmate that the practice in recent times has practice and by way of Orders in Cotmcil and other been for governments to bypass the regulation methods. review process. That is particularly so in the building industry which has developed its own In 1989 I attended a conference in London at which codes of practice. extensive discussion was conducted on the issue of governments in the Western World seeking to I have received representations from various people bypass Parliaments and the scrutiny of within my electorate of Murray Valley. One in Parliamentary committees established to review particular is from Mr Richard Underwood, a regulations. The response of governments to these director of Underwood and Underwood, architects matters is that they must meet the demands placed of Wangaratta. Mr Underwood expressed his on them. concern about the development of codes of practice applying to building and construction in the health I welcome the second Part of the Building Control field. I checked the codes of practice developed by (Further Amendment) Bill, which provides in clause Health Department Victoria and fotmd that they are 5, headed ''Parliamentary scrutiny of Building produced by the department and are not gazetted; in Code", that codes of practice will come within the fact, no approval has been given for those codes of purview of the Subordinate Legislation Act. Early practice. last year a major amendment was made to section 32 of the Act. It clarified the posi tion of the section and Mr Underwood's complaint is that he must meet provided, where a particular regulation or code of guidelines set by the codes of practice of Health practice is being put in place, for other documents to Department Victoria, which have no Parliamentary be brought before Parliament. The Bill includes the approval. His concern is that although he can scrutiny provision as it is applied tmder section 32 of produce plans that meet the guidelines set by the the Interpretation of Legislation Act and provides codes of practice, those codes can be changed and that the amendment that was gazetted and received his plans no longer conform. Royal assent on 16 April last year will be included in the proposed legislation, despite the fact that it was BUILDING CONTROL (FURTHER AMENDMENT) BILL

1920 ASSEMBLY Thursday, 28 May 1992 approved on 8 April, which was prior to The second Part of the Bill ensures that building Parliament's passing that amendment to the Act. codes are subject to the scrutiny of the Subordinate Legislation Subcommittee of the Legal and Clause 5 also provides that: Constitutional Committee, as is detailed in the Minister's second-reading speech. The Bill should be Any amendment to the Building Code made after the supported and the government should be commencement of section 5 of the Building Control congratulated on introducing it. (Further Amendment) Act 1992 may be disallowed in whole or in part if each House of Parliament passes a Mr HONEYWOOD (Warrandyte) - My brief resolution in accordance with the requirements of contribution to the debate on the Building Control section 6(2) of the Subordinate Legislation Act 1962. (Further Amendment) Bill is made for two reasons. The first concerns Mr Gough Whitlam and the Section 6(2) of the Subordinate Legislation Act second is related to the word "control" as it appears provides that where it is sought to disallow a in the title to the Bill. This afternoon I had leave from regulation it must be disallowed by both Houses of Parliament to represent the opposition at an ethnic Parliament. affairs function at which Gough Whitlam was a guest speaker. As soon as I saw that almost Honourable members will be aware that the statesman-like figure I was reminded of the reason coalition has been making amendments to most of that I became involved in politics. the legislation passed by Parliament to ensure that disallowance of a regulation may be made by either I recalled that at the age of 12 years I watched my House of Parliament. That recommendation was father, who was a domestic home builder, sitting at made by the Legal and Constitutional Committee in the dining table trying to cope with all the papers its sixteenth report to Parliament. A associated with a range of red tape that had been recommendation was also made by the Standing foisted on the building industry in this country by Orders Committee of the Legislative Assembly that the so-called reformist Labor government. The approval should be given to disallowance of a problems that were created in our family through regulation by either House of Parliament or that the the policies of the Federal Labor government on the regulation should be dealt with within the building industry got me interested in politics, prescribed time and not allowed to expire, as is making me ask what the alternatives were to the detailed in the Subordinate Legislation Act 1962. nightmare that my father was confronted with through the activities of the three brief years of the The Bill contains provisions that have been expressly Federal government administration from 1972 to requested by the Legal and Constitutional 1975. Committee in respect of disallowance of a regulation by either House of Parliament rather than retaining Mr Maclellan - Gough got to you! the provisions of the Subordinate Legislation Act which provide that disallowance must be by both Mr HONEYWOOD - Yes, it was Gough who Houses of Parliament. got to me, I must admit, and it is Gough's fault that I am here today. I trust that the government will take up the recommendation of the Legal and Constitutional I have found that when the word "control" is Committee and the Standing Orders Committee of applied to small business it means more red tape, the Legislative Assembly to provide that where a more resources having to be expended on regulation is deemed to be out of power or where it bookkeeping activities and administration as well as is deemed that it should be disallowed, that coping with such matters as WorkCare and training disallowance can be effected by either House of levies - all the different hurdles, so to speak, that Parliament. are put in the path of genuine small businessmen, particularly builders. The coalition supports the proposed legislation. Based on the review I have undertaken of the Bill, I Builders have a difficult job. They must coordinate a consider it to reflect an excellent move by the building site, whether it be a large commercial or government. The Bill will clarify the situation industrial site, or a domestic site. They must surrounding the establishment of uniform building coordinate the subtrades, the plumbers, electricians, codes not only in Victoria but indeed throughout plasterers, bricklayers and so on. They must Australia. coordinate the work to ensure that the job comes BUILDING CONTROL (FURTHER AMENDMENT) BILL

Thursday, 28 May 1992 ASSEMBLY 1921 together and that a quality project emerges at the This is another record that the government can be cost quoted or, it is hoped, below what was quoted proud of; Melbourne is in the top 10 cities in the so that they can actually make a profit. world with empty office space. One-quarter of the office space in the city is unoccupied. After the Over the years the Labor government has targeted artificial building boom that was promoted by the this particular industry. Another Labor initiative former Premier, the honourable member for was the creation of the building licensing board, Bundoora, we find that the Building Workers which requires all builders to be licensed, for which Industrial Union has decided to enter the domestic they pay large fees. They were not required to pay building trade. It is no longer concentrating on the those large fees in the first year that the board was CBD but is getting out into the suburbs and picking instituted but as each year has passed the licence on the domestic builders, urging them and their fees were increased until they have become onerous employees to become union members. Often these imposts. union people are also members of the deregistered Builders Labourers Federation. There are many disincentives for a young person wanting an apprenticeship to be trained in the I recall my father being physically assaulted by a building trade, which involves genuine craftsman union shop steward because one of the carpenters in ability. A person must be able to join wood, survey, his business did not agree to join the union. It was ensure that walls are in plumb and that the building during a recession and the radical building union is well constructed and architecturally sound. Young members decided that because there was not any people find it impossible to enter the building trade work to be done in the city they would focus on the and that is why so often immigrants are sought who small home builder to make heroes of themselves by have skills that are needed to fill the gap. The Labor signing up new members. That trend is occurring government has placed so much red tape in the way again. We find that John Halfpenny -- of apprenticeships that there is no incentive for builders to take on young people who are the The SPEAKER - Order! I ask the honourable potential craftsmen of the future. member for Warrandyte to relate his remarks to the Bill. The coalition supports the Bill because it is a step in the right direction. Too often the third tier of Mr HONEYWOOD - I can easily do that. The government has impinged upon the regulations that Bill is designed to bring about uniformity come from the Federal and State governments. Local throughout Australia through the Building Code of government wants its share of the cake and it is Australia. Building is a volatile industry. The union inclined to build hurdles. We all know the stories movement has had a great deal of input. about local government building inspectors who cannot resist the temptation to side with clients or to The SPEAKER - Order! The honourable side with builders to the extent of being intrusive member for Warrandyte is well aware that the and difficult, adding extra building costs by provisions of the Bill relate to building codes, not to requiring foundations to be ripped up if they have industrial relations. I ask him to relate his remarks to had a bad day or they believe that a builder has been building control. negative towards them. This is the kind of thing that goes on in the industry. Mr HONEYWOOD - It will bring about an agreement with the BWIU on a tripartite basis that Honourable members should consider the context in will include -- which the Bill appears in the Chamber. The honourable member of Berwick, who was the Mr Roper - That has nothing to do with coalition's lead spokesman, referred to the building building control. boom in Melbourne being at an end. The 3LO news broadcast this morning reported that Melbourne has Mr HONEYWOOD - It has a great deal to do the eighth highest empty building rate in the world. with building codes. I take up the interjection by the A number of American cities and Auckland have Leader of the House. If he is prepared to ring up more empty office space, but 24 per cent of Brian Boyd -- commercial buildings in the central business district of Melbourne are empty. Car parks are not being The SPEAKER - Order! The honourable used because people are not using the office space member for Warrandyte will ignore interjections. I and do not need to park their cars. BUILDING CONTROL (FURTHER AMENDMENT) BILL

1922 ASSEMBLY Thursday, 28 May 1992 ask him to relate his remarks to the Bill or he will not but also for larger commercial buildings. All the be heard. services - and in the building trade "services" refer to plumbing, electrical work and so on - are made Mr HONEYWOOD - The Victorian Building provision for in the concrete walls and panels before Industry Agreement has three parties: the building they are erected. The process is like assembling industry employer groups, the building industry prefabricated kits on site. unions and the State government. I know about that because of my involvement on the opposition task That is causing problems in the union movement force on the building industry. The Bill has caused a because of the overlap with traditional craftsmen's great deal of discussion between those three parties. skills. The Amalgamated Society of Carpenters and Only last week I was discussing the Bill with an Joiners of Australia, which is a conservative union, is advocate for the Master Builders Association. I am concerned about its traditional rights in this area. As therefore relating my remarks to the building code part of the push by the Acru to form super unions initiatives before the House. the Building Workers Industrial Union has been trying to take over many of the responsibilities of Because of the internal politics of the union other unions, particularly those of the Plumbers and movement with John Halfpenny taking Gasfitters Employees Union of Australia. That is responsibility for the building trades from Brian seen as a threat by many shop stewards and Boyd and Trish Caswell -- organisers out in the field.

The SPEAKER - Order! It does not appear to the The mayor of one of my local municipal councils, Chair that the matters about which the honourable Mr Les Wilmott, who is an organiser with the member for Warrandyte is speaking rei a te to the plumbers and gasfitters union, was telling me last provisions of the Bill. I remind and direct him that week about the difficulties caused by these building he must relate his remarks to the provisions of the codes and by the trend inherent in the Bill to try to Bill or I will not hear him further. stop infighting within the union movement over who is responsible for which codes and who is Mr HONEYWOOD - The fact is that this is a responsible for doing different jobs, which in many volatile industry, as I am sure all honourable cases involve multi-skilling. members are aware. The Bill has gone at least some way down the path towards redressing the situation It would be a shame if the Bill were to be seen as in in the building industry that has arisen partly any way encouraging that infighting - which has because of the recession and partly because of the arisen partly because of the lack of jobs and partly politics involved, at least by the adoption of a because of the fight for union coverage and uniform building code for Australia. That provision membership. We have to protect small business is fundamental to the Bill. people, who have struggled for so long and who risk going under, just when the industry looks like If honourable members read the Bill they will see taking off again because of lower interest rates­ that we may be able to redress some of the problems and the stimulus to be provided by a coalition that I have spoken about in my background government. comments to the Bill, and for that reason the opposition will support the Bill. We have to be careful that the infighting in the trade union movement does not hamper the ability of The Bill introduces new controls, and as I have builders to perform without constraints being placed already said the opposition has major problems with on them. It concerns me that the words ''building the imposition of more red tape and controls on a control" are included in the title of the Bill because struggling industry, but at least the Bill is moving "control" usually means the imposition of extra towards uniformity between the States and limiting regulations and more red tape; but as I said, at least the powers of municipal councils to make local laws we are getting uniformity. on building matters. Nonetheless, the three parties involved in the building industry have come We cannot let a situation continue where, for together to develop a code they can support. example, a commercial building project is erected in Box Hill and the builder has to pay his employees a A number of innovations have been introduced into site allowance, above the award, that is different the building industry. We now have new methods from the allowance that would be paid if the for constructing, not only houses and small factories, building were being constructed in MEDICAL TREATMENT (AGENTS) BILL

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Doncaster-Templestowe. Those different site Mr McCUTCHEON (Minister for Planning and allowances are major barriers to builders being Housing) - I thank honourable members who given the incentive to get on with the job. contributed to the debate, particularly the honourable members for Berwick and Murray Currently a dispute is under way at West field Valley, who indicated the coalition's support for the Shopping town in Doncaster-Templestowe, where Bill and made complimentary remarks about it. there is a problem with both internal union politics because of Halfpenny -- I do not need to respond to any particular matter other than the point made by the honourable The SPEAKER - Order! The honourable member for Berwick, which is actually referred to in member should relate his remarks to the Bill, the a letter to the Department of Planning and Housing purposes of which I will repeat in case he has not from the Housing Industry Association. I will quote read them. They are: from that letter of 21 January this year: (a) to limit the powers of municipal councils to make It is a pity that your proposed amendment is not being local laws in relation to building matters; and made to the Local Government Act 1989. This would (b) to provide for increased parliamentary scrutiny of prevent proponents of local laws from even the building regulations; and contemplating building-related matters. In my mind this would be preferable to having the Building Control (c) to remove any doubt about the adoption by the Act containing a section that amends or clarifies the Victoria Building Regulations 1983 of the Building provisions of the Local Government Act. Code of Australia. If he can relate his remarks to those purposes, he is That is a point well made, and at some future stage in order. At the moment it appears that he is not it should be the subject of an amendment to the relating his remarks to either the purposes of the Bill Local Government Act. I thank the honourable or any of the other provisions of the Bill. member for Murray Valley for his remarks relating to clause 5. It is important that Parliament review Mr HONEYWOOD - To conclude, the building any alterations that are made to the code, rather than industry has five principal parties - employers, automatically adopting them - and that is the employees represented by the trade union intent of that particular provision. movement, the State government, the Federal government, which imposes other regulations, and Motion agreed to. local government. Read second time. In the past those five parties have often been at loggerheads. Building inspectors employed by local Passed remaining stages. municipalities have become carried away with their jobs, adopting the trade union line too rigorously, MEDICAL TREATMENT (AGENTS) BILL often because they are trade union members. Introduction and first reading That means sensible building codes cannot be agreed between the parties. Although the current Received from Council. Victorian Building Industry Agreement has given stability to the industry, negotiations are continuing Read first time on motion of Mrs SETCHES between those five parties to the forthcoming (Minister for Community Services). building industry agreement, which will be in place for three years. ENVIRONMENT PROTECTION (RESOURCE RECOVERY) BILL I hope the Bill does something to aid sensible negotiation between all the parties. Otherwise the Returned from Council with message relating to economy of the State, which has been so reliant on amendments. the construction and domestic home building industry, will not be given the impetus it needs, and Ordered to be considered next day. we will witness only an artificial recovery. LOY Y ANG B BILL

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LOY YANG B BILL Mr PLOWMAN (Evelyn) - I move: 2. Clause 5, line 11, omit "or to the effect of". Committee The clause currently reads: Resumed from earlier this day; further discussion of clause 1. The Minister is authorised to enter into an agreement in or to the effect of the form set out in Schedule 1. Clause agreed to; clause 2 agreed to. As I said during the second-reading debate, this is a Clause 3 fundamental amendment in that the opposition holds the view that Parliament should never be Mr A. J. SHEEHAN (Treasurer) - I move: asked to endorse, agree to or approve an agreement that is not a complete agreement. The current clause 1. Clause 3, line 21, after "acquisition," insert "use,". 5 asks the Minister to enter into an agreement that is 2. Clause 3, page 3, lines 31 to 35, omit the definition of rather like the agreement set out in Schedule 1. We "subsidiary" and insert - believe it is quite improper for a Parliament to be asked to do that. The amendment will authorise the ""subsidiary", in relation to the Commission, Minister to enter into an agreement in the form set means a company of which the Commission out in Schedule 1. The Parliament should be able to would be the holding company within the come to an agreement on this when the Bill passes to meaning of the Corporations Law of Victoria if the the other place because there will be some other Commission were a company within the meaning amendments to the schedule before that happens. of that Law;". Mr DELZOPPO (Narracan) - I should like an We are asking the Parliament to authorise and agree explanation from the Minister as to the force and to the Minister entering into a specific agreement, effect of the words he proposes to insert into the not to an approximation of the agreement. clause. Amendment agreed to; amended clause agreed to; Mr A. J. SHEEHAN (Treasurer) - Part of it is the clause 6 agreed to. use of works on sites, so we are adding the word "use". Clause 7

Amendment agreed to; amended clause agreed to. Mr PLOWMAN (Evelyn) - I move: 3. Clause 7, lines 23 to 27, omit sub-clause (3). Amended clause 3 recommitted. When examining this clause the coalition received Mr PLOWMAN (Evelyn) - I move: advice to the effect that the subclause is so general that it would be very hard for any court to interpret 1. Clause 3, page 3, after line 35, insert - its effect; therefore, we felt the subclause should be "statutory body" means a body corporate omitted unless we were persuaded otherwise. In established by an Act for a public purpose or a discussions with the coalition the government body corporate all the shares in which are owned, indicated that it felt the same way and had no whether directly or indirectly, by or on behalf of a objection to the opposition removing the subclause body corporate so established or the State; from the Bill. However, we have received advice from a government adviser that the SEC has some This amendment adds a definition of statutory body problems with our removing it, so rather than to which a later amendment refers. At the moment proceeding with the amendment I will seek leave to the Bill has no definition of a statutory body; withdraw it. therefore, the acceptance or rejection of this amendment will test the acceptance of a second That will allow discussions on whether the amendment. subclause should stand while the Bill is between the Chambers. If we are not persuaded, the government Amendment agreed to; amended clause agreed to; and the coalition will agree to withdraw the clause 4 agreed to. subclause when the Bill reaches the Legislative Council. Clause 5 LOY Y ANG B BILL

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Amendment withdrawn by leave. relate to possible trade union activities. Clause 4.1 states in part: Mr CLARK (Balwyn) - I support the concern expressed by the honourable member for Evelyn If any goods or services for the purposes of the Project regarding subclause (3) of this clause. The subclause are required to be supplied to SECV, the Participants or provides that: the Operator by any agent or instrument of the ... State ... the State will, if requested to do so ... endeavour to A person must not to anything that interferes with or procure the timely supply of those goods or services by derogates from the operation or implementation of the the relevant agent, instrument, statutory body or State Agreement or the ability of the parties to the State Council ... Agreement to exercise rights, or discharge duties or obligations, under the State Agreement. That could apply, among other things, to the supply of coal to the project. If trade unions were to impose When I first read the proposed subclause the note I some industrial ban, limitation or strike on the made in the margin of my copy of the Bill was supply of coal it would seem to fall squarely under "anti-strike clause". That is what occurred to me as clause 7(3) of the Bill. I should have thought that, the most practical effect. The preceding subclause particularly for a government of the political states that there is a requirement that the persuasion of the current government, a provision government of Victoria, the Ministers, that had such effect would require justification. instrumentalities of the State and all bodies created by or under an Act for a public purpose are I hope the government will take on board these authorised, empowered and required to do all concerns and the general concern about the things necessary or expedient to carry out the State far-reaching nature of this clause. Unless the Agreement to implement the Loy Yang Project, so government can come up with a good reason for subclause (3) by implication must be applying to retaining the clause, I suggest that it be deleted. If people other than public bodies. there is a good reason, I hope the clause can be redrawn in a way that achieves that purpose Who is it to apply to? It is conceivable that it may without having the sweeping effects I have outlined. apply to ordinary citizens who have some complaint about pollution, development or something else The ACI1NG CHAIRMAN (Mr Shell) - Order! connected with the project and who might try to In view of the comments of the honourable member demonstrate or take some action to hinder it. for Evelyn, I intend to put clause 7 without amendment. However, the prime group likely to want to interfere with the State agreement would appear to be Clause agreed to. sections of the trade union movement, either immediately in an attempt to frustrate the project or Clause 8 at some stage down the track when they decide they are not particularly happy with something that the Mr PLOWMAN (Evelyn) - I move: project manager is doing to improve efficiency at the 4. Clause 8, omit this clause. power station or with something that is happening in the Latrobe Valley and they decide to call a strike Clause 8(1), relating to the general modification of or impose a boycott or black ban. the law of Victoria, reads:

When one examines the State agreement, which one The law of Victoria is modified SO far as is necessary to is prohibited from interfering with under this give full effect to the State Agreement. subclause, one discovers that most of the provisions relate to the formal entering into and carrying out of Members of the opposition consider clause 8(1) to be the project and the agreement and do not have much an incredibly wide-ranging clause that is not tangible impact likely to come within the sphere of followed by sufficient qualification or explanation to operations of the trade unions and likely to be a make it clear. As the result of having had basis for disruption of the agreement. considerable briefings on the Bill we have a better idea than would most people of what it means, but However, the obligations of the State set out in we consider that the drafting does not really make clause 4.1 of the State agreement do not seem to clear to future readers what the clause means. LOY Y ANG B BILL

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The government's solicitors -Arthur Robinson and obligations, agreements, undertakings or Hedderwicks - provided the opposition with warranties relating to the power station.". precedents for the wording. Those precedents Amendment agreed to; amended clause agreed to. concerned the Roxby Downs and Golden Grove Bills in South Australia, the Northern Pulp Mill Bill in Clause 12 Tasmania and the Westernport Oil Refinery Bill in Victoria. In each case where those Bills used similar Mr A. J. SHEEHAN (Treasurer) -I move: language and amended the laws of the State in the way that is spelt out in clause 8 they were followed 4. Clause 12, omit this clause. by subclauses that indicated in significant detail the Mr CLARK (Balwyn) - Will the Minister variations the Bill made to quite a number of laws in indicate whether this omission is made with a view the State. to substituting another provision? The Minister has previously inserted a definition of "subsidiary" into In relation to Roxby Downs there were details of the agreement. It may be that a provision will be various Acts and amendments, the provisions of included by the moving of amendment No. 20 laws of the State under royalty tax imposts and so standing in his name. If that is so, will the Minister on. Clause 8 does not contain those extra details. indicate the reason for the restructuring of the clause? The opposition spoke to the Parliamentary draftsman, departmental officers and the Mr A. SHEEHAN (Treasurer) - The government on this matter and it was agreed that J. amendment is to allow for the insertion of a new the meaning of the clause was too wide and vague. clause. It was agreed that the opposition's amendment should be accepted and that new wording should be Amendment agreed to. introduced. 1 indicate that that new wording will be the subject of a further amendment. To make way Clause negatived. for that further amendment, this amendment deletes clause 8. Clause 13 Mr DELZOPPO (Narracan) - 1 support the Mr A. SHEEHAN (Treasurer) -I move: remarks of the honourable member for Evelyn. In J. my speech in the second-reading debate 1 said that 5. Clause 13, page 7, line 8, omit "exemptions" and many parts of the Bill were offensive to me, and insert "exceptions". clause 8 is one of them. If the Committee were to 6. Clause 13, page 7, line 17, omit "1958" and insert agree to clause 8 it would mean that the law of "1988". Victoria would be suspended from the Constitution down - it would be like giving a two-year-old child Amendments agreed to; amended clause agreed to. a loaded shotgun to play with. It is totally inappropriate and 1 urge the government to accept Clause 14 the amendment moved by the honourable member for Evelyn. Mr A. J. SHEEHAN (Treasurer) - 1 move: 7. Clause 14, page 8, line 1, after "this" insert "or any Amendment agreed to. other". Clause negatived. 8. Clause 14, page 8, line 5, after "Loy Yang" insert '1and". Clauses 9 and 10 agreed to. Amendments agreed to; amended clause agreed to; clauses 15 and 16 agreed to. Clause 11 Clause 17 Mr A. J. SHEEHAN (Treasurer) - 1 move: 3. Clause 11, page 6, after line 6 insert - Mr A. J. SHEEHAN (Treasurer) - 1 move: "(g) may enter into arrangements enabling the 9. Clause 17, page 10, after line 2 insert - Commission to enforce, for the benefit of "and persons other than the Commission, any LOY Y ANG B BILL

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(d) the easement or right created by instrument the State Electricity Commission is concerned that lodged in the Office of Titles and numbered the omission of the clause may affect provisions in R 756311L, affecting the land in Folio of the the State agreement. The opposition will listen to the Register Volume 9842 Folio 383; and arguments put by the SEC while the Bill is between here and another place, but I state now that it has yet (e) the easement or right in favour of the to be convinced that the clause should not be Commission affecting the land in Folio of the omitted. I shall not pursue my amendment at this Register Volume 9205 Folio 935 and expressed stage but, if necessary, the opposition will move the as a condition in the Crown grant for that amendment in another place. land; and

(f) any easement or right in favour of the Mr CLARK (Balwyn) - I also express my Commission and recorded in the Register concern about the clause because it gives sweeping under the Transfer of Land Act 1958 powers to the Governor in Council by order affecting- published in the Government Gazette to declare that the provisions of an Act or subordinate instrument (i) land in the Parish of Traralgon, being any specified in the order, to the extent to which they are part of Crown allotment SOA section A, inconsistent with the Act or State agreement, will Crown allotment SOB section A, Crown not have effect in relation to the State Agreement or allotment 76U, Crown allotment 76W, will have a varied effect as specified. The clause Crown allotment 76Y, Crown grants the government sweeping powers because it allotment 76Z (formerly part of Crown overrides the statutes of the State. allotments 761 and 76J), Crown allotment 84 section A, Crown I do not doubt there is precedent for it and I allotment 85 section A, Crown understand that the State Electricity Commission allotment 90B section A and Crown may want a "belt and braces" set of provisions: the allotment 92 section A; or first being a broad proviSion that provides that in (ii) land in the Parish of Loy Yang, being any the case of any inconsistency the State agreement part of Crown allotment 7H section A. ... prevails over the laws of the State; and the second putting the matter beyond doubt by declaring that The amendment relates to the mechanics of the the provision of a specific law does not have effect in transfer of land. relation to the State agreement either at all or as varied. Amendment agreed to; amended clause agreed to; clauses 18 and 19 agreed to. Even given those arguments, I am still concerned that the clause provides that the Order in Council Clause 20 can be revoked only by a resolution of both Houses of Parliament passed within six sitting days after the Mr A. J. SHEEHAN (Treasurer) - I move: order is laid before each House. If Parliament 10. Clause 20, line 37, after "1990" insert ", except in delegates sweeping authority to the executive respect of coal". government it is highly desirable that either House of Parliament be allowed to revoke the order. The amendment allows for coal production in the power station. Dr WELLS (Dromana) - I support the remarks of the honourable members for Balwyn and Evelyn Amendment agreed to; amended clause agreed to; and I share the same concerns they have expressed. clause 21 agreed to. Clause 22 provides not only an exemption for the project but also stipulates that the Governor in Clause 22 Council may publish orders overriding State laws. The Upper House may not be of the same political Mr PLOWMAN (Evelyn) - The opposition persuasion as the Lower House, and it should have proposes to omit this clause while noting the the ability to block a proposal. amendment to clause 8 and the change to be made through proposed amendment No. 10. The Clause 22 should be omitted unless agreement to opposition agrees with the government that the amend it is reached while the Bill is between here wording of clause 8, as amended, obviates the and another place. necessity for clause 22 and Parliamentary Counsel has advised that the clause is unnecessary. However, LOY Y ANG B BILL

