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Joint Standing Committee on the National Capital and External Territories
14/05/2015
Governance in the Indian Ocean Territories

FLEMING, Ms Robyn, Executive Director, Local Government and Territories Division, Department of Infrastructure and Regional Development

LINDSAY, Mrs Karen, Acting General Manager, Jervis Bay and Indian Ocean Territories Branch, Department of Infrastructure and Regional Development

Committee met at 10:24

CHAIR ( Mr Simpkins ): Welcome. I declare open this public hearing of the Joint Standing Committee on the National Capital and External Territories. This is the fifth public hearing of the committee's inquiry into governance in the Indian Ocean Territories. The inquiry was proposed to us by Minister Briggs in March 2015. The minister invited the committee to inquire into and report on the interaction between formal institutions and the Indian Ocean communities, the role of the administrator, consultation mechanisms undertaken by government representatives, best practice for small remote community engagement with Australian and state governments, the role of local governments and opportunities to strengthen and diversify the economy.

Today we will hear from the Department of Infrastructure and Regional Development. Although the committee does not require to you give evidence under oath, you should understand that these hearings are formal proceedings of the Commonwealth parliament and warrant the same respect as proceedings of the respective houses. The giving of false or misleading evidence is a serious matter and may be regarded as a contempt of parliament. Would you like to make an introductory statement before we proceed to questions?

Ms Fleming : We were not going to make an introductory statement other than to say we do have a submission that we will provide to the committee later today. We just wanted to make sure there were not any issues that might arise out of today's meeting that we needed to include in our submission.

CHAIR: I have a lot of questions. I believe it was 19 March when we last met and you provided us with a private briefing. I want to pursue something that came out of the briefing. I was informed that there was no proponent and no business case for a casino on Christmas Island. Can I just clarify that the department has not seen a business case for that.

Ms Fleming : The department has, through periods, seen a proposal. I would not call it a business case in that it is not a feasibility study that provides all of the financial data. But there was an early proposal for the previous government that was submitted—from memory—by Soft Star for consideration.

CHAIR: When was that?

Ms Fleming : I would have to check for the exact date.

Mrs Lindsay : I do not have the date but it was to the previous government.

Ms Fleming : I can come back to you on that.

Mr SNOWDON: It is still alive?

Ms Fleming : The proposal was received by the previous government and further information was required. There was a period of engagement with the person who was interested. The issue around a proposal is that there is no framework at the moment under which one can consider a licence for a casino. The government has to have a policy that it wants a casino to operate on Christmas Island. If it did want a casino to operate, what would be the regulatory framework that would operate to support such a proposal? And then, if we had a regulatory framework, what would be the operational service delivery arrangements and with which jurisdiction would they be negotiated to support such an arrangement? That would inform the cost structures that would need to be considered in the business case. Yes, there is a proposal that was floating around earlier, but, by its nature, it cannot deal with many of those issues because there is not a settled government policy.

As the committee would be aware, the last decision on a casino was taken in 2001, I think, by the then Howard government that dismantled the Commonwealth legislation under which the casino operated. So there is no Commonwealth legislation for managing a casino and the policy was not to have a casino. So, in order for a casino to be considered there would have to be a policy that the government would consider a casino and then it would be: 'Well, is it Commonwealth legislation; is it state legislation; or is it territory legislation?' And then who would monitor it and oversee those arrangements? They are the steps that we would have to go through.

Mr SNOWDON: I am just a bit pissed off, to be very frank. You have been to Christmas Island?

Ms Fleming : Yes.

Mr SNOWDON: You would have seen the stone out there that has my moniker on it for issuing the first licence. There was a process, which was not hard to get to. I am presuming that the department has reviewed the previous licensing process and the administration arrangements that were in place at the time.

Ms Fleming : No—

Mr SNOWDON: Why not?

Ms Fleming : because the legislation does not exist.

Mr SNOWDON: That is not what I am talking about. I know the legislation does not exist. It is within this committee's power to make recommendations to the parliament and to the government to have a policy and to say what that policy might include.

Ms Fleming : Yes.

Mr SNOWDON: You could help us by explaining what the processes would precisely or potentially be and what options there might be for regulatory frameworks for a casino.

