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STANDING COMMITTEE ON FINANCE AND PUBLIC ADMINISTRATION
31/08/2007
Commonwealth Electoral Amendment (Democratic Plebiscites) Bill 2007

CHAIR —Welcome, Mr Hobbs. Would you like to make a brief opening statement.

Mr Hobbs —Thank you very much. First of all, I welcome the Senate inquiry into the Commonwealth Electoral Amendment (Democratic Plebiscites) Bill 2007. I believe it does give us a good opportunity to examine the bill, to look to the benefits of it and to look at some of the reasons why we are all here today.

I am the shadow minister for local government here in Queensland, and I have had long experience in local government over many years. These forced council amalgamations have been one of the most undemocratic and dictatorial acts by a Queensland government that I have witnessed in my time in the parliament. As background—and it has already been mentioned—no professional, academic, social or cost-benefit analysis has been done in relation to this exercise. It is like going out and buying a huge business and not looking at the books. Local government assets are valued at about $86 billion, and nobody had a look to see what the impacts are likely to be at the end of the day. Nor did they really have a good look at what the social impact is likely to be on many of the communities and on the 37,000 employees.

The reports—and this is interesting—used as the reasons for the restructure have been found to be untrue and to have been manipulated. The state government has stated that councils will go broke within the next term of government unless they act now, and they cite a Queensland treasury document that financially rates councils. The weak category councils cited in the Queensland Treasury Corporation report were in fact sent to a firm of international administrators and receivers, McGrath Nicol. That company assessed the financial documents. They found, in fact, that the majority of those councils had financial ratings that were higher than those of some of the listed companies on our Australian Stock Exchange. They found that they were not at any risk of becoming insolvent. They found that they had ample time in the foreseeable future to in fact put in place remedial action should they be in trouble. Quite clearly, there was no evidence at all to show that they were in any financial difficulty.

The government used a PriceWaterhouseCoopers report on sustainability of councils across Australia. That was used to support their claim that councils were unsustainable and needed restructuring. The report of PriceWaterhouseCoopers did not examine councils in Queensland. In fact, they examined councils in New South Wales, Victoria, South Australia and Western Australia and, all but Western Australia, have faced mass amalgamations. So they examined councils that have been amalgamated and found they were unsustainable. Yet Queensland councils rated very high in that category, so they are the same level. So we were going pretty damned well. They found that the amalgamated councils down south had sustainability problems, so why on earth would we do it here?

The reality is that this has been a purely political exercise to divert attention away from major water infrastructure concerns, mounting debt levels in Queensland and the deal with the unions to prevent the spread of Work Choices throughout Queensland councils. Amalgamation may be right for some councils and not right for others but, at the end of the day, the decisions of local communities should be accepted, not overridden by a government prepared to fine, sack, publicly humiliate, punish and make criminals of elected officials who are prepared to exercise their legislative and democratic rights for their communities to have a say. From what I can see, this bill will give our communities the right to have a say.

Senator IAN MACDONALD —A lot has been made of the fact that if councils around the Northern Territory or even Queensland wanted to have a say on Work Choices they are not being asked to do that. But your understanding of the Queensland law before this and the Queensland law as it will be as a result of this is that if councils wanted to have a say on Work Choices, they would be able to—until Mr Beattie’s legislation. Is that your understanding?

Mr Hobbs —Absolutely. In fact, that was part of the legislation. It was always there that the councils have a legislative and democratic right to hold a poll in their community on issues they felt were important. That right was taken away.

Senator IAN MACDONALD —As an aside, for those of us who are not from Queensland, can you explain where your electorate of Warrego is and how many councils are affected in your electorate?

Mr Hobbs —My seat of Warrego is the same size as the state of Victoria. It runs just west of Dalby and goes to Mungindi and out to the South Australian border. It is one of the five big seats in Queensland. My colleague Vaughan Johnson from Gregory is here as well. Gregory is bigger again. I have nine councils in my region. They are facing some real concerns. Some of the councils in the far west will not be amalgamated simply because of the enormous fight they put up to the government to get that changed. At the end of the day, there is just no way that the government can see what is going to happen to those councils’ workforce and communities. Stress and job losses are inevitably going to occur. As we all know, 11,000 have been lost down in Victoria. Jobs change from town to town. For instance, where I am, based at Roma, five councils are going into one. The towns from which councils will be removed will surely experience job losses in their regions. People will have to relocate, the value of their houses will be going down, they will have to pay more to get into other areas and it will really means job losses, not job transfers.

