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Rural and Regional Affairs and Transport Legislation Committee
24/02/2015
Estimates
INFRASTRUCTURE AND REGIONAL DEVELOPMENT PORTFOLIO
National Capital Authority

National Capital Authority

[22:37]

CHAIR: Thank you ladies and gentlemen. I apologise for the hour of the night. There is a semi-crisis in the building over parking arrangements and the fact that parking in this building now has a value. The tax office now has a view that maybe it is a fringe benefit to park here. We have people like cleaners who come here on what you would call pretty average wages and work hard, and, if we are going to hit them with pay parking, in my view, that is bullshit. Do you have any influence over this process? I guess you have initiated the value-adding in the surrounding areas. Do you have a flow-on impact in this building?

Mr Snow : No, we do not. Parliament House and the Australian War Memorial were specifically excluded from the pay-parking schemes, and those institutions were left to settle their own arrangements in respect of whether they charge for parking in their carparks.

CHAIR: So were you consulted by DPS?

Mr Snow : No, we were not. We were contacted recently by the Department of Parliamentary Services in relation to whether or not we would be prepared to provide parking enforcement services within the building.

CHAIR: Are you able to give us a quick estimate of whatever it is going to be? It is going to be some Coles-type giveaway plan, and if you shop at the local shop you will get parking at a discount or parking free or something. They say they are going to have an income of $250,000 from the carparks in this building. But there are people like cleaners that come in here at three o'clock in the bloody morning who can ill afford it. Just for the record, just so you guys know—because it has nothing to do with you—they originally thought it would cost $1.3 million to do up the DPS secretary's office here in this building. It is now $4 million to refurbish an office in this building. So 10 years of the income from the car parking that they are going to slug people coming into this building is going to pay for the renovations of the secretary's office. It is a great system. Could you assist us by trying to estimate the cost of supervising and the wherewithal to set up the car parks as a paid proposition?

Mr Snow : Within Parliament House?

CHAIR: Yes.

Mr Snow : As I said, we have no control over the Parliament House area.

CHAIR: No, but do you have an idea of the cost? What I am trying to get to is how much it is going to cost to do this and what is the cost-benefit analysis of the car parking. What does it cost for a swipe-put-your-card-in or whatever the system is? How much does all of that cost? You must know if you are going to do it, or you have done it.

Mr Snow : It is a completely different parking arrangement. The arrangement that Parliament House has gone with is akin to a shopping centre. The scheme that we have been asked to implement by government relates to parking in open lot surface car park areas. It is a meter system; it is a ticket machine system. It is not a comparable system, so I do not believe we would be able to assist you.

CHAIR: How much does it cost for your system?

Mr Snow : You mean in terms of a parking fee?

CHAIR: Per year, per park.

Mr Snow : Per year, per park?

CHAIR: The administrative overheads, which includes the capital.

Senator XENOPHON: I till try and assist you. As I understand Mr Snow's evidence, it is quite a different system of paying, because you have got—

CHAIR: I understand all that.

Senator XENOPHON: But it may be relevant. In terms of the amount of revenue that you collect, Mr Snow, how much of that is chewed up in overheads? In other words, if you collect $100,000, how much of that is overheads, administrative costs, capital costs and the like to install the parking system?

Mr Snow : Thank you, Senator. I would have to take that on notice. The scheme has only been operating for less than five months. A number of the services you are referring to—the enforcement, coin collection—those services have only just been introduced. I would be pleased to try and make that calculation and provide that to you.

Senator XENOPHON: Roughly, is it a third; a quarter?

Mr Snow : I would say it is approximately a fifth; it is certainly less than a quarter.

Senator XENOPHON: So a 20 per cent cost in admin?

Mr Snow : Yes.

Senator BULLOCK: Just looking through the estimates, and this is just my reading of the sums—and maybe I have got this wrong—but on page 109 it says, 'Expense measures—paid parking on national land in the suburbs of Parkes, Barton, Russell and Acton'. Total expense measures looking out into the forward years are $3.465 million. Then on page 115 it says:

The pay parking scheme was programmed to commence in July 2014 but was delayed until October 2014. An ongoing increase in parking revenue over forward years is expected to be in the order of $5.0m per annum.

I would have thought, in answer to your question, the difference is between $3½ million and $5 million—so spend $3½ million and you will get $1½ million.

Senator STERLE: So it is sweet FA.

CHAIR: The cost-benefit analysis may well be marginal, but the financial impact on people who service this building could be horrific. In this afternoon's Canberra Times there is an article: 'Credit card fraud'. Have you read it?

Mr Snow : Yes.

CHAIR: Could you take us through that?

Mr Snow : There has been an issue in relation to credit card transactions. The operator of the ticket machines undertook a software upgrade earlier this month and, as a result of doing that, he advised us that they had detected that transactions that had occurred in an earlier period had not flowed through to the bank and had actually appeared in people's statements. The complaints that have been received in the last few days have been from people who have received their credit card statements and have seen one or more transactions in relation to a parking fee that they have paid with their credit card. In fact, those multiple payments date back to an earlier time, but the transactions have only just appeared on their statements. So no-one is out of pocket. What has happened is that transactions that were done in October and November or December have only just appeared on people's statements, as a result of this software glitch.

CHAIR: What is the explanation of the glitch?

Mr Snow : The contractor is saying that there was a glitch and that the upgrade that they undertook, earlier this month—they assure us—has corrected this problem, but it had been undetected up until that point.

CHAIR: So the National Capital Authority would wear that as an extra fixed charge—the cost of the upgrade?

Mr Snow : No. The agreement with that particular contractor allows them to undertake those software upgrades at their cost. What we are seeking assurances on is that the standards related to the operation of that transaction are occurring efficiently, and that is what we are holding them to account for.

CHAIR: Did you pay for the capital works to enable that contractor to take the contract for the car parking?

Mr Snow : That is correct. It went through a public tender process in conjunction with the ACT government.

CHAIR: Did the contractor who does the supervision of that go through a public contract too?

Mr Snow : It is the one and the same operator. The supplier of the machines is also the company we are contracting with to make sure that that software and the transactions occur promptly.

CHAIR: And the commission, as it were, the income, is about 25 per cent of the total take that that contractor gets, is it?

Mr Snow : Can you just clarify the question again?

CHAIR: I pay 10 bucks for the car park. What does the contractor who collects the 10 bucks get—and who puts the machine in and, I suppose, provides security?

Senator BACK: Maintains them, does the software upgrades.

CHAIR: In other words, what do you actually finish up with—sweet FA, a fair bit or—?

Mr Snow : As I said, it was through a public tender process.

CHAIR: But I am asking you: what is the net in the National Capital Authority's pocket after you have gone to the trouble of installing all this paid car parking?

Mr Snow : The NCA receives nothing. All revenue goes to consolidated revenue.

CHAIR: Do not play games. How much finishes up in consolidated revenue? How much goes on expenditure before it gets to consolidated revenue—proportion and dollars? If you do not know that, you should not be doing what you are doing—or don't you care?

Mr Snow : No; we do care.

CHAIR: Well, tell us.

Mr Snow : We are monitoring the scheme and we will be reporting.

CHAIR: You do not know.

Mr Snow : I do not know that—

CHAIR: If you do not know, say you do not know.

Mr Snow : I do not know that detail.

CHAIR: So you have started a scheme and you have got no idea what the financial outcome is?

Mr Mrdak : I think Senator Bullock drew attention to the tables in the additional estimates document, which provide revenue and cost estimates.

CHAIR: But that is estimates. I am talking about reality.

Mr Mrdak : The scheme has been running for five months. I think it is fair to say—

CHAIR: I would have thought that at least every three months you would have some sort of accounting process.

