Indigenous Business Australia

[11:45]

CHAIR: I welcome the officers from the IBA. Because of time constraints we only have 10 minutes for questions on the IBA.

Senator SCULLION: As I indicated, I table a letter from Ron Morony dated 13 September 2012, saying he has no objection to IBA providing to the Senate a copy of a letter Mr Morony sent to the board at the time of his termination of the CEO—we have already been through that. Mr Fry wrote to me saying he was prepared to provide a copy of that letter, but first he would like to write to Mr Morony seeking his express permission to do so. Of course, I accepted that and I will also table that letter. Did the IBA approach Mr Morony about this? If so, when was that?

Mr Bator : Yes, we did write to Mr Morony to seek his consent to the release of his confidential letter to the IBA board. And yes, he agreed to the release of that letter.

Senator SCULLION: I understand you also asked Mr Morony to indemnify the IBA. That wasn't a part of our conversation about what you had to satisfy yourself about. What was the purpose of that request?

Mr Bator : He signed a deed with IBA which covered the letter and the disclosure of the letter to other parties or any kind of detrimental comments that he would make of IBA now or of IBA in the future. He signed a binding arrangement that that letter would remain 'in confidence' into the future.

Senator SCULLION: Are you able to provide the letter?

Mr Bator : Are you asking me to—

Senator SCULLION: I am. This is about the provision of a letter from Mr Morony on his resignation, which I understand provides a range of advice to IBA. I would like to have that made available to the committee. This process has taken place and you have written to Mr Morony. Are you going to provide us with the letter?

Mr Bator : I can provide the letter.

Senator SCULLION: Excellent.

Mr Bator : The important thing is that IBA has considered the issues raised in the letter. Whilst we are ready to put the letter forward, as requested, I think some comments should be made about the letter and the context of the letter.

CHAIR: Can we get the letter first?

Senator SCULLION: I haven't seen the letter and unless there are questions on notice I won't be able to talk about this letter or the issues within it until the next set of estimates. We have come to this stage in pulling teeth where we have actually got the letter, but I am not sure how useful it would be for you to put it in context. I am more than happy to start this conversation again, given the time. I hope you don't mind my moving from this, but we have very little time so I won't be dealing with the letter in this session—I will deal with it at the next set of estimates.

Senator SIEWERT: Before we move on, could we have that letter plus any other relevant correspondence?

Senator SCULLION: The only other relevant correspondence I will be tabling is the letters I have said come from—

Senator SIEWERT: I mean from the IBA. That letter is the response, is that correct?

Senator SCULLION: Yes.

Mr Bator : IBA has not provided a response.

Senator SIEWERT: So that is the original?

Mr Bator : That is the letter.

Senator SIEWERT: And there has been no response since then?

Mr Bator : There has been no response to that letter.

Senator SIEWERT: To Mr Morony.

Mr Bator : To Mr Morony's letter. We have written to Mr Morony and sought his consent to release the letter, but IBA has not been given the opportunity to comment on the letter. Presumably the letter is now on the public record and IBA has not been able to comment as I would have liked to comment.

Senator SIEWERT: There is no relevant correspondence other than the letters we have been through?

Mr Bator : That is correct.

CHAIR: I am happy for this discussion to continue while I take some advice about what was said about the letter being in the public sphere and no response from IBA being available to a significant letter which has at least 20 pages.

Senator SCULLION: To assist, Mr Bator, I ask you on notice to provide a response to contextualise the letter. The committee would be grateful for that.

CHAIR: Mr Bator, out of session I will take some advice and talk to the committee. This letter will not be made public until I have received that advice, because I am very concerned that there will be no discussion on the letter because we have not had a chance to read it. I will take some advice from the secretariat about the process for publication and when and how it will become public. This advice will be taken in the next couple of days, so until it is finalised this letter will go no further than the committee. We will work with Senator Scullion about what happens next.

Mr Bator : Thank you very much.