Senator IAN MACDONALD —My colleague Senator Joyce raised an interesting question about whether this is a political exercise by certain politicians. A federal group of one party and a state group of the same party can have different views. I am wondering whether you are aware of any impact at local government level. Has this been a partisan thing at local government level or is it bipartisan because of opposition to this particular legislation which our legislation is trying to override?

Mr Hobbs —The vast majority of councils in the communities are vehemently opposed to what is happening at present because they have not had a say; there has been no real process. There are a few councils around the state who see themselves as the major centre. They are thinking, ‘Maybe this will be okay for us.’ They may end up with more staff coming in and perhaps creating more jobs in their region. They see it as a possible benefit to them but you could probably count those on one hand, or two at the most. The other 148 to 150 councils are very strongly opposed.

Senator IAN MACDONALD —Even those that favour amalgamation still believe that their constituents should have a right to have a say on it?

Mr Hobbs —They do in the majority of cases. There are some councils that perhaps are political and may want to run the government line, but at the end of the day the majority, I am sure, would have no problem having a plebiscite in their town. I made the point the other day at the local government conference that it is fine for a council to say, ‘We from the council believe in amalgamations; we are happy with that.’ My point to them is to ask, ‘Does your community support you? I suggest you have a plebiscite as well.’ Having gone to the community you can say, ‘The council supports it and the community supports it.’ In many instances, I think you will find that the communities do not support them.

Senator FORSHAW —I want to get the time line straight so that we have it clear when we write our report. The Queensland parliament passed the Local Government Reform Implementation Bill 2007 on 9 August—I am looking at your submission and that is obviously correct. I think you said it was introduced on 7 August.

Mr Hobbs —That is right.

Senator FORSHAW —That was the day the Prime Minister made an announcement that he would take steps to allow the Australian Electoral Commission to assist in holding plebiscites for local councils that wanted them. Are you aware of that?

Mr Hobbs —Yes.

Senator FORSHAW —Are you aware that prior to this bill being introduced that power existed under the current Electoral Act?

Mr Hobbs —Under the Commonwealth act?

Senator FORSHAW —Yes, the Commonwealth act. You were obviously in the parliament. You state in your submission:

This legislation was further amended so that the Minister had the power to dismiss a Council if the Council conducted a “poll…

Was that amendment raised in the parliament during the debate on the bill?

Mr Hobbs —That amendment came in at a very late stage. It was virtually an overnight amendment that they brought in.

Senator FORSHAW —My understanding is that you had the Prime Minister’s announcement coincidental with the so-called reform bill—I will concede that for your purposes—being put to the parliament. It seems that what happened was that the Queensland Premier, reacting to the Prime Minister’s announcement, then amended the state legislation—

Mr Hobbs —That is correct.

Senator FORSHAW —to try, in other words, to put a block on the Commonwealth intervening in that respect.

Mr Hobbs —That is quite correct.

Senator FORSHAW —That goes through. So we then end up with this bill being brought forward on 16 August in the federal parliament to add in extra clauses which, while they do not mention local government plebiscites at all, would enable the federal law to override the state law. Is that correct?

Mr Hobbs —That is correct, yes.

Senator FORSHAW —So we have that clear. You also refer to the fact that, as we know, Mr Beattie said that the state government was going to repeal or amend the bill again to take out those penalty provisions. Where is that debate at?

Mr Hobbs —The Premier has in fact said that he is going to withdraw it. The bill has been put into the house.

Senator FORSHAW —Is that the Local Government Amendment Bill 2000?

Mr Hobbs —It would have to be 2007.

Senator FORSHAW —Yes, 2007.

Mr Hobbs —It would. Well, both of them were called that, but it was another amendment to withdraw that. However, it has not happened.

Senator FORSHAW —When did that come in? When was that introduced?

Mr Hobbs —It came in on the last Wednesday of parliament. We assumed that it was going to be debated on the Thursday; it was not. They had the opportunity to do that. Normally, you have a statutory period where bills lie on the table, but that did not happen.

