2014-11-25
Madam Speaker took the Chair at 10 am.
Madam SPEAKER: Honourable members, I advise of the presence in the gallery of a Year 10 class from Palmerston Senior College accompanied by Fran Davies, Veronica Hempel, Rebekkah Crawford, Kym Wilton and Brendon Williams. On behalf of honourable members, welcome to Parliament House. I hope you enjoy your time here.
Members: Hear, hear!
Madam SPEAKER: Honourable members, I have received Message No 21 from His Honour the Administrator notifying assent to the bills passed at the October sitting. The message is dated 20 November 2014.
Madam SPEAKER: Honourable members, I have received Message No 22 from His Honour the Administrator recommending to the Legislative Assembly a bill for an act that will create statutory guarantees of certain liabilities of the Motor Accident (Compensation) Commission and authorise amounts to be paid from the Central Holding Authority. The message is dated 24 November 2014.
Madam SPEAKER: Honourable members, I advise that the Clerk has received correspondence from the official secretary to the Administrator containing an instrument signed by His Honour on 11 November 2014 which returns the Darwin Rates Bill, as passed by the Assembly on 20 August 2014, requesting consideration be given to a recommended amendment to the act.
Pursuant to Standing Order 205, the recommended amendment will be circulated to honourable members and printed unless the Assembly otherwise orders.
The Assembly must now fix a time for taking the proposed amendment into consideration in a Committee of the Whole.
Mr GILES (Local Government and Regions): Madam Speaker, I move that, pursuant to Standing Order 205, the recommended amendment to the Darwin Rates Bill being a proposed law returned by His Honour the Administrator, be considered in a Committee of the Whole on Wednesday 26 November at 2 pm.
Ms LAWRIE (Opposition Leader): Madam Speaker, when will that information be provided to members of the opposition, the Independent member and members of the Palmer United Party? Given we will be considering an amendment in a Committee of the Whole tomorrow, could we be provided with that information this morning?
Mr Elferink: Forthwith. If it is not already there it should be shortly.
Motion agreed to.
Madam SPEAKER: Honourable members, you have on your desks some coloured ribbons. The green ribbon is to support mitochondrial disease, which can affect both children and adults. Due to its genetic basis the disease often affects multiple family members and can present itself at any time in life. Recent research shows that one in 200 people may carry this genetic disorder.
The purple ribbons are for Pancreatic Cancer Awareness Month. Pancreatic cancer is a silent and devastating disease. On members’ desks, as well as the ribbon, is a very personal account from a Territory police officer, Mr George Hillen, about his journey fighting this cancer.
Honourable members, you also have a white ribbon. One woman a week dies from an act of domestic violence. Today Northern Territory Police and ambassadors will be attending the White Ribbon Solidarity March at 11.30 am. Wear your white ribbon to pledge your support to never commit, excuse or remain silent about violence against women.
Madam SPEAKER: Honourable members, pursuant to Standing Order 262, I advise I have received correspondence from the Leader of the Opposition regarding changes to committee membership.
Ms LAWRIE (Opposition Leader): Madam Speaker, I move that the following committee membership changes, as nominated on 10 November 2014, be adopted: the members for Nightcliff and Nhulunbuy be discharged and the members for Casuarina and Johnston be appointed to the House Committee; the member for Wanguri be discharged and the member for Nhulunbuy appointed to the Legal and Constitutional Affairs Committee; and the member for Johnston be discharged and the member for Casuarina be appointed to the Standing Orders Committee.
Motion agreed to.
VISITORS
Madam SPEAKER: Honourable members, I would like to welcome in the gallery the Mayor of Litchfield Council, Allan McKay. Welcome to Parliament House. I also acknowledge the electorate officers of Country Liberal members who are having their week’s seminar.
SUSPENSION OF STANDING ORDERS
Introduce Two Bills
Take Two Bills Together
Pass Bills through all Stages
Mr ELFERINK (Leader of Government Business): Madam Speaker, while there is no question before the Chair, I move, pursuant to Standing Order 306, suspension of so much of standing orders which would prevent the Chief Minister from immediately introducing the following bills:
1. Motor Accidents (Compensation) Commission Bill (Serial 108)
and that the bills be considered together as cognate bills with one second reading debate, be considered separately in the Committee of the Whole if required by the Assembly, and that the bills pass through all stages today.
The question raised by the introduction of these bills before the House today will be one of threshold. As a matter of threshold, it is important that members understand that whilst this process is hastened, it is done for a good reason. I understand all members were provided with copies of the bills yesterday, and were offered and given briefings in relation to this matter. Also, if any member in this House determines they do not want TIO sold they do not need to read these bills because they will be voting against them.
The issue before Territorians, and before this government, is one of urgency. Urgency is at the core of the issues surrounding this motion. This motion seeks to deal with a hardship element, and for it to be successful hardships needs to be made out. One of the elements of hardship we on this side of the House are mindful of is to TIO. The sale of TIO, as well as its banking arm, will pass to another owner should this legislation be passed today. Having this debate drawn out over a period of time will damage confidence – as we have already seen from today’s newspaper – in the insurer. If it damages confidence in the insurer, and in the brand of the insurer, it potentially causes hardship not only to the purchaser – which is Allianz and People’s Choice Credit Union – but may well cause damage to customers, which is what we are concerned about.
If insecurity is allowed to build around these brands, people will choose to move away from them. That is a matter of concern because we, as good business partners – unfortunately current business partners of Allianz and People’s Choice by way of contractual arrangements with them – are forced to take a businesslike approach to what we are doing.
I do not want to see the brand damaged. I do not want to see a run on the bank. I do not want to see people suddenly withdrawing their insurance from TIO and going elsewhere because there is an ongoing element of public uncertainty surrounding this debate. I do not think any member of this House would like to see that uncertainty continue.
At the moment, with the sale arrangements and agreements between the Northern Territory government and the purchasers of these two arms of TIO in place, they will continue to use the TIO brand and sell the TIO product.
We also heard today that People’s Choice is offering slightly lower interest rates to many of the people who have loans with TIO. We do not want to jeopardise those people who have loans with TIO enjoying lower interest rates, but I am also mindful of the 259 employees currently guaranteed continued work in their various workplaces.
If TIO was to suffer reputational damage and a contracting environment through ongoing public debate, ongoing committee processes and ongoing discussions, by the time we reached the point of sale we would not have much left to sell and there could be fewer than 259 people employed by the organisation.
I will finish on this simple observation: the business of government should, and generally does, allow for open transparent processes for the passage of legislation through committee processes where committees are warranted. We are doing the business of business. The problem with doing the business of business is that to protect brands you have to do things quickly. This is one of the reasons government owned businesses like TIO, particularly in the financial services area, should not necessarily be in the hands of government. Essentially, financial services, insurance and banking products are not the domain of government but the domain of business, and we are a parliament with a business question placed in front of us.
It is a clunky fit. It means we have to do what we are doing today in passing this motion – should the parliament chose to support it – and getting on with the business of getting us out of business.
The first time I came into this Chamber in 1997 the then Administrator, Neil Conn – a Professor of Economics – addressed this House. I recall one line in his address: ‘Government in business is government in the wrong business’. I urge members to support the suspension of standing orders so we can get on with the business of being a government.
Ms LAWRIE (Opposition Leader): Madam Speaker, the opposition does not support the suspension of standing orders, just as we do not support the sale of TIO. Let us be clear about this. TIO is a public asset; it is owned by Territorians, not the CLP. It is not owned by your government, because you have no mandate from the public to sell TIO.
Yesterday morning we became aware of the Sunday night Cabinet decision to sell TIO. We sought a briefing on the legislation and conditions of sale. The briefing was set for 4 pm, and I thank the people who provided us with that briefing. However, the outstanding matters we raised during the briefing have still not been responded to.
We sought a list of the KPIs that would exist from the MAC Commission to Allianz. This is crucial information that would clearly set down the expectations of government in the administration of the MAC Scheme, and crucial information for Territorians, but we do not have the KPIs.
For us to make a considered decision on establishment of the MAC Scheme and its legislative base we should have the KPIs – they are crucial – but we do not. I requested them yesterday afternoon. I was told the officers would get back to me. We are still waiting for those KPIs and no one has got back to me or my office.
Secondly, within the legislation, transfer orders exist for assets and liabilities. Again, I asked for the list of assets and liabilities within the transfer orders in the sale act. I was told it runs to about 700 pages. I advised the information is vital to Territorians and it is our job to get the information and scrutinise it. I was told advice would be sought on provision and timeliness of that because ultimately it will be public through gazettal. I am waiting for that response, Leader of Government Business.
You ask us to suspend standing orders, debate legislation from its introduction to the second reading debate and passage without information vital to those considerations and we are meant to say that is okay. You have ignored Territorians who own TIO, and who have overwhelmingly said, ‘Do not sell’. We are meant to say it is okay.
We can see the legislation the afternoon before, but you will not provide us with the KPIs. You have not provided us with the transfer orders list of assets and liabilities but we are meant to say it is okay. We will go on trust, shall we? We will trust that you are doing the right thing. We are meant to trust it will all be okay. We do not trust you, and Territorians do not trust you.
The NT News front page screams the fundamental betrayal of Territorians that the CLP is pursuing with the sale of TIO. We do not trust you. You have proven you cannot be trusted. We will not trust you on the KPIs we do not have and cannot see in regard to the MAC Scheme operations. Territorians who are clients of those compensation schemes will be beholden to the administrative decisions of Allianz, and there is a reason it is a very profitable compensation provider.
We do not trust you. We do not trust you on the transfer orders for assets and liabilities. We want to see it in detail, and if it runs to 700 pages then happy days. Hand it over and we will read it, but to rush it through in the same day – we do not have the information we requested yesterday afternoon, and we do not trust you.
You say this is a business-to-business transaction, and that is where you fundamentally do not understand the impact it has on the livelihoods of Territorians. You fundamentally do not understand the role of a public insurer. You fundamentally do not understand that in a region dealing with flood, cyclone and storm surge a public insurer is crucial. You ignore the recommendations of the Pivot North report that clearly articulated that TIO is a successful public insurer model that needs to be rolled out across northern Australia to ensure the existing impediments to business investment are removed. Read the report; it is very clear.
We love our TIO. We will fight every step of this dastardly day to save our TIO. We love the dedicated staff who are local, who pick up the phone and understand the issues raised by the client calling in and who work with local businesses and industry, from insurance brokers to motor vehicle traders to car repair shops – all of the service and supply industry associated with and reliant on the work flowing from TIO. We love the fact TIO is our great trainer of our financial services sector and that the real brains trust trained and delivered in the financial services sector of the Territory come through TIO. We love the fact it is local and we own it. It is in the public’s hands and that means government has, as the representative shareholder, the seat at the table around policy decisions. We love the fact equalisation is embedded within the policy framework of TIO.
We do not agree with that being torn asunder through the current policy direction of the Northern Territory CLP government, so we will debate and challenge this suspension of standing orders. We are not about trashing TIO or the TIO brand. We are strongly in support of TIO. However, it is not just a brand; it is a public insurer crucial to the needs of vulnerable families and businesses sitting in storm surge and flood areas. Those of us who understand what happens after a natural disaster – as a survivor of Cyclone Tracy I get that.
For timeliness of payment, when you have a public-owned insurer versus a private insurer, they are worlds apart. Public insurers pay up in a timely manner and private insurers quibble and squib for a long time. Every day that goes past is one where you cannot rebuild your business or get on with rebuilding your home and your livelihood. That is what you do not get. That is what Territorians love about our TIO and what you are fundamentally ignoring.
You will crunch the numbers and we will stand against you and challenge the numbers. Why? Because we want a couple of CLP members to cross the floor. We want a couple of CLP members to say, ‘I get it. I get that I am elected to represent my people, and people in my electorate have overwhelmingly said don’t sell.’ If you are not here representing your people you do not deserve to be here. Maybe you think, ‘Don’t look, we will wash this through. We will spend our way through our quick cash grab of $275m. We have $150m up front between now and the election in 2016 and we will pork barrel our votes.’
Territorians are not shallow people. You cannot betray Territorians and regain their trust. On this, we do not trust you. The Chief Minister, throughout the debate – the mature conversation he wanted to have with Territorians – kept saying, publicly and in this Chamber, ‘It will remain Territorian’. That is not true, it is being sold. The banking is being sold to an Australian operator, People’s Choice, and the insurance is being sold to a German operator, Allianz. That is not remaining Territorian, so that fundamental commitment is not true. Will you spin? Will you pretend? You are trying to with, ‘Don’t worry, the TIO brand remains and the products will be the same’. In fact, the spin is it will get better and it is all okay because MAC remains Territory owned.
Let up unpack that. There are no legal guarantees, either in legislation or conditions of sale, that TIO will remain TIO even as a brand. There are no legal guarantees the products offered across cyclone, flood and storm surge will remain as they are. There are no legal guarantees it will remain the same and will provide Territorians with the insurance coverage they need because we are subject to flood, storm surge and cyclones.
Thank you for ensuring the jobs of the 250-odd staff at TIO are transferred on existing conditions. I note seven executives are out of that. They are capable, I hope, of negotiating a good outcome for themselves, but thank you for the provisions guaranteeing job security. However, that ends once sale takes effect on 2 January because Allianz and People’s Choice start making decisions about the size of the staff complement. People’s Choice is a great banker already in the Northern Territory and has a good strong complement of staff. Do you think we all exist in some sort of bubble where we do not know the reality, where we do not understand People’s Choice is already well staffed and is getting a banking book they can significantly absorb within their staffing ratio?
I hope, for the banking staff of TIO, this sale does not go through. If it does, I only have hope left for their future time frame of employment. They are great people and are going into a period of uncertainty.
TIO staff have been well informed by TIO management and I thank them for that, but I also note many have broken down and cried. They know, working in the banking or insurance industry, that their jobs are no longer as secure as they were prior to the sale.
I hope every employee has a job ongoing for the same time frame they would have if TIO had not been sold, but it is just a hope. When you have to meet the livelihood of your family on a hope, things get pretty grim.
Be under no illusion, we will fight every step of the way to save TIO from this sale because too much is at stake. You talk about the need to get on with flood mitigation works in Rapid Creek and Katherine. I have yet to hear anything from government which specifies flood mitigation works for the Darwin rural area. There is no detail on Rapid Creek, no detail on Katherine and not a skerrick of detail on the Darwin rural area …
Mr Chandler: Get a briefing.
Ms LAWRIE: I pick up on the interjection from the member for Brennan, ‘Get a briefing’. Are you missing the point that with solid consultation and forums across the Territory on the proposed sale of TIO all that detail would, should and could have been provided but has not? You are making it up as you go along because, quite frankly, a levee in Katherine? Yesterday I was advised that still will not cover some 20-odd households in Katherine regardless of the extent of the levee. What will happen to them? They are considered uninsurable.
What does Darwin area flood mitigation works mean? Anyone who knows the flow of water – you stop it in one area and it flows to another. What are we talking about? Are we talking huge drains carved through areas of the rural area and land acquisition to allow it to go ahead? We have heard about retention ponds for Rapid Creek. Thank you, but that was part of a pre-existing election commitment for works at Rapid Creek; that is not new and you have not done it. What else are you talking about? What will occur in the Rapid Creek corridor? Will we see roads raised? Is there a bridge for McMillians Road in this?
What do you say to the residents of Coconut Grove, Nightcliff, Cullen Bay, Bayview Haven, Ludmilla, Alice Springs, Daly, Jilkminggan and Ngukurr? What do you say to people who are affected but have not rated a mention in anything you have said to date, and certainly are not on the list set aside for flood mitigation?
These are things Territorians deserve to know and the opposition has to understand for debate and passage of legislation on the same day to give effect to our insurance safety net. I will say that again in case you missed the point: it is our insurance safety net. TIO has provided a product where the private market has failed. We are meant to guess or somehow understand your intentions for that. That is not appropriate when dealing with the proposed sale of a public asset.
ABC news reported today that Allianz has no contractual obligation to maintain insurance premiums at current prices, or offer flood insurance to Territory Insurance Office customers. Thank you for that clarification, Chief Minister.
The Chief Minister told ABC radio that the government had negotiated a purchase agreement but there was no contractual time line to stop Allianz from changing the price of premiums when it took ownership on 2 January 2015.
There is no legally binding condition to provide cyclone, flood and storm surge coverage, and the Chief Minister said Allianz would not change premium prices because they purchased the goodwill of the business and changing prices would mean loss of a fantastic business. That fantastic business is our TIO. That is what you want to do today; you want to rush it through without adequate scrutiny.
The Allianz web replied to overnight inquiries regarding insurance for a home with a tin roof in Darwin:
Really, tin roofs? That will hurt a lot of people. How will that go?
Mr Styles: Go to TIO.
Ms LAWRIE: Will that change? I pick up on the interjection from the member for Sanderson, ‘Go to TIO’. Member for Sanderson, do I take that as an indication you will cross the floor and support retaining TIO as our public insurer so people with tin roofs are okay?
Mr Styles: You know what assumptions are.
Madam SPEAKER: Honourable members, I advise of the presence in the gallery of intensive English unit students from Sanderson Middle School, accompanied by Terry Atsas and Elise Smith. On behalf of honourable members, welcome to Parliament House and I hope you enjoy your time here.
Members: Hear, hear!
Ms LAWRIE: The CLP government has completely dismissed out of hand the genuine concern Territorians have based on market failure from private insurers. People are not guessing anymore; the guess work has gone. The Queensland floods and catastrophic cyclones have removed the guess work of how the private market caters for catastrophic events. That is why, Chief Minister and your colleagues, there is such grave and deep-rooted concern about losing our public insurer. It is not about a brand; we love our TIO, but we understand it is our safety net.
On 3 February 2013 the Daily Telegraph reported, ‘Big insurers leave towns high and dry’. It reports that giant insurers Suncorp and Allianz have turned to other regional towns, raising flood insurance premiums by as much as 2000% and refusing outright to do any more business in areas deemed at risk. The article reported that homes in areas such as Ipswich, Gympie and towns in the Lockyer Valley have been added to the insurers’ hit list, even if their homes have never flooded. The article reported Ipswich Mayor Paul Pisasale as saying anyone was fair game, including his own home perched on the highest point in town. He went on to say:
Seriously, Chief Minister, are we meant to say, ‘That’s okay, we trust you that nothing will change even though there are no guarantees in the sale contract or in legislation’. We do not. You have betrayed Territorians. You did not even have the decency to front public meetings and forums across the Territory to put the case to Territorians.
I acknowledge the member for Katherine at least did that. The member for Katherine held a public meeting in Katherine, to his credit. He was told by the people he is elected to represent that TIO should not be sold. He is now putting his name to this and not crossing the floor against the sale of TIO. Why, when it is against the interests of the constituents you are elected to represent, are you pursuing the sale of TIO? Here comes the rub: you have billions of dollars of unfunded election commitments across the Territory. You are desperate to create a slush fund to pork barrel your way to the 2016 Territory election. You are desperate to have a $215m infrastructure fund to pay for a plethora of election commitments you will roll out for beyond 2016. You are desperate because you have been the worst government in the Territory’s history. You are so on the nose the only thing you can do now is get the cash grab and run.
Let us look at that cash grab. It is down to $275m, not the $425m reported sale price; you could not be honest there. The Chief Minister repeatedly advised Territorians one of the benefits of the sale of TIO was the 15% recycling program the federal government has as an additional payment for the sale of public assets, but it does not exist. You are selling an asset before the 15% recycling program exists; federal legislation has not been passed.
I cannot remember the exact comment by Senator Dastyari, but essentially he said you were foolish because the fund does not exist and you should get some advice. You will have to go cap in hand to your mates in Canberra if – and it is a big if given the numbers in the Senate – the 15% recycling incentive passes through federal parliament. We do not know when, but if it passes will you ask the federal government to respond to it retrospectively? Get some advice from Treasury on that, Chief Minister, also Treasurer. The Commonwealth is not big on providing retrospective financial payments to states or territories. You are rushing the sale of TIO, having told Territorians it is okay and we will get an extra 15% from the Commonwealth when the recycling program does not exist. Legislation has not been enacted by the federal parliament; it is simply a policy idea of the Liberals.
Again, it makes a mockery of what you have been telling Territorians. You told us it will remain Territorian; it will not. You told us you would get a good sale price. During debate the values varied between $500m and $700m. There was no broken down, concise information. You did not provide the financial advice to Territorians which you now tell the Chamber you received. When did you receive that advice? You could have held forums to inform people about a decision on their asset, not yours.
So many people have said to me, ‘This bloke was not elected Chief Minister’. So many people have said to me, ‘We elected Terry Mills not this bloke’ …
Mr ELFERINK: A point of order, Madam Speaker! This is a suspension of standing orders debate and the argument should be placed within the hardship domain. She has strayed far and wide, and I believe she realises she can say all this in a subsequent debate.
Madam SPEAKER: Opposition Leader, the motion is about giving notice, cognate bills and passage through all stages. Please restrict your comments to those areas. There has been a bit of leniency, but if you could come back to the three areas of notice, cognate bills and passage through all stages.
Ms LAWRIE: Yes, thank you, Madam Speaker. I had hoped there would be willingness, given there is a rush through on the same day, for the government to be open to hearing what Territorians are saying. I take on that advice. I have about three minutes left so I will be wrapping in a moment.
At no point during the briefing did officials advise the opposition the bills would be cognate. That would have been helpful, useful and pertinent information. Why did the Chief of Staff to the Chief Minister not advise us? It is his role. The KPIs on the MAC Scheme are still outstanding. We want to see them; they are pertinent to debate. The transfer orders and the list of assets and liabilities are pertinent to debate; we want to see them. Fundamentally, you have no mandate to sell, and the sale of TIO will perpetrate a great hardship on Territorians who will be hit with escalating insurance premiums across flood and storm surge zones. Those of us with tin roofs are in strife when you consider the Allianz website. TIO must stay with Territorians. We will fight this sale every step of the way.
Mr WOOD (Nelson): Madam Speaker, I asked a question of the Chief Minister today because the crux of what we will debate later today is not so much if TIO should be sold or not. That is a reasonable thing to discuss and people have different points of view on the matter. However, there needs to be an understanding that TIO, as a public insurance company, is regarded by many as our TIO, the people’s insurance company.
One issue I am concerned about is the speed with which the government has moved to sell TIO, not transfer ownership. I had my first briefing around 1 October, which is when I understood the government was serious. I then had someone fly into my office and ask where the posters were from the campaign years ago stopping the sale of TIO, which the CLP supported. Later I had several businessmen ask, ‘What can we do?’
We did not have much time to develop a strategy to take this debate to the people so we could have a reasoned, or as the Chief Minister calls it, a mature debate. We have not had that mature debate. What really irks me is not only have we treated Territorians with contempt, but we are rushing legislation through not only on urgency, which happens occasionally and is normally debated at the end of the sittings, but we do it all on one day. If you wanted to kick people when they were down, you have certainly done it today.
If the message to the public is the government is arrogant by doing what it is today – it has every right to because it has the numbers – it is showing more arrogance because it is not allowing parliament time to look at the legislation.
I will not support this legislation. I received an e-mail yesterday from the chief of staff saying, ‘The Chief Minister would like to provide an advance copy of legislation pertaining to TIO we will introduce tomorrow into parliament’. That is not adequate time for me to look at two bills which have enormous consequences for many people. To say there was a briefing available – that was not in the e-mail.
As an Independent member I am obliged to look at other legislation and get ready for Question Time. I could have asked for a briefing but I have other work to do. What is happening today is, ‘Here is the legislation’ and the next day, ‘’We will pass it through in one day’ – too bad, oh dear, how sad. My view is, big deal.
I do not think the government understands the message it is sending to people. The message people are sending to government is they have not been fully consulted about whether it is a good or bad thing to sell TIO. If you had convinced people – I have heard your arguments and those from TIO – that what you are doing is good for the Northern Territory you would not be getting this reaction.
This government has not consulted with the people, not taken them along in this discussion and not treated them as mature citizens of the Northern Territory. It has told them what the Territory government will do and what the benefits are. It has not asked people what they think, given them the opportunity to have a two-way conversation or see what happens if another company takes over. Will they pay more in premiums? Will they be able to get insurance at all because they are in a high-risk area? We have not allowed people to ask those questions.
By rushing this today you are aggravating the situation, not smoothing it over. People will hear what parliament has said: this government would not let this sit on the table for one day so it could be discussed; it wants to rush it through today. The member for Port Darwin says if we delay it or take it to committee it will trash it. Nothing could be further from the truth. My house and my vehicle are insured with TIO and have been for as long as I can remember.
Two panel beaters and I organised a meeting with a PowerPoint presentation which members of the CLP did not attend. We used the heading, ‘We are for Territorians – TIO’. We listed everything TIO stood for and promoted it. We did not trash it, and I do not intend to trash it.
To use that as an excuse to stop debating the issue is a furphy. It took some time to get the annual report. We debated this in the last sittings of parliament but the annual report was not available. Chairman Mr Bruce Carter – we used this in the meeting the government did not attend – says in his report:
That has answered my question. The question then is, why the hurry? The chairman of the board says we have a healthy insurance company for years to come. Why did you not take your time and discuss this with the people?
You will jam this legislation through and have not learnt from what the people are saying. We have not been part of this discussion. I said to someone recently, ‘You can’t talk to a full page ad in the NT News’. That is not a discussion; that is just information you are giving people. When they want to ask a question can they discuss it with the government? You can probably send an e-mail to someone.
I sometimes think people forget we represent our electorates. There are times you have to attend meetings and times you will be told you are a dickhead. You have to put up with that; it is part of being in public office. What is desperately missing in the discussion today is the government has not taken this to the people.
I will not be supporting the motion to suspend standing orders. The government is selling itself out here as well. I have heard government members make grand speeches about the way we should run parliament and the importance of doing things properly. That is not happening today. Why do we need important legislation going through in such a hurry? If the government believes it will win friends and influence people, this is a funny way to do it.
Mr GUNNER (Fannie Bay): Madam Speaker, the CLP is asking us to consider the sale of TIO in one day, from the introduction of the bill to debate and passage. This is urgency on steroids and a mad rush. The CLP is trying to escape the outrage of Territorians by doing it in one day. It is an extraordinary move to have the introduction, debate and passage for the sale of TIO in one day.
This side believes there is no case for urgency, but a clear case for consultation. The proper process of parliament is a bill is introduced and sits on the table for at least a month before it is debated and passed. In this instance, we are in the November sittings and the next sittings are in February. That would give Territorians reasonable time to consider something the size and substance of the sale of TIO. Territorians want to see the detail of the deal and the CLP is doing everything it can to hide it. The CLP is hiding in the Chamber today seeking passage of this bill in one day.
There is no case for urgency, but a clear case for consultation. The CLP has not consulted, to date, on the sale of TIO. It has actively done its best to ignore the voice of Territorians. Conservatively, 80% of Territorians say do not sell, and the CLP is doing its best to ignore the voice of Territorians. This includes trying to pass this bill for the sale of TIO in one day. As parliamentarians and local members we believe there is a clear case for consultation with Territorians.
I disagree with the member for Port Darwin, who said we should be doing the business of business. As local members we represent people in our electorates. They have clearly told us they want the sale of TIO debated and they do not support its sale. They want details of the sale. All this is being denied and legislation is being rushed through by the CLP.
Members of parliament should do the business of members of parliament, and local members should do the business of local members. That includes holding proper debate and consultation on something as big as selling TIO. This is a significant, major decision by the government, and it is being rushed through without adequate consultation with Territorians. Territorians are being put second to a private contractual deal by the CLP; it is deliberately putting Territorians second and denying them access to the detail or any debate. Territorians should be allowed to participate in this debate, and they are being ignored by the CLP. The CLP is trying to escape the outrage of Territorians, but they see through you.
There are reasons beyond consultation as to why this should not be debated on urgency, though consultation is a critical one. The federal government said it may offer a 15% incentive to sell public assets. That incentive has not passed the Senate so does not exist. Why should the federal government provide an incentive to the Territory government if it has already sold TIO? We run the real risk, if you sell early on urgency, of missing out on that 15%.
The Chief Minister said, in the lead-up to the sale, he is interested in the 15% from the asset recycling program. I quote:
The money that is not there is an incentive to sell? What need is there for the federal government to provide an incentive to sell something you have already sold? We run a real risk of losing that 15% by you ramming this through parliament today. Not only are you ignoring Territorians, but in your haste to do this deal you risk the 15%.
This is a bad decision by the CLP on many grounds. The CLP is denying Territorians the opportunity to see details of the deal. This should be debated in the February sittings, which would follow the proper, normal processes of parliament. Territorians should not be treated as second rate; they should be part of this discussion. At the moment they are second to private contractual deals the CLP is making.
This is not good government or a good decision. There is no case for urgency; there is a clear case for consultation and the CLP is denying Territorians a voice.
Local members should be doing the work of local members, and CLP members are not doing that today. They are ignoring the people in their electorates to push this through on urgency.
This is urgency on steroids. We do not believe there is a case for urgency but there is one for consultation. All members of this House should take the detail of this bill to people in their electorates, engage in a two-way conversation and have that debate in February next year. The proper, normal process of parliament should apply to something the size and substance of the sale of TIO. There is a clear case for those processes to apply, and for the detail of the sale to be taken to Territorians and for us to have this debate in the February sittings.
The CLP should not be ignoring Territorians and denying them the chance to participate in debate in this Chamber.
Mr McCARTHY (Barkly): Madam Speaker, I do not support the suspension of standing orders. As the opposition and the Independent member for Nelson have made clear, this matter is far too important to be rushed through.
I take a great interest in the member for Port Darwin, the Leader of Government Business, moving a suspension of standing orders over this important matter on the hardship principle. He wants to rush it through, not take questions, have minimal consultation and minimal debate and it be just a case of ‘trust me’. It is the ‘trust me’ principle again. We hear this time and time again. It is now ramped up with the sale of Territorians’ public assets. ‘Trust me’, said the member for Port Darwin, ‘It is the hardship principle and we need to get it through today. We are not comfortable leaving this in the public domain any longer, we want the contract signed off.’ I do not and cannot support that.
I have constituents in the Barkly engaged in extremely important conversations about this matter, and they want details. The government has operated under a veil of secrecy. We have asked many questions about the sale of public assets on behalf of constituents and there has been a complete denial. There has then been a twist and turn in semantics, then the classic clich of, ‘We don’t rule anything out’, while this deal was being conducted behind the scenes. This deal has been ongoing since the crisis in the CLP, the revolving door of ministers, the three consecutive budgets, the financial mismanagement and now the desperate attempt to be cash-strapped for the 2016 election. They are all reasons why this is not rational or sensible.
The opposition presents a clear alternative to get a hold on this major deal of the possible launch of a sale of public assets over the next two years. This is the test case. This is a sensitive case and the government says, ‘Trust us, we will push this through in one day and it will all be good’.
The public sentiment stands on the side of the opposition in this case. The level of conversation in the electorates is enough evidence for government to be honest, open and accountable and say, ‘Yes, we hear it, we understand it and will follow normal procedures in the parliamentary process to gain the confidence of the electorate and convince people of the mature conversation’.
There was a big media launch yesterday and I received a copy of the pack. I saw one copy of the legislation pushed across the Leader of the Opposition’s desk yesterday. I do not know where I could have seen it prior to that, but that was yesterday.
Chief Minister, I was working yesterday, with two committee meetings, a meeting and a briefing with Major Events, a Caucus meeting and then a briefing from the government on TIO. The following day I am in parliament representing about 7000 people in the Barkly electorate having the government tell me, ‘Trust me, it will go through today and will all be okay’. Any arguments about briefings or whatever are a side issue. This was put on the table yesterday and will be rushed through the parliament today. That is disgraceful for any democratic process.
I will quote from the CLP media pack of 24 November 2014:
The reality is the TIO is now – as the legislation is rushed through parliament on urgency – an insurance company owned and operated by an international buyer, a global insurance giant ...
Madam SPEAKER: Honourable members, I welcome into the gallery the remote area students from St John’s College. Welcome to Parliament House, and I hope you enjoy your time here.
Mr McCARTHY: It has become very clear from yesterday’s briefing that our TIO, the Territory’s TIO, will now become an insurance company and finance broker owned and operated by an international buyer – a global insurance giant, Allianz, and People’s Choice will now run the banking arm. Essentially we will have new owners, new decision-makers and new corporate businesses taking control of Northern Territory insurance and banking public assets. There is nothing minor in this. This is a major change, a major sale of the public’s assets, and the government is telling us it is a deal to be done in one day in the Northern Territory Legislative Assembly. Also, the branding on the Territory’s public assets will be sold. Legislation rushed through today will enable contracts to be signed by 2 January 2015, and there is a lot of talk about the TIO brand.
The government has made it very clear it is not interested in what I have to say; it is a difficult job in opposition. This morning in Caucus I wondered how the member for Port Darwin would handle this issue if he was in this chair, as I had the pleasure of studying him for four years. His aggression and determination to completely take out any government trying to bluff its way through with a matter of such significance would be enormous. His rage and pursuit of justice for the good people of the Northern Territory would be immeasurable. However, today he has the quiet sedate approach of, ‘Trust me, it will be all right’.
Let us look at somebody the CLP trusts and somebody I monitor for media comments: Ted Dunstan. I will quote from the Northern Territory News of 24 November 2014:
The comment they, ‘have not been analysed or applied correctly’ is an interesting comment from an interesting commentator. The letter goes on:
Mr Dunstan makes some very strong points. Obviously the member for Port Darwin and Leader of Government Business, the Chief Minister and all those on the other side choose to ignore that comment as they will probably choose to ignore mine.
As the Leader of the Opposition says, it is our responsibility to face this. It is our responsibility to argue the point, to debate with the government and represent Territorians. We have heard the real concern in the electorate and we have a clear alternative which can occur in this House. The processes are there to complete this matter of government business properly in an open and accountable manner, or there is the choice to rush it through on urgency. The decision is with the government. I look forward to continuing the debate because I have more to say about this. I do not support a suspension of standing orders to pass this bill on urgency.
Mr ELFERINK (Leader of Government Business): Madam Speaker, I thank honourable members for their contribution. It was largely predictable, and I understand the repetition of things I once said. However, that does not detract from the observation I made at the outset, which was for us to have made out the case as being argued by members opposite would have placed us in a position of having to be exceedingly critical of the product we were trying to sell. One does not sell a car in a car yard by beating it up with a sledgehammer beforehand.
In part, we have had to fight this fight with one, perhaps two, hands tied behind our back. We, nevertheless, find ourselves in the situation of having to do the business of running a business, even if it is nothing more than selling the business. Nowhere in the business world or business community do you run down your product or allow it to be damaged prior to entering it into the marketplace. It is an important reputational thing you have to protect.
We are talking about a financial services business which is only an asset because it has made a profit in recent times. I pick up on the member for Nelson’s comments, as well as the question during Question Time about the last five years being profitable. That is not surprising considering there have been no substantial disasters. However, if there is a disaster TIO will not be profitable. That is something the taxpayer would have to pick up. I do not want to be responsible for placing the Territory in a position where it has to pay out insurance claims before it rebuilds schools, replaces hospitals and health clinics, and fixes roads.
The exposure the Territory carries will be discussed at some length during the debate to follow. The more immediate problem we have is we owe a duty to the Territory Insurance Office to make sure its reputation is protected, as well as ensuring the Territory taxpayer and government are protected in the same process.
We have thought about this long and hard. This is not something the government does with relish or enjoyment. It is done out of chronic and serious necessity.
Several people have run the argument that this matter needs to be consulted on and how can they possibly deal with a bill they have only just seen. It is clear the members opposite had already determined long before walking into this House they would vote against this bill. What is in front of us is simply a threshold question: do we sell TIO or not? If the answer is no, no matter what is in the bill, no matter how well it is drafted and no matter what is said in the bill, it is of no consequence to a person voting no in this House.
We have made it clear that TIO and the brand need to be protected for the sake of employees, policyholders and the purchasers of the various arms of TIO. For that reason we move to suspend standing orders and find ourselves in the process of doing business. As far as I am concerned, the matter is being dealt with by this House. I look forward to the fulsome debate in relation to passage of the legislation later today.
The Assembly divided.
Ayes 13 Noes 8
Motion agreed to.
The Assembly suspended.
Ms PURICK (Goyder): Mr Deputy Speaker, I present a petition from 746 petitioners praying that the Northern Territory government continues to support the retention of TIO in its current legal status. The petition bears the Clerk’s certificate that it conforms with standing orders. I move that the petition be read.
Motion agreed to; petition read:
Mr WOOD (Nelson): Mr Deputy Speaker, I present a petition from 1069 petitioners praying that the Northern Territory government does not sell any part of TIO. The petition bears the Clerk’s certificate that it conforms with standing orders. I move the petition be read.
Motion agreed to; petition read:
Mr CLERK: Mr Deputy Speaker, pursuant to Standing Order 100A, I inform honourable members that a response to petition No 38 has been received and circulated to honourable members. The text of the response will be placed on the Legislative Assembly website. A copy of the response will be provided to the member who tabled the petition for distribution to the petitioners.
Bills presented and read a first time.
Mr GILES (Treasurer): Mr Deputy Speaker, I move that the Territory Insurance Office (Sale) Bill (Serial 109) and the Motor Accidents (Compensation) Commission Bill (Serial 108) be now read a second time.
Yesterday the government announced the sale of the insurance and banking business of TIO, subject to the passing of legislation. We also announced the outsourcing of the management of the Motor Accidents Compensation Scheme, or MAC Scheme, to the purchaser of the insurance business for a period of 10 years. The total proceeds from the sale are $424m, consisting of $48m for the banking business, $236m for the insurance business, and a $140m special dividend from MAC. The bills we are introducing today will give effect to this important decision.
TIO has a proud and long history. Our decision to sell TIO will allow the TIO brand to survive and continue its long tradition of serving the needs of Territorians.
Insurance and banking markets in the Territory are very different today than those that existed when TIO was established in 1979. TIO competes against 11 other insurance companies in the Territory, while all the major banks plus a number of second tier banks and credit unions operate in the Territory.
All insurers in the Territory provide cyclone insurance and all but one provide flood insurance. Flood insurance is more readily available and simpler since the Commonwealth introduced reforms after the Queensland floods several years ago, including the National Flood Information Database and a standard definition of flood damage. There is more consistency in flood terminology for those taking out and claiming insurance.
When TIO was established, every state in Australia owned an insurance company. Now TIO is the only remaining state or territory insurer. The reason other state governments sold their insurance companies is their insurance markets reached a state of maturity which meant there was no justification for governments and their taxpayers to risk owning an insurance business. This is the position the Territory finds itself in today.
Insurance companies and banks now operate on a national and international basis, accessing global capital and diversifying risk across a wide range of markets. TIO is required to operate in a market constrained to the Northern Territory against competitors which are many times larger and which operate across national and international borders.
For these reasons Australian governments have come to realise insurance companies and banks are best run by the private sector, and the most effective policy approach is ensuring effective regulatory frameworks are in place to protect the interests of consumers. In this regard, private insurance companies and banks in Australia are required to comply with national regulatory regimes administered by the Australian Prudential Regulatory Authority, or APRA, and the Australian Securities and Investments Commission, better known as ASIC. These regulatory institutions are recognised internationally and have served Australian consumers well, as evidenced by the relative stability of Australian banks and insurance companies during the global financial crisis.
However, TIO is not regulated by APRA or ASIC and is facing ever-increasing competition from much larger and diversified private insurance companies and banks. The situation is not sustainable, and as long as TIO remains in government hands, these risks are ultimately borne by Territorians.
It would be irresponsible for the Territory government to allow the situation to continue. The most appropriate response is to transfer these risks to the private sector where they can be most effectively managed, and to the national regulatory framework.
While removing a substantial risk for Territory taxpayers, the sale of TIO will also provide an important source of funds to invest in new infrastructure to support the ongoing growth and development of the Territory. As such, the sale of TIO will deliver benefits for future generations of Territorians.
The government will be establishing a Northern Territory infrastructure development fund with approximately $215m of TIO proceeds going into the fund immediately. The fund will be administered by a statutory board which will assess projects and make recommendations based on agreed economic criteria.
The remainder of the funds released by the sale of TIO will be used for immediate infrastructure priorities, including investment in flood mitigation initiatives. As I announced last week, the government will be providing $50m for this purpose and will establish advisory committees to inform the development of mitigation strategies for regions of the Territory prone to flooding. This is a much more sustainable approach to ensuring the ongoing affordability and availability of flood cover in the Territory than owning an insurance company. No Territory government has undertaken this level of commitment to ensure flood immunity in any part of the Territory.
The successful purchaser of the TIO insurance business is Allianz Australia. Allianz is committed to keeping and further promoting the TIO brand by using TIO as its premium insurance offering, featuring mandatory flood, storm and cyclone cover.
The head office of TIO will remain in Darwin and the existing branch structure will be maintained. Furthermore, all TIO staff will be offered ongoing employment. All existing community sponsorship initiatives will continue, and TIO will also be providing an additional $200 000 per annum towards a TIO Territory Day celebration for at least the next two years.
Allianz is the largest general insurer in the world and, therefore, TIO now has access to global markets to enable it to grow and compete while remaining a local Territorian institution.
People’s Choice Credit Union will take over the banking business from TIO and will continue to provide all home, personal and commercial loans, credit cards and retail deposit accounts. All TIO banking staff will also be offered employment. People’s Choice will continue to provide substantial community sponsorship for the Territory and will increase that sponsorship by around $50 000 per annum. They have also committed to introduce new banking services at Coolalinga within two years, working with Allianz to ensure the ongoing availability of services in Katherine, and will sponsor three young Territorians in traineeships each year.
With regard to the MAC Scheme, the government has decided to retain ownership of the scheme but outsource management to Allianz for 10 years. If we were simply after a cash grab we would have sold the scheme as well as it has greater value than the other components of the TIO business. However, MAC will continue to remain in the Territory government’s hands.
Part of the legislation I introduce today will establish a MAC commission which will oversee management of the scheme and ensure it is being managed in the best interest of Territorians. The establishment of the commission results in improved governance and management arrangements with the agreement, including a range of performance measures that need to be met.
As part of the sale process, $140m in surplus funds will be withdrawn from the MAC Scheme and used for future infrastructure projects. The special dividend will be paid into the Northern Territory infrastructure development fund. Excessive funds have accumulated in the MAC scheme over recent years on the back of strong investment returns and prudent claims management by TIO. The accumulated funds are substantially higher than necessary to maintain a prudent level of reserves against potential compensation claims, and significantly greater than what is required by the minimum level established for the scheme by regulatory standards.
As at June 2013 the MAC Scheme had the highest capital margin compared to other similar state motor compensation schemes. Even after the withdrawal of these funds the MAC Scheme remains well capitalised compared to motor accidents compensation schemes in other states. Having this level of excess funds locked up in the MAC Scheme presents an inefficient use of capital and it is appropriate to use these funds to invest in infrastructure that can deliver long-term economic benefits for the Territory.
Moving to the legislation, the first bill I am introducing today is the Territory Insurance Office (Sale) Bill. This bill facilitates the sale of the insurance and banking business and outsourcing of the MAC Scheme management. The sale legislation is necessary to facilitate the transfer of the businesses to private sector purchasers. As such, the sale has to be structured as a sale of the assets and liabilities of each business. The actual transfer of the assets and liabilities will be done by transfer order issued by the minister under the act.
Clause 8 of the legislation provides that the minister may sell the insurance business and that the sale will be by an agreement to sell the assets and liabilities of that business. Clause 8 also provides that the sale may involve the minister making a transfer order to facilitate the sale.
Clause 9 of the legislation provides that the minister can, in conjunction with the insurance sale agreement, enter into a contract with the purchaser of the insurance business for it to manage part, or all, of the MAC Scheme. The Northern Territory government is not selling the MAC Scheme. The transaction we announced yesterday is for the management of the scheme for 10 years. This contract will allow the purchaser to use its extensive experience to better manage claims under the scheme. The agreement contains extensive performance requirements to ensure claims are handled in a way we expect for a government owned scheme.
Clause 10 provides for the sale of the banking business in a similar way to the insurance business. Clause 11 deals with how the proceeds of the sale will be used. It is the government’s intention that $215m will be held in the Northern Territory infrastructure development fund to be used solely to fund or support future infrastructure projects in the Territory. The balance of the proceeds will be used for more immediate priorities, including flood mitigation, and will be held in the Central Holding Authority until appropriated to an agency.
Clause 12 provides that the minister may do anything necessary or convenient to exercise a power under the act, including anything to facilitate the sales. This will include any and all of the preparatory actions undertaken by the minister and TIO before the commencement of this clause. The minister is also empowered to issue a direction to TIO to do anything necessary to facilitate the sale.
Part 3 of the bill contains provisions relating to making transfer orders to transfer the banking and insurance business to the private purchasers. Under the sale agreements entered into the transfer orders will take effect when the transactions are completed.
There are a number of protections in the bill to ensure the transfers are effective and also to enable any errors to be corrected. Part 4 of the bill deals with the effect of things done under the act. These provisions are designed to provide certain protections from unintended consequences. Part 5 of the bill deals with a range of administrative matters relating to the sales.
Importantly, clause 33 provides for the removal of the statutory guarantees of insurance policies and banking deposits. One of the key sources of risk to the Territory government from its ownership of TIO is that it explicitly guarantees all insurance contracts and banking deposits. The sale of these businesses means these guarantees will be extinguished.
Parts 6 and 7 of the bill deal with the consequential amendments and temporary provisions. It is anticipated the insurance sale and the banking sale will take place on the same date. However, if they do not the order of amendment to provisions of other acts will be affected. For instance, if the insurance sale precedes the banking sale, TIO will have to continue for some time as a banking only business. Part 7 of the bill deals with this eventuality, should it arise.
The Motor Accidents (Compensation) Commission Bill being introduced today will create a new Motor Accidents (Compensation) Commission, or MAC Commission, to own the MAC Scheme on behalf of the Territory. Establishment of the MAC Commission is an important milestone for the Territory. For the first time the Northern Territory will have a government owned entity solely focused on administering the MAC Scheme for the benefit of Territorians. This reform will enable the scheme to better meet the needs of road users in the Territory. The commission will outsource management of claims and management of the scheme’s funds to the purchaser of the insurance business for a period of 10 years. This 10-year management agreement is based on a rigorous set of performance criteria to ensure management of the scheme is in the best interests of scheme participants. This is the first time management of the scheme has been subject to formal performance assessed by government.
The commission we will establish under this legislation will be responsible for ensuring private sector managers do the job. A significant proportion of fees paid under the contract will be at risk. This means the managers will only get paid if they do their job, and they will only get paid the maximum if they do an exceptional job.
Turning to the bill, Part 1 deals with the definitional issues. Part 2 establishes the MAC Commission and sets out its powers and functions. The commission will also be subject to the direction of the minister, with any such directions to be disclosed by the commission in its annual report. There is provision in the bill to have both a commissioner and associate commissioners. At this stage it is the intention of government that there be a single commissioner. All support staff and facilities will be provided by government.
Part 3 of the bill deals with the Motor Accidents (Compensation) Fund. It provides for the receipt of money into the fund in the same way as currently, namely through registration payments and its own earnings. Payments from the fund will be on the same basis as currently exists.
Clause 20 is a new provision providing for the payment of surplus monies from the fund to the Territory. Where such a payment is made a copy of the direction to the commissioner to make the payment must be tabled in the Assembly.
Part 4 of the bill deals with the financial management of the commission, including its accounting and reporting requirements, the prudential supervision of the scheme and the continuation of the government guarantee for claimants. These provisions are a continuation of those already in existence.
Part 5 of the bill deals with the confidentiality of information and provides for an offence for unauthorised disclosure of information. Part 6 deals with the transitional matters required to transfer the operation of the MAC Scheme from TIO to the new MAC Commission.
In conclusion, my government has not taken this decision lightly, but it has been taken in the best interests of all Territorians. We are allowing TIO to continue to grow and support Territorians without being hampered by government ownership. The sale has also realised a pool of funds that can be used for much-needed infrastructure across the Territory, consistent with our developing the north agenda.
I commend these bills to honourable members, and table the explanatory statements to accompany the bills.
Mr McCARTHY (Barkly): Madam Speaker, there it is: the number crunch. We are into it now and it is very interesting. The second reading speech took about 10 or 12 minutes, and that sums it up. I can only wonder at the level of dysfunction in the CLP Cabinet room. I can only wonder that you are being led blindly by this Chief Minister right over the cliff.
We can debate this on various levels so let us look at Cabinet processes, where each Cabinet minister has blindly signed up to this deal. Why? Let us hear it during debate ...
Mr Elferink: No.
Mr McCARTHY: I pick up on the interjection. The member for Port Darwin will lead the CLP Cabinet and each person, one after another, will put their position to the people of the Northern Territory that TIO, since 1979, has been a valued asset, a high-performing company which has made $305m in the last five years and $60m this year, and the Chief Minister has put his hand in the till and taken $10m. However, it is suddenly a major liability. It has not been a liability for the last five years. It is a high-performing company employing many good Territorians. Now the Chief Minister tells you to sign up and you have. The Territory will remember you and Territorians have long memories.
Today in Question Time we had a taste: 4300 Territorians signed our petition, with more signing as we speak. That is in two weeks; that is 300 people a day. That is politics. We polled different CLP seats and 80% were opposed to the sale. The Northern Territory News has been running this debate. Its poll suggests 90% of Territorians are opposed to the sale. Mix 104.9 registered 80% opposed to this sale. Yet the Cabinet room of the CLP has decided, ‘This is good for us. This is a bitter pill, just swallow it. Trust us and get on with it.’ The sale will go through but the question is, what do we have to lose? That is the influence in the CLP Cabinet room led by the Chief Minister because he has the sell strategy and has answered the question, what do we have to lose? It is a shallow answer.
You have your seat to lose, you have government to lose, then, of course, you have TIO to lose. You will lose it. Then we hear the spin about creation of a massive infrastructure fund. We shall do a number crunch on that, shall we? Shall we deconstruct those numbers? Was it done in the Cabinet room? You must have all agreed to the spin as well. ‘No, we will say this and that, it will come out like this and everybody will believe us.’ Nobody is buying your story.
You want to continue this today on urgency. You want to push it through because, as the Leader of Government Business said, you cannot risk damage to the brand. I have heard some things in my time in this parliament, but today will be on a pedestal for many years to come. We will see the outcome of your very shallow decisions. You will reap what you sow. That will live on in the CLP.
We can go back to a litany of broken election promises. The heat now, in the national arena, is the media now aggregating Prime Minister Abbott’s broken promises. You can see this is gaining momentum.
Two years down the track, two years into your dysfunctional government, two years of your revolving ministerial door, two years of your revolving Treasurers – and we are assuming the Chief Minister will retain 13 portfolios, including Treasury, for the rest of the term – we have also seen the knifing of a Chief Minister, the infighting and the chaos. The national heat is now coming to fruition. Broken promises from 2012 are becoming the rhetoric of the media and the rsum of the CLP.
‘We need cash. This is the plan.’ You will lose if you do not pork barrel the electorate. It is the cheapest shot, the last shot in the locker. That is what I assume because you guys do not have anything else to say. However, we will hear each Cabinet minister today and the member for Port Darwin will lead the charge. We will hear each one explain first to their constituency, second to Northern Territorians, and you may as well add your families as well because this is big business. The member for Port Darwin calls it business; this is huge business.
My theory, being left in the dark and having to endure this rush through on urgency – first take of the legislation yesterday where two copies were pushed across the table, one of each bill – I am left to make these assumptions. I am interested in your replies to my assumptions, each and every one of you.
We will go to the big idea from our reactionary Chief Minister, who is now in the second half of the game. The whistle has blown, you are on the field, you have election promises to fund and you will do it with the sale of public assets. I suggest, because you do not inform this House to the contrary, more public assets will be sold. There is more pork barrelling planned, and you believe you will get this across the line. From the lunchtime car rally alone you can see there is a lot of sentiment out there. It was not only the cars, it was on the streets, and the radio and newspaper polls and the opposition petitions show this is a hot issue.
You can play it as cool as you like, but the Territory electorate has a long memory. We have the chaos of the CLP with a caption of ‘mature conversation’. Of course you can have a mature conversation when you garnish $33m from the 2013-14 budget. An amount of $33m went to the Chief Minister’s department to run that glossy advertising campaign. That equates to a mature conversation.
I see the member for Stuart’s ads have dropped off the television lately. That is when I get a chance to watch the television, because mostly I am in the bush having conversations about you guys. Those advertisements tell people in the bush how great it is under the CLP. I talk to people and they are not so enthusiastic. I remind them how much television ads cost, about prime time television and $33m being rolled into the spin machine. That is a lot of money where I come from.
You can say there is a mature conversation carried out with one-way traffic, with $33m worth of high-end advertising telling a one-way story to Territorians who are now questioning the other side of the story. As you know, common sense and good manners dictate there are always two sides to the story, and I spend a lot of time doing many miles to make sure the other side of the story is told in all electorates, not just in the Barkly.
We have the Chief Minister and a $33m mature conversation. We have a one-way dictatorial spray about what is good for you. We have a young Chief Minister who has quite recently joined us in the Northern Territory now telling old Territorians what is good for them and a Cabinet following blindly. We have a government that has signed up to a deal because it can see no alternative. It has backed itself into a corner and is trying to buy its way out. It is about a cash grab and, Chief Minister, you provide that rhetoric. When you read between the lines it is about a cash grab.
You talk about infrastructure funds and having lots of money to do interesting things, but I will remember the list published when this debate started – a swimming pool. The high-performing nation building asset to be achieved from the sale of TIO is a swimming pool. From the embarrassment that statement caused it became an Olympic-size swimming pool, and I challenged that. What economic modelling? Who have you spoken to about this? Where is the negotiation? Who will take ownership of the asset? Who will provide the on costs to manage an Olympic-size swimming pool? In which electorate will an Olympic-size swimming pool capable of holding national competitions be constructed? We are not quite sure. Then there was a pattern of reaction and reaction. Watching it in the media and listening to debate in the House, it became a ‘make it up as you go along’ story.
Finally we get the insurance industry speak around individual risk management. That is the last of the mature conversation: the one-way conversation spun with $33m backing it. The conversation has gone to the heart of the global insurance industry but it took a while to get there. It went through various cheap stages, to promises, to mega-infrastructure projects that had to be – even as late as this morning on ABC radio – curtailed and described as perhaps being pie in the sky.
You are flip-flopping back and forward. Make it up as you go along, reactionary politics, and I do not believe the CLP Cabinet is following this chaos blindly, this cheap shot at pork barrelling an election in 2016, because people know better.
Let us look at a pork-barrel exercise in the seat of Arafura, where 1% could swing the difference in 2016. Will the Chief Minister’s cash grab deliver that 1%, or will the 1% go against the member for Arafura? That question can be answered today. You can tell us what spending you will do for Arafura for 2016.
Let us look at Sanderson at 3.1%. The deal today could deliver 3.1% for the member for Sanderson or it could work against him. He will find out. He is a Cabinet minister following the Chief Minister; he has signed up to this deal and Territorians will judge him accordingly. However, 3.1% is an interesting margin.
In Blain it is 3.2%. I am not sure what Blain has been promised yet other than a swimming pool, but 3.2% could turf him out or keep him in. It is a gamble; he is betting on the Chief Minister’s horse. The Chief Minister owns a race horse. He is a gambling man, knows how to handle the odds and has convinced the member for Blain it is a good bet. ‘Back me and we will be together in 2016’. It certainly is a gamble, member for Blain.
Member for Stuart, you are running on 3.4% odds. It is 4.6% for the member for Daly, but the member for Fong Lim is on the knife’s edge at 7.3%, with radio polls running at 80%, television and newspaper coverage, and people are talking. You are being exposed one step at a time and Territorians will judge. They will get their chance, and I cannot believe you will let this legislation pass. It is a disgrace.
You and your government, Chief Minister, will play this bet. It is a train leaving the station and you are all on board, but we are not sure if it is a train ride or train wreck. The Minister for Infrastructure is an important player; he is the Casey Jones of the train because he will decide where the infrastructure goes. He is at the Cabinet table and will tell you what you can and cannot have. He will do the planning around this infrastructure.
Let us deconstruct a few numbers because I get a little tired of the Chief Minister’s spin. I give him credit; he is the master of spin. In opposition or government he does it so well. It is crafted and designed to convince, but when you are dealing with big issues like this people take notice. It does not just roll off the tongue and go through to the keeper. People have been asking the opposition lots of questions. The first answer is: there was a $424m sale price for the Territory’s public asset but, in reality, $140m should be subtracted because that $140m was surplus capital from the MAC Scheme and a glossy $33m-backed spin document described it as the sale price – rubbish! Tell Territorians the truth. We will subtract $140m straight up.
This is not easy business, as the member for Port Darwin says, as it cost $9m to conduct it. That is a nice price tag. I could do a lot in Ali Curung with $9m. Nine million dollars comes off, so we get to a figure of $275m. I asked a question about that, because in the last few hours people have asked me if it is good price. I said I would ask the Chief Minister for a comment, and he said, ‘Well, maybe, sort of, well’, and did not really provide Territorians with an answer. I was seeking leadership, asking the top man, and I did not get an answer to whether $275m was a good figure. I compared it to what TIO made in the last five years. It made $305m in profit and they sold it for $275m. I do not know where these guys went to school, but Territorians are asking if it is a good deal. I do not know, but the Chief Minister or the string of Cabinet ministers who signed up to the deal can tell us.
The discussion reaches the new infrastructure in relation to the global insurance industry – the individual risk management infrastructure. The Chief Minister spoke about flood mitigation, but that is as good as it gets. A budget figure of $50m has been appropriated with $25m for the Rapid Creek area and $25m for Katherine – big figures, big statement.
Let us deal with Katherine. We can deduct $7.6m from the $25m to relocate the ambulance station. We have seen a fairly significant reduction in flood mitigation money for Katherine, but where is the modelling? Where is the substance to these statements? How we will provide flood mitigation for Katherine? How much will it cost? The member for Katherine is going home with a cheque in his back pocket. He will have $7.6m taken out to relocate the ambulance station – a good project – but then he has to deliver.
For a number of years I tried to deliver a heavy vehicle bypass, and Katherine residents were extremely interested in consulting on that. Finally we developed four different models. It is good to see the minister has picked one of those models but has cut the price by half. It went from $10m to $5m, and it is very much a modified plan for heavy vehicle diversion through Bicentennial Drive. We are not sure where the other $5m went. I congratulate the minister for picking up the work the Department of Transport did. We were very busy working with Katherine on that small project.
The Chief Minister will deliver flood mitigation for Katherine. In the 1970s I lived in a town surrounded by a levee bank. It was on the junction of two rivers, and I came to understand river hydrology, particularly when the levee banks were under threat. The infrastructure was phenomenal, but it was built in the 1960s. I will not hazard a guess at how much that infrastructure in northwest New South Wales would cost today. I cannot guess how much it will cost for Katherine. It is big dollars, a big project with no real modelling or understanding, just throwaway lines. It is a disgrace when we are talking about selling the Territory’s own insurance company. We are talking about a major change of ownership and public assets being controlled by a global giant.
We have heard how this can change and affect middle-income earners, low-income earners and people like me, who have a house with a tin roof and live in the bush.
The Local Government Association of the Northern Territory advised the opposition that around $900m in assets is insured across the Northern Territory, yet this mature conversation has provided no empirical evidence about any changes. They are not sure what will happen and are a little confused. The opposition has outlined other important aspects of our Territory community being in the dark and unsure.
It will be interesting to watch the Katherine flood mitigation progress. If no flood mitigation is provided by government you can bet your bottom dollar the insurer – now a global private company with no conditions to preserve existing policies – will zone in on this new way of doing business across the world. We will have a bulldozer on one side of the fence, a global insurer on the other side, and the Chief Minister is not able to tell Territorians what will meet in the middle. Is this urgent? We are told this is really urgent ...
Mr Elferink: It is.
Mr McCARTHY: I am reminded it is so urgent, yet there are many questions. This is just one aspect of the debate. Hundreds of thousands of Territorians have questions. There has been no mature conversation; it has been one-way traffic.
One of the big complaints I heard was that no CLP members attended the forum held at Charles Darwin University. That is a local member’s job. Where were the Darwin and Palmerston members? Obviously they were told not to attend. They are told what they need to know and patted on the head with a, ‘Trust me’. They should be sitting on this side because that is the way the opposition is treated. I expect CLP backbenchers to be asking questions and getting answers. Hopefully we will hear about that today because they will share that with us.
The real question is: is it a train ride or a train wreck? I always provide a clear alternative and you will hear many. The opposition discussed many alternatives. We believe you guys should stop this train today. It can be stopped in various ways, but it should be stopped. We believe there is a need for real and meaningful consultation relating to the normal passage of legislation. That is not a lot to ask. That assumes the traditions of this parliament, of self-government and the honesty and integrity of the government executive. Let us hear from each Cabinet minister why that is not possible, and from those on the backbench. Let us hear why the process of democracy in the Northern Territory has to be changed today.
Refer this deal to the Public Accounts Committee. That is a simple and pragmatic suggestion, and in the past I have heard strident opposition to that from the government and cannot understand why. Having spent time as Chair of the Public Accounts Committee, with the dynamic member for Port Darwin on that committee, I saw the enthusiasm and shared strength in solidarity that we were all working together to examine important financial issues. What is more important than selling public assets? What is more important than the sale of TIO and the sale of the banking arm to a national credit union? I see contradictions emerging here.
Member for Port Darwin, I learnt from you, took it on board, and you are completely contradicting it. It is one rule for one and one rule for another, when it suits you or when it does not. In that style of governance you lose credibility; you guys are losing credibility with the Territory public at a rate of knots.
What about the senate inquiry. The Leader of the Opposition has taken a lot of time and effort to give another opportunity to Territorians, and there is willingness from Australian Senate representatives to conduct an inquiry to deliver answers. Would Territorians support that? You bet they would. Does the opposition support that? Yes, we do. Will the Independent and members of the Palmer United Party? I am sure they will. Will the government? That is up to you, but it is a credible offering to have this examined by a Senate select committee. Territorians would value having their questions addressed and this would be open, accountable and transparent.
This relates to an insurance safety net for Territorians. This is an important aspect of their lives, their families and their assets. Today it will go through on urgency, and today will decide the fate of what I suggest is a string of public asset sales.
I listened to the Deputy Chief Minister being interviewed on 7.30. Alas, 7.30 in the Northern Territory will be scrapped under the cuts by the Liberal government, but let us cut through the semantics: they are not cuts they are efficiency dividends. It is about making ABC staff more efficient. I did some research because I had to front the constituency of Tennant Creek the following morning and was sure they would have questions on this.
The Deputy Chief Minister, more or less, assured the audience nothing would change for the next three years. I took that to the street the next day and said, ‘That is one glimmer of hope’, then I found out at a briefing that is not true. I will give the guy credit; he either did not know, made a mistake or was telling the yarn he heard in Cabinet. Was he trotting out one-liners from Cabinet, ‘Trust me Deputy Chief Minister, you’ll be right, it’s all okay’, because I did not hear that in the briefing. I heard the opposite. There are no guarantees attached to preserving conditions for Territorians. You hear one thing, you hear another, you try to cut through to the middle and give people the truth. I am now in parliament watching this massive Territory-changing legislation move through at a rate of knots.
I will not take up too much more time because I know government members will use their time to explain this, and I will be scribing at a rate of knots to take the story back to my constituents. At the end of the day the question remains: what do we have to lose?
Mrs LAMBLEY (Health): Madam Speaker, I support the sale of the Territory Insurance Office and support the legislation put forward by the Chief Minister for the sale to proceed.
Listening to the member for Barkly, it is no surprise Labor lost the 2012 election. He clearly illustrated, to each and every one of us in the Northern Territory, a lack of understanding of what it is to run a business. The decision to sell TIO is a business decision we have made. Some would argue reasonably quickly, but it is a sensible decision which has taken great courage, and one no government in the last 35 years was able, or willing, to make.
In 2014 the Territory Insurance Office has been in business for 35 years. In anyone’s estimation, a business that survives and flourishes 35 years has had a good innings. That in itself does not mean it should end, but 35 years is probably longer than 90% of businesses survive in the Northern Territory.
The fictitious story from the member for Barkly – his understanding of why we are selling TIO, the motivation behind it and trying to guess what we are thinking – was pathetic to say the least. He demonstrated, by sprouting some bizarre figures, that he has no understanding of business. He said TIO made a profit of $350m last year …
Mr McCarthy: $305m over five years.
Mrs LAMBLEY: That is incorrect, member for Barkly. I am glad you corrected your own record. The figures are $255m over the last five years, with $181m attributed to the MAC Scheme and $74m attributed to TIO, before tax.
For the record, let us get the figures right. You might have the right figures had you availed yourself of a briefing. No, opposition members think they are beyond a briefing. They think they know what is happening with TIO, and the member for Barkly has proved that is not the case. He does not get it and part of the reason is because he did not get a briefing.
I will not speak for 30 minutes this afternoon; I will keep my comments concise. This is a good business decision. I do not remember the former Labor government, in 11 years, making more than one good business decision. The only good business decision I remember was knuckling down and doing that wonderful deal with INPEX. They can forever hold that high when they leave politics and are forced to look for another job because that is the only one that stands out. They sat on their hands for 11 years in so many ways.
Within the next 12 months we should count all the decisions Labor did not make in 11 years. In two years we have made 10 times the number of big decisions Labor did, even more. Why? Because we are not here to take up room; we are not here to stay in government forever and a day. We are here to make good, responsible fiscally-proven decisions that are good for the Northern Territory.
The opposition remained in power because it was all about political opportunism, expediency and members retaining their seats. I almost fell off my chair earlier when the member for Barkly said, effectively, the only reason we should not support TIO is because we might lose our seat or lose government. That spoke volumes about the motivations of the Labor opposition. That is all you want to do.
Let us put this into perspective. At some point in government you need to make a difficult, perhaps unpopular, decision, but it is the right one. What you see today is a united team. Not one person in the ranks has any misgivings about the decision we made to sell TIO.
All the speculation around the Chief Minister leading us astray – do you think we are that stupid or is that a question I should be asking the Labor opposition? We are not about procrastination. We are not about sitting on our hands and waiting for the next government to make the hard decisions. It is not a money grab either.
We have come to government and pulled in the fiscal situation in record time, despite the sale of TIO. All funds from TIO will essentially go into our Northern Territory infrastructure development fund, apart from funds allocated for flood mitigation. That brings me to my next point.
Flood mitigation: prevention is better than cure. A few years ago the former federal Labor government put money on the table for flood mitigation throughout Australia. The former Labor government of the Northern Territory could not be bothered applying for that funding. It could not be bothered turning its mind to the need for flood mitigation throughout the Northern Territory. When I heard the member for Barkly say, ‘Where is the modelling? Where is the business case and where is the empirical evidence?’ You did not look for it at the time. You had 11 years to flood mitigate Katherine and Rapid Creek, your own electorates. You had ample time to progress flood prevention throughout the Northern Territory and did not do it. What flood mitigation did you create in 11 years, member for Barkly?
Mr McCarthy: I was doing it in the rural area. I can tell you a good story about flood mitigation.
Mrs LAMBLEY: You did not do anything, but you can sit across the Chamber and criticise us for talking about minimising the impact of flooding in Katherine, Rapid Creek, parts of the rural area and part of my electorate in Alice Springs, Araluen. A consideration in the future could be looking at improving flood mitigation in flood-affected areas of Araluen.
These are responsible decisions. These efforts can change people’s lives. The sale of TIO means we can change more people’s lives by spending the proceeds on infrastructure projects such as flood mitigation.
If this risky business remained the responsibility of the Northern Territory we could not embrace the opportunity, as we are doing now, to spend the proceeds on other infrastructure projects. It is important to look at the opportunities the sale of TIO will bring to all Territorians.
We are not about populist government; we are not about trying to bend over backwards to keep the vote. We have proven that time and time again. When we first came to government we made some difficult decisions to restore efficiency to the Power and Water Corporation. All Labor could do was jeer at us and make out we were evil creatures who were leading the Northern Territory into rack and ruin.
We have made some tough decisions and we stand by them because responsible governments make these decisions. We had the courage and leadership skills and will prove to be a strong government in the eyes of the Northern Territory.
Ms LAWRIE (Opposition Leader): Madam Speaker, there was a lot of table thumping from the member for Araluen. I am sure her constituents, whilst they will not get the table thumping, will be interested in her indefensible defence of the sale of TIO the government is today rushing through on its numbers.
The member for Araluen has not secured any commitment from her government to take care of flood mitigation works for the constituents in Araluen she says are affected by flood. You have to ask why not, given the extent of the $150m still not allocated as a result of the rushed sale of TIO. If you have no chance of getting a bite out of that $150m, you have to question how you have managed to fail the constituents of Araluen to such a great extent.
I daresay other members of the Chamber are probably in that same boat. Not to identify your failure, member for Araluen, but the member for Greatorex has significant flooding in his electorate in Alice Springs. The member in this Chamber whose constituents are most affected by floods is the member for Daly. I look forward to hearing his contribution to debate. One of the concerns we have is the worsening effects on Daly in any future mitigation works in Katherine.
TIO has provided Territorians with decades of insurance they need to live and invest here, given our unique circumstances. I heard the Chief Minister hide behind what has occurred elsewhere in the nation. Perhaps he still has an eye on federal parliament so when he is thrown out of office in the Territory he can put his hand up for pre-selection and have another tilt at Lingiari, which, of course, was quite disastrous for him last time. The hide-behind-the-national-skirts routine of your contribution was quite shameful because we are here to represent the constituents of the Northern Territory, just as TIO has done well for decades.
TIO meets our unique insurance needs. It provides no-loophole cyclone, flood and storm surge cover. We know selling TIO risks skyrocketing insurance premiums and less coverage. Listening carefully to the public comments made by the Allianz representative yesterday, he could provide no surety of when insurance premiums would increase. His comments were three to six months. At this stage, Territorians do not know to what extent those insurance premiums will increase. The Chief Minister has referred to increases of some 200%.
Chief Minister, did you bother to consult directly with affected constituents? Surely you have had some analysis done? Surely you know exactly where and who will be affected? Have you spoken to the families or the businesses? You can guess the answer is no because no forums were held throughout the Territory, with the exception of the member for Katherine fronting up with the CEO of TIO in his constituency of Katherine.
Selling TIO risks creating an insurance crisis post a natural disaster as we saw in Queensland. TIO is not just a brand; it is an insurance safety net for Territorians. Until you get your way, it is ours collectively. Imagine not being able to insure your home for cyclone, flood or storm surge in the Territory. With the CLP selling TIO, that may be a future reality as the government will no longer, as it can now, control what level of insurance cover or price settings TIO offers.
Under a deal crafted by the CLP, the new owners of TIO can change our policy cover and insurance premium prices, and could withdraw from providing cyclone, flood and storm surge cover altogether. Why? There are no legal guarantees in the legislation we are debating today or the conditions of sale, despite promises to that effect from the Chief Minister which have been clearly broken. You have cobbled together a dud deal which gives Territorians no guarantee for future insurance coverage, with no mandate and with utter contempt for the will of Territorians.
Territorians and businesses sent the message loud and clear that they did not want TIO sold. Thousands of Territorians signed petitions in just two weeks. Polling showed over 80% of Territorians in Katherine, Port Darwin, Fong Lim, Sanderson, Goyder, Daly and Greatorex opposed the sale. The NT News poll showed 90% were opposed. The Chamber of Commerce surveyed, and the majority of its members strongly opposed the sale. Greg Bicknell from the Chamber of Commerce said businesses have significant concerns about the major impact the sale will have on premiums. Peter Donovan from the Motor Trades Association NT says his members have real concerns about the local impact of the TIO sale. He said publicly that some members have said they will not be able to continue in business if TIO is sold. You have ignored small businesses. You are ignoring Territorians who own this public asset and are selling TIO for a quick cash grab to pork barrel at the next Territory election.
Of course we have the spinner. The Chief Minister told Territorians it is not a sale, it is just a transfer of ownership. Seriously? Did you come up with that line yourself or was it one of your spin advisers, because no one with any sense would have used it. You are happy to spend thousands of dollars on a spin exercise to promote the sale while having no genuine consultation with Territorians. You set up a cynical website promoting the spend fest, but gave Territorians no opportunity to register their views with the government on a sale. What stopped government from an online poll? You did not want to know; you had no intention of listening. You continued with your crash through method of government which, of course, has made you the worst government ever.
Instead, in every way it could, the CLP bombarded Territorians, telling them – despite Territorians not wanting it sold, the CLP went on a spending spree with a whole lot of paraphernalia. Despite being bombarded with the spin from the government, Territorians signed petitions, registered their opposition on radio station polls, in the NT News polls, sent you e-mails, wrote to the newspaper, and commented on social media, yet we continue to have an incredibly arrogant Chief Minister treating Territorians with contempt.
Territorians are saying this is the worst CLP government ever. Even CLP party members are saying that. The CLP campaigned against the sale in the past so Territorians reasonably went to the last general election thinking TIO was not for sale. You have no mandate to sell. Of course, as part of the great spin you have to present the picture that TIO is in dire financial jeopardy and you had no choice. Rubbish.
In a Statement of Corporate Intent both the chairman and CEO of TIO laud the financial position TIO finds itself in after years of hard work to build the business. It is a strong and financially sound business. You need go no further than the Statement of Corporate Intent and read the contributions. I refer you to the Chairman’s report, page four:
Chief Minister, your spin is wrong. Read the chief executive’s report and look at operational profitability. Yes, over five years that totals $305m. It is a fact and appears on page five of the report. TIO was making such a profit the government took a record $10.5m dividend from it this year. The Chairman of the TIO Board, Mr Bruce Carter, in speaking about the financial position said:
TIO makes a profit, and funds that could be put towards flood mitigation around the Territory could be through the dividend. Where did the $10.5m just this year go? Chief Minister, you might want to enlighten us when you wrap this debate, or the $140m drawdown facility you have created out of the MAC Scheme. That well and truly covers the $50m you identified for flood mitigation works. You could undertake the flood mitigation works you have signed up to and not sell TIO, but it is not your style to be honest with Territorians is it, Chief Minister?
Territorians should not be forced to have their TIO sold to pay for flood mitigation in these areas. The drawdown facility you are creating in this legislation could easily cover that. The dividends from TIO you are cashing in to God knows what could contribute to flood mitigation, but that is not a story you want to tell because it is far too factual for your spin, Chief Minister.
TIO has greatly improved its profitability over the past five years, returning record profits. The board stated in its recent annual report that it had great confidence TIO could continue to provide services our community needs for many years to come.
That will come to a crashing end once you give effect to the legislation for the sale of TIO, where Allianz will own the insurance, People’s Choice its banking and the compensation scheme will be administered by Allianz.
The CLP government has abandoned the long-standing community service obligation on price equalisation on insurance premiums. You chose to walk away from the equity we had in the insurer representing us to cover people in the most vulnerable areas of the Northern Territory, but that is your style.
You have threatened Territorians. When the debate commenced the Chief Minister would say, ‘If we don’t sell TIO we will face a 30% increase in premiums’. However, the debate rolls on. I participated in the forum the Independent member for Nelson provided, and the CEO of TIO, Richard Harding was there doing his best to put the case for sale. The policy decision to sell had obviously been made by the government by then and it became patently apparent at the forum. He did his best to put the case to sell, representing the policy views of the government. One was around how competitive TIO insurance premiums are and, in some cases, cost more than their competitors.
I stood up because my office had been getting insurance premium quotes for houses valued at $400 000 with contents insurance of $50 000. We did some comparisons between TIO and private operators in the market. There were insurance premium hikes of 200% between the TIO product and the private market.
All of a sudden, perhaps coincidently, the Chief Minister started saying, ‘If we don’t sell TIO we will have to increase insurance premiums by 200%’. Without any explanation of how it went from a 30% scaremongering to a 200% scaremongering from the Chief Minister if we do not sell TIO, the quantum shifted. I suspect the shift was based on the factual information we provided to the community when the Chief Minister failed to show at the community meeting, and was instead seen dining at Hanuman. It is happy days for you, Chief Minister, while Territorians suffer.
You were scaremongering about prices going up but failed to acknowledge that in government’s hands a public insurer can have control over equalisation and the community service obligations we provide to Power and Water to ensure power and water is affordable across the Northern Territory, irrespective of where you live.
Let us not muddy the waters of your spin, Chief Minister. Territorians pitch in and support each other; that is at their core and in the values we share. If you were here for the Katherine floods, the Alice Springs floods or Cyclone Tracy you might understand that, Chief Minister. You did not give Territorians the option of across the board rises to avoid abandoning the equalisation or sale of TIO. Why would you engage Territorians in a mature conversation when you have a spin machine selling your agenda for the quick cash grab you are so desperate to achieve with the sale of TIO?
You sold TIO out from under Territorians and will start your funding and pork barrelling of projects you favour between now and 2016. You will use the $215m infrastructure fund for your next round of pork barrelling.
I note the CEO of the Northern Australia Development Office is today calling for the infrastructure fund to be used for roads. Chief Minister, I invite you to comment, when you wrap debate, on whether the entire $215m will be quarantined for roads for economic productivity purposes. I await advice as to whether you agree with the CEO of your Northern Australia Development Office.
Fundamental to this disaster is the abject failure of the Chief Minister to yield a single cent for additional infrastructure from the Commonwealth. You have been in government for two years and there has been not one cent in additional Commonwealth infrastructure funding – abject and utter failure. You make big announcements about second ports and sealing roads, but I am yet to know the details of the agreement with the member for Arafura to get him back into the CLP fold; it all comes at an infrastructure dollar cost. You have failed to achieve any additional funding from the Commonwealth – abject failure.
Your Infrastructure minister rattled off the projects you are currently spending on which Territory businesses are benefiting from through contracts. They were Labor-agreed projects on the capital works program signed off between Commonwealth and Territory Labor governments. That is embarrassing for you. It is okay because you will spin your way through that one, pretend and brand them as your projects when Labor agreements delivered the funding.
The CLP has no mandate to sell. This process is a sham and has been done behind closed doors. The Chief Minister was too spineless to tell voters before the Casuarina by-election that he was selling them out with a TIO sale. In October, after the Casuarina by-election, he revealed he had been working on the TIO sale since March.
You have deceived Territorians. The fact the Chief Minister has not engaged with Territorians highlights the reasons the sale does not stack up. This government did not have the spine to go to voters on this issue. It did not have the capacity to mount solid evidence in forums around the Territory on this issue. It is a sign of how this CLP government will sell out future public assets of Power and Water, which it has set up for sale with its separation, and attempt to sell our port assets.
Each of these has a profound cost of living impact on Territorians. We have seen the dire cost of living impact from the fattening up of Power and Water for sale approach by this government, with massive tariff hikes causing Territorians to pack up and leave. If you want to sell the crucial asset of the port – even business is saying not to sell it – check out the ENI submission to the development of northern Australia inquiry where they say not to sell it. Small businesses do not want it sold because they know what it will mean to their businesses.
Chief Minister, you have shown us your capacity to completely ignore business when it comes to the sale of TIO. I have genuine concerns that you will completely ignore business pleas not to sell our port assets. Obviously, that raises the significant concerns of which part of our Power and Water assets you are pursuing to sell with your discussions behind closed doors. Is it generation? Is it retail? Is it both? We suspect the cash grab with TIO is not quite enough for you, with just $150m to spend before the next election. Let us face it, that equates to an adjustment in the GST for population growth.
It is not enough for this Chief Minister because he is a greedy man who says, ‘I’ve been forced to offer $50m for flood mitigation. I had to justify it by setting up an infrastructure fund, but that is okay because I can use that to pork barrel announcements at the next election. Damn, it only leaves $150m.’ That will not go very far. It will certainly not pay for a bridge to Mandorah. It is not even a down payment on it, but that is okay. He can tell himself he is a big man with big visions for big projects. Then the reality hits and he is greedy and wants more. What is up next? The port, generation, retail? What public asset sale will we debate next in the Chamber?
Selling our assets goes straight to the cost of living. Commercial rates at the port ratchet up freight increases, which ratchet up the price consumers pay for goods. Selling generation or retail ratchets up tariffs, which ratchets up the price we all pay to live in our magnificent, beautiful Northern Territory under the CLP. That is the sting. We all agree this is the best place to live. We choose to live here; we love our Territory. However, the cost of living under the CLP is starting to kill us.
I do not know if the Chief Minister gets that. He is doing okay. He flies between Darwin and Alice Springs for work, has a place in Alice, a place in Darwin, has cars, drivers and life is pretty good. Do not touch the bubble.
Selling our public assets is a fundamental attack on Territorians. There is no mandate to sell, and as we know, it leads to skyrocketing costs of living. That is one of the reasons this government will not engage and consult with Northern Territory residents affected by these decisions.
I wrote to the chair of the Senate Standing Committees on Economics undertaking forums on proposed public asset sales. I thank Senator Sam Dastyari for accepting referral to the senate inquiry, and look forward to participating in the senate inquiry when it visits the Northern Territory early next year. I look forward to the government spelling out the case for the sale of public assets of TIO and the port, and spelling out its intentions in both generation and retail at Power and Water if members are honest enough to front up and explain their actions. It is a bit of an ‘if’ when it comes to the CLP.
Selling TIO risks skyrocketing premiums and less cover, and risks creating a real insurance crisis post a natural disaster as we saw in Queensland. It is the only insurer in the Territory market that provides our all-important no loophole cyclone, flood and storm surge cover, the cover Territorians need to be fully protected ...
Mr Chandler: And it will continue.
Ms LAWRIE: I pick up on the interjection from the member for Brennan. He says, ‘And it will continue’. Member for Brennan, you have no guarantee in either the conditions of sale or in this legislation. Once you sell it for a price to a private insurer you cannot guarantee it. You failed to get the guarantees in either the conditions of sale agreement or the legislation. We have to trust the member for Brennan, who has been saying on ABC 7.30, as pointed out by my colleague the deputy leader, these things will be there for three years. We were pleased …
Mr CHANDLER: A point of order, Madam Speaker! You can ask me for an explanation, but that is wrong. You need to read the transcript, Leader of the Opposition.
Madam SPEAKER: Member for Brennan, if you want to make a personal statement talk to me later.
Ms LAWRIE: The member for Brennan can explain himself in debate because people watching say, ‘Three years. That’s not what we were looking for, we wanted it ongoing. Three years is better than nothing’, and we got nothing. The guarantees are not there. The three-year guarantee is not there, member for Brennan. You got a two-year commitment for an extra $200 000 for Territory Day celebrations. That is fantastic, but that is all you got. Cracker night will be a bit more fun. It is already a hell of a lot of fun; we love our cracker night. Not everyone wants the crackers, but everybody loves our Territory Day celebrations. Thanks for the $200 000 for Territory Day celebrations, we got that, but we did not get the three-year guarantee you hinted at Territorians in the 7.30 interview. You want to be the good guy. You want to be – when the Chief Minister becomes toxic from the sale of TIO and the party gets nervous and conducts some polling – Chief Minister.
I understand that, and I know you are worried because the member for Fong Lim is making his comeback. He showed up and asked a question. The member for Fong Lim is pretty keen to get back into Cabinet. Will he sit behind you? Will he say, ‘That’s okay, you can be Deputy Chief Minister and I will be below you in the pecking order’. Will he sit behind the Leader of Government Business in the pecking order? Where will the member for Fong Lim sit in Cabinet? Will he be Treasurer because he set this up? He can say,‘Guys, I set up the separation of Power and Water to prepare it for sale, I set up the port to prepare it for sale and I set up TIO to prepare it for sale. I deserve to be Treasurer because I’m the guy getting the cash grabs because the Chief Minister makes promises and someone has to find the money to fund them.’ That is your pitch, member for Fong Lim. Good luck, because in the constituency you are still a man covered in disgrace. You are now joined in disgrace by your entire government. When you betray Territorians – which the sale of TIO does – you have fundamentally broken their trust, and governments that betray and break the trust of constituents in such a way fail.
When given the opportunity to vote on this type of disgraceful behaviour, governments fail. We will not rest on that because that is not what we do in opposition. We will continue to hold the government to account every day, as we already do.
We will communicate across the Territory the actions you have taken and the impact they have on constituents’ lives, because that is what we do. We will continue to write letters to constituents. We have held meetings with constituents and will communicate directly. We do not have the extra $33m the Chief Minister has tucked away in the Department of the Chief Minister to pay for spin and glossy advertising, but we get out there. We will communicate every bit of this to your constituents because you are selling them out today, without a mandate, for a quick cash grab to pork barrel.
You are selling our financially strong, viable and sustainable insurer – as described by its chair of the board in its Statement of Corporate of Intent –for a quick cash grab. This is a shameful day ...
Mr McCARTHY: A point of order, Madam Speaker! Pursuant to Standing Order 77, I request an extension of time for the member.
Motion agreed to.
Ms LAWRIE: Madam Speaker, I thank members of parliament and my deputy leader for the extension of time.
These are cognate bills, it is a significant debate and it takes quite some time to get through it …
Mr Tollner: Particularly when you are dribbling.
Ms LAWRIE: I pick up on the interjection from the member for Fong Lim. You have not changed, member for Fong Lim. You have had your time on the benches, in the sin bin, and you are still offensive. You cannot help yourself. He has not changed; I do not know who was working with him.
Mr Tollner: Dribble on, anything to keep the clock ticking over.
Madam SPEAKER: Order! Member for Fong Lim.
Ms LAWRIE: I Pick up on the interjection from the member for Fong Lim. You really have not changed, have you? One issue here is, ‘Don’t worry that there are no guarantees in the flood, cyclone and storm surge product uniquely provided for TIO because as a public insurer’ – you want us all to say, ‘That’s okay, we trust you because you have chosen Allianz’. Allianz comes with a reputation. Are we meant to pretend we live in a bubble in the Northern Territory and do not understand the insurance debate in northern Australia as a result of floods and cyclones? Do you think we do not read information from elsewhere?
Allianz comes with a reputation and people are genuinely and deeply concerned. Territorians who went on the Allianz website last night were told they were not covered if they had a tin roof. How well was this thought through? How well did you go? ‘We will set Allianz up as the big trust us. Don’t worry, we don’t need guarantees of insurer of choice for Territorians but we better make sure they offer some coverage.’ No, that did not happen.
In Queensland this global insurer is not known for its goodwill and community support. The experience after the floods shows how Allianz responded to Queenslanders’ hour of need. I have already mentioned that the Mayor of Ipswich described them as the worst. Queenslanders, as already mentioned, had their insurance premiums increased by as much as 2000% despite their homes never having flooded. The mayor said he lived on the highest hill and copped a massive insurance premium hike. We are not making this up. This is fact; it is on the record. You are okay with that because we are meant to trust the goodwill – unbelievable. You have left Territorians with no guarantees in their insurance premiums and coverage with Allianz, which has a reputation. Great!. It is little wonder there is such an overwhelming fight to save our TIO.
The CLP is ignoring that all-important recommendation to the Australian government to expand TIO across northern Australia because, ‘It is affordable and consistently available’. It would address the insurance crisis and support developing the north.
That comes directly from the PIVOT NORTH Inquiry into the Development of Northern Australia: Final Report of the Joint Select Committee on Northern Australia from September this year. This is not something we have dug up from years ago. The Chief Minister quoted what TIO was like as an insurer decades ago. No, this is contemporary, factual, evidence-based and a significant recommendation. You are heading in the opposite direction with this proposed sale.
The northern Australian development inquiry head, Coalition MP Warren Entsch, said publicly he warned the Chief Minister against selling TIO. He stated the NT was the only place in northern Australia where insurance was consistently available and affordable, and the sale would risk creating an insurance crisis like that in Queensland. Warren Entsch said selling Suncorp led to market failure and price gouging. Check that, it is from ABC radio. The inquiry heard evidence that insurance was now unaffordable or unavailable as private insurers withdrew, leaving homeowners without access to flood or cyclone cover in north Queensland.
Following the sale of Suncorp and natural disasters in many areas of Queensland, people cannot get or afford home and business cyclone and flood cover.
The Queensland government’s submission – this is an LNP government with similar policies to the CLP – says:
Regional Development Australia, which is not a leftie organisation, said in its submission:
This is the crisis the Chief Minister is setting us up for in his betrayal of Territorians. Territorians will get a triple whammy. According to the Chief Minister, there is potentially a 200% increase over the next three years in insurance premiums. Certainty on floods, cyclone and storm surge coverage does not exist for the three years we were led to believe in the 7.30 NT interview with the Deputy Chief Minister. There is no guarantee. We are abandoned to the mercy of the private insurance market which has seen catastrophic market failure in Queensland.
The infrastructure fund will not meet the wish list the Chief Minister included in his media release. It will not fund a bridge to Mandorah or come close to sealing the Tanami. It will not build all the promises or contracts you signed up to in the bush. You are throwing away our insurance safety net for $275m. In context, the Territory’s average infrastructure budget for the four years to the 2012-13 financial year was $1.467bn.
Mr TOLLNER (Fong Lim): Madam Speaker, it was interesting listening to the dribble from the Leader of the Opposition. The Leader of the Opposition finds power in being ignorant of the issues and has demonstrated that quite well today. The Opposition Leader and the opposition find security in ignorance. That is demonstrated by the fact they have failed to attend any briefings and failed to try to understand the issues in relation to TIO.
It is appalling because at one stage the Opposition Leader was Treasurer of the Northern Territory and part of a government that tried to sell TIO, but did not have the ticker to carry it through and capitulated. It was shortly after the 2005 election campaign. If there was ever an opportunity to sell TIO and give them some free air in the lead-up to the election in three years’ time, that was the time to do it.
The opposition, particularly the Opposition Leader, knows the reasons TIO is being sold. They are also reinforced by former Chief Minister Paul Henderson, who has put in writing his support for the sale of TIO and his advice that government should sell TIO.
In this debate you see a group of informed people making informed decisions being opposed by a group of people who feel solid and safe in their ignorance, and try to project that ignorance on to other Territorians.
TIO has been a fabulous insurer for the Northern Territory for a long period of time. It was set up in the late 1970s because no other insurer would come to the Northern Territory. At that time, they pretty well had 100% of the market. I have been a big supporter of TIO for years. I am a customer of TIO and have been for more than two decades. I do my personal banking with TIO, the house and cars are insured through TIO, and I am keen to see TIO continue operating in the Northern Territory. I support this legislation because, fundamentally, TIO is not sustainable in its current form.
When TIO started it had 100% of the marketplace. That has now shrunk to less than 40%. We heard the Chief Minister say this morning that less than 15% of the workers compensation market is going to TIO. That means 85% of businesses are choosing other insurers and we have a competitive marketplace.
TIO does not have the opportunity to increase its market share, and that has been lacking in this debate. TIO, for want of a better term, is not currently a proper insurance company as it is not regulated by APRA. That might come as a surprise to many people, but the Australian Prudential Regulation Authority has no say in the operations of TIO because it sits outside its control. TIO has been set up by an act of the Northern Territory government. It is responsible to the Northern Territory government but it should not be confused with other insurers who have to meet very high prudential regulatory standards. I am not suggesting TIO does not meet those standards, but it cannot go into other marketplaces where APRA regulation is a requirement. It is confined solely to operating within the jurisdiction of the Northern Territory government, which is the Northern Territory, so it finds it difficult to expand its market share. Similarly, with the declining market share, its expenses are increasing.
The Chief Executive of TIO, Mr Richard Harding, said a standard insurer pays less than 10% of its revenue to reinsurance costs. TIO is paying in the order of 30% of its revenue in reinsurance costs. It does not take Einstein to work out as the market share shrinks and expenses grow the business is not sustainable into the long term. The only way to make it sustainable is allow it to diversify its risk – get a bigger pool of customers and share the risk – and, at the same time, be regulated by APRA, and that should not be underestimated.
As a customer of any insurance business you want to make sure it is properly regulated. The Australian Prudential Regulation Authority is the regulator and it is comforting that TIO will be regulated by APRA but, most importantly, it allows TIO to sustain itself into the future. As a proud customer of TIO I want to see it remain in place and continue operating in the Northern Territory for years to come. This legislation ensures that will be the case and the company, the products and the people we have come to know will remain in the Northern Territory.
Obviously the spin-off is it frees up money Territorians have invested in TIO to be used in other north Australian development projects, and that is a good thing. It is an area where you see market failure such as in the Northern Territory in the 1970s, or telecommunications in Australia in the 1950s, 1960s and 1970s – the only investors in that type of infrastructure have been governments. However, as the market picks up and competition starts to occur, governments have to step out of the private sector and let competition run. Competition will ultimately derive the most efficient prices for people ...
Mr Wood: Like fuel. That took some time, didn’t it?
Mr TOLLNER: I pick up on the interjection from the member for Nelson regarding fuel. When people started using their buying power we saw the influence on fuel prices. In years gone by nothing ever happened. I take my hat off to Dr Harry Kypreos; he is a great bloke and he certainly belled the cat and got some action. Government, I am proud to say, responded well and supported him in his campaign to drive down fuel prices. I thought the member for Nelson would celebrate …
Mr Wood: I am.
Mr TOLLNER: … the great initiative by Dr Kypreos. The member for Nelson likes to have it both ways. I asked him this morning if I could go to his lunchtime rally and speak. He said, ‘No, this is not a rally for you guys to speak at. This is a rally for people who oppose the sale of TIO.’ I thought it would be a good opportunity to explain to people why it is in their best interests. You organise a rally, get a crowd out the front and chant and carry on with, ‘Come on minister, come on government member, where are you? Come out and face the crowd.’ The minute a government member wants to face the crowd and give information to people you deny them. I asked if I could attend that rally ...
Mr Wood: Member for Fong Lim, you did not attend the Charles Darwin University meeting.
Mr TOLLNER: Madam Speaker, when does the member for Nelson get pulled up for interjecting? Goodness me?
Madam SPEAKER: Member for Fong Lim, when will you address your comments through the Chair and not across the floor? Address your comments through the Chair please, member for Fong Lim.
Mr TOLLNER: Yes, Madam Speaker.
I was raising the hypocrisy of the member for Nelson and the fact he wants open debate. He says, ‘We must have all the facts on the table’. The first opportunity a member from the government has to say, ‘I’d like to come to your rally to say a few things’, he says, ‘No, we don’t want that information. We want to make sure people are happy in their ignorance and are opposed to the government.’ For the member for Nelson and Labor this is not about policy; this is about politics.
They see some cheapjack politics here. They see a political opportunity to take a populist line, pouring fuel on the fire of populism and trying to elicit a kick for the government. We are ready to explain this to anybody at any time. The member for Nelson should avail himself of a briefing …
Ms Walker interjecting.
Mr TOLLNER: … before he organises rallies and protests because – the member for Nhulunbuy has her fingers in her ears and does not want to hear this ...
Mr Wood: Do you have a pause button.
Ms Walker: You are too loud.
Madam SPEAKER: Order, member for Nelson, member for Nhulunbuy!
Mr TOLLNER: Thank you, Madam Speaker. I can hear them at this end of the Chamber.
The Leader of the Opposition pours a bucket all over Allianz. What a pathetic thing to do. We have a new insurer in the Northern Territory which will pick up TIO, and the Leader of the Opposition wants to make sure it does not get a good start in the Northern Territory and smears it with mud.
Let me tell you about something that happened to me a few years ago. In the mid-1990s I was director of a horticultural business which had to make a claim with TIO. The claim, to my knowledge, was around $120 000; it was a business interruption claim. TIO refused to pay. The business ended up being involved in a five-year court case and eventually a Supreme Court judgment was made and TIO was asked to cough up. Five years after the event the claim, which originally started at $120 000, was $650 000. The five years in court would have cost the business, conservatively, around $1m in legal fees. TIO would have paid between $1m to $1.5m. The claim, which started out at $120 000, finished up costing TIO $650 000.
That was a Supreme Court judgment they refused to pay. I was with the bailiff when we served a warrant of seizure and sale on the chief executive officer of TIO. It was late on a Friday afternoon, the doors of TIO instantly shut and, miraculously, they found a judge late on a Friday afternoon. We ended up in the Supreme Court and TIO was given until 9 am the following Tuesday to pay the $650 000 judgment, otherwise the bailiff would have been well within his rights to start clearing the place out.
We were paid, but it took more than five years with TIO fighting it all the way through the Supreme Court. To suggest TIO is squeaky clean, always looks after Territorians and always pays out on claims – what rot!
Insurance companies have to make judgment calls from time to time about who is paid and who is not. Customers of those insurance companies would expect nothing less. It is not hard to understand how an insurance company works. It operates through a range of actuaries who determine a – the Attorney-General has drawn my attention to a section in the annual financial report of TIO on page 144. It talks about contingent liabilities and contingent assets.
That reinforces the point I made about the company I was involved with. TIO makes that statement, and most customers of insurance companies would expect no less from their insurer because paying claims without checking impacts on every customer of the business. It is important that insurance companies make sure they pay legitimate claims. Every now and then, as I demonstrated with TIO, they get it wrong.
Allianz might have got it wrong, but Allianz will own the Territory Insurance Office. What benefit the Opposition Leader thinks will be derived by pouring a bucket of mud over Allianz is beyond me.
I am a great supporter of TIO, a TIO member, I bank with TIO and have insurance with TIO. I want to make sure TIO is around and stays the distance because I like being a TIO customer and that is why I support this bill. With a shrinking market and increasing expenses it is unsustainable in its current state. To put it into a bigger pool of risk is the most sensible way to go. At the same time, it delivers benefits by liberating the capital Territorians have tied up in the insurance business to use for other Territory building opportunities.
Mr WOOD (Nelson): Madam Speaker, it is wonderful to hear from the member for Fong Lim. He sounds articulate, but he talks a lot of rubbish at times and uses his loud voice to overcome any opposition to what he says. I can use a loud voice too. One uses a loud voice when you do not want to hear any opposition. He will use a loud voice when he does not want to hear the truth.
There was a public meeting some weeks ago to which the CLP was invited, and the member for Fong Lim could have put the case. It was a neutral meeting. I have not said in this debate TIO should never be sold. In fact, those posters do not say that. They say, ‘It is our TIO, Mr Giles not yours’. The inference is the people own TIO, and they would like to be part of this debate and be informed before you sell it.
CLP members had the opportunity but word got out it was hijacked by the unions and the ALP, which is so far from the truth it is not funny. It appeared government members did not want to stand in front of people to put their point of view and answer questions.
Today’s rally was a protest, not a public forum for you to waffle on. It was a protest because opportunities were given to the government to put forward its case a few weeks ago, and it did not take them up. Today was about what people think of the government in relation to TIO. You might laugh, member for Fong Lim, but I have e-mails coming to me from staunch CLP supporters who will never vote CLP again. They might not vote Labor, but they will not vote CLP and will look for independents or some other party. I have not seen so many e-mails before, and people stop me in the street. A small businessman from Cullen Bay e-mailed me yesterday because he is totally disgusted.
You might think that is a laughing matter, but it highlights that you have left the people behind in this debate. Yes, we have two bills before us. They are technical bills to allow both the insurance and banking arms of TIO to be sold and rearrangement of the affairs of the MAC Scheme. These bills were sent to us yesterday with the second reading today. If you want an informed debate on the technicalities of the bills you will not get it from me because I do not have time to look at them and seek advice. We normally get a second opinion.
One of the disappointing facts in this debate is there has been no opportunity for people to discuss what will happen to their insurance. Will we be better off? I had an e-mail today – I will not tell you who it is from as they asked me to keep that private. It was done through an insurance broker and quotes annual workers compensation renewal. These people have been TIO customers for decades. They said the quote is frightening now the sale of TIO appears imminent.
They were happy to provide this information as long as confidentiality was maintained. These are the charges for this company for workers compensation: TIO $106 895; CGU $114 210; QBE $152 091; GIO $165 676; and the company the government has sold to, Allianz, $171 946. There is a difference of around $65 000. Where is the opportunity for that company to ask the government if it is better off under Allianz or TIO? Where in this debate has the public had a chance to see if it will be better off?
The Chief Minister said, in some parts of the Hansard I read, premiums will go up 30% in storm surge areas. Then during debate up comes a figure of 200%. Where that 200% came from I do not know. Figures are being thrown around to make it sound like if TIO is not sold there will still be increases in premiums, but who knows the truth. I am going on the figures in Hansard, where 30% was quoted by the Chief Minister then 200%. People do not know the truth. They do not know where they stand as that debate has not been had.
I am not against this debate, but am against the government rushing this legislation through. This debate has only become serious since the beginning of October. You only need to read the media releases at that time. The government continually said it had not made up its mind. It talked about a mature debate; I am still waiting for the mature debate. It will not be in here; this is the rarefied air of parliament, not where people come to have a debate ...
Mr Elferink: What?
Mr WOOD: They come to debate here, but if you want to debate with the people who own TIO take it to them.
The member for Fong Lim has TIO policies, so have I and so have the people who turned up for the rally today. Who had discussions with them, other than via the media? On 4 October no final decision had been reached. That was good to hear. Then another e-mail saying no final decision had been made – 20 October. Obviously things were happening behind the scenes, but the people missing out on this were the most important ones: the people of the Northern Territory.
I have another e-mail from a local resident who tried to apply through Allianz. I understand Allianz has just moved in, in the sense of taking over TIO, but the e-mail said she rang them. They asked for her postcode and when she gave it they said they would not insure her as it was too high a risk. There might be reasons for that, but again there is no debate. People do not know what is going on. ‘Trust me, we are from the government’. Unfortunately, that is where this debate has gone.
The member for Fong Lim mocks people. The lady rang Allianz at 10 am today about home and contents insurance, gave them the postcode and they said they would not insure her because she lived in a high risk area – Darwin. This is not made up, and there may be very good reasons. This highlights that the debate has been too quick for the average person. It has left the people behind and now they are worried they will not get insurance because with government support of a publicly owned insurance company, people who could not normally get insurance were probably insured. The member for Katherine held a meeting in Katherine, and I am told about 24 houses there are not insurable. They may be insurable under TIO because the government is behind it – the insurer of last resort.
What will happen to those people? Has the government a responsibility – even going back in years – by allowing subdivisions in surge zones and flood areas? Is there retrospective responsibility for allowing those things to occur? Prior to self-government there would have been planning controls as to where you built your house or where you could subdivide. That issue has been raised with me.
It beggars belief in this debate that we have not bothered to take a little time. I, the Chief Minister and Bruce Carter from the board said TIO can provide services our community needs for many years to come. I find it interesting that in the chairman’s report or the chief executive’s report there is no mention of the possibility of selling TIO. A line in the Statement of Corporate Intent says:
It does not say sell TIO. It says we should look at those things, and I accept that.
During the last debate I raised the issue of a public company where we could all have shares in TIO. The Chief Minister said, ‘It’s a good idea but we don’t think it would work’. A mature debate over a period of time would have allowed us to see if that was true or not. Experts could have seen if it was possible to form a public company – if there were enough people in the Northern Territory interested in buying shares in TIO. We have not gone down that path …
Mr Elferink: Nothing stops you getting investors and doing it.
Mr WOOD: That may be the case, member for Port Darwin, but I am highlighting the fact there has been no real opportunity for people to hear the options, debate them and find out the consequences of selling TIO.
If you had said during the Casuarina by-election, ‘We are interested in selling TIO to Allianz. If you are looking to get workers compensation you will be paying $55 000 more, but that doesn’t matter.’ Of course it matters. Debate on the effect on businesses and households by the change to Allianz is missing. Will they charge existing TIO prices? Where is the proof it will not change? Is it just goodwill?
I know a company that has been around a long time which would be concerned about the change. I doubt they will use Allianz. The second cheapest is $8000 more; they will go to CGU because Allianz will certainly not get their business if their quote is correct.
The government will hope none of its backbenchers cross the floor. I hope some do because in some of their electorates – I have received copies of e-mails – people are concerned. I wish you could have let this sit on the table and allowed rational discussion in the community. Some of what you put forward today is reasonable, there are some benefits in what you are doing, but you have not convinced the people. That is why so many people are angry.
If you were in the PR business you would be out of business because your public relations in regard to the sale of TIO scores about one out of 10. That is unfortunate because it is good to debate the sale of government assets, whether I agree or not. However, the mature debate has not occurred and the people have not been part of it.
I will not support this bill until the government gets off its bum, goes into the community and talks to the people who own TIO: Territorians.
Mr CHANDLER (Deputy Chief Minister): Madam Speaker, I pick up on what the member for Nelson said. It is clear it has not been a long-term strategy of this government to sell TIO. Many people have said publicly, and behind the scenes, that we have not done a good job of selling the message on this. When governments have a well-defined policy and are going in a particular direction they put together a good public strategy. If there is criticism of the government’s approach to this it is probably a clear indication it was never our intention to sell.
This is a clear demonstration that the board approached the government and identified the problems, just as it did with the previous Labor government. The difference is we had the courage to do something about it.
TIO is an institution loved by all in the Northern Territory. No one in this Chamber or in the Territory wants to see our TIO disappear. The government was faced with two choices: do nothing and let TIO fade into history as something that once was, or take action to secure TIO for future generations.
When you unpack all the information – Territorians may not be aware of much of the information. We put out a lot of information, perhaps too much. Perhaps it reaches a point where a government puts out so much information it becomes white noise and the message is lost. It was the approach of this government to get as much information out as possible to give Territorians an opportunity to understand why the decision was made.
This government has made the tough decisions that will benefit Territorians well into the future. This is the best decision for the long-term sustainability of our TIO; however, it is a difficult decision. We often speak about some of the tough things we have to do, and I assure you politics is a populist game. Politicians like to be popular; they do not like to make unpopular decisions so when they have to you can be damn sure there is a genuine need for it.
How much turmoil has this created in our community? How much pressure have each of us been under from our constituents, friends, family or the rhetoric from a sometimes immature Labor opposition, given they fully understood the position of TIO? As many know, they were about to sell TIO some years ago but did not have the ticker to go through with it.
A decision like this is not made lightly. It has been debated up and down, and each member on this side of the Chamber has spoken candidly about the issues and the political danger involved. It is not popular, but is it the right thing to do? It is the right thing to do if we want to ensure TIO, and the TIO brand, survive into the future.
It would have been easy to do what Labor did some years ago. It lacked the courage to do what was right. This government is faced with the decision to take the easy road or the hard road, the popular road or the right road. This is not something we have done lightly because we know it has upset many people. You can be assured we, on this side of the Chamber, have worked hard. We have stretched the limits of our imagination to find other ways forward, but this is the right way to ensure the long-term future of TIO.
The ALP has no policies to ensure continued growth of the Territory. It is a party bereft of policies and ideas. There is no better example of its lack of policy to ensure the ongoing viability of TIO for Territorians than this issue. Changing ownership of TIO is about securing the future of the TIO brand so Territorians can continue to enjoy an organisation that has become part of us all.
However, there is a fundamental issue with TIO’s business model if it remains under government ownership. TIO is exposed to substantial risk, more than any competitor in the Territory market. In turn, this risk passes to the Northern Territory government. The Opposition Leader knows this because her government tried to sell it, but did not have the character to do what was best for Territorians. Labor took the easy road.
Insurance companies spread their risk over different locations, in different markets and with different types of risk. For example, they could balance flood risk against bushfire risk. TIO is legislated so it can only offer policies in the Northern Territory. This means 80% of its customer base is concentrated in Darwin, where the main risk is cyclone and flood. Unlike other insurers, TIO is unable to offset that risk in different markets. This not only places TIO in a precarious risk position, but reinsurance costs are also increased. It costs TIO three times more to reinsure than it would a company like Allianz, which has a huge portfolio of diverse risk. The difference is about 30c in the dollar compared to about 8c for larger insurers. That means if TIO reinsured to the same extent most insurance companies in this country do, the price of premiums would be so high no Territorian could afford them. Therefore, they would not have a business.
There is a huge gap in the reinsurance market, and it leaves government to pick up that gap. The gap between what is reinsured and what is not is around $603m. If we had another cyclone like Tracy – and I hope to God we do not – TIO would go broke and leave government to pick up the pieces. This would be at a time government infrastructure like roads, schools and hospitals would need to be repaired or replaced. Government should be putting money into those areas in a time of crisis, not propping up an organisation that could be funded by the private sector.
This new ownership is a game changer for TIO. It moves the risk from the public sector to the private sector, allowing government to focus on repairing key public infrastructure in an emergency to get the Territory moving again. Allianz has a worldwide footprint, insuring over 76 million customers in more than 70 countries. That means it can spread its risk cover over a wide range of customers in many markets, with access to global cities.
TIO will be in safe hands. The TIO brand is recognised and loved by Territorians. However, sometimes people can get mixed up in brands. Over the years, businesses change names and other companies own them. I believe many people insured in the Northern Territory do not even realise they are insured by Allianz. How many people in the Territory have boats, particularly in the Top End? Club Marine is an insurer. I have my boat insured through Club Marine …
Mr Elferink: You are an Allianz customer.
Mr CHANDLER: An Allianz customer.
Business works in a strange way. When I first came to the Territory I had a bank account with the NT Credit Union. At one stage it became the Australian Central Credit Union, which is now People’s Choice. One thing that has never changed is my account number. It has remained the same although there have been different owners. As a customer, I have always remained a priority of that company. It is a good company. People should not fear change of ownership because businesses remain because of the way they treats their customers. If they do not treat their customers well they will not be in business for long.
The Leader of the Opposition said there will be major increases in premiums under this model. Allianz will still have to work in a competitive environment. If it tries to increase premiums out of reach, out of kilter with the market, it will lose customers. The company would not spend hundreds of millions of dollars to buy a brand and the loyalty behind that brand to trash it. The company will not spend hundreds of millions of dollars then put premiums out of the reach of the customer base it bought. It will want to protect and serve its customers. The scaremongering from the Labor opposition, and many others at the moment, is wanton destruction of a brand because it is unfair, unwarranted and they know in their hearts it is not true.
The TIO brand is recognised and loved by Territorians. It is associated with community sponsorship such as CareFlight and DriveSafe NT Remote Indigenous Driver Education and Licensing. However, the brand was at risk if the government continued to own TIO. Allianz has not only bought a good insurance company, it has bought a brand that is ingrained in the minds of Territorians. We have heard from those opposite that TIO has gone. They could not be more wrong; TIO is here for the long term.
I know the Leader of the Opposition does not understand much about business, but Allianz has not spent hundreds of millions of dollars on a brand to trash it. It is in Allianz’s interest, like it is in Territorians’ interest, to invest in TIO and grow the brand even further. TIO is here to stay.
The Country Liberals know Territorians are concerned about what the sale of TIO means for them. For that reason in all negotiations the government made a number of things clear to Allianz, as it did to other companies bidding for TIO: flood, cyclone and storm surge insurance must remain; all TIO staff must be protected; the TIO brand must stay; and all sponsorships must stay. These are the things Allianz has agreed to. In addition, Allianz has also agreed to invest a further $200 000 into Territory Day celebrations, further cementing the TIO brand association with the Territory’s rich history.
The sale of TIO has unlocked significant funds to reinvest in the Northern Territory. An amount of $215m will be placed in an infrastructure fund to support the future development of the Northern Territory. This is about unlocking something you guys keep calling an asset. It is more of a liability, but we are turning it into an asset for Territorians’ benefit. The fund will be managed by a statutory board. It can accrue interest, it can levy off the private sector and access contributions from the Commonwealth. The fund will support future infrastructure needs of the Territory, which could be roads, bridges, hospitals or schools. This is turning a risk for Territorians into a saleable asset that will benefit Territorians.
In addition to the infrastructure fund, $200m will be set aside for community infrastructure, beginning with $50m of flood mitigation works in Rapid Creek, Katherine and Darwin’s rural area. Investing in this infrastructure will reduce the risk of flood and storm surge, therefore reducing the premiums TIO will charge. There are real practical benefits to doing this. The experience in Queensland, and since the 2011 floods, is that federally-mandated wording of flood cover has been brought in. Flood mitigation works in Roma alone have brought down premiums by up to 80%. My understanding is the flood mitigation works in Roma cost about $13m. I also understand the rescue element of the last floods cost about $12m for helicopter use.
After the government invested $13m into flood mitigation for Roma insurance companies reacted immediately by dropping their premiums by 80% because a fair business attributes premiums against risk. The risk was lowered in Roma therefore the premiums were reduced. I cannot say for sure, but I suggest the same thing would happen in Katherine, or for people who own homes along Rapid Creek. If mitigation methods, programs and works are put into a particular area, the risk changes and an insurance company will look at the risk and set premiums at an appropriate rate. People living in Katherine, Rapid Creek and other areas where flood mitigation works are undertaken could find, in the near future, their premiums are lower than they are paying today. That can only happen by realising the true benefit TIO can become to Territorians – turning a liability into an asset.
The Leader of the Opposition is being xenophobic suggesting there is something wrong with Allianz, the biggest insurer in the world, because it is German. Australia is one of the last countries with a government owned insurance agency. I have a list of countries that have sold their government owned insurance companies: Belgium, Brazil, Cameroon, China, the Czech Republic, Egypt, Estonia, Finland, France, Germany, Hungary, Ireland, Italy, Kenya, Latvia, Lithuania, Malawi, Mexico, Morocco, Netherlands, Nigeria, Oman, Peru, Philippines, Poland, Portugal, Slovakia, Spain, Sri Lanka, Thailand, Tunisia, Turkey, Uganda, United Kingdom, Venezuela, Vietnam and Zimbabwe. Those countries have done what we are trying to do today.
In 1992 New South Wales sold GIO and Victoria sold SIO. Tasmania sold GIO in 1993, Western Australia sold SGIO in 1994, South Australia sold SGIC in 1995 and Queensland sold Suncorp in 1997.
There is a lot of rhetoric around the sale of TIO and it has stirred up emotive responses from people in the community. I am certain many of these people would change their mind if they fully understood the risk to TIO, its long-term future and the Northern Territory government, ergo the taxpayer.
The real risk associated with the TIO model as it stands, as it has done for years, is to Territorians. In the last few weeks, having the opportunity to openly discuss some of the issues with some very emotional, in some cases angry, people, some my friends – when having the time to talk through the real issues and why government is making this decision, many of them – some are still not happy as they see the TIO as theirs and something they want to protect – understand why we needed to make this decision.
I do not think anybody I spoke to did not understand. I had time to respond and all those people understood why. It still did not appease all and there is still anger out there, but they understood why this decision was made.
While the Leader of the Opposition does nothing but criticise and make outrageous claims without any policies whatsoever, I highlight to the House an important report developed by this government last year. The government put together the Economic Development Advisory Panel the Chief Minister spoke about earlier when he mentioned some of the recommendations of the Northern Territory government’s economic development strategy. The advisory panel was made up of some interesting people and had some interesting conclusions and recommendations. The panel members were, as described by the Chief Minister, Mr Doug McTaggart, Ian Smith and Mr Paul Henderson. I will quote from the Recommendations for the Northern Territory Government’s Economic Development Strategy as it is important this information is placed on the Parliamentary Record:
A former member of the ALP, the former Chief Minister no less, has put some thought into the efficient use of government assets. This is not unlike other ALP state leaders, but apparently not those opposite. Let me quote further from the report.
The report continued:
This government was elected to fix Labor’s debt and improve the problems the Territory has today. We aim to move forward in the Northern Territory, but there is a lot of angst and community concern about the sale of TIO. We understand. We have listened, and we continue to listen to some of those concerns. However, when you get the opportunity to clearly articulate the risks to Territorians most people come away with a different point of view.
This government has been elected to do the right thing for Territorians. Sometimes that is not popular, but unlike the former Labor government, which lacked the ticker and courage to do the right thing the moment it became a little tough, we know this is the right thing to do to support TIO into the future.
Ms FYLES (Nightcliff): Mr Deputy Speaker, we do not support the suspension of standing orders to rush this sale through on extreme urgency in one day. The last time, I understand, a bill …
Mr ELFERINK: A point of order, Madam Speaker! She is alluding to a debate which has already been dealt with. Under standing orders she cannot return to a debate previously held.
Mr DEPUTY SPEAKER: Member for Nightcliff, the ruling is you should not reflect or speak on a decision that has already been made by the House. You need to be careful with that.
Ms FYLES: My apologies, Mr Deputy Speaker. I understand the last time a bill was rushed through in a day was in 1992. Other bills on urgency take a few days. As the member for Fannie Bay put it, this is urgency on steroids.
One only had to be outside at lunchtime to see the hundreds of people in vehicles circling Parliament House and blocking Mitchell Street to show the frustration in our community that has been evident since the proposed sale was first flagged by the Chief Minister only 34 days ago. It was casually slipped into debate three days after the Casuarina by-election, and 34 days later we are debating it on urgency.
You gagged debate this morning. You have had your head in the sand for the past month, ignoring Territorians, and you will not even follow traditional parliamentary process to debate this legislation. You are ramming it through.
You made the announcement yesterday morning, and 24 hours later we see introduction, debate and a vote taking place. You do not want proper debate on this. Your arrogance and refusal to listen to Territorians is upsetting Territorians.
Chief Minister, you have failed to give Territorians the full information and you simply say, ‘trust us’. We do not trust you, and the lack of trust has been further reinforced today with debate rammed through in one sitting day.
You could easily leave it on the Notice Paper until February, which would allow ample time for people to discuss it. The Deputy Chief Minister claims he talks to people and manages to get the message through, so why not leave it on the Notice Paper?
On 21 October the Chief Minister casually mentioned he was looking to sell TIO. As events rolled on it looked like he was serious and, in fact, a deal had probably been done.
At a Sunday night Cabinet meeting it was agreed to sell TIO. A late night Cabinet meeting seems a little rushed.
If you look back in history to 1979, when TIO was established, you will see why. Perhaps this will help our relatively new Chief Minister. Why was TIO set up? In the wake of Cyclone Tracy our previous parliamentarians, in those early days of the NT Legislative Assembly, put it in place to protect Territorians.
The Territory Insurance Office is a government owned statutory insurance provider which has provided affordable insurance to citizens of the Territory since 1979. It provides a potential model for creation of an insurance office covering northern Australia because other states in recent times have looked towards our model and thought it would be – it has been recommended – helpful.
Growing up after Cyclone Tracy you heard stories of rebuilding, and something that made it easier was insurance and being adequately covered. I have seen the floods in Alice Springs and the devastating damage done to Katherine.
Perhaps the Chief Minister does not understand why we need a TIO model across northern Australia because he has not witnessed these events firsthand. If he spoke to and listened to our community he would understood a little more.
Talking about goodwill, have you seen the track record of Allianz in Queensland? They have not been in our market in recent years. A global company will not look after Territorians the way TIO does.
There were no public forums on this legislation, except the member for Katherine holding a meeting to hear what the people of Katherine had to say. We will wait to see whether he listened to them.
Even this morning the Chief Minister said it will remain Territorian. That is wrong. People’s Choice and Allianz are not Territorian. There are no legal guarantees in legislation or conditions of sale to guarantee TIO will remain as it is, just a simple ‘trust me’ from Adam Giles. People do not trust you. Terry Mills trusted you and look what happened.
Madam Speaker, you read a petition today from 743 people praying we as a parliament leave TIO as it is. The member for Nelson also read a petition from 1069 people. The Labor MLAs also had petitions from 4300 people urging the government not to sell TIO. People signed the petition in a few short weeks. Many others did not quite get there, but their sentiment is there; they do not want TIO sold.
These signatures were collected in just a few weeks. People queued at Casuarina Square, they lined up at the Sunday markets, stopped me at the supermarket and on the school run asking where the petition was and how they could sign it. They signed in Katherine, Alice Springs, Tennant Creek and remote communities all saying they did not want TIO sold.
Chief Minister, you have betrayed Territorians in deciding to sell TIO without a mandate and against overwhelming public calls to keep our insurance safety net in place. There is no legal guarantee TIO will remain the same and no legal guarantee insurance cover will remain the same. A simple ‘trust me’ and a measure of goodwill is not enough.
We respect our local TIO staff and feel for them right now. This is their livelihood and does not just impact on their insurance and banking. We know it is a tough time for them. People’s Choice in the Territory is already well staffed and TIO banking staff must be wondering if they will be absorbed into current staff.
In dealing local, you only have to be a Territorian to understand what that means. Who has rung for pizza and ended up trying to order from down south? Occasionally, when trying to order something online, they suggest you pop into the nearest store in Adelaide, Sydney or Brisbane. They do not understand the distance. TIO, as a local insurance provider, does. It means a lot to Territorians but now we have a dud deal with a big German multinational. You sold us out, Chief Minister.
One gentleman came into my office asking if he could take the petition away. He came back with a few sheets filled in. He had taken it to family and friends. This is how much it means to people. In my community we have particular reason to be upset. People started contacting me after the last sittings guessing something was up, not that the Chief Minister had been open and honest. Storm surge is an issue and we only have to remember last Wet Season and the high tides. People are most concerned.
Chief Minister, I will read a letter from a local resident:
Did you respond to that e-mail, Chief Minister, or the hundreds of others you received? We know you received them because people copied us in; they told us about it.
Another e-mail I received was not only about ability to get insurance, but asked if we would really benefit from the infrastructure. The cyclone risk in the Territory is too strong to ignore, but you are denying people’s concerns.
That e-mail said:
That is from one resident in Nightcliff. Residents in our community expect TIO to be the insurance safety net providing insurance to those unable to access commercial insurance from other providers. In the Nightcliff, Rapid Creek and Coconut Grove areas there are a number of older properties which may not be cyclone coded. Storm surge is a huge issue.
There is no legal guarantee from Allianz that TIO insurance cover will remain the same. There is only a ‘trust me’ from the Chief Minister and a measure of goodwill. That did not go well for the previous Chief Minister.
Every Wet Season my community faces the impact of our tropical weather. Residents living in older homes not cyclone coded are extremely worried about access to insurance as TIO is currently the only provider. They pay huge insurance premiums and are worried they will be priced out of the market.
Chief Minister, these are real concerns you did not address with the community. Did you have any community meetings? No.
People love living the tropical seaside lifestyle but they need insurance. They understand the hazard of living there. They know they could be impacted any Wet Season, but having insurance will help ease the pain of rebuilding if an unfortunate event occurs.
One resident I know helped in the cleanup after the Katherine floods. Both my parents helped, and I was at school or university. People were bussed down for the day, and both the NT government and private enterprise gave people a day off to go to Katherine and help with the cleanup.
One resident shared her concern because she saw how TIO had assessors on the ground immediately after the floods and was able to get funds through to help people. They were devastated by the floods that had impacted on their homes and businesses. Will we see the same level of support from a big multinational company? This is why TIO is so important.
Member for Katherine, you will have heard those stories and they really hit home. This person had helped someone clean up in their time of grief, knowing it could happen to any of us. We live in a cyclone area in the north, most of our towns face flooding, and Tennant Creek has had an earthquake. We know we are at the mercy of natural disasters, but we want to have protections in place. This is what homeowners and businesses are most concerned about and why they do not want TIO sold.
This government does not have a mandate to sell TIO. If you are genuine you should take it to the next election as a policy. You campaigned against it in the mid-2000s so most people thought your policy position was against a sale. People are shocked by the speed of this. You are arrogantly rushing through a sale behind closed doors without any consultation with Territorians.
We risk skyrocketing premiums and less cover. Selling TIO will create an insurance crisis, as seen in Queensland. The north Australia development inquiry head, Coalition MP Warren Entsch, warned you against selling TIO. He said the NT was the only place in northern Australia where insurance was constantly available and affordable, and a sale would risk creating an insurance crisis like Queensland.
He is one of your own. You do not have to listen to us, but why not listen to him? He said selling Suncorp led to market failure and price gouging. Townsville said in its submission that the cost and availability of insurance in north Queensland inhibits investment and increases costs for businesses and residents.
You say we are the last state and must sell. We heard about every country in the world but, Chief Minister, we have unique climatic conditions in the Territory. TIO protects Territorians. Talk to Queenslanders who were not covered after the floods and Cyclone Yasi – the insurance companies that changed their mind about certain things. People know when they insure with TIO they are insuring with a Territory-based company that understands our conditions and will not suddenly say, ‘No, that storm surge was not caused by the cyclone, it was the storm before it so you are not technically covered’.
Insurance companies will use things like that and people will be delayed in receiving payments or will not be paid at all. These were real concerns after the Katherine floods, which was our most recent natural disaster.
People would say, ‘I am with TIO. I have been paid out and am getting on with my life. Yes, it was horrible, but I am getting on with it.’ Others had to take legal action or just gave up altogether. This is why Territorians feel so strongly about TIO. TIO provides disaster cover to mitigate potential profiteering from rebuilding efforts after major disasters. Other insurance companies do this as well, but the unique factors have to be accommodated. Keeping TIO in public hands is critical to ensuring timely insurance payouts for flood and cyclone insurance, to and avoid the crisis seen in other states, like Queensland, after the floods.
The Chief Minister and government members tell us TIO is a liability. Over the last five years TIO has made a $305m profit. This is a short-sighted sale. In the last year alone $10m was given back to the Northern Territory government.
Chief Minister, you sold it for $424m which, after you deduct the $9m fee and the $140m drawdown, equals $275m not the $500m to $700m you talked about. You like to talk big but you cannot deliver. You only got $275m for our TIO, with no consultation and not one community meeting, forum or engagement – whatever you want to call it – apart from the one the member for Katherine held. It is a $275m quick money grab for the next election, leaving Territorians at risk of no insurance or being priced out.
This debate has been going on for the last month. Territorians are not only frustrated TIO is being sold when they thought it was safe, but are unhappy with the speed of the sale and lack of consultation. Clearly things were happening behind the scenes but we were not informed. Do you think people would not have noticed or cared? We are not even having a proper review of the legislation in this House, where we, as elected members of our community, can debate points. There has been no opportunity as we were e-mailed the legislation yesterday afternoon. Apart from the few people we are in contact with on a regular basis – even if they could respond in less than 24 hours – there has been no opportunity to meet stakeholders and hold community meetings. These are things we typically do with legislation, as constantly advised from your side of the House.
It is extremely frustrating for our community not only to be facing the sale of TIO, but not to have the opportunity to consult. It is not too late to leave it on the Notice Paper until February. We have a Christmas break. Perhaps you are hoping we go away for Christmas, have a good time then come back and forget you sold it. That must be what you are hoping because no one can work your plans out.
I give credit to the member for Katherine for meeting with his electorate. Will he listen and vote against this? I look forward to hearing him justify his reasons for the sale.
Chief Minister, I know your head is in the sand but you received e-mails – we were copied into them and people told us about them. You say you have advice but you have not met with Territorians to share it in public forums. You are not interested in talking to or listening to Territorians. Your little circle of Yes, Minister people might be telling you it is a good move, but Territorians are waiting for the chance to tell you what they think of this decision. You will hear them clearly.
TIO makes a profit, so much so that your government took a $10m dividend this year. These funds could go into flood mitigation, your unfunded election commitment. Territorians should not be forced to sell TIO to pay for your unfunded election promises.
TIO has greatly improved its profitability over the past five years, returning record profits. The board stated in the recent annual report that it had great confidence TIO could continue to provide services our community needs for many years. We have an insurance company, our community wants and needs it and it is profitable.
If you bothered to listen and visited communities to share your plans of selling TIO, you would have heard the stories of hardship Territorians have faced over many years. If you had your ‘mature conversation’ you would have heard why TIO is so important to Territorians. Perhaps you could learn why.
The Territory has had more than its fair share of natural disasters and we will face more. Territorians are a tough, special breed, and perhaps you should speak to some of them and hear their stories. Madam Speaker, growing up you would have heard stories. I grew up hearing stories of surviving natural disasters and rebuilding, and this is why TIO is so important. Territorians are prepared to pick themselves up and rebuild, but they need the support of a local TIO to do so, not a big multinational based thousands of kilometres away.
The member for Fong Lim laughs and thinks it is a big joke. He said the government is ready to explain what is happening – so ready we have had no forums apart from the one in Katherine.
Chief Minister, your government and the CLP has abandoned the insurance equalisation policy making TIO pursue premium increases in flood and storm surge zones, something you have conveniently forgotten. This allows an insurer to charge different rates depending on where you live, and it is the same policy that has seen homeowners in Weipa, north Queensland, pay $10 000 to insure their homes compared with $2000 in Brisbane. The pricing model is a key factor in the insurance crisis in north Queensland.
Member for Braitling, you are the unelected Chief Minister. You do not care about representing Territorians who are overwhelmingly and strongly opposed to the sale of TIO. That was evident today and has been evident over the past few weeks. I was at the petition stand at Casuarina Square and people were lining up to sign it. It is not like the show where you have to grab their attention; they come to you. I have had people ask, ‘Where is the petition? How can I get my hands on it?’
This sale is motivated by greed, with your CLP government desperate for a quick cash grab to splash $150m around prior to the next election, hoping we forget everything.
Today will see passage of this legislation and the CLP tearing up democracy to pursue profits before people. You have no mandate to sell TIO and are ignoring the impact it will have on families and businesses across the Territory. TIO is a profitable business which provides insurance safety nets for families and businesses in high-risk areas of flood and storm surge, and a competitive product which keeps cyclone coverage affordable.
Show us the details of the sale. No, you are rushing it through talking about goodwill. Can you explain how goodwill works in the tough world of business?
Chief Minister, you have ignored thousands of Territorians, the Chamber of Commerce, the Motor Trades Association and the federal government’s Pivot North report, all arguments against the sale of TIO. Why have you not held forums across the Territory and explained the sale to people? Why are you rushing it through? Why not take it to the 2016 election?
Your arrogance is astounding. Social media – you must have seen it, you cannot ignore it. There are comments on friends’ pages and some of the local media outlets.
Someone said this morning, ‘I rang Allianz to get a quote. I got someone who did not know what to do who forwarded me to someone else who put me in the too hard basket and forwarded me to someone else. I explained I wanted a quote because of the sale of TIO. They suddenly became hesitant to talk, recommended I talk to TIO and would not give me a quote.’
This morning were heard what it meant to have a tin roof. Another person said they were disappointed such an important Territory icon has gone into foreign hands.
The timing could not be worse considering this Christmas is the 40th anniversary of Cyclone Tracy, a period of heartbreak and financial despair for many. To face the prospect of a Wet Season with potential damage from a major cyclone without the reinsurance and backing of TIO by the NT government worries me no end, especially considering what could happen with a privately-owned insurance company with such high stakeholder interest. Approximately 90% of residents may have everything they own – private and business – insured with TIO. The decisions it may make in the face of a major disaster – potential bankruptcy, delaying payments, etcetera. As much as I love Darwin, it may be time to consider moving south.
These are some of the posts we see on Facebook: ‘TIO supported the people not insured for floods in Katherine’. ‘Allianz was the worst payer for the Brisbane floods.’ ‘Watch out people.’ The NT News poll showed 90% opposition to the sale.
How could you miss the front page of last Friday’s paper? Did you literally put you head in the sand?
Thirty-four days ago this was raised in a very casual manner in the Chamber. It was only after the public started asking questions that the Chief Minister started revealing details. It was a case of another question was asked and we got another media release. It was like being drip fed. When the opposition, the member for Nelson and the community started asking questions we found out a bit more. This is not how government should operate, but this is how the Giles government operates.
Territorians are staunchly opposed to the sale of TIO. TIO belongs to Territorians not the CLP government, and they should be given a chance to say what happens with their TIO. No, you are rushing it through.
A public meeting was organised but the CLP did not turn up.
The community has an expectation of the government of the day, which has a responsibility to protect public assets, particularly where monopolies exist in small jurisdictions. Public assets like TIO belong to Territorians, not the government. Once they are sold you cannot ensure they protect Territorians.
You talk about goodwill, Chief Minister. Territorians trusted the CLP by voting for it at the last election. There was goodwill you would look after the Territory, but look what has happened. The unelected Chief Minister is selling public assets without consultation.
Considering you have thought about how things will be once the sale is over and we have an international global company, how will it treat a small number of Territory-based insurance policies?
It is happy days at the moment. We are told about all the things we can buy with the money, but once the money runs out and the happy days are gone, what will we be left with? When Allianz decides the cyclone and storm surge risk is too much, what do we do then? What if the people of Coconut Grove, who live in a primary storm surge zone and may already pay thousands of dollars to insure their homes, cannot get insurance at an affordable rate? What about residents along Casuarina Drive?
One retired gentleman spent quite a bit of time getting quotes. His quotes were $5000 to $6000 more than he is currently paying with TIO and the storm surge section was variable; he could not get assurance on that.
Chief Minister, you might not care too much. I am not sure what your long-term plans are, but I love this place and am passionate about the Territory, Territorians and ensuring they have protection. TIO is currently the only insurer in the Territory market which provides the cover Territorians need to be fully protected against cyclone, flood and storm surge. It also provides disaster cover to mitigate against potential profiteering from rebuilding efforts after major natural disasters.
The member for Araluen said it is 35 years old and we should sell it; it has had a good innings. If that is how Cabinet makes decisions it shows you do not understand Territorians. What will you say to your constituents in the Alice Springs CBD and The Gap, all at huge risk from floods? Prevention is better than cure you might say, but not a cent is mentioned for flood mitigation in Alice Springs. Under the previous Labor government the Alice Springs Town Council received funding to carry out rechanneling and sand removal in the Todd River and for storm water drains. This helped redirect flood water and reduce the chance of flash floods impacting the town.
The CLP government has not committed one cent to flood mitigation, and we have not seen one cent for this infrastructure fund either. Chief Minister, you say it is a good deal because we get money for Territory Day celebrations for two years. Are you serious? Is that what we get for selling TIO? Can you be more insulting? There was also a $50 000 sponsorship and a few traineeships. Somehow we are meant to go away for Christmas, come back and just forget about it. Five minutes into your speech today you were talking about what we could do with the money, not answering the questions people are raising.
The Labor opposition demands the CLP reveals the terms of sale. Does it include a restraint of trade clause which will prevent the federal government from establishing a TIO government owned model of insurance being established in the Northern Territory?
It is appalling the CLP government is not only selling TIO off without a mandate, but we have the unelected Chief Minister selling something that is not his. It is a public asset and you do not have a mandate to sell it. We have heard an outcry from Territorians that they do not want TIO sold. Businesses, families and our community are staunchly opposed to this sale but are being arrogantly ignored by this government.
Territorians rely on the specific coverage provided by TIO against our unique conditions. Chief Minister Giles, you do not get it.
Ms LEE (Arnhem): Mr Deputy Speaker, TIO is Territory owned and I support TIO remaining owned by every Territorian. The sale of TIO is putting all Territorians at risk of expensive flood insurance, especially those in the Katherine and Daly regions. Many members in your area have rung me, Facebooked me and sent me a text in regard to the sale of TIO.
Remote communities come into this as well. Insurance cover with TIO has always been available for remote communities; they rely on it heavily. There has been no consultation in the remote areas except for Katherine, where people have said we should not go along with the wishes of the government. I wonder if the member for Katherine will do anything about that. Will he cross the floor? Will he support the people who voted him in or will he go along with the Chief Minister?
The unelected Chief Minister is a blow-in to the Northern Territory and, all of a sudden, thinks he can make decisions and everybody just follows the leader. It is a day of disgrace for the Northern Territory. The CLP government put TIO in place, and the CLP government will take it out. I was born four years after TIO was established. I have insurance with TIO. I now have to deal with Germany and Allianz to talk about my car insurance and everything else.
The office in Katherine …
Mr Chandler interjecting.
Ms LEE: The member for Brennan has something to say but he has had his turn. It is our turn now. If you do not want to listen, there is the door. You obviously did not listen to the people of the Northern Territory. No one is stopping you. Eighty per cent of people in the Northern Territory voted against this; they said no. They are the same people who will throw you out of government in 2016. Believe me, it will happen.
Bush seats on that side will go. That is not a joke any more. This government is a joke. That is the reason my colleague and I walked out, and we are more than happy to do it all over again. You can always rub lemon into the scar.
Territorians who own it do not want to sell it. I do not know if that has got through to you. What gives the Giles government the right to arrogantly ignore the wishes of Territorians and sell people’s assets? It has not listened to people.
The sale of TIO has 700 signatures against it from Madam Speaker’s Goyder electorate alone. If you do the maths, 700 people is approximately 15%. That is a lot of unhappy people in one electorate alone. I trust these people will have the final say during the next Territory election.
Any risk to Territorians which increases the cost of insurance premiums will have a knock-on effect and will damage the Northern Territory economy. Expensive insurance premiums mean expensive body corporate fees. Expensive body corporate fees mean a risk of devalued property markets. Devaluing property markets means property investors will lose millions of dollars across the Northern Territory, but you had that all figured out with your spin doctors.
The story speaks for itself, and when the truth comes out in 10 years it will be a shame. The people had their say but they were never heard. Is that not what we were elected to parliament for? Yes, you have to make hard decisions sometimes, we all understand that. No one wants to be unpopular. When it comes to something Territorians value so much, that they have grown up with and has been there during hard times, including the major loss in Katherine – I was there in 1998 when the flood came in and my father’s house was totally trashed. We had to strip the carpet out. Kids in bush communities like Barunga and Beswick were starving. Who will go there to support them? Who will help with the cleanup? Will people from Germany come to Australia? Will you go there, Deputy Chief Minister? Will you go to Katherine or these remote communities to help people? Will any of you go there? I live in my community and will definitely be there. I was there in 1998, I was there in 2008 and I will always be there. It is a shame for the people of the Northern Territory, especially people in the bush, who know TIO is theirs.
I know how arrogant this Chief Minister is, but I do not know if he gets the point or not. That is not for me to decide, because in 2016 it will be laid on your head, not mine. Yes, some of you will make it back in. You can smile about it, but it will not be for long. Being a politician does not mean you are here to grow bigger than this House. We are politicians because people believe in us to make the right decisions. Be humble enough to understand that. Be humble enough to speak from your heart. I cannot say much for the other side; I do not know if there are any souls left there. Everything has been stripped out and thrown onto the verandah.
This is a bad deal for the Territory and Territorians, full stop. The Chief Minister has described Allianz as one of the world’s largest insurance companies. The member for Nightcliff said someone called Allianz to get an insurance quote and they would not help them. I have seen the ads on television. I am happy with TIO; I will stick by my own. Everybody will have the same problem, not just the person who commented on the Facebook page. It will affect everybody who has insurance with TIO.
How does the Chief Minister think they became so big and successful? They reached this position by making a profit in the business. TIO did not get to be this big by being a charity. How does the Chief Minister think they will run this business? Of course they will run it at a profit! Chief Minister, who will pay for the profit? Territorians will pay that profit and foot the bill, as always. Territorians have this to look forward to, especially the people in the bush who voted this government in. They are now footing the bill but they do not get any support there. ABA is building the road at Gapuwiyak; it is their money. It is not government money; it is royalties from soils dug out of our ground.
High insurance premiums will line the pockets of new owners who are only interested in high profits. Shareholders want a profit; they are not here for Territorians and neither are politicians on the opposite side. Territorians own it. The Giles government has no mandate to sell off Territory assets. The sale of TIO is not in the best interests of Territorians. It puts in jeopardy affordable flood risk insurance plans which will further expose Territorians’ homes and personal assets to be lost without any risk mitigation insurance in place if it becomes unaffordable.
When making a high-level corporate decision business always seeks shareholders’ support. Where is the support to sell TIO from Territorians? It is probably a few CLP members who are left, not a lot. You definitely do not have the bush, you lost that bat.
The equivalent shareholder of TIO is currently every Territorian, young and old. The sale is high risk to those of Katherine, Rapid Creek and Indigenous communities like Daly River, Barunga and Beswick that are under flood risk. The Chief Minister’s arrogance has been shown by ignoring the 89% of Territorians who are opposed to the sale of TIO, as quoted in the NT News.
The sale of TIO is not in the best interests of Territorians, me, my colleagues or the Labor members. At the end of the day, at least we listen to the people. Even if we were in government we would still listen to the people.
When the member for Namatjira and I were on the other side we tried to tell them in the wings, so many times, what people were saying. That did not get through to anybody. Here we go again, another blow-in with another big idea because he wants to follow the world. We are already 10 years behind the world. What else do you want to follow? Will you try to keep up with them? We do not have enough money so how is that helping anybody in the Northern Territory, especially people in my electorate or those in the Katherine electorate? You will have to do a lot of convincing there, and in Daly and Stuart, because I know where they stand.
We all live with our choices at the end of the day, but the one that means so much to us is something you cannot take away. You made a decision on Sunday night to say, ‘Yes, we decided this’. We may as well go to the Blue Mountains and take away the Three Sisters. How would he feel?
No, he comes to the Northern Territory and wants to take everything away. You do not want to recognise it is Territory owned.
Ms ANDERSON (Namatjira): Mr Deputy Speaker, I speak against the sale of TIO and the fact it has been brought into this Chamber on urgency.
As everybody has been saying, there should have been a two-way conversation and a discussion in this House. It is only appropriate that there is appropriate debate on any legislation. The fact there was not a two-way conversation between the people of the Northern Territory and this government is of huge concern to many of us.
The sale was not explained to Territorians. You can see from the many polls media outlets have conducted – ABC, NT News, and I can quote many more.
The complaints to our office in Alice Springs – I have had people from Alice Springs and businesses e-mail or text me to say they do not support the sale of TIO. As my colleague has said, you have to be a born and bred Territorian to understand the importance of owning something.
The member for Barkly put it well: we are old Territorians, born and bred in the Northern Territory so we understand the Territory, the climate and exactly where each of us fit in. We understand businesses born in the Northern Territory, and as Territorians we cherish them and like to hold on to what we own. The member for Barkly hit the nail on the head. It is like a young person coming to the Northern Territory overnight, trying to educate born and bred staunch Territorians on what should stay in the Northern Territory and what should go.
It is really inappropriate and distasteful to Territorians to have someone, who is not duly elected by the way, try to get rid of something that is real Territorian, something like the first people, Aboriginals, born and bred and owning the country.
TIO was owned by the people of the Northern Territory. Territorians do not like a stranger trying to take something away without talking to them. Territorians like to be consulted. Territorians want people to say, ‘I want a two-way conversation with you. I want you to tell me what you think is appropriate. These are the ideas of the government of the day, and we will be in for the next 15 months or 16 months. What do you think we should do? This is the information from people who know the industry and we want to know what you think?’
It is only appropriate that Territorians are included in any discussion. By the way, you have always said you were about openness, transparency and want to be on this journey with Territorians. It is always best to take Territorians on a journey with you. It is all of us jumping on the truck, the train or the plane travelling together and making decisions and listening to each other.
One side says 80% of people say no. Perhaps we need to ask why 80% of Territorians disagree with the sale of TIO.
Perhaps we need to put the brakes on and start listening to people who were born here and will die here, not people coming to make a quick buck then leaving the Northern Territory. These people will live here forever, like us.
Territorians do not like being excluded from the debate. They want to be on this journey with politicians, with the government of the day. The Chief Minister has been open with the media in saying he wants to develop the north, but he wants to make sure there is a conversation with the people, engaging the people to make sure he is driving with all Territorians on board and that there are economic opportunities for everybody in the Northern Territory, whether they are in remote or rural areas, or in our major towns. People want to be part of that journey. With the sale of TIO, you have left people behind.
The Speaker presented a petition from 700 people. As my colleague said, that is 15% of people in her electorate. The member for Nightcliff presented a petition, as did the member for Nelson. Thousands of people have said, ‘Listen to us. Please stop. Make sure we are on this journey with you.’ Pushing it through on urgency is what we do not like.
This is a house of debate and we should debate these issues. We do not like that it has been rammed through parliament without any consultation. There has been no conversation with people. If we need to take people with us we need to make sure we are involved in the journey. It is sad when thousands of people in the Northern Territory say no to the sale of TIO and an arrogant government says, ‘There’s no use screaming and yelling. We will ride all over you and do what we think is appropriate.’ I hope you are right.
I hope you are getting the e-mails and text messages we are from small businesses, from people who have gone to my office, people who have our e-mail address, ordinary people. They are not people in my electorate, they are people from Darwin e-mailing us saying, ‘Please vote against the sale of TIO’. They are pleading with us knowing we are not government. You will win anyway. You will ram it through parliament and win on numbers. I hope to God you are right because many of your colleagues will not be here come 2016 because of TIO.
We are not talking bush seats; we are talking about northern suburbs seats. People in the northern suburbs are complaining about the sale of TIO. These people have not been included in the debate. Why the hurry? Why are you ramming this important legislation through this so-called House of debate? We are supposed to have our debates in this House, the House where we can be outspoken and where we make rules that embrace and encompass Territorians. The government is saying, ‘We’re not listening to you. We are the government of the day. I am the unelected Chief Minister and I decide what happens in the Northern Territory.’ It is really sad to see some of my former colleagues go along with this. We have seen floods in Alice Springs and in Darwin.
The Chief Minister was not here in 1974 when Cyclone Tracy hit Darwin. He was nowhere near Alice Springs when the floods happened, and he was just coming into Alice Springs when the Katherine floods occurred. There was devastation everywhere. People’s marriages broke up because of the insurance processes and people found it very hard to go through the things they needed to. Many people attended counselling.
These are real concerns and issues the government should take notice of. These are real people in the northern suburbs, across the Daly region, Goyder, Katherine, Alice Springs and Barkly. These people voted us in and want to hear our voices in this Chamber. We oppose this bill and the sale of TIO, Mr Deputy Speaker. It is important that people like you listen to your constituents and hear the voice of Territorians who live in your electorate. They are calling on you to vote against the government, speak up and hold the reins of this fresh, new chum Territorian who has come to the Territory and started pushing us around. Do we, as Territorians, want someone else coming in to push us around? Of course we do not.
That is the concern of ordinary long-term Territorians. They are saying, ‘This is our TIO and you are not selling it’. They are pleading with us, but they know only certain members on this side of the Chamber will vote against this. There are eight members in the Labor Party, one Independent and my colleague, the member for Arnhem, and me. We will be taking what we have heard and seen back to Territorians. We will take most of the comments from Hansard, reprint them and give them to people. We will make sure we expose what you have said in the Chamber to people who might not have heard it or read Hansard. People will know if you have backed the sale or said it should not go ahead. ‘Who gives a damn about your cries? We won’t listen to you.’ We will be passing that around.
Mr WESTRA van HOLTHE (Primary Industry and Fisheries): Mr Deputy Speaker, today is perhaps one of the most significant days in the history of the Northern Territory parliament. Today this parliament will pass, or otherwise, legislation that will give effect to the decision Cabinet, the executive arm of government, made on Sunday to approve the sale of the Territory Insurance Office.
As a Katherine resident and local member for Katherine, my initial response to the sale was one of great concern. I was quoted in the media as having major concerns about the sale, and at the time that was true. However, it did not mean I was against the sale, and I will be happy to explain.
As much as anywhere in the Territory, I believed a change of ownership for TIO may have adverse impacts on many TIO policy holders in Katherine, and I wanted to make sure I fully understood the real implications of such a change for and on behalf of those policyholders. More broadly, as one who represents not only my electorate, but as a minister of the government representing the interests of all Territorians, I had concerns about the impact such a sale might have on TIO policyholders in other areas. These areas include Darwin’s cyclone-affected areas and parts of Alice Springs affected by occasional flooding.
I have experienced all those things. I have lived in Darwin and been through cyclones. I have lived in Alice Springs and seen the Todd River flood and seen it flow many times. I was in Katherine during the 2006 flood, where some of my property was inundated to a depth of 2 m. I am not new to the Territory’s major natural disasters and the potential risk they present to property owners in the NT.
Anyone who has been in the Territory for a significant length of time would know the major reason for my hesitation, and the hesitation of Katherine residents, in supporting the sale of TIO. It is because of the devastating floods that caused significant property damage in Katherine.
The first of these was in 1998, which was the worst as the majority of Katherine homes and businesses were affected. Floodwaters swamped just about everything in town. In that time of despair, having adequate and comprehensive insurance helped Katherine repair and rebuild. However, there was a significant contrast between locals insured with TIO and those not.
Residents insured with TIO received compassionate and helpful advice, their claims were paid in a timely fashion and they could start the massive job of rebuilding and repairing. Allianz would be well served by taking note of the lessons TIO learned during that period.
As the prevailing headline issue for Katherine residents, it was for this reason I was reluctant to throw my full support behind the sale of TIO before knowing all the facts. I was not Robinson Crusoe in that regard. I assure all members in this House and all Territorians that every minister and member on this side of the House shared a greater or lesser degree of concern about the sale of TIO and the implications that come with it.
As a local, and after talking to Katherine locals, I knew the two main issues causing major concern were that the sale might cause premiums to rise, and flood insurance for Katherine residents would be adversely affected. So I joined the CEO of TIO, Richard Harding, at a public meeting I called in Katherine to have these concerns addressed, find out the facts and gain reassurance – if Mr Harding was able to provide it – that the sale is the best option for the Northern Territory and for policyholders of Katherine.
The meeting was fairly well attended with about 50 locals in the meeting room at Knotts Crossing Resort. To be honest, I was a little surprised the bleachers were not filled to overflowing, but it was what it was. Mr Harding did a great job in presenting the facts to some very concerned people. He also did a great job answering questions about the potential sale. What became apparent was things were about to change if TIO was not sold and retained its current structure.
I am not giving away any secrets, but Mr Harding said – he said it in the media as well – under a new approach to the insurance business premiums for flood cover in Katherine would rise significantly in 2015. With flooding data now available to insurance companies they can better target high risk areas. He said since the 2011 floods in Brisbane the industry in general had adopted a consistent definition of flooding. Mr Harding said TIO would have put up premiums to better reflect the insurance risk in high-risk areas.
In one graphic, Mr Harding showed the average premium for flood cover for companies other than TIO was around $6000. His indications were TIO would be moving premiums to more closely reflect that average cost. If TIO is not sold, that is the fate in store for flood policyholders.
Mr Harding also detailed a number of other realities about TIO’s place in the insurance market. TIO spends about 30% of its premium revenue on reinsurance compared to the industry norm of between 6% and 8%. TIO’s reinsurance covers a much smaller percentage of TIO’s risk compared to other insurance companies. This raises, for me, a serious concern for the Northern Territory government, and, more importantly, Territory taxpayers. If there was a shortfall in TIO’s capacity to pay out in a major disaster the Northern Territory government would carry the risk. In other words, Territory taxpayers would bear the risk of underwriting loss payouts beyond TIO’s ability to make the payments, even with reinsurance.
The question in my mind, be it a philosophical one, is why should people who do not live in a flood or cyclone-affected area underwrite those who do? Moreover, with current pricing policies adopted, policyholders need to know non-flood premiums are subsidising flood premiums. Someone who lives on Maluka Road, which is not subject to flooding, is subsidising the premium of someone who lives on Riverbank Drive, which is subject to flooding. In my view, this is not fair.
I have now seen the details behind the sale. I have spoken at length to the TIO CEO, Richard Harding. I have met with executives of both Allianz and People’s Choice Credit Union and am confident Allianz and People’s Choice will continue to do the good work done by TIO.
I have been unequivocal in my position in relation to conditions a prospective new owner of TIO would have to adopt if it were to receive my support for the sale. Things like the continuation of flood cover, cyclone cover, local branches, especially in Katherine, and security of jobs for current TIO staff.
All those things are important to me personally, and on behalf of my constituents in Katherine and more broadly. All the conditions I considered vital and needed to be protected are in the contract of sale. My colleagues and I have been successful in negotiating the best outcome for TIO customers.
Like the member for Fong Lim, I am a TIO policyholder and I live in a flood-affected zone in Katherine. I have two properties in Katherine that are potentially flood-affected. Does anyone think I would sell myself out by endorsing a change of ownership for TIO that would not be in my best interests?
Politicians are often accused of all sorts of things, many of which relate to self-interest. I will not be lectured by a bunch of lily-livered ideologues on the other side of this House accusing us of blindly following the Chief Minister. Each one of us critically examined the pros and cons of selling TIO. We all critically examined TIO’s current position financially and as it sits in the greater insurance market. We all critically examined the politics of this.
Does anyone really think we want this fight? Does anyone think we enjoy the criticism being levelled at us as a government or individually? Does anyone think I enjoy good Katherine people railing against the government and me as their local member? Of course not.
This is not about having a fight; this is about doing the right thing. Selling TIO is the right thing to do. Suggesting we on this side of the House have simply rolled over, are taking a quick cash grab or are motivated by greed is another example of the opposition measuring us by its standards.
I will not reflect too much on the opposition’s contributions because they were pretty much the same bile and vitriol we are used to, but I pick up on a couple of comments, the first made by the member for Namatjira. I hope she does not mind that I paraphrase what she said. The member for Namatjira effectively said she hopes to God this is the right thing to do. I believe it is and, at the end of the day, history will judge if the decision to sell TIO was the right thing to do.
It is important to point out some major things that are critically important for Territorians. The TIO name remains, branches stay open, policies stay the same, flood and storm surge cover continues and staff will keep their jobs. When people wake up next Monday, after a relaxing weekend, TIO will still be there. Their policies will be there, the branches will be there and the jobs will still be there. When people come back from school holidays in January, TIO will still be there. Their policies will still be there, the branches will still be there and the jobs will still be there.
The sale of TIO will provide an injection of funds that will be used to secure the Territory’s economic future by building vital economy-building infrastructure that will open up the Territory’s full potential.
I did my homework; I acted on behalf of my electorate. Unlike the opposition, I did not use this to score cheap political shots. In fact, the opposite is probably true. All members on this side of the House have put themselves in the firing line from constituents not only in our own electorates but broadly across the Territory who disagree with the sale of TIO. Did we do it willingly? Yes. Do you think we enjoy the position we are in? No, but at the end of the day the test is whether this is the right thing to do for Territorians.
Unlike the opposition, I did not scaremonger Territorians; I did not put up signs opposing the sale on every road in town. Those actions would have been a disservice to the people in my electorate and Territorians in general. I am confident the sale of TIO is in the best interest of all Territorians. The benefits of selling TIO far outweigh the negatives and the reasons to sell far outweigh the reasons not to.
The sale will transfer the risks currently borne by Territory taxpayers to the private sector, where they can be more effectively and efficiently managed. The new arrangements for insurance will see the iconic TIO brand retained along with flood, storm surge and cyclone cover.
I pick up on contributions from members opposite – I cannot remember which ones specifically – but there was talk about phone calls being made to Allianz about flood cover and the response received being, ‘Sorry, Allianz does not cover flood in that area’. I cannot verify the veracity of those calls, but TIO remains regardless of what Allianz does with the remainder of its business. TIO remains along with the conditions set down in the sale. That includes flood cover in Katherine, cyclone cover in Darwin, and – the Alice Springs members would know better – flood cover in Alice Springs. It certainly covers storm surge in Darwin.
That is another example of the opposition playing cheap politics without the benefit of the requisite knowledge to bring sensible debate to this House. Allianz has a number of business divisions which all operate slightly differently. TIO will, as a new part of its stock, operate differently from other parts of its stock and other business divisions it has. TIO in these conditions will in many ways be independent of the remainder of Allianz’s operating conditions. That is critically important for people to know. The opposition either does not know or does not want to know that so it can bring cheap, political and spurious arguments into this House, trying to diminish the good name of TIO and Allianz.
The funds raised from the sale of TIO will enable this government to invest in infrastructure needed to unlock the full potential of the Northern Territory, creating jobs and opportunity. Every region in the Northern Territory will benefit.
The $25m set aside for Katherine includes $7.6m to move Katherine’s ambulance centre out of the flood zone, with the remainder to be used for other flood mitigation works. The aim of flood mitigation works is to reduce the risk faced by individual properties and the community in the long term, thereby keeping premium price rises to a minimum. Flood mitigation is not about flood prevention. There is probably no way to prevent Katherine from flooding. You cannot block up water that easily and stop it coming into town; it is not the nature of the beast. Mitigation is about providing resilience, preparing people and doing what we can to minimise the impact of flooding when it comes. This is bearing in mind much of Katherine is built on the floodplain of the Katherine River.
I look forward to working with the Katherine Town Council, emergency service providers, insurance companies, local business owners and the community as a whole to advance any projects to help make Katherine more resilient to flooding. This includes flood mitigation, drainage measures, flood preparedness, safety and recovery, and understanding our flood risk.
This is expensive work. Twenty-five million dollars rolls off the tongue easily, but it is a lot of money. It is expensive work that has never been considered and acted upon by any previous government. Regardless of who owns TIO, pricing for flood cover is a difficult issue. Indeed, TIO has been examining how it should price flood cover into the future in light of significant increases in global reinsurance costs and developments in flood insurance nationally. These changes are due to changes in flood pricing nationally and are unrelated to ownership. While the ownership of TIO will change, TIO will remain in the Territory and the Territory will remain in TIO. It will maintain local services but ensure a global spread of risk. If the Northern Territory government remained as the owner of TIO, Territory taxpayers would continue to be exposed to significant financial risk.
If the Territory government remained ownership of TIO the company would be forever constrained and held back by the Northern Territory border, because no Territory government would underwrite the risk outside our borders. This is unacceptable for Territory taxpayers and counterproductive for TIO. Larger diversified insurers have a much bigger capital base than TIO. Those insurers are much more capable of holding the risks TIO is exposed to, like flood and cyclone. In reality, government ownership was strangling TIO not helping it.
The sale of TIO will provide funding that will be put to good use in building and upgrading key infrastructure in the Northern Territory. If the Northern Territory government remained the owner of TIO we would not have this major injection of funds to help build our future. The sale of TIO is not a quick grab for cash, as has been suggested by members opposite. This government is getting out of running an insurance and banking business and getting on with building the Territory.
What is highly questionable in this whole debate, and a threshold question, is why a government should be involved in an insurance industry? Even more so, why should a government be involved in the financial services industry? Again, I say it should not.
The sale has converted a high-risk locked asset into a cash asset that will help the Northern Territory reach its full potential and ensure jobs and prosperity in the future. It will be a Territory that has immediate infrastructure priorities where safer communities, new jobs and economic opportunity can be created for Territorians.
Mr Deputy Speaker, I support passage of this bill through the House. I implore my good friends and neighbours in Katherine and across the Territory to take an objective view of this matter and put aside their emotional attachment to two businesses that should not be run by government and would be better run by the private sector.
Ms MANISON (Wanguri): Mr Deputy Speaker, I contribute to this debate regarding the bills before the Chamber to sell TIO. This is a sad day for the Northern Territory. It is not only sad because we are losing TIO, it is sad to see the process followed in selling TIO. For the government to announce sale of TIO on Monday then ram through legislation to sell it the following day, not allowing proper scrutiny, is a disgrace.
We just heard the contribution from the member for Katherine. He has been under a lot of pressure. He said history will judge if selling TIO was the right thing to do. One thing is for sure, history will not look back kindly on the process followed by the CLP government in selling TIO. That is fact. It is arrogance to sell the people of the Territory’s public asset without allowing proper scrutiny or debate around the sale of that asset. That is a disgrace.
I have seen members of the government hold their heads down because they know it is a hard deal to sell two assets belonging to Territorians. According to them, it is the right thing to announce the sale of TIO on Monday, come into parliament on Tuesday, introduce the bills, not allow for proper scrutiny or debate and ram through passage of those bills. That is a disgrace. You should be ashamed if you vote for these bills in the way they have been presented.
I believe history will judge this government very poorly for how it handled the sale of TIO. From the start it has not been up front or honest with Territorians about its plans for TIO. Let us be clear about that. After the last sittings the Chief Minister said the CLP government had been in discussions on the sale of TIO since March. We are now at the end of November. Cabinet has been discussing the sale of TIO since March.
The opposition got word of this and started asking some important questions of the government about the possible sale of TIO. The answer from the government was nothing was on or off the table. It was not a clear or up-front answer for Territorians.
What have we seen happen in the Territory since March? We have had two by-elections, with the people of Blain and Casuarina going to the polls. When did we see the government come clean with Territorians about its agenda to sell TIO? Two days after the Casuarina by-election result came through.
If selling TIO was such a good idea the government should have been up front and honest with Territorians. It should have allowed due time for debate and scrutiny of the sale of TIO across the Territory. The government should have provided more information about why it decided to sell TIO rather than bombarding Territorians with full-page expensive adverts in newspapers and a high rotation of television advertising.
The government did not ask the question regarding the sale of TIO. It did not present an argument to people as to why it believed TIO should be sold. Instead, it arrogantly put to Territorians, ‘If we sell TIO, and we are sure we will, what would you like to spend the money on?’
That is not how you do business. That is not good government. People can see through the spin. Territorians think the way you ran the campaign was arrogant.
It was a terrible communications campaign. You have been told this, I am sure. There are some fantastic communications professionals in the Department of the Chief Minister, outstanding people who have been working in communications for a long time. They would have been horrified at having to put some of those adverts together, knowing it was not a good way to communicate with people.
It was not good to treat Territorians the way you did and not ask them the fundamental question, ‘Do you want TIO sold, yes or no?’ It was not seen as genuine and people thought it was a disgrace.
This week the Giles government will finally execute its plan to sell TIO despite overwhelming opposition from Territorians. I find it ironic that only a few days ago the government asked people to reflect on the tragedy that unfolded almost 40 years ago when Cyclone Tracy wiped out this great city. We have seen devastation from natural disasters in this city and the Territory, but it seems the CLP has learned little from that.
Despite knowing what cyclones can do to Territorians the government is still selling the insurer that has stood by us through thick and thin since 1979, and abandoning Territorians who will need the support of an organisation like TIO in the future.
The Giles government has not listened to the views of Territorians on the sale of TIO, and the way it executed plans to sell it is disgraceful. It has been a fundamental betrayal of Territorians and their needs. The Giles government has let Territorians down again and shown its arrogance by not listening. Unfortunately we have all become accustomed to that. Territorians do not trust the CLP government and have good reason not to. Look at the track record so far.
In the 2012 election you told Territorians you would reduce the cost of living. What did we see straight after that? The price of power and water went through the roof and there is another 5% coming on top of that on 1 January.
CPI has increased. The government promised not to sack public servants, especially vital frontline workers, but we have seen instability throughout the public service and big cuts to frontline services, including teachers and education, a critical area for the Territory.
Last sittings the CLP government made a commitment to bus drivers that privatisation of the Darwin bus service would not mean loss of entitlements. Their entitlements are already being stripped away.
You cannot trust this lot, and people are sceptical about your promises around TIO. This is not just as a result of the government’s broken promises and appalling track record to date, but because of the process the CLP government has followed.
Despite months of questions from the opposition the government only came clean on the agenda to sell TIO two days after the Casuarina by-election, even though it had been discussing it since March. The Chief Minister came clean on that as well.
The effort from the government to communicate with people on the sale of TIO and why it is going down that path shows arrogance. Rather than asking questions and engaging people in meaningful debate and two-way communication about the pros and cons of the sale we had, ‘What would you like us to spend the money on when we sell it?’ The government treated Territorians like idiots, and people are not happy to say the least.
To tell people you wanted a mature debate on TIO then drive a costly campaign where you failed to ask if they supported the sale infuriated people more. To now ram the sale through and do your best to silence debate in parliament is beyond arrogant, it is betrayal. It is disloyal to Territorians, and many Territorians will now face skyrocketing insurance premiums in their future, that is if they can get insurance. People have been abandoned by this government.
It is disgraceful. You should think hard before you vote on this bill. You have failed to listen to your constituents and stand up for them. You will fail to do your job as a member of parliament if you support this bill because Territorians across every electorate said loudly and clearly they do not support the sale of TIO.
This is another disgraceful part of the way the Giles government has gone about selling TIO. Because you understand what an unpopular decision it is you have decided on swift execution of the sale. By passing this bill on urgency you are not allowing for due process. This is arrogant and you know it. We have seen this government ram things through on urgency, but to do it in one day is outrageous.
Some members on your side respect the job they do and the importance of following the processes of the Westminster system. Those processes have come about for good reason: to enhance democracy, transparency and appropriate scrutiny of government. You are making a mockery of this. Why rush? Why not allow for passage of this bill and a sale in February? Why are you being so arrogant by announcing the details of the sale of TIO yesterday and executing the sale by legislation today? That is the day after! You have not given Territorians the opportunity to see the details of this legislation or ask questions before debate so there is proper scrutiny of it.
You would be horrified if you were on this side of the Chamber watching the process taking place now. I can only begin to imagine the reaction we would have seen from government members when in opposition several years ago. They would have been astounded and fighting this all the way. I hope every government member supporting this bill understands what they are doing and justifies their decision so constituents can see why they are voting to sell TIO. I remind you once it is gone, it is gone forever.
Everyone can see the Giles government is ramming this through in one day to minimise scrutiny and debate. Quite simply, the government has decided it wants to minimise the pain over a few days rather than a few months if these bills were properly debated in February. By doing it quickly, just before Christmas and the school holiday break, you hope people will forget. When we see big spending budgets, particularly in 2016, you will hope people have forgotten the controversy surrounding the sale of TIO. This again demonstrates what an arrogant government you are and that you treat Territorians like idiots.
Just like the massive power and water price hikes in 2012, you hope people will forget by 2016. People face another 5% on 1 January and are feeling the ongoing pain of power and water price hikes and the sacrifices families have to make to pay those bills. People have not forgotten.
I want to be clear and remind parliament what the sale of TIO is about. This is simply a way for the CLP government to get its hands on money. This is a cash grab for the 2016 election campaign. This government is hoping the big spending promises it can make with the money will be enough to make people forget about the disgraceful process it followed to get there.
The government will also be hoping insurance premiums do not increase until after 2016 so it does not have to cop a further backlash as a result of that. What is concerning about this move by the government is it flies in the face of recent recommendations to keep an insurer like TIO the way it is, that is, not privatise it as there has been significant market failure on the east coast of northern Australia.
Recommendation 6 point 5.30 of the PIVOT NORTH Inquiry into the Development of Northern Australia: Final Report says:
TIO has worked and has even been profitable. The government is selling a sustainable insurer that works, gives families and business affordable insurance and makes money. Over the last five years TIO has made a $305m profit. The CLP even took a $10m dividend this year. Now it has sold it for $424m, which equates to $275m after you take out the $9m fees and the $140m drawdown, less than the five-year operational profit of $305m. This is another indication of how short-sighted this sale is and how desperate the government is to get quick cash to bankroll and pork barrel during your 2016 campaign.
People are concerned about what will happen to insurance premiums. The Pivot North report shows in Queensland there are huge differences in insurance premiums between the south and the north. In Brisbane you could pay $2000 whilst in Cairns about $9000.
We looked at the Allianz website last night to see what home insurance premiums were like in Cairns. The page said, ‘Your home insurance quote. We are unable to offer you insurance online due to a change in our underwriting guidelines. Allianz is no longer able to provide home insurance in this area. We apologise for any inconvenience this may cause.’
As somebody who uses TIO insurance looking at renewal this year, I found TIO was the cheapest by $800 a year to the next insurer. I live in sunny Leanyer in a cyclone-coded home and am not in a storm surge area, so I dread to think what people in Katherine, The Gap in Alice, Coconut Grove, Cullen Bay or Rapid Creek may feel like. What happens to businesses and households that may become uninsurable because of the sale of TIO?
There will be big losers in this, yet you will not allow proper debate or consultation on the sale of TIO when you know people stand to lose so much. This is an appalling way to go about the sale of a major public asset like TIO.
For those who can get insurance, what they will pay in the future is a huge concern. We cannot see any conditions requiring Allianz to keep prices reasonable and affordable for Territorians.
After watching the member for Brennan on 7.30 NT on Friday, I am concerned there is a misunderstanding in Cabinet about what the sale means to premiums. He spoke about premiums staying down for three years. We saw the details of the sale yesterday, questions have been asked, and there are no assurances that premiums will remain at an affordable level for Territorians.
This seems to be based on goodwill and on promises the CLP government has been making to Territorians about the future of TIO. However, we cannot see protections in place. We must talk straight here; we are talking about a global insurance company that has purchased TIO. You have sold an essential Territory-owned business to a German global giant. It does not get on top of the game by going down the goodwill road. We heard about some of the horrid insurance hikes in Ipswich at the hands of insurers like Allianz, and the huge insurance burden people are now carrying.
Territorians are now in the hands of a global insurer, not a local they trust. There are no guarantees around the future of premiums. Territorians are feeling exposed. As much as the government tries to argue market forces will guarantee enough competition to drive premiums down, members clearly live in a different reality to everyone else. The government needs to look at what is happening in northern Queensland for an example of market failure in the insurance sector hitting the hip pockets of people hard. The Pivot North report acknowledged the problem yet the CLP seems to think the Territory, with a small and isolated population coupled with extreme weather events, is an attractive market for insurers. It has the same idea for Power and Water.
This shows the government is desperate to get its hands on cash from the sale of TIO and will try to spin new realities. Despite the huge effort and excessive money it has thrown into the spin trying to convince Territorians about premiums, nobody believes it. The CLP understands this now, and that is another reason this legislation is being rammed through today. This is a sad day for the parliament and for government members. Not only will they be marked in history as the people who sold TIO, but as the ones who passed the bill in a day, demonstrating how arrogant they are. You have failed to listen to Territorians.
Since the opposition got word you were looking at selling TIO we have asked the hard questions, and asked Territorians if they wanted to see TIO sold. People have signed petitions in droves because they do not want TIO sold. You have failed to listen to those people. Almost 4500 people have signed petitions. Leaving mine outside my office, it has not been hard to get it signed.
You failed to listen to the member for Goyder and constituents who signed her petition. You have failed to listen to the member for Nelson and his constituents. Together, several thousand people have signed those petitions. You have failed to listen to the messages coming through loud and clear from local media.
The Northern Territory News has seen a huge amount of comment and debate regarding the sale of TIO. Its polls showed an overwhelming response – about nine in every 10 – saying, ‘Don’t sell TIO’. It has been the topic of talkback on Mix 104.9 with Pete Davies, where people were ringing in saying they thought the sale of TIO was outrageous. Their poll had over 80% saying, ‘Don’t sell TIO’. Calls have been made to CLP seats across the Territory and 80% of people said, ‘Don’t sell TIO’. In social media there is 9 News, the Northern Territory News and Mix Online where the comments are loud and clear on the sale of TIO. People are not mincing words; they are saying it is outrageous. I am sure when you doorknock your constituents, as I do, they tell you not to sell TIO.
The back yard barbecue topics are the ones people take heed of in politics because they know people are talking about them. The sale of TIO is a subject of debate across the Territory. In workplaces and socially people are talking about this because they do not agree with what the government is doing.
Another issue they are upset about is you did not come clean with voters about the sale of TIO prior to the 2012 election. You had a chance to do that in Blain and Casuarina and develop some type of mandate with regard to the sale by asking voters, ‘Do you want to sell TIO, yes or no?’ Territorians have not had an opportunity to have a say. You have not listened to them; they have no voice in this debate. That is seen today with the speed of this legislation – one day.
Territorians deserve to have a say on their assets. It will take 13 members to pass this bill. We know the Cabinet ministers have signed off on this and will have to live with that decision.
Backbenchers, you have an opportunity to stand up today, but from the tone of the debate you will not. You will side with the CLP government. You are not listening to Territorians, certainly not listening to your constituents and this sale is happening.
This is a sad day in the history of the Territory. The front page of today’s Northern Territory News is right, ‘Rest in Peace TIO, 1/7/97 to 24/11/14, beloved by Territorians, taken suddenly before its time’.
The members of government have ignored Territorians and let them down. Territorians have no guarantees in the sale of TIO that they will have the insurance protections they need in the future. They can see through the sale and see this is a cash grab and is pork barrelling in electorates in 2016. Many people will watch with great interest to see how that money is spent in 2016 and see how you try to sandbag some of the more vulnerable seats. People feel they have been treated with contempt.
To ram this legislation through in one day – make an announcement on Monday, introduce legislation on Tuesday, debate it and give it passage in one day is wrong and you know it. You know that is not the way this parliament should operate. You are making a mockery of being in government. It is the height of arrogance to pass legislation in one day for a publicly owned asset like TIO. It is a disgrace.
You have let Territorians down today. Seeing how you handled the sale of TIO and passage of this legislation is not a good day in the history of this parliament.
Mr KURRUPUWU (Arafura): Mr Deputy Speaker, I support both these bills. I will not hold the call for too long. After the previous address from my colleague there is not much more I can add. I would like to start by addressing comments made by the current Leader of the Opposition and her deputy, the member for Barkly.
Earlier in this debate, the member for Barkly spent a considerable amount of time mentioning margins in electorates Labor lost in the last election. One of those he mentioned was my electorate of Arafura.
I suggest the member for Barkly concentrate on his own electorate. After all, he had a swing of about 8% against him and Labor lost government after that election.
We heard the member for Karama making accusations and personally attacking members on this side. Her contribution was full of venom and spite. She suggested the Chief Minister and I had made some type of deal. The truth is I came back to the Country Liberals because I realised what could be achieved as a part of this government.
The work and economic development occurring in my electorate, as a direct result of our government working for people and communities, is something those opposite are unable to comprehend. Look at the economic development happening on the Tiwi Islands. The barge landing is about to start.
After 11 years in government Labor achieved nothing for people in the bush and that is why we are here to vote them out.
The Opposition Leader has accused this government of a cash grab for pork barrelling in 2016. She already makes excuses for an election loss under her leadership. I can hear it now, ‘We only lost because they are pork barrelling with our TIO money’. Perhaps she will not be leader in 2016.
Let me turn to the sale of TIO. Insurance is based on pooling of risk to share the cost of this risk across a large group of individuals or companies. The share of risk works best when risks are different. In the case of TIO, over 80% of this pool is one risk: a Darwin cyclone. This is simply untenable. Allowing a company as large as Allianz to purchase TIO allows them to diversify that risk across the globe. This has potential to affect premiums in a positive way for policyholders. A sale will also unlock funding for important infrastructure work that can go towards economic development in remote communities, like communities in my electorate.
I make this commitment: I will be fighting hard to get as much as I can for my constituents. On top of that, the new Territory infrastructure development fund is a great way of ensuring any benefits from the sale are preserved for our kids and future generations of Territorians.
At yesterday’s media conference we heard the brand name will remain as TIO, the TIO branches will remain open, and local jobs will be maintained. A commitment was also given to continue supporting local and community events.
Members of this House have two options: we can sit on our hands and watch as TIO fades into oblivion, or we can do the right thing and allow TIO to change and adapt to our current circumstances so it is around for future generations of Territorians. The first is easy and a popular choice; however, it is not the right one for the Northern Territory. The second is hard and tough, but it is the right one for TIO and the Northern Territory.
I argue that all members make the hard, but right, decision and support these bills.
Ms WALKER (Nhulunbuy): Mr Deputy Speaker, I oppose the bills the Chief Minister – also as acting Treasurer – is rushing through the House to sell off a publicly owned asset, a unique and irreplaceable asset, the Territory Insurance Office. Once it is sold we will not get it back. This is a betrayal of Territorians and one the CLP government and its elected members will pay for dearly.
Somehow the CLP has managed to completely ignore the voice of the overwhelming number of Territorians – between 80% and 90% – who have made it clear they do not want the Territory Insurance Office sold. Somehow the CLP has managed to break every election promise it made in the lead-up to the 2012 election on coming into government. However, the biggest betrayal of all is selling the government owned insurer without a mandate, without engaging with Territorians in a two-way meaningful conversation about what the sale means, without observing proper democratic process or without referring this to the normal legislative process. That should have been preceded by a period of consultation and, given the scale, a parliamentary inquiry or, as the Leader of the Opposition called for, a Senate inquiry. Today in this Chamber CLP members are putting forward their position on this sale to not only Territorians, but to their constituents, explaining why they are selling TIO, shafting their constituents and hanging them out to dry.
A forum was held at Charles Darwin University a few weeks ago, but no one from the CLP saw fit to attend. They were not interested, not feeling there was an onus or responsibility on their part to show their faces, listen, speak up or be prepared to tell people why they made this decision. They were not prepared to have the courage of their convictions and defend their position. That evening the Chief Minister chose to attend a dinner at the Hanuman restaurant for the local government sector. I saw him there.
I noticed the first person who made a beeline for him was a former member of this House, Ms Fay Miller, Mayor of Katherine. I have no doubt she gave the Chief Minister a strong message, but one that has clearly fallen on deaf and arrogant ears.
The Mayor of Katherine, a long-term resident, knows only too well what is at stake in Katherine, a community very vulnerable to flooding and with businesses and residents with long memories. They remember how the last major flood in 1998 devastated their town and how many insurers did not pay out. Only the Territory Insurance Office stuck by Territorians, honoured policies and paid out, and helped people get back on their feet and recover. As we heard from the member for Katherine, TIO was the only insurer to deal with people in a compassionate and timely manner when working through claims.
I give credit to the member for Katherine for attending the public meeting in Katherine recently. Indeed, he called it. He has gone up in my estimation a notch. He was caught between a rock and a hard place, and to not show his face would have been a bad look for the local member who knows his re-election prospects in 2016 are tarnished with this decision to sell TIO. He even went to the media to voice his concerns and make it known he had major concerns about the sale of Territorians’ public insurer. He is a little sensitive to criticism and bad decision-making, unlike the rest on that side. They are unflinching in the face of a tsunami of criticism and vitriol, and an outpouring of anger that puts all their re-election prospects at risk come 2016.
I suspect some are putting on a brave public face, but away from the public glare of angry Territorians they must be having some sleepless nights. The member for Brennan’s contribution to this debate alluded to that personal level of discomfort.
Let us talk about people in the regions who know the CLP does not care about them despite its spin. It was sad to hear the member for Arafura had returned to the ranks, believing the government cares about him and his region.
People in the regions are no different to Territorians in our urban centres in this dreadful situation. They are alarmed this train wreck of a government is selling a public asset which has served Territorians, no matter where they live, for more than 30 years. It is their access to a unique and proven insurance business in particular which provides a product for those living in areas where flood and cyclone threats are a way of life every Wet Season.
I live in the Top End and represent a constituency in the Nhulunbuy electorate in beautiful northeast Arnhem Land. It is, of course, a region subject to cyclones. We have weathered a few of those in the almost 25 years I have lived there.
We all know it is not just a big blow that can wreak havoc. The lower rated cyclones or low pressure systems bring floods and inundation which can be just as damaging. These threats are real, which is why the Chamber of Commerce surveyed its members. The result was they told the CLP their members did not want the Territory Insurance Office sold. I know members of the East Arnhem Chamber of Commerce received that survey and that feedback was provided.
My constituents, like everyone else in the Territory who is so angry about this decision, have been active on Facebook and in letters to the editor, including one I would like to place on the record from Mr David Mitchell from Nhulunbuy, who is not a member of the Labor Party. His letter was sent to the Arafura Times, our local weekly paper, and was also published in the NT News:
My constituents are, sadly, all too familiar with the modus operandi of the Chief Minister and his arrogance, incompetence, inability to listen and predisposition to shaft and betray hard-working Territorians. Nhulunbuy and the Gove region is on the cusp of its first anniversary of Rio Tinto’s announcement to close its alumina refinery operations, a decision it made as a direct result of the betrayal of the Chief Minister, who trashed a deal to provide gas to Gove.
On 26 July 2013 the Chief Minister announced the gas deal was off. Single-handedly he overturned an agreement to on-sell contracted gas to Rio Tinto, a deal which had been brokered by his predecessor, Terry Mills, months earlier and then trashed by the current Chief Minister. He pulled up his big boy pants, took on Rio Tinto and lost. As a result we lost more than 1100 jobs, an economy and a bright future which was guaranteed for 20-plus years, not to mention a reduction by 2% of GSP to the Northern Territory’s economy. It is small wonder he is trying to flog off our public insurer to make up for that disastrous mistake and the loss of dollars into the Territory economy, not to mention jobs. In Nhulunbuy we know all about betrayal from this Chief Minister, where people take it personally.
Let us fast forward to where we are now in Nhulunbuy, thanks in no small part to the resilience of locals, residents and businesses who survived despite the mismanagement of the whole affair by the unelected Chief Minister. Last Friday we saw the launch of the new development corporation called Developing East Arnhem, no doubt a name to link in with the brand Developing the North. It is, I acknowledge, an important step forward.
However, at a time when the CLP is trying to attract new enterprise to the region, prospective investors may well be nervous about doing so in the wake of this decision to sell the government owned insurer. We need to look no further than the federal Coalition’s report into developing the north and comments about insurance. The report, Pivot North, is clear about the need for a government owned insurer for northern Australia. The CLP is ignoring a recommendation to the Australian government to expand the Territory Insurance Office across northern Australia because, as it said in its report, it is affordable, consistently available, would address the insurance crisis and support developing the north.
Northern Australia development inquiry head, Coalition MP Warren Entsch, said he warned the Chief Minister against selling TIO stating the Northern Territory was the only place in northern Australia where insurance was consistently available and affordable, and a sale of TIO would risk creating an insurance crisis like the one in Queensland. It does not matter who you are – a conservative colleague of the Chief Minister or a Territorian – you are ignored if you have a view contrary to the Chief Minister on the sale of the asset.
Keeping TIO in public hands is critical to ensuring timely insurance payments for flood and cyclone insurance, avoiding the crisis seen in other states, like Queensland after the floods.
Further, I heard on ABC radio yesterday morning an independent insurance analyst saying remote communities in the Northern Territory will be hit hard by the sale of the Territory Insurance Office. The analyst, Mr Brett Hagan, said many insurance companies will not insure clients in remote and regional areas, and the public insurer filled that gap by providing cost-effective insurance packages. He said after the sale – today – remote communities may find it impossible to get insurance. He said:
We all know a hastily hobbled together program for home ownership in the Northern Territory’s remote communities was launched mid-year whereby eligible tenants can purchase the Territory housing asset they rent. It would be irresponsible of government, in supporting these potential homeowners, to not ensure they have access to secure home and contents insurance.
With that in mind, I will quote from the Pivot North report and a submission from the City of Townsville. I know other colleagues have made reference to this report and the phenomenal hike in insurance costs the further north you go in Queensland. It is less than $2000 a year for a standard house worth just under $400 000 in Brisbane rising to about $9000 once you get to Cairns. I quote:
What does that mean? How does that translate to the Northern Territory, for instance in the member for Arafura’s electorate of the Tiwi Islands or Groote Eylandt? These remote Indigenous communities have houses available for purchase by people wanting to enter the housing market.
After the experiences in Queensland, what comfort can people have in remote island communities knowing when they purchase a property – if people take up the government’s offer, what access will they have to an affordable insurer? If they need $9000 a year to insure their home it may kill off the home ownership program. I bet the member for Arafura was not told that in his briefing, if he had one, from his CLP colleagues.
On a different note, I have spoken with several health professionals today, one a doctor the other a physiotherapist. Both were concerned about what the sale of TIO means for workers compensation cases and their patients. The doctor said, ‘All our long-term TIO cases are being finalised rapidly and closed, obviously to decrease liability. I hope this can be put forward in the parliamentary discussion.
My discussion with the physio focused on the concerns she has dealing with the new insurer to the Territory market. She said she had no problems dealing with TIO; they were by far the easiest to work with and supportive of her patients.’
By contrast, she said Allianz was terrible to deal with and slow to pay. She is owed thousands by Allianz and their customer service treatment of individuals was pretty ordinary. People’s recovery from physical injury was hampered by the constant worry of having to deal with Allianz as the insurer for workers compensation. The physio was also referring to patients she currently treats under TIO motor vehicle accident coverage.
I am concerned about the Chief Minister’s statement later this evening on workers compensation. I would like to quote from a media release the member for Nightcliff put out as our shadow Attorney-General. She said:
We should be concerned about the moves afoot today, quite apart from legislation with two cognate bills being rammed through this parliament. We see moves afoot that threaten to compromise workers compensation, particularly as it pertains to motor vehicle accident cover knowing Allianz will be brought in as the new administrator for the scheme.
In another life I worked for Alcan and its successor Rio Tinto Alcan, where the company’s insurer for workers compensation was and still is, I believe, Allianz. I worked in the human resources department and though not involved with workers compensation cases, in my communications role I saw firsthand some of the results of workplace accidents. Of course, an alumina refinery is a dangerous place to work as there is no shortage of hazards, but I know employees going through workers compensation, some with terrible injuries, battled the insurer and, to a degree, their employer.
A former executor of Alcan I worked with and spoke with today dealt with workers compensation cases regularly as the HR manager. He said they were a nightmare and dogmatic and difficult to deal with.
There is much at stake with this forced sale of the Territory Insurance Office. As the Leader of the Opposition stated in a media release this afternoon:
Let us see this for what it is: a sale driven by greed, a quick grab for cash so the CLP can splash $150m in the lead-up to the next general election and pork barrel its electorates. The CLP mistakes Territorians for fools. They are not. They are angry, outraged and have made it plain, overwhelming so, this public asset, the public insurer, should not be sold.
I have been to rallies in the last two years in Darwin, and a few in Nhulunbuy, since the CLP came to government. That is more rallies than I can remember, and I was pleased to be part of the ‘Toot for TIO’ car rally today. I thank the member for Nelson, who was the key driver for that protest. No one in the city would have missed it, and who did I see as we were doing the lap of parliament but the former member for Drysdale, Ross Bohlin. I thought he might have been in a truck, knowing he likes trucks, but he was in his four-wheel drive and good on him. He was shafted by the CLP, spat out, and knows all about betrayal. I understand he was interviewed by 9News this evening, so good on him. Anybody like him, who has been treated as badly as the rest of the Territory, should be dishing it out to the CLP.
While the CLP so arrogantly ignores the voices and protests of Territorians time and time again, there is one protest it cannot ignore. I do not know the date, but it will a Saturday in mid to late August 2016 when Territorians have the opportunity for the ultimate protest. It is will one the CLP cannot ignore and one the members for Brennan and Sanderson, the member for Katherine in particular, the member for Greatorex and everyone on that side should be anxious about. You will not be able to ignore that protest.
Territorians will go to the ballot box and cast a vote. It will be the test of the CLP’s arrogance and woeful performance not just on the sale of TIO, but the many other terrible decisions of this government which have hurt Territorians.
CLP members of this House and their arrogant upstart of a Chief Minister should not forget that forthcoming protest. Shame on the CLP, it has hit an all-time low. I do not support the move to sell TIO. Territorians do not support this sale without a mandate, and I do not support these bills.
Mr GUNNER (Fannie Bay): Mr Deputy Speaker, this is a serious and significant debate about the sale of the Territory Insurance Office. The circumstances in which we come together to see this passed in one day are extraordinary.
We believe in affordable insurance which recognises the special conditions of the Northern Territory and is there when you need it. The best way to deliver that is through the Territory Insurance Office, and we are not alone in believing that. Community leaders, business leaders, the general public and the Pivot North committee have all spoken in favour of the Territory Insurance Office and its model. There are good reasons for that. This is not just an argument about sentiment; business has overwhelmingly said it wants to retain TIO.
The government says this is a business decision, yet only 25% of businesses have said TIO should be sold. The remainder do not support the sale. Business disagrees this is a business decision and says TIO should not be sold.
The Pivot North northern development committee said we have a competitive advantage in the Northern Territory based on our insurance. Far north Queensland, for example, is struggling to facilitate development because of insurance costs. We have a competitive advantage and the CLP wants to take it away. The Pivot North committee report recommended the TIO model, others have spoken about that today, and we spoke to that during the last sittings as well. The TIO model has worked to provide development but, unfortunately, the CLP is selling that off.
Conservatively, 80% of Territorians have said, ‘Don’t sell TIO’. It is not often you can call 80% a conservative number, but we found 80% through our polling, the NT News found 89% and I believe Mix FM had high 80s. People say that because they believe in affordable insurance which recognises the special conditions of the Northern Territory and is there when you need it. The TIO model is a proven one for Territorians.
We believe a genuine measure of whether a public asset should be sold is whether the public wants it sold. It is clear, if you engage with the community, people do not want their asset sold. The CLP has not engaged with the community. As the member for Nelson said, you cannot talk to an ad in the paper. There has been no effort, apart from the member for Katherine, to actively engage with the community on this issue. The way the government is ramming this through parliament today takes the opportunity to look at the details of this deal away from the community.
This debate can, in some respects, be broken into two questions. Should TIO be sold? We say no, the Independent says no, PUP says no, 80% of the public say no and community and business leaders say no. Many of the reasons the CLP gave for selling TIO are answered in TIO’s annual report.
If you think it should be sold – the CLP has made it clear it does – 20% are unsure or would sell TIO for a good deal. The question then is: is this a good deal? No, this is not a good deal; $285m is not a good deal for TIO.
Only a month ago the Chief Minister said TIO could be worth well over $500m, and now we have sold it for $284m, minus $9m in fees. That is $275m, a bad deal. This is a poor return and half what the Chief Minister said he expected. You only have to look at the annual report to see this is a bad deal. Turn to the Chief Executive’s Report on page five of the 2013-14 annual report to see the money TIO has made over the last five years. There are several different columns.
Operational Profitability has seen $305m delivered to Territorians over the last five years. The net profit after tax is $234m. Either way, it puts the $275m sale figure into context. This is not a good deal or a good return for Territorians. Why do 80% of Territorians believe TIO should be retained? Why is the CLP wrong to sell TIO? This has not been taken to the public to discuss and engage on.
The member for Fong Lim mentioned risk. He was not untruthful but mischievous when he said TIO is not regulated by APRA. Page 3 of the 2013-14 annual report says:
It is regulated by the Treasurer as it is owned by government, but it complies with APRA.
Also, the most recent annual report shows it reinsures. The APRA guideline is for a one-in-200-year event. According to its most recent annual report, it reinsures based on a one-in-250-year event. We know it reinsures, it complies with APRA, is a sound business and has delivered a profit for five years. The money it has made puts into context the sale figure, showing the sale figure is not a good return to Territory taxpayers. Should it be sold? We believe not, and many others agree. If you want to sell it, should you not sell it for a good price and get a good deal?
I encourage any Territorian concerned about the sale of TIO, who has heard the concerns of the CLP, to look to the latest annual report and see the returns TIO has delivered over the last five years, how it reinsures and how it complies with the Australian Prudential Regulation Authority. They will know much of what the CLP is saying are furphies or mischievous.
It is a shame we have not had a proper debate about this. The member for Nelson put this point clumsily when he said, ‘This House of debate is not the house for this debate’, because there needs to be a conversation with Territorians which the CLP has avoided. The reason the government wants to ram this through today is to not have a conversation with Territorians over the Christmas period and leading into February. It knows the reasons it is spruiking for the sale do not stack up and are answered in the TIO’s most recent annual report.
It is not a good deal and we believe TIO should not be sold. We believe the CLP is failing Territorians around the principle of affordable insurance which recognises the Territory’s special conditions and is there when you need it. TIO guarantees a good insurance product in the Northern Territory with good terms and conditions at a competitive rate. The most recent inquiry into conditions in the north found the TIO model delivered a competitive advantage to the Territory. We support the TIO model.
Australians, Territorians in particular, have a good, finely-tuned bulldust meter. Without doubt, it has been going off during the recent conversations around TIO. They may not know everything about the insurance industry, but they know bulldust when they hear it, and their bulldust meters have gone off lately. When the Chief Minister said, ‘We are not selling TIO, we are just transferring ownership’, their bulldust meter went through the roof. Apparently our Chief Minister does not buy a beer he transfers ownership, he does not buy coffee he transfers ownership. It will be interesting to see if Casuarina picks up on this change of phrase. Instead of seeing ‘Christmas Sales’ or ‘Boxing Day Sales’, we might see the ‘Christmas Transfer of Ownership Event’ or the ‘Boxing Day Transfer of Ownership Event’.
It was nonsense to say, ‘We are not selling TIO, we are just transferring ownership’. Love or hate the member for Fong Lim, he is a straight shooter and I doubt he would say anything like that. He would have said straight up, ‘We are selling it’ or ‘We are not selling it’. I doubt he would say, We are just transferring ownership, don’t you worry about that son’.
I think the bulldust meter also went off when the Chief Minister started saying, almost hysterically, ‘We will see a 200% increase in premiums’. When you say that to justify a sale people say, ‘Hang on a second, you’re not convincing me at all’.
The arguments the CLP made regarding risk are worth looking at and answering, and are answered in the latest annual report. However, some of what they are running does not sit right with Territorians.
The member for Port Darwin said self-government was in danger if we did not sell TIO and we would go the way of Norfolk Island. He compared the Territory to Norfolk Island.
We know from the tragedies and disasters in Queensland and Victoria that the federal government has a responsibility when disaster hits. We are part of Australia and, when a major cyclone hits or flooding or bushfires occur, the federal government has a role.
If the federal government came in under those circumstances, which is expected and justified, self-government would not suffer. When we heard the rather hysterical statement that self-government could be at risk, Territorians’ bulldust meters said, ‘That won’t happen. We are not buying the reason to sell TIO is because we will suddenly not be a self-governed Territory anymore.’ That does not pass the common sense test. The federal government will and should be involved. We are the Northern Territory of Australia and a natural disaster will not affect self-government. That will not happen so the argument does not work.
Let us put this sale figure in context, this great deal the CLP has delivered for the Territory. The Chief Minister will buy the Territory billions of dollars’ worth of new infrastructure and we will build our children’s future.
We have $275m. The last infrastructure budget for the Northern Territory was $1.1bn, so this is a fraction of the Territory’s annual infrastructure budget. Earlier this month the Chief Minister said:
That is a fantastic value statement. It is good in theory, but $215m is going into that fund. This year the NT government’s infrastructure repairs and maintenance budget is $335m. That is how much we spend to maintain our infrastructure to current standards. This sale has delivered less than what we are spending on potholes. This is not a good deal for Territorians. It sounds great in theory, ‘Let’s create a fund for our children and grandchildren’, but the money is less than we will spend on repairs and maintenance this year.
You still have the two questions: should we sell it? Eighty per cent of Territorians say not to sell it, we say do not sell it, PUP says do not sell it and the Independent says not to sell it. Eighty per cent of Territorians, community leaders, business leaders and the Pivot North community say do not sell it, and they all have good reasons.
We also have the other side of the argument: if you sell it, get a good deal. We do not have a good deal. The CLP has failed 100% of Territorians. It has failed the 80% who do not want to sell it, and the 20% who said they were not sure but if you do get a good price. It has failed everyone except the elected members opposite, who all think it is a fantastic result for the Territory.
The CLP has no mandate to sell TIO. In fact, it has a mandate to not sell it. Before the election they said, ‘The CLP stands firmly opposed to the sale of TIO and will fight to see it retained’. Instead of fighting to retain TIO, we see introduction, debate and passage of the bill to sell TIO all in one day.
The government is hoping people will forget and it can ram this through, go into Christmas and New Year and come out the other side thinking people will have moved on. I doubt that will happen.
It is ironic the banking arm of TIO has been sold to People’s Choice, because if people had a choice TIO would not be sold. People will not forgive or forget. This is a public asset, and a genuine measure of whether a public asset should be sold is whether the public want it sold for good reason. It provides affordable insurance which recognises the Territory’s special conditions and it is there for us when we need it. That has been proven year after year. We do not believe TIO is a broken model; we have seen the returns it delivers government and how it reinsures risk.
You have not proven to us or the public why suddenly the TIO model is broken and needs to be sold. There has been no engagement with Territorians on the points you are making. Territorians say it works, we have seen it work and seen the report saying it will work in the future. In the latest annual report the chairman quite clearly states TIO is healthy and can succeed for years to come:
That is the chairman of the board. We have a proven model that works and the CLP has not convinced the public the TIO model is broken and should be sold. Instead, it is ramming legislation through today because it has not been able to make the argument.
The member for Port Darwin, a strident advocate for democracy when in opposition, has become a strident hypocrite in government by pushing this through in one day. The member for Port Darwin spoke passionately on this side of the Chamber, about processes, procedures and giving people the opportunity to talk. I do not believe in my heart the member for Port Darwin agrees with the approach of ramming this through in one day. He has done his job as Leader of Government Business, he has spoken to it and led the debate on urgency, but I do not believe in his heart of hearts he supports ramming this through in one day. The things he said in opposition he must no longer believe. I refuse to believe what he said about this needing to be pushed through in one day. I think he would say, ‘I’m happy to have the debate. We will introduce it today, let the public have their say and come back in February. We will debate it and pass it because we are the CLP and have the numbers.’ I do not believe he would run from a fight, and that is essentially what the CLP is trying to do in ramming it through in one day. It is disappointing.
The CLP has flagged its priorities during its limited conversation with the public around this issue. It asked, ‘How would you spend the money?’ The government did not ask, ‘Should it be sold? On what grounds should it be sold?’ The government should not be surprised people think this is a cash grab for pre-election money because it led with, ‘How would you spend this? We will get some money and want to know what you want so we know what to deliver in the goodies bag.’
The public and the opposition do not want TIO sold. The CLP is walking away from something which provides affordable insurance to Territorians, recognises the Northern Territory’s special conditions and is there when people need it. The Pivot North report showed this was critical to developing the north. We are now handicapping development of the north. The report said the TIO model should exist in other parts of Australia because it delivers infrastructure. We have a competitive advantage and the government that wants to develop the north is removing that advantage, which is a mistake. Should it be sold? No. If you do sell it, should it not be a good deal? This is not a good deal because we are not getting value for money.
The return TIO has delivered over the last five years, compared to the sale price, shows this is not a good deal. When you compare the sale price with what we spend on infrastructure every year, this deal will not suddenly change the face of the Northern Territory.
Rapid Creek was promised flood mitigation at the last election not contingent on the sale of TIO. From within the CLP’s $1.1bn infrastructure budget Rapid Creek could have flood mitigation works if the government had prioritised it. You made an election promise and have not delivered on it. You now say flood mitigation at Rapid Creek is contingent on the sale of TIO. You have a $1.1bn infrastructure budget and $215m is going into the infrastructure fund. The proceeds from the sale are $275m. This is not a good deal for Territorians; it does not stack up.
The amount you will deliver from the sale, in the context of the Northern Territory budget, will not suddenly change the Northern Territory. That amount will not build a future for our children or our grandchildren when the Northern Territory’s infrastructure budget of $1.1bn a year is four times the size. This is a fraction of what we spend every year on infrastructure, so let us look at it again ...
Mr Barrett interjecting.
Mr GUNNER: The repairs and maintenance budget is $335m. What the CLP will deliver from the sale of TIO is less than pothole money. This is not a good deal for Territorians, and I look forward to the member for Blain explaining why he thinks TIO should be sold, how its annual report is wrong on the profits and proceeds returned to Territorians, how it reinsures for risk and the chair’s statement that it is fine to operate for years to come. Where is this imperative to sell TIO?
The CLP has not convinced the public about this sale mainly because it has not even engaged with it, which is disappointing.
It is a sad day in the parliament’s history to see this rammed through in one day. Territorians have been treated as second rate to a private contract the CLP has made. We do not support the sale of TIO. Should TIO be sold? No. If you sell it, should you not get a good deal? This is not a good deal. We do not support these bills or the sale of TIO.
Mr BARRETT (Blain): Mr Deputy Speaker, I support this legislation and hope the member for Fannie Bay takes note since he said he was looking forward to my response.
I will look you in the eye, straight across the Chamber – through the Chair of course – and say I sincerely, from the bottom of my heart, completely and utterly believe this is the right move for the people of the Northern Territory. It is the most rational, sensible thing to do, member for Fannie Bay.
You said this is a bad deal. You said how glowing the annual report was so there must not be issues with TIO and therefore no reason to sell it. The information I received from Treasury, and in talking to management and the chief executive officer of this entity, is that there are issues with TIO. I believe members opposite have a good understanding of those issues and are playing populist politics. It is easy to jump on the bandwagon and support something that is not right but is popular at the time.
Albert Einstein said, ‘Things that are right are not always popular, and things that are popular are not always right’.
The member for Fannie Bay mentioned the speed at which this has happened and how the government is being deceitful – not being a straight shooter. In the world where this is no government owned entity there is an announcement on the Australian Stock Exchange before it opens saying stock XYZ will open in a trading halt. At some point during the day there will be an announcement saying, ‘Your $4.20 stock was bought for $5.60, expect a cheque’.
There are reasons why transactions happen with speed. It is about making sure the company, between the time it is sold and transactions taking place, is like for like. You are not committing to buy something which over time dwindles down to something which was not what you thought. That is damaging, particularly for financial companies.
It is important for us to make sure this transition happens as effectively and smoothly as possible. This highlights why government should not be in this type of business, because it creates issues where it could be easy to level accusations of dishonesty, such as those levelled at us this evening. We are trying to conduct a financial transaction that happens in the real world quickly, in a way that melds with the way parliament works. These two systems do not work well together, which is why governments should not be in these industries.
Talking about economic fundamentals, economics is about scarcity. It is about looking at the allocation of resources, individual utility as opposed to the government’s greatest good for the greatest number. Individuals will always go for that which gives them the greatest utility at any given time given the resources available. Governments look for the greatest good for the greatest number. We hear small scope things like, ‘This may or may not be better for this small group of Territorians’. I am cognisant of that and sensitive to the issues people are raising – businesses working with TIO. People living in risky areas are sensitive to these issues because prices can vary largely between insurance companies.
At the end of the day, we were elected to govern and to do the right thing. Given the risk profile Territory taxpayers hold by hanging on to this company, it makes no sense to retain it. I would be derelict in my fiduciary duty to the people of the Northern Territory if I did not say this is the right thing to do.
I have looked at the reasons and I have listened. I have had discussions with people on the board of TIO, with management of TIO and with people who work in Treasury who analyse the numbers. I can say, hand on heart, this is the right thing.
What are the pros? Is this a risk-averse move by the Giles government? This gets taxpayers off the hook of having to pay astronomic figures in the event something nasty happens. It means taxpayers can move forward without that risk over their head and without playing Russian roulette every cyclone season.
The cons I understand. My constituents say they are concerned about the loss of direct market control and worried about leaving things to market forces. I encourage people concerned to remember almost all markets in Australia operate under a system where there is competition for consumers’ dollars. This is no different.
A market exists. We talk about market failure like it is a magic thing. If you say ‘market failure’ you justify anything you do. The term ‘market failure’ has very specific connotations in economics and means the market has no way of price allocating some type of good or service.
An example is the Australian Army. My colleagues and I could probably not get together and buy an F/A-18 Hornet, a tank and get a few guys to drive it and fix it. That is market failure. If I was responsible for my own defence, I could not do it nor would I. Collectively, as Australia, we put all our tax money together in order to achieve this.
This is the type of thing governments should be in – areas where there is a market failure. There is not a market failure here. There are many players in this industry all competing for consumers’ dollars.
Many of the reasons I hear for this being a bad idea come down to specific cases. We need to look at these and understand, but at the end of the day this government is for the greatest good for the greatest number. This is the right thing for the people of the Northern Territory.
I will not go over it because many people have already spoken. The Deputy Chief Minister has spoken eloquently tonight and I could not have put it better. I am proud to support this and will not take a backward step because this is the right thing to do. I support these bills.
Mr VOWLES (Johnston): Madam Speaker, I have a list of key messages that pretty much sum this up: Territorians and businesses do not want TIO sold; the CLP has no mandate to sell TIO and should take its privatisation plans to the next election so voters can have their say; the CLP is arrogantly rushing through a sale behind closed doors without any consultation with Territorians; selling TIO risks skyrocketing premiums and less cover; selling TIO risks creating an insurance crisis like that in Queensland; TIO is the only insurer in the Territory market that provides no loophole cyclone, flood and storm surge cover to cover Territorians’ need to be fully protected; TIO also provides disaster cover to mitigate against potential profiteering from rebuilding efforts after major disasters; over the last five years TIO has made a $305m profit; this is a short-sighted sale; and Territorians should not be forced to sell TIO for flood mitigation or the CLP’s unfunded 2012 election promises.
This gets me to my electorate of Johnston, the residents of Millner and flooding along Rapid Creek. I have spoken about my constituents and their concerns many times. The Minister for Lands, Planning and the Environment has been working with the residents group and that is a good thing. I am kept in the loop with that and have attended three or four briefings on Rapid Creek. To hold the residents of Millner, in the electorate of Johnston, to ransom by saying the government must sell TIO if they want flood mitigation works done, and for the Chief Minister to then promise $50m in flood mitigation works across the Northern Territory – I was confused in Question Time this morning when the Chief Minister said on two occasions $25m will be spent on Rapid Creek.
In his announcement last week he said around $25m would include Rapid Creek and parts of the rural area. I would like the Chief Minister to clarify that, or perhaps the Minister for Infrastructure, the member for Sanderson, could clarify that. Is $25m being spent on flood mitigation along Rapid Creek, or is the $25m, as per his media release last week, for Rapid Creek and parts of the rural area? I would like some clarification, as would the constituents of Millner affected by that.
The opposition will be talking about the impacts on Territorians and what TIO means to born and bred Territorians as well as new Territorians. Everybody says not to sell TIO and I agree.
I have said I will not bag government just for being government. If something good happens I will say it is a good thing. This is not right. If you have to make a big decision you need to take people on the journey, and it has become apparent you have not done that. Territorians have voiced their concerns about selling TIO, especially to a foreign company. It is Territorian.
I have a vested interest in this. My insurance is through TIO and my sister works for TIO. I agree with the member for Karama, it is a good thing people’s jobs have been guaranteed for a little while.
I get back to the $50m commitment. In 2012 there was an election commitment to do this work. The then Opposition Leader, Terry Mills, along with the CLP candidate, Ms Sangster, held a media conference where they said, ‘Here is $1.5m for commencement of the works. This is a down payment for more works.’ Labor had already committed $2.5m as a down payment because the 2010 floods in that area were significant and we needed to do something.
Both parties at the time, I thought, had done the right thing for affected residents by making commitments. The people of Millner already had a commitment the work would be done and that $1.5m would be spent initially then the remainder of the work would be done. To date, not one cent has been spent on flood mitigation for Rapid Creek Road.
When the Chief Minister said he would commit $25m initially the phone started ringing. People said, ‘How can we trust this bloke? It’s been over two years and the $1.5m commitment as a start has not been given. Now he offers us $25m if they sell TIO, which insures us. We are stuck in a pocket, jammed in a corner. How do we do this? We will be touched up either way. If they sell TIO our insurance will go through the roof. If they sell TIO we might get some flood mitigation works as the Chief Minister has said there will be $25m.’
The end result is premiums for people along Rapid Creek Road will, at a minimum, double. The cost of living for people in that area, and other areas across the Northern Territory affected by flooding, will be severely impacted. They will go to insurance premium assessments of individual risk, and the cost will go through the roof. The impact of the north Queensland floods and what that meant for insurance has been mentioned by opposition members as well as the Independent and Palmer United Party representatives.
I have announced a working party of residents as well as the Rapid Creek Landcare Group. A Rapid Creek Catchment Advisory Committee had already been set up. Ian Kew, from the airport, said it was a great committee but this government decided it was not and removed it. This committee has reformed and will start consulting with people, which should have already been happening. If you want to make big decisions you have to bring people along with you. You have to explain what you want to do and give people the opportunity to voice their concerns then address those concerns. You have not given Territorians that opportunity.
I give the member for Katherine credit for holding a public meeting because he would have known he would get a caning. However, he gave his constituents the opportunity to have their say and to hear from him, as a Cabinet minister, what he would do. I take my hat off to that; it is a good thing.
From media reports we know the member for Katherine promised $20m in flood mitigation works and $8m to move the ambulance service. That is $28m. The Chief Minister announced $25m for Katherine flood works. The member for Katherine has already lost $3m for his constituents. Is there any more for the people of Katherine? Will some be taken from the residents along Rapid Creek for flood works? Twice in Question Time the Chief Minister mentioned $25m for Rapid Creek. If that is just for Rapid Creek I would love it. I have been working hard with government to make sure we hold it to the election commitment of $25m.
How much will go to the rural area? Is that included or not? I hope the Minister for Infrastructure will contribute to this debate. What is the government considering along Rapid Creek?
The Chief Minister held a media conference on the side of Jingili Water Gardens which does not flood, which was interesting. I assume, and seek clarification, that the $25m would pretty much be taken up by raising the Trower Road bridge. A report I saw a few years ago suggested it would be in the vicinity of $20m.
I would like three questions about flood mitigation works in Rapid Creek answered. Will any works lower insurance premiums for residents in that area? How many homes will the $25m works take off the flood map? How many homes will not be affected? How will it lessen flooding?
In the last report I saw, raising Trower Road bridge was more of a transport issue and access to the hospital. Last time access to the hospital was cut off. Raising the Trower Road bridge will give Police, Fire and Emergency Services and the ambulance access to the hospital. Those works will be done. In the report I saw 10 homes out of the 68 would not be affected if Trower Road bridge was raised. I am happy for the government to clarify that.
Not all Cabinet ministers who decided to sell our TIO have spoken so far, and I look forward to hearing from them. Perhaps they could get some advice from the relevant minister. Perhaps the Minister for Lands, Planning and the Environment could provide that to the next Cabinet minister to contribute to this debate. It is obviously a serious issue. Raising Trower Road bridge will mean only 10 homes will not be affected.
The issue around flooding, Millner and the flood mitigation works is the safety of residents. The second thing is to keep premiums down. In a briefing with the Lands and Planning minister’s office they were looking at areas – I thank the Minister for Lands, Planning and the Environment because every time I request a briefing it is organised quickly and I appreciate that. That is how government and opposition should work. The briefings are always informative.
I was told they are looking at rezoning some of the homes at the bottom corner of Rapid Creek Road that would be severely impacted by another flood. Obviously the issue with the new insurer will be whether they will be uninsurable, like some of the homes in Katherine. What happens to residents who have bought homes? What will happen to their premium, if they can get one? Also, what will happen to the residents along there who have had surveyors in regarding the level of flooding? Some are only 10 cm or 15 cm deep. Could the flood mitigation works include a flood mitigation fund? People could apply for a fence to be put up in their front yard preventing their properties being flooded?
Not many people have mentioned it, but I have seen the Alice Springs flood map. This is a huge issue considering most of Alice Springs is Flood Level E, a major flooding area. I do not know how many TIO clients or businesses in Alice Springs are insured with TIO, but looking at the flood map I have the mall, Telegraph Terrace and most of the east side near Centralian College is classified Flood Level E, which is a major flood. I would like to know how many TIO clients have flood insurance because they would be impacted. How much will their premiums increase?
We are nervous with both the government and Allianz, which has said some people will take a big hit in their premiums. My phone has been running hot from Rapid Creek Road residents and others in the area asking, ‘Are they talking about us?’ We will wait to see.
I place on the record several letters sent to the NT News:
‘It’s our Future’, NT News 13 November 2014:
‘CLP backlash’, NT News 11 November 2014:
To the member for Katherine, ‘Party v people’, NT News 18 November this year:
We are asking ourselves the same question. Several government members have said publicly they are concerned about TIO being sold.
The member for Katherine has, according to this, publicly stated he will support his constituents. Of all areas in the Northern Territory severely impacted by the sale of TIO leading to an increase in insurance premiums, non-insurance of some homes – 20 was mentioned earlier – it is time for the member for Katherine to stand up for his constituents, the people who voted him in. They are the people he looked in the eye on election day, or who perhaps he doorknocked or met in the street and said, ‘Please vote for me, I will always look after you. I will represent your best interests.’
It is time for the member for Katherine to walk the walk of the talk he told people. It is time for the member for Katherine to stand up for the people he represents. I urge the member for Katherine, if he wants to continue in this parliament after 2016, to do the right thing by his constituents and cross the floor to vote against this sale. Everybody in Cabinet – I assume this is a unanimous decision because if it is not we will find out.
The members for Katherine and Sanderson have a lot to lose. They asked people to vote for them. It is time to do the right thing and represent the people who voted you in and gave you an opportunity to be a Cabinet minister. They gave you the honour of representing them in this House, although the powers have been abused today by ramming this legislation through.
We cannot believe the member for Port Darwin has allowed this to happen. He has done his job. The member for Port Darwin must be thinking he would kick this off and it will be such a bad thing for the Chief Minister that the one man wolf pack will have an opportunity to take over when it all falls down, as happened with the elected Chief Minister, Terry Mills, when he increased power prices, which Cabinet supported. In the meantime you were sharpening the knives to remove him, which you did. Perhaps that is what the member for Port Darwin is doing. Kick it off so the Chief Minister can fail and then he can launch a challenge. I believe that is about to happen.
I do not know what cave you are living in but the public sentiment around not selling this public asset Territorians own has been unbelievable. Many people have come to our offices or stopped us in Casuarina. Member for Port Darwin, we were in the mall at lunchtime for two weeks straight. Guess who was not there for those two weeks? The member for Port Darwin was missing.
He is famous for being accessible in the mall during the lunch break. For two weeks we did not see him. I wonder why. No accountability. He does not want to listen to the hundreds of people signing our petition and complaining about this government, how out of touch and arrogant it is and how it does not listen. Not once did you give people an opportunity to vote no. If you think this is the right thing I do not know how you sleep at night, member for Port Darwin.
You have some morals, some ethics somewhere deep inside you that would be totally against the way this has been rammed through parliament today without process and without listening to people.
I always said when I drove past, ‘Look at that idiot on the side of the road’, but I respect it because you gave people the opportunity to chat to you. During the two weeks we were in the mall I said, ‘Let’s see if the member for Port Darwin rocks up in his normal spot’, because we were about 3 m from it. I wondered what sort of bloke you were. We did not see you or any government ministers as they did not want to be accountable for this stinker of a decision to sell TIO, or to hear Territorians.
I have said things about the member for Katherine today, but he gave his constituents the opportunity to listen to his side of the story and face them. No one else in Cabinet has done that. I did not see public meetings at Hibiscus. I did not see any public meetings with government members. I did not hear the members for Sanderson, Brennan, Stuart or Port Darwin – he could have consulted in the mall. Cullen Bay might be in the storm surge zone or subject to a cyclone or flooding. Some of your constituents might have wanted to talk to you. You are normally in the mall; you would have listened, but for the two weeks we were there for nearly three hours and there was nothing …
Mr Styles: Having three-hour lunches every day.
Mr VOWLES: No, member for Sanderson. The difference is we were not having three-hour lunches; we were manning our TIO stalls and listening to Territorians. Some said it was a good idea. That was rare, but we gave Territorians, especially in Darwin, the opportunity to have their say. I copped it a couple of times from people at the markets saying, ‘You are a bunch of bloody bastards. You pollies are all the same. You just collect your big fat pay cheques and piss all over us.’
Mr ELFERINK: A point of order, Madam Speaker!
Madam SPEAKER: Member for Johnston, could you withdraw that language please.
Mr Elferink: For God’s sake, it is infantile enough.
Madam SPEAKER: Member for Port Darwin, sit down. Do not blaspheme
Mr VOWLES: It is not infantile, I was quoting somebody, but I withdraw. Sorry, Madam Speaker.
I have had people at the markets on Sunday, where I am from 8 am to 12 noon, say it is a good idea and Labor tried to do it. We would have a conversation. They would thank me for having that conversation and being accessible. As I said earlier, to make such a big decision you have to bring people with you. You have to give people the opportunity to have their say, listen to their concerns and take them on the journey. If it is good or bad, that is what we are supposed to do.
Governments make tough decisions; this is a bad decision. There is a difference between a tough decision and a bad decision. On this side we are united in fighting the sale of TIO and will always keep you accountable. Warren Entsch warning Adam Giles against selling TIO is at the back of my mind. He said the NT was the only place in northern Australia where insurance was consistently available and affordable, and the sale would risk creating insurance prices like those in Queensland.
At some stage we will hear whether it was a unanimous Cabinet decision or not. There are many leaks from that side of the House. We will find out, do not worry. When you took it to the party wing, what were the other …
Mr McCARTHY: A point of order, Madam Speaker! Pursuant to Standing Order 77, I seek an extension of time for the member.
Motion agreed to.
Mr Elferink: I would not mind if you were making a contribution that mattered.
Madam SPEAKER: Member for Port Darwin, cease interjecting. Member for Johnston, you have the call.
Mr VOWLES: The member for Port Darwin was missing in action in the mall for two weeks. I am sure he is being contacted by the people of Cullen Bay about their issues and concerns. He is either a good local member or not. He is either taking those concerns on or ignoring them like the rest of his government.
When it went to the party wing after the Cabinet decision, what was the reaction there? We know the member for Goyder presented a petition to parliament today signed by over 700 people. Many people in her electorate have visited her. I know many people in her electorate as well, and there is a certain undertaking she will stand up for her constituents. The member for Nelson has collected nearly 1000 signatures. There is a lot of concern.
You can say, ‘You’re setting your own agenda, you are being political about this’. It is our job to represent people and that is what we have done. I do not know where you were at lunchtime, but several hundred people took time out to drive their car around Parliament House and voice their concerns by beeping the horn. I was interested to see the former member for Drysdale, who was interviewed on 9News about this. There are some …
Ms Lawrie: Called them arrogant!
Mr VOWLES: Yes, he called them arrogant. Thank you, member for Karama. It is all about representing the people who voted for us and listening to the voices of Territorians, which you are not doing.
We believe this sale is part of a fund to pork barrel all the way through into 2016 and find things to win votes. Like power price increases, you think this will go away after a while. We will not forget, and will remind Territorians power prices will increase by 5% on 1 January. We will remind Territorians and they will remind us how you sold their asset.
As soon as premiums go through the roof, or even increase by $50, I am sure people will contact us after they contact you. We represent small electorates and are accountable to our constituents. If people come to see me they must be seeing you. They must be e-mailing you, knocking on your door, demanding meetings and trying to voice their concern.
I said at the last sittings this was a done deal. A few of you threw sledges. It might have been the member for Port Darwin having a sly crack at me. There is no way this was not a done deal. You were discussing it. It has already been sold; you are just finalising it. I said you would ram it through on the first day of sittings, and here we are on the first day of sittings ramming it through.
I will not support this and will hold this government to account for the $25m the Chief Minister said, on two occasions during Question Time, is for Rapid Creek flood mitigation works. As an opposition we are united against the sale of TIO. It will be voted on this evening. I urge some members on the other side to vote with the constituents who elected them. Hear their concerns and vote. I urge the members for Katherine, Goyder, Blain and Daly to cross the floor and not allow this sale to go through. At least delay it so you can explain to Territorians who are feeling ripped off because you have sold their asset and not asked their opinion of why you are selling TIO.
Vote against it today, bring it back in February, talk about it, give Caucus an opportunity to discuss it, your party wing, your Cabinet, your Chief Minister, your ministers and local members to talk to constituents and hear their concerns. Then take it from there. This is being rushed through and it does not need to be ...
Madam SPEAKER: Your time has expired, member for Johnston.
Mrs PRICE (Community Services): Madam Speaker, it is important we get back to the facts of this debate. The members opposite speak as if TIO is about to vanish, dissolve, become extinct or disappear. TIO will not disappear; TIO will remain in the Territory with all its current offices, shopfronts, staff, products and its name. TIO will remain in the Territory and the Territory will remain in TIO. It will maintain local services to Territorians but will be able to spread its risk.
I do not believe government should keep part of its assets locked into a financial company; government should be investing in infrastructure. Infrastructure is what is needed to develop the north and infrastructure is what is needed to build our Territory and improve the quality of life in remote areas.
I am pleased a substantial portion of the proceeds from the sale; $215m, will go into a long-term infrastructure development fund. The fund will promote investment in significant environmental, social and infrastructure projects supporting economic growth and the social wellbeing of Territorians.
In addition, $25m will be spent in Katherine for flood mitigation works. This includes over $7m to move the ambulance centre out of the flood zone, and another $25m will be set aside for works in Rapid Creek and the Darwin rural area.
This government will establish the Territory infrastructure development fund through legislation introduced in parliament early in the new year. An amount of $215m of the TIO sales proceeds will be transferred to the fund to build infrastructure. This will support economic growth and the social wellbeing of Territorians.
The fund will be managed by a board which will assess potential projects and make recommendations to Cabinet. It could also leverage private investment where viable, and access contributions from available Commonwealth funding for infrastructure purposes.
The Northern Territory government cannot rely on the Commonwealth government and expect to be part of a nation building future if it does not make the most of its own opportunities to create economic activity. Improved economic activity and infrastructure in the bush means more jobs and a stronger economy.
When I am travelling in my electorate the issues people raise are not about who owns TIO. What they care about is major life-changing infrastructure of roads, bridges, schools and sporting precincts, youth centres, oval upgrades and training centres.
The people of the bush care about getting between major centres and their homes. Upgrades to key roads such as the Buntine Highway mean better access for our remote communities and more opportunities and jobs, driving development in northern Australia.
The Buntine Highway is the major transport route for my electorate and provides vital access to Indigenous communities such as Kalkarindji, Timber Creek and Mistake Creek. It is also a key access route for the cattle industry and upgrades would ensure it is safe and accessible for truck drivers and pastoralists.
Better roads create better health opportunities, better education opportunities and better social opportunities. The money from the sale of TIO will provide resources to further develop northern Australia and secure a bright future for current and future generations of Territory children.
The Territory has tens of thousands of kilometres of roads, many unsealed. People in major towns often take good, safe, sealed roads for granted – an everyday luxury. This money could go towards sealing parts of the Central Arnhem Highway to provide safer travel conditions and greater flood resilience.
The Tanami Road is another key road for pastoralists, tourists and local communities in the electorate of Stuart. Sealing parts of this road would greatly improve the lives of those Territorians who live and play in this remote part of the world.
The Country Liberals government is working to make the Territory a better place to live, work, invest and play. This government is planning ahead. The government wants to create an infrastructure nest egg which is invested and grows over time, ensuring TIO’s legacy is felt by Territorians long into the future.
Having lived in a remote community I know how tough it can be and the major issues faced every day. Investment in our bush areas creates real jobs for Territorians and real change for those living in the communities.
Water concerns severely limit housing, community and commercial development opportunities. Funding towards improving water infrastructure ensures remote Territorians have a secure water supply into the future. It is so important we keep focusing on the bush and providing vital infrastructure needs.
The Giles government has seen the problems ahead for the business and made the difficult decision to act and secure TIO’s future. I fully support the sale of TIO because I am passionate about building community infrastructure and improving the lives of those living remotely.
Ms MOSS (Casuarina): Madam Speaker, I am deeply disappointment in the government and am against the sale of TIO. I am appalled at the way this has unfolded and the way Territorians have been ignored. This is about respect, and we should be showing people the respect they deserve in this debate. It has been interesting for me to watch this. Questions were raised about this in the lead-up to the Casuarina by-election and TIO was neither on nor off the table. Two days after the Casuarina by-election it was clearly on the table. Two weeks later we were looking at final offers for TIO, and four weeks later we are discussing the sale and trying to push through the legislation in one day.
A number of members on the other side of the House spoke about the need to make a business decision. It seems bizarre to me, when making a business decision of this size, to ignore not only the advice of a number of major stakeholders but circumnavigate the concerns of the biggest stakeholder of all: Territorians. For a decision of this magnitude to be made on a Sunday night, with legislation to be rammed through on Tuesday to avoid full and proper debate, is as astounding as it is disgraceful. On Sunday night while you were discussing and deciding the sell-off of this public asset, people were still asking me for the petition at my mobile office, as I know, they were my colleagues, even as recently as yesterday and still signing the electronic petition today.
The member for Araluen referred to the need for leadership, something we can all agree on. I believe leadership should involve the facilitation of meaningful dialogue to take people with you, but not in this case. In this case it has involved one-way, expensive, full page ads in the Northern Territory News and television advertisements.
Providing information does not replace the need to have meaningful conversations with your constituents. The sale of TIO flies in the face of the Territory community, which made it clear it is strongly opposed to the sale of this asset. People have been unequivocal and strident in their opposition.
Page 6 of the TIO Statement of Corporate Intent says:
A number of polls, including those done by the media, show an 80% to 90% objection. Territorians have put their own signs up, signed petitions, written to the editor of the Northern Territory News day after day and written to and called members of parliament. Today they tooted car horns and I am sure everybody heard that. Many of us were at the rally with Territorians, who have been ignored. They do not want TIO sold.
For several weeks I have been collecting signatures at Casuarina Square for Labor’s petition against the sale of TIO, and I have been overwhelmed by the response of residents from all over the Territory. Residents from Katherine and Darwin’s rural area have been particularly vocal, but so too have residents from Rapid Creek, Nightcliff, Coconut Grove, Bayview, Cullen Bay and my constituents from Brinkin and Tiwi, who live in vulnerable areas along the Casuarina coast – and everywhere in between. All these residents have stories to tell. ‘TIO helped me buy my first home’, ‘TIO helped me after the Katherine floods’, or ‘TIO helped my son play for his local footy team.’ Territorians young and old, even those who do not bank or insure with TIO, have had their lives made a little easier by the Territory Insurance Office, owned and run by Territorians for Territorians. Territorians have a strong affinity with the publicly owned insurer. They do not want TIO sold.
TIO will not remain Territorian if it is owned by a multinational company from Europe. There are no contractual obligations for the conditions the CLP promised would be in place. It is just based on goodwill.
In some cases, TIO saved lives. In 1998, in the aftermath of the Katherine floods, TIO paid out to policyholders within days when other insurers took weeks or months.
TIO has always provided peace of mind for Territorians who might face similar situations, which we often do. It is this peace of mind residents value so highly and makes living in our harsh environment, which is prone to cyclones, flood and fires easier to cope with.
The point of a government owned insurer was the government taking into account the unique situation in the Territory. TIO continues to provide packages based on our unique needs to provide Territorians with the cover they need.
TIO has provided much support to hundreds of young Territorians on the sporting field, in sporting clubs, community groups and for community awareness initiatives. Goodwill guarantees for two or three years, no further, offer little comfort to Territorians.
It has become clear how many Territorians’ lives are affected by TIO and how far-reaching the decision to sell this is. Huge numbers of Territorians will be affected: car owners, homeowners, business owners and, potentially, those involved in community groups too. They want to have a say and do not want TIO sold.
The Chief Minister said this level of community support will remain intact despite the sale. Let us face it; we may no longer have control over a lot of these decisions. We are taking a multinational company at its word, and I wonder how much influence we will have over these decisions five or 10 years down the line when they are made in Munich by people who are in no way answerable to the people of the Northern Territory.
This year TIO again generously supported the NT Automotive Apprentice of the Year Awards. It was bittersweet, I imagine, for businesses in the automotive industry. They often deal with insurance claims and are deeply concerned about the ramifications of this sale on their businesses.
This brings me to the big problem in this debate. Territorians, our businesses and service providers have not been provided with information needed to have a say in a meaningful way, or the mechanisms.
The CLP says this is not rushed; however, from days after the Casuarina by-election just over a month ago to today, TIO has gone from safe to sold.
There is no mandate. Public comments from every direction are telling you that. Dozens of letters to the editor, thousands of signatures, and clearly expressed concerns from the Chamber of Commerce, the Property Council and the Motor Trades Association have all gone unheard, as has Coalition MP Warren Entsch, and the Pivot North report. They have all been ignored and are all warning against the sale of TIO.
A public forum was held in Katherine by the local member. We would have hoped more were conducted across the Northern Territory given the apparent urgency and considerable concern, but no, of course not.
The forum held at CDU was attended by people from across Darwin and Palmerston. Not one CLP government member was present. This was a good opportunity to answer questions and concerns Territorians have and present your case to them. You did not show up.
To not attend was a slap in the face for Territorians. The consultation presented to the people of Casuarina amounted to one A4 flyer, letterboxed, which gave one side of the story and referred to a change of ownership for TIO.
The people of Casuarina are smart enough to see through such wording and are left wondering why their TIO has been sold with minimal consultation. I know the people of Sanderson and Alice Springs are also wondering, because they have been writing, calling and e-mailing me too during this period, expressing their views and trying to find more information on why this is being done so hastily and asking for proper and full public debate.
My opposition to the sale is not just about the sentimental value of TIO or the lack of consultation or a mandate. I question the need to do this and whether it will benefit Territorians long term. Many questions are unanswered. Flood mitigation in Rapid Creek should not be reliant on the sale of TIO. There are many questions about the sale. Why does an asset providing the government with an annual dividend of roughly $10m need to be sold for a one-off cash splash? What happens when the money runs out and Territorians no longer own TIO? I question the Chief Minister’s extremely convenient figure of a 200% rise in premiums if TIO was not sold. How far will the money go long term?
Yesterday the Managing Director of Allianz Australia acknowledged some TIO customers will see high increases in their premiums. Again, I question the need to force more pain on Territory families already struggling with the cost of living.
As a first homebuyer I have insurance with TIO. My partner works on cars. Often the cars he works on are insured by TIO. This decision hits home, as I know it does for other members of this Chamber. It says this government is forgetting that its power comes from the people. It is disappointing to see how you are ignoring them.
Territorians could not have been clearer or their voices louder in opposition to this sale even though they were not given a mechanism by the CLP government to do so. This government has been derelict in its duty to consult and to listen to the concerns of the Northern Territory electorate. People have been ignored.
Madam Speaker, it is a disgraceful day and I oppose the bills and this sale.
Mrs FINOCCHIARO (Drysdale): Madam Speaker, I speak to this bill, but more importantly, I speak to each and every one of my constituents.
Since the discussion began about the future of TIO, many people have contacted my office for different reasons. Some people wanted to voice their support for the change of ownership of TIO and others wanted more information. Many people were opposed to the sale.
I cannot deny I have taken many calls and replied to many e-mails on this matter in recent weeks. I also met with a Palmerston business owner who is one of the organisers of the ‘Don’t Sell TIO’ campaign to discuss the issues of paramount concern to business and the motor repair industry.
I feel proud so many people have raised their voice, whether for the sale or against. There are many passionate people, and it is a great reminder to us that Territorians are engaged, care about the decisions we make and have the means to make their case heard. For many who contacted my office a simple, helpful question and answer sheet detailing the facts was enough to help allay their concerns. For some people no amount of information was enough to convince them the sale was a good thing.
I have not been happy with the speed and way the sale has been communicated; however, I understand the commercial limitations placed on Cabinet, which have been discussed at great length tonight. I appreciate the limitations placed on our communications strategy.
Throughout this public debate my primary focus has been to ensure current TIO customers will not be affected by any sale. I also regularly updated the Chief Minister and my Cabinet colleagues when comments were received from the public to convey community sentiment. In speaking with my colleagues, I know not everyone has been fielding as high a number of constituent concerns as I have, and I am comforted that my constituents and other Territorians have felt comfortable to share their questions, comments and concerns with me.
Over the previous few weeks a decision to sell TIO had not yet been made. I spent my time disseminating the information I had about the government’s terms and conditions of any sale. These conditions included ensuring the TIO brand and products remained the same, there were no job cuts, community sponsorship remained the same and prices do not skyrocket.
Yesterday it was announced the sale of TIO would proceed and greater detail around the terms of the sale are now in the public domain, which I am grateful for. Just as my constituents let me know how they feel about the sale, I am now able to let them know my position on the sale, having been appraised of the full detail. As a member of parliament, I am compelled to look at long-term benefits to the Territory and make sure we govern on behalf of all Territorians. I have now formed the view that Cabinet made the right decision to sell TIO, not just on the economic arguments which cannot be disputed, but on a range of broader social policy objectives.
I will outline the distinguishing factors that have given me comfort that the future of TIO is secure and future insurance cover for Territorians is secure. I note all my personal insurance is with TIO and always has been.
Perhaps the most alarming detail and compelling argument for the sale is if there was a cyclone the size and magnitude of Cyclone Tracy, Territorians would not be insured to cover the cost of the damage. I understand TIO was only ever able to cover approximately $677m worth of insurance to home and business owners. The predicted cost of insurance payouts in the event of a cyclone is closer to $1.28bn.
With the sale of TIO Allianz is able to provide insurance to Territorians in excess of $4bn. This fact alarmed me and should alarm Territorians. The great divide of nearly $600m will now be mended.
Imagine as a loyal TIO customer waking up the day after a catastrophic event to realise TIO is not able to financially cover the damage. Imagine seeing TIO collapse into financial oblivion due to an inability to reinsure its liability to sufficient levels. We live in a disaster prone part of the world, and the financial backing of one of the world’s largest insurers is a good thing for Territorians provided the spirit and direction of TIO is maintained for the benefit of Territorians.
Further to that spirit and direction it has now been confirmed Allianz will:
preserve and promote TIO’s brand throughout the Northern Territory in the long term
These are important attributes of the sale which cover off on many of the concerns my constituents had which I could not respond to prior to today. In particular, the investment in flood mitigation is critical, and the member for Katherine, more than anyone in this House, knows how important and meaningful flood mitigation is.
The retention of staff is also a key factor in forming my decision to support the sale. I was concerned there would be job cuts as a result of the sale. It is now confirmed there will be no job cuts and all accrued employment benefits will be recognised.
The fact there will be no closure of TIO branches, and the maintenance of community sponsorships, which will be increased, is hugely important in forming one’s decision.
We heard People’s Choice Credit Union will own the banking component of TIO. Key features that assisted me in forming my decision include that People’s Choice will:
acquire all TIO Bank home loan, personal loan, commercial loan, credit card and retail deposit accounts
I also understand People’s Choice Credit Union today announced it would pass on its low interest rates to TIO customers, which will deliver immediate and real financial relief for Territorians who bank with TIO. That is a genuine offering from People’s Choice to give Territorians who bank with TIO better interest rates.
Again, there will be no job cuts to the banking arm of TIO, community sponsorship will be enhanced and a new office in Coolalinga will be opened. These factors are reassuring.
There are many reasons Territorians are worried or opposed to the sale of TIO, just as there are many reasons Territorians are in favour of the sale. I am sure many Territorians are also indifferent and may not insure with TIO.
To those opposed to the sale, I understand your concerns and have heard and communicated them at the highest levels. Having reviewed the detail provided to me recently, I feel comfortable the sale is the right decision for the benefit of Territorians now and into the future. I look forward to a stronger, more competitive TIO which can fully protect all Territorians.
Insurance is a complicated area and I do not profess to be an expert. However, I am comforted by the words of Allan Manning, Adjunct Professor at Victoria University and author of nine books on insurance. He wrote the article ‘Will the Territory Insurance Office sale push up premiums?’ dated 25 November 2014 published on The Conversation and I quote:
Mr STYLES (Transport): Madam Speaker, I support this bill. Insurance is about risk management and that is what insurance companies do. They have some really good people and experts assessing those risks. When you participate in this argument, it is about risk management. I thought those opposite might have done some risk management of their own and had some briefings, but when I checked this evening they had not asked for briefings.
It was not until it was announced. The Leader of the Opposition said she heard a decision had been made by Cabinet on Sunday night to sell TIO. Why did she not get up early on Monday and ask for a briefing? There were no briefings before the announcement …
Mr Conlan: Got it from the NT News.
Mr STYLES: It is a bit sad getting information from the NT News. If you look at the front page of today’s paper ...
Ms Walker: You are dreaming; you are gone!
Madam SPEAKER: Member for Nhulunbuy.
Mr STYLES: Members on the other side have come into this debate with assumptions, and we know where assumptions lead.
It was not until after the press conference that the deputy opposition leader asked for a briefing. I am reliably informed the briefing was about the media release, not necessarily what is being debated today, and it did not go for long.
Mr McCarthy: I was a witness.
Mr STYLES: Why do you try to trash a good company based on incorrect information? I have made notes of wild statements. The member for Barkly said hundreds of thousands of people want an answer. There are only about 30 000 policyholders. I note the member for Barkly is a policyholder, as are many on this side. I am also a TIO policyholder.
The member for Casuarina mentioned respect. Before I made a decision I asked questions, made sure I received briefings and got information about the risk. I respect my constituents, unlike those opposite who do not believe in respect because they did not get any information. You did not get the facts. You went off into fantasyland about what would happen and said the sky would fall in. It is Tuesday and the sky has not fallen in.
I do not think members opposite understand business. I will give you an example. My brother-in-law bought a mobile coffee van. When he bought the van he did not double the price of coffee because he understands – he has been in business all his life – you have to remain competitive.
TIO has 39% of the market. I cannot believe members opposite do not understand business basics. Perhaps they have never been in business; perhaps they do not understand or do not want to understand. Perhaps they want to create fear and whip up emotion about TIO. Several hundred thousand people want an answer, obviously they are not all TIO policyholders because there are just over 30 000 in the Northern Territory. Not everyone has insurance with TIO; they go to the other 11 companies in the Northern Territory that offer flood and cyclone insurance.
The member for Johnston said how terrible things are in Queensland. If you bothered to get a briefing you would know after the 2011 Queensland floods the federal government stepped in. We now have consistent wording for flood insurance across Australia. He should also know in Queensland premiums went up because many homes are not built to code.
Since Cyclone Tracy we have a cyclone code and houses are built differently. They cost a bit more to build, but they are built to a higher code than those in Queensland. If you have a home in Queensland not built to code you say, ‘I live in a cyclone area. I have a nice old Queenslander on stilts not built to code. The roof is not tied down but has a couple of straps on it and I want to insure it.’
This morning on ABC radio the presenter said, ‘I rang Allianz in Queensland and asked for a price to do this’. Allianz has partners there. Allianz in the Northern Territory has 1% of the insurance market and wants to buy a good, strong entity. One Allianz board member said, ‘The reason we want to buy it is exactly the problem you are having. People love TIO. We want to get hold of that book and we want those customers. We want to retain them.’
As with the coffee van, you do not kick the living daylights out of the coffee van then charge double; you would go broke. Allianz is in the risk management business. It has offered a fair price. Mr Jan Van Der Schalk, a senior insurance analyst with stockbroking firm CLSA, Credit Lyonnais Securities Asia, one of the top insurance analysts in the world, said, ‘Based on TIO’s last annual report, it appeared the sale price for the insurance business was about 10 times annual earning, making it a good deal’.
I do not have time to quote all the figures the opposition should have seen prior to running the debate in this House. They based their arguments on misinformation.
In 2006 the Labor government went against the board and the management committee. It wanted to offload TIO. I am told in 2006 – this is from people currently on the board – it was not in a very good position. A new CEO came in just after that, but the Labor government wanted to sell TIO. I do not know what it planned for the MAC Scheme or what funds were there. I understand, and am happy to be corrected, the member for Nelson was leading the charge with 23 000 petitioners opposed to the sale. The Country Liberal Party spoke to the board, probably spoke to some of the management, who said, ‘It’s not ready to be sold, you can’t sell it. It would be a disaster.’ The government wanted to go against the board.
The difference this time is the board approached the government. The fiduciary duty that board members and directors have is when they see a looming problem they are obliged to advise shareholders on what they should or should not do. What the shareholders do with that information is up to them. The shareholder of TIO is the Northern Territory Treasurer. In 2006 Labor knew TIO had a total aggregate risk of approximately $30bn and 80% of that was concentrated in Darwin and exposed to cyclone risk.
TIO currently, because it is government backed, only insures to about $700m. If you wipe out 700 $1m homes – there are many in the Territory these days – that is it. What do the rest of the people do?
I have not heard about statehood in this debate. If we were to keep TIO, having been advised of the contingent liability and the exposure the Northern Territory taxpayer has by the directors – that is all of us and our constituents. You may not even be a customer of TIO, but you are exposed to carrying the risk of TIO. We are seriously exposed and have been told to sell it. What happens if we have a catastrophe? This is about managing risk. If we have a catastrophe and the government still owns it, TIO pays out $700m and we have guaranteed the extras. Where do we get the extra money?
There is not much risk management when you look at debt levels racked up by the former Treasurer, the current Leader of the Opposition. We have a projected debt of $5.5bn and the opposition thinks that is all right. That is a 98% debt to income ratio. If we went to the federal government and said, ‘We were silly and did not protect the taxpayers of the Northern Territory. We exposed them to risk when we did not have to. We could have reduced and managed our risk.’ –not to manage our risk would be totally irresponsible. There are members on the other side who are happy to expose every taxpayer in the Northern Territory to perhaps $300 000.
We would have to go cap in hand to the Commonwealth and say …
Members interjecting.
Madam SPEAKER: Members for Greatorex and Nhulunbuy, cease talking across the Chamber.
Mr STYLES: … we are dumb because we exposed everyone to this massive debt’. Look at Norfolk Island at the moment …
Mr Conlan interjecting.
Mr McCARTHY: A point of order, Madam Speaker! Standing Order 51. The member for Greatorex is interrupting debate.
Madam SPEAKER: Member for Greatorex, member for Nhulunbuy, cease interjecting and talking across the Chamber floor otherwise you will be asked to leave the Chamber. Minister, you have the call.
Mr STYLES: We would have to go to Canberra and ask for billions of dollars. I cannot imagine what the Treasurer and Prime Minister would say if we had the opportunity to take that risk factor away from Territory taxpayers and shift it to the world’s largest insurer, which is far better at managing risk than the Northern Territory government, and did not.
I take on board what the member for Port Darwin said when he quoted Dr Neil Conn: government in business is government in the wrong business. That is right, we are seriously exposed.
The federal government could say, ‘We have to invest billions of dollars to fix your mess, we don’t think the Northern Territory is capable of self-government’.
Norfolk Island is about to lose self-government because they messed it up. I moved here 33 years ago and have put a lot in. My kids and grandkids are here and we are not going anywhere.
I do not want to see the federal government bail us out because we did not do the right thing. We are saving TIO. TIO cannot expand.
Warren Entsch was mentioned. Of course he would want us in Queensland because he would say that is the federal government. We cannot underwrite everything in Queensland.
The Leader of the Opposition said we need an affordable safety net. TIO is not the cheapest; other companies offer flood and cyclone insurance at a much cheaper rate.
The Leader of the Opposition said we have sold out Territorians. The opposition has sold out Territorians by failing to get the facts on this and being prepared to expose Territory taxpayers to this massive debt. I am not surprised that is the attitude when I look at the debt we inherited when we came to government. Debt does not seem to worry the opposition because members do not seem to understand someone has to pay it back.
You heard a business case from this side of the Chamber. We understand companies can do this far better than the government because it cannot offload billions of dollars’ worth of risk.
In the Territory we self-insure our infrastructure. On top of $30bn, which is the total aggregate risk, we still have schools, hospitals, roads and government owned infrastructure. We also self-insure this building.
Where is the opposition’s business case? It says, ‘We want to keep our Territory Insurance Office’. I wonder if members have explained what people are exposed to when they have been talking to them.
A delegation came to my office a week ago. These people were putting posters on the side of the road about TIO ownership. They walked out of the meeting pretty satisfied with the explanation I gave them.
People may scoff, but I also spoke to the ABC in Alice Springs on the morning of 14 November. I explained what was happening and at the end they said, ‘You have virtually convinced us’. This was an ABC reporter and ABC cameraman, and I was quite surprised they had gone a long way to saying it sounded reasonable and fair. Why? Because they had the information.
It is disgraceful that members of the opposition say premiums will double or triple. Gerry Wood said someone rang TIO this morning about workers compensation and received a quote for $106 000, GIO was another $3000 or $4000, another one a bit more then Allianz was $161 000. The member for Nelson said there was a difference of $55 000.
What he did not say is go with TIO, because TIO is an entity and will remain an entity. Allianz will have its business – it has a different portfolio – and TIO will still operate.
My advice to the member for Nelson is tell that person to go to TIO because $106 000 is the best deal. If he had attended a briefing he would know what was happening, but he wanted to spread rumours and scaremonger in the community.
If you had a briefing and continued scaremongering in the community you would be lying and would be caught out at some stage. ‘We can’t get a briefing because then we would have to tell fibs.’ You just make it up as you go.
I have so much more to say but time is rolling on and there are other speakers. I have another nine pages, plus four-and-a-half pages of notes in relation to the hypocrisy from the other side. I wish I had more time, but will pass on to other speakers so we can all have a turn then get on with saving the Northern Territory, saving TIO and allowing it to expand.
The member for Nightcliff has said in the past if you buy a house or a business premise in Nightcliff and want to rent it out you do not trash it to get less rent.
I congratulate the staff of TIO because when Richard Harding took up his position TIO was in a lot of trouble. Government had been putting money into it. He has turned it around and taken it to a point where it needs to grow further. It is now being restricted and strangled by the fact government owns it. It cannot go interstate, it cannot increase its business, government is seriously exposed and it is like the humble tomato – you plant the seed.
In 2007 Richard Harding planted a seed. He, his executives and the staff have done a great job – all 259 of them – of the tomato being on the vine, ripening and needing to be picked. The board has recommended we pick the tomato. If you leave it on the vine we all know it will wither away and be useless for consumption.
The time is right, the evidence is right. Jan van der Schalk says the time is right, and he is one of the most eminent insurance specialists in the world. I trust him, I trust the board of TIO and I trust TIO management for giving us the best advice for the Territory. I trust the excellent consultants from around the world who have given us the best information and I accept it. The information I do not accept is from the uninformed opposition.
Mr CONLAN (Central Australia): Madam Speaker, this is a fantastic day to be a member of a government prepared to put its foot down and do something right for the Northern Territory and Territorians. A day like today makes seven years sitting opposite this mob almost bearable and worthwhile. I have listened to these guys, watched them perform and lurch from one disaster to another for seven years, five in government and the rest in opposition. They are a hopeless case and full of haters.
The member for Nhulunbuy is a case in point. She is a hater. She does not like much. Unlike the member for Nhulunbuy, and contrary to popular belief, I do not hate anyone on the other side of the Chamber. In fact, I quite like you all. I know in this Chamber we try it on every now and then; we have to go to battle, draw our swords, pretend to dislike and engage in some fairly robust warfare. However, I do not dislike anyone on the other side of the Chamber. I will make sure when I retire from parliament I have no deep down dislike and do not harbour any resentment for anyone on the opposite side of the Chamber, unlike the member for Nhulunbuy, who seems to be a hater. She dislikes people, and I think she particularly dislikes me. Being on this side of the Chamber …
Mr McCARTHY: A point of order, Madam Speaker! Standing Order 113: relevance. The debate is about the sale of TIO.
Madam SPEAKER: That is not a point of order. There is latitude, minister, but if you could please address the topic.
Mr CONLAN: Yes, Madam Speaker. It was simply an introduction to the 30 minutes I am allowed in the TIO debate. Being on this side of the Chamber I regularly hear the member for Nhulunbuy. It is quite annoying but, notwithstanding that, I do not hate her.
It is great to be part of a government prepared to do something significant for Territorians. I have looked back at the 11 years of Labor, which I remember every day of. For five of those years I watched members lurch from one disaster to another. I wonder if they made a significant decision. What did they do that took some intestinal fortitude? Did they do anything? I find it hard to put my finger on anything Labor did. All they did was run 100 miles from decisions. The moment something became tough and might invoke an unpopular opinion, Labor ran. They were like the ostrich that stuck its head in the sand.
Labor could have made this decision in 2005 but did not. They had the biggest landslide victory in the history of the Northern Territory with a 19-seat majority. It still was not enough to convince a Labor Chief Minister to make a tough decision and deal with TIO.
All we have heard today is the pontificating holier-than-thou garbage of, ‘You are selling something so endearing and so important to the people of the Northern Territory’. That is your only argument. Let us look at assets. We live in a global world not a closed cocoon like mushrooms, as you would like us to. This is a global economy and a worldwide environment. Look at some of the other iconic assets that no longer belong to their original owner.
I am from the great state of Queensland. The member for Karama likes to depict that as a disadvantage, that I am a second-rate person and she is so much better than everyone else because she was born and bred in the Northern Territory. She makes no allowance for the fact importing skills into the Northern Territory makes it what it is today. People moving from interstate or overseas have made the Northern Territory what it is today.
The member for Barkly is a New South Wales boy who moved to the Northern Territory 35 years ago, as he keeps telling us. How do you feel when the member for Karama beats her chest and says, ‘You are a second-rate citizen. I’m better than you because I was born here.’
I am from the great state of Queensland and am proud of my heritage. Most of my family still live there. My in-laws live in the other great part of Australia, Western Australia. I choose to live here, my kids were born here and I love the Northern Territory. I do not know where I will end up. Many people say, ‘I’m going to stay here for the rest of my life’. I will not make that commitment. I love Australia, I love travelling and I love the world. I might end up anywhere. Who knows? For the moment, I am a committed Territorian, my kids go to school here and we have a lovely life in Alice Springs.
Let us look at that great icon from Queensland, XXXX. It is one of my favourites – XXXX Gold, XXXX Bitter and XXXX Heavy. It is now owned by the Kiwis – Lion Nathan. It is the same great taste and the same great looking can. It is still one of Australia’s most popular beers, but it is owned by the Kiwis …
Mr Styles: Did it double in price?
Mr CONLAN: It did not double in price. In fact, the price might have gone down. Vegemite is another great Australian icon now foreign-owned. Budweiser, that great American brand is no longer owned by the Americans. Rolls Royce, one of the great British icons, is no longer owned by the Brits. You do not get much more Australian than Billabong. Guess what? It is no longer owned by Australia. RM Williams is now owned by the French. Another iconic Australian brand is Victa, which is now owned by Briggs and Stratton.
They are examples of companies that have gone from strength to strength. Their iconic status, the quality of service, the quality of the brand and the brand recognition has not been lost. In fact, it has been enhanced. These companies have rescued most of these organisations and put them on the path of financial success. This will happen with TIO under ownership of one of the biggest organisations in the world, Allianz. Yes, it is foreign owned, no doubt about it; however, this is the right decision and it has to happen.
We have watched this mob for seven years. We watched you never make a hard decision, only run from them. You guys would be happy to let TIO stay exactly where it is and allow Darwin to be wiped out once again by a cyclone, with no propensity or capacity to rebuild the community as a result of the financial situation that will become TIO’s if we did nothing ...
Mr ELFERINK: You could rebuild your house with the insurance money but there would be no sewerage system.
Mr CONLAN: Yes, another great quote from the member for Port Darwin. He put it beautifully.
This decision has to be made. It is a decision to save TIO from oblivion, let alone Darwin if it were wiped out once again by a cyclone; it is coming, do not worry. You would have us do nothing. Come that day the government of the day – whoever that might be – is left holding the can. ‘I am sorry Territorians, we can’t rebuild your police station, the hospital or the school. We are flat out paying out your insurance claim as a result.’
I ask the opposition if that is where you want us to be? It is a question the opposition should answer. They cannot and will not answer that question. They tug on the heart strings and make up this pontificating, holier-than-thou argument about how important it is this organisation remains in Territory hands. It is a completely flawed argument. I know you believe it, and that is the problem I have with the Northern Territory Labor Party opposition. The Labor Party under Prime Minister Paul Keating would have had a coronary at the argument you tried to mount with regard to saving TIO. He was a Labor Prime Minister who did something, unlike the Labor government of the past and now the Labor opposition.
The insurance industry is facing global changes. We live in a global environment. The increase in the number of large violent natural disasters has put pressure on insurance companies around the world. TIO and the Northern Territory are no different. According to the Labor opposition, that is not the case. It is the case and why we have made this monumental decision. Yes, we might face electoral oblivion. I am quite prepared to lose my seat over the fact this is the right decision to make. It is the right decision and that may happen.
You wave that in front of us as if to run from that threat: that we do not have the intestinal fortitude to stand up for what we believe in based on, whether or not we will have another four years employment. That is not the case, unlike you. That is what you did and what you will continue to do. You will not make a decision if you fear you will be out of a job at the next election. Do you have that few job prospects? Is your future so bleak you must stay in this Chamber for the next 20 years until you retire? It seems like it. We can do other things. We are prepared to throw caution to the wind, roll the dice and back ourselves.
If we face electoral annihilation and lose our seats, if I am despised in my electorate as you say – I do not get that feeling. We are midterm. This government has made several big bold decisions.
Any polling usually indicates a run against the sitting member. If that is the case I am prepared for it and will stand by that decision. If I am defeated on election night 2016 I will not regret making that decision and being part of a Cabinet that made one of the most important decisions in the history of the Northern Territory. However, that will not happen. This is crucial for the future of the Northern Territory, and it does not surprise me you have taken this path. It has been a pretty lame argument all day long from the Territory opposition.
You know this is the right thing to do. You wanted to do it in 2005 but could not because you did not have the guts then or now.
The infrastructure program was raised tonight – what will happen to the money? The money will go into building significant long-term infrastructure for Territorians. Yes, it may go into building a football stadium. What is wrong with that? The Northern Territory is becoming a proving ground for national sporting events. We have shown we can host some of the biggest international sporting events in the world. Between Alice Springs and Darwin we can do it, so why not have a stadium commensurate with what we want to host?
You talk about a swimming pool; it is called an aquatic centre. What is wrong with an Olympic standard aquatic centre, something lacking in the Top End? We also lack a tennis centre.
We have so much talent, so many people, organisations and peak sporting bodies across the world that want to bring first-class competition to the Territory, but we are limited because we lack infrastructure. If we can set things up for the future the Territory will be a better place.
The member for Casuarina asked what will happen to the money. That is what will happen to some of the money. Katherine, Darwin, Palmerston and the Barkly will benefit from the money.
This government has already done more in two years than you could ever have hoped to do in your term for under four years, let alone what the previous government did in 11.
The turnaround in the community has been remarkable thanks to the policies of this government. We will continue to invest in the Barkly, Alice Springs, Katherine and the Top End. We will set up a legacy for future generations of the Northern Territory.
This is a monumental day and it makes me proud to be a member of parliament. It makes sitting here for seven years looking at this defunct, lost opposition, formerly government, worthwhile. I hope once some of the heat dies down, which may be tomorrow, Thursday, another month or even six months, people will say, ‘Those guys did what we elected them to: make a tough decision. We do not expect politicians to live on the gravy train, run from decisions and play a popularity contest all the time.’ That is what the opposition does. To you it is a popularity contest. ‘If they don’t like me what can I do to re-shape the message so they do?’
It is not that easy in the real world, where you have to make decisions. That is what we have done today. We will do it again tomorrow, on Thursday, and every day we are in government we will make decisions to benefit the Northern Territory. These are great bills, it is a great day, it is great for TIO and great for the Northern Territory.
Mr ELFERINK (Attorney-General and Justice): Madam Speaker, TIO has not lived up to expectations. I will read something from 8 March 1979, where Chief Minister Paul Everingham introduced the TIO Insurance Office Bill to create the Territory Insurance Office, which says, inter alia:
I ask that honourable members read that second reading speech in relation to TIO’s creation then compare it what it has done in building theatres – we are a bit light on for theatres built by TIO. In fact, the only concrete bricks and mortar asset TIO has is part of the MAC Scheme, which is the TIO building itself. The TIO building will remain as part of the MAC Scheme asset base and, for the first time, rent will be paid by TIO into the MAC Scheme because TIO will be owned by somebody other than the Northern Territory government. As a consequence it will support the MAC Scheme, which we are not selling. We have passed that scheme on to Allianz to manage.
I have heard people say, particularly the Leader of the Opposition, they love TIO. I understand the emotional argument, but to love an insurance company is a rare thing. I believe people are saying they like the security of an insurance company they own. ‘It’s our TIO’. I understand that. I am scared senseless nearly every morning I get out of bed because of all the things that could go wrong in my life but I refuse, point blank, to allow my fears to govern common sense. Perhaps that is the difference between members opposite and me; they trade on fear.
Every media release the opposition has put out in relation to TIO trades on fear. It is not a rational debate they are pursuing; it is irrational and they are trying to goad people into a state of angst over TIO. What is implied is if TIO fails to pay for itself the government will fix it. That is typical of members opposite. At the end of the day government is an amorphous blob of goodness that floats around in the socialist mind manifesting itself to make people happy. That is not the role of government, and if you wait for government to make you happy I suspect you will be waiting a long time.
Government has some very important functions but running financial institutions is no longer one of them. It was perhaps in the post-Keynesian world of the late 1970s, but that world is fundamentally different, which is why other jurisdictions have moved on. Finally, we walk to the edge of the precipice and today we jump off so that insurance company can take flight.
TIO will continue, and we hear from members opposite, ‘There is a risk TIO will not exist’. Allianz is purchasing the goodwill of the company. Why on earth would you purchase the goodwill of a company if you wanted to move in and compete directly? Why not just compete directly? You could buy a lot of advertising for $424m. You could probably muscle out most of your competition if you wanted to. For $424m you could pretty much subsidise your way through the whole insurance industry in the Northern Territory.
Allianz has chosen not to run with the Allianz brand; it wants to run with a local boutique brand. This is part of the marketing strategy. It is looking to pick up more boutique insurers because boutique insurers are trusted names. It looks at the business model of boutique insurers and, rather than applying the Allianz model, applies the TIO model because the TIO model has been successful. It will continue to apply the TIO model and that is what it has signalled.
It is mere puffery and nonsense to suggest otherwise. You would be a moron if you decided, in business, to take over a small boutique company to get its goodwill then take that goodwill into the public domain and shoot it in the back of the head. It does not make sense and is nonsense. Unfortunately, opposition members cannot help themselves.
We also heard tonight, repeatedly, the suggestion that in the last five years TIO has done well. That is not so surprising because in the last five years there has not been a GFC or a major disaster, and there has been no major reason to pay out. The opposition made reference to the most recent annual financial report, but I suggest members read TIO’s annual report from 2005 at page 26. A graph on that page shows the MAC Scheme spent $30m in two years. Much of that had to be paid out from subsequent years and prior to make the MAC Scheme float.
It may be a great surprise, but since 1979 the Northern Territory government has extracted about $18.5m from TIO. It has, however, at various other times, been required to put in about $20m to keep TIO solvent. Seeing the headline in today’s paper with the tombstone of TIO – it has had two heart attacks in that time. Who resuscitated it? The taxpayer! If we offered that to any insurance company in the world – to say we would subsidise insurance premiums with taxpayers insurance, what would the chances of the taxpayer sitting on the sidelines and applauding be? I suggest somewhere between Buckleys and none.
Page 26 of the 2005 annual report says:
What was the response of the Labor government when it had to deal with increasing pressure on the MAC Scheme? It changed the law and the methodology of payouts so it could limit payouts. It was the only way it could manage the risk. What did TIO do? It did what all insurance companies do and mitigated its risk, limited its expenses and, therefore, was able to trade out of the hole it was slipping into. In other words, it gave less back to the insured. That is not ‘our TIO’. That is an insurance company doing what insurance companies do.
Let us go forward to the report often quoted today, the annual financial report for 2013. I draw honourable members’ attention to page 111. Whilst I have heard members repeatedly quote this report saying how rosy TIO’s future is, they do not refer to the financial notes at the back of the document. These talk about the risk exposure and put qualifiers on the risk exposures, so a person reading this report from cover to cover knows they feel confident about the future. However, any number of things could occur which would expose us to risk. Page 111 says:
Vigorously. In other words, the attitude of TIO is like that of any other insurance company. ‘If we don’t believe your claim we will take you to court. See you in court.’ That will be the way it approaches its business because it is an insurance company. Tonight we have heard examples of claims being rejected and people having to fight through the court system.
It is tempting to romanticise TIO. There is no doubt it has provided a good service to the people of the Northern Territory. Nevertheless, we should not convince ourselves this institution is an unregistered public benevolent organisation. It is not a charity; it makes a profit.
From time to time it did not make a profit and had to be put on life support by the taxpayer. This is what bothers me the most. Two members have touched on it already, but I must mention that if we were to have another calamitous disaster the exposure of TIO, with its limited footprint of reinsurance, means the taxpayer would again have to come to its rescue. If that calamity was one of substantial consequence – a cyclone through Darwin where the vast majority of this organisation’s risk sits – the taxpayer would have to come – after $680m-odd worth of reinsurance payments – to government saying, ‘Please can we have some more?’ If the damage to Darwin was substantial the effect would be the taxpayer would be racking up debt to cover taxpayers’ contingent liability to TIO. That means no schools. We would be paying people’s insurance claims before we rebuild schools, fix bridges, roads or houses. It is not government’s job to underwrite insurance companies, and that is the frustrating, sad truth.
I will finish with an observation made by the member for Fannie Bay, ‘I bet this process of jamming it through sticks in the craw of the member for Port Darwin’. Yes, it does. I do not like going through this process. As I said during the debate on urgency, unless we go through this process today, more of those headlines will be seen day in and day out. People will lose confidence with either their banking or insurance investments with TIO. They will go elsewhere as confidence dwindles, because that is not how businesses do their business. Businesses make quick decisions which can be executed quickly. That is a necessity of business.
You cannot run businesses through committees. You cannot run businesses as a democracy because businesses would cease to operate in that environment. They are run by a board which is rarely elected. The policies are set by the board and executed by the CEO, who is never elected. That person is headhunted and purchased for the job. They then have to respond to the business environment they are in.
How we go about dealing with this business is placing us, as a government, in the position of having to make a business decision and behave like a business. That gives me all the reasons it is wrong to continue running it as a business. It belongs in the business environment.
I prefer to bring bills into the House and let them go through the normal passage. As Attorney-General I have tried to consult widely on most of the legislation I bring into this House if it is substantial legislation. I hear, from time to time, members opposite acknowledge that truth.
Yes, I feel uncomfortable with this process, but it reflects the nature of the organisation we are dealing with. It is a business and this has to be done quickly otherwise it will be damaged by ongoing debate and dispute. This is the nature of what we do. We need to leave business to businesses and we will do government.
I support this bill not because I relish the political difficulties involved – I could not have said it better than the member for Greatorex, ‘From time to time government is not about listening to polls or becoming sensitive to complaint and criticism. From time to time government is about making decisions that matter for the people we serve, the people of the Northern Territory.’
There could not be a more calamitous failure than a government that can see a problem such as its exposure to a contingent liability of the nature TIO exposes the Territory to and not respond. That contingent liability may not become manifest this year, next year or in 10 years’ time, but at some point consistent with the behaviour of cyclones in the Northern Territory in the late 1800s, 1937 and in 1974, there will be another blow that damages or destroys this city. It will probably only be damage because of housing construction now, but the damage will be substantial. People will have long forgotten this debate, but a government of the future will know it has to touch its savings or borrow to repair the damage to schools, hospitals, roads and bridges. However, it will not have to bail out an insurance company it should not have been involved with in the first place.
Mr GILES (Business): Madam Speaker, I thank everyone who has spoken on the second reading of two cognate bills. I have appreciated most of the debate, particularly that from this side of the Chamber.
I also reflect on the summation by the member for Greatorex. It spoke about leadership, decision-making and great team effort in standing up for the Northern Territory.
The government will continue to make decisions for the benefit of all Territorians. The TIO decision has been made for the benefit of Territorians. We carefully considered all the options and decided to allow TIO to be competitive in the future and to unlock $424m of vital infrastructure for projects.
TIO ownership had to change because, as the Leader of the Opposition well knows, TIO was at risk, as were Territory taxpayers. It is a decision we did not crash through. TIO is 35 years old and the community has been debating its future for at least a third of its life. It is a decision we have been up front about, much more than any of the Labor Party decisions ever made.
Let me remind the House that TIO raised its concerns with the previous Labor government. I will quote current TIO CEO Richard Harding, speaking on the Darwin Mix FM program on Tuesday 11 November 2014:
Mr Harding went on:
The Labor Party, the former Treasurer and current Leader of the Opposition knew in 2006 that TIO faced challenges of risk and uncertainty over its future. I believe the Leader of the Opposition knew about the challenge TIO faced before 2005.
Let me quote from the Parliamentary Record of 12 October 2005 and an answer to a question without notice to then Treasurer Syd Stirling:
There is another hint the Leader of the Opposition knew what was going on. Here is another gem from the Parliamentary Record from the then Chief Minister, Clare Martin, on 14 February 2006 in answer to a question:
I believe the current Leader of the Opposition was, at that time, a member of the ministry. She must have known about TIO’s situation then but lacked the courage to make the hard decisions. In fact, she made reckless decisions and spent the money running up debt on the Labor credit card to the tune of $5.5bn. The level of debt and the rapid rate it was racked up by the former Labor government, and the Leader of the Opposition, is nothing short of breathtaking. What happened to the money? What do Territorians have to show for the Opposition Leader’s mad recklessness?
This government saw the problems ahead for TIO and made the difficult decision to secure TIO’s future. As the House knows, I have been clear about the sale and its process. We did not hide it; we were completely up front about it. At every opportunity I raised the issues, debated the issues and answered every media and opposition question. The opposition brought on a matter of public importance. The government had a motion on TIO the following week which allowed everyone in the Chamber to debate it. The opposition had a petition on TIO which commenced before the Casuarina by-election. At the Casuarina by-election they had signs up saying, ‘Don’t sell TIO’. It is outrageous for the new member for Casuarina to mislead the House on that.
The Leader of the Opposition has been outside Parliament House with her union mates demonstrating. She attended the old Town Hall meeting. That is what democracy is.
One thing the Leader of the Opposition has not done is present one good argument or alternative to the TIO challenge. She has whinged, whined and complained without presenting an alternative. I said at the start we wanted a mature debate. I really wanted people to come up with solutions and opportunities for the way forward. I wanted people to come forward with criteria that could fit the sale. Not once did anyone from the other side of the Chamber come forward with a viable alternative, apart from sending it to a committee because you do not have the guts to make a decision.
We put up the criteria for the sale while you sat there whingeing. You could have been part of leadership in trying to find a way through, but nothing. ‘I didn’t know anything about it until after the Casuarina by-election.’ You were protesting at the by-election. Are you that forgetful? It is outrageous.
We have spoken about this issue for months, not like the Leader of the Opposition and the dodgy Deputy Leader of the Opposition – the people who rushed through a Stella Maris deal in the blink of an eye, under a shadow, before the last Territory election. Was there talk about that, member for Barkly?
I would like to again spell out to the House the pressing needs that brought about a change in TIO ownership. The strategic imperatives for the creation of TIO no longer exist. The Territory insurance industry is vibrant and competitive, with 12 insurers competing for customers. TIO can only operate within the NT if it is owned by the government. Its customer base is small and there are risks. Here are a few numbers that, if you sought briefings, you might understand about the industry: total aggregate exposure is $23bn, which includes $19bn worth of cyclone risk and $16bn worth of risk in Darwin alone; it has only paid a $13m dividend to the government over 10 years; it lost $40m in the GFC; TIO has only $100m in prudential capital to back that risk and the rest would have to come from NT taxpayers, but we do not hear a peep from anyone on the other side ...
Mr Wood: You did not attend the meeting and explain that.
Mr GILES: It was your meeting. We sent Richard Harding, the expert on the matter ...
Mr Wood: We invited you. It is politics.
Mr GILES: It was your meeting. That is what you are playing here. You are a populist, Gerry.
Richard Harding from TIO said in that same radio interview:
TIO was and always will be Territorian. I will spell out what will not change. We would never agree to new ownership rules had certain sacred elements to Territorians not remained, the TIO name will continue serving Territorians; the products stay the same and flood insurance is automatically included in all TIO policies from now on; all TIO staff will be retained; the MAC Scheme will remain in government hands, one third of the insurance business in government. We could have realised more for the sale if we had included the MAC Scheme as part of it. We believe this is the right outcome at the right time. The new owners of the insurance and banking industries are good corporate citizens and have willingly pledged to continue all TIO’s community support programs such as the CareFlight helicopter, DriveSafe NT Remote and the sports stadium sponsorship. In fact, the new owners of TIO’s insurance business are expanding community involvement by $200 000 a year for a significant Territory Day event.
It was clear TIO was coming under increasing competition. However, there are some other interesting aspects in changing TIO’s ownership. If a cyclone caused major damage, the NT government would have had to cover the shortfall in TIO payments to TIO policyholders, which are around 40% of the market in the NT.
Every Territorian would have to pay for TIO policyholders. NT government payments to TIO policyholders would not be eligible for funding from the federal government under its post-disaster funding arrangements. The NT government is only eligible for federal government post-disaster funding when NT taxpayer money is spent on public infrastructure like schools, hospitals and roads not privately-owned homes and businesses.
Turning to the issue of mitigation, we have committed $50m for flood and storm surge mitigation in Rapid Creek and the Katherine area, as well as parts of the Darwin rural area. This is completely in line with the federal government’s push for changes to disaster funding the draft recommendations from the Productivity Commission. A stitch in time saves nine.
My colleagues have spelt out the reports on and benefits to the community of flood mitigation. As TIO moves more into a local risk area assessment, this $50m of mitigation will go a long way to easing price increases on home insurance premiums. As Mr Harding said at the Katherine public meeting and in the media, TIO has historically community-rated flood risk the same way for everyone in the NT. Whether TIO was sold or not, the CEO of TIO publicly announced TIO would move to risk pricing. For 70% of TIO customers Mr Harding estimated there would be no price change. For 300 TIO customers there will be an increase of more than $1000, and some customers will be uninsurable under TIO. I repeat, some customers under the current TIO regime would not get insurance had we not made these changes.
The Country Liberals government is determined to undertake mitigation in the most at-risk areas to ease pressure on prices and price increases and ensure houses unable to be insured by TIO will now be able to.
There has been a lot of hysteria in some of the opposition’s commentary about price increases in north Queensland. My colleagues have spelled out why this will not happen in the Northern Territory. Basically, our cyclone building code has been in place since the mid-1970s post-Cyclone Tracy, which wiped out almost all substandard housing in the Territory. About 99% of all stock in the Top End is now built to cyclone code as opposed to Queensland, particularly regional and remote Queensland, which was built before a building code was introduced and much later than the code in the Northern Territory.
We have a long-term plan from an economic and social point of view, particularly with infrastructure. An important component on the TIO change is the introduction of a Northern Territory infrastructure development fund. The government is giving Territorians certainty that revenue from the sale will be used strategically to build the Territory’s future, not just frittered away. It will not pay off Labor debt, as has been done in other jurisdictions. The government is putting it back into the Territory through community and social infrastructure. A total of $215m from the sale will be held in the long-term infrastructure development fund and be set aside for longer-term infrastructure projects which benefit our children and our children’s children.
The government is creating an infrastructure nest egg for Territorians which will be invested and will grow over time, ensuring TIO’s legacy is felt by Territorians long into the future. The fund will be administered by a statutory board appointed by Cabinet once the legislation is introduced and passed. The money will be used for investment in economic and social infrastructure in the Northern Territory. It will also be used to leverage private investment where viable, and access contributions from available Commonwealth funding for infrastructure purposes.
The board will assess potential projects then make recommendations to the Treasurer applying the following economic criteria: the nature and direct economic costs and benefits of the proposal, including potential returns to private investors; the investment risk for private proponents and government; the wider economic benefits of the proposal, including the scope to unlock longer-term economic development prospects through the Territory and facilitate private investment in downstream markets; the potential to establish new industries in the Territory and support economic development in regional and remote areas; and the capacity to promote defined public policy objectives such as improved education, health and housing outcomes.
Legislation establishing the fund will be introduced into parliament early next year, with operation of the fund set to begin around the second quarter of 2015. The remainder of the proceeds will be available for more immediate community infrastructure projects including $50m, as mentioned, set aside for flood mitigation in Katherine and the wider Darwin area, particularly Rapid Creek. We are also implementing a growth plan to build the Territory by a continued pro-development policy with sustained economic growth and a focus on our north Australia development strategy.
The Northern Territory government cannot rely on the Commonwealth and expect to be part of a nation building future if it does not maximise its opportunities to create economic activity. When the current NT government was elected just over two years ago it faced a $5.5bn Labor debt legacy. Through good management, cutting government waste, innovative policies and focusing on support for private business development, there has been a dramatic change in the Territory’s debt projections.
At the same time, the Northern Territory government inherited inefficient and costly government utilities. The government has reorganised the Power and Water Corporation to bring it into line with the rest of the nation’s energy reform process to enable it to be more efficient and transparent. It has also tackled red tape head on. Since being elected in 2012, more than 200 pieces of red tape have been removed, making it easier to do business in the Northern Territory.
More work can be done, but coming out of the TIO change of ownership process is the freeing up of TIO to have a long and sustainable future, the protection of customers and employees, and the investment of funds into much-needed flood mitigation work which could not have been undertaken had this decision not been made.
There is an opportunity for us to realise capital investment through an asset recycling model, some of which may receive 15% from the federal government, but it is an opportunity to give that back to Territorians.
Opposition members have spoken about pork barrelling. There are two options here: we spend the money on community infrastructure or pay off Labor debt. Our choice is not to pay off Labor debt but spend it in the community. Call it what you like, we will spend it and will make sure it is used for the long-term future of all Territorians, whether it is community infrastructure or economic infrastructure in roads, bridges, hospitals or otherwise. It is about giving back to Territorians. That is where it came from and where it should go.
I commend the bills to the House and look forward to any further debate that may come.
Motion agreed to; bills read a second time
In committee:
Mr CHAIR: The committee has before it the Motor Accidents (Compensation) Commission Bill 2014 (Serial 108).
Mr McCARTHY: Clause 9 of the MAC bill gives the commission power to delegate powers and functions under the act. Clause 9(d) says:
Who do you envisage delegations being made to?
Mr GILES: That would be through the people we contract to provide the service over the 10-year period.
Mr McCARTHY: Clause 14, Staff and facilities, says:
Where will the commission staff be located, when will they be appointed and what is the estimated cost of employing commission staff?
Mr GILES: Those answers will be determined when this bill has passed and we appoint a commissioner to facilitate that role.
Mr McCARTHY: Do you have any idea where they will be located?
Mr GILES: At this point no, but we can identify that once we get the process under way. In regard to cost, obviously a budgetary decision will be made to set aside costs to employ staff. We will make that decision when we need to.
Mr McCARTHY: Clause 22 …
Mr GILES: Can I interrupt, Mr Chair. I take it we are not going backwards and forwards all the time.
Mr ELFERINK: What clause, member for Barkly?
Mr McCARTHY: Clause 22.
Mr GILES: We are not going backwards and forwards now, but I take it in the future we are not go backwards and forwards.
Mr CHAIR: No. Standing orders provide we work through the sequence and do not go back.
Mr McCARTHY: Thank you, Mr Chair.
Clause 22 makes provision for an annual report and audit. In a briefing yesterday we were advised the key performance indicators would be developed between the commission and MAC. Chief Minister, could you provide the KPIs or an indication of what they might cover?
Mr GILES: As provided in the brief yesterday, they will be developed between the commission and MAC, and the commission has not been developed. That is what this bill is developing. When the commission is developed it will form a relationship and set the KPIs.
As you would understand, setting the regulatory framework is a process we go through to establish the commission and the rules under which it operates. Those KPIs have not been drawn as yet.
Mr McCARTHY: Mr Chair, that is it for the MAC bill. Could we go to the TIO sale bill?
Bill taken as a whole and agreed to.
Mr CHAIR: I will hold reporting until we finish the second bill.
The committee has before it the Territory Insurance Office (Sale) Bill 2014 (Serial 109).
Mr McCARTHY: Chief Minister, I will read from parts of the bill then ask a question. Clause 11 provides for sale of TIO insurance and banking divisions with monies transferred to the Central Holding Authority. Clause 12 provides for the transfer and sale of assets and gives the minister power to do all things necessary to facilitate a sale. Clause 14 provides for the transfer of assets. In essence, once a transfer order is made, registration can be immediate.
There are also provisions in the sale act dealing with remedial issues on transfer and reversal orders, clause 25, as well as joint ownership issues, clause 28. There is no mention of indemnity being offered to any vendor.
In many large scale commercial sales, particularly involving government, there are indemnity provisions in the contract for the incoming purchaser who wants protection from any liability that may exist or be created due to the sale. Given the nature of this legislation, the opposition expected a mention of indemnity. It could also be that avoiding mention avoids any publicity. In any event, there would be an expectation of indemnity. Without offering it the government risks litigation against it at a later date if the sale, or aspects of it, becomes problematic.
Chief Minister, why is there no provision for indemnity in the bill?
Mr GILES: Which clause are we talking about?
Mr McCARTHY: The provisions of the sale act dealing with remedial issues on transfer and reversal orders, clause 25, as well as joint ownership issues, clause 28. There is no mention of indemnity. Given the nature of this legislation, the opposition expected a mention of indemnity. Why is there no provision for indemnity in this bill?
Mr GILES: Because we have chosen not to put indemnity in the bill. That is the main reason, to be frank without being smart. We are not seeking to indemnify the purchaser. It is to our advantage to not have indemnity there. I am not sure how you would like us to indemnify Allianz or People’s Choice. If you could provide a hypothetical on indemnifying Allianz or People’s Choice I might have a greater understanding of your question.
Mr McCARTHY: It goes to protecting the government in case there are any problems as the sale goes through. In my briefing I understood it would be completed by 2 January, but if there are any problems on that journey is there anything to protect the government?
Mr GILES: Between now and 2 January, assuming these bills go through, the Northern Territory government still retains all financial risk by owning TIO. Should a cyclone come through on 1 January we would maintain all level of risk until midnight. We still own it until 2 January and cover all risk and liability until then. After 2 January it becomes the business of the two purchasers and they take on all risk and liability.
Mr McCARTHY: That is up to the sale contract being signed. What about if there was any contest from the purchaser after that?
Mr GILES: The purchasers take on all risk and liability from that point. Anything beyond that would be subject to any litigation that may present itself, but the purchasers take on ownership and responsibility of the assets they are purchasing.
Mr McCARTHY: That is probably enough on the record for us to have analysed.
Clause 16 provides for the transfer of assets and liabilities. Would you provide a list of assets and liabilities being transferred to both People’s Choice and Allianz? If not, how can Territorians be confident the numbers are right and TIO has been sold for the appropriate price?
Mr GILES: That is commercial-in-confidence as part of contractual agreements, member for Barkly.
Mr McCARTHY: The answer is they cannot be disclosed?
Mr GILES: It is commercial-in-confidence. I have said publicly the TIO building remains owned by MAC, which is a part of government, if that is where your question is going.
Mr McCARTHY: It was general, Chief Minister.
Mr Chair, those are all the questions the opposition had.
Mr WOOD: I understood from my briefing that the TIO building was a TIO asset. Are you saying it is not?
Mr GILES: No, it is a MAC asset. The building – I do not know the street number – we are talking about across the road was 75% owned by MAC and 25% owned by TIO. As part of this transaction it becomes 100% owned by MAC and fully retained by government.
Bill taken as a whole and agreed to.
Bills reported; reports adopted.
Mr GILES (Business): Madam Speaker, I move that the bills be now read a third time.
The Assembly divided:
Motion agreed to; bills read a third time.
Mr GILES (Chief Minister): Madam Speaker, the Darwin Port Corporation has completed some of its biggest infrastructure projects and recorded some of its greatest results over the past financial year.
The 2013-14 year has seen significant milestone achievements, record profits, new and efficient business models, and large successful capital projects delivering efficiencies and costs savings for customers. Positive economic benefits for all Territorians form the basis for this year’s Darwin Port Corporation annual report.
The corporation’s performance as Australia’s northern gateway is not just a catchcry. The port is a cornerstone asset in developing northern Australia and its potential to further service Southeast Asia’s growing demand for food presents an immediate opportunity along with other successful port industry sectors.
The highlights in this year’s annual report are small in number but enormous in accomplishment. Darwin Port Corporation continues to punch above its weight despite its small scale and relatively small trade volumes. It has a mandate to be commercial and competitive. This year’s results are a credit to the corporation’s management and staff.
Some of the highlights of the annual report are as follows. East Arm recorded the highest trade results across the board at 4.6m tonnes, a 7% increase on the previous year. This is significant in the face of a major downturn in iron ore exports and the result of bolstering project cargo and significantly increased vessel calls to the port of Darwin.
Live cattle exports set another Australian record, with a whopping 47% increase on the previous year and over 406 000 head exported to Indonesia and new markets in Vietnam. Also, 22 more cattle ships visited Darwin last financial year. The forecast demand for cattle from Indonesia, Vietnam and our huge prospective market in China looks certain to ensure Darwin remains the cattle export capital of Australia long into the future.
There was a 53% increase in container trade on the previous year with new services from ANL, a former government owned company which purchased Perkins.
Darwin has a low volume of trade in its general containerised cargo but huge potential to expand in this sector. The Territory government continues to work on ways to reduce freight costs in its bid to lower the cost of living for Territorians.
Darwin Port Corporation has achieved a record profit of $17m before tax. This is a tremendous achievement, particularly in the face of diminishing iron ore exports, significant operational changes to infrastructure, record expenditure in infrastructure and technology improvements, and channel dredging.
The $17m profit was accompanied by a 14% growth in revenue, or a total of $58m, exceeding the corporation’s forecast income target by 11%. This was due to a significant increase in berthage of 29% or $9m, and a 15% increase in vessel visits and revised pricing in key sectors.
Staff training was a key investment with an average of $2200 per FTE in specialised training, with a focus on pilotage training for the additional LNG vessels for future INPEX operations and new facilities such as a module offload facility at Blaydin Point and the Marine Supply Base at East Arm.
Darwin Port Corporation’s safety and environmental management systems proved valuable in the reclamation of its retention ponds with the use of quality dredge material from the construction of the MSB, or Marine Supply Base, channel.
The commencement of two privatised commercial operators at East Arm occurred over the period: the operation of the Marine Supply Base by ASCO and the operation of two crane services by Patrick Stevedores and Qube.
The opening of the Darwin Harbour Control Centre and the $8.2m vessel traffic system, the first fully integrated vessel, traffic and port management system in the world, positions the port of Darwin at the forefront of technology and provides the world’s best practice in efficient and safe management of vessel traffic. It was great to showcase this vessel traffic management system to the Prime Minister in his February visit. I have no hesitation in commending this report to the Legislative Assembly today and I congratulate the port on its ongoing achievements.
Mr BARRETT (Blain): Madam Speaker, I table the Subordinate Legislation and Publications Committee report on the Motor Accidents (Compensation) Amendment Regulations 2014. The committee routinely scrutinises all rules, regulations and by-laws tabled in the Assembly subject to disallowance to ensure they are fit for purpose.
Standing orders require that where the committee is of the opinion that an instrument or provision of an instrument ought to be disallowed or disapproved it is to report the matter to the Assembly within the disallowance period. Based on the advice of its independent legal counsel, Professor Ned Aughterson, the committee is of the view regulation 4N(2) of the Motor Accidents (Compensation) Amendment Regulations 2014 is a case in point.
The Motor Accidents (Compensation) Amendment Regulations support the operation of national injury insurance scheme benefits under the Northern Territory’s compulsory Motor Accidents Compensation Scheme. Tabled on 20 August 2014, I note the disallowance period for these regulations expires tomorrow, Wednesday 26 November 2014. As detailed in the committee’s report, Professor Aughterson has advised regulation 4N(2) goes beyond the power conferred by section 20A Part 5 of the Motor Accidents (Compensation) Act under which it is made.
Section 20A of the act sets out the circumstances under which benefits payable in respect of the death of qualifying persons may be reduced, for example, the influence of alcohol, and the process for determining any reduction in benefits. Section 20A(4) provides any reduction of benefits is to be a proportion of the benefits otherwise payable considered appropriate by the Territory Insurance Office, having regard to the extent to which the influence of alcohol contributed to the accident. Where it is determined benefits are to be reduced, Section 20A(5) provides they are to be reduced in accordance with the regulations.
However, as Professor Aughterson points out, regulation 4N(2) incorrectly assumes a correlation necessarily exists between an alcohol concentration reading and the extent to which that alcohol contributed to the accident, thus an alcohol concentration range of 0.08 to 0.133 gives rise to a 30% reduction in benefits. Consequently, the regulation impermissibly avoids the statutory requirement of TIO making a determination in each case as to the extent to which the influence of alcohol contributed to the accident.
As is the case whenever the committee has concerns about a regulation, this advice was forwarded to the Treasurer as the responsible minister for his consideration and comment. Following consultation with the Department of Treasury and Finance, TIO and the Office of Parliamentary Counsel, the Treasurer advised that, as agreed, regulation 4N goes beyond the power conferred by its enabling legislation and proposed that regulation 4N be repealed at the Executive Council meeting on 16 December 2014. Since the offending regulation 4N(2) is neither self-contained nor capable of standing or falling alone, I note it is proposed regulation 4N be repealed in its entirety.
A regulation that purports to go beyond the power under which it is made has no effect in law and may not be enforced by a court. However, until it is ruled to be beyond power by a court it will be treated as being law. As a matter of principle, the committee is of the view any regulation purporting to go beyond its power should be removed at the earliest opportunity.
While the committee welcomes the Treasurer’s advice and proposed course of action to remedy this matter, the committee is of the view that, as a matter of principle, it should not allow its jurisdiction over the regulation to expire before the matter is finally resolved. To ensure the regulation’s disallowance period does not expire prior to its repeal, tomorrow I will give notice of a motion to disallow on behalf of the committee to be moved on 17 February 2015.
The committee proposes that the notice of motion to disallow the regulation be withdrawn following repeal of the regulation and prior to it being moved in the 2015 sittings. Given the above, the committee recommends that the Assembly:
a) agrees that as regulations should not purport to go beyond the power under which they are made, Regulation 4N should not be allowed to stand; and
On behalf of the committee I thank Professor Aughterson for his attention to detail and diligence in advising the committee. I would also like to thank the Treasurer and members of the committee for their bipartisan approach in seeking to assure regulations in the Northern Territory are of the standard the Assembly requires under standing orders.
Mr BARRETT (Blain): Madam Speaker, I move that the report be printed.
Motion agreed to.
Mr BARRETT (Blain): Madam Speaker, I move that the report be noted and seek leave to continue my remarks at a later time.
Leave granted.
Madam SPEAKER: Honourable members, I table four travel reports from the members for Stuart, Daly and Arnhem pursuant to clause 4.1 of the Remuneration Tribunal Determination.
Northern Territory Electoral Commission Annual Report 2013-2014
Madam SPEAKER: Honourable members, I also table the Northern Territory Electoral Commission’s Annual Report 2013-2014.
ADJOURNMENT
Mr CHANDLER (Deputy Chief Minister): Madam Speaker, I move that the House do now adjourn.
It has reached that time of year when the parliamentary calendar is winding down. I know we will all have a few kind words to say about our staff, family and friends. I would like to do that now, being the last week of parliament for the year.
I feel my constituents in Brennan are like part of a big family. We never see ourselves as just member for a certain electorate in Palmerston. Lia, Nathan, Natasha and I see ourselves as Team Palmerston, trying to do everything together and sharing the city we love so dearly.
Thank you to my office staff in Brennan, Ben, Brandon and Robyn, who have done an amazing job this year. Thank you to my ministerial office staff, Anthony – before Anthony, I had Lawson – Jarrad, Lorne, Renee, Alana, Corina, jolly Jess, as we will call her tonight, and Jess before her, and of course, the first PA I had, Kerry, who has been taken by another department – damn!
Thank you to the Legislative Assembly staff, you have been tremendous this year. Michael and his team have done an amazing job. Thank you to the Hansard staff upstairs and everyone who works in Parliament House, from security through to our amazing drivers who get us to and from places safely.
To my department staff: Education under the stewardship of Ken Davies and the rest of the senior team; I wish everyone a Merry Christmas there. Thank you to Lands and Planning under John Coleman, the team there is amazing. We have seen some great reforms in not only Lands and Planning, but also Education. Merry Christmas to Bill Freeland from the EPA, and also our Planning Commissioner, Gary Nairn.
We might forget them every year, but they do an amazing job of keeping us fat – Karen’s kitchen. Their food is tremendous and I am sure they will be with us next year.
To my parliamentary colleagues, we do not always agree and sometimes have different ideologies, but everyone is in this House to do the right thing for Territorians. I wish you and your families all the best for Christmas and hope you can spend time with them. This is such a busy job and takes up so much time. This includes you, Gerry – Merry Christmas.
To my family, none of us could do this job without the support, love and affection of our families. They are the losers in the role we undertake because we cannot be there for special occasions. Last week, having my second son pass a CDU course and not being there on the night was disappointing. He knows the job is important. He appreciates that mum could be there but dad could not. They are some of the things you miss from a family perspective in this job. I wish my wonderful wife, Robyn, and of course, my children a wonderful Christmas.
To you, Madam Speaker and all your staff, thank you for another wonderful 12 months and here’s to a big 2015. Thank you.
Mr WOOD (Nelson): Madam Speaker, I have to mention this otherwise I will be in trouble. If anyone wants to go to a restaurant play at Taminmin College on 4 and 5 December called Harem Scarem, teachers at Taminmin College are putting it on as part of the Rural Amateur Theatre Society, known as RATS. You are most welcome to attend. There is a three-course meal, which I presume is being put together by Taminmin College students. It will cost you $80, but it will be a night of great fun.
I know we only have three days in these sittings but I want to talk about, believe it or not, banana freckle. People have spoken to me about it recently, and there was a small protest outside today. I ask the minister to look at matters which require attention and how the situation is being handled.
Reading some of the documents on the website about banana freckle, one says banana stumps must be treated with a suitable commercially available herbicide in accordance with label instructions. Some people in the rural area, and possibly the Darwin area, do not like to use herbicides. This document says you must use it. People know you can use kerosene or just dig them out. People who do not want to use chemicals on their property have come to see me. The department needs to make sure there are other alternatives besides herbicides.
Also, a gentleman who grows a particular species of bananas came to see me. The species came from the Philippines many years ago through the right channels and is a particularly nice cooking variety. He has a shop at Rapid Creek Shopping Centre where he sells a range of foods, one of which is banana fritters, and he makes a reasonable income from that. He is not a big commercial grower, but he makes money out of selling bananas.
I plead with the government to deal with these people in a fair way. You cannot say, ‘We’re going to give you one fruit tree’. People are losing their livelihood. They might not be signed up for the banana industry levy, but the government has made a decision to destroy part or, in some cases, all of a person’s livelihood. The government needs to work out some form of compensation for these people.
If this person loses several hundred bananas it will break his heart. He has not been well for some time, and he and his wife keep themselves occupied with the shop in Rapid Creek. This is an important part of their living. I ask the minister to look at that.
I would like the government to seriously think about the other matter I raised before. There are varieties of bananas in the rural area and the city which are not normal. You can take tissue samples and grow them in a quarantine area. I understand there is a quarantine area at Berrimah Farm. If you took tissue samples you could set up a place in Katherine where bananas could be grown for the next three or four years, with the owner’s name attached and perhaps the variety. People with special varieties could retain them. If we wipe out all bananas how can different varieties be brought to Darwin? We will just have Cavendish and Lady Fingers. There are many more varieties and people enjoy a range of tastes when it comes to bananas.
Some people might say it is not a big deal. It is a big deal for many people, especially in this part of the world where people enjoy growing bananas for cooking, for the markets, or eating. The government has a role to investigate if it is possible, before these plants are destroyed in April next year, that people can apply for tissue culture propagation of plants and they can be removed to a quarantine site. I would like the government to give serious thought to that.
This is a sad day. The selling of TIO, especially in the way it has happened today, is disheartening. I do not accept it when the minister says, ‘If you don’t agree with it what alternative do you have?’
Some of us did not agree with it being sold. You decided it should, and that is fair enough. However, if your idea was so good why not take it to the people? I found that most disappointing.
I presented a petition today with a little over 1000 names from a table at Howard Springs and one at Humpty Doo. No one sat at those tables, no one asked people to sign the petition, but people did. They are the people I am concerned about. The government’s argument to sell TIO did not convince them. I heard rhetoric this afternoon from most government members about why we should sell it, but you did not convince the people it was a good thing?
I become annoyed when I hear the Chief Minister, who did not attend a meeting, go crook at me. If you want to be the leader do not blame Richard Harding, the CE of TIO. The shareholder is the Chief Minister as the Treasurer, and he is making a political and economic decision to sell TIO. It was his responsibility to attend that meeting to discuss the future of TIO.
It is good to have a discussion about the future of TIO, but the government could not be bothered doing the hard yards. It pushed this through much quicker than it claims. It pushed it through from October to now in a total of seven or eight weeks.
Have we had enough time to have a mature debate? No, we have not. We have not had time to bring in experts to challenge what the government says, to question what TIO might have said and look at things like workers compensation.
A rural company that has been in the Northern Territory for years will now have to pay $56 000 more for workers compensation if it wants to use Allianz, because that is the difference between Allianz and TIO premiums.
People on that side might think they are tough, have shown leadership and are doing what they are paid to. You have made the decision. The problem is you left the people behind, and you have to live with that.
Ms FINOCCHIARO (Drysdale): Madam Speaker, tonight I recap on the year and thank many people in the Drysdale community who do such a wonderful job to help make Palmerston the beautiful city it is.
I will start by thanking Driver Primary School Council, a fantastic group of people. This year it was made up of Principal Rob Presswell, Council Chair Tracey Johnston, Rosalina Burrowes, Liz Ganley, Jewelil Riley, Kylie Hide, Richelle Kent, Sharon Keats, Magdeline Mahomet and Mandy Hart. The preschool representative on the school council this year was Dianne Morrison.
Driver Primary School has a very active school council which delivers working bees and fundraisers throughout the year. One of the biggest efforts is delivering the Food and Fun Festival, which was fantastic this year and the main fundraiser for Driver Primary School. Congratulations to the school council on that.
This year they have been working hard to transition to global budgeting, and made the decision not to apply for independent public school status. I respect and understand that.
I want to thank them all for their hard work. I thank acting Principals, Robyn and Allie. They do a wonderful job, especially at assembly when they are getting the kids revved up for a big day at school. I would also like to thank all the teachers and staff who make Driver Primary School such a wonderful community of learners.
I also, sadly, say farewell to Sherrida Edgecombe. Sherrida is a garden specialist and a teacher at Driver Primary School in the senior leadership team. She will be sorely missed by everyone in the Driver Primary School community. I got to know Sherrida through working at the Stephanie Alexander farm and she is also a constituent. I will miss her twofold but wish her and her family all the best in the new life they are about to start. Thank you very much to everyone at Driver Primary School and best of luck to Sherrida for the future.
Durack Primary School Council has a wonderful group of people. This year it was chaired by Wally Mauger. Principal Sheila Delahay was also part of the school council. Pat Coleman, Lyndell Nichols, Angelina Lee, Bindi Johnston, Kylie Akers, Libby Ferguson, Heather Steadmans, Simone Tims and Peta Pollock made up Durack Primary School Council.
The school council is extremely active. Durack runs fundraisers throughout the year and is very good at creating fun events which engage with the school community and raise a lot of money as well.
This year the school ran its spell-a-thon, its primary fundraiser for the year. It was enormously successful. As a result of running the spell-a-thon, Durack Wheel-a-thon was scaled to Durack on Wheels. There was less focus on raising money, but nonetheless it was a hugely successful event and the school council should be proud. The school council ran the barbecue and did all the hard work, as usual.
Another fundraiser the council organised this year was the car boot sale.
I thank all the staff at Durack Primary School for being so wonderful and taking such good care of our children. The ladies in the front office have to deal with me lumping piles of letters for students on their desk. They disseminate them ever so graciously to the students and I am grateful for that.
Durack Primary School Council has been transitioning to global budgets and doing really well. Durack applied to become an independent public school and I was excited by that. Unfortunately, it missed out in the first round, but received some constructive feedback and is looking forward to reassessing its position and moving forward. Congratulations, I know it gained a lot from the interviewing and panelling involved in the independent public school process. Durack Primary School has done a wonderful job in 2014 and I look forward to working with staff in 2015.
Gray Primary School Council is made up of Principal Sue Beynon, Merrilyn Lo, Anita Wickremasena, Jodie Speed, Kylie Granger, Kylie O’Keefe, Genna Smiley, Sharon Chin, Phil Taylor, Sarah Schubert and Jenny Washington.
Gray Primary School had a huge year and a lot of the focus for the council was keeping its eye on the school’s 30th birthday celebrations. This year Gray Primary School turned 30 a few days after I turned 30. It was nice, being a former student of Gray, to have shared a special birthday with Gray Primary School.
It was a fantastic evening and many teachers and staff put in long hours to make it as special as it was. I thank everyone at Gray Primary involved in putting together the 30th birthday celebrations. It was magnificent and will be remembered by everyone for eternity. I wish Gray Primary School all the best for its next 30 years.
The school council was also busy with the Halloween disco, its Mother’s and Father’s Day fundraisers and transitioning to global budgets. It has transitioned really well and Jenny Washington, the finance officer, is a whiz at this and perfectly placed to guide the school through this transition.
I thank all staff and students at Gray Primary School; it is a wonderful school. I love visiting you guys and look forward to working with you in 2015.
Good Shepherd Lutheran College, in my electorate, is a wonderful school. Principal of both the Howard Springs and Gray campus, Julian Denholm, is leaving us so I wish Julian and his wonderful family all the best for their change. They are moving to Murray Bridge. Julian is a valuable individual who has done a wonderful job at Good Shepherd and will do a wonderful job at Murray Bridge. We will miss him.
I thank Lynne Pokela, head of the junior school, for being so wonderful and welcoming. We have worked on extension of the Howard Springs campus. I always visit Good Shepherd campus at Gray to give my Drysdale all-round excellence awards. I brought several cakes for teachers at the junior school to enjoy on World Teachers’ Day. Thank you Good Shepherd. Julian, best of luck and I look forward to working with Lynne and her team in 2015.
Ms MANISON (Wanguri): Madam Speaker, I place on the record my thanks to the wonderful people working hard around the Wanguri electorate. First I thank my electorate officers. I left them until last in 2013, which was a mistake because I did not get to say exactly how much they mean to me and the community. To Chris Grace and Jenny Djerrkura, you are champions of the community. You work so hard and I feel lucky to have you as part of the team. Nothing I ask is too much, you both put such a huge effort into your job and I feel so lucky to have you.
I cannot wait for another year of hard work. I love it when we all get together to achieve something for someone, and when we have helped someone else. We have had a few situations where we have said, ‘That was well worth the time and effort we put into it. We made a positive change in someone’s life.’ It is wonderful to see how much they enjoy that sense of satisfaction knowing they have made a difference. I look forward to another year of hard work team.
Thank you to Leanyer Primary School and hard-working Principal Anne Tonkin, her Assistant Principal team of Tania Kolomitsev and Louise Corrigan, Maria Albion who departed in Term 3, as well as school council Chair Neale Cooper. They are an extremely hard-working team always striving for excellence in education and wanting to be a role model school. I congratulate them on another excellent year.
From Wanguri Primary School I thank Principal Gail Quigley and Assistant Principal Michael Calwell for their excellent work as a new leadership team at the school. Wanguri Primary School is a wonderful community school, and Gail has brought some new energy into the school which has been wonderful to see.
I say a special thanks to school council Chair Andrew Green, a passionate advocate of public education. It makes me so proud seeing parents like Andrew and Neale go on school councils because they want to ensure their children get a great public education that will continue well into the future.
I say a special thank you to Rachel Dolan, the Defence Force Transition Aide at Wanguri Primary School. She has done an outstanding job and organised the best Anzac Day and Remembrance Day assemblies I have ever seen at a school. Wanguri Primary School is a Defence community, and Rachel will be sorely missed next year as she heads off to another posting with her family. I thank her for the outstanding contribution she has made to the Wanguri school community.
To Dripstone Middle School Principal Jodie Green and school council Chair Melissa Reid, thank you for all your hard work this year, your contribution to educating children in the vital middle years and preparing them for their senior years of education. You do a great job and I love seeing the assemblies and how talented the students at Dripstone Middle School are.
St Andrew Lutheran School is going through quite significant growth at the moment because it comes under Good Shepherd Lutheran College now. It has been wonderful to see the growth under the leadership of Principal Karen Koehler, who has been doing a wonderful job. It is clear the partnership with the Good Shepherd Lutheran College is taking the school to some great new places. It was already a good school, but this is helping make the school community even stronger and it is wonderful to see.
To Holy Spirit Primary School and the new Principal Simon Duffy, congratulations on doing a great job with the students. It is always great to go to Holy Spirit and see how well the students are performing.
I place on the record a special thanks to the Henbury School community, Principal Carolyn Edwards and Assistant Principal Brenda Moore for their outstanding leadership and hard work for the students at Henbury School. Well done to school council Chair Paula Callaghan and school council members Robyne Jhowry, Sharon Campbell, Noel van Kleef, Dee-Ann Vahlberg, Jenny Dignan and Jane Boydell. You have secured a new Henbury School. This is a wonderful achievement for children with special needs attending senior school in Darwin. All your hard work, effort, advocacy, petitions and lobbying government finally secured a new school. I am proud of the work you have done and the difference you are making in the lives of those children.
It will be great to see the planning work commence early next year. I understand it will be open in the second semester of 2016. It is great work. Thank you for your dedication and hard work.
I also thank all the local businesses I work with every day at Hibiscus. When you work at a shopping centre the shopkeepers become part of your working life. They are wonderful people. Gabby and Laurie, the cleaners, are always there to talk and keep an eye on everyone. They are real members of our community. I thank Laura and the management of Hibiscus. Joan and the ladies at Strawberry Fields are a great help to us in the office. We adore you Joan, you are a wonderful lady.
I thank Nelson and his team, Matthew and the team, Lim our local chemist; Tracy and staff at the pet shop next door to me; Paul, Sarah and Tenelle at Dolly’s; Baby at Moneygram; Robyn at the newsagents; Tracy, Renee and the girls at Lime Hair; Tania at the beauticians; and, of course, the boys at Jamie’s Tender Meats. It is a great team to work with. Charlie on the checkout at Woolworths, who can forget you? You are a great person and keep an eye on everybody in the community.
Vim Sharma at Wanguri shops is not only a shopkeeper but somebody who advocates for the community, keeps an eye out for people, and is always telling me what we need to do and how to make things even better around Wanguri.
I also say a big thanks to Tracy Dale Middleton from Neighbourhood Watch and Bob Maxwell from Wanguri. He said he wanted to see community safety improved in Wanguri after he had experienced break-ins. He has helped reactivate Neighbourhood Watch in Wanguri, which has been great to see. Thank you for all the hard work.
Kerry Hoskins, Officer in Charge at Casuarina Police Station, is always an incredible help.
I also thank some of the people who drop by who I appreciate listening to and chatting with: Mr Henry Gray, Dotty Darby, Hazel Glencross, Rob Porteous, Barb Kiiver and Isabelle and Johnny Walker. How can I forget the wonderful former member for Johnston, Chris Burns, and the wonderful former member for Nhulunbuy, Syd Stirling. It is always great to catch up and chat. It is wonderful to have such experienced ex-members of this Chamber I can run ideas past.
I also thank the investor team from Muirhead for keeping up their good work, local aldermen Rebecca Want de Rowe, George Lambrinidis and Garry Lambert, especially Rebecca, who works very hard for our community and does a great job.
To the Labor team, particularly my Caucus colleagues, I hope you have a very merry Christmas. To the hard-working staff of the Leader of the Opposition’s office, you do a terrific job. We cannot do this gig without you guys, so thank you so much.
To the Legislative Assembly staff, thank you for all your advice and hard work. The security staff at Parliament House are great. I love chatting to the cleaners year after year, and thank you for all your hard work every night. Of course, to Hansard for putting up with all of us.
I thank my family, the MacNeills, my brother Luke, and my mum and dad especially for moving all the way from Perth back to Darwin. Being a member of parliament and a mum, to have your support here is wonderful. It is great to have you back in the electorate living across from an excellent spot for me to do roadside. Thank you mum and dad, and of course Scott and Aiden, thank you for all your love and support and for making my life so happy.
Ms WALKER (Nhulunbuy): Madam Speaker, today I have been looking at this magnificent crocodile skin sitting on the table which holds the dispatch boxes. I want to acknowledge it because it is a sacred totem to at least two of the clan groups in my electorate, the Madarrpa clan and the Gumatj. I daresay it is a sacred item to clan groups around the Darwin region as well.
It is truly a magnificent object but also a sacred object. One similar to this was gifted to the Leader of the Opposition, Bill Shorten, when he came to the Garma festival in August. I acknowledged at that time the significance of the gift in a conversation with Djawa Yunupingu, who said it was indeed a very powerful totem and the giving and display is quite significant. I wanted to make that acknowledgement.
I would like to talk about some of the good things happening in my electorate and acknowledge all the teachers and school staff in the Arnhem region who were acknowledged and their efforts celebrated on World Teachers’ Day.
Celebrations were held at the Arnhem Club Bali Pavilion on Friday 31 October 2014 to recognise all in our schools who contribute to education. Lots of teachers turned up; I think they enjoyed the hospitality laid on by the department, and that is a great thing.
There were many excellent nominees from Arnhem region schools, and I will rattle through those who received awards and, where I can remember, who the nominees were.
The support staff member of the year went to the wonderful Mary Manager, who works in the Arnhem education office. Also nominated were Glenda Birch, Terrie Pollard and Cynthia May all from Nhulunbuy Primary School. Well done to those wonderful ladies.
The winner of Leader in Indigenous Education was Selena Uibo from Numbulwar School, who also won that recognition at Northern Territory level. She is an incredible teacher. I enjoyed meeting her when I made my first visit there in July.
Primary Teacher of the Year went to Rachel Blundell from Nhulunbuy Primary School, another amazing teacher. I have known Rachel since she was about 13 years old when I was teaching at Nhulunbuy high. I note Laura Wecket was nominated also.
Secondary Teacher of the Year went to Jodie Beauchamp from Nhulunbuy High School, and Principal of the Year for the region went to Joanne Jefferson from Alyangula School. Early Childhood Teacher of the year for the Arnhem region went to Jenny Martin at Nhulunbuy Primary School.
There is no doubt our teachers and school support staff do an amazing job in educating our kids despite some increasingly tough conditions. I am not talking about just the decline in the number of people in Nhulunbuy, but in an environment where there are declining budgets and resources and I know our teachers are doing it really tough.
Make no mistake, these global budgets are a con job. Our teachers know that, our principals know that and I wish them well, along with the good support of COGSO, in battling the department to get what they need to run their schools.
Territory Tidy Town Awards – Nhulunbuy won the Territory’s Tidy Town Best Large Community award for 2014 and the community of Nhulunbuy was the Territory’s Tidy Town finalist taking the Best Large Community award for 2014. These were announced in Darwin on Friday 24 October 2014 by the Keep Australia Beautiful Council Northern Territory.
I offer congratulations to Nhulunbuy Corporation for its involvement and support role. The Nhulunbuy community is looking pretty good and I think the corporation can take great pride in its achievements as provider of municipal services in Nhulunbuy.
I want to acknowledge the good work the new CEO of Nhulunbuy Corporation, Angela MacMillan, does. She has been in the role for a few months. She stepped in to a big job but she is determined to do it well and make a difference. She is doing so at a time when Nhulunbuy is going through a difficult period. Congratulations to Jodie Trew, who represented the corporation at the Keep Australia Beautiful Awards on behalf of Nhulunbuy Corporation. It was lovely to see Jodie at Speaker’s Corner Caf when parliament was sitting at that time.
Last Saturday, 22 November, the Year 12 formal for Nhulunbuy High School students was held in our town hall. I acknowledge the parent committee headed by the marvellous Fiona Pearce, who was tireless in her efforts to work with the community and do stuff for kids. Fiona was well supported by Catherine Rutishauser, Kylie Farnsworth, Alison Thomas and Raewyn Huddy. There is a special acknowledgement to Raewyn who was unable to be there on the night with her daughter Lauren. She put her heart and soul into organising and designing the amazing decorations in the hall. Sadly, she is another great Gove woman who had departed because her husband lost his job.
I also acknowledge the efforts of the Rotary Club which ran the bar, Walkabout Lodge which provided the catering and also a volunteer group of high school parents who did the waitressing as a fundraiser to support a group of senior students travelling in the Over the Top Tour to England and Europe in 2015.
Importantly, I put on the record the names of these fabulous young people who were presented on the evening. The girls looked stunning – makeup, hair and beautiful gowns. Right alongside them were some very handsome young men who also scrubbed up pretty well and looked very smart in suits and ties. Congratulations to Tim Baxter, Rochelle Briston, Te Amai Campbell, Crystal Carr, Trecia-Ann Cummings, Latryce Douglas, Rachel Dunn, Pietro Elford, Zoe Farnsworth, Monique Gilmore, Matthew Groom, Sabrina Hunter, Peter Jacobs, Luan Jongedyk, Erin Keeley, Ashleigh Lewis, Joseph Lluch, Jude Lluch, Pia Lynch, Tupou Malupo, Maddison McSherry, Sarah Pearce, Tylar Short, Jason Spivey, Tara Thomas-Doyle and Harry Walker.
There were some magnificent speeches during the night; some made us laugh and some made us cry. All in all it was a fantastic evening. I send my best wishes to these young people as they move on to the next chapter of their lives.
I also acknowledge sponsors for that evening, which included, apart from me, Nhulunbuy Corporation, Walkabout Lodge, Rio Tinto, Kansas, Gove Combined Unions, Blue and Evelyn Douglas, Maria Slatter, Robyn Pellenat and Gove Peninsula Surf Life Saving Club.
I also place on the record the Northern Territory Star of the Community Award. I had not heard of this award until I saw a media release from Northern Territory Medicare Local. It was awarded to long-term resident Mr Paul Mastin, who has worked at Rio for many years as an engineer. He has recently been recognised as the winner of the inaugural Star of the Community Award. This award is through Northern Territory Medicare Local and aims to recognise and reward the vital role of GP spouses in remote Northern Territory communities. Paul is the other half of our long-term GP, Dr Wendy Page, who works at Miwatj Health.
Paul was nominated for this award by members of the Nhulunbuy community, including Northern Territory Emergency Services for whom he volunteers a lot of his time and energy, for his positive attitude, his willingness to assist, help or lead, and for being a good team player. He has been a part of many other community groups during his 21 years in Nhulunbuy including Runners North, Gove Peninsula Surf Life Saving Club, Gove Yacht Club and the Ultimate Top End Adventure. I know him to be a very keen bushwalker. My husband has been on a couple of trips with Paul. On those trips – because my husband tells me – Paul talks about his wife’s work. He, obviously, shows a keen interest in the work Wendy does, particularly around Indigenous health issues and, most notably, with strongyloides.
Motion agreed to; the Assembly adjourned.
VISITORS
Madam SPEAKER: Honourable members, I advise of the presence in the gallery of a Year 10 class from Palmerston Senior College accompanied by Fran Davies, Veronica Hempel, Rebekkah Crawford, Kym Wilton and Brendon Williams. On behalf of honourable members, welcome to Parliament House. I hope you enjoy your time here.
Members: Hear, hear!
MESSAGES FROM ADMINISTRATOR
Message No 21
Message No 21
Madam SPEAKER: Honourable members, I have received Message No 21 from His Honour the Administrator notifying assent to the bills passed at the October sitting. The message is dated 20 November 2014.
Message No 22 – Motor Accidents (Compensation) Commission Bill
Madam SPEAKER: Honourable members, I have received Message No 22 from His Honour the Administrator recommending to the Legislative Assembly a bill for an act that will create statutory guarantees of certain liabilities of the Motor Accident (Compensation) Commission and authorise amounts to be paid from the Central Holding Authority. The message is dated 24 November 2014.
Return of Darwin Rates Bill 2014
Madam SPEAKER: Honourable members, I advise that the Clerk has received correspondence from the official secretary to the Administrator containing an instrument signed by His Honour on 11 November 2014 which returns the Darwin Rates Bill, as passed by the Assembly on 20 August 2014, requesting consideration be given to a recommended amendment to the act.
Pursuant to Standing Order 205, the recommended amendment will be circulated to honourable members and printed unless the Assembly otherwise orders.
The Assembly must now fix a time for taking the proposed amendment into consideration in a Committee of the Whole.
MOTION
Amendment to Darwin Rates Amendment Bill
(Serial 72)
Amendment to Darwin Rates Amendment Bill
(Serial 72)
Mr GILES (Local Government and Regions): Madam Speaker, I move that, pursuant to Standing Order 205, the recommended amendment to the Darwin Rates Bill being a proposed law returned by His Honour the Administrator, be considered in a Committee of the Whole on Wednesday 26 November at 2 pm.
Ms LAWRIE (Opposition Leader): Madam Speaker, when will that information be provided to members of the opposition, the Independent member and members of the Palmer United Party? Given we will be considering an amendment in a Committee of the Whole tomorrow, could we be provided with that information this morning?
Mr Elferink: Forthwith. If it is not already there it should be shortly.
Motion agreed to.
STATEMENT BY SPEAKER
Green Ribbon, Purple Ribbon and White Ribbon Day
Green Ribbon, Purple Ribbon and White Ribbon Day
Madam SPEAKER: Honourable members, you have on your desks some coloured ribbons. The green ribbon is to support mitochondrial disease, which can affect both children and adults. Due to its genetic basis the disease often affects multiple family members and can present itself at any time in life. Recent research shows that one in 200 people may carry this genetic disorder.
The purple ribbons are for Pancreatic Cancer Awareness Month. Pancreatic cancer is a silent and devastating disease. On members’ desks, as well as the ribbon, is a very personal account from a Territory police officer, Mr George Hillen, about his journey fighting this cancer.
Honourable members, you also have a white ribbon. One woman a week dies from an act of domestic violence. Today Northern Territory Police and ambassadors will be attending the White Ribbon Solidarity March at 11.30 am. Wear your white ribbon to pledge your support to never commit, excuse or remain silent about violence against women.
MOTION
Change of Committee Membership
Change of Committee Membership
Madam SPEAKER: Honourable members, pursuant to Standing Order 262, I advise I have received correspondence from the Leader of the Opposition regarding changes to committee membership.
Ms LAWRIE (Opposition Leader): Madam Speaker, I move that the following committee membership changes, as nominated on 10 November 2014, be adopted: the members for Nightcliff and Nhulunbuy be discharged and the members for Casuarina and Johnston be appointed to the House Committee; the member for Wanguri be discharged and the member for Nhulunbuy appointed to the Legal and Constitutional Affairs Committee; and the member for Johnston be discharged and the member for Casuarina be appointed to the Standing Orders Committee.
Motion agreed to.
VISITORS
Madam SPEAKER: Honourable members, I would like to welcome in the gallery the Mayor of Litchfield Council, Allan McKay. Welcome to Parliament House. I also acknowledge the electorate officers of Country Liberal members who are having their week’s seminar.
SUSPENSION OF STANDING ORDERS
Introduce Two Bills
Take Two Bills Together
Pass Bills through all Stages
Mr ELFERINK (Leader of Government Business): Madam Speaker, while there is no question before the Chair, I move, pursuant to Standing Order 306, suspension of so much of standing orders which would prevent the Chief Minister from immediately introducing the following bills:
1. Motor Accidents (Compensation) Commission Bill (Serial 108)
and that the bills be considered together as cognate bills with one second reading debate, be considered separately in the Committee of the Whole if required by the Assembly, and that the bills pass through all stages today.
The question raised by the introduction of these bills before the House today will be one of threshold. As a matter of threshold, it is important that members understand that whilst this process is hastened, it is done for a good reason. I understand all members were provided with copies of the bills yesterday, and were offered and given briefings in relation to this matter. Also, if any member in this House determines they do not want TIO sold they do not need to read these bills because they will be voting against them.
The issue before Territorians, and before this government, is one of urgency. Urgency is at the core of the issues surrounding this motion. This motion seeks to deal with a hardship element, and for it to be successful hardships needs to be made out. One of the elements of hardship we on this side of the House are mindful of is to TIO. The sale of TIO, as well as its banking arm, will pass to another owner should this legislation be passed today. Having this debate drawn out over a period of time will damage confidence – as we have already seen from today’s newspaper – in the insurer. If it damages confidence in the insurer, and in the brand of the insurer, it potentially causes hardship not only to the purchaser – which is Allianz and People’s Choice Credit Union – but may well cause damage to customers, which is what we are concerned about.
If insecurity is allowed to build around these brands, people will choose to move away from them. That is a matter of concern because we, as good business partners – unfortunately current business partners of Allianz and People’s Choice by way of contractual arrangements with them – are forced to take a businesslike approach to what we are doing.
I do not want to see the brand damaged. I do not want to see a run on the bank. I do not want to see people suddenly withdrawing their insurance from TIO and going elsewhere because there is an ongoing element of public uncertainty surrounding this debate. I do not think any member of this House would like to see that uncertainty continue.
At the moment, with the sale arrangements and agreements between the Northern Territory government and the purchasers of these two arms of TIO in place, they will continue to use the TIO brand and sell the TIO product.
We also heard today that People’s Choice is offering slightly lower interest rates to many of the people who have loans with TIO. We do not want to jeopardise those people who have loans with TIO enjoying lower interest rates, but I am also mindful of the 259 employees currently guaranteed continued work in their various workplaces.
If TIO was to suffer reputational damage and a contracting environment through ongoing public debate, ongoing committee processes and ongoing discussions, by the time we reached the point of sale we would not have much left to sell and there could be fewer than 259 people employed by the organisation.
I will finish on this simple observation: the business of government should, and generally does, allow for open transparent processes for the passage of legislation through committee processes where committees are warranted. We are doing the business of business. The problem with doing the business of business is that to protect brands you have to do things quickly. This is one of the reasons government owned businesses like TIO, particularly in the financial services area, should not necessarily be in the hands of government. Essentially, financial services, insurance and banking products are not the domain of government but the domain of business, and we are a parliament with a business question placed in front of us.
It is a clunky fit. It means we have to do what we are doing today in passing this motion – should the parliament chose to support it – and getting on with the business of getting us out of business.
The first time I came into this Chamber in 1997 the then Administrator, Neil Conn – a Professor of Economics – addressed this House. I recall one line in his address: ‘Government in business is government in the wrong business’. I urge members to support the suspension of standing orders so we can get on with the business of being a government.
Ms LAWRIE (Opposition Leader): Madam Speaker, the opposition does not support the suspension of standing orders, just as we do not support the sale of TIO. Let us be clear about this. TIO is a public asset; it is owned by Territorians, not the CLP. It is not owned by your government, because you have no mandate from the public to sell TIO.
Yesterday morning we became aware of the Sunday night Cabinet decision to sell TIO. We sought a briefing on the legislation and conditions of sale. The briefing was set for 4 pm, and I thank the people who provided us with that briefing. However, the outstanding matters we raised during the briefing have still not been responded to.
We sought a list of the KPIs that would exist from the MAC Commission to Allianz. This is crucial information that would clearly set down the expectations of government in the administration of the MAC Scheme, and crucial information for Territorians, but we do not have the KPIs.
For us to make a considered decision on establishment of the MAC Scheme and its legislative base we should have the KPIs – they are crucial – but we do not. I requested them yesterday afternoon. I was told the officers would get back to me. We are still waiting for those KPIs and no one has got back to me or my office.
Secondly, within the legislation, transfer orders exist for assets and liabilities. Again, I asked for the list of assets and liabilities within the transfer orders in the sale act. I was told it runs to about 700 pages. I advised the information is vital to Territorians and it is our job to get the information and scrutinise it. I was told advice would be sought on provision and timeliness of that because ultimately it will be public through gazettal. I am waiting for that response, