Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard   

Previous Fragment    Next Fragment
Wednesday, 7 December 1983
Page: 3437

Senator GIETZELT (Minister for Veterans' Affairs)(8.41) —For the second day in succession Senator Reid has moved to disallow an ordinance in respect of a development in the Australian Capital Territory. This time she has moved to disallow the Canberra Commercial Development Authority (Amendment) Ordinance 1983 contained in the Australian Capital Territory Ordinance No. 51 of 1983. The Ordinance which the honourable senator seeks to disallow enables the Canberra Commercial Development Authority to construct and manage the shopping centre planned for the Erindale Centre in Canberra's southern suburbs.

We have listened to two speeches by Opposition senators, which were full of a great deal of their philosophical and ideological position and which included some ingredients from the reports of the Auditor-General and the Joint Committee of Public Accounts. However, I think they failed miserably to project their views as being other than rhetoric. They did nothing but indicate the views of the Liberal Party and the National Party, in which they believe that their role in government or in opposition is to prevent any public sector activity that might generate a profit for the benefit of the Australian people.

From the outset I should point out that on 13 May this year the Australian Capital Territory House of Assembly recommended that the development and management of the Erindale Centre be undertaken by a public authority. Yesterday , Senator Reid used the fact that the House of Assembly had disagreed in respect of the casino as the substance for her argument that the casino should not be built. Today, she is seeking to disallow an ordinance despite the fact that it has the overwhelming majority of probably the most representative group in the political sense of any house of assembly in Australia. On 25 October last, the House of Assembly endorsed the choice of the Canberra Commercial Development Authority for this project. This view was expressed by the elected representatives in the Territory after the matter had been fully debated and examined by the House of Assembly. The Government, therefore, had due regard to the views of the House of Assembly in deciding to allow the Authority to undertake the Erindale development.

Of course we have heard a great deal about the Belconnen Mall. The Canberra Commercial Development Authority was established in 1974 by the previous Labor Government to build and operate the Belconnen Mall. That seems to get under the skin of the conservatives. They do not like to look at a successful public enterprise. Nobody can doubt the success of that Authority's project at Belconnen. Of course, by the good grace of the electors, in March of this year the Labor Government was elected and the previous Federal Government's plan to sell the Belconnen Mall at a reduced and ridiculously low price was reversed. The Authority, when establish nine years ago, was designed to prevent a one- retailer one-developer monopoly in retail centres in Canberra, to foster a more competitive retailing environment and to create the opportunity for profits from consumer spending to be returned to the local community. One would expect the conservatives on the other side of the chamber to have some regard for what happens in major retail complexes. If honourable senators opposite know anything about the small business sector they will be aware that small shopkeepers in privately owned super complexes are very unhappy with the behaviour of private entrepreneurs who develop shopping complexes throughout Australia. In 1974, the Labor Government sought to create a situation in Canberra where small businesses that operate in retail complexes are given some protection by a public authority .

It was in pursuit of these objectives that the Government proposed, having learned from the experiences of other complexes throughout Australia, that the Authority should develop and manage the Erindale shopping centre. We make no apologies for doing that. We believe this decision is in the best interests of the consumer; we believe it is in the best interests of the small retailer. We know something about what has happened in the retail industry in the post-war years. We know that a dozen major shops in all the capital cities of Australia have been swallowed up. Probably within this decade we will find that our retail outlets will be owned by one single entrepreneurial monopoly and company.

I believe the Authority's record in developing and managing the Belconnen Mall is an impressive one. How can Senator Watson come into the Senate and put forward the arguments that he did today in regard to the Belconnen Mall, suggesting that it was some sort of white elephant and a drain upon the taxpayers and that it was unsuccessful in every sense of public or private activity? He spoke at great length about the shortage of public funds in Australia. Does not he appreciate-obviously he has not done his homework-the extent of government involvement in the Belconnen Mall which has a book value of $54m? He does not seem to understand that the total Government outlay in respect of this project was only $1m. He does not seem to understand that the money that helped to finance that project came overwhelmingly from private sector funds. At the end of the 1982-83 financial year almost $22m had been spent in interest payments from private lenders in respect of that project.

The Authority completed construction of the Belconnen Mall ahead of schedule. It came in very close to budget. It has operated at a profit. It has provided community facilities rarely found in private malls. It pays full municipal charges and a commercial rent for its land. It has received no public subsidy. Contrary to what Senator Watson has said, it pays all taxes-income tax, profit tax and sales tax-as well as municipal charges. The Belconnen Mall was financed almost entirely by loans. As I said, only $1m worth of equity capital was provided by the Australian Government. Its accumulated profits to date have exceeded more than $2.25m. Yet, Senators Reid and Watson come into this chamber and suggest that this arrangement should not be repeated at Erindale. What bunkum, what balderdash-if I wanted to continue the alliteration I could use another word beginning with 'b' but, having due regard to the way in which the Senate operates, I will not.

