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

CLAY, Mr Stephen John, Private capacity

[10:31]

CHAIR: I welcome Mr Stephen Clay. 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 parliament. Would you like to make a brief introductory statement before we proceed to questions?

Mr Clay : Yes, just a brief one to emphasise one point. If the government is serious about investigating options for governance changes in the IOT I think it is imperative that the local community is brought along on that journey. As I said in my submission, there is a big difference between consultation and information sharing. True consultation involves providing some options, considering comments from the community, reflecting them back and demonstrating that those comments were taken into account when decisions are made. I think that is an important point.

Can I also say that this process needs to be adequately resourced. Whatever we do needs to be adequately resourced and not rushed. It is going to take over 12 months for this to occur. That is an important point and it needs to be considered carefully.

CHAIR: There are a number of questions we would like to go through. As I said before, I am going to have to step out. I will be back as soon as I can. I will have to ask Mr Snowdon if he could go through all the questions to cover this.

Mr SNOWDON: I am happy to.

CHAIR: I will ask you a question and then we will continue to consult about getting some backup for this event. Can you explain some of the difficulties of applying economic development policies under the current governance arrangements?

Mr Clay : I guess some examples around that relate to the notion of the kind of fundamental tension that the Commonwealth has in trying to deliver state type services. As you can imagine the Commonwealth is not actually well versed in providing state type services at all, but obviously WA is employed as a contractor almost to do that. But the Commonwealth arrangements that apply in the territories around things like land sales—it is a very turgid process to go through any land sale system at all. If we wanted to seek overseas investors, like states do, that is a difficult thing for the Commonwealth to actually embark on. I think there is also an inability to bank income from, say, asset sales or land sales within the territories. It has to go to CRF, Commonwealth revenues. And asset depreciation does not stay with the territories program as well, so it gets hoovered off as well. So you do not have the normal arrangements that you would have around asset management that exist in other places.

There is also a kind of heightened sensitivity from the Commonwealth around endorsing policies and vision statements and the difficulties in getting those policies and statements made through the processes that we have in the Commonwealth. And of course there are constant changes to government ministers—priorities change and that kind of thing.

Lastly, I think there is a lack of resources to do a lot of this work—staff and expert advice. So there are a range of things that militate against economic development in those islands.

CHAIR: What is your preferred governance model? What would you say would work better? Do you think it is okay at the moment, or what would work better?

Mr Clay : As I said, in my submission I have given you some examples of governance models that might be considered, but my preferred model, of course, is incorporation into either WA or the Northern Territory, for sure. It is the only way to make the proper governance system work on the islands. That would be my preferred model. Second to that is something you alluded to before, around a board structure. I am thinking of, say, Lord Howe Island board. That might be one to think about as well. But these need to be investigated properly, all these options.

Mr SNOWDON: Prior to the Northern Territory getting self-government, they had an assembly, which was of marginal use, I suspect, but anyway it worked and it gave a sense of people having a responsibility to express a view about things, which did not exist elsewhere. My idea about the regional structure is effectively to do that, not to replace the state government, particularly, but to allow people to consider state-type issues—and indeed other issues—which they do not currently have a remit to do in a formal sense.

Mr Clay : No.

Mr SNOWDON: I am conscious of the issue about a very small number of people we are talking about here, relatively speaking, but, you could have a structure where potentially, for example, you had the shire presidents both on it as a matter of right and perhaps one or two other shire people and then two or three elected people. The other thing I would do, by the way, is create it like a competency based board and make sure you have a couple of external people who are put on by the authority of the administrator because of their expertise.

Mr Clay : There is local accountability out of that as well. It could work with support from Canberra, if necessary, through policy advice and mentoring support. As you said before, having people on island really helps. The official secretary model for support for the administrator is a good one. I acted as the official secretary on Norfolk Island last year. I brought a lot of that model with me to support the administrator, Mr Haase, when I was there for the first six months of this year. I understand that role and, I think, I provided the support that he needed at the time.

Mr SNOWDON: You have heard about the issue of consultation, which is partly about giving people a right to participate in the discussions in a formal sense. How would you see that being developed?

Mr Clay : You cannot rely on one form of consultation on the island. It is a really complex place. There are some existing consultation mechanisms there. The community consultative committee is one. It was originally set up, as I understand it, to inform the community on the results of the changes in 1992 from the applied legislation. It was like a filter to the community.

Mr SNOWDON: It also had resources—

Mr Clay : It did.

Mr SNOWDON: which it does not have now.

