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Joint Standing Committee on the National Capital and External Territories
03/12/2015
Governance in the Indian Ocean Territories

YATES, Mr Julian Anthony, Private capacity

Committee met at 10:11

CHAIR ( Mr Simpkins ): I now declare open this public hearing of the Joint Standing Committee on the National Capital and External Territories for its inquiry into governance in the Indian Ocean Territories. Under the inquiry's terms of reference, the committee has been asked to look into the role of the Administrator, consultation mechanisms and best practice for engagement with small or remote communities, local government's role and opportunities to strengthen and diversify the economy. The committee has held a series of hearings in the Indian Ocean Territories, Perth and Canberra, at which a range of issues have been discussed. Hearings are coming to an end for this inquiry. Today we will hear from two experienced former public servants, as well as from the current Indian Ocean Territories Administrator.

I now call Mr Julian Yates. Although the committee does not require you to give evidence under oath, you should understand that these hearings are formal proceedings of the 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 contempt of the parliament. Do you wish to make a brief introductory statement before we proceed to questions?

Mr Yates : Thanks, Chair. I would. It was suggested to me that it might be worth considering the higher level governance arrangements of the Indian Ocean Territories, particularly on the question of whether an arrangement that associates them with the Northern Territory is worthy of consideration. Some of the things driving that would be around the fact that they are in the seat of Lingiari in a representative sense, but all the state type services are, by and large, provided out of Western Australia, and Western Australian state law is provided.

Looking at whether the Northern Territory could take a greater role is something that I had given some consideration to when I was in the formal position, but any comments I have now are my personal ones. In a pragmatic sense, the Commonwealth clearly has the ability to put the Indian Ocean Territories in the Northern Territory, either through full incorporation, so that they just become local governments like any other Northern Territory local government, or through a service delivery arrangement being done with the Northern Territory and Northern Territory law being applied.

I can see some pragmatic problems with it, though. First of all, the islands are used to running under the applied Western Australian law scheme, with its pluses and benefits. Changing it to the Northern Territory system would not be a simple task. There are a very wide range of delegations that would need to be changed. The local government acts are not the same. The people of the communities would need to understand how Northern Territory law worked, because it is not identical to the Western Australian one.

Then there is the question of the Northern Territory government's capability to deliver the services. Whilst it is able to do so in its own remote communities, that has not been without some challenges. But there is also a much smaller public sector than in Western Australia, so it lacks the depth that Western Australia has to meet changing demands the Commonwealth might ask for in terms of the delivery of services. These are simple things like the Western Australian water authority having an enormous depth of expertise in running water systems in remote communities and, in my experience, being easily able to find technical experts to deal with difficult problems at very short notice without affecting its own services.

The final issue is the distance from the Northern Territory. Whilst Christmas Island's distance from Darwin is close to the same as it is from Perth, the flights are out of Perth for reasonably good operational reasons. If you change the flights to go from Darwin, I would suggest it would be considerably more expensive, if only because Cocos is a lot further from Darwin than it is from Perth.

The last observation I would make is that there are now reasonably significant expatriate communities of Christmas Islanders and Cocos islanders in Perth and south-west WA. Should services and flights come from the Northern Territory, those people—both on the islands and in Western Australia—would find maintaining links in fact very difficult. So I think, on purely pragmatic grounds, staying with Western Australia is probably a better answer.

I had a quick look at the submission I made previously, and I think this covers what I wanted to say. I am happy to take any questions.

CHAIR: What is the role of the Administrator, from your involvement, and what is the legal basis for the Administrator?

Mr Yates : It is covered under the two acts that govern the territories. The Christmas Island Act and the Cocos (Keeling) Islands Act set out the statutory arrangements for the Administrator, but in many respects it is a lot like the Governor-General's role. There are a whole raft of unwritten conventions about what they do and how they operate. If you look at the Australian Constitution, the Governor-General is the commander-in-chief of the armed forces, but we know that, in practice, the Chief of the Defence Force is the commander-in-chief of the armed forces.

The Administrator's role that I saw—and this is looking at how it operated under a number of incumbents—was critically important in representing the community back to government, because the position is one that is appointed by the Governor-General; they are not a public servant. So they can, if you like, speak the truth to ministers without being concerned that the department secretary is not happy with what is being said. They have the ability to do that, and I think that is an extremely important role. The other very important role is speaking to the communities on behalf of the minister about what the government's roles and objectives are. So it has a very powerful representative role in both directions.