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Clause agreed to. Water is of concern to people living in Gippsland. The SEC requires vast amounts of water for its Clause 23 boilers and various other procedures within the powerhouse. Will the Minister explain why the Mr PLOWMAN (Evelyn) - I move: Water Act has to be varied in this way? 6. Clause 23, line 36, after "body" insert "participating in Mr A. J. SHEEHAN - I shall provide the project". information on that while the Bill is between here 7. Clause 23, page 14, line 6, after "body" insert and another place. "participating in the project". Clause agreed to. The amendments will ensure the provisions relating to a public authority that has specific ties to the Loy Clause 25 Yang project are not misunderstood. Mr A. J. SHEEHAN (Treasurer) - I move: It may be that VicFin or the Treasury Corporation of Victoria will provide support to public authorities 11. Clause 25, page IS, lines 15 and 16, omit "Shire of on an open-ended basis, and that should not be the Morwell" and insert "City of Morwell". intention of the clause. The amendments stipulate Amendment agreed to. that the clause relates to public bodies or authorities wi th specific ties to the Loy Yang B project. Mr DELZOPPO (Narracan) - Clause 25 says, in effect, that, notwithstanding the portion of the SEC Amendments agreed to. that has been sold to private enterprise, the private enterprise component of the Loy Yang B power Mr CLARK (Balwyn) - Will the Minister advise station will be exempt from local government rates. why it is necessary to bring subsidiaries o.f ~ p~blic. The effect of the clause is to remove that portion of authority, albeit subsidiaries that are partiCIpating m the Loy Yang B power station from the purview and the project, under the scope of the VicFin Act or the control of the Local Government Act. Clause 25(2)(c) Treasury Corporation of Victoria Act? Is it envisaged states: that borrowing transactions will be conducted through subsidiaries of the SEC rather than the SEC if, at any time after 31 July, 1992, the amount required itself or that surplus cash of an operating subsidiary to be paid is not the subject of an agreement under of the SEC connected with the project will be paragraph (a) or a determination under paragraph (b), handled by VicFin or the Treasury Corporation of such amount or amounts as the Governor in Council Victoria? Perhaps there is another reason why the determines are payable by that person to the relevant Treasurer requires the subsidiaries of the SEC to be council at such times as the Governor in Council covered by the respective Acts. determines. Mr A. J. SHEEHAN (Treasurer) - I will provide It means there has to be an agreement so tha t the the information to the honourable member for private portion of Loy Yang B, which is owned by Balwyn while the Bill is between here and another Mission Energy, will, after negotiation, pay a sum of place. money to local councils in lieu of rates. Amended clause agreed to. As a local government person I believe privately owned enterprises should be subject to rates, and Clause 24 there are many precedents, one being the huge petrochemical works in the City of Altona, which Mr DELZOPPO (Narracan) - Clause 24 states: pays the same rates as any other landowner. The clause provides for agreement to be reached on an A licence under section 51 or 52 of the Water Act 1989 amount to be paid in lieu of rates. Subclause 4 that is expressed to be issued for the purposes of the defines the municipalities that would benefit from project remains in force, despite section 56(3) of that the money received in lieu of rates. It states: Act, for the period specified in the licence (which may be a period longer than 15 years or an unlimited In this section "relevant council" means the Shire of period) but may be renewed under section 58 of that Traralgon, the City of Traralgon and the Shire of Act. Morwell. LOY Y ANG B BILL

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I admire the honourable member for Morwell for the A debate should take place between Mission Energy way he took the mutual line when he discussed the and probably the Latrobe Valley Regional Bill in the second-reading debate; he never favoured Commission to work out the total amount of rates anyone of the three municipalities within his that should be paid by that organisation. Having electorate. I congratulate him for adopting an arrived at the sum, the distribution should be even-handed approach to the matter. carried out on an impartial basis. I believe the Grants Commission would be the ideal body: it has He neglected to mention another municipality, all the statistics of the municipalities concerned and namely the City of Moe, which is in my electorate. would be able to arrive accurately at the degree of One may think that is sour grapes on my part, but I disadvantage each of those municipalities would assure the Committee it is not: I am aiming for suffer as a consequence of the activities of the SEC. equity and fairness. That would be an equitable and fair way to go.

Dr Napthine - And social justice. Will the Minister give the Committee an undertaking that between here and another place he Mr DELZOPPO - Yes, and social justice. The will examine that suggestion and advise me of the SEC has never paid rates because it has been outcome? considered to be the Crown and the Crown is exempt from local government rates. The Mr STOCK DALE (Brighton) - I wish to make a commission provides money in lieu of rates to the contribution on clause 25 because it is important to municipalities in the Latrobe Valley: the Shire of the coalition. The clause is objectionable on two Traralgon, the City of Traralgon, the Shire of broad grounds in terms of general principle. I Morwell and the City of Moe. understand, however, that the history of this matter perhaps moves it outside the general principle that There is a formula for the distribution of those might otherwise be regarded as applicable in the moneys. The Shire of Narracan, which is in my sense that when the Yalloum open cut was closed electorate, is also considered. in that dividend. I am certain agreements were entered into on how sorry to ca use you, Mc Acting Chairman, some populations would be relocated in order to provide distress by going into detail, but I owe it to my access to that coal. That circumstance raises an issue constituents to make that point. I am not being peculiar to this particular transaction and like parochial, I am supporting the high view and the transactions bearing on the Latrobe Valley and the high ground taken by the honourable member for impact of development on municipalities in the Morwell, and I applaud him for that. What I am Latrobe Valley. It not only extends to the three saying reinforces the contribution made by the municipalities specified in the clause, but, it might honourable member for Morwell during the be argued, extends to the City of Moe on the sort of second-reading debate. ground raised by the honourable member for Narracan. The SEC contributes a sum of money to councils in lieu of rates. It contributes the following: Shire of I make it clear that that is the basis upon which the Narracan, 9 per cent; Shire of Morwell, 40 per cent; coalition parties will not oppose the clause; but the City of Moe, 15 per cent; City of Traralgon, 17 per opposition does not accept that the principle that cent; and the Shire of Traralgon, 19 per cent. That might otherwise be thought to underpin this clause formula has worked for many years; the could properly be applied generally to local municipalities are happy with that distribution, as it government or developments in any municipality or roughly reflects the impact the SEC has on each of bearing on any set of municipalities. those municipalities. We consider this clause to be undesirable in I do not wish to go too far down that track, but will principle and that a special case of the kind that has the Minister recognise that there are other been made by the honourable members for Morwell municipalities within the Latrobe Valley proper that and Narracan would be necessary to justify it. It are worthy of consideration for the distribution of would have to turn upon particular agreements what I call rate equivalent funds. While the Bill is rela ting to particular circumstances. between here and another place the Minister should take up the suggestion that the Grants Commission We are concerned, firstly, that the clause have a say in how that money should be distributed. discriminates between municipalities involved in providing services to people who are related to the LOY Y ANG B BILL

1930 ASSEMBLY Thursday, 28 May 1992 project in some sense, either as workers or as question of the allocation of any payments among members of communities associated with the project those bodies, but the bottom line is that participants by virtue of their relationships with workers. Those will be totally at the mercy of the government of the people may belong to communities which, although day as to the aggregate payments to be made to geographically discrete, are interrelated because of them. their relationship to the operations of the SECV in the Latrobe Valley. But in normal circumstance there I am rather surprised that this open-ended power is would not be a case for substituting this sort of right being conferred on the government and is something in lieu of the normal application of the rating the participants are willing to accept. I suppose it is principles on which local government revenue is really a concern for the participants rather than based. Parliamentarians to raise - unless there is something apparent with which we could not agree. Secondly, we are concerned about the differential impact of the cost structure of what is now likely to I hope the government will exercise that power become a competitive industry, which could create a responsibly and not use it as a back-door means of precedent that could disadvantage future players in taxing the participants to get them to fund local the electricity industry outside the Latrobe Valley. government in lieu of revenue that would otherwise For example, if additional generating capacity were be payable by the government to the participants. to be developed outside the Latrobe Valley or if the That would be a most improper use of the provision. generating capacity that already exists were to involve private equity participation in a location Mr STEGGALL (Swan Hill) - This clause has outside the Latrobe Valley, it could be subject to a created much interest among many honourable rating on the ordinary principles; and that would members. It is one of the small provisiOns in the involve a cost structure that would not be conglomeration that goes to make up the State comparable throughout the industry. It could agreement and the other agreements. discriminate between operators in the industry, distort their cost structures, distort the allocation of If possible, I should like the Treasurer to give the capital and other resources, and create unfair Committee some justification for the inclusion of the competition between participants in an industry that clause in the Bill and to say why one half of this we certainly believe ought to become more clause is included in the miscellaneous and service competitive - and this is the first step towards agreements that go to make up the State agreement, creating competition. where the negotiations between the Commonwealth government and local government are lurking. On those two grounds we hasten to add that this clause will not be regarded by the coalition as a As I understand it, the councils in the Latrobe Valley precedent for dealing with this issue in any other have sought a justification for the clause. During my context. If that is any justification whatever, it turns contribution today I mentioned the letter I received on particular circumstances, in particular, the from the Shire of Rosedale, which, while not seeking agreements made to relocate communities to to be a participant, argues that the rates or the facilitate access to the coal deposits in the Latrobe money in lieu of rates should be directed to the Shire Valley. It is not the application of the general of Traralgon. principle but the general principle itself that is objectionable. Given the open-endedness of this clause I am wondering whether it is part of one of the Mr CLARK (Balwyn) - I raise a further concern agreements. Because of the interest among about this clause. Throughout the Bill, the State honourable members and local government, and the agreement and the other documentation the parties fact that this is the first of our semi-privatised have gone to great lengths to carefully define their government business enterprises, the Treasurer respective rights and obligations. Yet this clause should explain to the Committee why the clause has includes a provision which, were I not one of the been included and, if pOSSible, why it has been participants or a legal adviser to the participants, I included in this manner. would be worried about. As I understand it - and the agreements and the It gives the Governor in Council open-ended power clause demonstrate this - the Local Government to direct payments of certain amounts to certain Act will have no power in this area. The agreements local government bodies. I totally leave aside the within the State agreements will give the power to LOY Y ANG B BILL

Thursday, 28 May 1992 ASSEMBLY 1931 determine the rates or the money in lieu of rates for Mr STEGGALL (Swan Hill) - No, you are not this Loy Yang B power station. on the same wavelength. I shall explain why the Committee has some concerns about the clause. It I seek an explanation from the Treasurer so that local deals with local government rates and is government and honourable members have some self-explanatory. It sets out what the government idea of where we are headed. wishes to do, but the Bill puts in place the State agreement for Loy Yang. Today I went through the Mr A. J. SHEEHAN (Treasurer) - I should have seven agreements that make up the State agreement. thought the reasons for the clause were self-evident. The State agreement gives power of the law to To my knowledge there is no disagreement between modify certain Acts. For example, the Committee the parties about its inclusion in the Bill. If a further has just dealt with clause 24, which provides and explanation is needed while the Bill is between here exemption from a section of the Water Act to give and the other place, I will ensure that that happens; the project the right to have a 3O-year licence, which and I take on board the comments of the honourable no-one else in the State can have. member for Narracan in so doing. Despite this clause the amount and distribution of Mr DELZOPPO (Narracan) - I am not satisfied the local government contribution have already been with the performance of the Treasurer. As I said in agreed to. I should have thought that if the my second-reading speech, in many way this Bill is a government did not wish to move this clause it disgrace. The Treasurer has presented a huge Bill would not have done so. One of the problems with firstly to Parliament and now to the Committee - this powerful and mixed-up Bill that Parliament is but he cannot explain the three clauses he has been being asked to agree to is locked up in those asked about. multiple agreements that we have not seen and do not have. I hope by the time the Bill gets to the This is the Treasurer's legislation. It is reasonable to Legislative Council it will at least contain the expect that the Treasurer knows what he is doing principles of those agreements. when he introduces a Bill containing clauses to provide for the biggest financial deal in the State's This Parliament is being asked to accept a pig in a history. I am prepared to let two or three balls pass poke on the biggest operation and financial deal in through to the keeper but I am getting sick of this. the State's history. This area is a small part of it, but The Minister has not laid bat on ball! He has to do it is a part that clearly explains some of the better - otherwise we will be here all night. frustrations that honourable members have and future Treasurers and governments will have. We Mr A. J. SHEEHAN (Treasurer) - I think we do not know to what extent the State is committed to may be here all night anyway. I am surprised that the agreements. Clause 2S does not contain any this has caused so much excitement. There have figures or facts, they are in the agreements. been extensive negotiations and discussions. I suggest to the Committee that it would not make Mr Steggall interjected. the slightest difference if the government did not go ahead with clause 2S or if we tried to amend it. We Mr A. J. SHEEHAN -If you are seeking an are giving power for this agreement to literally amendment -- override the State laws where they affect the joint project. This Parliament is very frustrated and a little Mr Steggall - No. anxious and nervous about the Loy Yang B Bill.

Mr A. J. SHEEHAN - You are not seeking an We do not know the extent to which the forward amendment? If there were a problem I should have commitments are being made, or the extent of the thought the opposition would have sought to move State support. The honourable member for Brighton an amendment. The intent of the clause is clear: it is said that the coalition would not accept this as a a proposal to allow for the distribution of moneys to principle. I agree with that. If it were possible to find those shires and provides a mechanism to do so, out just what this clause means in the agreements which would not be possible under the Local and to what extent those agreements commit funds Government Act. It is a means of providing a to those areas, we would have some idea of what mechanism for the funding. I thought that was clear. this is about. This House needs an explanation as to Am I not on the same wavelength as you? what is involved in such clauses. The government is drawing a hell of a long bow in asking this LOY Y ANG B BILL

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Parliament to agree to the whole structure of the The CHAIRMAN - Order! Honourable State agreements for Loy Yang B. It is not asking too members will cease the chitchat across the table. much to ask for clarification of a small item like local government rates or payments in lieu. Honourable members interjecting.

Mr STOCKDALE (Brighton) - Mr Chairman, I Mr STOCKDALE - This matter concerns the should like to address some specific questions to the relationship of the privatised part of the project in Treasurer on this matter. The clause contemplates particular with the various levels of Australian that there will be agreement as to amendments. I ask government. Mr Chairman, the interjections are the Treasurer through the Chair whether agreements making a farce of the debate. I cannot get the have already been made. I understand there is a Treasurer's attention for him to hear my question. substantial body of agreement as to the detailed This clause concerns the relationship of the project as implementation of the Bill. If there has been a whole and in particular it is critical to the agreement, what is the amount that is proposed for relationship of the privatised part of the project with payment? If there has not been agreement, is it the various levels of Australian government. It deals proposed there will be agreement or that the specifically with local government, but it raises the Governor in Council will make a detennination? In issue of how the privatisation element of the project any case, upon what principles would the Governor will be dealt with in terms of the relationship with in Council approach the formulation of the the three levels of government. determination required by clause 2(b)? They are all interrelated. In addition to the matters I I instance the importance of this matter by raising have specifically raised about local rates I ask the another matter that is analogous concerning the government whether it has sought compensation implications for the State flowing from these from the Commonwealth government for the matters. In the government's published discussion additional revenue flow to the Commonwealth paper relating to corporatisation the government's through company taxation that will flow from the proposal was that privatised government agencies privatised component. Is that a factor that is to be or corporatised government agencies would be taken into account in determining whether local obliged either to pay rates or pay to the State an rates will be payable to the councils? Will there be a amount in lieu of rates. Why has that principle not payment in lieu of local rates to the councils? What been applied in this case? How is it proposed to does the government propose in the light of that mix create competitive neutrality through this clause? of factors in the application of the principle spelt out in the discussion paper, which raised the alternative Another analogous matter concerns taxation of a payment in lieu of rates to the State rather than implications for the privatised part of the project. to the councils? The effect of Mission Energy's involvement will be to divert to the Commonwealth some revenue that There is a clear interrelationship between these might otherwise have gone to the State. No doubt matters, and the Committee and the people of the Treasurer will be aware that there are Premiers Victoria are entitled to know whether the Conference guidelines that -- government is seeking tax compensation from the Commonwealth and, if so, how that relates to this Mr Roper interjected. clause.

Mr STOCKDALE - It raises considerations Mr A. J. SHEEHAN (Treasurer) - This clause about the relationship of the privatised component relates to the local government areas affected and of the project with various levels of government. If the government is happy with the suggestion of the the former Treasurer cannot see the analogy then honourable member for Narracan about using the perhaps we can only hope that the current Treasurer Grants Commission and its guidelines in the can. It would be helpful if the Treasurer would listen determination of the distribution of the moneys. We to the question. are happy to accept that as an application. It is important to understand that Mission Energy is not Mr A. J. Sheehan interjected. yet in a pOSition to do that because the agreement has not been concluded. This is a mechanism to Mr STOCKDALE - You try to work out the begin discussions and no agreements have been relevance. entered into. The government is happy to use LOY Y ANG B BILL

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Victoria Grants Commission guidelines with regard issues regarding the form of State support and the to the distribution of moneys. extent of guarantees has been substantially resolved.

Amended clause agreed to. I ask the Treasurer to indicate the order of magnitude of the potential or contingent liabilities of Clause 26 the State under the transactions. If there is any proposed limit, what is the actual or likely limit on Mr A. J. SHEEHAN (Treasurer) - I move: the State's liability? 12. Clause 26, line 27, omit "may undertake" and insert Mr A. J. SHEEHAN (Treasurer) -It has not been "may, if the Commission requests it to do so on resolved. The latest information I have on the matter behalf of the Commission,". is that it may be resolved it in the next 24 hours. It Amendment agreed to. would not be reasonable for me to pre-empt that position at this stage. The nature of the Bill is to Mr STOCKDALE (Brighton) - I again raise the enable the transaction. Once the Bill is passed we taxation implications of this transaction. One of the can proceed with the transaction, but I cannot purposes of the clause is to make it clear that the anticipate the details of it. subsidiaries of the State Electricity Commission that are involved will not be subject to Commonwealth Mr DELZOPPO (Narracan) - Given the fact that laws such as Commonwealth taxation. I represent people in the area affected, how can I vote for this clause and this Bill when that sort of I ask the Treasurer whether the State has sought answer is given to the Committee? There used to be from the Commonwealth any tax compensation on fellows down at the show with a thimble and a pea account of the fact that the transactions will involve doing a few tricks. the diversion of revenue to the Commonwealth or an increment in revenue to the Commonwealth. I An Honourable Member - You still are. also ask whether the government has initiated any requests for such compensation pursuant to the Mr DELZOPPO - You would be a great Commonwealth guidelines for tax compensation for exponent of the thimble and pea trick. The up to five years. opposition is taking a great leap of faith in agreeing to this legislation, and that disturbs me. The Minister Mr A. J. SHEEHAN (Treasurer) -As an has to make some arrangements to ensure that the outcome of the passage of this Bill the government questions raised by the opposition are answered; he will have to negotiate a number of issues with the just cannot brush them aside. I do not know who Commonwealth, and this is one of them. prepared the Minister's briefing on these clauses, but it is a bloody disgrace. Amended clause agreed to; clauses 27 and 28 agreed to. The ACTING CHAIRMAN (Mr J. F. McGrath) -Order! Clause 29 Mr DELZOPPO - I shall withdraw that word Mr A. J. SHEEHAN (Treasurer) - I move: and call it a sanguine disgrace. In dealing with legislation of much less importance than this 13. Clause 29, line 25, omit "section 28" and insert "this Ministers have provided tables with the clauses, the Part". amendments and their effects set out in three 14. Clause 29, line 32, omit "section 28" and insert "this columns, and anyone can understand them. On Part". some occasions they have notes that they toss to the opposition to satisfy any inquiries. I do not know Amendments agreed to. what has happened to this particular Treasurer and who is preparing the notes for him -- Mr STOCKDALE (Brighton) - I raise with the Treasurer the question of whether a formula is set An Honourable Member - He cannot read them. for determining a monetary limit on the extent of the liability of the taxpayers of Victoria under any Mr DELZOPPO - That is unkind; I do not proposed guarantees. It is clear from the briefings associate myself with that remark at all. The that the opposition parties have been given that the Minister is ill-prepared to debate this important LOY Y ANG B BILL

1934 ASSEMBLY Thursday, 28 May 1992 piece of legislation. The answers he is giving to the opposition will be pressing the government to opposition are less than satisfactory and he will have provide some satisfactory answers to the question. to up his game or get some better notes. Otherwise the people of Victoria will be suspicious about where the government is leading them and the Mr PLOWMAN (Evelyn) - As my colleagues the opposition may find it difficult to support the clause. honourable members for Brighton and Narracan point out, this is an extraordinary and important Mr A. J. SHEEHAN (freasurer) - The provision provision dealing with guaranteeing the cash flow to of information at this stage would pre-empt the Mission Energy if the SEC or its successors happen finalisation of the negotiations. To say that a specific to fall over and are not able to make good their amount is satisfactory to the government or that an undertakings particularly under the power supply amount is anticipated by the government would agreement. The guarantee is specifically provided by give away a position that is obviously still being the Treasurer. The Treasurer has abrogated his finalised. The Bill will provide for the sale of responsibility if he has not examined the potential Loy Yang B. The government well understands the liability to the State or what might happen in terms need to provide the information to honourable of the magnitude of the liability under this clause. members opposite --

I could use the analogy of the Alcoa power deal Mr Steggall - To the Parliament! where some guarantees were given on a flexible power tariff in the expectation that good times were Mr A. J. SHEEHAN - And to Parliament when it here forever. That unwise decision has cost Victoria is finalised; but to give it away in anticipation of and will continue to cost Victoria extremely dearly finalisation is to give away our position of for many years to come. negotiation. The information will certainly be made available before we seek finalisation of the proposed I am advised that if, in the worst possible scenario, legislation. The information will be provided either the Treasurer had to back this guarantee over while the Bill is between here and the other place or 30 years for the full output from the station the total when it is in the other place. liability to Victoria would be in the vicinity of $9 billion. I am not suggesting that that is going to Mr STOCK DALE (Brighton) - I endorse the happen; in fact it is unlikely. However, the thrust of the remarks of the honourable member for government has been irresponsible if it has not Evelyn, but I express concern that I believe the addressed the potential liability and if it cannot give Treasurer is being less frank with the Committee the Committee some indication of what it sees as the and the people of Victoria than he ought to be. potential maximum liability under this clause. Mr Micallef interjected. If the Treasurer is not able to give an answer I urge the him to seek advice when the Bill is between here Mr STOCKDALE - Don't be so pathetic, you and another place because Parliament needs to clown! The briefings the opposition parties have know within some bounds what sort of potential or been given suggest that there is substantial contingent liabilities this clause may leave the State agreement on the form of State support not only to face up to in years to come. between the government and Mission Energy but also between the government and the banks that are Governments come and go; the coalition is on its financing Mission Energy. I do not seek the way in but it may not be there for the next 30 years. I disclosure of any commercially confidential hope it is, but it may be that the Minister's information. It seems to me that this is a case where government will be back in power. His government the clause specifically provides a completely at some future time may have to face up to the open-ended appropriation on the face of the Bill. contingent liabilities that the clause presents. The opposition's understanding from the briefings it Therefore, it is in the interests of the Treasurer, the has been given is that the exposure of the taxpayer is government and Parliament to offer some not totally open-ended. That is absolutely vital. It explanation of what the contingent liability is under goes to the very core of the accountability process of the clause. If the Treasurer cannot give an answer the executive government through the Parliament to tonight, I urge him to admit that he does not have the people of Victoria. the answer but will seek it while the Bill is between here and another place. In the other place the LOY Y ANG B BILL

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The clause has a constitutional history going back the opposition has now been told that the over centuries and is an intrinsic part of the government cannot let it know what the accountability of the executive government to philosophical intent of the clause is because it has Parliament. It is probably the most important single not yet negotiated it with Canberra. clause in the whole set of transactions. It represents the degree to which the taxpayer is ultimately The Victorian Parliament is a sovereign State in its committed to stand behind the transactions which own right. Before the opposition can be expected to involve $3 billion in capital outlays and, as the pass the clause the philosophy has to be agreed on in honourable member for Evelyn said, revenue this place between the government and the commitment of something of the order of $9 million. opposition. The government can then discuss the philosophy with Canberra. It should not negotiate The coalition understands that there is substantive with Canberra first and then expect the opposition agreement on the nature of the limitations. It may be to pass the clause. The Treasurer must lift his tha t they cannot be defined in precise monetary performance. My advice is for the Committee not to terms, but their nature could be and ought to be pass those provisions until the government gives an described to the Committee. If that is not the case the absolute assurance. debate is just a mockery. It is not satisfactory for the Treasurer to say, "Don't worry, it will all come out Mr CLARK (Balwyn) - I am becoming more and in the end and we will provide all the details." The more concerned about clauses 29 and 28 as the Premier gave a commitment in this Chamber that all debate unfolds. Clause 29 provides for a blanket the details of the transactions would be contained in appropriation for amounts that will become payable the legislation. In reality we have a skeleton under various guarantees. It gives further framework facilitating Bill which, in its own tenns, assurances to the participants and others that the gives virtually no detail of the nature of the money will be available to meet any payment under transactions. It amounts to the government seeking guarantees that are given under clause 28. all power and providing no accountability. The two clauses need to be examined together We have reached the point in the debate where the because clause 28 provides the guarantee that leads Treasurer has a duty to explain to Parliament the to the liability under clause 29. Clause 28 provides broad basis on which the limitation of the State's the Treasurer with a wide power to give guarantees. liability and the potential or contingent liabilities On its face it relates primarily to the SEC and other have been arrived at. The Treasurer's answers have public bodies and subsidiaries of the State or SEC, been most unsatisfactory and they raise serious but the clause is sufficiently broad that either concerns about the extent of the future exposure of directly or indirectly the State or the SEC could end Victorian taxpayers. They have to be examined up giving guarantees of bottom line returns to the against the background of uncertainty of such basic private participants in the project or to their bankers things as the power tariffs. The opposition has been or on any other organisation involved in the project advised that negotiations have not been completed one cares to imagine. In other words, sufficient and that the indicative figure of 6.8 per cents per guarantees could be given under clause 28 and kilowatt hour may not be the final tariff. Significant thereby appropriation provided under clause 29 to information is available to explain the nature of the eliminate any risk whatsoever being undertaken by limitations if not the precise limitations themselves. the private participants in the project.