Ms Fleming : At the broad level, the policy is to establish a policy. There is no policy by the previous government and no policy decision has been taken by this government that there should be a regulatory framework established to operate a casino at this point in time. The options for a regulatory framework for a casino would be for the Commonwealth to develop its own legislative framework as it had done previously when a casino last operated on Christmas Island to adopt a state body of law as Commonwealth law. It could be the Western Australian body of law or an alternative body of law through an ordinance that would allow a different state's body of law to operate. For example, it could be the Northern Territory law, but we would then have to make ordinances to allow a Northern Territory law to apply to a state, as we have done in Jervis Bay, where fire and emergency laws are the laws of New South Wales rather than the laws of the ACT for pragmatic fire management purposes. They are the three basic frameworks. Then you would have to do a service delivery arrangement also with that state to provide the oversight that is required for managing casinos.

Early discussions with Western Australia when a proposal was first floated indicated that the Western Australian policy is for one casino, and that is the Burswood Casino. If it were to be a state law then we would have to enter into discussions with Western Australia. But the first decision is a policy decision to say that the government wants to pursue further consideration of such an approach, because otherwise we are negotiating or raising expectations outside of a policy framework. So we do need a policy framed to commence those processes.

CHAIR: How would you define 'proponent'? In March I was told by the department that there was no proponent on Christmas Island. After I said the same thing on Christmas Island, Soft Star said: 'We've been talking about this for years. Here's a business case for it.' The department obviously was not aware of that, otherwise you would not have told me there was no proponent.

Ms Fleming : There is no proponent because there is no process. I would phrase this as 'interest', because there is no expression of interest process, there is no first rights to the previous casino, there is no government policy to have a casino. There cannot be a proponent if there is no—

CHAIR: I should look up what 'proponent' means. I would have thought that if there was a proposal then that would have been worth mentioning. On a personal basis, I am a little bit concerned that I go out to Christmas Island and say that there is no proposal and then they say: 'Here you go. Here's a proposal.'

Ms Fleming : I think also that the key issue is—it is my understanding, and I will validate our records—that this proposal that was put to the previous government has not been put to the current government—

Mr SNOWDON: That is semantical rubbish.

Ms Fleming : —and that it was not accepted by the previous government as a proposal.

Mr SNOWDON: I was part of the previous government and I can tell you what happened. They were encouraged to continue the discussions. There was a proposal put forward and there were discussions taking place within the government about how to proceed. That was happening. Don't tell me they were not, because I had the discussions with the minister.

Ms Fleming : There were general discussions with the proponents, but still no decision to have a policy. In our view you cannot have a proposal if you do not have a policy to have a casino and to have an expression of interest. A proposal to me would be that the government has made a decision to pursue this. It has established a framework and then it has called for expressions of interest. Is there interest from a company to manage a proposal and to lobby that such a regulatory framework should be in place? There has been, but the last time we saw interest from Soft Star directly in this, other than general conversations, was late in around mid-2013. I can confirm those dates with you.

Mrs GRIGGS: That document does not look like just a little bit of interest.

CHAIR: Or a brief email.

Mrs GRIGGS: No. From our perspective, we look foolish in front of a whole community. That is where our frustration is. On advice from you guys we were going down a certain path and we were trying to build good faith with the community, which was already sceptical. It embarrassed us in front of the whole community, through no fault of our own.

CHAIR: That is exactly right. I think every report in the last 10 years from this committee and other committees has always said 'Let's have a casino,' because it is in the best interests. The local people believe it and obviously every committee has believed that it is in the best interests of the people on Christmas Island. So I am a little bit surprised that the department has not done some advisory work for governments to implement something that is in the best interests of the people of Christmas Island.

Mr SNOWDON: Would it have been clear to the incoming government brief?

Ms Fleming : There were I believe some comments around this and we have provided some advice to the government and to the previous government on casinos and policy positions, but no decision has been taken on whether a policy would be established that would support the development of a casino. Therefore, if you have not established a policy and you have not established the rules, you cannot establish a business case, because the business case that you can assess has to be assessed against the operating rules, which are not established, because the policy to have a casino has not been established. So, yes, there is an idea, and, yes, there is a fleshed out proposal from a particular company. But looking at the way that casinos are managed in the states, there is always an open tender process and there is a regulatory environment you have to identify—

Mr SNOWDON: There is not always an open tender process.