Senator SCULLION: I move to an issue associated with Tjapukai. I have been keenly interested in this establishment for some time. On 1 June last year, Mr Fry told an estimates hearing about additional investments IBA was making in Tjapukai. He said the board had approved $12 million in capital expenditure, $2 million in working capital and $4 million for the next number of years to 2014-15. He went on to say that from 2015 to 2023 there is a consideration of an additional $19 million. In your response to question on notice 474 you indicate Tjapukai's value is around $1.4 million. Is that correct?

Mr Bator : That would be correct.

Senator SCULLION: How is it that you will invest a minimum of $18 million in a business that you have valued at $1.4 million?

Mr Bator : The board has made a decision that that investment requires a substantial upgrade in order for it to be a profitable investment and for it to continue to have high numbers of Indigenous employment. It is an older establishment which requires an upgrade. It is a significant employer of Indigenous people within that region. We have gone through a comprehensive process of design, looking through who might be able to provide the very latest and best structure and facilities to make sure that that is a very successful tourist facility in that part of Australia.

The value of that asset is probably because of the condition that it is currently in, rather than the potential that the land and the environment holds, and the increasing presence of Chinese and Japanese tourists that are starting to come through that particular venue—which will be increased through the improvement of facilities and amenities that are there.

Senator SCULLION: Is it true that the IBA administration, in considering this, advised in a board paper against this additional investment in Tjapukai?

Mr Bator : The board has robust conversations about all of its investments and whether or not there will be value for money. That is a proper function of the IBA board. In my experience, they do that with all the investments to see whether they are going to get value for money and a return on investment. We received, and the board considered, many different options and projections around Tjapukai, and they made a decision that this was a sound investment that would return an improved investment over time, and maintain the high levels of Indigenous employment that Tjapukai currently provides.

Senator SCULLION: I have visited Tjapukai on a number of occasions and I still have some very serious concerns about the nature of the investment. An $18 million investment is a huge investment, and I guess we will have to wait and see.

If I could move quickly to the Medina Vibe—one of your investments. I understand the main purpose of investing some $50 million in the Medina Vibe Hotel was to generate Aboriginal jobs. However, you advised in your answer to questions on notice that there were one or two Indigenous employees, but none at the moment. Thirty per cent of the population in Darwin is Indigenous, so how many non-Indigenous staff are employed at the Medina?

Mr Bator : I do not have that information just in my head. What I can tell you is that the board and my staff have been working very closely with the company that provides the hotel facilities. We have also been working with local Indigenous employment providers and we want to turn that around. We do not feel that the type of outcome that you are referring to is appropriate, with only one or two Indigenous employees. We would like to see more. There is nobody more strident in wanting that outcome than the IBA board, and it has been given to us as a task to make sure that we can turn it around.

Senator SCULLION: There are two things. You do not have an Indigenous partner—normally, as you have told me before, you like to have an Indigenous partner in this process. You have bought out the previous Indigenous partner and you are looking for another one. How are you going with that search?

Mr Bator : That search is progressing. At the moment we are still going through various options and the opportunities that exist. I cannot currently say who that might be, but it is not from want of trying.

Senator SCULLION: I understand.

Mr Bator : It is work which is underway.

Senator SCULLION: I go to the Medina quite often and there are a lot of staff there. As you say, I am happy to take that on notice. We have a lot of Aboriginal people who are being trained, particularly in hospitality, as you would be aware, around Darwin, and I find it completely extraordinary that you cannot find an Aboriginal person—given the record of the ILC in Ayres Rock. They have focused on it and they have achieved it. I will watch very closely.

Mr Bator : We are working with the ILC on this issue to try and understand how they have been successful; to try and work through their training facility in order to see whether we can encourage the rotation of staff who are trained there into the Medina. It is certainly a high priority.

Senator SCULLION: I certainly would like to see staff from Darwin trained there. In any event, we will keep an eye on those numbers.

CHAIR: Thank you very much to the officers from IBA. We will be in contact with you early next week.