I suggest that the Committee, Parliament and the If that is done the public will lose all the benefits that people are entitled to have a clear description of the this partial privatisation and establishment of situation so that we are not taking a leap in the dark private sector management are expected to provide. in entrusting the current government to protect the I raised this matter with Treasury officers during interests of the people. one of the briefings provided to the coalition, and as I understood it assurances were given to the effect, Dr WELLS (Dromana) - I support the in broad terms, that the power to grant guarantees honourable member for Brighton in his comments under clause 28 would be used only to guarantee the on clause 29 and express my frustration and anger at performance by the commission and its subsidiaries the deviousness of the Treasurer. Earlier he said the of the obligations undertaken by the commission governm~nt did not have the details of the and its subsidiaries - in other words, the supply of transactions, that they were not complete but that coal, the supply of ancillary services and the we should trust him. In a dishonest play on words purchase of power from the project by the LOY Y ANG B BILL

1936 ASSEMBLY Thursday. 28 May 1992 commission. To the extent to which guarantees are Mr A. J. SHEEHAN - No further. used for that purpose, they are reasonable in the context of the whole deal because the private sector Mr STEGGALL (Swan Hill) - As I tmderstand participant is saying that it does not want to accept it, State support comes in four areas. In the the credit risk of the commission as a freestanding agreements in Schedule 1 the State has an obligation body. It does not know what might happen to the to: assist the participants in the procurement of commission down the track or if the commission on goods and services; issue and procure government a freestanding basis has sufficient credit worthiness. permits; make representation to the Commonwealth It wants the State to stand behind the commission. I in relation to any policies or actions that might cause can tmderstand and accept that but I would be adverse effects to the project; and not discriminate worried if the guarantees were taken further - to against the power station compared with other assure the banks, for example, that they would be power generation in the industry. paid even if the private sector participant made a mess of the management of the station or to assure The point made by the honourable member for the private sector participant that it would not bear Balwyn is that State support requires the State to any of the risk if there was an industrial relations stand behind the SEC and its subsidiaries if the SEC problem or if the power station blew up or some is tmable to meet its contractual obligations. As I other contingency. tmderstand what the Treasurer has said that is the limiting factor. If the SEC meets all of its Parliament is really taking on trust the assurances commitments and obligations tmder this project, the being provided by the government that the State would not have to call on its guarantee. guarantee power will not be used for any of those purposes because there is nothing in the Bill or in the Mr A. J. SHEEHAN (Treasurer) - Yes. State agreement and there will probably be nothing in the statement of principles relating to the various Amended clause agreed to. subordinate agreements, to put beyond any possibility the State giving the sort of broader Clause 30 guarantees that I am talking about. Mr A. J. SHEEHAN (Treasurer) - I move: It is a sensitive issue for Parliament and it is 15. Clause 30, line 36, omit "section 28" and insert "this important that sufficient comfort be given to Part". honourable members that the clause will not be abused in the manner I have outlined. Perhaps with Amendment agreed to; amended clause agreed to. a different government I would have accepted the assurances of the officers of the department given Clause 31 privately to the opposition but, at this stage of the debate, it is important that those assurances be put Mr PLOWMAN (Evelyn) - I move: on the record in clear and categorical terms either 8. Clause 31, omit this clause. before this Committee or by the Minister's cotmterpart in another place. Parliament and the This clause states that the Freedom of Information public must be assured that the guarantee power Act 1982 does not apply to a document relating to contained in clause 28 and given effect tmder the establishment, operation or carrying on of the clause 29 will be used only to stand behind the project or affect or relate to anything done or to be legi tima te commercialtmdertakings of the SEC and done in relation to the project. will not be used for any of the broader purposes I have outlined. The opposition is aware, and the government should be, that commercially sensitive information is I hope the Treasurer will give those assurances. If exempt from freedom of information legislation and not, I hope they will be given in another place. therefore the participants in this project should have nothing to be afraid of in relation to revealing Mr A. J. SHEEHAN (Treasurer) - I can give that commercially sensitive information under the assurance as it relates to the activities of the SEC­ Freedom of Information Act. However, the the State stands behind the SEC. opposition believes it is improper to remove the requirements from the rest of this project. A Mr Clark - And no further? precedent was set in the Alcoa (Portland Aluminium Smelter) Act which is not subject to freedom of LOY Y ANG B BILL

Thursday, 28 May 1992 ASSEMBLY 1937 information legislation but the opposition believes Clause 35 that is a bad precedent. Commercially sensitive information is protected, therefore this clause should Mr A. J. SHEEHAN (Treasurer) - I move: be omitted. 16. Clause 35, after line 10, insert-

Dr WELLS (Dromana) - I support the 1/(1) The Commission may do all things necessary honourable member for Evelyn in his comments or convenient to be done for, or in connection about clause 31. It is clear that if one combines with, the performance of its functions.". clause 8, which proposes to place this proposed Act 17. Clause 35, line 11, omit 1/(1)" and insert "(2)". above the rest of the law of Victoria, with Schedule 8.3, which proposes to allow the 18. Clause 35, line 11, after "may" insert "promote, form government to alter the agreement without reference or". to Parliament, and then with clause 31, which 19. Clause 35, line IS, omit "(2)" and insert "(3)". proposes to protect the total agreement from the operation of the Freedom of Information Act, one Amendments Nos 16, 17 and 18 extend the powers has a situation called government by executive given to the SEC and also make it clear that the SEC government. can initiate as well as respond to proposals.

That runs totally counter to the principles of this Amendment No. 19 is a consequence of the other democratic Parliament. Not only am I totally amendments. opposed to clause 31 and support its removal but I invite the Treasurer to explain to the House in Amendments agreed to; amended clause agreed to. practical detail why the government should wish to place this proposed Act of Parliament beyond the The CHAIRMAN - Order! The time for me to scope of the Freedom of Information Act. report progress under Sessional Orders has now arrived. Mr A. J. SHEEHAN (Treasurer) - The government has agreed to accept the amendment. Progress reported.

Amendment agreed to. The SPEAKER - Order! The time appointed under Sessional Orders for me to interrupt the Clause negatived. business of the House has now arrived.

Clause 32 Sitting continued on motion of Mr ROPER (Minister for Employment, Post-Secondary Mr PLOWMAN (Evelyn) - I move: Education and Training).

9. Clause 32, line 10, before ''The'' insert "(1)". Committee 10. Clause 32, after line 13, insert - Resumed from earlier this day. 1/(2) Regulations made under this section may be disallowed in whole or in part by resolution of Clauses 36 and 37 agreed to. either House of Parliament in accordance with the requirements of section 6(2) of the New clause A Subordinate Legislation Act 1962. (3) Disallowance under sub-section (2) is deemed to Mr PLOWMAN (Evelyn) - I move: be disallowance by Parliament for the 11. Insert the following new clause to follow clause 7- purposes of the Subordinate Legislation Act 1962.1/. Modification of law of Victoria

The amendmer,ts simply insert the standard 1/ A. If a provision of the State Agreement is inconsistent disallowance provisions the opposition has as a with a provision of the law of Victoria, the matter of course applied to most legislation passing provision of the State Agreement prevails CUld the through this Chamber. provision of the law of Victoria is, to the extent of the inconsistency, modified accordingly." Amendments agreed to; amended clause agreed to; clauses 33 and 34 agreed to. LOY Y ANG B BILL

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In earlier discussion on clause 8, the Committee 20. Insert the following new clause to follow clause 11 - omitted clause 8. The amendment contains the Guarantee etc. by Commission for subsidiary words that will replace the original clause 8. They more aptly describe the meaning intended by "AA. The Commission, on such terms and clause 8. conditions as the Commission determines - (a) may execute a guarantee in favour of any New clause agreed to. person or body of persons guaranteeing the due satisfaction of amounts that New clause B become payable or of other actions Mr PLOWMAN (Evelyn) - I move: required to be performed; and (b) may give a covenant or undertaking to, or Insert the following new clause to follow clause 7 - enter into an agreement with, any person or body of persons in respect of or relating Variation of State Agreement to the performance of obligations required to be performed - "B. (1) The parties to the State Agreement may from time to time by agreement in writing add to, or as a result of or in connection with the substitute for, cancel or vary all or any of the participation in the project by, or the provision of provisions of the State Agreement. financial accommodation for or in connection with the project to, a subsidiary of the Commission, (2) The Minister must cause a copy on agreement including, without limiting the generality of the under sub-section (1) to be laid before each foregoing, the payment of expenses of enforcing or House of the Parliament within 6 sitting days obtaining or endeavouring to enforce or obtain of the House next following the making of the such a guarantee, covenant, undertaking or agreement. agreement.". (3) An agreement under this section may be New clause AA replaces clause 12. It is in the same revoked wholly or in part by resolution of form as 28, which was discussed earlier. either House of the Parliament passed within 6 sitting days of the House after a copy of the Mr CLARK (Balwyn) - The Treasurer agreement is laid before that House. mentioned 28 as something to which new clause AA (4) Unless the agreement is revoked under this is similar. I wonder what the Treasurer is talking section, an agreement under this section about. Is he talking about clause 28 or an comes into force on the expiration of the amendment No. 28, which does not seem to be the period within which it could have been case? Will the Treasurer clarify what is the analogy revoked.". he drew in the remarks he made? It seems to me the major difference between new clause AA and the The schedule contains a variation of the State previous clause 12 is the provision of power to give Agreement which the coalition seeks to include in guarantees to matters that arise as a result of or in the Bill. It will remain in both the Bill and the connection with the participation in the project by a schedule, as we seek to ensure that the new wording subsidiary of the commission. Can the Treasurer is in the Bill. offer some specific comment on new clause AA? I have a verbal amendment to new clause B(2) which Mr A. SHEEHAN (Treasurer) - New clause presently reads "must cause a copy on agreement J. AA relates to the State Electricity Commission under sub-section (1) to be laid" but should read standing behind a subsidiary and clause 28 relates to "must cause a copy of an agreement under the State standing behind the SEC. sub-section (1) to be laid". New clause agreed to. Amendment amended by leave; amended amendment agreed to; amended new clause agreed New clause C to. Mr PLOWMAN (Evelyn) - I move: New clause AA 12. Insert the following new clause to follow clause 12: Mr A. J. SHEEHAN (Treasurer) - I move: Financial Agreement LOY Y ANG B BILL

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"e. Financial accommodation obtained by a statutory also face the possibility of a continuing debt if the body for the purposes of investment, whether $340 million is funded as an ongoing investment. directly or indirectly, in the project is to be taken to We have a vital interest in the way the liabilities of be a borrowing by the State for the purposes of the the other government bodies will be handled under Agreement set out in the Financial Agreement Act the legislation. We are keen that the government 1928 of the Commonwealth as amended and in ensures that the liabilities of those government force for the time being.". bodies under the legislation are a matter that Parliament controls and can keep track of. The provision will ensure the participation in the other government body, which is a proprietary We look forward to the discussions while the Bill is company being set up as an investor or as a between here and another place. The coalition participant in the joint venture with the SEC believes a reasonable agreement can be arrived at subsidiary and Mission Energy. with the government so that the other government bodies financial agreement, which will be put in The object of the clause is that borrowings in relation place under the clause, will be identified and to the investment by government bodies will be understood. brought in under the global borrowing limits of the State. The government indicated that it was not New clause negatived. prepared to accept this clause and it will vote ag.ainst it. We ~ant to ensure that the borrowings for New clause BB this purpose wlll not simply become another method of extending this finance deal, which was Mr A. J. SHEEHAN (Treasurer) - I move: widely discussed during the second-reading debate, by widening the borrowings of the other 21. Insert the following new clause to follow clause 24: government bodies outside the global limits. We Planning and Environment Ad 1981 want to ensure that there will be some discipline on the borrowings relating to this part of the joint ''BB. Sections 30 and 38 of the Planning and venture agreement. Environment Ad 1981 do not apply in relation to the Traralgon (Shire) Planning Scheme I advise the government that we will discuss this Amendment UO, notice of which was published in matter while the Bill is between Chambers to see the Government Gazette dated 27 May 1992.". whether some common ground can be gained. Our Mr CLARK (Balwyn) - The concern I raise about intention is clear. Perhaps we will introduce a new clause BB is the general one that it supersedes stronger amendment in the other place. I suspect the at least two provisions of the Planning and government will oppose the amendment. Environment Act in its application to the Traralgon (Shire) Planning Scheme Amendment lAD, notice of Mr STEGGALL (Swan Hill) - This clause deals which was published in the Government Gazette of 27 with the financial arrangements of the other May 1992. Honourable members should be government bodies and of the ability to incur a concerned about the practice of overriding planning liability on their behalf until the actual statutory schemes as it is becoming far too prevalent. A authorities or public authorities are named and put general principle should be established in a form in place in the agreement. We hope that the other that does not require specific exemptions. government bodies will be identified before the Exemptions have been made in the past to the legislation goes through the other place. Bayside development project and more recently to the redevelopment of the Royal Melbourne Hospital. Th~ extent of the liability is 11 per cent of the project, Many of the exemptions seem to end up in trouble. which represents $340 million of either borrowings On occ~si~n the legitimate interests of other parties or investment that can be made as a future forced are prejudIced when the normal planning process is liability on government bodies. As I understand the superseded. Can the Treasurer inform the arrangement that is to be put in place, in its initial Committee to what extent new clause BB will form the joint project will be able to borrow supersede the normal planning process in respect of $340 million. The other government bodies will have lAD, and perhaps indicate which parcels of land are an agreement mirroring the agreement before the protected by lAD? Committee. If it affects only public land and does not affect The other government bodies are required to have private citizens, it may be reasonable to include it. $100 million worth of equity in 1996 and they will LOY Y ANG B BILL

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Will the Treasurer inform the Committee whether regard, but we wish to have it clearly provided in new clause BB will deprive people of rights they the legislation that that must be the case. would otherwise have under the legislation? We are also concerned that beyond the Loy Yang B Mr A. J. SHEEHAN (Treasurer) - My power station there is the development of the understanding is that new clause BB provides for national grid, and the evolution of competition in private activities, as distinct from the previous the industry raises the prospect of private equity provision for SEC activity. participation and the unbundling of the electricity industry even in public ownership, which would New clause agreed to. create more meaningful competition across the generation, distribution and retailing sectors. New clause D We want to ensure that contracts or financing Mr PLOWMAN (Evelyn) - I move: arrangements that preclude or prohibit such development will be avoided. We believe it is critical 13. Insert the following new clause to follow that the process of introducing competition into the clause 30- industry does not end with this deal. It is Act not to affect restructuring of the electricity particularly important that the agreement provides industry that Mission Energy be the operator on behalf of the joint venture, but in terms of accountability to "0. Nothing in this Act or the State Agreement is capital markets there are severe limitations arising to be construed as inhibiting the restructure of out of the structure of the arrangement, the the electricity industry in Victoria.". limitation of equity to 40 per cent and the This is a self-explanatory amendment. The convoluted arrangement of government equity opposition wishes to ensure that nothing in the Bill being split for reasons of taxation and global limits and in the State agreement can be construed as so that it is not treated as being covered by the inhibiting the restructure of the electricity industry global limits and does attract taxation advantages. in Victoria. Clearly, as was mentioned during the second-reading debate, there will be restructuring in That convoluted arrangement does not seem to offer the industry no matter who is in charge in the years the advantages that a more clear-cut partnership to come. This clause seeks to guarantee and make would offer. We believe this is a fundamental clause clear the intention of the Bill that the State agreement and the intention is that any provision conflicting not be inhibited by the restructuring of the industry. with that objective should be prohibited as a matter of law. That is particularly important in the context Mr STOCKDALE (Brighton) - This clause is an of agreement between the parties to adopt the example of the consequences of the haste with which government's objective to provide that the the government is proceeding in this matter. It will agreement and the Bill overrides all other Victorian need further consideration while the Bill is between law. here and another place. I pay tribute to the work of the honourable member for Evelyn, who has Therefore it has to be dealt with in the context of this prepared the amendment without the support he Bill, and I believe it will be necessary to further had from the coalition in the general discussions of consider this clause between Houses to ensure that the transaction. Even so, I believe the draftsmen that intention is carried out beyond any question of have not captured the intention of the coalition in doubt. the substantive objective of the clause. Our intention is that it should be clear as a matter of law that the New clause agreed to. actual contractual agreement or the financing operation will not operate to inhibit further New clause E competition coming into the industry. Mr PLOWMAN (Evelyn) - I move: We are concerned that there be no inhibition on further extension by private sector equity Insert the following new clause to follow clause 30 - participation in the Loy Yang B station not only in actual contractual terms but also in the way the Proceeds of sale transactions are established. We understand from liE. (1) Subject to this section, any money received by briefings that there is no real difficulty in that the Commission as a result of the sale or lease of LOY Y ANG B BILL

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any interest in the Loy Yang property must be (a) has a right of access at all times to the books of applied as soon as practicable after receipt of that the State, each administrative unit of the money- Public Service within the meaning of Public Service Act 1974, the Commission and each (a) first, to reimburse the Commission for any statutory body; and transaction costs paid by the Commission; and (b) may require from a member, officer or (b) second, in repaying, discharging or satisfying employee of a person referred to in Commission debt. sub-section (8)(a) any information, assistance (2) Sub-section (1) does not apply to money received by or explanations necessary for the performance the Commission from a subsidiary as a result of of the duties of the Auditor-General in relation the sale or lease by the Commission to the to the preparation of the report referred to in subsidiary of any interest in the Loy Yang B sub-section(1 ). property, to the extent that financial (9) In this section - accommodation was provided to the subsidiary by the Commission for the purposes of making the "Commission debt" means liabilities of the payment to the Commission. Commission, whether current or non-current, but does not include any liability of the Commission to the State; (3) Money referred to in sub-section (1) or (2) is not payable and must not be required to be paid, either Il[.oy Yang property" means - directly or indirectly to the State. (a) the Loy Yang land; and (4) Money referred to in sub-sections (1)(a) and (2) must be used, at the discretion of the Commission, (b) any business carried on by the Commission on for the purposes of carrying out the Commission's the Loy Yang land; and functions. (c) any real or personal property, whether or not (5) The State and any Minister, statutory body, agent or situated on the Loy Yang land, associated with instrument of the State must not - any business or undertaking carried on on any part of the Loy Yang land; and (a) submit an application or program for a loan or other financial accommodation; or (d) a company, joint venture, partnership or other body which has an interest in any of the (b) obtain a loan or other financial property referred to in paragraph (a), (b) or (c); accommodation - "transaction costs" means the direct or indirect costs, if the application, program, loan or other financial charges and expenses of, or in connection with, selling accommodation takes into account, or is dependent on, or leasing any interest in the Loy Yang property, directly or indirectly, a repayment, discharge or including, without limitation - satisfaction of Commission debt from the moneys referred to in sub-section (1). (a) the costs, charges and expenses of negotiating, preparing, executing and settling each project (6) The auditor-General must, one month after the last agreement; and day of any financial year in which the Commission receives money to which sub-section (1) applies- (b) the costs, charges and expenses payable to any financial or legal adviser or other professional (a) prepare, and sign, a report as to whether there consultant appointed by the Commission - has been compliance with this section and include a summary of the reasons for the but does not include the costs, charges and conclusions of the Auditor-General; and expenses of stamping or registering a project agreement or an instrument executed to give effect (b) transmit the report to the Legislative Assembly. to a requirement of a project agreement. ... (7) The Auditor-General has, for the purpose of The object of the new clause is to ensure that the net preparing the report referred to in sub-section (6), proceeds of the sale go towards the retirement of all the powers conferred on the Auditor-General SEC debt. One of the most important objectives of by any law relating to the audit of public accounts. any privatisation - if there is to be a true public (8) Without limiting the generality of sub-section (7), benefit - is to reduce the debt of the organisation, of the Auditor-General, and each officer of the which part is being privatised. Auditor-General- LOY YANG B BILL

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In the case of the Loy Yang B power station a Of course, State debt will be reduced only by the substantial amount of money will be received from amount of the repayment facilitated by the Mission Energy and the other government bodies for transactions that is not offset by borrOWings in other the purchase of their portions - 40 per cent and areas. Because the purpose of the clause is to reduce 11 per cent - of the total value of the power station. the authority of the State in the relevant year to enter We wish to see the net returns from this sale applied into new money borrowings, it is intended to reduce to the reduction of SEC debt. We are concerned that the new money borrowings by the amount of the net if that is not the case the government will use the proceeds of the Loy Yang sale so that there will be, proceeds for its own purposes and fritter them in a real and genuine sense, a reduction of State debt away. We wish to avoid that; we wish to see the at least relative to what it might otherwise be. proceeds applied to the retirement of the SEC debt of $9.1 billion. Part of the object of this whole exercise The global requirements under the Loan COWlcil is to retire as much of the debt as possible. allocations apply not to particular organisations at the level of the Loan Council but across the Victorian As to the second part of the amendment, we insist public sector. Indeed, they also extend to local that once that debt is retired the overall reduction in government and any other creature of State law, so the level of State debt is not used by the government, that in assessing the application of the global limit either before or after 1 July this year, to borrow and the compliance with the limit, the Loan Council against under the global limits set by the Loan and the secretariat will have regard only to the Council. aggregate level of borrowings for the State as a whole, and those limits are specified in two forms. We believe the government has borrowed too much money over the years, which has put Victoria in Firstly, although there is a new money limitation, hock to an extent this State has never seen before. there is an acceptance that debt is rolled over from The government should not be allowed to use this time to time, so that borrowings that occur by way transaction to borrow more money, either to bail of refinancing are not counted towards a measuring itself out towards the end of this financial year or to of compliance with the new money limitation under fund what would obviously be a giveaway Budget the global limit. in the spring sessional period. If the SEC were to repay, say, $550 million as a result The third part of the amendment requires the of this transaction, it could offset borrowings by Auditor-General to assess whether the government VicFin.1t would otherwise be new money, but the has adhered to this provision and to report to government and Loan Council would treat it as Parliament in due course as to whether the refinancing in light of the repayment of SEC debt - government has abided by the will of Parliament and there would be no reduction of State debt. At once this new clause is passed. The government has best we would end up where we were before the again said that it will not support the amendment, transaction was made. that it will vote against it in this place and that it wishes to discuss it with the shadow Treasurer, the Therefore, the requirement is intended to be in three shadow finance Minister and me while the Bill is parts, as the honourable member for Evelyn has between Houses to try to persuade us that it is not said. Firstly, it makes clear the intention of necessary. Parliament that the new money borrowing authority is to be reduced by the amount of the net proceeds; However, I think the amendment is vital to the secondly, that provision is not to be avoided by financial health of the State. It will take considerable using those repayments to treat any other argument to convince us not to vigorously pursue borrOwings as refinancing rather than new the amendment to its conclusion in another place. money-raising avenues; and thirdly, that within a reasonable time the Auditor-General should Mr STOCKDALE (Brighton) - I reinforce the investigate and certify to Parliament that the clause comments just made by the honourable member for has been complied with to ensure accountability in Evelyn and add that the genesiS of this clause is the the management of debt. agreement of the government - indeed, one might say the assertion of the government - that the There should be no problem with this clause; it does proceeds of the sale, after meeting the expense of the no more than require, by force of law, what the transactions themselves, will be applied to the government has said should be the essence of the reduction of State debt. treatment of the proceeds. The government has LOY YANG B BILL

Thursday, 28 May 1992 ASSEMBLY 1943 made a point of arguing that the proceeds will allow I understand from the briefings I have had that the a genuine reduction in State debt. 1his clause does involvement of those other government bodies is no more than ensure that that occurs, and ensures going to be totally funded by money borrowed by accmmtability so that Parliament - and through Mission Energy. Their involvement can start from Parliament the people of Victoria - can be satisfied now until any time up to 1996 so there may be a that what the government said would take place has number of annual reports of this kind before that taken place. cut-off time of inclusions or deletions from this particular provision. By the time the second unit of I cannot understand why the government disagrees the station is commissioned the other government with the amendment. I should have thought it was bodies should be complete. quite straightforward. The Minister for Manufacturing and Industry Development raised Notwithstanding that, this report by the Minister the matter with me earlier in the evening - we had will indicate to the Parliament the state or the quite an extensive discussion about it. I understand involvement of other government bodies, who they he has gone away to consider the refinancing issue; are, what their nature is and to what degree they are but if the government is serious about achieving a investing in the project. genuine reduction in the State's debt as a result of these transactions, it ought to readily embrace the New clause agreed to. amendment. New clause CC New clause negatived. Mr A. J. SHEEHAN (Treasurer) - I move: New clause F Insert the following new clause to follow clause 36: Mr PLOWMAN (Evelyn) - I move: Amendment of sections 69B and 69C Insert the following new clause to follow clause 30 - "Cc. (1) After section 69B(2) of the Principal Act insert- Annual report of interests "(2A) The Minister must not grant an authority ''F. The Minister must cause to be laid before each under sub-section (2)(d) if it would House of the Parliament on or before 31 August in materially adversely affect the ability of each year, or if a House is not then sitting, within 6 the Commission to fulfil its obligations sitting days of the House next foJlowing that date, under a project agreement within the a report identifying the statutory bodies that have meaning of the Loy Yang B Act 1992.". an interest, whether direct or indirect, in the project and specifying the interest of each such (2) After section 69C(2) of the Principal Act insert - body.". "(2A) The Minister must not grant a licence That mythical beast we have talked about at some under sub-section (2) if it would length - other government bodies or OGBs - is materially adversely affect the ability of still very much mythical because nobody knows the Commission to fulfil its obligations who they comprise and what sort of involvement under a project agreement within the those in government bodies will have in their meaning of the Loy Yang B Act 1992.". participation in the joint venture. There is no This relates to the ensuring of reliability of coal indication as to whether those government bodies supply to the station. will have a debt or equity participation in the joint venture, and we believe the people of Victoria and New clause agreed to. the Parliament should be given the details of the public bodies that are investing in this jOint venture. New clause DD Therefore the opposition moves this new clause, which will require the Minister to produce an Mr A. J. SHEEHAN (Treasurer) - I move: annual report on or before 31 August, which will be laid before the Parliament indicating who those Insert the following new clause to follow clause 36: bodies are, their nature and the degree of their investment. Amendment of section 102 LOY YANG B BILL

