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Tuesday, 28 November 2000
Page: 19895

Senator SCHACHT (2:14 PM) —My question is addressed to Senator Kemp, the Assistant Treasurer. How does the Assistant Treasurer justify the $2.3 million GST start-up assistance grant which was given to the Tourism Council when that organisation was insolvent? Is he aware that the general manager of the GST Start-Up Assistance Office has stated that the office would not have contracted the council if they had been aware of the facts? Why weren't they aware of the facts? Is it true that the council breached its contract by charging for attendance at its GST seminars? What role did the director of the New South Wales Liberal Party, Mr Scott Morrison, or the former managing director of the council, Liberal MP Mr Bruce Baird, play in securing the $2.3 million grant?

Senator KEMP (Assistant Treasurer) —My first response to Senator Schacht's question is that it is a great pity that he did not bother to attend the Senate estimates, where these matters were raised. One of the reasons we have Senate estimates is that it allows senators to deal with a wide range of questions. Some people work quite hard at Senate estimates—

Honourable senators interjecting

The PRESIDENT —Order! There is too much noise in the chamber. Senators on both sides will cease making so much noise.

Senator KEMP —As I said, it is a pity that Senator Schacht was not at the estimates, because these matters were covered at Senate estimates.

Senator Schacht —Are you going to answer them?

Senator KEMP —I am coming to the answer, but I am just making an obvious point that you loafed in the previous week and you come into this parliament and waste some time when you could have dealt with it at the end of last week.

Let me now turn to the detail of the question asked by Senator Schacht. It refers to the GST Start-Up Assistance Office and the contract that it entered into with the Tourism Council of Australia. I do have some advice on this matter. Probably much of this advice was given in relation to Senate estimates, but I will go through it again. The contract with the Tourism Council of Australia was signed on 11 November, more than a month prior to the so-called technical insolvency that Senator Conroy apparently advised Senate estimates was reached in December 1999. Technical insolvency, I am advised, can sometimes describe a corporation that has an excess of liabilities over assets. This does not mean, however, that the company is technically insolvent. The legal test, I understand, is that the company is unable to pay its debts as they fall due. Let me advise the Senate and Senator Schacht that the TCA delivered the products and services required under the contract, including 65 seminars. My advice is that they were delivered by a major accounting firm and were attended by some 6,638 industry participants. A seminar manual was also provided.

The funding contracts signed by the GST Start-Up Assistance Office with organisations such as the Tourism Council of Australia have been structured to minimise the Commonwealth's risk. For example, only a component of the contract amount is paid on signature, with the remainder—I think this is important for the question that Senator Schacht raised—paid as instalments after an acquittal of previous payments against the delivery of milestones. In addition, the funds shall only be used to carry out the project in accordance with the budget and during the funding period. The organisation may not use or expend the funds for meeting past deficits or expenditures. Senator Schacht will be delighted that the funds are subject to an independent audit. There are some other aspects of that question which I plan to turn to if Senator Schacht would be kind enough to ask me a supplementary question.

Senator SCHACHT —You still had half a minute to go, Minister. You were looking to peg out early, were you?

The PRESIDENT —Senator Schacht, do you have a supplementary question?

Senator SCHACHT —Yes, I do, Madam President. First of all, Minister, I was at another estimates hearing on the day. Of course, you have had four or five days now to get more information to answer this question. Minister, in particular, will you carry out an investigation to ensure that all the money has been properly acquitted? Secondly, will you also investigate why the Tourism Council apparently was permitted to breach its contract by charging tourist businesses $40 each to attend the supposedly free GST seminars?

Senator KEMP (Assistant Treasurer) —In relation to the first part of that question, I have indicated in my earlier remarks that the funds are subject to an independent audit, and that should give you the comfort that you are seeking. If you had listened to my answer, you would have known that I already said that.

The point I want to turn to is the $40. The advice I have received is that, in some cases, industry organisations decided that they needed to cater food and beverages for seminars beyond what the GST Start-Up Assistance Office was prepared to sponsor. Of course, there was a wide range of organisations participating in the TCA coordinated workshops. These included the Restaurant Catering Association, the Hotels, Motels and Accommodation Association and a wide range of others. In the case of the Tourism Council contract, the constituent organisations agreed that a higher level of catering was required and that $40 was the appropriate charge. My advice is that the TCA delivered the products and services required under the contract, including 65 seminars. (Time expired)

Senator Schacht —Forty bucks for a cup of tea!

The PRESIDENT —Senator Schacht, you have had a question and a supplementary question.

Senator Schacht —We now have a rort, Madam President.

The PRESIDENT —There is an appropriate time for you to take the matter further if you wish to do so.