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Tuesday, 7 June 1994
Page: 1380


The PRESIDENT —I call Senator Kemp.


Senator Robert Ray —We let you in, Elmer.


Senator KEMP —Senator Ray should wait for the question on branch stacking; it is coming up. My question is directed to the Minister representing the Minister for Administrative Services.


Senator Robert Ray —Is this your maiden question?


Senator KEMP —It refers to another Labor scandal, so Senator Ray should keep quiet. I refer the minister to his answer on 15 December 1993 to a question on notice asked by Mr David Connolly about the transfer of the Kurrajong Hotel to the Canberra Institute of Technology. The minister said that the price of $1 million was based on `the most recent valuation of the property'—at $825,000—`obtained on 1 February 1993.' Given that the Australian Valuation Office valued the hotel for use as a hotel in November 1992, only two months earlier, at $1.8 million, and that the most recent valuation was in July, not February 1993, at $3.8 million, if the property was used for office purposes, why did he permit the Kurrajong to be transferred at substantially less than its real value?


Senator McMULLAN —I was afraid I was not going to get a question on this and the chance to give an answer to correct the myth perpetrated by Mr Connolly last night and now reiterated by Senator Kemp. The words `most recently valued as a hotel' mean the one just before I made the comment and just before the decision was made. `Valued as a hotel' means the valuer goes and sees what it is worth as a hotel. If we put those two things together, we find that the most recent—


Senator Kemp —One point eight million.


Senator McMULLAN —No, Senator Kemp is quite wrong. In the middle of 1993, the valuation in February 1993 was more recent than the one that was done in November 1992. This is arithmetic, and if Senator Kemp knew anything about it he might be over here.

  The fact of the matter is that the most recent valuation of the Hotel Kurrajong was $825,000, and it was done by the independent private sector valuer Roberts. When we use the AVO, those opposite complain; when we use the private sector, they complain. They just want to pick and choose. The fact of the matter is that an independent private sector valuer, whose area of expertise is valuing hotels, made a decision that the valuation was $825,000. Therefore, the objective which I set for the department when I was minister was that it should get the best price for a use consistent with the planning guidelines in the ACT. The planning guidelines in the ACT do not allow this building to continue to be used as an office, so all those valuations for office purposes are not allowed by the NCPA guidelines for this building. None of those are relevant. It is designed to be used as a hotel.

  I said it was based on the most recent valuation because it was based on the most recent valuation. In fact, it was $175,000 more than the most recent valuation. It is a good price for a good project and for good use of a heritage building. It will continue to be used for heritage purposes; it will continue to be available for the Australian people; and it will continue to be available and used for good educational purposes for Canberra. It is a good deal for Canberra; it is a good deal for Australia; it is a good deal for the taxpayers; and it takes care of our heritage. The answer I gave that it was based on the most recent valuation of the building as a hotel was because it was based on the most recent valuation of its use as a hotel.


Senator KEMP —Mr President, I have a supplementary question.


Senator Cook —Don't embarrass yourself.


Senator KEMP —Keep quiet, Cookie! It is another Labor scandal, and it always causes embarrassment on that side of the chamber.


The DEPUTY PRESIDENT —Just ask your question, Senator Kemp.


Senator KEMP —When the minister received the advice of that valuation of $825,000, did he ask why it differed so substantially from the valuation obtained by the Australian Valuation Office? If so, can he explain to us that difference?


Senator McMULLAN —Yes, I can. Roberts, the independent valuer whose specialisation is hotel valuation—hotel valuation is not the AVO's specialisation, although it is a very good organisation—took account of four elements: the operator's risk or developer's profit; the run-down condition of the building; the available target market for future use of the building as a hotel; and the heritage registration and associated requirements. My advice from the department remains that the AVO did not take these into account because it considered the building to be sound and that it would always have a government tenant. Those are the distinctions. That is the answer I got at the time, and I understand that it continues to be accurate.


Senator Gareth Evans —Mr President, I ask that further questions be placed on the Notice Paper.