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"''DO. In section 102 of the Principal Act, sub-section 19. Schedule I, page 21, clause 1.1, in the definition of (1) is repealed.". "Power Supply Agreement", before "pursuant" insert "in accordance with the principles set out in New clause agreed to. Part 6 of the annexure, being an agreement". Schedule 1 20. Schedule I, page 21, clause 1.1, in the definition of "Sale of Assets Agreement", before "to provide" Preamble to schedule insert "in accordance with the principles set out in Part 7 of the annexure, being an agreement". Mr A. J. SHEEHAN (Treasurer) - I move: This is further to the argument put during the second-reading debate by a number of opposition 23. Schedule I, page 20, before "[parties to be named)" members who pointed out the various agreements insert "State Electricity Commission of Victoria, a body listed and the schedule: the Coal Supply Agreement; corporate established by the State Electricity the Completion of Construction Agreement; the Commission Act 1958 ("SECV")." Joint Venture Agreement; the Miscellaneous Services Agreement; the Operating and Maintenance Amendment agreed to; amended preamble to Agreement; the Power Supply Agreement; and the schedule agreed to. Sale of Assets Agreement. In each case there is a definition of agreement but to somebody reading the Clause 1 Bill or, later, the Act there is absolutely no edification as to what the definition is really about. Clause 1.1 During the debate we indicated that we would wish Mr A. J. SHEEHAN (Treasurer) - I move: to see an outline of the general principles of each 24. Schedule I, page 21, omit the definition of "SECV". agreement recognising the fact that the commercially sensitive information relating to such agreements Amendment agreed to. would not be appropriate to put in a schedule of this kind. It is seeking to indicate to anyone reading the Mr PLOWMAN (Evelyn) - Amendments Nos 14 Bill or Act in due course the real meaning of these to 20 standing in my name are: various agreements. Without the addition of these 14. Schedule I, page 20, clause 1.1, in the definition of major provisions to each agreement the definitions "Coal Supply Agreement", before "pursuant" are insufficient to indicate to somebody looking at insert "in accordance with the principles set out in the Bill what it is all about. Part 1 of the annexure, being an agreement". We have had discussions on these amendments and 15. Schedule I, page 20, clause 1.1, in the definition of the means by which we intended to have the "Completion of Construction Agreement", before principles of the agreements incorporated in our "pursuant" insert "in accordance with the amendment No. 22, which would have been an principles set out in Part 2 of the annexure, being annexure to the schedule that would have spelt out an agreement". in each case the principles of each agreement. The 16. Schedule I, page 21, clause 1.1, in the definition of government has indicated that it does not oppose '1oint Venture Agreement", before "to provide" the intention of spelling out clearly the principles insert "in accordance with the principles set out in involved in each definition but it has said that it and Part 3 of the annexure, being an agreement". its lawyers are concerned at the means by which we are going about achieving that objective and has 17. Schedule I, page 21, clause 1.1, in the definition of sought to have discussions with us on the principle "Miscellaneous Services Agreement", before of induding the principles of these agreements in the "pursuant" insert "in accordance with the schedule and how this may be achieved in the spirit principles set out in Part 4 of the annexure, being of cooperation. an agreement". 18. Schedule 1, page 21, clause 1.1, in the definition of We are prepared not to proceed with the "Operating and Maintenance Agreement", before amendments and that will mean we will not proceed "pursuant" insert "in accordance with the with amendment No. 22. We will insist in another principles set out in Part 5 of the annexure, being place that an adequate description of these an agreement". agreements is appended to the schedule by whatever method is agreed between the parties. LOY Y ANG B BILL

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So, Mr Chairman, I will not proceed with accurate copy of the variation, modification or amendments Nos 14 to 20 and No. 22 standing in replacement is given to the Minister. my name. Amendment agreed to. Amended clause 1.1 agreed to; clause 1.2 agreed to. Amended clause 3 agreed to. Clause 1.3 Clause 4 Mr A. J. SHEEHAN (Treasurer) - I move: Clause 4.1 25. Schedule 1, page 22, clause 1.3 (b)(i), omit "clause 3.1" and insert "clauses 3.1 and 3.2". Mr A. J. SHEEHAN (Treasurer) - I move: 26. Schedule I, page 22, clause 1.3 (b), omit 29. Schedule 1, page 24, line 1, before "the Participants" sub-paragraph (ii) and insert- insert "SECV,".

"(ii) the seeking of approvals from the Minister 30. Schedule 1, page 24, clause 4.1(b), after "procure" under Clause 5;". insert "(but without any obligation to pay for or to provide a subsidy for". The amendments deal with the renumbering of clauses. 31. Schedule I, page 24, clause 4.1, omit all words and expressions after paragraph (b). Amendments agreed to; amended clause 1.3 agreed Amendments agreed to; amended clause 4.1 agreed to. to. Amended clause 1 agreed to. Clause 4.2 Clause 2 Mr A. J. SHEEHAN (Treasurer) - I move: Clause 2.1 32. Schedule I, page 24, clause 4.2, omit this clause and insert - Mr A. J. SHEEHAN (Treasurer) - I move: "4.2 Grants of interests in Crown land 27. Schedule 1, page 22, omit clause 2.1 and insert­ In respect of any Crown land which is necessary "2.1 Clauses 1, 2 and 3 take effect on the date of this for the purposes of the Project and which is not Agreement". required or reasonably likely to be required by the State for any other purpose (including, within Amendment agreed to; amended clause 2.1 agreed limitation, its sale), following a request by SECV, to. the Participants (or by the Operator on behalf of the Participants) the State will grant or cause to be Amended clause 2 agreed to. granted to SECV or the Participants (as the case may be), on terms and conditions which are reasonable in all the circumstances, such an interest in that Crown land as is requested by Clause 3 SECV or by or on behalf of SECV or the Participants and which is necessary for the Mr A. J. SHEEHAN (Treasurer) - I move: purposes of the Project." 28. Schedule I, page 23, omit clause 3 and insert - The amendment provides a stronger assurance that "3. MINISTER'S COPIES OF AGREEMENTS the vacant land will be made available. I further AND VARIATIONS move: 3.1 Promptly after executing any Project Agreement That the amendment be amended by altering the word the Participants will ensure that an accurate "within" to "without". copy of it is given to the Minister. 3.2 Promptly after executing any variation to or Amendment on amendment agreed to. modification or replacement of any Project Agreement the Participants will ensure that an Mr PLOWMAN (Evelyn) - I move: LOY YANG B BILL

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That the amended amendment be further amended by: 42. Schedule 1, page 25, clause 4.5(a)(i)(B), omit "or operators of those other power stations" and insert 1. Proposed new clause 4.2, omit "which is necessary" "of those other power stations and related (where first occurring) and insert "which the facilities". Minister determines necessary". 43. Schedule 1, page 25, clause 4.5(a)(i) after 2. Proposed new clause 4.2, omit "which is necessary "discriminatory" insert "to a material extent". (where second occurring) and insert "which has been determined by the Minister to be necessary". 44. Schedule 1, page 25, clause 4.5(b), omit "authorising or permitting" and insert "or continuing". These further amendments seek to identify who has responsibility for detennining whether Crown land 45. Schedule 1, page 25, clause 4.5(b)(ii)(B), after "power is necessary for the purpose of the project. The stations" insert "and related facilities". opposition believes that the clause should be 46. Schedule 1, page 26, clause 4.5 (b)(ii)(B), omit "or qualified to provide that it is the Minister who must operators of those other power stations" and insert take the responsibility for detennining whether "of those other power stations and related Crown land is necessary for the project. facilities". Further amendments agreed to; further amended 47. Schedule 1, page 26, clause 4.5, after paragraph (c) amendment agreed to; amended clause 4.2 agreed insert- to. "(d) It is not discriminatory within the meaning of this Clause 4.5 if: Clauses 4.3, 4.4 and 4.5 (i) (A) an action or combination of actions Mr A. J. SHEEHAN (Treasurer) - I move: affects or potentially affects the Power Station or the rights, benefits or 33. Schedule 1, page 24, clause 4.3, omit "application for obligations of a Participant in relation to it" and insert "application for the permit to be the Power Station in a way that is different granted or to be reissued, renewed or extended (as from the effect or potential effect of that the case may be)." action or combination of actions on power 34. Schedule 1, page 24, clause 4.3, before "the stations and related facilities owned by Participants" (where secondly occurring) insert SECV or the rights, benefits or obligations "SECV,". of SECV as proprietor of those power stations and related facilities; and 35. Schedule I, page 24, clause 4.3, paragraph (a), omit this paragraph and insert - (B) that difference results from or is attributable to SECV being a statutory "(a) if the Permit is required from the State, if body of the State; or reasonable to do so and consistent with any requirements generally applicable to the (ii) the State or an agent, instrument or granting, reissue, renewal or extension of such statutory body of the State, or Council, a Permit, prompti y grant, reissue, renew or enters into or continues an agreement or extend the Permit; and"; arrangement in respect of:

36. Schedule 1, page 24, clause 4.3(b)(i), after "grant" (A) income, titles, property or other assets: insert", reissue, renewal or extension". (B) products, materials or services used or 37. Schedule 1, page 24, clause 4.3(b)(ii), after "procure" produced by, or through the operation of, insert "(but without any obligation to pay for or to power stations and related facilities; provide a subsidy for)". (C) the generation, disposal or sale of 38. Schedule 1, page 24, clause 4.3(b)(ii), after "granting" electricity produced by power stations insert ",reissue, renewal or extension". and related facilities, 39. Schedule 1, page 24, clause 4.3 omit all words and on terms different from those provided for expressions after paragraph (b). in this agreement or a project agreement.". 40. Schedule 1, page 24, clause 4.4, before "the Amendments agreed to; amended clauses 4.3, 4.4 Participants" (Where first occurring) insert "SECV". and 4.5 agreed to. Amended clause 4 agreed to. 41. Schedule 1, page 25, clause 4.4, omit all words and Clause 5 expressions after paragraph (d). LOY Y ANG B BILL

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Mr A. J. SHEEHAN (Treasurer) - I move: 58. Schedule I, page 26, clause 5.4(a), omit "Clause 5" and insert "Clause 6". 48. Schedule 1, page 26, clause 5, omit heading "5. ASSIGNMENT" and clause 5.1 and insert- 59. Schedule I, page 27, omit "5.5" and insert 1/6.6". "5. LIABILITY OF THE STATE Mr CLARK (Balwyn) - I raise a question concerning proposed clause 6.2 which is to be A variation, modification or replacement of a inserted by the Minister's amendment No. 48. That Project Agreement after the date of this Agreement amendment inserts a provision that a participant does not modify or reduce the rights or add to the may assign, mortgage, charge, dispose of or obligations of the State under this Agreement otherwise deal with its rights under the agreement unless that variation, modification or replacement or any part of the agreement with the prior written has been approved for the purposes of this consent of the Minister. Agreement by notice in writing by the Minister. 6. ASSIGNMENT In a joint venture arrangement of the kind being given effect to by this agreement 1 can understand 6.1 It is an essential term of this Agreement that there may be a restriction on assignment, but 1 that, otherwise than as provided in this wish to know why it is the Minister rather than the Clause 6, rights under this Agreement or other joint venture participants who has to give any part of this Agreement cannot be prior written consent to the aSSignment. Normally in assigned, mortgaged, charged, disposed a joint venture arrangement the parties are naturally of or otherwise dealt with by a Participant concerned about the identities of the other parties and that a purported assignment, and assignments are therefore not allowed without mortgage, charge, disposition or dealing the agreement of other parties. In this case it is not otherwise than as provided in this Clause the other parties who have to agree but the Minister. 6 is void and of no effect. 6.2 A Participant may assign, mortgage, charge, I wonder whether there is any particular public dispose of or otherwise deal with its rights policy reason for the Minister, on behalf of the State, under this Agreement or any part of this to have to agree to an assignment by the participants Agreement with the prior written consent of their interest under the agreement rather than the of the Minister." other participants, or the parties generally who have to agree to the assignment. Why does it lie page 26, omit "5.2" and insert "6.3". 49. Schedule 1, exclusively within the power of the Minister to SO. Schedule 1, page 26, clause 5.2(b), omit "the costs of consent? acquisition or development of" and insert "or refinancing costs of acquiring, holding, developing Mr A. J. SHEEHAN (Treasurer) - I understand it or maintaining". is partly for the State's knowledge, so that some control is retained over changes that may be desired 51. Schedule 1, page 26, clause 5.2, omit "(in a form to be effected. approved by the Minister)" and insert "(in such form as the Minister reasonably requires)". Amendments agreed to. 52. Schedule 1, page 26, clause 5.2, omit "Clause 5" and insert "Clause 6". Amended clause 5 agreed to. 53. Schedule I, page 26, omit "5.3" and insert "6.4". Clause 6 54. Schedule I, page 26, clause 5.3, omit "(in a form approved by the Minister)" and insert "(in such Mr A. J. SHEEHAN (Treasurer) -I move: form as the Minister reasonably requires)". 60. Schedule 1, page 27, omit clause 6 and insert - 55. Schedule 1, page 26, omit "5.4" and insert "6.5". '7. TERMINATION 56. Schedule I, page 26, clause 5.4, omit "5.1" and insert 7.1 If a Participant goes into liquidation (other "6.1". than a voluntary liquidation for the 57. Schedule I, page 26, clause 5.4, omit "a form purpose of reconstruction) unless that approved by the Minister" and insert "such form Participant or a person acting on behalf of as the Minister reasonably requires". that Participant continues to perform that Participant'S financial obligations under the Joint Venture Agreement the State LOY Y ANG B BILL

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may by notice in writing given to that Oause7 Participant terminate the obligations of the State to that Participant under this Mr A. J. SHEEHAN (Treasurer) - I move: Agreement, but such termination will be 61. Schedule 1, page 27, omit '7." and insert "B.". without prejudice to any right, obligation or liability of the State, that Participant or 62. Schedule 1, page 27, omit '7.1" and insert "B.1". any other Participant then accrued or 63. Schedule 1, page 27, omit "7.2" and insert "B.2". incurred under this Agreement and without prejudice to any right, obligation 64. Schedule 1, page 2B, omit '7.3" and insert "8.3". or liability of the State or any other The amendments simply change some numbers. Participant thereafter arising under this Agreement. Amendments agreed to. 7.2 The State may by notice in writing to the Participants terminate this Agreement at Amended clause 7 agreed to. any time after the Power Supply Agreement has been terminated (whether OauseS by efflux ion of time or otherwise) or discharged, but such termination will be Mr PLOWMAN (Evelyn) - I move: without prejudice to any right, obligation 21A. Schedule 1, page 28, clause 8. VARIATION OF or liability of the State or a Participant AGREEMENT, omit this clause and insert the then accrued or incurred under this following: Agreement." "9. VARIATION OF AGREEMENT The amendment is to ensure that the determination is not forced. If honourable members require further (1) The parties to the State Agreement may from advice I shall obtain the information for them. time to time by agreement in writing add to, or substitute for, cancel or vary all or any of Mr CLARK (Balwyn) - I desire to take up the the provisions of the State Agreement. Minister's offer; it would be helpful if either now or (2) The Minister must cause a copy of an agreement when the Bill is between here and another place the under sub-section (1) to be laid before each Minister could provide some advice as to the form of House of the Parliament within 6 sitting days proposed clause 7.2, which provides that the State of the House next following the making of the may terminate the State agreement at any time after agreement. the power supply agreement has been terminated, whether by effluxion of time or in other ways. (3) An agreement under this section may be revoked wholly or in part by resolution of I understand that the State agreement would be either House of the Parliament passed within terminated once the power supply agreement 6 sitting days of the House after a copy of the terminated through effluxion of time because it may agreement is laid before that House. well be that the State agreement would become (4) Unless the agreement is revoked under this irrelevant at that time. I wonder what circumstances section, an agreement under this section are envisaged under which the State might comes into force on the expiration of the terminate the State agreement if the power supply period within which it could have been agreement were to be terminated for default or some revoked .... other premature reason and not due to the effluxion of time. The difficulty the coalition had with the wording of the clause is that if there is a variation of the Is it a tidying exercise or is it a deterrent to agreement the Minister must table the variation and termination of the supply agreement that the State give either House the opportunity of amending or agreement could be terminated? I appreciate that the rejecting the variation. The clause stipulates that a Minister may need to seek advice on that matter variation of the agreement can be agreed to only by while the Bill is between here and another place. resolution of both Houses. The new wording allows either House to amend or reject a variation of the Amendment agreed to. agreement.

Amended clause 6 agreed to. LOCAL GOVERNMENT (ELECTIONS) BILL

Thursday, 28 May 1992 ASSEMBLY 1949

The coalition believes this is a very important 76. Schedule I, page 28, omit "13." and insert "14.". amendment because it ensures that a variation of the Amendment agreed to. agreement will not occur without adequate Parliamentary scrutiny. Amended clause 13 agreed to. Dr WELLS (Dromana) - I endorse the comments Clause 14 of the honourable member for Evelyn and in so doing indicate my opposition to clause 8.3, which is Mr A. J. SHEEHAN (Treasurer) - I move: unacceptable. 77. Schedule I, page 28, omit "14." and insert "15.". Amendment agreed to. 78. Schedule I, page 28, omit "14.1" and insert "15.1". Amended clause 8 agreed to. 79. Schedule 1, page 28, omit "14.2" and insert "15.2". SO. Schedule I, page 28, omit "14.3" and insert "15.3". Clause 9 81. Schedule I, page 29, omit "7' and insert "8". Mr A. J. SHEEHAN (Treasurer) - I move: Amendments agreed to. 71. Schedule I, page 28, omit "9." and insert "10.". Amended clause 14 agreed to. Amendment agreed to. Amended Schedule 1 agreed to; Schedule 2 agreed Amended clause 9 agreed to. to. Clause 10 Preamble to Bill Mr A. J. SHEEHAN (Treasurer) - I move: Mr PLOWMAN (Evelyn) - I move: 72. Schedule I, page 28, omit "10." and insert "11.". 23. Preamble, omit "and ratify the entering into of that 73. Schedule I, page 28, clause 10, omit "11" and insert Agreement" and insert "the entering into of the "12". Agreement set out in Schedule 1 and to ratify and approve that Agreement". Amendments agreed to. The amendment clarifies the preamble as it relates to Amended clause 10 agreed to. the entering into of the agreement and the ratification and approval of that agreement by Clause 11 Parliament.

Mr A. J. SHEEHAN (Treasurer) - I move: Amendment agreed to; amended preamble agreed to. 74. Schedule I, page 28, omit "11." and insert "12.". Amendment agreed to. Reported to House with amendments.

Amended clause 11 agreed to. Passed remaining stages.

Clause 12 Sitting suspended 11.59 p.m. until 12.33 a.m. (Friday). Mr A. J. SHEEHAN (Treasurer) - I move: LOCAL GOVERNMENT (ELECTIONS) 75. Schedule I, page 28, omit "12." and insert "13.". BILL Amendment agreed to. Second reading Amended clause 12 agreed to. Debate resumed from 14 April; motion of Mrs Clause 13 SETCHES (Minister for Community Services).

Mr A. J. SHEEHAN (Treasurer) - I move: Mr DELZOPPO (Narracan) - The Local Government (Elections) Bill originated in the other FAIR TRADING (ENVIRONMENTAL LABELLING) BILL

1950 ASSEMBLY Thursday, 28 May 1992 place. It was extensively amended by both a House advertising guideline under the umbrella of the amendment and amendments proposed by Commonwealth Trade Practices Act". Mr Hallam in another place, the local government spokesperson for the coalition. The opposition does not oppose what the Bill is endeavouring to achieve but it is a Xerox effort The opposition has achieved all the changes to the because it replicates provisions in section 52A of the Bill that it required and supports the Bill. Federal Trade Practices Act.

Mr W. D. McGRATH (Lowan) - It was It is appropriate in dealing with the legislation that interesting that after a meeting today with regional honourable members be made aware of what is representatives, Robert Marshall, Chief Executive ,contained in the Federal legislation. Section 52A of Officer of the Horsham City Council, asked if the the Trade Practices Act states: Local Government (Elections) Bill would be passed. (1) A corporation shall not, in trade or commerce, in He was concerned that, if it were not passed and connection with the supply or possible supply of were left until 9 June, that may not allow adequate goods or services to a person, engage in cond uct time for nominations for local government. At that that is, in all the circumstances, unconscionable. time we spoke with the Minister for Ethnic, Municipal and Community Affairs, who then made (2) Without in any way limiting the matters to which the some inquiries and advised that it would be better if Court may have regard for the purpose of the Bill were passed now. determining whether a corporation has contravened subsection (1) in connection with the We should give credit to the Chief Executive Officer supply or possible supply of goods or services to a of the City of Horsham for being alert to the need to person (in this subsection referred to as the have the legislation passed at the appropriate time to "consumer''), the Court may have regard to: facilitate those nominations for council elections. (a) the relative strengths of the bargaining positions of the corporation and the consumer; I thank the Minister for Ethnic, Municipal and Community Affairs for ensuring that the (b) whether, as a result of conduct engaged in by information was correct and introducing the Bill in a the corporation, the consumer was required to timely fashion to solve the problem. comply with conditions that were not reasonably necessary for the protection of the Motion agreed to. legitimate interests of the corporation;

(c) whether the consumer was able to understand Read second time. any documents relating to the supply or possible supply of goods or services - Passed remaining stages. surely that goes to the issue of what the Bill is about; FAIR TRADING (ENVIRONMENTAL it is an all-embracing reference and the Bill relates LABELLING) BILL specifically to matters relevant to the environment -

Second reading (d) whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the consumer or a person acting on Debate resumed from 16 April; motion of behalf of the consumer by the corporation or a Mr HARROWFIELD (Minister for Finance). person acting on behalf of the corporation in relation to the supply or possible supply of the Mr GUDE (Hawthorn) - I would refer to the goods or services; and Fair Trading (Environmental Labelling) Bill to as a Xerox Bill, because it replicates Commonwealth (e) the amount for which, and the circumstances legislation, and I, therefore, propose to move a under which, the consumer could have reasoned amendment. I move: acquired identical or equivalent goods or services from a person other than the That all the words after "That" be omitted with the corporation. view of inserting in place thereof the words "this House Section 52A(3) states: refuses to read this Bill a second time until consideration is given to a national environmental A corporation shall not be taken for the purposes of this section to engage in unconscionable conduct in FAIR TRADING (ENVIRONMENTAL LABELLING) BILL

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connection with the supply or possible supply of goods Anyone who has taken the trouble to read those or services to a person by reason only that the three Federal Act provisions will see that this Bill corporation institutes legal proceedings in relation to replicates in large measure those particular that supply or possible supply or refers a dispute or provisions yet specifies an envirorunental claim. The claim in relation to that supply or possible supply to coalition believes this particular measure is well and arbitration. truly covered by Federal law.

Section 53 of the Federal Trade Practices Act also If one harks back to last year's Premiers Conference contains extensive provisions relating to false or one remembers that Victoria's Premier warned: misleading representations. They relate to such matters as falsely representing: Time is running out for the States and the Federal government to agree on national policy priorities and ... that goods are of a particular standard, quality, the elimination of duplication. value, grade, composition, style or model, or have had a particular history or particular previous use. The Premier also said there was no place in the process for State parochialism. Accordingly, this Bill That subclause more than adequately covers the flies in the face of the Premier's speech to that specific provisions represented in the Bill. important conference convened by the then Prime Minister. That section further states: The extent of the government's double standards ... falsely represent that services are of a particular can be seen in those few areas. Presumably the Bill standard, quality, value or grade; has been introduced because of a genuine desire to improve envirorunentallabelling. It seems the (b) falsely represent that goods are new; government has seized upon some recent media (bb) falsely represent that a particular person has publicity in this area and drummed up a piece of agreed to acquire goods or services; legislation that is designed to curry favour in border electorates. Anyone who has taken the trouble to (c) represent that goods or services have sponsorship, read the Federal Acts will know that the provisions approval, performance characteristics, accessories, of the Bill are a superfluous duplication of uses or benefits they do not have; legislation that flies in the face of the words uttered (d) represent that the corporation has a sponsorship, by the Premier. If one reads the Premier's statement approval or affiliation it does not have; of last year one will see that under the heading "Federal-State government relations" she said: (e) make a false or misleading representation with respect to the price of goods or services; Cooperation between levels of government and (ea) make a false or misleading representation achieving reform of administration by eliminating concerning the availability of facilities for the duplication of services - repair of goods or of spare parts for goods; and I emphasise "duplication of services" - (eb) make a false or misleading representation concerning the place of origin of goods; will make an important contribution to achieving (f) make a false or misleading representation concerning greater efficiencies. The government will continue to the need for any goods or services; or actively pursue reforms through the special Premiers Conference. (g) make a false or misleading representation concerning the existence, exclusion or effect of any They were nice words at the time but they have not condition, warranty, guarantee, right or remedy. been followed up because the House is now dealing Section 55 of the Federal Trade Practices Act states: with a Bill that flies in the face of the Premier's comments. A person shall not, in the trade or commerce, engage in conduct that is liable to mislead the public as to the Under the heading "No place for parochialism", and nature, the manufacturing process, the characteristics, following a reference to available jobs, an article in the suitability for their purpose or the quantity of any the Australian of 25 July 1991 states: goods. FAIR TRADING (ENVIRONMENTAL LABELLING) BILL

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Ms Kimer said it was essential that the special In a related arena the Premier and other public conference was successful and warned "time is rwuting figures have expressed concern about the plight of out" for the States and the Federal government to agree the more than 250 000 Victorians who presently find on national policy priorities and the elimination of themselves out of work. Honourable members know duplication between the different tiers of government. that the real unemployment figure in Victoria is more than 300 000 and in many areas youth She said there was no place in the process for State unemployment has reached 46 per cent. Legislators parochialism. should be cognisant of any additional impost placed on the business community that could impact in any At the minimum there would need to be a commitment way on the cost of employing people. by all the States to the new national rail freight corporation, agreement to reform roads funding, at When proposed legislation replicates Federal law least some untying of Commonwealth specific-purpose one must question the seriousness with which the grants so they could be used for general revenue government pursues its so-called employment goals. purposes by the States and harmonisation of The coalition and the Victorian public believe the regulations between the States. government has lost its way entirely. That is clearly demonstrated by the nature and force of the The Premier specifically dealt with this matter, yet proposal before the House tonight. The press release only a few months after those comments were made continues: in the most public Australian forum, the government has introduced Xerox-type legislation to It has all the earmarks of an expensive bureaucratic replicate the Federal situation. exercise to establish another regulatory structure in Victoria. It does not give sufficient regard to the The Victorian government's endeavours to be a consequences on companies and it will achieve nothing pacesetter in a number of areas have become beyond the existing TPC requirements. increasingly alarming. I shall put on my industrial relations hat for a moment and point out that the The legislation was introduced just before Easter and is government is trying to set the pace in the expected to be debated in the next few years. occupational health and safety area and in a number of other areas including codes and regulations Mr Paterson warned that it threatens to: despite all the States agreeing about the need for Compromise the uniform national approach national unifOrmity. The exact same circumstances established two months ago with the release of apply to the fair trading arena. special guidelines by the Trade Practices Commission. I refer to a press release of the Australian Chamber of Manufactures dated 26 April 1992, which states: These guidelines are the result of extensive consultation between the Commonwealth, States and business and Victoria does it again: proposed environment labelling reflect a shared commitment by all parties to establish laws out of step. acceptable standards.