Senator FORSHAW —We used to have those too.

Mr Hobbs —So they decided to put the bill into the house and that is it. The Premier also made a statement on that day about the Winton Shire Council wanting to have a plebiscite even though their boundary had not changed. However, the whole structure of their local government will change and they want to have a say. It is my view that the Premier was probably having two bob each way by saying, ‘It is in the house and we are going to withdraw it.’ But he has not and, quite frankly, none of us really believe anything that he says much these days.

Senator FORSHAW —Well, that is a nice political statement. I will not worry about that for the moment.

Senator IAN MACDONALD —It has not been debated.

Senator FORSHAW —I am asking. My next question is whether you have an indication as to when the bill is likely to come on?

Mr Hobbs —No. As I said before, there was an opportunity for the government to bring that bill on the next day. They forced the previous bill through; we assumed they would have forced this one through. They did not. We would assume that it will go up at the next sitting of parliament.

Senator FORSHAW —I have heard anecdotally that it could be next week.

Senator IAN MACDONALD —Well, you should give evidence then, shouldn’t you?

Senator FORSHAW —No, I want to discuss this with the witness. It has been indicated to us that it will be dealt with next week. Is that your understanding?

Mr Hobbs —We do not know. We have no idea at all.

Senator FORSHAW —Okay.

Mr Hobbs —All we know is what the Premier has said and that is it.

Senator JOYCE —It sounds like a question for the manager of government business in the Labor Party.

Senator FORSHAW —Could I just be allowed to ask my questions? We do actually have to write a report about this at the end of the day. It is not just a political stunt by these people at the other end of the table who are worried about losing the next election. You state in your submission, and this is the state coalition submission to the body or whatever you call it and not to this committee:

… the merger or major alteration of boundaries of a local government should require a referendum in order to be changed.

We know that this bill only goes so far as enabling plebiscites to be held and to not be prevented by any action. What do you think should then happen federally? What does that statement mean about having a referendum to effectively, I would imagine, enforce the decision of the plebiscite?

Mr Hobbs —At the end of the day, this bill that we are examining now will give people a say. We would hope that people having their say may eventually force the government to recognise the will of the community and perhaps go back to the core of the issue, and that would be to have a referendum on the particular boundaries. There was a legislative process which was there in the past, until it was withdrawn by this government, whereby if councils wanted to have boundary changes or amalgamations the community played a part in that. That is all we are asking, that the community be able to have a genuine part in any restructure of their community, which is being denied to them.

Senator FORSHAW —So you think if we made a recommendation to that effect, because this bill does not provide for a referendum—

Mr Hobbs —Yes, that would be good.

Senator FORSHAW —Thank you.

Senator JOYCE —Mr Hobbs, I want to go back to your statement about two bob each way. How many Labor Party members are there in the state parliament?

Mr Hobbs —They have a majority of about 29.

Senator JOYCE —Have any of them raised an objection to the council amalgamations?

Mr Hobbs —In fact, what we are finding is that some are saying one thing to their community and another thing in the parliament. That has been documented. At the end of the day there seems to be a strong belief among the government that what they are doing is correct. It is quite amazing. When I travel around this state—and I have probably done 15,000 to 17,000 kilometres since 17 April—I have found there are enormous objections and a lot of those objections come from government members’ seats as well.

Senator JOYCE —But in the chamber, has any state Labor Party member of parliament raised an objection to the council amalgamations?

Mr Hobbs —No.

Senator JOYCE —How do you explain that? Mr Swan, Mr Rudd, Ms Livermore, Mr Bevis, Mr Emerson and Mr Ripoll all think it is a bad idea, and they are all in the Labor Party, yet everybody in the state parliament thinks it is a good idea?

Mr Hobbs —As I said before, there was a deal done in relation particularly to Work Choices—that is the most significant one—to maintain that. There are 14 councils in Queensland that have been on Work Choices agreements, and some of those councils are big, like the Gold Coast, for instance. That seems to be one of the significant benefits the government seems to be pursuing. The minister stated recently that they are really waiting for the Etheridge Shire Council case before the federal courts at the present moment to try to implement a second phase of Work Choices agreements. The government have flagged they are going to set up a statutory authority—maybe one overarching one or perhaps one for every council—to employ council employees and the CEO so they can avoid the Work Choices arrangements.