Ms Fleming : There is usually—

Mr SNOWDON: There was not one for Burswood.

Ms Fleming : There is usually a tender process for such an important operation, particularly in a small economy. So you have to establish the foundations first. You have to establish that it is government policy to have a casino. Then you have to establish the rules and regulations that would apply to supporting a casino. Then you have to establish the service delivery arrangements. Then you have to determine how you would approach the market—whether you would single-source, have expressions of interest or an open tender process. So it was not our intention to mislead the committee. From our perspective, there isn't a proposal because there isn't a process. But there is and has been some interest in casinos, and I think, in earlier briefings under the previous government to this committee, we did note that there was some interest at that time. It is not something we have hidden from the record of the committee that there was interest earlier, but this government has not received a proposal from the proponent, and there was no decision that concluded the process for the previous government and there is no policy setting—

Mrs GRIGGS: The committee has received this proposal, so this was tabled. My question is: has there been any other interest from any other parties that have submitted something similar to this that we are not aware of?

Ms Fleming : I will check my records but, to the best of my understanding, there was at an earlier stage in the period of the previous government the potential for a second proponent but that did not progress to the stage that the document you have in front of you progressed to. I believe that that interest lapsed.

Mrs GRIGGS: From the committee's point of view, it would be really handy if we had that information.

Mr SNOWDON: Through the chair, could I ask that you provide the committee with the nature of the regulatory framework and arrangements that existed with the previous casino operator; the regulations which applied, how they are applied and how it was run.

Ms Fleming : That will take some work on the basis—

Mr SNOWDON: I appreciate that.

Ms Fleming : that these are archived files from legislation, but we can—it will take us some time to do that.

CHAIR: We look forward to a supplementary then on your submission.

Mr SNOWDON: One assumes, if you are providing advice to government on new policy, you would go back to the old regulations and say, 'This is what applied previously.'

Ms Fleming : At this stage, the advice has been high level in that, if you wanted to have a casino policy, we would need to explore what kind of regulatory environment you would want; whether you would want Commonwealth owned legislation or to apply state legislation. As you are aware, the approach has been to apply state legislation where possible, early indications, which may or may not be still valid—

Mr SNOWDON: I understand all that. Let's not go there, but you would also say, presumably, 'By the way, here's the document that explains how it operated previously.'

Ms Fleming : We would at a high level talk about that but we do not have the document. We have to go back through the archives, as you would appreciate, the territories division has been in many portfolios over many periods over the last 10 years, so it will be quite an investigative task for us to—

Mr SNOWDON: At some point, you will have to do it.

Ms Fleming : We are happy to do it but we are just indicating that it is not something that we are going to be able to do quickly. We are going to have to work our way through and find legislation that may or may not still be able to just be picked up as previous legislation and applied, because other laws might have changed in that period.

Mr SNOWDON: I understand all that but that is not the issue. The issue is: there was a process which I believe did operate. There was a set of regulations which applied. There was a relationship with the Federal Police which applied. There was a casino gaming authority in Western Australia which applied. That all happened, so all I am asking is to put it down on paper and explain how it operated. One presumes that, if this committee were to make a recommendation to the government like previous committees have done, and the government says, 'We'd better seek some advice,' they would seek this advice from you.

CHAIR: And you will be better prepared to give it to them. So has there been an options paper prepared to explain to government how it could be done?

Ms Fleming : Advice has been provided to government of interest, and of course the response to the 2012 committee on the casino—I will have to check the exact words. It was a recommendation of the 2012 report. At this stage, I thought there was no policy on the casino. I am just trying to check which recommendation it was. Recommendation 8 of the JCNET report recommends:

… that the Australian Government commit to the reopening of the casino on Christmas Island and that it facilitate the approval process…

The government's response was:

Noted. While the Government supports economic and tourism development for Christmas Island, broader Government and community consultation would be required prior to any consideration of a proposal to re-establish a casino.

There is no policy setting at this stage. There have been general considerations, but no policy setting at this point in time.

CHAIR: Nothing arose out of that?

Ms Fleming : The department has not been asked at this stage to provide in-depth or detailed considerations, but there have been some discussions with both this government and the previous government around matters that might need to be considered should government wish to examine this further.