Victoria's proposed new laws on environmental Obviously a lot of effort has been put in at the labelling and advertising are unnecessary and national level to achieve a set of standards and misguided, John Paterson, National Chief Executive of guidelines that will be acceptable to the community. the Australian Chamber of Manufactures, said today. They were prepared in the way the government and its Federal counterpart usually like to work: the Mc Paterson said the legislation seeks to establish so-called tripartite arrangement aimed at achieving additional State administration in an area of the law the required changes. Despite the Premier's which is already more effectively and appropriately statement that Victoria should not replicate administered at the national level under the Trade legislation and the fact that the Commonwealth is Practices Act. seeking to produce new acceptable standards to make even more relevant the provisions of the Trade "The legislation is another example of the Victorian Practices Act to which I referred earlier, the propensity for excessive government expenditure and government has introduced the proposed legislation. coercive over-regulation of business", he said. I can only assume that the reason for doing that was to try to create for itself a nice warm feeling among That area should be of concern to the government. supporters of the Labor Party. The government has FAIR TRADING (ENVIRONMENTAL LABELLING) BILL

Thursday. 28 May 1992 ASSEMBLY 1953 done nothing for consumers. It is not offering any Bill proposes to change the process of law in this new or efficient efforts in that area; it is simply State as well as to identify changes in definitions and wasting the resources of the State. certain environmental claims that may be prohibited under the Bill. Mr Paterson warns that it threatens to: Why should one group of people work with the Commonwealth to achieve acceptable standards and Further erode confidence in Victoria as an appropriate another group in Victoria produce the Fair Trading base for business and investment. (Environmental Labelling) Bill? It has been impossible to find any members of the business In Victoria, as part of the inertia and stagnation community who support the Bill. Despite the fact under the Cain and Kirner governments, confidence that the measure has been available I, as the shadow has been eroded to unprecedented levels. That is Minister in this area, have not received one single reflected in the level of unemployment, the record request for the Bill and I have not heard one iota of number of bankruptcies, the number of shops and support for it. There has been no shortage of businesses that are struggling to survive, the sale of criticism of the Bill, particularly about the fact that it motor vehicles which have declined substantially is a replication of existing Federal law. Mr Paterson and most other economic indicators. They all also warned that the Bill threatens to: demonstrate the effect of the erosion of confidence that has been caused by the sorts of proposals now Convert into State law guidelines which were designed before the House. to assist companies and consumers to interpret and comply with the existing Federal law. There have been duplicative provisions, excesses, unwarranted, unwanted and totally unnecessary Expose companies doing business in Victoria to double provisiOns. Mr Paterson further warns that it jeopardy of prosecution and penalties in respect of threatens to: particular products because the area already is adequately covered by the Federal TPC. Involve the State in wmecessary expenditure of taxpayer funds. Again it exposes business to a new dimension of double jeopardy, as he calls it, which is the prospect With debt and liability in this State around the of penalties being applied at both Commonwealth $60 billion mark I should have thought the and State levels for the same process and the same government of the day would have been a little deficiency. One assumes additional people will have more cost-conscious, a little more penny-wise and to be employed to carry out that process. Why less pound-foolish in becoming involved in such a should the States be duplicating those facilities when proposal. The press release further states: the Commonwealth is already providing that level of service and follow-up through staff of the Trade "ACM is no less committed than consumers and other Practices Commission? The Minister did not say so sectors of the community to stamp out misleading in his second-reading speech, but if the government labelling and advertising," Mr Paterson said. is concerned that the Federal Labor government is not doing the job properly, firstly, it should say so We have consistently maintained that environmental and, secondly, it should try to work with the Federal advertising should be subject to the same law as other government to attain improvements in the area. advertising and that this law should be applied Heaven help us if members of one political party at uniformly throughout the Commonwealth. the Federal and State levels cannot get their act together on a single area of legislation! Mr Paterson The coalition says "Hear, hear" to that! We certainly further warned that it threatens to: support that proposal. The press release continues:

Create the dangerous precedent that The Trade Practices Act is the most appropriate law environmentally-related advertising in Victoria is and the Trade Practices Commission is the most subject to different legal criteria than that agreed to by appropriate body to administer that law because they other States and the Federal government. have national jurisdiction.

Again there is this pace-setting approach or On behaU of its members, ACM accordingly concept - he puts it no higher than that and nor do participated in the consultations which led to the TPC I -where a Bill provides a clear indication that guidelines. there may well be some differences in outcomes. The FAIR TRADING (ENVIRONMENTAL LABELLING) BILL

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However, the Victorian government has again chosen and again relies on the Federal law. The same to put itself out of step with the Commonwealth, other applies in South Australia. We can see from that that States and business. the Victorian government is out of step with the rest of Australia. It is not prepared to work with other The press release concludes: States or the Commonwealth on national guidelines, although in her Priority Victoria statement the Given the current depressed condition of Victorian Premier gave tacit support at least to the proposition industry and job prospects and the government's own that it is not sensible to replicate laws. Priority Victoria statement, one would have expected the government to have recognised by now that there is I often wonder whether the Premier in her busy time more kudos to be gained from assisting companies to schedule knows exactly what her colleagues in the maintain standards than from big stick coercion and Ministry are producing. I am sure she would be penalties. concerned to find out, if she did not know before tonight, that Victoria is replicating Federal law. A In many ways that press release from the Australian Minister in the Victorian government is acting to Chamber of Manufactures sums up the concerns of bring about additional change and at the same time the business community and the coalition. is supposedly working with the Commonwealth to bring about exactly the same thing. During the consultative process we have undertaken we have not found any support for the proposal. A I repeat that the coalition is not opposed to fair whole raft of business organisations, virtually all the trading, control, proper advertising and proper organisations that can be affected by environmental environmental labelling on products sold in this labelling that were contacted by the coalition, said State or, for that matter, anywhere else in Australia. either in writing or by telephone message that their However, it believes the Federal provisions more concern and consternation was that the government than adequately cover this area and that there is no would be replicating Federal law. need for additional jurisdiction.

The coalition has taken the trouble of checking the It is in that context that we believe it would be wise current status of environmental labelling in other for the government not to proceed with the Bill and States of Australia. As I have said, section 52 and the to give further consideration to the national other sections of the Trade Practices Act to which I environmental advertising guidelines under the referred specifically earlier cover the process of umbrella of the Commonwealth Trade Practices Act misleading advertising. In Western Australia the that has been referred to in the reasoned amendment government considers its Fair Trading Act to be before the House as well as in the press statement adequate because of its small industry base and also from the Australian Chamber of Manufactures. It because of the Federal prOvisions. The Northern has also been referred to by most business Territory has chosen to rely entirely on the Federal organisations which contacted the coalition on this law. Queensland is contemplating matter. Those organisations share our concerns legislation - whatever that means - but it is about the waste, mismanagement, extravagance and watching Victoria. misuse of scarce taxpayer resources when it is neither called for nor necessary. I hope that in watching Victoria the Queensland government is not silly enough to waste its resources The Federal provisions more than adequately cover in the same way as the Victorian government does. I the situation especially when taken with the fair suggest that Queensland should look closely at the trading legislation that exists in this State. I political outcome of the next election to gain a commend the reasoned amendment to the House measure of the community's appreciation or lack and I trust that the Minister for Finance will give due thereof of the waste and mismanagement of this consideration to it. government reflected in Bills like this, no matter how small they are. Mr HARROWFIELD (Minister for Finance) - This Bill is important in meeting the needs of both New South Wales has a Fair Trading Act, as indeed consumers and manufacturers throughout Victoria Victoria has, to cover misleading advertising and it who are making a genuine effort to buy or produce also relies on the Federal law. Tasmania has no and market products of environmental importance. legislation proposed and relies on the Federal law. Honourable members would know about the The Australian Capital Territory has little legislation considerable degree of activity in the marketplace in FAIR TRADING (ENVIRONMENTAL LABELLING) BILL

Thursday, 28 May 1992 ASSEMBLY 1955 recent years as consumers and businesses have counter to the intent of the Federal legislation. The attempted to take advantage of goods and products Bill represents a Significant improvement in making that have a major impact on improving the information available to consumers. environment. A number of retailers and other business organisations have adopted schemes or The government rejects the reasoned amendment products which, although in many cases are well moved by the opposition. The Bill represents an intentioned, have contributed to a high degree of important contribution to prOviding better confusion among consumers about the information to both consumers and those businesses environmental significance of the products they that are providing genuinely environmentally purchase. friendly products.

Consumers have been frustrated about the House divided on omission (Members in favour environmental claims of products on the market and vote No): the fact that many claims are misleading or meaningless. For example, claims that Ayes, 45 chloroflourocarbons, phosphates and solvents are Andrianopoulos, Mr McDonald, Mr absent from products are misleading because they Baker,Mr Mathews,Mr have never been components of those products. Barker, Mrs Micallef,Mr Batchelor, Mr (Teller) Noms,Mr People want to know about the products they are Cain,Mr Pope,Mr buying and they want to be assured of their real Cole,Mr Ray,Mrs environmental significance. The Bill seeks to provide Crabb,Mr Roper,Mr them with better information so that they can be Cunningham, Mr Rowe,Mr more environmentally aware about the products Dollis, Mr Sandon,Mr they purchase. The Bill will protect not only Emst,Mr Seitz,Mr consumers but also those who produce products of Fordham,Mr Sercombe, Mr genuine environmental significance. Garbutt, Mrs Setches, Mrs Gavin,Mr Sheehan, Mr A.J. I am disappointed at the attitude taken by the Hamilton,Mr Sheehan, Mr F.P. opposition to the Bill. It has misrepresented the Harrowfield, Mr Shell,Mr nature of the proposed legislation in the context of HiII,Mrs Simmonds, Mr the Federal legislation. Hirsh, Mrs Spyker, Mr ,Jolly,Mr Thomson,Mr The Victorian government is a pacesetter in Kennan,Mr Trezise, Mr proViding better information for consumers about Kennedy,Mr Vaughan,Or environmentally friendly products. The Green Spot Kimer,Ms Walsh,Mr campaign, which was initiated by my colleague the Leighton, Mr (Teller) WiIson, Mrs Minister for Employment, Post-Secondary Education McCutcheon, Mr and Training, is a successful scheme. The Bill Noes, 33 complements both that campaign and the Bildstien, Mr (Teller) McNamara, Mr Environmental Choice Australia scheme that has Brown,Mr Maclellan, Mr been developed at a national level. I reject the claim Clark,Mr Maughan,Mr made that the Bill duplicates the Commonwealth Coleman,Mr Napthine, Or Trade Practices Act in some way; it complements Cooper, Mr Perton,Mr that Act. It is important that honourable members DeIzoppo, Mr Pescott, Mr understand that the Trade Practices Act applies only Elder, Mr (Teller) Plowman,Mr to corporations that operate in more than one State. Gude,Mr Reynolds, Mr Mounting a prosecution under the Trade Practices Hayward,Mr Richardson, Mr Act is a complicated and often costly exercise. Heffeman, Mr Smith, Mr E.R. Honeywood, Mr Steggall,Mr The Bill will ensure that individuals can obtain Jasper, Mr Stockdale, Mr better information about the products they are Kennett,Mr Tanner,Mr purchasing. The Bill complements both the Trade KiIgour,Mr Wade,Mrs Practices Act and the Environmental Choice Lea, Mr Weideman, Mr Australia scheme, which is a voluntary scheme, McGrath, Mr J.F. Wells, Or rather than being contradictory or in some way McGrath, Mr W.O. ACCIDENT COMPENSATION (FURTHER AMENDMENT) BILL

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Amendment negatived. Mr CLARK - Frankly, it would be better if the Bill were to proceed without this provision in it. I Motion agreed to. appreciate that the Minister is hamstrung and is limited by the professional advice he has been given. Read second time. I suggest that Parliament should consj·:ier whether it includes these sorts of provisions in legislation such Passed remaining stages. as this. Caution can be taken only so far. I believe this establishes an unfortunate precedent and brings ACCIDENT COMPENSATION the Constitution into disrepute. I place on record my (FURTHER AMENDMENT) BILL grave reservations about the appearance of this clause in the Bill. It is undesirable for clauses of this Second reading nature to be included when they do not directly affect the jurisdiction of the Supreme Court. Debate resumed from 27 May; motion of Mr HARROWFIELD (Minister for Finance). Mr HARROWFIELD (Minister for Finance) - The Bill makes some important amendments to the Mr CLARK (Balwyn) - Other honourable Accident Compensation Act. It closes some members who have spoken on the Bill have loopholes that have emerged as a result of court adequately addressed most of the issues. I shall decisions that have effectively altered the intent of comment on only one specific, aspect and that is the Parliament regarding a number of matters. The Bill limitation of jurisdiction of the Supreme Court. It is a deals with a situation where people were given matter of concern that in every second Bill we debate access to both a table of maims and also common these days there is a clause providing for the law, which was clearly not the intent of Parliament. limitation of the jurisdiction of the Supreme Court. I It deals with the situation where access to death appreciate that it is not a matter for the Minister benefits was available under both the old workers responsible for the Bill to resolve, but as compensation scheme and WorkCare. Again it was Parliamentarians we must decide where we are not the intent of the legislation for that to be so. The going to draw the line on this matter. Bill also clarifies the appointment process of the occupational health and safety inspectors, again as On the face of it, the Bill has little to do with the the result of a recent decision of the legal system. limitation of jurisdiction of the Supreme Court. The provisions that purport to relate to the limitation I appreciate the cooperation of the honourable relate to changes to the law of compensation for the member for Hawthorn and the contribution that has death of a worker and to the reduction of damages. been made by honourable members to this debate. It appears to me that these changes are clearly As the honourable member for Hawthorn changes to the substantive law of the land. They are mentioned in his contribution, a number of not changes to the jurisdiction of the Supreme Court amendments have been agreed to between the in the sense of changes to matters which the government and the opposition and they will be Supreme Court can or cannot hear. We are simply moved in another place. I thank honourable changing the law that is applied by the Supreme members for their cooperation on this matter and I Court. commend the Bill to the House.

It would be a different matter if the law were to do The SPEAKER - Order! As the required certain things that could not be litigated in the statement of intention has been made pursuant to Supreme Court. That would be a perfectly proper section 85(5)(c} of the Constitution Act 1975, I am of case to limit the jurisdiction of the Supreme Court. the opinion that the second reading of this Bill now However, I believe we are establishing a bad requires to be passed by an absolute majority. precedent that brings the Constitution into disrepute. Motion agreed to by absolute majority. The SPEAKER - Order! There is far too much audible conversation. The honourable member for Read second time; by leave, proceeded to third Balwyn is putting a case to the Chair, which reading. happens to be particularly relevant to rulings which the Chair has to make. Motion agreed to by absolute majority.

Read third time. RACING (FURTHER MISCELLANEOUS AMENDMENTS) BILL

Thursday. 28 May 1992 ASSEMBLY 1957

RACING (FURTHER MISCELLANEOUS No restrictions apply to the holding of Sunday race AMENDMENTS) BILL meetings in South Australia and Queensland. To allow up to five Sunday race meetings in Victoria Second reading each year is necessary, to say the least, given that the Sunday racing experiment that began in 1986 at Debate resumed from 6 May; motion of Moonee Valley - the Moonee Valley races are now Mr TREZISE (Minister for Sport and Recreation). traditionally held on the Sunday after grand final day - has been a success both financially and in Mr REYNOLDS (Gisborne) - The Bill makes a attendances. Why should we not have horse racing series of minor amendments, many of which are on a Sunday when AFL football, the Australian reasonably important, necessary and supportable. Open tennis final, golf tournaments, car racing and However I express my displeasure at the fact that other major sports are held on that day? the Bill is being considered so late in the sessional period. This tired, lazy and incompetent government On 12 March this year the first Sunday race meeting could not run a pie stall. The Minister knew on 31 was held in New South Wales, and the Victorian December of the desire for extra Sunday racing TAB was open for betting on the event. The TAB dates, yet he has taken until the end of May - a full turnover was $5 million without any meetings being five months - to present the Bill to Parliament. It is held in Victoria. The community definitely accepts an absolute disgrace and the government stands the concept and people have shown that they will condemned. attend and gamble on Sunday races.

The reason for the Bill being debated at this time is Some difficulty has arisen in arranging convenient that it has to be passed before the end of the session dates agreeable to all States because of the varying because the racing industries in New South Wales conditions, one being that the TAB must be open. and Victoria have agreed to hold a meeting on 12 One of the concerns about additional meetings has July. The Bill must get through to the other place by come from four of our major provincial clubs - 10 o'clock this morning so that it can be considered Geelong, Bendigo, Ballarat and Werribee - who and passed in time. The Minister knew all about it as believe that some of the Sundays may fall on the far back as December of last year, when he Sunday prior to their cup carnivals and therefore suggested that if the opposition gave a guarantee detract from the quality of horse likely to enter those not to oppose the Bill he would allow a meeting on carnivals, particularly the cup races that are held 12 March - a Sunday - and have the provisions of during the carnivals. I share the concerns of those the Bill apply retrospectively. It was a stupidly naive four major clubs who work hard to provide excellent suggestion that had no chance of success. There is no stake money and good racing. excuse for dealing with the Bill at this hour at this stage in the session. Already 12 July has been tentatively agreed upon as a Sunday race day, and provided the Bill passes The Bill will amend the provisions relating to racing through Parliament in the next few days there will on Sundays in three different areas. Firstly, it will be a race meeting at Flemington, with the Grand increase the number of Sunday meetings from one to National Steeple being a major attraction. New five. In effect that amounts to an extra four Sunday South Wales has agreed to race on 9 August this meetings. It will also allow for racing on Anzac year when the feature event will be the Chirnside Day - when it falls on a Sunday - and will also stakes. allow Plump ton coursing to be held on Sundays. One area of concern has been expressed to me in Last year New South Wales passed a Bill allowing correspondence I have received from the Australian Sunday racing on eight Sundays from the end of Trainers Association. It has suggested that 1991 through to the end of 1993. An interesting transporting horses to the course on a Sunday will innovation in that Bill provides for profits from the mean paying staff almost double because of penalty TAB and from racing to be used to help fund that rates. They say they receive no greater reward for State's bid for the Olympic Games in the year 2000. their efforts and will not be recompensed for the That is a sensible idea and ought to be looked at double cost. It has been suggested that the Minister when funding is needed for bids for Olympic and might put it to the clubs concerned and the TAB or Commonwealth games. government to assist in that regard. After all, it is a fairly expensive part of preparing and arranging for horses to appear on a Sunday. RACING (FURTHER MISCELLANEOUS AMENDMENTS) BILL

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The next facet of the Bill is to allow racing on Anzac are more than 400 meetings and the amendment will Day when it falls on a Sunday. The RSL approves of allow for up to at least six extra meetings a year for this amendment to the Act for the simple reason that at least five years to phase in the extra meetings. the Patriotic Funds Council of Victoria, involving legacy, war widows and other RSL charitable funds, On 22 July 1987 I issued a press release calling for benefits from sporting events held on Anzac Day; a additional country meetings. It has taken the race meeting held on a Sunday will mean an extra Minister a long time to get around to it. In $400 000 to the RSL. correspondence to him in 1987 the Victoria Racing Club requested more meetings. It wrote to the Anzac Day is a sacred day to the war veterans but it Minister in December 1990 saying that all facets of has been softened in some regards over the years. the industry had agreed that they wanted extra While endeavouring to keep it as a semi-sacred day, country meetings and asked him to facilitate the sporting events have been permitted to commence necessary amendments to the Act. It has taken the from 1 p.m. onwards, but the proceeds or a donation Minister 18 months to act. There are many good must be paid into the fund I mentioned earlier. reasons for additional meetings in country Victoria and you, Mr Acting Speaker, being a country person, Until a few years ago race meetings were not would agree with that. It is a fact that there are now allowed to start until 2 p.m. on Anzac Day, but it has many more horses running than in the past. gradually been wound back to allow racing to start earlier, because it is of great financial value to the An interesting chart from Dr Tony Stewart of the RSL. Victorian Bloodhorse Breeders Association shows that in 1984, 6022 horses raced in Victoria. By 1990, The third aspect of Sunday racing allows Plump ton 9041 horses were racing in Victoria, which is an coursing for greyhounds to race on Sunday. increase of about 33 per cent over seven years and it Currently, there are three Plumpton coursing clubs is expected to increase further. In 1989-90 the Racing that have two-day meetings, now held on a Friday Services Bureau stated that 9641 individual horses and a Saturday. Because Friday is a working day, started in galloping races in Victoria for that year. very few people turn up - only those vitally interested in the dogs. Those three clubs are There is not only a need to save horses from being Charlton Coursing Club, which has a two-day balloted out; there is also a need to allow more meeting in July; the Camperdown Coursing Club, horses to have an opportunity to win prize money. which has a two-day meeting in August; and the There is a need for races to be held during the winter Lang Lang Coursing Club, which has two two-day when people are loath to run their events because, meetings, one in August and the other in October. although crowds may dwindle, horses still need to By being allowed to race on Saturday and Sunday, run. as distinct from Friday and Saturday, they would attract bigger crowds and it would be much more For the 1992-93 racing year it is notionally intended convenient for those who own dogs to take them to that the first of the extra six meetings will be held in the meetings. 1993 at Cranbourne on 1 May, Yarra Glen on 20 February, Benalla on 5 June, Bairnsdale on 24 July, This style of racing is not terribly popular, although Cranbourne on Thursday, 3 June and Echuca on to the hardened greyhound racing person they are Monday, 26 July. I wish the Minister had considered the ultimate. It is match racing between dogs over a the extra race meetings earlier, and I am sure the shorter course and on a knock-out basis so that one Victoria Racing Club agrees with me on that point. is the winner. It is a picnic atmosphere. Recently we amended the Lotteries, Gaming and Betting Act to Two clubs contacted me in recent months, the allow Sunday betting at the Stawell Gift, and this is Penshurst Racing Club and the Wodonga Racing just a progression of that. It is a good move, Club, each seeking an extra meeting. I am sure the particularly for the greyhound racing fraternity. Racecourses Licences Board will consider that when allocating meetings in the next 12 months or 2 or 3 Another amendment will allow a total of 30 extra years. It will give racing administrators an meetings outside the metropolitan area to be phased opportunity to reward the clubs that are successful. in. Currently the law says there may be up to The clubs that get off their butts, are prepared to do 400 race meetings a year in country Victoria. That their best to encourage people to their courses, run does not include meetings held outside the successful meetings and provide good stake money metropolitan area on Anzac Day and Sunday. There RACING (FURTHER MISCELLANEOUS AMENDMENTS) BILL

Thursday, 28 May 1992 ASSEMBLY 1959 and good conditions will be rewarded with extra consideration to the board's request for additional meetings. country harness racing meetings.

At the moment the 400 meetings in country Victoria I now turn to some minor facets of the Bill. An must be held in certain districts every year. They can amendment allows a three-year registration for be shifted around the clubs within the districts but bookmakers, bookmakers' clerks and bookmakers they must be held within the specified districts. That course agents. Currently no fee is payable by those allows very little opportunity for senior operators. Every year the department will review administrators to reward clubs that are successful the financial viability of bookmakers to ensure that and are prepared to work. I know the Minister they are able to pay their debts. agrees with me on that point. Another amendment allows bookmakers clerks to The city clubs, which hold about 97 meetings, will write tickets while the bookmakers they work for are probably push for more city meetings. They have present. That is a sensible amendment for the simple already flagged their intention with the Victorian reason that to obtain a bookmakers licence a person Amateur Turf Club, writing to interested parties to must become a bookmakers clerk for a year. If part tell them they would like more meetings. This will of the training included the writing out of the ticket, give owners - who after all are the backbone of particularly writing legibly, it would be a great help. racing - an opportunity to get a start for their The Bill also recognises a new innovation in the horses because if they cannot get a start they will bookmaking industry - computer tickets. Many lose interest, drop out of the sport and be lost to the bookmakers now use computers. People placing industry. The owners are the essential cog in the bets are issued with a computer ticket that is legible racing industry because they are the ones who pay and accurate. Computers must be of great assistance the bills. to bookmakers who have adapted to using them.

