PARLIAMENTARY REPORTS Wednesday, 1 November 1995 COUNCIL 381 Wednesday, 1 November 1995 and calls for an independent public inquiry into the circumstances of the sale and leasing deal. The motion is about the failure of the Minister for Conservation and Environment to act on proper The PRESIDENT (Hon. B. A. Chamberlain) took advice from responsible officers, his failure to ensure the chair at 10.02 a.m. and read the prayer. tha t proper processes were observed in disposing of public land, his failure to follow the government's PARLIAMENTARY REPORTS current asset management policy, and his failure to obtain full market value based on the full Hon. D. M. EV ANS (North Eastern) presented Valuer-General's valuation of the land. The sale reports for 1994-95 of: resulted in a loss to consolidated revenue of $1.8 million to $2.8 million and sets a precedent that Department of the Legislative Council; cannot be defended. I will show convincingly that the minister has been compliant in a scheme Department of the Parliamentary Library; designed to get around the Valuer-General's valuation and land-monitoring processes. Department of Parliamentary Debates; and The minister's officers made it abundantly clear to Department of the House Committee. him that his actions would have that effect; but he ignored their advice, which was given in good faith. Laid on table. In doing so he failed to heed the lesson that Victorians and former ministers learnt from the PAPERS Gowans inquiry and Frost royal commission: in selling public land it is necessary to follow due Laid on table by Oerk: process and correct procedure -and that applies particularly to the departments and the people City West Water Limited - Report, 8 November 1994 involved with property. to 30 June 1995. The Gowans and Frost inquiries found that the role South East Water Limited - Report, 8 November 1994 of the minister is to set an example and lead the to 30 June 1995. process. If the minister fails to follow due process and provide support to and engender confidence in Vistel Ltd - Report, 1994--95. the officers charged with those responsibilities, he undermines the system. Why should officers of a Yarra Bend Park Trust - Report, 1994-95. department bother to fight to obtain the correct value for public land if the minister does not back Yarra Valley Water Ltd - Report, 8 November 1994 to them up? If the minister ignores the advice given to 30 June 1995. him by his officers, if the minister is compliant and allows other ministers to roll him, and if the minister SALE OF PUBLIC LAND allows a process that avoids the clear intention of the sale of public land, which was made clear by the Hon. B. T. PULLEN (Melbourne) - I move: Gowans and Frost inquiries, he undermines the process. That this House condemns the Minister for Conservation and Environment for his failure to: The minister has clearly done that. To make it clear, (a) protect the public interest in the sale and transfer of we are dealing with the disposal of land not by the former Flemington Secondary College site to expressions of interest or by public auction but by the Victoria Racing Club; private treaty. (b) sell the land at the Valuer-General's valuation; Honourable members interjecting. (c) uphold the recommendations of the Gowans inquiry and the Frost royal commission into land deals; and Hon. B. T. PULLEN - That was made clear by the then Minister for Finance, Mr I. W. Smith, the (d) adhere to the provisions of the Land (Amendment) honourable member for Polwarth in the other place, Act 1993 which provides that no sale take place at in his second-reading speech on the Land a price below the valuation of the Valuer-General; SALE OF PUBLIC LAND 382 COUNCIL Wednesday, 1 November 1995 (Amendment) Bill, which was passed by this We know something about the way it occurred. The Parliament -and the Minister for Conservation and figure orig{nany proposed was not $3 million but Environment should have been mindful of what he $4 million - and that figure was to be considered by said: the VRC board. One of the board members was Uoyd Williams, a name that crops up from time to The government is mindful that there must be time. safeguards to ensure that sales are managed in the best interests of the public. The public must be assured that Honourable members interjecting. all transactions are conducted with proper accountability. For this reason the bill provides that sale A Government Member - What a surprise! by private treaty of any Crown land must have the prior approval of the Governor in Council. Hon. B. T. PULLEN - He was a member of the board, when the $4 million was put forward. The bill also provides that no sale will take place under the new provisions at a price below the valuation of the Hon. M. A. Birrell - Was he on the board when Valuer-General. Joan Kirner stitched the deal up? Honourable members interjecting. Hon. B. T. PULLEN - Uoyd Williams said he could advise the other members on how to get a Hon. Bill Forwood - We want the contract! better result. In the end the price was not $4 million or even $3 million; it was $1.2 million, Hon. B. T. PULLEN - For the benefit of the plus a 63-year lease for a peppercorn rent, if house, I will go over -- requested. The rent was certainly not commensurate with the balance of the price, $1.8 million. The Honourable members interjecting. Minister for Finance knows that with a mixture of a sale and a lease it would have been possible to get a Hon. B. T. PULLEN - The land, which is well market rent for the lease commensurate with the placed and suitable for many uses, was the site of a value of that part of the land, which on the school for some 30 years, from 1%3; but in 1993 it Valuer-General's valuation was worth was considered surplus to school requirements. apprOximately $1.8 million - at that rent it would Based on its best use, the Valuer-General valued it at be more than a peppercorn a year. Instead, a device $3 million The VRC expressed an interest in was designed to get around the government's own purchasing the land for a training centre, an policy of paying the full Valuer-General's valuation. obviously worthwhile use. There is no argument If a lease had been required, it could have been a that it was a reasonable propOSition. But the motion market lease. But the 63-year peppercorn rent was is not about that; it is about the way the land was designed to put up a facade that gave the impresSion transferred. the sale did not breach government policy. In their advice to their minister departmental As a result of the Gowans inquiry and the Frost officers made it abundantly clear that any subsidy royal commission state governments adopted the provided to the VRC - if the government policy of not dealing carelessly with public land. considered it to be of benefit to the state - should They stressed the importance of full market return be transparent and should be paid by the and full Valuer-General valuations. There was-- appropriate department responsible for racing under the Minister for Sport, Recreation and Racing. Hon. R. M. Hallam - Who was to be the They said it should be transparent - that is, if in the beneficiary of this so-called seam you have outlined? government's opinion it was worth while subsidising a training facility the subsidy should be Hon. B. T. PULLEN - The loss was to explicit Whether it could have been at a TAFE consolidated revenue, because it should have college or at another site is a separate question. It occurred as a direct -- may well be that some government support for the industry is justified. But that process was not Hon. R. M. Hallam interjected. followed. The subsidy was not transparent; instead it was provided by rorting the process for the Hon. B. T. PULLEN -It is a very bad precedent disposal of public land - and the minister was in terms of disposing of public land. How was it aware of that done? SALE OF PUBLIC LAND Wednesday, 1 November 1995 COUNCIL 383 Government members interjecting. Hon. B. T. PULLEN - I will come to that. It is not the beneficiary; the losers are the pUblic of this Hon. B. T. PULLEN - A number of players were state. involved in the result. Honourable members interjecting. Hon. R. M. Hallam - What was the point? Never mind who the players were; what was the The PRESIDENT - Order! point? Hon. B. T. PULLEN - The briefing note to the Hon. B. T. PULLEN - The point was that a minister says: number of people in the government organised it to avoid the responsibility of selling or arranging the It is also of concern that departmental officers from transfer of the land based on the Valuer-General's conservation and natural resources, Mr Birrell's valuation. department, were not involved in early negotiations of future use arrangements for the site. At subsequent Hon. R. M. Hallam - So we did it to avoid the later meetings, the department's consistent view was Valuer-General ? that full market return on the Crown's assets, i.e., land and buildings, should be realised. Hon. B. T. PULLEN - I draw the attention of members to a briefing note dated 5 May 1994 and So the minister had a very clear statement from the addressed to the Minister for Conservation and most senior officers involved in advising him on the Environment.