12323 LEGISLATIVE ASSEMBLY Wednesday 7 March 2001 ______ Mr Speaker (The Hon. John Henry Murray) took the chair at 10.00 a.m. Mr Speaker offered the Prayer. AUDIT OFFICE Report Mr Speaker, pursuant to the Public Finance and Audit Act 1983, tabled the Performance Audit Report entitled "Ambulance Service of New South Wales—Readiness to Respond", dated March 2001. Ordered to be printed. CASINO CONTROL AMENDMENT BILL Bill introduced and read a first time. Second Reading Mr FACE (Charlestown—Minister for Gaming and Racing, and Minister Assisting the Premier on Hunter Development) [10.01 a.m.]: I move: That this bill be now read a second time. This legislation will implement many of the recommendations made by Mr Peter McClellan, QC, as a result of last year’s inquiry into the operations of Star City Casino. For the benefit of honourable members, I will give some background to that inquiry. The casino legislation requires the Casino Control Authority, at least once every three years, to investigate whether the casino operator, Star City, is suitable to continue to give effect to the casino licence and the casino legislation, and whether it is in the public interest that the casino licence should continue in force. The authority must report its findings and opinion to the Minister, giving reasons, and it must take whatever action under the casino legislation it considers appropriate in light of the findings. The Authority is empowered to appoint an outside person to conduct an inquiry that would assist it to undertake a section 31 investigation. In May 2000 the authority appointed Mr Peter McClellan, QC, to conduct an inquiry for this purpose. Mr McClellan released an interim report on 31 August 2000. The Premier and I announced immediately that the Government accepted the recommendation in that report that the Director of Casino Surveillance and casino inspectors, who form part of the Department of Gaming and Racing, be combined with the authority to improve government scrutiny of activities at the Sydney casino. The authority advised me of the final outcome of its inquiry on 15 December 2000. The authority had formed the view that it is in the public interest that the casino licence remains in force. It had also formed the view that Star City continues to be suitable to hold the casino licence. The authority further advised me that it had endorsed all of the recommendations made by Mr McClellan in his final report. The McClellan report contained a total of 25 recommendations, including various proposed amendments to legislation. The Government unreservedly accepts all of Mr McClellan’s recommendations, both those requiring legislative amendment and those that can be implemented through administrative means. The purpose of the legislation is to give effect to those recommendations which require legislative action. I will turn now to the details of the legislation. As I mentioned previously, Mr McClellan recommended in his interim report last August that the Director of Casino Surveillance and casino inspectors, who form part of the Department of Gaming and Racing, be combined with the Casino Control Authority. This recommendation was restated in his final report. Honourable members would be aware that the casino inspections function is presently vested in the Director of Casino Surveillance and his staff, who are employed by the Department of Gaming and Racing, 12324 LEGISLATIVE ASSEMBLY 7 March 2001 while the licensing and disciplinary functions are held by the Casino Control Authority. The Director of Casino Surveillance is an independent statutory position who is not subject to the direction and control of either the Department of Gaming and Racing or the Casino Control Authority. Mr McClellan found that the authority in discharging its obligations relies largely on the observations of and information from the Director of Casino Surveillance. Under the current regulatory structure, the Authority does not have effective control over the manner in which the Director of Casino Surveillance carries out its functions. McClellan also noted that in 1998, the Audit Office had found that the present structure led to duplication of effort by the Director of Casino Surveillance and the authority. As a result of these observations, Mr McClellan recommended that the activities undertaken by the director should be sourced from the authority rather than the Department of Gaming and Racing. McClellan also recommended that under an integrated body, there would no longer be any justification for a statutory officer performing the functions of the Director of Casino Surveillance and accordingly, the authority should perform those functions, and the statutory office of the director should be abolished. Since Mr McClellan's interim report was handed down last August, the director and his staff have physically moved to the premises of the authority, but in order to give full effect to the merger, it is necessary to amend the legislation. The bill before the House will do so. Schedule 1 to the Casino Control Amendment Bill repeals the provisions establishing the office of Director of Casino Surveillance and amends various provisions of the Casino Control Act to transfer the functions of the Director to the Casino Control Authority. The savings and transitional provisions provide for the public service positions within the present Casino Surveillance Division to be transferred to the Casino Control Authority, with the transferred officers to retain their present public service conditions of service as long as they remain within one of the transferred positions. I will turn now to Schedule 2 to the bill. Mr McClellan noted that the Act confers a number of objects on the authority, although the Act itself does not contain an objects clause. One of the objects of the authority is to ensure that the management and operation of the casino remains free from criminal influence or exploitation. Mr McClellan expressed the view that this object should also apply to Star City, and, indeed all of the objects of the authority should extend to the operation of the Act as a whole. The bill inserts a new section 4A in the Act, which defines three primary objects of the Act. These three primary objects are: ensuring that the management and operation of the casino remain free from criminal influence or exploitation; ensuring that gaming in the casino is conducted honestly; and, containing and controlling the potential of the casino to cause harm to the public interest and to individuals and their families. The amendment requires all persons having functions under the Act to have due regard to these objects when exercising those functions. The next significant group of amendments relates to conducting probity checks on authority staff and consultants. Section 136 of the Act presently requires a determination to be made that any person proposed for appointment as a staff member of the authority, or a consultant to the authority, possesses the highest standard of integrity. Probity checks must by undertaken prior to such a determination, and these checks are to include consideration of a police report. Mr McClellan noted that there is no present statutory requirement or capacity for a person, once appointed to any of those positions, to undergo probity updates during the course of their tenure. Mr McClellan recommended that the authority should be empowered to require its staff members and consultants to submit to a probity review at any time, for the purposes of a fresh integrity determination. Items [9] to [13] of schedule 2 give effect to this recommendation. The next major amendment relates to the conduct of future inquiries such as that recently performed by Mr McClellan on behalf of the authority. Mr McClellan was appointed to preside over the authority's inquiry under section 143, which enables persons willing to give evidence to such an inquiry to do so on oath or affirmation. The legislation is defective in that it does not empower the presiding officer to require a person directly or indirectly associated with matters that are the subject of the inquiry to give evidence to the inquiry. As Mr McClellan noted, unless a person is willing to come forward, the capacity of an inquiry to get to the bottom of an issue under the present law is hindered. Proposed new section 143A will overcome this unsatisfactory situation. The proposed section gives the person presiding at a section 143 inquiry most of the powers, authorities, protections and immunities conferred on a commissioner by the Royal Commissions Act 1923. If the person is a Supreme Court judge or a legal practitioner of at least seven years' standing, the powers and authorities of division 2 of part 2 of the Royal Commissions Act also apply. These provisions will allow witnesses to be compelled to attend and give evidence at an inquiry and will ensure that witnesses who do so have the same protection as witnesses who give evidence in a Supreme Court proceedings. Mr McClellan also recommended that the Act be amended to empower the person presiding over a section 143 inquiry to direct that the following must not be published or must not be published except as 7 March 2001 LEGISLATIVE ASSEMBLY 12325 specified: evidence given to the inquiry; the contents of a document or description of a thing produced to the inquiry; information that might enable a person who has given evidence or is about to give evidence before the inquiry to be identified or located; or the fact that a person has given or may be about to give evidence at a hearing. Mr McClellan recommended that this power to restrict the publication of information should be confined to those situations where it is necessary or desirable in the public interest. New section 143B gives effect to these recommendations.