Harness racing clubs have contacted me in relation Another amendment is the deletion of reference to to the additional race meetings, fearful that they will the Royal Melbourne Showgrounds, the venue be held on a Monday and impinge on the days that where trotting was conducted for many years. are traditional harness racing days. In the current Reference to the showgrounds was left in the Act racing year there are 35 Mondays out of 52 on which because it was thought there may be times when there are no galloping meetings and the harness meetings would need to be conducted there if racing fraternity is concerned that there will be more Moonee Valley was not available for harness racing. Mondays on which there are galloping and trotting That has not happened for many years so it seems meetings, occasions that are called clash dates. On sensible to delete that reference from the Act. those days TAB punters are more inclined to bet on the galloping meeting than the trotting meeting. It is The Bill also clarifies the power of racing clubs to set a fact of life and there is not much we can do about it. and regulate fees, especially with regard to bookmakers who field at their meetings. The Bill The trotting administrators want to retain their rectifies anomalies and eliminates meetings so that people will bet exclusively on them. misunderstandings about mixed sports gathering It really does not matter much while a fixed permits and frees up the ability of the Minister to percentage distribution is in place and stays at issue them. current levels. I hope that situation will apply for some time. The Bill removes the restriction that a certain number of horse races must be held at such As this Bill increases the number of country gatherings. No-one could argue that it was an galloping meetings, I ask the Minister to give anomaly to require any organisation seeking the sympathetic consideration to an application by the granting of a permit to run a certain number of horse Harness Racing Board for additional meetings in its races at a mixed sports gathering. The Bill also country zones. Currently 252 harness racing removes the requirement for mixed sports gathering meetings are held in country Victoria - an area permit holders which do not hold horse races to be outside a 32-kilometre radius from Melbourne. I circumscribed by costly and cumbersome know that the board will apply for that increase in regulations. The Minister will now be able to the near future and I ask whether the Minister will approve organisations to obtain permits without undertake to give serious and sympathetic including horse races in the gatherings, and that seems a sensible change. RACING (FURTHER MISCELLANEOUS AMENDMENTS) BILL

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The Bill also removes the limit on the number of holds its own meetings and has a licence, the VRC mixed sports gathering permits that may be granted has the ability to apply for and be granted an in a year. The current legislative limit is 80 permits a electronic gaming licence. year. In 1990-91 only 56 permits were issued and in 1991-92, 71 have already been issued. The Bill also The Harness Racing Board operates its own requires a mixed sports gathering licence to be meetings but does not have its own premises, and it issued for a new innovation at picnic-type functions deserves special consideration. I hope the board will around the country: the running of endurance horse use the revenue it expects to gain from the races. The Bill enables the imposition of a code of introduction of electronic gaming machines to practice and conditions in relation to those permits maintain the stake money. so that horses are properly cared for and receive veterinary attention. The Bill also enables a permit In his latest report the Auditor-General referred to holder to supervise bookmakers. the losses of the board and stated that in the 1989-90 racing year the board made a profit of $130000, in The Bill empowers the Harness Racing Board to hold 1990-91 it lost $1.7 million and in 1991-92 it has a liquor licence under the Liquor Control Act and a budgeted for a loss of $470 000. In other words, the venue operators licence under the Gaming Machine board may suffer an operating loss of $2.3 million in Control Act. That provision is of concern to some two years. The board believes the introduction of people. Years ago the Harness Racing Board bought electronic gaming machines will improve its the Moonee Ponds Tavern, a two-storey building on finances, but it must review its administration and the corner of Mount Alexander Road and Dean ensure that it operates effiCiently. Harness racing has Street, which was previously owned by the had difficulties attracting off-course betting and I Essendon City Council. The board is able to occupy believe the board will be assisted by having its own the top floor as offices - it is closer to Moonee central headquarters. Valley and allows it to avoid paying rent - and the ground floor remains a licensed premises and is The official opening of the introduction of electronic currently conducted as the Moonee Ponds Tavern by gaming machines took place today with great a licensee who is in default of his lease. fanfare. It is a pity that the government did not produce an impact statement months ago to The Harness Racing Board wishes to develop the ascertain the effects electronic gaming machines will ground floor of the building as a gaming venue with have on society and established forms of gambling, a liquor licence and run it as a club for the Victorian particularly the racing industry. History shows that Harness Racing Club. whenever a new form of gambling is introduced the established gambling revenues suffer a loss of A prerequisite of the Victorian Gaming Commission turnover. for granting a gaming licence is that the club must hold a full liquor licence. Many people have asked In the 1990-91 racing year the TAB suffered a why a statutory authority such as the Harness $12 million reduction in its surplus from $87 million Racing Board should be able to hold a gaming to $75 million. I am reliably informed that the licence and be permitted to run a tavern. 1991-92 anticipated surplus will be about $83 million. Who knows what will happen in future The Harness Racing Board is different from other years when electronic gaming machines have statutory authorities in the racing industry. The become well established. The racing industry must Greyhound Racing Control Board does not conduct take steps to anticipate the problem. its own meetings but has meetings conducted under its auspices by other clubs. The Harness Racing Racing clubs will install gaming machines in their Board holds 67 meetings a year and hires the tracks own establishments and the TAB will have control to run them on. In the city it uses Moonee Valley of 50 per cent of gaming machines. exclUSively. The Moonee Valley Racing Club also wishes to use its premises for electronic gaming. Mr Trezise interjected.

The other pseudo statutory authority in the racing Mr REYNOLDS - The Minister indicates by industry is the Victoria Racing Club. Traditionally interjection that the gross turnover of the TAB will the VRC has run galloping racing in Victoria and has increase significantly in future years, but the TAB done so for approximately a century. As a pseudo will spend approximately $100 million to install statutory authority under the Act, and because it gaming machines. RACING (FURTHER MISCELLANEOUS AMENDMENTS) BILL

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I hope the Minister is right and there is an upturn in functions that it would be appropriate to mention revenue that will overcome the problems that I when discussing the Bill, which increases the foresee. The Harness Racing Board has not covered number of Sunday race days from one to five. Some itself in glory with its financial management but the members of our community are somewhat critical of opposition has reluctantly agreed to allow the the Sunday fixtures - not only of race meetings but amendment to the Act that enables the Harness also Sunday activities including football matches Racing Board to apply for a gaming licence and a and many other sporting functions. liquor licence and operate the Moonee Ponds Tavern. From a religious point of view, such activities The opposition supports the legislation and believes detract from the traditional meaning of Sunday. it is a step in the right direction. The amendments With today's diminution of religious beliefs, we will be good for racing and will assist in maximising should be careful that we do not break up the family Totalizator Agency Board turnover. In a couple of unit and further denigrate the religious meaning years Melbourne will have a casino and we know attached to Sunday. what happened to the TAB turnover in South Australia when a casino began business in I am a Catholic and for many years I attended Adelaide -a downturn of 16 per cent. sporting meetings conducted by the church on Sunday afternoons. In fact, the Catholic religion led The government stands condemned for introdUCing the way in utilising Sunday afternoons for sporting this Bill at 2.5 a.m. on Friday, the last day of the activities. Sitting for a Bill to be passed so that it can be debated in the other place, when the Minister knew Now society is moving from what were basic about it five months ago. sporting activities to such activities as gambling on horse races, thereby involving professionals. The Mr W. D. McGRA TU (Lowan) - The Racing honourable member for Gisborne mentioned the (Further Miscellaneous Amendments) Bill makes additional costs involved in conducting race seven or eight minor amendments to the Racing Act, meetings on a Sunday, particularly additional and the shadow Minister for Sport and Recreation penalty rates for staff. Society should address some has done a thorough job in consulting with various of those issues because, for example, penalty rates interest groups, such as the Victoria Racing Club, the are holding us back from enhancing our tourism and Victorian Amateur Turf Club, the Moonee Valley sporting activities. Racing Club, the thoroughbred racing clubs and picnic racing clubs, the Harness Racing Board and The government should take the ball and move it the various harness racing clubs, the Greyhound quickly towards the goal of abolishing penalty rates Racing Control Board, the greyhound racing clubs, that impinge on our tourism opportunities. Perhaps the allied bodies and the Returned and Services the Minister could tell us of the extra Totalizator League. Agency Board costs for Sunday operations versus Saturday or weekday activities. Those matters The main players in the racing industry do not have should be addressed in the total context of race any grievances with the legislation and are happy meetings. Otherwise we cannot guarantee that for the opposition to support the Bill. The Bill additional Sunday race meetings will be successful increases the number of Sunday race days from one because of the additional costs involved in staging to five. Currently a Sunday race day is held after the the events. Melbourne football grand final to provide for tourists from overseas or interstate who come to The Bill allows race meetings to be held when Anzac Melbourne an opportunity to attend a race meeting Day falls on a Sunday, as it will in 1993. The on the Sunday after attending the AFL grand final at Returned and Services League benefits from the the Melbourne Cricket Ground. Victoria is seen as racing industry to the tune of $400 000 a year and the top sporting State of Australia and a number of the funds are used for the welfare of the widows and good committees, organisations and associations families of returned servicemen. The holding of a provide either professional or voluntary race meeting on Anzac Day significantly benefits the contributions to promote and stage top-quality RSL. Other sporting activities such as football sporting events and sporting attractions. matches held on Anzac Day also contribute to the RSL welfare fund. The Australian Football League grand final and the Melbourne Cup are only two of the sporting RACING (FURTHER MISCELLANEOUS AMENDMENTS) BILL

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The Bill provides for greyhound Plumpton coursing I remember talking to Geoff Torney, the President of events to be held on Sundays. Those match racing the Victorian Country Racing Council. In his events are conducted along the lines of a tennis wisdom he saw value in allowing some of those tournament draw where the good dogs are seeded Wednesday meetings to be transferred to Melbourne and perhaps given byes in the early rounds and the for the extra turnover which he said would benefit unseeded dogs come through the heats leading up to the whole racing industry. Those involved in the the quarter finals, the semi-finals and the final. administration of country thoroughbred racing will be pleased with the additional meetings available The Bill also provides for the Harness Racing Board, over the next five years, and country clubs will be which owns and operates the Moonee Ponds Tavern able to apply for them. This year clubs such as to apply for a gaming machine venue operator's Benalla, Echuca, Cranboume, Yarra Glen and a licence. That provision was the sticking point for the couple of others will have the opportunity of having coalition and it took some time to come to grips with an extra race date. it. However, through hard work and research, the honourable member for Gisborne was able to satisfy The National Party is happy to support the Bill. the coalition that it should support the amendment. Although only minor in the overall context of the racing industry it will provide some support and Other provisions in the Bill allow bookmakers to incentive to it. We wish the Bill a speedy passage take out a three-year rather than an annual through Parliament because it will ensure that the registration and that will be of benefit them. At racing industry remains strong and viable and not present there is not much wealth among only provides excitement for the people personally bookmakers in the racing industry; it is difficult for involved but also benefits the economy of this State them to remain viable because of competition from and maintains Victoria as the leading State in the TAB, gaming machines and other new forms of Australia for thoroughbred and harness racing. gambling. Anything that can lessen the load imposed on bookmakers will be appreciated. Or NAPTHINE (Portland) - I declare that I am a member of the Hamilton Racing Club and have been From the early days of racing before the TAB came for a number of years. I also declare a pecuniary on the scene bookmakers were the characters who liability because of a number of horses I have had made country and city race meetings more exciting. the pleasure of leasing over the years. Many good stories have been told about punting exercises at race meetings over the years. Many of I support the remarks of the honourable members the legends and characters of the racing industry for Gisborne and Lowan, and I commend the have been the bookmakers and their contribution to honourable member for Gisborne for his work in racing has been invaluable. consulting widely on the Bill and presenting a succinct and full summary of the Bill tonight. The Bill permits bookmakers' clerks to write tickets in the presence of their employers and allows The issues of importance to my electorate in the computer tickets to be issued by bookmakers. Many Racing (Further Miscellaneous Amendments) Bill of the metropolitan and major regional racing clubs are clauses 5 and 6, relating to country race meetings now use technology in the issuing of betting slips to and Sunday racing. In doing some research on the punters. I guess it speeds up their operations and it proposed legislation, my attention was drawn to an may give them a greater degree of accuracy in their excellent speech made in this House on transactions, although I would not swear to that. 1 June 1983 - which is nine years ago, almost to the day - by one of my predecessors, the late Don The honourable member for Gisborne mentioned the McKellar. I suggest that those honourable members country venues to which additional race dates will who are interested in a good and colourful history of be allocated, and that will be appreciated by the racing in south-west Victoria should read his speech country racing industry. A few years ago some in Hansard. It is a wonderful contribution and a Wednesday race dates were taken from country tribute to Don McKellar's knowledge of the racing clubs at Coleraine, St Arnaud and Echuca and they industry and the history of the area. felt badly done by. Those race dates were transferred to city clubs because it was felt they would provide In his speech, Don McKellar highlighted the loss of more turnover to the TAB. race meetings to country Victoria, in particular the 'race dates for Penshurst and Coleraine racing clubs RACING (FURTHER MISCELLANEOUS AMENDMENTS) BILL

Thursday, 28 May 1992 ASSEMBLY 1963 both of which suffered through the changes made at Jim Cerchl moved his training establishment to that time to the racing industry. Coleraine because it had an all-weather track and no matter how wet the winter got he could train and Clause 5 increases the number of race meetings in race at Coleraine. country Victoria from 400 to 430. As I understand the arrangement, the extra 30 race meetings will be We should look at dubs like Penshurst Racing Club, introduced at the rate of six race meetings over the which contacted the honourable member for next five years to bring the total to 430. I am Gisborne and me. The club made a plea for an extra concerned that the South-West District Racing racing date in return for the one that was taken Association did not get any of the additional six away from it in 1983. Coleraine Racing Club could races to be held in the 1993 racing season. handle an extra racing date in the winter because it has good facilities. As I said, when the industry was rationalised in 1983 a number of meetings were lost from south-west The honourable member for Gisborne demonstrated Victoria. Now that more race dates are to be set the significant increase in the number of aside for country race meetings, it is important that thoroughbred horses currently racing in Victoria. areas such as the south-west, which is a strong Many racehorse owners have been frustrated racing area as you well know, Mr Acting Speaker, because their horses have been continually balloted are given some of the dates. out of races, particularly the class 1 races or the maiden handicaps, as they are called. Horse owners I refer to some of the major racing events conducted who are spending considerable amounts of money in south-west Victoria. In April the two-day on country training fees - $25 to $30 a day - Hamilton Cup carnival is conducted. The become frustrated after spending six weeks getting honourable member for Warmambool will be well their horses ready to race and being continually aware of the excellent three-day racing carnival held balloted out. in that city in May. It is important that we recognise the need for I shall digress slightly: it is a pity that the House additional racing dates to give owners, who are the chooses, through ignorance, to sit on the days of the backbone of the industry, a chance to race their Warrnambool and Hamilton racing carnivals. It horses. It has been clearly demonstrated that this would be in the interests of honourable members if also provides the community with an opportunity to in future the House sat on more appropriate dates so bet on those races through the Totalizator Agency that the important racing events on the State's Board or on-course betting. A need for additional calendar were recognised! meetings has been demonstrated by the community and the racing industry. Another significant racing club in western Victoria is at Casterton. Its history goes back as far as the time The thoroughbred racing industry in Victoria is a when Adam Lindsay Gordon rode in steeple chase multi-million dollar industry employing more than meetings both there and in Coleraine. Recently I had 30 000 people. The expansion of that industry will the pleasure of attending a race meeting at not only be good for the economy of the State but Casterton.1t was a meeting of Significance in that it also, as the Deputy Leader of the National Party was attended by the Governor and Mrs McGarvie on said, make Victoria well respected throughout their first visit to country Victoria. It is a tribute to Australia as the leading State for thoroughbred Casterton and country Victoria and the racing racing. industry in south-west Victoria that they attended the race meeting. One of the great strengths of the Victorian racing industry is its country racing. In other States there is As I said, as 30 additional dates will be available for an over-emphasis on city racing. Victoria has a good country race meetings the racing industry in balance between city and country meetings because south-west Victoria should get a fair share of those the Victoria Racing Club (VRC) has put in a great dates. The honourable member for Gisborne referred deal of effort over the years maintaining a strong to the need to ensure that the additional race dates country racing network and maintaining a proper will be allocated during the winter months. racing infrastructure. I pay tribute to Peter South-west Victoria has some excellent winter Armytage who did an excellent job representing courses. Honourable members will be aware that the country racing as Chairman of the VRC. The current course at Coleraine is of a high standard. The late chairman, David Bourke, is continuing that same RACING (FURTHER MISCELLANEOUS AMENDMENTS) BILL

1964 ASSEMBLY Thursday, 28 May 1992 strength of understanding of country racing as an Secretary of the Hamilton Racing Club and has essential component of horse racing in Victoria. written to me on behalf of the club supporting the change proposed in clause 6(2) of the Bill so that the The people of western Victoria and those involved in club can run its traditional Anzac Day meeting in the racing industry welcome the increase in the 1993 when Anzac Day falls on a Sunday. numbers of country race meetings. But I make one plea to the Minister and to the incoming Minister I seek clarification from the Minister regarding the after the next election, to distribute those meetings game of two-up, which has become a tradition fairly and equitably across the State and to associated with racing on Anzac Day. Two-up is remember that south-west Victoria is a strong racing played after the racing finishes not only at area. The area was affected when the race meetings Flemington but at the Hamilton course. A crowd were taken away in 1983 and it will welcome the stays for the game and enjoys it, and I would be allocation of 30 additional meeting dates. interested in the Minister's comments as to whether there are any provisions in the current legislation During his response I am sure the Minister will be allowing not only Sunday racing when Anzac Day pleased to give a commitment to the South-West falls on a Sunday but allowing two-up to be played District Racing Association for additional meetings after the races. Do we need further legislation to to be allocated from those 30 dates. I know the enable that to happen? Minister has a close affinity with that part of the racing industry. Indeed, Penshurst Racing Club, Clause 6(3) allows the Minister to approve not more which is seeking one of those additional meetings, than five Sundays in a calendar year when race well remembers the day when the Minister's own meetings can be held. Under the current rules only horse Dream Ruler won the Penshurst Cup on Boxing one Sunday race meeting is allowed to be held in the Day. I am sure the Minister recognises that it is a State, and that is traditionally held at Moonee Valley great racing club and how efficiently it runs its race on the Sunday after grand final day. The Moonee meetings. A racing club such as Penshurst would be Valley Stakes is usually run for three-year-olds. able to handle one of the additional race dates with the same professionalism as it handles the Boxing On the same day the Coleraine Racing Club runs a Day meeting, at which event the Minister's own successful race meeting after the grand final. It has horse won the Penshurst Cup. become a big family day for Coleraine and district and certainly answers the critics of Sunday racing Clause 6 concerns two major changes to Sunday who said that if we introduced Sunday racing it racing. The first of them is provided for in subclause would take people away from their families and be (2), which allows for racing to be held on a Sunday counterproductive to what were seen as traditional when Anzac Day falls on a Sunday. As the family Sunday activities. honourable member for Gisborne has said, racing on Anzac Day has become a tradition in Victoria, Indeed the very successful race meeting held on that particularly among returned servicemen and their Sunday at Coleraine is the epitome of a true family families. day out. Everybody can attend and have a wonderful time in a picnic atmosphere and enjoy the For a number of years the Hamilton Racing Club has day's racing. We welcome the extra Sunday that will run an Anzac Day race meeting, and in 1993 Anzac be available for racing in Victoria and I look forward Day will fall on a Sunday. The Hamilton Racing to the opportunity to attend. Club is keen to run a race meeting on that Sunday, and the provision will allow it. I understand the Grand National Steeplechase will be held on a Sunday. Jumping races have lost some The Secretary of the Hamilton Racing Club is Mr Bill of their attractiveness in recent years but they are Picken. The Minister might remember the name re-emerging as a major feature of racing. The Grand because he was involved in another sport when he National Steeplechase, to be held on a Sunday in wore with great distinction the famous No. 25 July, will be a big attraction, and I expect that there guernsey in the black and white Collingwood will be a big crowd at Flemington on that day. colours. Bill was born and bred in MacArthur and played football for MacArthur and Haywood before The honourable member for Gisborne mentioned the transferring to Collingwood, where he played with additional costs involved in Sunday racing. This distinction, especially in a number of losing sides. issue must be addressed. There are costs involved Bill has returned to western Victoria and is now for "the trainers, racehorse owners, clubs, the TAB RACING (FURTHER MISCELLANEOUS AMENDMENTS) BILL

Thursday, 28 May 1992 ASSEMBLY 1965 and everybody else involved in racing but Sunday commented on the strength of country racing. The racing is here to stay. There will be five meetings Minister, in particular, is aware of the great strength and there may be an expansion of that number later, and success of the Mildura Racing Club. I am a but we must address the issue of costs. As the member of that club and I sponsor an annual race honourable member for Lowan said, it is about time known as the Craig Bildstien Handicap. Victoria came into the 19905 and addressed the issues of penalty rates at weekends for the sporting The Minister and the honourable member for and tourism industries and other service industries. Gisborne would both be aware that the The issue of spread-of-hours provisions in all secretary-manager of the Mildura Racing Club, industries ought to be addressed. Sunday racing will George Tilley, has been the backbone of racing in not be held to make more money; the costs will Mildura for many years and has done much to double or triple and the industry will look to the promote the cause of racing in Victoria as a whole. I incoming government to support it in addressing circulated a copy of the Bill and the Minister's the problem. second-reading speech to George and he wrote to me in the following terms: Clause 11 should not go without some comment. The Royal Melbourne Showgrounds will pass into Mildura Racing Club is fully in favour of the Bill, history as the place of harness racing. I remember as particularly in regards to the Anzac Day proposals for a veterinary student going to the trots at the next year as this club is one of those which races on showgrounds on a Saturday night. They were called Anzac Day and the date would be completely lost if the "red hots" because it was a small, tight circuit. racing were not allowed on the Sunday. Unless you backed the first one or two horses going around the back straight you had no hope of The Minister would be aware that the Mildura winning because the course was pretty tight and it Harness Racing Club also has a meeting on Anzac was hard to win from the back. They had cheap Day and would also benefit. The letter continues: seats - all I could afford in those days - in the pigeon stands. They were called that because you We are also keen to see a gradual introduction of extra had to stand there and not only try to pick a winner race days and have already applied for an extra date but also dodge the pigeons in the loft which tried to when one becomes available. make your night even more miserable. I trust that the Mildura Racing Club will be Many great horses raced at the showgrounds. One I successful in its application for an extra event. As remember from my early days was Bold David. I requested by the club, the support of the coalition remember him winning the Interdominion. Alf for the legislation will be forthcoming. Simons was the driver. There are always two sides to every story. Being the The ACflNG SPEAKER diligent local member of Parliament that I am I also (Mr J. F. McGrath) -Order! The honourable circulated copies of the legislation to all groups in member on the Bill! the community, including the Mildura Ministers' Fraternal. They wrote to me requesting that I Or NAPTHINE - This is on the Bill. Clause 11 represent their views in the debate. The letter says: says the showgrounds will no longer be used for harness racing, and that is a significant event in the Needless to say we are strongly opposed to the Bill for history of harness racing and should not go without the following reasons: comment. 1. The original Christian teaching of setting Sunday In conclusion, the major part of the Bill that relates apart for the worship of God, and the enrichment of to increasing the number of race meetings that are family life that followed, has not changed over the able to be held in the country from 400 to 430 is years. We believe that anything contrary to this is not welcomed by the industry, as are the changes to in the best interests of the individual, the family or the Sunday racing on Anzac Day and additional Sunday nation. race meetings. I wish the Bill a speedy passage. 2. To increase Sunday racing would financially benefit Mr BILDSTIEN (Mildura) - The hour is late and the racing fraternity. We question whether the Bill is I will say only a few brief words. During his proposed solely "to provide Victorians with a wider contribution the honourable member for Portland ADJOURNMENT

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range of leisure choices", but would serve the vested been increased. 1bat issue is now under review by sectional interests of that group." the respective authorities and the recommendation will be treated favourably. 3. Increase in gambling opportunities is deplorable. It is already well-known that gambling profits a few at the I am WlSure what the current regulations are expense of the many. It exploits human weakness and regarding the conduct of two-up games on Sundays, human need especially in times of recession. Some but I shall take advice on that and infonn become addicted to gambling that further increases honourable members in due course. misery, and creates additional problems for social welfare agencies. Already 86 per cent of all PAYE taxes The racing industry has suffered from the go into national welfare. introduction of electronic gaming machines in other States, but they will soon be working for the racing 4. We are opposed to the Bill because racing is not a industry in Victoria and will help the industry's family activity. The family is the heart and strength of finances in the years ahead. any community and we believe Sundays should be used as opportunities for promoting the family life of The Harness Racing Board should have foreseen the our nation. downturn in the economy and the subsequent effect that would have on the finances of the board. The 5. Sport, (including racing), is being given far too much revenue of the board increased at an extraordinary emphasis nationally, and the Bill, if passed would rate during the past 10 years, but the end had to compound this problem. There was an outspoken come and the board should have foreseen that its article in the Weekend Australian (24-25 April) entitled income would level out. "Sport Our National Disease", that we believe reflects the opinion of many concerned citizens on this subject. Motion agreed to. We believe the government should enact legislation that is responsible and in the best interests of the whole Read second time. community. Passed remaining stages. I have put the views of the Mildura Ministers Fraternal to Parliament because there are two sides ADJOURNMENT to every story. The coalition has consulted widely and considered all views but has decided on balance Mr ROPER (Minister for Employment, not to oppose the Bill. Post-Secondary Education and Training) - I move:

Mr TREZISE (Minister for Sport and "That the House, at its rising, adjourn until Tuesday, Recreation) - I thank honourable members for their 9 June 1992. contributions and their interest in the racing industry. Many of the suggestions they have made Motion agreed to. will be of benefit to the industry. LEGAL AID COMMISSION The allocation of extra racing days is not a decision (AMENDMENT) BILL (No. 2) that should be made by Parliament; it should be made by the racing industry because Parliament Second reading may not always have the best interests of the racing industry at heart. The honourable member for Debate resumed from 30 April; motion of Gisborne said the allocation of extra gallop racing Mr KENNAN (Attorney-General). meetings could dash with harness racing meetings. I am instructed that the race meetings will dash only Mrs WADE (Kew) - In introducing the Legal once in the first year and not at all in subsequent Aid Commission (Amendment) Bill (No. 2) the years. The maintenance of the fixed percentage will Attorney-General noted that the Legal Aid benefit the racing industry. I cannot say what will Commission Act: occur in the future, but I do not see it being altered in the near future. ... obliges the commission to ensure that legal aid is provided in the most effective, efficient and economical The honourable member for Gisborne also asked manner and in a manner which dispels fear and why the number of harness racing meetings had not distrust. LEGAL AID COMMISSION (AMENDMENT) BILL (No. 2)