CHAIR: Let us move on to SDAs—service delivery agreements.

Ms Fleming : Certainly.

CHAIR: We have a list that has been provided. What is the process for negotiating SDAs and the role of the Perth office?

Ms Fleming : I would just like to take a bit of history here, if I might. There was previously service delivery arrangements negotiated with Western Australia. We have about 40 of them. Our preference has been to try to establish a single SDA and to operate services as they do under other national partnership agreements and the federal financial framework. But the Western Australian government's preference is to have single SDAs negotiated with each portfolio, so that is what we do. We coordinate them through an office that we support in the Premier's department that provides a coordinating function for the delivery of services provided and procured through the SDAs to Christmas Island.

CHAIR: Are you saying that they are embedded?

Ms Fleming : No. I am saying: as the Commonwealth, our preference is to have a single service delivery agreement as a national partnership agreement through the federal financial framework. We have not been able to achieve that approach, because it has been Western Australia's preference to establish 40—

CHAIR: I get that. But didn't you say that there was, through an office in—

Ms Fleming : Sorry. I will try and be clearer. As part of those arrangements, because there are 40 service delivery arrangements, we also support a unit in Premier and Cabinet that provides a coordinating function for the Premier's department around how they manage their 40 SDAs. They have a coordinating agency that works with their own agencies.

CHAIR: Is that a Commonwealth official?

Ms Fleming : No, it is a state official.

CHAIR: But it is paid for by the federal government?

Ms Fleming : Yes. When you are delivering services at a state level, there are crosscutting issues that they might need to take into consideration. They have a coordinating function in the same way that we also support their Treasury. Their Treasury collects revenues and has to process receipt of taxes and charges at the state level in the same way that we have to process them. That is just the broad umbrella of the 40 funding agreements. Up until 2010, they were three-year funding agreements with a three-year cycle. But there were three impediments to renegotiating the service delivery arrangements which we have been working on, and we now have a more productive way to take forward.

As you would be aware, the Financial Management Act changed to the new PGPA act. I know it by its acronym. It is a new financial framework. One of the issues was that we have been trying to renegotiate new template agreements with Western Australia for some time. But, under the FMA act, there was no capacity for the state revenue departments to retain revenues and offset that against the financial arrangements. They were reluctant to agree to formal service delivery arrangements whilst that remained in place. Under the PGPA framework, our chief financial officer, in consultation with the Department of Finance, has been able to obtain an exemption so that departments in Western Australia which gather less than $50,000 in revenue can now offset that against the services, making it easier administratively for them to manage some of the service delivery arrangements and, therefore, progress some of our service delivery templates. That is only one issue. Sorry, Chair, I know this is a bit long-winded. Do you have a question?

CHAIR: No. Try to be concise, and then will get to the nuts and bolts of it.

Ms Fleming : I will try. The second is: up until there was a reduction in immigration activity, the budget for territories was provided in two tranches. It was provided at the beginning of the budget cycle and then there was an adjustment at additional estimates PAES in February. You cannot commit more money than you have. That adjustment, the revenues, was we got a minor adjustment, I think, in 2013 and again in 2014. At the time, immigration activity was very active. The gap between the money that we were appropriated at the commencement of the financial year and the PAES budget was considerable—sometimes as much as 30-35 per cent. So we could not commit money because we had to buy fuel, we had to run the power diesel generation. So we had a budgetary constraint in that you cannot commit money greater than you have, and you do not have it until February. This made negotiating both the state delivery arrangements and the commercial arrangements incredibly difficult.

The current government, through the Minister for Finance, agreed last year for us to have a special account. That special account operates from 1 July 2015. That has been something we have been pursuing—before my time in territories—for some time. What it allows you to do is to collect and use revenues—

CHAIR: Yes.

Ms Fleming : I do not mean to tell you what you already know; I can see you nodding. It allows you to get the revenue. That means that we then have a fixed budget within which we can negotiate service delivery arrangements. With the gap between revenues and what the states might do in terms of any increases that they put through which are still adjusted at PAES for parameter adjustments, like population, CPI or actual cost of delivery, we can carry that gap in the way we set our budgets. We can now set three-year funding agreements. We have been aware for a long time—I have been in territories for two years and I have been aware since I arrived—that this was an issue. We did have early discussions with premiers and cabinet but we could not address the funding issues that needed to be addressed until we addressed the financial circumstances—the building blocks.