When this Government came to office it was faced with a situation in which the new suburbs of Tuggeranong lacked many of the basic facilities available elsewhere in Canberra. This was, of course, a legacy of years of neglect by the Fraser Government of the community needs of Canberra, our own national capital. Therefore, this Government has made it a priority to rectify the situation. There is, contrary to what Senator Reid said, an urgent need for additional shopping facilities in Tuggeranong. In fact, I point out to Senator Reid, who was sympathetic when I, as Minister for Veterans' Affairs, opened new facilities in Canberra, that my Department was criticised by some of the shopkeepers for using important frontage to the streets of Civic, because they claimed there was a shortage of office and retail space in the city. So there is a need for additional shopping facilities in Tuggeranong, in contrast to what has been claimed by some private interests which have objected to the proposed Erindale development.

I think Senator Jack Evans is quite correct in drawing attention to the fact that private interests are intent upon stopping the Government's role in this development. The Development Authority has recognised the need for more shopping facilities and the market potential. I find it hard to appreciate the arguments put foward by Opposition senators about the market-place and about competition because here we will have a project that will be in competition with the other shopping centres operated privately in the Australian Capital Territory. Given the track record of the Authority in completing Belconnen Mall ahead of schedule , there can be a confidence that it will provide these facilities in Tuggeranong as soon as possible.

One of the objectives of establishing the Canberra Commercial Development Authority was that of using its profits progressively to develop community facilities. The bone of contention seems to be that the profits that will flow from both the Belconnen Mall and the Erindale project will be used to provide community facilities for the residents of Canberra. They will have access to those profits. They will not go into Consolidated Revenue; they will go to providing important community facilities within the project itself and much needed retail space. From the beginning, a child care centre was provided at the Beleconnen Mall as an indication of our intent in that respect. The operation of that child care centre is subsidised by the Authority to the order of some $50, 000 per annum. The mall has been specifically constructed to accommodate further facilities on its roof.

Allowing the Authority to develop Erindale will provide the opportunity to fund much needed community facilities in Tuggeranong without drawing on the Commonwealth Budget. I say to Senator Watson that it will also enable the Government to meet some of the needs that he believes governments ought to meet elsewhere throughout the Commonwealth. There is a limit to the Commonwealth dollar. We are aware of that. That is why we believe that, in respect of Erindale, we should be involved as a Commonwealth and as a public authority. The Government believes it is economically sound and just to use profits generated by consumer spending for the benefit of the community. That seems to be the point at which we depart from the Liberal and National parties in the Parliament . In so many privately owned retail centres, where the profit motive is paramount, that fact is reflected in the poor level of facilities for patrons and the community. Let honourable senators think about that. Let them look at the paucity of public facilities in some of the privately owned shopping complexes, not only in Canberra but also in all our capital cities.

The development of the Erindale shopping centre by the Canberra Commercial Development Authority will strengthen its integration as a community facility with other surrounding facilities in a very important and fast growing part of Canberra. The Authority, in managing the Belconnen Mall, has built up considerable expertise in the local retail industry. Let honourable senators opposite name one tenant of the Belconnen Mall who is critical of the way in which the Authority operates, controls and manages the mall. The Authority is more accountable to the Canberra community for its actions than is any private developer or manager. Most of the Authority's members are Canberra residents and , under the Ordinance, one is also a member of the Australian Capital Territory House of Assembly. That seems to me to retain a certain obligation on the part of the members of the Authority to act properly on all occasions and in respect of every development with which it is associated.

Three of the four largest retail centres in Canberra were built, and are currently managed, by one firm. Do Opposition senators want it to have another? The Government has been concerned, therefore, to encourage greater competition in the retail property market. We think it is a good thing to have the public and private sectors compete with one another. The Government's actions on Erindale will contribute, we believe, to that very important objective. I would like to remind honourable senators that previous, conservative governments have also considered concern over the near-monopoly situation in Canberra's retail industry.

I have already indicated that the Belconnen Mall was financed with almost no call on the Commonwealth Budget. The Government has decided that the Erindale project will be financed entirely by loans. No Commonwealth funds will be expended, I remind Senator Watson. That can be achieved because of the significant asset that exists already in the form of Belconnen Mall, which is now held by the Authority. Of course, it has been said by Opposition senators that the Government's decision is anti-business. It is suggested that it will seriously jeopardise prospects for future private investment in the Australian Capital Territory. Where is the evidence of that statement? What person or firm has suggested it? It forms part of the Opposition's argument, but it is just nonsense to suggest that that is so.