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The Bill has been introduced as a result of a funding cent in 1990-91. This is not out of line with other crisis at the Legal Aid Commission. It is not clear figures recorded for the past 10 years. that the Legal Aid Commission is providing legal aid to the citizens of Victoria in the most effective, The third claim made by the Attorney-General was efficient and economical manner. It is difficult to that the Legal Aid Commission has reach conclusions on this issue because the annual comprehensively reviewed aspects of its reports of the commission do not in my view administration and has identified areas where provide sufficient information to permit such a savings can be made. I again refer to the Legal Aid judgment to be made. Commission reports during the 19805. I ask the House to note that in 1982-83 the total number of The Bill gives the Legal Aid Commission applications received was 40 952, or 164 each significantly greater powers in dealing with legally working day. The figure in 1990-91 was 48 683, an assisted clients of the commission and private increase of about 8000 applications, although in practitioners who carry out a great deal of the work terms of working days, 197 additional applications of providing legal assistance to citizens of Victoria were received daily. who qualify for legal aid. The Bill has nothing to do with the efficiency or effectiveness of the operations The number of family law and civil matters has of the Legal Aid Commission itself. slightly decreased during the past few years. The increase in criminal cases is about 4 per cent. These The Attorney-General made a number of statements statistics do not account for the increase in legal aid in moving the second reading of the Bill and those staff and associated costs in recent years. statements require further examination. He said: The assessment of salaries and related expenses That demand has increased sharply with the effects of discloses an increase from $6.76 million in 1986-87 to the recession. $13.4 million in 1989-90; that figure further increased to $15.73 million in 1990-91, representing an increase ... government funding for legal aid over the past of approximately 62 per cent in salary costs during decade has increased dramatically. the period. In no way does that compare with the relatively small increase in the number of The Attorney-General said that the Legal Aid applications received. Commission: In these circumstances, and without any other ... has comprehensively reviewed aspects of its explanation from the government side, I find it odd administration and identified areas where savings can that the Legal Aid Commission has apparently be made. concluded it is appropriate to reduce the fees of barristers and solicitors. Those fees have not I shall deal with each of those issues in turn: firstly, increased at the same rate as have the costs for Legal the demand for legal aid has increased sharply as a Aid Commission staff; no indication has been given, result of the recession. The 1990-91 annual report of to the best of my knowledge, that any review of the the commission records that in that year there were commission costs will be undertaken. a record 48 683 applications for legal aid, an increase of 3.1 per cent or 1197 additional applications. The Legal Aid Commission allocates work to itself During the 1980s there were increases in and to private practitioners - solicitors and applications for legal aid and in one year there was barristers; 25 per cent of legal aid cases are handled an increase of 6.3 per cent. The number of by the commission. Therefore, 75 per cent of cases applications fluctuates considerably. The are handled by solicitors in private practice. commission recorded a decrease of 4.7 per cent in Reference to the commission's accounts reveals that another recent year. the commission spends $47.7 million on case-related fees involving private practitioners, of which Despite the general increase in the number of $26.5 million goes to solicitors in private practice. applications, the number of applications granted by the Legal Aid Commission in 1990-91 was fewer Solicitors in private practice perform 75 per cent of than those granted in 1989-90: 36170 compared with the solicitors work for annual fees of $26.5 million. 36 321. The number of applications refused Barristers cost the Legal Aid Commission increased from 20.5 per cent in 1989-90 to 26.4 per $15.3 million when acting in cases handled by private solicitors and the commission. LEGAL AID COMMISSION (AMENDMENT) BILL (No. 2)

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The commission also funds community legal aid opposed to services provided for the benefit of the centres, which cost $2.7 million in 1991. There are no citizens of Victoria. details in the Legal Aid Commission annual report of case-related activities provided by the I am sure all honourable members would appreciate commission and conducted by its own staff. One can that the demand for legal aid services in this State is come up with an estimate of the cost of the not being met. All of us know of constituents and case-related and administrative activities of the other people who ask for assistance in obtaining commission if one assumes that the commission is legal aid, and many of those people seem to fall into providing solicitor services on the same basis and at the deserving category. However, the legal aid the same cost as private practitioners. If the dollar is limited and not everyone is able to obtain it. commission provides 25 per cent of services it If we could examine the cost of the Legal Aid carries out at the same cost as private solicitors it Commission and determine whether an excessive will be spending approximately $8.8 million a year amount is being spent on administration it may be on case-related work. One can then estimate the cost possible to free up some of the money to provide of the additional functions carried out by the legal services to more people. commission, such as administrative services dealing with applications for legal aid, carrying out An examination of the figures I have quoted tonight follow-up activities and handling telephone suggests that the commission may be overstaffed. It inquiries. is clear that the staff of the commission has increased dramatically in the 1980s. One can deduct from the total expenditure of the Legal Aid Commission, which is $73.1 million, the I refer back to the final contention of the amount for private practitioners, $26.5 million; Attorney-General in his second-reading speech: that barristers, $15.3 million; community legal aid government funding for legal aid has increased centres, $2.7 million; disbursements due to solicitors, dramatically over the past decade. It is certainly true $6.6; and the cost of providing legal services by the that government funding has been increased over commission, $8.8 million; which add up to the past 10 years, but a large part of that has been as $59.9 million. One can assume the remaining the result of Commonwealth funding rather than services provided by the commission cost in the State funding. The larger part of the State share of vicinity of $13.2 million. funding for legal aid has come from the Solicitors Guarantee Fund and not from consolidated revenue. I point out that the figures have been calculated on an accrual basis because that is the way the In 1988-89 an amount of only $1.7 million was commission presents its accounts. I have not appropriated for legal aid in Victoria. In 1989-90 the attempted to turn them into cash figures because I government appropriated and spent $1.9 million on am trying to point out the respective costs incurred legal aid and it was not until 1990-91 that a for the provision of legal aid solicitors and other considerable amount was appropriated. As a result commission activities. These are rough figures of a shortfall in the Solicitors Guarantee Fund in that because I do not know whether the solicitors year an amount of $8.11 million was appropriated employed by the commission are conducting the and $7.11 million was spent by the State in same types of services and cases handled by private providing legal aid. I have been endeavouring to practitioners. I suggest that the figures are discover what happened to the remaining $1 million somewhere in the ball park and that they indicate but it would seem that it was reallocated somewhere that the administrative functions of the commission in the Attorney-General's Department, no doubt to are expensive. an area the Attorney-General felt should have a higher priority than the demand for legal aid It appears that most of the legal aid dollar is being services. spent on administration, not on providing solicitor services to legal aid clients. Administrative services The figure provided by the commission for State cost almost twice as much as solicitor services. I government payments last year is slightly less than believe the commission is another example of the figure shown in the Budget Papers. The Chief something that is endemic in the Labor government Executive Officer of the Legal Aid Commission under both the Cain and Kirner administrations. advised me that the sum spent was some $45 000 There has been a major emphasis on the bureaucracy less than the sum shown in the Budget Papers, and and on the provision of bureaucratic services as again I imagine it was reallocated by the Attorney-General. LEGAL AID COMMISSION (AMENDMENT) BILL (No. 2)

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On a number of occasions I have written to the Legal got into this situation because it has failed to Aid Commission and I have also raised in this appreciate the potential for a blow-out both in its House a number of questions relating to the debtors and creditors. The accounts of the financial position and accounts of the commission, commission are quite appropriately prepared on an especially the accounts for 1990-91. In particular I accrual basis. However, it has advised me in a letter have referred to the fact that moneys owed to and by of 22 May sent to me by Mr Peter Gandolfo, the the commission have significantly increased over Chairman of the Legal Aid Commission that: recent years. I have learned from the Legal Aid Commission that the problem is worse than I Although we are required to report on an accrual basis thought in that fewer contributions have been in our annual report, our funding, budgeting and collected from legal aid clients than I had management are on a cash basis. appreciated from looking at the accounts. I suggest that this may well explain the fact that the That is because the accounts are prepared on an Legal Aid Commission appears to have disregarded accrual basis and the amounts described in the the problem that is disclosed in its accrual accounts accounts as client contributions are in fact until the problem became an actual cash shortage contributions assessed and not actually cash problem, which became apparent to the commission received. I thought the Legal Aid Commission at the end of last year. This is a matter of concern collected $13.9 million in 1990-91, but the and I suggest that the Attorney-General may wish to contributions actually collected were in the vicinity obtain a report from the Auditor-General on the of $7 million. In 1990-91 uncollected client management and operations of the Legal Aid contributions increased by $4.5 million to a total of Commission. I am sure a coalition government $28.5 million, an increase of 19 per cent, and the would welcome such a report; I encourage the amount owed to the commission's creditors Attorney-General to waste no time in requesting one. increased by $3.9 million to $14.4 million, an increase of 37 per cent in only one year. Accounts on The Legal Aid Commission's solution to its problem hand that were unpaid at the end of the last financial is two-fold. The Bill contains one lot of provisions year had increased from the $3.2 million that was directed to assisting the commission in collecting the owing on 30 June 1990 to $5.5 million on 30 June moneys owing to it. The second lot of provisions is 1991. directed at giving the commission greater powers to negotiate with private practitioners with a view to If moneys that are owed to the Legal Aid the commission reducing the fees payable by the Commission could be collected in a more timely commission to private practitioners. manner the commission would not be in the financial crisis it appears to be in at the moment. Before I go to those proposals, I raise with the However, most of the money owing to the Legal Aid Attorney-General one other issue that arises from Commission is money tha t is to be paid in my inspection of the accounts of the Legal Aid instalments by people who have received assistance Commission. Although it is not directly related to from the commission. The reason those people have the issues before the House tonight, it is another received assistance is, of course, because they are not matter the Attorney-General might wish to have in a position to pay legal costs themselves. Most of examined by the Auditor-General. them are not in a position to make the repayments that are required to be made to the commission The accounts of the Legal Aid Commission recorded except over a fairly long period. Some of the money interest earnings of $1.655 million for the year owing to the commission will be collected only 1990-91. This figure seems to be out of line with the when the houses over which the commission has a investments recorded in the 1990-91 annual report of charge are finally sold. In fact, a large proportion of $6.597 million at 30 June 1990 and $4.390 million at the money owing to the Legal Aid Commission will 30 June 1991. That is an average of $5.5 million. The never be collected. The estimates for doubtful debts, interest figure to which I referred earlier of reassessments and write-downs were $1.6 million $1.655 million suggests that the commission has for 1986-87 and $4.6 million in 1990-91. In 1990-91 been most efficient in its investments because that there was an increase in $2.8 million in doubtful suggests a return of 30.1 per cent, when a return of debts. 15 per cent would have been a good return in that year. A 15 per cent return would have resulted in It seems from the correspondence I have had from interest payments totalling approximately $824 000. the Legal Aid Commission that the commission has LEGAL AID COMMISSION (AMENDMENT) BILL (No. 2)

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The only conclusion I can reach about those figures was to be a reduction in the number of cases from is that the commission has other money invested. It 33 000 to 30 000 a year by June 1992 and a further appears that a large amount has been invested in the reduction to 25 000 in the next financial year. That short-term money market, returning an annual strategy was decided by the commission in interest of approximately $830 000. That would December. suggest that the commission has an average daily cash float of approximately $7 million which it has However, something happened after that point and placed on the short-term money market for the the commission, at its first meeting in 1992, reviewed whole of that year. the fourth measure and decided that instead of further reducing the level of legal aid services it I am not sure how the Legal Aid Commission gets its should reduce the cost of those services. I would be money from the State government or the Federal interested to know whether the Attorney-General government. I query whether the large amount of can throw any light on the reason for this change in money being managed by the commission is approach by the commission. appropriate if indeed that is the explanation for these large amounts of interest shown in the The Legal Aid Commission explained the various accounts. changes in the strategy to me early this year, and on 3 April it advised me by letter that the proposal for Returning to the proposed amendments, I am not free legal services had been put to both the Victorian convinced that the best use has been made of the Bar Council and the Law Institute of Victoria, and funds appropriated by both the State and Federal that both organisations had agreed to provide free governments for the commission and of moneys out legal services to the value of $1 million. of the Solicitors Guarantee Fund. However the coalition is not in government and it is not able to They also advised me that the State government had explore solutions other than what has been put refused to pay its share of the $700 000 required, and before it tonight. Even if it were able to put forward I now understand the Commonwealth government other suggestions, it would not be able to put those has also refused. The Legal Aid Commission said in into operation at this time. tha t letter tha t:

The Legal Aid Commission believes the To achieve cost savings equivalent to those obtainable amendments to the Act are necessary and the by the earlier proposed reduction in assistance, the Attorney-General has accepted its advice. The commission put a proposal to the Law Institute and coalition is therefore faced with either accepting or Victorian bar for a 20 per cent reduction in fees in rejecting the proposals. I do not believe it is criminal and family law cases in the Magistrates Court. appropriate for the coalition to put forward its own proposals at this stage. Indeed, despite the efforts I Following a suggestion by the bar, the proposal in have made I do not believe we have enough relation to criminal fees was changed to a 10 per cent information before us to know what the solution is. reduction across all criminal jurisdictions.

The history of the provisions in the Bill goes back to My understanding is that that proposal did not come December 1991, the time that the Legal Aid from the bar. Commission appreciated that it had a significant cash flow problem. At that stage the commission The proposals were considered by the councils of the adopted a strategy to deal with this problem, by Law Institute and bar. In a joint letter dated 26 containing the level of debt and the level of February 1992 they informed the commission that they approvals at sustainable levels having regard to the were unable to support these proposed fee reductions. budgetary outlook for the next financial year. The commission then looked at such measures as a Salaries and administration costs were to be reduced success fee to be paid by clients who were by $1 million, a $1 million pro bono program was successful. They looked at the possibility of a put to the legal profession - that it provide legal contingency legal aid fund, the provision of services free for the amount of $1 million. A request litigation loans, and they looked at the possibility of was made to the Commonwealth and State a legal aid levy on the issue of proceedings or on governments for a one-off payment of $700 000. I practising certificate fees. understand that request has been refused by both the Commonwealth and State governments. There LEGAL AID COMMISSION (AMENDMENT) BILL (No. 2)

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They decided to introduce a compulsory both unfair and contrary to accepted trade practice contribution of $30 for all grants of assistance made principles. after 6 April 1992 and they also decided to cut back on family law cases. Apparently after writing that letter the Bar Council representatives had a meeting with the The commission went on to advise me in that letter Attorney-General. The chairman wrote to the of 3 April that there had been a considerable Attorney-General on 26 May and the letter reduction in the number of applications for legal commences by referring to the earlier letter and the assistance received in this financial year, and that meeting with the Attorney-General: the level of application was 6.6 per cent lower than for the same period last year. That suggests that the I should say at once that no reason is seen to alter any Attorney-General's claim that there had been an part of my earlier letter. increase in applications as a result of the recession is not correct. Again the Bar Council sets out its concerns about the proposed new fee provisions and I think there is The letter goes on to set out the proposals which are reason for concern with these fee provisions. I do not now embodied in the Bill, and the Attorney-General wish to go into the detail of the letter but it appears has accepted all of the proposals put forward by the that the concerns raised are genuine and that the commission in April of this year. The only Attorney-General has disregarded most of them, Significant difference in the Bill and the proposal by although I understand he is proposing to move one the commission to the Attorney-General is that in amendment that will pick up one of the concerns­ relation to the fee changes the commission said it that is, to remove the ceiling on fees. should be required to take into account the views of the Law Institute and the Victorian Bar Council in The Bill removes the floor on fees payable to the reaching decisions about new levels of fees. legal profession by taking out the 80 per cent level that the legal profession now obtains as compared This requirement is not included in the Bill and no with fees being paid in other cases. The Bill had doubt the Attorney-General will explain why he did imposed a ceiling that the Legal Aid Commission not include it. As I understand it, a requirement to should not pay any more than the fees paid by consult does not include a requirement to take into people who are not legally assisted. TItis is contrary account the views of the person consulted with, and to the idea of a free market. I understand the in order for the views of the Law Institute and the Attorney-General is prepared to meet that concern. Bar Council to be required to be taken into account However, it would seem that the result of this Bill the Bill would have to specify not only that they may well be that the fees that will be paid by the must be consulted but also that their views must be Legal Aid Commission will not cover the outgoings taken into consideration by the Legal Aid of some barristers and solicitors who take on legal Commission in reaching the level of the new fees. aid work. If this is correct some members of the bar will leave the bar and some solicitors will go out of The Legal Aid Commission said its proposals are business. supported by the Law Institute but the Law Institute has now advised the Attorney-General that it is not It is likely that in the case of barristers the people entirely happy with clause 8, which amends section who will leave will be those who will" easily find 32 and sets out the new provisions relating to fees. It employment elsewhere; in other words, the more also believes there should be a second Law Institute competent people engaged in this type of work. The representative on the Legal Aid Commission. The end result may well be a sub-standard legal service. Bar Council also has significant reservations about One should indicate to the Legal Aid Commission the legislation. In a letter dated 6 May to the that people may well be better off not to have legal Attorney-General it points out that the provisions in aid if they have legal aid assistance that is the Bill regarding the fixing of fees by the Legal Aid sub-standard. Commission could have a detrimental effect and that in significant areas of legal aid the commission The other provisions of the Bill are designed to has work monopoly and that the market is not a free improve the commission's financial position by market. It believes that giving the commission the assisting it to collect contributions that are owing to right to fix fees - taking into account the fact that it by legally assisted persons. Clause 7 allows the Bar Council's views may be disregarded - is contributions paid by legally assisted persons to attract interest. The coalition has asked that it be LEGAL AID COMMISSION (AMENDMENT) BILL (No. 2)

1972 ASSEMBLY Thursday, 28 May 1992 made clear that interest is not payable until 30 days provides for the assignment of rights to recover after notice has been given to the persons of the money. amount of money owing. The amendment prepared by the government for our consideration was not Recently I received correspondence from a citizen of satisfactory and I understand it has gone back to the the State, a Mrs Kathy Gilmour, who, as a result of drawing board. litigation against the State, is faced with an enormous debt. It is an injustice and puts the Clause 10 gives wider powers than the Legal Aid proposed legislation into perspective. Commission presently has to take a charge on a property tha t was recovered or preserved for a Mrs Gilmour's letter of 20 May merits the attention legally assisted person. Clause 12 allows the Legal of the House and the Attorney-General. Aid Commission to exercise rights or remedies for assisted persons to recover moneys where the She said that for the past six and a half years of her person has not taken action himself. life she has been fighting the government, in particular three government departments. Her Coalition members have raised a number of problem arose as a result of an action by Community concerns in relation to the amendments and Services Victoria in rela tion to a care and protection particular concerns about those relating to charges. order. In November 1985 some six months after the Those concerns have been recognised as revealing birth of her youngest child, Mrs Gilmour and her deficiencies in the Bill and amendments have been then husband had counselling at an organisation prepared. known as Southern Family Life. During the course of that counselling she made a statement of some I understand that the Attorney-General has frustration which obviously disturbed the counsellor undertaken that those amendments will go forward, because the proceedings were reported to but for some reason he does not wish to proceed Community Services Victoria, and the subsequent with them at this time and proposes to put them events are examples of extraordinary acts of forward in another place. discrimina tion.

Much of the work in the area has been done by the In January 1986 an inspector from Community honourable member for Balwyn and I am sure he Services Victoria knocked on Mrs Gilmour's door will explain in detail the problems he saw with the and made a number of subsequent visits. In Bill and the way in which those problems can be February 1986 she refused to receive further visits sorted out by amendment. from the department. In March 1986 she was summoned to the Moorabbin office of the In conclusion, the issues raised by this Bill are department and was served with a care and important. I do not believe that the problems of the protection order. Not long after that she appeared Legal Aid Commission will be sorted out by this before the Children's Court where a care and legislation. The legislation may provide a little relief protection order was made. An appeal against the but no more than that. Coalition members believe ruling was then lodged and the Legal Aid the problems of the Legal Aid Commission will still Commission became involved not long after that. exist following the State election and the legislation will require significant change at that stage. Mrs Gilmour was not well off so she applied for assistance from the Legal Aid Commission. An The opposition will not stand in the way of the Bill appeal was made to the County Court but at this stage, but I should like an undertaking from Community Services Victoria sought and was the Attorney-General that the amendments which granted a number of adjournments. have been put to the opposition will be put forward in another place. Mrs Gilmour said:

Mr PERTON (Doncaster) - The Bill alters the In May of 1986 after numerous adjournments during way in which the Legal Aid Commission can treat which I lost my employment due to absences for court individuals who receive assistance from it; it allows appearances, CSV finally obtained a 12-month the commission to impose charges over land in supervision order. This order was appealed on the respect of unpaid costs; it provides for interest to same day. In the remainder of 1986 and early 1987 we accrue on amounts owed by assisted persons; and it put up with visits from CSV and a varied change of LEGAL AID COMMISSION (AMENDMENT) BILL (No. 2)

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supervisors. Then there was a gap with no visits and no Mr Kennan - This has nothing to do with the explanation for same from July 1986 to November 1986. Bill.

In April and May of 1987 the appeal against the Mr STOCKDALE (Brighton) - On a point of Children's Court order came to the County Court. order, Mr Deputy Speaker, the Attorney-General At that time, one year and one day after the original advises me that this has nothing at all to do with the order was obtained, Mrs Gilmour was anxious to Bill. I raise a point of order on the question of have the case heard before a judge of the County relevance. Court. A deal was cooked up where CSV did not lead evidence on the basis of there being no order for Mr KENNAN (Attorney-General) - On the point costs. of order, Mr Deputy Speaker, the honourable member for Brighton is quite correct. Mrs Gilmour was not included in those negotiations. In the end, the solicitors, Slater and Gordon, and the Mr PERTON (Doncaster) - On the point of Legal Aid Commission, essentially agreed to order, Mr Deputy Speaker, the provisions of the Bill compromise the proceedings on the basis that no actually relate to the reason Mrs Gilmour is in debt. evidence would be led and no order for costs would be sought. The DEPUTY SPEAKER - Order! There is no point of order. An honourable member interjected. Mr PERTON (Doncaster) - At the end of four Mr PERTON - Mrs Gilmour was in receipt of days the settlement involved all documents being legal aid and officers of the Legal Aid Commission, handed to Mrs Gilmour. As has been the practice in together with solicitors, appeared to have agreed to the Administrative Appeals Tribunal and as a result compromise the proceedings at that point. of the Freedom of Information Act, no order as to Mrs Gilmour was appalled by the treatment she had costs was made. received at the hands of CSV and wanted to know the basis of the case because the government had not Mrs Gilmour had two victories: the order for care lead any evidence in the County Court. She made an and protection was overturned with the government application under the Freedom of Information Act. leading no evidence and after four days of hearing At that time the department denied her access to any in the FoI test case the government handed over the of the documents and she was forced to go to the documents. The result is that Mrs Gilmour was left Administrative Appeals Tribunal. One would have in debt to the tune of about $12 000, which she thought that that would have been an easy and disputed vigorously having regard to the fact that straightforward set of circumstances. At that point the FoI application was public interest litigation. Mrs Gilmour went to the preliminary conference at the Administrative Appeals Tribunal. Government The House will note from the original terms of the members usually do not attend those hearings, the 1978 Act that a charter for the Legal Aid Attorney-General was represented by two QCs at Commission to support public interest litigation is the proceedings and opposition members attended; included. Mrs Gilmour vigorously asserted that she the opposition was made aware of what the never agreed to compromise the case without an government gets up to in such circumstances. order for costs.

Mrs Gilmour was an ordinary citizen trying to That dispute went to the Law Institute of Victoria obtain access to her file but was faced with seven because the Legal Aid Commission said, ''We will officers of CSV, legal aid advisers and social do nothing for you, take it to the Law Institute". The workers. Mrs Gilmour had legal representation institute was left with a conflict of evidence: the arranged by the Legal Aid Commission and solicitors with one version saying that they had a ttended the proceedings. The proceedings took explained it to Mrs Gilmour and she accepted it, and place in camera - four days of secret proceedings Mrs Gilmour with another version, supported by that Mrs Gilmour could not attend. Why? It was a documentary evidence, saying that she had never test case by CSV about the voluntary reporting believed she would compromise her costs. The Law requirements and it wanted to fight the case. The Institute was prepared to make a decision. It said four days of in camera hearings led to a settlement. that Mrs Gilmour had to pay the full sum of money. LEGAL AID COMMISSION (AMENDMENT) BILL (No. 2)

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Mr Bildstien - Will this legislation solve that been forwarded to the Secretary to the type of problem? Attorney-General's Department for information.