There has been a lot of consideration as to whether the Administrator could have more delegated powers from the minister to do things, and I think there is a lot of merit in having a look at giving the Administrator more decision-making authority for those things that really do not need to go to the minister in Canberra. You would need to have a look at how you would have some checks and balances for accountability, but coming up with those is not beyond people's wit. So, if you are asking me how to change the Administrator's role, I would say: increase the delegated powers that the position has to do things. I know Mr Clay has some specific ideas on that, so I am not going to steal his thunder. He will be able to talk to some detail on that.

CHAIR: Okay. Is there a need for state or territory based government representation, or is that not essential?

Mr Yates : Are you talking about the Western Australian government being represented?

CHAIR: Or laws that impact on the residents of the island—and therefore political representation at that level.

Mr Yates : I think the issue I have is that is not well understood how the applied law regime works. It is not Western Australia state law; it is in fact Commonwealth law that feeds directly off Western Australia law. So it is not Western Australia law that is being imposed; it is Commonwealth law that uses their state law as the basis. The rationale for that is fairly pragmatic: the Commonwealth does not have a body of state law, so it needs to, when it is running territories where it provides the state equivalent services, have a body of state law from somewhere. The choice was made, Western Australia—reason: because Western Australian state agencies are contracted to deliver the services, they are best placed to deliver them under the applied Western Australian law regime. It is the Commonwealth parliament that makes that applied law work and the Commonwealth parliament that removes it. Reasonably regularly in my time, we would go to the minister with proposals that a particular Western Australian law not apply or be modified substantially to suit the needs of the community. It is not actually the Western Australian parliament that makes the applied law; it is the Commonwealth law.

The islanders are represented in the Commonwealth parliament through the Northern Territory, and that gives them the ability to influence that.

Mr SNOWDON: Julian, you have had a long experience. I am just wanting to tease out further the capacity or possibilities for the administrator to have departmental accountability. Could you just elaborate on that and how you think it might actually function.

Mr Yates : I think the issues there is the necessity to find a good way to manage the accountability for funds being spent. In the current Commonwealth financial system, secretaries are responsible for the departmental and the administered funds, which are the main areas we are talking about, which are applied to them. They can be called and are called to Senate estimates to account for that expenditure. I am not sure whether the administrator could be called to a Senate estimates committee to account for that. That is something that would probably need to be looked at, but there are a number of delegations that could be done in a fairly straightforward way that do not involve direct expenditure of funds—land release is one of them. I know that Mr Clay has got some specific comments on that, so I would prefer to leave that to him to look at.

Mr SNOWDON: But if you had a public servant who might in the old terms be the official secretary, who could be the public servant to whom accountability would not apply.

Mr Yates : That certainly is a viable option. The act still allows for the appointment of an official secretary—a public servant is fully accountable—so that is quite soluble.

Mr SNOWDON: And reporting to the administrator.

Mr Yates : Yes, with some accountabilities to the secretary as well. In fact, if you look at some of the history, in my time we tried to push more of those out to the island by upping the ability and the capacity of the island employees—the people employed under the Christmas Island Act—to do just that.

Mr SNOWDON: One of the criticisms we have had from successive administrators was their lack of personal staff. In fact they thought that the public servants were not reporting to them therefore they were not responsible for them and they did not see themselves as being responsible to them. So they had no capacity, they say, to actually exercise powers which they might otherwise want to exercise.

Mr Yates : I think that is a valid criticism. I would be very interested to see what Mr Haase has to say on that later, because I believe there has been more specific support given to them. I think that would be a critical part, if you increasing their delegation and ability to make decisions, that they have to get competent advice from the staff on how to do it. I think that it is a really important part of it.

Mr SNOWDON: But it would not be beyond a structure where you have got an official secretary who, for accountability purposes, is responsible to a secretary but is also, for daily delegations, responsible to the administrator, including providing some advice on which the administrator can make decisions.

Mr Yates : I think that would be entirely achievable and probably a very good way of trying to deal with this situation.

Mr SNOWDON: You know better than I would ever know, I am assuming—I am sure actually: I don't think; I know. The need for the community to want to be consulted with—how do you reckon we could actually improve that process?