Mr Mrdak : I think at this stage what we are hearing from the NCA—

CHAIR: They do not know.

Mr Mrdak : is that it is operating within the budget estimates that are there.

CHAIR: How do they know that? They do not even know what is coming in and what is going out.

Mr Mrdak : I do not think that is the question you are asking.

Senator STERLE: Yes, it is. That is exactly what Senator Heffernan is asking. We are screwed for 10 bucks or whatever it is, and this mob cannot tell us how much you are going to make out of it.

CHAIR: Down the road.

Mr Mrdak : I do not think that is the case. I think the estimates that are available in the PAES document are the government's estimates of revenue and expense.

CHAIR: Estimates are one thing. Given my experience with DPS squirting money all over the place with no accountability—and bloody getting rid of security, for God's sake, out of the building to save $400,000, and it has cost them millions to put it back—I am just wondering whether this is one of those futile exercises to make the books look right, the same as trying to prop the shop up by saying, 'We'll give you a $25 parking voucher if you spend $25 at the bloody shop.' That is a direct subsidy to the shop, right?

Mr Mrdak : Yes.

CHAIR: I want to know what the net effect is. In getting to that message, I would like to know what the net effect of the Parliamentary Triangle parliament arrangements is. If you have not got a three-monthly and a six-monthly accountability, how do you know somebody is not touching you?

Mr Mrdak : The essence is that I am sure the NCA has that data in terms of what is happening. The question then is: has the take-up of parking in the Parliamentary Triangle since paid parking was introduced matched revenue estimates?

CHAIR: No, I am not interested in revenue estimates. I am interested in what is in the bank—

Mr Mrdak : That is what I am saying.

CHAIR: and what it cost to get that in the bank. So, if you could take that on notice—

Mr Mrdak : We will.

CHAIR: and give us a three-monthly, a six-monthly and then a nine-monthly and a 12-monthly update, I would be grateful.

Mr Mrdak : That is fine.

CHAIR: And if you cannot do it in three-monthly grabs, how do you know someone is not taking you down in the meantime?

Mr Mrdak : I think we have clarity now about what we are being asked for.

CHAIR: You have all these people sitting around and going home bored every night from work. If it was my bloody business, I would want to know what was happening every week.

Senator Cash: I think the point is taken.

Mr Mrdak : The point is taken, and I think we now understand the information you are after. We will take that on notice.

CHAIR: But isn't it negligent for us not to have to say that? Isn't that sloppy business, Mr Snow?

Senator Cash: I think your point is taken.

Mr Snow : We will provide information. We have made a commitment that we will publicly report on a quarterly basis the performance of the scheme in relation to whether it is achieving the targets.

CHAIR: No, not whether it is achieving the targets. I am not interested in that but in what the reality is. Bugger the targets. We can get them. We want to know what the actual outcome is. I want to know if someone has collected the money but not put it into the till—that sort of thing. How do you know that? You do not have any records. The contractor could be taking three-quarters of it home and putting it through the pokie machines.

Mr Snow : That is not possible, because the machines are smart enough to actually tell us what has gone into the machines, and there is a reconciliation process—

CHAIR: If they are smart enough to tell you that, then why can't they tell you that every week?

Mr Snow : Well, we can tell you that.

CHAIR: But why wouldn't you, as a smart business person, want to know that anyhow? Up until tonight, it seems, no-one was worried.

Mr Snow : No, we monitor the transactions very closely.

CHAIR: This might be a little battle we have to fight, but, given that hopefully you might be making—what was it, Senator Bullock? About $1 million or $1¼ million?

Senator BULLOCK: One and a half.

CHAIR: And about one third of the income goes to profits.

Senator BULLOCK: Thirty per cent. And that is not counting capital costs; that is looking three years out at the estimated profit.

CHAIR: Do you have a cost recovery—you are going to get your money back in so many years? According to those figures, you are going to get 30 per cent on your money this year without capital costs.