Mr PERTON - This Bill will make the position That was the first flick pass. I refer the House to a even worse. letter dated 13 May written by Margaret Pi tt, manager, executive coordination unit, on behalf of Mrs Gilmour disputed the case with the commission the Attorney-General, which states: and in the end gave up the fight. Some honourable members may treat this matter with mirth, but Mrs The Attorney-General has received a copy of your letter Gilmour's position is very serious. If this House dated 5 March 1992, forwarded by the Department of cannot stand up for the rights of at least one citizen, the Premier and Cabinet, and has asked me to reply on no other place can. Mrs Gilmour gave up the fight his behalf. against the Legal Aid Commission and commenced to make payments on a weekly basis. Unfortunately the Attorney cannot assist you in resolving your problem. You should direct your Or Napthine - Where does she live? complaint to Or John Paterson, Director-General of Community Services Victoria. Mr PERTON - In Mordialloc. Another flick pass. What did Community Services Or Napthine - Whose seat is it? Victoria say? It said it was a matter for the Attorney-General. Most citizens would have given Mr PERTON - The Minister for Transport's. up by that stage but Mrs Gilmour telephoned Mrs Pitt saying that everyone was flick passing the Mrs Gilmour commenced making regular payments matter. Mrs Gilmour received another letter from the to the commission. Attorney-General:

This year her house was in need of repair. She is I have reread your letter, and wish now to advise you now a supporting parent and earns less than $20 000 that the Attorney-General is also unable to assist you in a year, but she wishes to take out a mortgage to resolving your dispute with the Legal Aid Commission. repair her house. She approached the Legal Aid The commission is an independent statutory body in Commission, having received the approval of her whose decisions the Attorney-General cannot intervene. bank for the repairs. The commission sent her a most extraordinary letter in which an officer of the It is an absolute disgrace. A citizen has become commission, a D. Posner, writing for the Director of involved in litigation with two government agencies. Legal Aid, gave an assessment of the repairs she She appealed for help from the Premier who flick wanted to carry out to her house. passed the matter to the Attorney-General who flick passed it to the Minister for Community Services. Officers of the commission somehow seem to be able When the matter was passed back to the to assess whether Mrs Gilmour needs to have her Attorney-General he simply threw up his hands and front or side fences repaired, whether her patio said, '1 can do nothing for this woman." needs repairs and whether she needs repairs to and what type of fittings for her bathroom. They are able Mr E. R. Smith - And they talk about social to give advice on ripping up concrete and other justice! cosmetic work. Mr PERTON - The government talks about After receiving that appalling letter from the Legal social justice but it has completely abrogated its Aid Commission, Mrs Gilmour wrote to the Premier, responsibility not only to the Legal Aid Commission who is currently in the Chamber. A letter of 9 April but also to this citizen. I urge the government to 1992 from Judy Tyers, Acting Assistant Director, assist this lady; I ask the Attorney-General and the Community Services Branch, Department of the Premier to help her. The Premier purports to stand Premier and Cabinet, states: up for the rights of those in need and for women. The Attorney-General purports to stand up for the The Premier has asked me to thank you for your recent rights of citizens in disputes such as this, but this letter and to advise you that the matters you have woman has been abandoned. I ask the government raised fall within the area of responsibility of the to deal with the question because it has done Minister for Community Services ... A copy has also nothing so far. LEGAL AID COMMISSION (AMENDMENT) BILL (No. 2)

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Clause 8 deals with fees paid to private insufficient funds have been allocated to provide practitioners. In her contribution the honourable legal assistance to those in need. member for Kew read material from the Law Institute of Victoria and the Victorian Bar Council on Clause 8 will not assist that process because in the the effects of the clause. It gives the Legal Aid end it may mean that second-rate legal Commission the right to determine scales of representation will be given to the people who need payments to be made to private practitioners lower first-rate legal representation but who are not in a than the current 8 per cent of fees. At present the position to pay for it. scales of fees are set by judicial officers in the Supreme, County and Magistrates courts. The Bill Mr CLARK (Balwyn) - I congratulate the proposes to set another rate, which is a completely honourable member for Doncaster for putting a illogical step. Another statutory authority will be human face on the operation of the provisions in the analysing the fees set by judicial officers who are Bill. Honourable members often talk in abstract charged with the responsibility of setting the scales terms about the way provisions operate; we can of fees. It is absurd for another body to duplicate the suggest that certain provisions are badly drafted and current arrangements. It is a typical example of the may have an adverse effect on citizens in the hands government's action in setting up layer upon layer of an insensitive bureaucracy. of decision makers and committees, and the plight of the citizen I mentioned will not be improved at all. The honourable member for Doncaster set out facts which, had the Bill been in force at the time the The shadow Attorney-General has set out the citizen concerned was having difficulties with the arguments of the Bar Council and the Law Institute Legal Aid Commission, would have led to outcomes of Victoria in respect of the effects on solicitors, but I even worse than those he outlined. Had this Bill am more concerned for the citizens. As the shadow been in operation, instead of the Legal Aid Attorney-General said, the imposition of those sorts Commission telling the citizen with great sensitivity of restrictions means that people might get how she could or could not paint her fence, with second-rate representation. The people who need similar sensitivity it could have imposed a charge, legal aid are most often the people who need sold her house and thrown her out on the street. first-rate representation. Given that bureaucracy is not always the perfect and Mrs Wade interjected. caring institution that idealistic citizens of a socialist tendency often think, we must be careful to make Mr PERTON - As the honourable member for sure that measures of this sort do not confer broad Kew interjects, they are often fighting the and unfettered powers on the bureaucracy in any government and the government employs Queens form. It is in that context that I wish to express some Counsel. Often the people who need legal aid are concerns about the provisions of clause 10 and some not the most articulate members of the community; of the following clauses of the Bill. they are not capable of putting their cases before a court and in many cases they cannot even put their Clause 10 allows the Legal Aid Commission to arguments to their legal advisers. I am sure that in impose a charge on land or property belonging to an the course of his practice at the bar the assisted person and to enforce that charge in certain Attorney-General would have run across people circumstances. During the conference we had with who were not able to properly articulate their cases. officers of the Attorney-General's Deparbnent I They are the people who need assistance and they raised a number of matters with them. To their do not need second-rate treabnent. The fact is that credit, they replied, addressing the issues I raised by this government has buggered the system. way of letter to the shadow Attorney-General, the honourable member for Kew, dated 20 May. The ACTING SPEAKER (Mr Delzoppo) - Order! I ask the honourable member to retract that I raised two matters in particular in relation to the sta tement. power of the commission to obtain a charge over the property of an assisted person. The first was Mr PERTON - I retract the use of the word whether that charge would override a caveat that "buggered". The government has so damaged the had been taken over the relevant property. The legal aid system through its neglect and failure to second was whether such a charge would override a properly manage the affairs of the State that mortgage by deposit of title deeds. The response given to the matter relating to the caveat is: LEGAL AID COMMISSION (AMENDMENT) BILL (No. 2)

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... if there is a caveat on the title, notice of the charge away the interest in the property of the person who will be given to the caveator. Pursuant to section 90 of lodged the caveat. the Transfer of Land Act 1958, the caveator then has 30 days in which to take proceedings to delay registration A similar concern is raised in respect of mortgage by of the charge, failing which the caveat lapses to the deposit of title deeds. That is a mortgage not extent necessary to allow registration of the charge. registered on a certificate but one where the mortgage title is lodged with a bank or other In other words, the reply is suggesting that the financial institution. Although it is not registered on position of a caveator would not be prejudiced a certificate, it is generally regarded as a fairly secure because the normal process would be followed interest in land because few dealings in land can be under which the caveator had an opportunity to lodged and registered at the Land Titles Office defend the claims over interest in the property that without a certificate of title. gave rise to the caveat. The response provided in respect of mortgage by By way of explanation, I indicate that a caveat deposit of title deeds is as follows: would be lodged by people who claim to have an interest in a property in order to protect that claim. It ... a charge will be registered in priority to the rights of could well be that a caveat was lodged by another an equitable mortgagee by deposit. The nature of the family member of the person seeking assistance or equitable mortgagee's security is such that it will somebody else who had dealings with that person. always be vulnerable to charges which can be The question is whether the charge obtained by the registered without production of a certificate of title, Legal Aid Commission under the proposed such as land tax charges. In deciding to use this form of legislation would operate in priority to the claim the security, the mortgagee will be aware of the risks other person had over the same property that was associated with not registering his or her interest. protected by the caveat. In other words, the Attomey-General's Department Notwithstanding that the reply given to the is effectively saying, "Tough luck. The mortgagee honourable member for Kew seems to provide an under a certificate of title already knows that he or assurance that the caveator will be protected, on my she is at risk in relation to land tax and other reading of the Bill that may well not be the case. matters, so who cares if there is one more potential Section 90 of the Transfer of Land Act, which was liability. The charge is being allowed to take priority referred to in that reply, to allow a person who has over the mortgage by deposit of title deeds". lodged a caveat to defend a claim, seems to have in that it may delay the registration of the charge until There are few circumstances in which land tax the claim of the caveator can be established. The amounts to such a Significant burden on landowners problem is that those provisions would seem to be as to be likely to extinguish the security value of the overriden by the statutory right conferred by property to the mortgagee. In other words, in the proposed new section 47B(2), which provides: usual course of events, the land could still be sold, the land tax paid and enough money would be A recording of a notice lodged by the Director is to be available to payout the mortgage. made in the register and upon the recording of that notice the land becomes charged with the payment of However, the value of the charge taken over an the amount which has not been paid. assisted person's property could be large if the cost of litigation mounted up. That would present a It seems that what that means is that the charge serious risk to the mortgagee in possession to find granted to the commission takes effect without any that even though he or she believed he or she had a opportunity of the registration of that charge being valuable security to protect the money, that may not delayed under section 90 of the Transfer of Land be the case because there was little value left at all. Act. Therefore I retain a concern that the legitimate In addition, in matters such as land tax a mortgagee interests of other parties in the property owned by can take such steps to ascertain what the position is the person being assisted by legal aid are not being before granting a mortgage - in other words, the protected under the Bill and that those legitimate outstanding land tax liability. interests of other people would take a second ranking to the charge granted even though the But a charge that would be obtained under the Bill assisted person who was allowing the charge to be would be a bolt out of the blue. The mortgagee could taken over the property was not in a position to give take all possible precautions to find out whether the TREASURY CORPORATION OF VICTORIA BILL

Thursday, 28 May 1992 ASSEMBLY 1977 ti tIe was good and whether there were existing provided before the matter proceeds in another charges, but a few months or a few years later the place. person might apply to the Legal Aid Commission for assistance and a charge would be imposed. In Mr KENNAN (Attorney-General) - I thank effect the commission would be provided for at the honourable members for their comments and expense or the risk of the mortgagee, rather than at enthusiastic support of the Bill. The honourable the expense or the risk of the person obtaining member for Kew raised a matter relating to a assistance. requirement to consult and said it should possibly go further and be a requirement to take into account. My concern is not just that the individual mortgagee That is a matter the government will look at between will suffer but that in consequence of that risk the the Houses. technique of obtaining funding by way of mortgage through the deposit of title deeds will be The honourable member for Balwyn raised a undermined, and that will be an impediment to the number of technical matters which we will certainly effective operation of our financial market. examine while the Bill is between the Houses because we may want to give further consideration A number of other points were raised in the to an amendment in light of the additional matters. conference wi th the officers of the Attorney-General's Department. I am pleased to say Motion agreed to. that several are likely to be dealt with in the amendments to be moved by the government in Read second time. another place. I shall make a comment about one of those in particular. It is outrageous and I am Passed remaining stages. surprised that it was placed there in the first place. Proposed section 48C inserts into the principal Act a TREASURY CORPORATION OF provision that says that where the commission VICTORIA BILL obtains an assignment of the right to recover money which is possessed by an assisted person and where Second reading that right to obtain that money has lapsed by virtue of the normal Limitation of Actions Act period, the Motion of A. J. SHEEHAN (Treasurer) (last right to the money revives in favour of the Legal Aid debated 21 May) agreed to. Commission. Read second time. The ordinary citizen cannot recover the amount because of the time that has elapsed, but the State Ordered to be committed later this day. could assert a right, which had been extinguished in the case of an individual citizen, and it could use it Message read recommending appropriation. to obtain money for its own benefit. That is a most improper provision to include in the legislation and Committed. it is pleasing that it is to be deleted. Committee The final issue I raise is in relation to the question of assignment and whether the Attorney-General has Clause 1 agreed to. given consideration to the way the assignment provisions contained in proposed section 48C will Oause2 operate where the other party to the transaction, the party owing the money to the assisted person, has Mr STOCKDALE (Brighton) - I move: some right and wishes to offset that right against the 1. Clause 2, line 9, after "proclaimed" insert ", being a claim the assisted person has, or where that other day or days after 1 July 1993". party wants to claim there is some sort of estoppel against the assisted person. That matter needs to be I have already indicated the reasons for the thought through. opposition's moving this amendment and it is not necessary to add anything further. If he is not able to provide a response to these matters at this stage, I ask the Attorney-General to Mr A. J. SHEEHAN (Treasurer) - It is the ensure tha t they be considered and a response government's intention to bring this Bill into TREASURY CORPORATION OF VICTORIA BILL

1978 ASSEMBLY Thursday, 28 May 1992 operation as soon as possible. The amendment is not "() A di;ection under this section may include a acceptable. direction concerning performance measures which the Corporation is to aim to meet.". Amendment negatived; clause agreed to. The amendment amends the power of the Treasurer to give directions to include a power specifically to Clause 3 give directions setting performance standards against which the performance of a corporation will Mr A. J. SHEEHAN (Treasurer) - I move: be assessed. 1. Clause 3, line 23, after "the" insert "voting". Amendment agreed to; amended clause agreed to; 2. Clause 3, lines 28 and 29, omit "an agency, clauses 11 to 13 agreed to. instrumentality or body" and insert "a body or trustee". Clause 14 Amendments agreed to; amended clause agreed to; clauses 4 to 7 agreed to. Mr A. J. SHEEHAN (Treasurer) - I move: 4. Clause 14, line 12, after "indemnify" insert "a person Clause 8 who is or has been". Mr STOCKDALE (Brighton) - I move: 5. Clause 14, lines 14 and IS, omit "during that director's or officer's term of office". 2. Clause 8, line 5, before "The" insert "(I)". 6. Clause 14, line 16, after ''her'' insert "during that 3. Clause 8, page 6, after line 2 insert - director's or officer's term of office". "(2) As soon as possible after giving a notice under Amendments agreed to; amended clause agreed to; sub-section (l)(k), the Treasurer must cause a clauses 15 to 25 agreed to. copy of the notice to be published in the Government Gazette.". Clause 26 Amendment No. 2 is purely consequential. Amendment No. 3 provides that where the Mr A. J. SHEEHAN (Treasurer) - I move: Treasurer confers additional functions on the 7. Clause 26, line 18, before "Superannuation" insert proposed corporation a notice of direction be "State". published in the Government Gazette. 8. Clause 26, line 18, for J/1958" substitute J/1988". Mr A. J. SHEEHAN (Treasurer) - I accept the Amendments agreed to; amended clause agreed to; amendments. The government will move its own clauses 27 to 31 agreed to. amendment to the clause. Clause 32 Amendments agreed to. Mr STOCKDALE (Brighton) - I move: Mr A. J. SHEEHAN (Treasurer) - I move: 6. Clause 32, page 16, line 11, after "declaration" insert 3. Clause 8, lines 11 and 12, omit "invest or manage, or "to be given to any other party before the invest and". provision of the financial accommodation or the Mr STOCKDALE (Brighton) - The opposition entering into of the financial arrangements and". does not oppose the amendment. The amendment has the effect of requiring the corporation to give notice to any other party affected Amendment agreed to; amended clause agreed to; where it proposes to issue securities without a clause 9 agreed to. government guarantee. At the moment the Bill simply provides for a form of notice by gazettal. The Clause 10 opposition considers it appropriate that where the other parties can be identified as being relevant they Mr STOCK DALE (Brighton) - I move: should be expressly given notice. In the nonnal 4. Clause 10, after line 7, insert - course of events one would expect them to be given notice in the form of a prospectus or other like instrument. TREASURY CORPORATION OF VICTORIA BILL

Thursday, 28 May 1992 ASSEMBLY 1979

Amendment agreed to; amended clause agreed to. to the Corporation accruing in any financial year to a subsequent financial year.". Clause 33 The amendments deal with the contents of the corporation's annual report. Paragraph (b) in Mr A. J. SHEEHAN (Treasurer) - I move: amendment No. 7 requires the inclusion of a report 9. Clause 33, line 22, after "arrangement" insert "entered to the extent to which the corporation has met the into or". objectives of its performance measures. Paragraphs (c) and (d) relate to the reporting of swap and other Amendment agreed to; amended clause agreed to; deferred liability transactions, as does amendment clause 34 agreed to. No.B. Clause 35 The amendment is consistent with the report of the Economic and Budget Review Committee which Mr A. J. SHEEHAN (Treasurer) - I move: indicated that there ought to be specific disclosure in 10. Clause 35, lines 4 to 7, omit sub-clause (1). the annual report of transactions of this kind. 11. Clause 35, line 8, omit "(2)". Amendments agreed to; amended clause agreed to; 12. Clause 35, line 8, omit "33" and insert "32". clauses 39 and 40 agreed to. Amendments agreed to; amended clause agreed to; Clause 41 clauses 36 and 37 agreed to. Mr STOCKDALE (Brighton) - I move: Clause 38 9. Clause 41, line 18, before ''In'' insert "(1) subject to Mr STOCKDALE (Brighton) - 1 move: sub-section (2),". 7. Clause 38, after line 21 insert- 10. Clause 41, after line 27 insert-

"(b) if a direction concerning performance "(2) sub-section (1) does not authorise a trustee to measures has been given under section 10, a invest money as mentioned in that sub-section report on the extent to which the Corporation unless the repayment of the money so has met those measures; and invested is guaranteed by or on behalf of the Government of Victoria." (c) contain details of amounts paid or received under swap contracts, or under deferred The amendments limit the conferring of trustee liability transactions, during the financial year; status on securities issued by the corporation where and the securities are government guaranteed. It is important that trustee status be carefully regulated (d) contain details of each swap contract or and be extended only to guaranteed instruments. deferred liability transaction in force at the end of the financial year showing - Amendments agreed to; amended clause agreed to; (i) the amounts payable or receivable under clauses 42 and 43 agreed to. each such contract or transaction in respect of each subsequent financial year; Clause 44 and Mr STOCK DALE (Brighton) - 1 move: (ii) an estimate of the net market value of each such contract or transaction as at the end 11. Clause 44, line 11, before 'The" insert "(1)". of the financial year; and". The amendment is consequential to amendment 8. Clause 38, page 19, lines 24 to 27, omit sub-clause (6) No. 12. and insert- Amendment agreed to. "(6) In this section, "deferred liability transaction" means a transaction to which the Corporation Mr A. J. SHEEHAN (Treasurer) -I move: is a party and which is a borrowing or has the economic effect of a borrowing and which 13. Clause 44, lines 13 to 15, omit paragraph (a) and defers all or part of the cost of the transaction insert- "(a) prescribed agencies;". EGG INDUSTRY (AMENDMENT) BILL

1980 ASSEMBLY Thursday, 28 May 1992

Mr CLARK (Balwyn) - I question whether the 14. Clause 46, page 22, after line 14, insert- amendment is correctly drafted. It provides that the "(3) A guarantee in force under section 31 of the Governor in COlillcil may make regulations for or Victorian Public Authorities Finance Act with respect to prescribed agencies. Prescribed 1984 immediately before the commencement agency is defined as: of this section in relation to a VicFin (a) a body all the shares in which are owned by or on instrument continues in force in relation to behalf of the State, whether directly or indirectly; or that instrument.

(b) a trustee of a trust of which the State is the sole (4) Section 34 applies in respect of a guarantee beneficiary - continued in force by sub-section (3) as if the guarantee had been given under this Act." prescribed by the regulations as an agency, instrumentality or body to which this Act applies. Amendment agreed to; amended clause agreed to; clauses 47 to 57 agreed to. The amendment will have the effect of giving power generally to make regulations with respect to Reported to House with amendments. prescribed agencies. What seems intended is to cross-reference clause 44 with clause 3 so that the Passed remaining stages. Governor in COlillcil can prescribe agencies rather than make regulations about prescribed agencies in EGG INDUSTRY (AMENDMENT) BILL general. Second reading I ask the Treasurer to clarify that amendment while the Bill is between here and another place. Debate resumed from 9 April; motion of Mr BAKER (Minister for Food and Agriculture). Mr A. J. SHEEHAN (Treasurer) - The honourable member for Balwyn is correct. I shall Mr W. D. McGRATH (Lowan) - The Egg take his remarks on board and consider the Industry (Amendment) Bill could have laid on the amendment while the Bill is between here and table lilltil the spring sessional period to enable another place. honourable members to make a considered contribution on the egg industry, but it is more Amendment agreed to. important to the industry to allow the amend~ent to be passed in this sessional period because that IS Mr STOCKDALE (Brighton) - I move: what the industry wants. 12. Clause 44, after line 18, insert - The Bill will enable the Victorian Egg Industry 1/(2) Regulations made under this section may be Licensing Committee to issue pennits to producers disallowed in whole or in part by resolution of to supply over-quota eggs for the product plant at either House of the Parliament in accordance Keysborough. The plant provides a valuable with the requirements of section 6(2) of the resource in Victoria; it is the only major egg product Subordinate Legislation Act 1962. plant in Victoria - providing 54 jobs - and the (3) Disallowance under sub-section (2) is deemed to amendment will allow the plant to use over-quota be disallowance by the Parliament for the eggs. The producers will not make a fortune out of purposes of the Subordinate Legislation Act it, but it will enable them to retain old hens for an 1962.". extra three or four months and sell their eggs to the Victorian Egg Marketing Board for egg production. I The amendment is the standard regulation lillderstand those eggs will be worth about $80 to disallowance provision which ensures $120 a kilogram. Producers will be able to get an regulation-making powers are inserted to enhance extra five or six weeks production from their hens. accolilltability. When the opposition researched the Bill, it found Amendment agreed to; amended clause agreed to; that imported egg products from Sweden were clause 45 agreed to. selling at $10.73 a kilogram; from Italy at $12.14 a kilogram; and from the Netherlands and Thailand at Clause 46 $10 a kilogram. In Australia the price is between $24 and $28 a kilogram. It is a case of imported products Mr A. J. SHEEHAN (Treasurer) -I move: being dumped in Australia. EGG INDUSTRY (AMENDMENT) BILL

Thursday, 28 May 1992 ASSEMBLY 1981

The Victorian Egg Marketing Board mounted a case It is important that the Bill be passed tonight so that that was decided in the producers' favour, and the it may be enacted before July or August because that board has now restricted the amount of egg product is the time when the egg numbers will escalate. The that can be imported at such low prices. sheds are likely to produce more than their quota and, therefore, the eggs can be used for product. An honourable member interjected. The Victorian Egg Marketing Board is sending half a Mr W. D. McGRA TH - The board has not been tonne a week of shelled boiled eggs to the Singapore able to stop the dumping completely but it has market by Qantas aircraft. That is a commendable slowed it down and now those countries must initiative and it is good to see the board getting into comply with certain price guidelines to enable them the market. It may seem a small amount but it shows to sell their product on the Australian market. that the board is having a go and trying to get into the export market. As tariffs and protection are phased out anti-dumping measures to safeguard and protect It is important for the industry to have this local agricultural production must be put in place amending Bill passed rather than its being delayed quickly. Fair trade is good, but we cannot allow our until the spring sessional period. It will benefit the producers to be exposed to the effects of dumping. industry to have it passed tonight, and that is why the opposition will allow the passage of the Bill. The coalition's agriculture committee has consulted with the Victorian Farmers Federation (Egg Mr BILDSTIEN (Mildura) - As has been Producers Group), the Victorian Egg Marketing explained by the honourable member for Lowan, the Board, and the Victorian Hatcherymen's Society. egg product industry is important, involving about The honorary secretary of that society, Mr Seers, 3.2 million birds. Given the hour, and in states in his letter to the committee: consideration of the staff, I will keep my remarks brief. Re: proposed legislation changes to Act covering use of commercial hen quota. At a recent meeting of the VHS The Bill amends the Egg Industry Act 1989 by the members voted to support changes to the Act which addition of a further clause: will allow commercial hen quota to be used for the prod uction of eggs for use in manufacturing egg After section 76(1)(e) of the Egg Industry Act 1989 products. insert-

1J(f) Hens for additional egg production for human Please consider the VHS support for the consumption to meet domestic demand for egg abovementioned changes at the time of consideration. products." I also received correspondence from a gentleman That will ensure a weekly supply of about 80 tonnes who has as good a knowledge as anyone of egg or more for the Victorian Egg Marketing Board prodUction, egg marketing and allied matters in factory at Keysborough and the eggs will be sold at a Victoria - Richard Guy from Bendigo. He states: competitive price. The Keysborough factory processes eggs into products for wholesale, retail, Therefore the product plant needs a steady source of national and international sales. In discussions with cheap eggs. The new amendment provides an excellent board members it was pointed out that the plant and solution to the problem provided it can be controlled. machinery valued as an ongoing concern was worth Effectively it allows a producer who is about to dispose about $5 million. The factory provides direct of some old hens to be allocated additional quota to employment for 54 people, 40 of them in the shell permit him to keep these hens. Provided the producer egg area. concerned has sufficient shedding his only additional cost for keeping these old hens would be his feed costs, The egg industry is divided into the shell egg area the operational costs of the shed such as electricity and comprising 86 per cent of sales and the product egg egg collection. Provided all these additional eggs are area comprising the remaining 14 per cent. The transferred to the product plant and not diverted to the breakdown of the production costs at the factory shell market I see no problems. indicates a break-even throughput of about 80 tonnes of eggs a week. The plant has the capacity for That is the important principle underlying the 200 tonnes a week. However the current assured egg legisla tion. supply from Victorian producers is only between 20 EGG INDUSTRY (AMENDMENT) BILL

1982 ASSEMBLY Thursday, 28 May 1992 and 40 tonnes a week. I have been advised that in Victorian Egg Industry Licensing Committee, which the past the plant has been supplementing its supply has the power to place conditions and restrictions on from the New South Wales market, but that market permits, is currently developing a set of conditions is slowly diminishing. The current level of supply to and mOnitoring procedures to ensure that the eggs the Keysborough plant is not viable. It has been are not sold on the shell egg market. The issuing of a recommended that if eggs can be sourced from permit to a producer will be conditional upon a Victorian producers at the marginal production cost contract existing between the producer and an egg of 80 cents a kilogram it would be of great assistance product manufacturer. The controls are expected to to the industry. minimise the leakage of eggs produced for product purposes into the shell egg market. I am advised that Victorian producers who produce eggs from hens the committee anticipates that its system should not covered by State hen quotas have no financial reason allow diversion equivalent to more than 0.5 per cent to sell those eggs for egg product manufacture. For of the total shell egg market. that reason, to overcome the supply problem for the past two years the Victorian egg board has been Motion agreed to. purchasing most of its requirements from New South Wales. Read second time.

If Victoria were to lose the Keysborough plant it Ordered to be committed later this day. would lose a factory worth about $5 million. Up to 54 permanent staff would have to be retrenched and Mr BAKER (Minister for Food and there would be secondary employment effects. Agriculture) - By leave, 1 move: Significant losses would be suffered on the forced sale of those assets. That it be an instruction to the Committee that they have power to consider amendments to allow a person The board did not want to go down that path and to apply to the Egg Industry Licensing Committee for a considered the interests of the Victorian industry. It permit to own and keep hens that are used at certain discussed the problem with its staff and producers times of the year for the production of eggs otherwise and subsequently the Minister and the government. than for human consumption and at other times of the The Bill was introduced to ensure that the producers year for the production of eggs for human consumption. can run hens at a marginal return of 80 cents a kilogram or better for eggs and so that those eggs Motion agreed to. can be sent to the factory at Keysborough to provide a better return from export income. It will also Committed. provide another permanent source of Victorian eggs for egg products at a marginal cost. Committee

As the honourable member for Lowan said, the Clause 1 agriculture committee of the coalition spoke with the Egg Producers Group of the Victorian Fanners Mr BAKER (Minister for Food and Federation, the Victorian Egg Marketing Board and Agriculture) - I move: the Victorian Hatcherymen's Society. We believe the 1. Clause 1, line 5, after "products" insert "or for the plant at Keysborough must be retained to provide production of eggs for human consumption at those opportunities for egg producers. We support certain times of the year for the production of eggs the passage of the Bill. for other purposes at other times of the year". Mr BAKER (Minister for Food and Amendment agreed to; amended clause agreed to; Agriculture) - I thank honourable members clause 2 agreed to. opposite for the way in which they have contributed to the debate. There is no disagreement with the Clause 3 points made so eloquently by the honourable members for Lowan and Mildura. 1 thank them for Mr BAKER (Minister for Food and allowing us to bring the matter forward at this time. Agriculture) -I move: 2. Clause 3, page 2, after line 3 insert- The'honourable member for Lowan sought an assurance about controls. 1 am advised that the EGG INDUSTRY (AMENDMENT) BILL

Thursday. 28 May 1992 ASSEMBLY 1983

"(g) Hens that are used at certain times of the year the eggs are not used for that purpose, they can be for the production of eggs otherwise than for used in the product plant at Keysborough. human consumption and at other times of the year for the production of eggs for human Amendment agreed to; amended clause agreed to. consumption.". Reported to House with amendments. Mr W. D. McGRATH (Lowan) - The opposition is happy to accept the amendment. It will allow the Passed remaining stages. Commonwealth Serum Laboratories to use eggs that are produced in Victoria for the production of serum House adjourned 4.58 a.m. (Friday) until Tuesday, and vaccines that are exported from Australia 9 June. thereby creating another export opportunity. When