Mr Clay : Correct. I think that could be rejuvenated. There are a range of other consultative mechanisms that exist now that started off the administrator's conversation series for both Cocos and Christmas Island. I think that was a good interim step as well. But, whatever we do, we have to do it in a well-structured way. It cannot just be public meetings. Some people do not attend public meetings. You need to have a series of either consultations with individuals and small groups or organisational consultation meetings.

Mr SNOWDON: My experience over many years has been, if you have a public meeting, you will have a public meeting. But if you really want to hear what people have to say you need to go and talk to them face to face.

Mr Clay : Yes, absolutely.

Mr SNOWDON: That is particularly so in Norfolk because of the make-up of the population.

Mr Clay : Yes. Some people just do not respond well in a public forum, and that is fine. That is human nature.

Mr SNOWDON: There can be language and other difficulties.

Mr Clay : Indeed. That is actually a really important point. We need to make sure that we have things well interpreted through the local community so that the Chinese and Malay community can participate fully.

Mr SNOWDON: You talked about the formation of a statutory authority. How would you see that happening?

Mr Clay : It is just one option. I was trying to give ideas. My idea with that was that you could probably have parallels with the Lord Howe Island board but that the board could be made up of a series of directorates. You might have a health one and a works one. They would be on-island people, again, so that there is that local accountability. They would report to the board. The board would set the broad policy direction for where the island might go, in consultation with the minister and the department. It would have some problems, of course, with funding. It probably would not be able to bid for funding as well as perhaps other areas might. But within the funding envelope that they might have I think there is the ability for much more local decision making and much more local influence in that respect.

Mr SNOWDON: Do you have any views about how the role of the department might be refined?

Mr Clay : If we are looking at the board model, in that case the department would be an adviser to the board and a conduit to the broader agencies that operate on the island.

ACTING CHAIR ( Senator Carol Brown ): Forgive me if this issue I am going to raise has already been discussed. I, again, apologise for being late. You talked about the role of the administrator and that it needs to be strengthened. Could you just go through exactly what you are suggesting.

Mr Clay : In a broad sense, to start with, I think there needs to be a good look at the delegations. You could apply some business rules to those delegations to determine which ones would stay with the minister and which ones might go to the administrator. Some examples relate to land issues and town planning schemes. If a shire wants to change a planning scheme the minister needs to approve it. It goes through the WA system. The WA agency then makes a recommendation to the department. The department passes that on to the minister. That could be circumvented through the administrator, with appropriate advice. So that is an example of how strengthening that role might occur on the local accountability side of things and the local consultation with the administrator.

ACTING CHAIR: Do you have a view as to whether the administrator would like to see their role strengthened as well? I can understand where you are saying it would be helpful in certain areas, but I wonder whether the administrator sees their role as being—

Mr Clay : That could depend a little bit on the individual person. But, in a general sense, the role of the administrator has standing on the island. So I am saying we should build on that. I have acted in that role myself on a couple of occasions, so I have some understanding of what that is. For that role to grow and not become an anachronism, I think it is important that that role is strengthened.

ACTING CHAIR: Do you think that might be the view of the community on the island as well?

Mr Clay : Yes, definitely. They would like to see more ability for the administrator to be able to make decisions. People come to the administrator's office with problems. Often they go away unsatisfied because they realise that the administrator actually cannot help them. The administrators have influence, but they cannot actually make the decision or address the issue that the person is concerned about.

Mr SNOWDON: Can I just go back to the local government stuff. What additional powers do you think the local government could have the capacity to undertake if we are perhaps to go down that path?

Mr Clay : I think it is a good time to review the model of local government that exists on the island. They have a low rate base at the moment. Almost all of their funding comes from the Commonwealth. So, if you look at financial viability, they are probably not viable. I know there is some work going on in New South Wales at the moment with amalgamations of local governments. I spent 29 years in local government. I think it is a really important part of Australian society. People understand what they do. But I think the local governments there could be strengthened into a regional type of government, as you mentioned. As Mr Yates pointed out, it is really important not to have one local government. There have to be two. One local government will not work for the communities there. There have to be two. But they could take on a greater role, if they are properly resourced and supported as well with mentoring and so on. There are options for them to partner with other local governments within WA and to bring out people with expertise to talk to them as well.

ACTING CHAIR ( Mr Snowdon ): We will need to suspend the hearing because we do not have a quorum. Thanks, Mr Clay.

Pr oceedings suspended from 10:49 to 10:55