Mr Mrdak : As I think Mr Snow has indicated, the NCA has had appropriation to install the system. The revenue goes back to consolidated revenue.

CHAIR: I understand that. I want to know if what is going to go back to revenue is 30 per cent of what was spent—the cost-efficiency of the deal.

Mr Mrdak : We will get that.

CHAIR: Unfortunately I am on the Public Works Committee, and I have never seen so many dodgy deals, including the new offices out at Woden or wherever it is. They are seriously dodgy deals, and the Public Works Committee, in one interrogation, has saved the Commonwealth $50 million because of the largesse of dealing with the government. It is like getting your car fixed if it is under insurance, or if you go to the panelbeater and say, 'I'm going to pay for it myself.' It will cost you a lot less than when it is under insurance. That is what it is to do business with the government, and I am wondering if this is not the same.

Senator STERLE: You would not know. This would not come to your committee.

CHAIR: No.

[22:53]

CHAIR: We will move on to Local Government and Territories.

Senator STERLE: I am going to try to put a lot on notice, and I want to talk about the FAG funding. We did touch on it today, and I am sure you would have heard it, so perhaps we can get straight to it. Could you let us know whether the department has done any analysis on the loss to each local government because of the FAG cut?

Mr Mrdak : We certainly have done analysis of the quantum of the impact on local government from the nonindexation, but we have not done an analysis of the impact of that. We have the quantum amounts but not an analysis impact.

Senator STERLE: Can you supply us with that, or are you taking it on notice? Do you have it here?

Mr Mrdak : No, we do not have that here.

Senator STERLE: Then perhaps you could take that on notice.

Mr Mrdak : For each council?

Senator STERLE: Yes, please. How many do we have? About 520, I believe—is that right?

Mr Mrdak : I will take that on notice.

Ms Fleming : Was the question how many local councils there are?

Senator STERLE: Yes.

Ms Fleming : There are 571 local governing bodies that are paid or receive money under the Financial Assistance Grants program.

Senator STERLE: So, you will be able to tell us the loss to each council.

Ms Fleming : We can tell you the variation in the payments. It is not as easy to tell you a loss. Perhaps I could take a second to explain the indexation.

Senator STERLE: Please do.

Ms Fleming : Indexation is applied as a factor of CPI and population. There was a population change. There was a pause to the indexation factor. So, at the national pool level—the national pool of the Financial Assistance Grants—$2.3 billion a year was held steady. Population variations, though, continue to occur, and those estimates are applied at the state level. Each state got a slightly different amount of money based on shifts in population. That money is then allocated through the Grants Commission each year. So, you cannot just assume that a council would have got what it got last year with four per cent or three per cent, because every year a state grants commission makes variations based on the horizontal equalisation factors that are specified in the legislation. Money go up and down, and some councils got more money this year than they got last year, despite the pause.

CHAIR: It is late at night, and I have got a thick head. Does your mob supervise the doling out of grants?

Ms Fleming : We make payments to the states, and the state grants commissions make the allocations.

CHAIR: So, you actually process the Commonwealth money to the states?

Ms Fleming : Correct.

CHAIR: How many people work in that process?

Ms Fleming : 1.5.

Senator STERLE: They would be 1½ busy people! So, you can tell us what states—how much they are going to be different each year?

Ms Fleming : Yes, and each payment is actually published on our website, for each council. That is readily available on our website.

Senator STERLE: So, you can tell us, roughly. Forget about population and—

Ms Fleming : The variations in payments.

Senator STERLE: Yes. And I can say that this year I got this and this year I might get this, for the whole 571 councils.

Ms Fleming : Correct.

CHAIR: Of course, I think there are more than 1.5 people sitting at the table. I think that bloke has legs; yes, I can see his legs. The 1.5 people in your department who dole out the—

Ms Fleming : There is 1.5 people who actually work on the Financial Assistance Grants payments scheme.

CHAIR: What do the rest of you do?

