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Tuesday, 1 February 1994
Page: 95

(Question No. 543)

Mr Costello asked the Minister for Finance, upon notice, on 26 October 1993:

  (1) Is an interdepartmental committee, comprising representatives from the Department of Finance, the Attorney-General's Department and the Department of the Prime Minister and Cabinet, considering the Midford Paramount claim for compensation.

  (2) Did the committee commission Coopers and Lybrand to prepare a report on the matter; if so, (a) when will the report be completed and (b) did the committee require the report to be completed by 23 July 1993.

  (3) If there has been a delay in completing the report, (a) why has there been a delay and (b) what costs to the Commonwealth for interest on the compensation claims have resulted.

Mr Beazley —The answer to the honourable member's question is as follows:

  (1) Yes. Such a committee was established on the Prime Minister's instructions on 14 April 1993. The IDC completed its task and reported its findings to the Attorney-General and the then Minister for Finance on 22 October 1993. Those Ministers considered the report and then made recommendations to Cabinet on the questions of whether/how much compensation should be paid to the claimants (twelve natural persons; and two businesses). In the event, Cabinet agreed to compensate the claimants amounts totalling some $25.2 million. Payments were made in November 1993.

  (2) Yes—to provide independent expert valuations of the costs and losses claimed by the two businesses.

  (a) The key dates involving the reports on valuations of the claims by the two businesses were:

  30 July 1993—Valuations by Coopers & Lybrand received on one of the businesses; report forwarded to that claimant.

  25 August 1993—Revised claim submitted by that business forwarded to Coopers & Lybrand for comment.

  14 September 1993—Valuation by Coopers & Lybrand received on the other business; report forwarded to that claimant.

  24 September 1993—Second business claimant responded, disagreeing with Coopers & Lybrand.

  28 September 1993—Comment received from Coopers & Lybrand on the revised claim from first business.

  1 October 1993—Second business claimant's response sent to Coopers & Lybrand.

  8 October 1993—Coopers & Lybrand confirms its original assessment in respect of the second business claims.

  (b) Yes.

  (3) (a) The time specified by the IDC, within which Coopers & Lybrand was to assess the claims, was underestimated. That is, the date set at the outset of the consultancy proved unachievable in the face of:

  (i) the large and technically complex nature of the business claims;

  (ii) the time taken to ensure that the claimants were accorded natural justice; and

  (iii) the differences of opinion over the validity of the respective methodologies employed by Coopers & Lybrand and the legal and financial advisers for the business claimants.

  (b) The basic requirement to furnish reports on the two business claims took some 7 weeks longer to complete than was originally planned for (ie, from 23 July to 14 September 1993). For those particular elements of the claims accepted by the Government as attracting interest, and at the rates that the Government agreed to pay, that period of 7 weeks generated additional compensatory interest payments to claimants totalling approximately $0.25 million. That amount did not exceed the normal bank interest accruing to the Commonwealth for the same period in relation to the full $25.2 million.