Senator IAN MACDONALD —Is that documented? Is it in Hansard?

Mr Hobbs —There is information available. The minister has made some statements.

Senator IAN MACDONALD —In Hansard?

Mr Hobbs —Not in Hansard, no; outside the house.

Senator JOYCE —What do you think is motivating them within the one political party from one state, all being members of the one show, to have two completely different views in unison—all the federal ones believing that council amalgamations are bad and all the state ones believing they are good?

Senator MOORE —On a point of order, Chair: that is not true.

Senator JOYCE —What—some of them have problems with it?

Senator MOORE —The way you presented that is not accurate.

Senator JOYCE —Can you correct me?

Senator MOORE —We are saying—and that is very clearly our position—that the process is wrong.

Senator JOYCE —So which one of these—Swan, Rudd, Livermore, Bevis, Emerson, Ripoll—believe in the councils?

Senator MOORE —I am not going to intrude on the witness’s time, Senator.

Senator JOYCE —I just wondered if there was one that had—

CHAIR —Senator Joyce, your question to Mr Hobbs?

Senator JOYCE —What do you think would be motivating them to have that form of tactic?

Mr Hobbs —There is obviously a strong bond between them for some reason. As I mentioned in my introductory remarks, there are serious problems down there in relation to infrastructure and the debt levels in Queensland mean that every Queenslander is going to owe $150,000 soon—it is $12 million interest a day. I think those sorts of things are really impacting on the government. It has to be that, plus the Work Choices arrangements. I think there is also another issue there in relation to the manipulation of the reform commission for those boundaries that will in fact flow on to the state electorate boundaries.

Senator JOYCE —I will be more direct. Do you think that it is contrived?

Mr Hobbs —There is no doubt about that. There is absolutely no doubt this is a contrived—

Senator FORSHAW —Do you want to sit over there and answer your own question, Senator Joyce!

Senator JOYCE —Premier Beattie and Minister Fraser are reported as saying that 43 per cent of the councils were unsustainable and would go broke unless they went into forced amalgamations. What does your research say?

Mr Hobbs —The research clearly shows that is absolutely false. The McGrathNicol report quite clearly shows that, while those councils might not have been strong, they certainly were not anywhere near in financial trouble.

Senator JOYCE —Do you believe the Local Government Reform Commission was given adequate time to fully examine the detailed submissions for a state as diverse and decentralised as Queensland?

Mr Hobbs —This is a very interesting question. The Premier talks about the reform commission—an independent reform commission. In fact, they are good people on there. I am not casting aspersions in any manner on them. The reality is this. Look at the terms of reference and look at the statements by the minister and the Premier as well as the second reading speech, which I did. I got a map of Queensland with the council boundaries. In fact, I drew what I thought they would have had to draw with those terms of reference. I came out very close to what they did. In other words, the instructions they gave the reform commission were to draw the boundaries the way they wanted them. That is quite clear. I do not think anyone can really deny that. It was simply a matter of just joining the dots.

Senator JOYCE —In Victoria, as you know, 11,000 jobs were lost in the council amalgamation process. What have the unions done in Queensland to protect council workers’ jobs?

Mr Hobbs —They have done nothing, honestly, and in fact that is one of the reasons we could not understand it. I will give you some examples. For instance, if you have a town where you have five councils going into one, or eight going into one, there are clearly going to be administrative jobs lost in some of those towns. We could not understand why the unions were not coming out and making a noise, trying to protect those particular jobs. It obviously became clear why later on. It was because of the work choice arrangement they put in place. Obviously it is very important to them—that is, to the union—to try to restrict the amount of work choice deals that were done throughout the councils.

Senator JOYCE —This is my final question. Mr Rudd has proposed a referendum in about 3½ years time—not at this federal election but the next one. What use would that be?

Mr Hobbs —No use at all, really. We are far better off to have it now, when people will have an opportunity to look at the issues that are important to them right now. Having it later on would be of no use at all.

Senator FORSHAW —But you have asked for one in your submission.

Mr Hobbs —That is later on. That would be later on on a different subject.