The second issue we have is that, under the current arrangements, the Fair Work Act applies. The Department of Education in Western Australia will not sign service delivery arrangements with us for education services until Western Australian industrial relations laws apply. They believe they should be governing their teachers that are providing services in the territories under the same rules that they applied because the teachers are Western Australian teachers. This government has agreed that those rules should apply. Minister Briggs entered into discussions with Senator Abetz, the Minister for Employment. We have started discussions with Western Australia. Amending the regulatory environment as such that Western Australia industrial relations rules will apply, as opposed to the application of the Fair Work Act in respect to Western Australian employees when they are on the territories, is quite complex. We are working our way through that tissue. That will enable us to then have a service delivery agreement with education for what is one of the largest service delivery arrangements. But it is a very difficult and complex environment to address, as you would appreciate.

CHAIR: I am very encouraged by that. That is great. I was also interested in the perspective of the department. I will enlighten you. When we were on Cocos and on Christmas, people would say to us, 'The SDAs affect us, but we never part of it. We hear that there's someone over on the other island who's involved with the SDA. They haven't talked to us.' The shire is saying, 'We're not involved with that process.' The ordinary people are saying, 'We only hear about these things after the event, yet it affects our lives.' What is the involvement of those who are actually the receivers of the service in the process of what is delivered?

Ms Fleming : The policy parameters within which we operate are that we try to provide services to the territories as if they were part of the state. The state, in the way it delivers services, delivers as if they were part of the state. So, if I have a water problem in a territory, as a normal Australian citizen sitting in a community I will not necessarily be consulted about how often the water service provider will come and deliver services. If I am a citizen in a school, I will talk to the principal, but I will not necessarily be engaged day to day around all of the policies that a state might have. It might have a particular interest in some policies, but I will not necessarily be involved in each and every state government decision as a citizen of a community. That said, can we improve and enhance the communication that we have had with the community around the service delivery arrangements? Absolutely. So, what we have done since is that we have created a more stable environment. That allows us to look at the service delivery arrangements to develop a three-year plan. I will table this document. There are 40 service delivery arrangements. We have taken them in three tranches, basically to work through over a three-year period. We have re-established some of the mechanisms that used to operate, but it is a big job to re-establish the normalisation of community services in the Indian Ocean territory. We started by releasing the budget book, which for the first time gave the community a sense of where the money was being spent. Before that all they had was access to the budget—

CHAIR: Can you be specific with the timings for this so we can understand when that occurred—12 months ago, two years ago, three months ago?

Ms Fleming : Twelve months ago we released the 2013-14 budget. We have not released the 2014-15 budget but we intend to very shortly. We will release a 2015-16 budget. Every year we intend to release a budget that shows the community how we spend the money. That was the first time the community had actually received that level of information. Secondly, we are going to produce, by the end of this year, the first report on service delivery arrangements. We have re-established the SDA contact officers with our office in Perth and they had the first meeting in March this year, where they brought all the state officers in Western Australia together to start to say how we are delivering the services and what the issues are. Before that, we had some intense relationships with some service delivery agencies and less intense relationships with others. As an example, we have a constant relationship with Water Corp. You would be aware that the water lenses on Cocos are incredibly difficult to manage. We would be in almost weekly contact with them around water quality issues and other water issues. We had less contact with some of the other agencies. There is performance data that is delivered and we will be producing the first report back to the community as part of our commitment to improve the transparency of government services as they are delivered to the community—that is, who did what on the island?

From there we can also to start talk, because we can have a three-year rolling program about services. We can start to talk about what the priorities are within the community and what the government's priority are so that we can set a framework. Within a community what we do is try and access all of the services that a department might have. If I take for example environment, we used to have just an officer in the west Australian Department of Environment who was the contact point for providing advice on environmental issues in the Indian Ocean Territories. That has been restructured such that we can now tap into all of the expertise of that office and they are treating the islanders as if they are part of a broader environment. There is a long way to go.