Ms Fleming : There is local government policy, local government awards, which have been going for 25 years almost, and territories.

CHAIR: How many people in your set-up altogether? That is really what I was asking.

Ms Fleming : There are about 90 people in the division—maybe around 100.

CHAIR: In New South Wales, there is endemic corruption in local government—a strong statement, but it is true—mostly through real estate agents, developers and the like being on councils and involved in the development world. Do you think it is appropriate in local government to have a convicted criminal as a mayor?

Senator Cash: I think we now are really crossing a boundary, perhaps because it is—is it after 11 o'clock?

CHAIR: Yes, it is 11 o'clock now.

Mr Mrdak : I think it is best dealt with elsewhere. I do not think we can assist you with that one.

Senator STERLE: I have some rough calculations on a council—Western Downs in Queensland is one that was given to me. Under the cuts, they stand to lose about $7.6 million over four years, I am told, because of the decision to pause the indexation of FAG. Could you confirm whether that is true? Would you have that in front of you?

Mr Wilson : We will take that on notice. I do not think we would be able to confirm the differential across the four years.

Senator STERLE: Yes, take that on notice, because you are going to come back to us with the figures that you do have so that we can put figures next to councils and states and all that sort of stuff. Has the minister received any correspondence from local governments complaining about the cuts?

Mr Wilson : Yes.

Senator STERLE: Could the department tell us which councils have written to the government?

Mr Wilson : We would have to take that on notice.

Senator STERLE: Please do, because I have written to every council in Western Australia. That is no secret. People know that. Half of them shit themselves because they think, 'Why is a Labor senator writing to a Liberal council?' It was because I actually wanted to know. It is amazing what they wrote back. Has the minister received any representations from any members of any parliaments regarding the paused indexation, to your knowledge?

Mr Wilson : I would think that the Deputy Prime Minister and the assistant minister would have had conversations with members of parliament regarding the issue. But I cannot give you a detailed—

Senator STERLE: Because you do not know.

Mr Wilson : list of who that might be at the moment.

Senator STERLE: But if you do know, can you give it to us?

Mr Wilson : Certainly.

Senator STERLE: You are taking that on notice. Great. Has the department been consulted on any plans to continue the pause on the indexation of Financial Assistance Grants?

Mr Mrdak : No.

Senator STERLE: So, there is no plan to continue it?

Mr Mrdak : Sorry—to continue?

Senator STERLE: To continue past the four years—there is no plan.

Mr Mrdak : Not at this stage. The government has made clear its intention that they would like to see a return of the indexation, but that will be contingent on the budget fiscal situation being improved.

Senator STERLE: Has the department been consulted on the government's reform of the federation paper?

Mr Mrdak : Yes.

Senator STERLE: Has the department been consulted on the funding arrangements for local government as part of the reform of the federation paper?

Mr Mrdak : Yes, I think there have been conversations with the Department of the Prime Minister and Cabinet in relation to where local government funding may sit in any federal structures.

Senator STERLE: Have you been asked to do an analysis?

Mr Mrdak : Not at this stage.

Senator STERLE: Is the department aware that local government is very concerned and wants to be consulted on the white paper?

Mr Wilson : I am aware that that they want to be consulted.

Senator STERLE: And will they be?

Mr Mrdak : I think the development of the white paper involves extensive consultation. Issues papers have been going out, so there are opportunities for everyone to be giving their views.

Mr Wilson : I believe the question would be more properly directed to the Department of the Prime Minister and Cabinet, but my understanding is that there has been over the last four or five weeks considerable consultation around a number of issues to be contained within the context of the paper, and that has included local government.

Senator STERLE: Sure, and I know it is a conversation at this stage. I am not going to be cheeky enough to ask you to tell me—although I would love it if you could tell me who has been involved and what they have been talking about! But you will take that on notice.

Mr Wilson : It is not a question for this portfolio.

Senator STERLE: Okay. That will do. I will put the rest of them on notice.