CHAIR —I call on Senator Murray. Senator Murray, could we maybe keep it to five minutes, then we will have five minutes for Senator Moore. Then we will break for morning tea.

Senator MURRAY —Mr Hobbs, was this Local Government Reform Commission an independent body, appointed as an independent set of individuals to come to a conclusion under specific terms of reference?

Mr Hobbs —Yes, I think they were individual people and I suppose they were independent in a lot of ways. However, with the terms of reference they were given, they really had no choice but to come up with the answer that they did.

Senator MURRAY —Confirm my general impression that the state government’s decision for amalgamations, subsequently enshrined in law, was mostly based on the Local Government Reform Commission’s recommendations—wasn’t it?

Mr Hobbs —Yes, it was.

Senator MURRAY —They have not set many of those aside.

Mr Hobbs —That is correct.

Senator MURRAY —That being so—and you would have heard my earlier questioning of Mr Scott—if the Local Government Reform Commission had made errors, in other words, if they had come to a conclusion which was not warranted on the evidence before them, that should therefore be subject to review and appeal in the normal way you would expect. The evidence we have had is that there is no appeal process. That is correct?

Mr Hobbs —That is correct.

Senator MURRAY —I want to turn now to pages 12 and 13 of your own submission. I have had a look at your summary of the amendments that you put to the Local Government Reform Implementation Bill 2007. I did not see in that list of amendments any amendment instituting an appeal process.

Mr Hobbs —Basically, the reason that was not done was because we were removing the actions of the dysfunctional process, therefore there would not be a need.

Senator MURRAY —I see. You did not have a fallback position or argue that there should be an appeal process?

Mr Hobbs —Yes, there is always an appeal process which would be in the normal legislation, that is part of the act. The act in the past always had an appeal process. In fact, it was subject to judicial review. This government has taken judicial review out of—

Senator MURRAY —So why didn’t you specifically try to amend the act to put it back in?

Mr Hobbs —As I said before, we believe that by taking out the offending parts of the government’s bill the rest of the appeal processes would still have been there.

Senator MURRAY —If I may say so, as one politician to another, I think that is a tactical error of yours.

Mr Hobbs —It could easily have been.

Senator MURRAY —Yes. Turning back to the problem we face, I think the federal parliament has to face issues of principle. I have heard a great deal of politics over these two days so far, but right at the heart of this, to me, is principle. The first principle is that people should be able to express their opinion, and therefore I support this legislation. The second area of principle is they should be able to get review where a decision has been made erroneously. I will ask you the same question I asked Mr Scott: would you support this committee recommending to the government that they try to find ways in which review processes can occur throughout Australia where they are lacking in state or territory legislation in defined circumstances such as these?

Mr Hobbs —I have not examined other issues, but certainly in relation to this local government issue I am sure that will be welcome. I am not sure about other examples.

Senator MURRAY —But you support the principle, don’t you, that people are entitled to have judicial review where a decision has been erroneously made?

Mr Hobbs —Absolutely.

Senator MURRAY —I am not saying made in bad faith; I am just saying where an error has been made.

Mr Hobbs —Yes.

Senator MURRAY —You agree with that?

Mr Hobbs —I do.

Senator MURRAY —Thank you.

Senator MOORE —I am going to ask the same question, Mr Hobbs, in terms of the legislation that is in front of this committee. The legislation in front of this committee is not about local government amalgamations, and I am really concerned that people in the community could feel that this committee is actually debating the issue of local government amalgamations. Can I clarify what you believe this particular piece of legislation is about.

Mr Hobbs —The way I see it, this legislation allows our communities to have a say. It is a matter of what they have a say on. The reason for this, the background to it and everything else, is local government amalgamations, so the two are linked, I believe, whether we like it or not. I understand that this bill is about giving people the right to have a plebiscite, but I think all Queenslanders really believe that it is tied—unfortunately or fortunately—to this legislation.

Senator MOORE —It is incredibly important for the credibility of the process that there are not false expectations in the community about what the terms of reference are for the committee. We are looking at the plebiscite process with the AEC. That has cross-party support and it will be passed. From that process, do you see any further role for federal government in the issue?