The Territories Division had a huge focus in the preceding four years in terms of constructing infrastructure and in terms of managing a number of very complex and difficult issues including the SIEV 222 issue. These issues took up resources and they created a focus away from some of the more community-based issues. It was not that we did not deal with community issues, but we did deal with them more on-island. As immigration activity has declined we have been able to refocus our efforts on the community and we are committed to a stronger engagement with the community. The new administrator, Barry Haase, has established a community conversation group that he engages with on a regular basis. This is not a formal conversation but is an informal mechanism to be able to engage with people about what issues are. Often it is not in the culture of these communities to complain formally to government so it is important to understand what the priorities are of the community or of the shire. A change in shire management can totally change the priorities of the shire.

I think some of the evidence you may have taken over recent months may reflect the change between the previous Shire of Cocos and the current Shire of Cocos, and that is part of the process that we have to respond to as the policy framework for the island changes, as the management changes and as the capacity and capability changes. My experience over two years is that I am not sure there is one way to manage the territories but we do need to have enhanced community engagement on this.

CHAIR: I think it was the Shire President on Cocos who said that someone was on the islands for several days to talk about SDAs or an SDA before he was even aware of that. Would that have been Commonwealth official or a state official? In fact do you think that there is a role for the administrator to be somehow formally involved with this process?

Ms Fleming : At the moment the agreement is set by the department. Those delegations could potentially be held by other officials under the existing legislation. We have been asked and are working through a review of delegations such that the minister can take advice on where he might best set the delegations. But that is a matter for government and it is a matter where advice is not yet settled because there are hundreds of delegations that might apply. The question is about the balance of those delegations. Which ones under law must be held by the minister and which ones can be delegated, and should they be delegated to the administrator or should they be delegated to the department. What are the frames for making those decisions, and if we make the decisions in one territory what I am interested to know is do we have similar issues in the other territories. Do we have one way of doing business in the territories or do we have different positions because the state laws are slightly different across three territories. We are trying to grapple with these issues and we have been asked by the minister to give consideration to these matters and report back to him. We have not yet completed that work because as I said the delegations are in the hundreds and we need to provide advice and that is something that is actively being looked at.

CHAIR: On the other matter of who is heading out to the islands to look at the SDAs: do they consult with the shires or with the other stakeholders?

Ms Fleming : At this stage, those negotiations have been led by our Western Australian office. As part of the process, we have—and I would like to table—two of the fact sheets that we put out around the consultations. We alert the community that these are occurring. There were I think some 30 consultations on the island that the Western Australian office had. They have created an issues register under each of the SDAs that we are dealing with. We are systematically working our way through those issues, which is why we are only dealing with 10 this time. As we test the process and the template, we will then get to a better understanding of where the issues are. Some of the service delivery arrangements are quite small. They are $50,000 or $100,000. They are used maybe once every three years or four years. Others are intensive and used on a regular basis. We are trying to just work away through those issues. But the community is consulted.

Within the division we also manage the Regional Development Australia program. We have this issue from RDA committees, who will say to us: 'We did not know X was going to be in our region, and we should be advised beforehand that they are coming.' We are trying to get greater awareness of who is coming on island and when and making sure there is some kind of bulletin that can say to people who is on island and what they are on island to look at and to work with. Of course, there are some issues where you might not be able to do that. If it is something to do with families or child care or child protection, you have to be careful. But for things like, 'We are fixing the water lenses', there is certainly an opportunity for us to engage more effectively and to try and work through with the states how they might do that. But this is not a practice that they would normally do if they are fixing something in one of their local areas in Western Australia. We would be asking them to adopt a different practice to that which they normally do. If they are going out to Wyndham, they probably do not ring the shire and say: 'We're coming out to Wyndham'. They just go to Wyndham and fix whatever they need to fix. They will talk to the people who they want to talk to, but they will not necessarily talk to everyone.

There is this balance between what the community expects, as a small and isolated community, and standard operating procedures for the state. If we ask the state to do something different to what they normally do, then it makes it more complex sometimes for the state to do that. I know it sounds only a small thing, but there could be several of these things. We have to strike a balance in how we manage those relationships. The community bulletins are something that we have been working with the Administrator to put out more on island—and the previous Administrator. That was a new initiative. We have introduced feedback forms for the first time. Again, this was an initiative of the previous Administrator, who we worked with to try and ensure—

CHAIR: When was this—the feedback forms?

Mrs Lindsay : The feedback forms were launched in late March-early April. It is an online feedback form. We are getting them translated into Bahasa, Malay and Chinese and making them available on the islands in hard copy, so that those who do not have access to computers can still provide the feedback through to the department.

Mrs GRIGGS: How has that been taken up in the community? How much feedback have you been getting?

Mrs Lindsay : It has probably been online for two weeks or so. We have not had terribly much at the moment. We are working with the Administrator at the moment to put out a bulletin announcing it. We have wanted to hold off until we have had the translated hard copies available, so that it is available to all of the communities and not just those who have English as their first language.

Mrs GRIGGS: Can I also ask another question on the grouping. According to the piece of paper you tabled, you have nine SDAs that are due to be negotiated by 30 June.

Ms Fleming : Yes.

Mrs GRIGGS: And then there are another three that new agencies identified for negotiation for 2014-15. Are you on track for that?

Ms Fleming : We are.

Mrs GRIGGS: So those 12 or 11 will be completed by 30 June 2015?

Ms Fleming : That is what we are working towards.

Mrs GRIGGS: We were on island a month or so ago, and the sense in the community was they were not being consulted. We have six weeks left to do this. Will you be consulting with the community on these 11 SDAs?

Ms Fleming : I think we did consult.

Mrs GRIGGS: Can you tell me your definition of consulting?

Ms Fleming : From 9 to 15 March, we had two officers of our Perth office and the IOT state coordinator in the Western Australian Department of the Premier and Cabinet go to Cocos. Then, from 16 to 19 March, we had another two departmental officers and the state officer on the island. They held meetings with 32 stakeholders across the week and a half.

Mrs GRIGGS: Across both islands?

Ms Fleming : Yes. So we did speak. Do we speak to each and every individual? No. But did we put out advice that we were coming? Did we open an invitation process for people to attend? Yes we did. Were the shires part of it? Absolutely.

Mrs GRIGGS: The new shire president and new CEO?

Ms Fleming : That is my understanding, yes. He was an active participant, I think.

Mrs Lindsay : Unless he was off island, but he was certainly invited and given the opportunity to engage.

Mr SNOWDON: You have both relatively recently been in the department?

Ms Fleming : You mean the department or the division?

Mr SNOWDON: In this part of the department. The reason I ask is my relationship goes for 28 years, so I have a very good corporate memory.

Ms Fleming : February 2013. Two years.

Mr SNOWDON: All I am saying is I remember when these SDAs were first initiated and the consultation process which was put in place. I recall the processes we put in place to inform people of legislation which was being passed in the Western Australian parliament. None of that happens anymore. So I think there is a perception—it may be wrongly perceived—that the consultation process which people currently have has been deficient. It may or may not be, depending on your view, but that is a view that is reflected in what is being said to the committee. I was not at the committee hearings, but I go to the communities pretty often. In fact, I will be over in three weeks.

Has there ever been an evaluation of the SDAs?

Ms Fleming : We in the department undertook an evaluation of our service delivery arrangements. That informed our approach. So we did undertake an internal review of our service delivery arrangements, and that was concluded in February this year. It started in late November. That also informed our approaches to better communicate and structure the service delivery arrangements and build on the foundations of getting the financial arrangements in place.

Mr SNOWDON: Could you provide us with an organisational chart of the part of the department that now deals with the Indian Ocean Territories and its functions?

Ms Fleming : Yes.

Mr SNOWDON: This is so we have a picture. I do not particularly care about the names.

Ms Fleming : Yes. There is a team in Perth and a team in Canberra.

Mr SNOWDON: And what they do, how many people there are, what there functions are, who looks after land release—those sorts of issues. This is so we can get some idea of what the workload might be like, because I suspect that is an issue.

Ms Fleming : It is quite intensive to manage separate territories.

Mrs GRIGGS: And Cocos and Christmas are very different. Their needs are very different even though they are grouped together. That is our observation.

Ms Fleming : In managing a territory or both for the Commonwealth in terms of policy you do engage in those strategic conversations. You are the state from the point of view of establishing the state services. I did read the transcripts. I do know there is a view that local shires can do more and that this would be better for the community. In theory, if you look at island management, from Lord Howe, through to Norfolk, through to Jervis Bay—which is not an island but is still a territory—through to Christmas and Cocos (Keeling), there are different approaches on each of those islands. There are issues with each one of those matters.

Applying a modern body of state law in 2015 is very different to applying a modern body of state law in 1985. There is just an enormous body of state law, some of which is applicable to the territories in full, some of which is applicable in part, and some of which is probably not applicable but you do not know. It might not be applicable so you will apply it anyway. Can you modify, through ordinance, each and every one of those pieces of legislation to adapt to a territory? You probably could but would you want to? What would be the resourcing that is required to write an ordinance which has to go through OPC and then has to be assessed with every other piece of Commonwealth and state legislation. It is an enormous—

Mr SNOWDON: I do not underestimate size of the matter. What I am trying to get at is that it is an enormous amount of work. It requires a detailed understanding of a whole range of issues which may be new to you when you arrive in the organisation. No doubt the place has changed significantly in terms of personnel over the period, so corporate knowledge is a bit of an issue. I think the question is opting out of stuff, not opting in. It seems to me that one option is to look at each piece of legislation and say whether you opt out.

Ms Fleming : I think that is the approach that we have taken with Norfolk Island in the bill that is before the Senate at the moment. It will turn New South Wales law on as we turn Norfolk Island law off. We can manage that transition because there is a body of law there already. In the Indian Ocean territories the only law is the state law.

Mr SNOWDON: But there is a specific law which applies in Western Australia which refers solely to the mainland if Western Australia. It does not apply to Christmas Island and people know that. It is the issue about how you see laws which are passed in the state which may need to be amended because of the particular circumstances.

Ms Fleming : Yes. The five-port policy. In the conversations that we had in Jervis Bay the ACT said, 'We do not take Jervis Bay into account when we are creating our laws.'

Mr SNOWDON: Yes, they don't.

Ms Fleming : Nor will New South Wales and nor will Western Australia. It is the Commonwealth role, through the Commonwealth minister, to determine whether a law applied as a state law needs to be modified or adapted for the community. We do that where it is absolutely necessary—the example is the fire regs in Jervis Bay—but we do not do it where it is not necessary. We will provide that resourcing, and then the subsequent question is: what resourcing is needed and what resourcing is appropriate for 2,000 people as well that live in two different communities. There is a balancing.

Mr SNOWDON: The resourcing I am thinking of is your internal resourcing, not the resourcing on the island. I think that is an issue in itself.

Ms Fleming : But they report to us. The IOTA office is a part of the division. There are 100 people on the island and we have about 25 in the branch, including in Western Australia.

Mr SNOWDON: What proportion of those are policy people as opposed to administrative agents?

Ms Fleming : Loosely, I have a policy team, which Karen normally heads up, which includes some legal policy officers, but we draw on the department's broader legal advice around legislation. We do not have that in house; we draw on that. We have a contract management, asset management, framework team, which has done all of the construction of all the major initiatives that we have been taking forward, and manages contract renegotiations including the big contracts that have to be renegotiated like the fuel supplies, the airports, the air services, the ports. We then have a team in Perth which manages our contracts that are managed out of Perth commercially, like Patricks as well as the mine, as well as our service delivery arrangements with the state. Then we also engage with our human resources team to manage our enterprise agreements, and then my finance unit works with the on-island team to do all of the fiscal reporting and responding to various audits that we have had over years around revenue collection. It is a large body of work.

Mr SNOWDON: Could you provide us, as you have done for the previous financial year, a copy of the 2015-16 budget?

Ms Fleming : The 2015-16 budget has not been set, but when it is agreed and released, absolutely. I presume we will also provide the 2014-15 report.

CHAIR: I am just going to go through some other stuff that you gave me.

Mr SNOWDON: It would be good for us to have another chat at some later stage.

CHAIR: Yes. I do not think this will be the last. We will probably have to leave some things on notice for you.

Ms Fleming : That is fine. We have to come back to you on some of the issues you asked about earlier.

CHAIR: Thank you for attending and giving evidence to the committee at today's hearing. If the committee has any further questions for you they will be sent in writing by the secretariat, and of course there will be.

Resolved that these proceedings be published.

Committee adjourned at 11:22