One of the issues that people have is—and you are right—that historically the federal minister has the role of applying the Western Australian law and that he can change law by regulation. They ought to know this, because it was part of the process. But they still feel, for whatever reason, that the Western Australian rabbit law applies, when we know it probably does not. But they believe, because the laws are ostensibly made in the Western Australian parliament and then applied by the Commonwealth, that they do not have any input into that process. How do you think we could overcome that lack of engagement with that part of the process?

Mr Yates : That is a really good question, and it is one I struggled with in the role. Some of the solutions must be the department having the staffing and resources so that they can visit regularly. I found that to be absolutely critical. I think increasing the empowerment of your on-island staff is an important part of that—giving them as many of the delegations as is possible for them to do it. Increasing the responsibility of the shire is a big part of this. The shires on both islands are relatively new—I think they were established in 1992. Their task maturity has been increasing over time and that needs to be actively pursued and supported. It may be appropriate to reconsider parts of the WA Local Government Act. The WA model comes from the old roads board in remote areas, so it is a rates, roads and rubbish model. It may be appropriate to look at the greater roles that local governments play in other parts of Australia, and, if necessary, change the applied WA Local Government Act to enable the shire to have more accountabilities.

Mr SNOWDON: I have been attracted by the proposition of having a regional governance structure with the administrator being, obviously, the key Commonwealth official, but having a level above the shires being probably from the shire and directly elected as being part of an Indian Ocean's board that could actually take some of the state-like decisions, consider them and provide advice to the administrator. Historically, and you would be aware of this, when we went to Western Australian state law, there was a lot of pressure on the Commonwealth from within—not from within the Commonwealth public service but from within the community—to give the shires a whole lot more responsibility, and we did not quite deliberately because we were concerned about the capacity to be able to undertake those tasks. If we actually use the economy of combining them in some way—not the local government function but the broader function—do you think that would have some potential?

Mr Yates : It is probably worthy of investigating. One of the things that drove me was to try and make the systems and procedures used on the island look and feel as much as possible like the rest of Australia. I think there are some really sound policy arguments for doing that. We do not have a strong regional governance model at the moment, so my advice at this point would be to look at continuing to increase the capacity of the shires, because people understand that, but actively look at how you can increase the role of the shires in delivering services and changing legislation where necessary. I did give some thought to the notion of a single shire council, but I worried considerably about the dominance that Christmas Island would have, so I cannot see that working.

Mr BRUCE SCOTT: Because they are dominant?

Mr Yates : Yes, that is right. And the islands are not the same. There are some significant differences, as you all know, so I would say—and I am a pragmatist at heart—let's stick with the existing structure as far as we can but actively increase the capacity of both shire councils to do more by supporting them with funding, training and staffing and giving them the authority to do things.

Mr SNOWDON: I know the Commonwealth has been under pressure because of staffing in the department, but potentially it would seem to me that if we were to relocate positions, not necessarily the body themselves, onto Christmas Island or Cocos, that would make a great deal of a difference so that the public servants who are responsible for administering the stuff are actually on the island as opposed to potentially in Perth or in Canberra. Do you think that is a possibility?

Mr Yates : I think absolutely. We did that during my period—we replaced APS officers with locally employed officers with the specific intent of getting more people out there to do things. I think that is something that should be considered. One reason the Perth office was structured the way it was was that that was where the services were being provided from. If you are doing more from the islands, they need to go out there. They should be local employees under the Christmas Island and Cocos (Keeling) Islands acts. We put more staff back into Cocos. I observed that we had taken everyone out. I did not think that that was appropriate. We started putting more senior people back. I think that is something that can be pursued actively.

Mr SNOWDON: Thank you very much, Julian.

CHAIR: Thanks very much for attending and giving evidence to the committee at today's hearing. If the committee have any further questions for you, they will be sent in writing through the secretariat.

Mr SNOWDON: On my own behalf I thank you, Julian, for your service.

Mr Yates : Thank you, Warren. I have really appreciated the support you gave over the time in the chair. Thank you for the opportunity. It is always a pleasure.

CHAIR: You have been very helpful to this committee in the last couple of years, so thanks very much.

Mr SNOWDON: So what are you doing with yourself?

Mr Yates : Semiretired—supporting my wife's business and mentoring out at the National Security College and at the Australian Defence College, playing angry secretary or angry minister. It is actually really good. I thoroughly enjoy it.

Mr SNOWDON: Yes. They should get us out there to do a bit of role-playing!

Mr Yates : Yes, absolutely.

CHAIR: Thank you very much.

Mr SNOWDON: Thanks, Julian.