Mr Hobbs —I suppose we just have to do one thing at a time at this stage. Local government is a creature of the state and the state government has, I believe, acted very heavy-handed with local government. The Commonwealth have now provided us with another opportunity to have a say. Let us hope that the matter can be resolved here and that we do not have to go to further stages. There are external powers the Commonwealth government have that can be used and have been used in the past. That may be an avenue we need to explore. I think that would be fairly drastic, but it would certainly be one of the issues that I would be exploring if this is not successful.

Senator MOORE —My last question is about your comment in your submission and also your response to a question from Senator Joyce about the role of the unions. We had one of the unions give evidence yesterday. Their position is that—and I would refer you to the Hansard so that you can see their position—their role is to look at the conditions of service and jobs of their members. They see that their interaction with the various bodies to develop a protection package on conditions of service is their key role. Do you have a different opinion on what they should be doing? I am interested. If you say they have done nothing, what do you think the unions should be doing?

Mr Hobbs —In this particular case, the unions have done absolutely nothing. In fact, they were so silent people were wondering where they were. People were calling for them to come out and help them but they would not. Mr Ludwig has come out and told members of the federal parliament to keep quiet and leave Mr Beattie alone because of the deal they have stitched up with the unions in relation to Work Choices. I am not trying to play politics with this; it is purely the way it is. Why the unions would be prepared to burn 10, 20 or 30 members of a community in those various towns where councils have been disbanded and let them wither away and have no jobs in the future was beyond us. That is the reason why I say they did not do anything.

Senator MOORE —As you know from the Local Government Association conference the other day, there is a differing opinion on that. That is a position on their process but I am sure there is debate about what their role would be. I just wanted to get that on the record so we have that in the Hansard so that people can read it and see what is done.

CHAIR —I just have something to say in relation to something Senator Moore said about not giving false hope about the role of this committee and what it can it achieve. Nevertheless, I think it is difficult when examining this legislation not to look at the context that gave rise to the necessity of this legislation. I would just offer that.

Senator MOORE —We have a really strong role with this committee in the Senate about being clear with the community about what our job is. It is always difficult when people do not really understand what we are looking at. I take your point.

Senator FORSHAW —I just want to go back. Mr Hobbs, when I read to you the quote regarding the requirement of a referendum, I was actually reading from your submission. It is correctly titled the Queensland coalition submission to this inquiry.

Mr Hobbs —That is right, yes. I think I said it was to the state government’s inquiry, but it was to this inquiry.

Senator FORSHAW —That is okay. Just to explain a little bit more, had this whole thing been wiped out and councils had gone back to the SSS process, they would have worked through that and then had the referendum at the next election. But they would have worked through a process.

Senator MURRAY —I have one point. When Mr Beattie brings through his amendment to take away that prohibition in the act, it will therefore open up the opportunity for other amendments. Will you put an amendment for an appeal process before the parliament, because that would cut short this issue?

Mr Hobbs —I will certainly take on board what you have said. I stress at the moment that I see no reason why there could not be one. Thank you for the assistance. I will have a look at that.

Senator IAN MACDONALD —Mr Beattie has said he is going to withdraw this part of his legislation. If because of that the Commonwealth decided not to proceed with its bill because it is would be no longer necessary, what confidence would you have that Mr Beattie would then actually do as he said he would? Has he been consistent all the way through his comments on the Queensland bill so far?

Mr Hobbs —I would have absolutely no confidence in the Premier withdrawing that bill. I would have to see it withdrawn, thrown out and screwed up before I believed that he would do it.

Senator IAN MACDONALD —There is a suggestion around that, because Mr Beattie said that he was going to withdraw it, there is no need for the Commonwealth to go ahead and pass this legislation? You do not subscribe to that theory? You think it is essential that the Commonwealth proceeds with its legislation?

Mr Hobbs —I think it is essential that the Commonwealth does proceed with this legislation. And there are so many people who are impacted by it, in particular, an area that we have not really talked about, the Torres Strait. It has had 17 councils wiped out down to one. What is going to happen up there when they have cyclones, immigration issues or sickness breakouts? It is absolutely extraordinary how 50 years of local government can be wiped out without any consultation et cetera.

CHAIR —We will have to end it there. Thank you very much, Mr Hobbs, for your time. We do appreciate it.

Proceedings suspended from 11.06 am to 11.24 am