The Government's decision will remove only a small proportion of the development from direct participation by the private developer. Construction of the centre will be funded by borrowing in the market-place. Those private investors who have funds to lend will have the opportunity to lend to the Authority and surely will regard it as a gilt-edged investment. The physical structure of the centre will be built by private developers under contract. The occupants of the centre, upon its completion, will be private businesses. The Authority's involvement will be as construction manager and, subsequently, as centre manager. Its record in this area, the Government says, is very impressive . To claim that the participation of a public authority in the management of two of the many shopping centres in Canberra would damage private investment confidence is quite ridiculous. I will wager now that when the loans are called for on the capital market we will be swamped with investment funds. I suggest that this public participation will enhance private investor confidence, not damage it, and also that a claim to the contrary demonstrates to me that the proponent has a poor opinion of private investor judgment. I believe that will be proven to be so.

The Authority has managed the Belconnen Mall in accordance with well- established commercial practices. It has been absorbed into Canberra's retail market without any distortion or disruption and has received no significant criticism from the private sector on that score. There has also been an insinuation that the Canberra Commercial Development Authority has been afforded favourable treatment, to the detriment of private investors. That is a dishonest claim and one that we reject. The Authority is subjected to exactly the same imposts and restraints as is a private developer. It pays exactly the same site rent. It pays exactly the same charges as does any private developer. It receives no favoured treatment whatsoever. It pays a commercial rental for its land and full municipal and commercial charges for its utilities and services. It is subject to assessment by the Commissioner of Taxation in exactly the same way as is a private corporation. I would defy any Opposition senator to find otherwise. In fact, it is the Authority which suffers a disadvantage. Every year it is subject to the vigilant scrutiny of the Auditor-General who, I would venture to say, would not look nearly as kindly as would his private counterparts on various schemes designed to reduce the contribution made to the Commissioner of Taxation.

We all know, of course, how the private entrepreneur is able to hide his profits and give himself and his shareholders great benefits by reducing his taxable profitability. We cannot and do not encourage this; it is not permitted to be done by a public authority. The Canberra Commercial Development Authority may have gained a slight advantage, I submit, in regard to the cost of its borrowings for the Belconnen Mall by virtue of the Government underwriting such borrowings, but the Authority has made a profit. If the advantage in the borrowing rate has lifted that profit then who benefits from it? Nobody in this chamber benefits from it. Only the residents of Canberra benefit. The benefit goes to the community. As I have said, the Authority receives no subsidy from the Commonwealth with regard to the Belconnen Mall. Likewise it will receive no subsidy for the Erindale development.

Let me turn to the suggestion that the Authority should in some way be disqualified from participating in this development because of certain allegations made against some members of the Authority and subsequent recommendations by committees of this Parliament. Obviously there have been some grounds for criticism. I think that the criticisms of Senator Georges were quite constructive, compared with the destructive criticisms of Opposition senators. It is true that the 181st report of the Joint Committee of Public Accounts tabled on 16 September 1980 and the sixth report of the Senate Standing Committee on Finance and Government Operations tabled on 16 September 1982 raised a range of issues concerning the membership and administration of the Canberra Commercial Development Authority. These allegations were raised yesterday in the 214th report of the Joint Committee of Public Accounts even though the Committee brought forward no new evidence to substantiate them. These allegations have been repeated again tonight in contributions to this debate. The evidence is indicated in a statement made by the previous Attorney-General, Senator Durack. He said:

The evidence given . . . consists of unsubstantiated allegations said to have been made by the executive director. Their evidence is hearsay. The subsequent evidence of the Executive director was directly inconsistent with these allegations. On the evidence of Mr Parker, the allegations said to have been made by the executive director were not more than his 'suspicions'.

That view of course, was also endorsed by the Solicitor-General. That was the finding of a member of the Liberal Party, the previous Government's Attorney- General.

I must add that since taking office the Labor Government has considered carefully all of the matters raised both by the Public Accounts Committee and the Senate Committee. Discussions have taken place with the Auditor-General, the Chairman of the Authority and officers of the Department of Territories and Local Government who have been involved with the affairs of the Authority since its inception. The Government accepted the recommendations of the Public Accounts Committee that the Authority be restructured. This has been achieved with the appointment of Mr W. Lawrence, who is a departmental nominee of the permanent head of the Department of Territories and Local Government; Mr McDonald who is the Secretary of the Australian Capital Territory Trades and Labour Council; Ms K. O'Clery, proprietor of the Cuppacumbalong Arts and Craft Centre, and Mr D. Griffiths who is an officer of the Department of Industry and Commerce and a director of Civic Co-operative Permanent Building Society Ltd. They are all reputable people, people in whom this Parliament can repose a great deal of trust. The new membership will ensure a wider representation of local community views on the Authority and will provide for closer departmental scrutiny of the operations of the Authority.

The Government will not accept the recommendations that persons subject to criticism in the reports not be reappointed. The Government believes that there is a vital need to provide some continuity of membership and commercial expertise on the Authority and that the reappointment of members can best fill this particular need. In taking this course, the Government had careful regard in particular to the allegations of impropriety reported by the committees. But none of the allegations of impropriety against members of the Authority were substantiated, as I have said. We have to have regard for the views of the former Attorney-General in respect of that. The Public Accounts Committee noted that the allegations should be resolved in the interests of both the witnesses and the Authority members. I do not think anyone would take kindly to some of the unsubstantiated allegations and suggestions that have been made in the chamber in this debate today. It is, therefore, unfortunate that the 214th report of the Public Accounts Committee added nothing to the original allegations and continued to criticise Mr Pead and the operations of the Authority. If there is any evidence of wrongdoing or mismanagement it should be brought forward. It has not been brought forward. As no evidence has been brought forward since these allegations were raised over three years ago the Government considers that these matters should now be considered resolved and the allegations dismissed.

The Committee also reported a number of instances in which the Authority failed to comply with provisions of its ordinance. I can assure the Parliament that my Government will not condone actions by a statutory authority which are not made in accordance with the Ordinance. The matters raised by the Committee occurred several years ago, in the life of the previous Government, not in the life of this Government. Upon examination of these allegations, we believe the Authority led by Mr Pead and Mr Elsworth made substantial progress in rectifying the areas of maladministration. The Minister for Territories and Local Government, Mr Uren , has discussed these matters with the Auditor-General. The Auditor-General has indicated that they were not serious and that a satisfactory relationship existed with the Authority. I should make it very clear that the Authority was not solely responsible for the delays which occured in obtaining the necessary approvals. Some other matters arose from genuine misunderstandings in interpreting the Authority's rights and responsibilities in dealing with these very complex issues. I believe that the Government has moved correctly and properly, in co-operation with the newly appointed Authority, to ensure that the remaining outstanding matters are resolved as quickly as possible.

Let us look at the question of depreciation of the Belconnen Mall since considered reference has been made to it in the debate. In disagreeing with the Auditor-General the Authority acted on advice from its accountants. Who else should it act in accordance with but its own advisers, its own accountants? The Authority believed that its actions were commercially proper and this was demanded by legislation. This matter has now been resolved. The Authority has agreed to accept the Government's preference that the Auditor-General's view be acceded to and has given an assurance that there will be no further occurrences of this nature. The Government gives an assurance to the Senate that this matter will be closely watched and monitored by the Minister for Territories and Local Government. If previous Ministers had properly exercised their ministerial responsibility and control for oversighting this Authority perhaps this would have happened earlier.

In conclusion, I must stress that the matters referred to by the two committees occurred several years ago. It is the Government's view that they have been satisfactorily resolved. Since the Government came to office it has restructured the Authority, appointed new members, resolved the issue of depreciation which was a contentious issue and obtained agreement from the new Authority that it will comply with the requirements of the legislation. In view of the assurances received, the efforts of the Authority to resolve the issues raised and the failure of any person to produce evidence or proof to substantiate the allegation of impropriety levelled at members of the Authority, the Government is therefore satisfied that no additional action is warranted. The Government rejects Senator Reid's motion to disallow the Canberra Commercial Development Authority (Amendment) Ordinance 1983. It rejects Senator Reid's proposition that development of the Erindale shopping centre will deter private investment in Canberra. The Government rejects this further attempt to make political capital from unsubstantiated allegations against members of a statutory authority.

A number of other matters were raised in the debate by honourable senators which I think I have probably dealt with in what I have said. One of the questions raised by Senator Watson concerned leases when the Belconnen Mall was opened. The lease with the major tenant was still under negotiation at the time he raised the matter. The rent was deferred. When the lease was finalised the rent was then paid in full. No advantage was given to that particular tenant. The same arrangement was made and extended to all of the other tenants. I believe that the Government is entitled to have the motion for the disallowance of the Ordinance rejected by the Senate. I ask the Senate to vote accordingly.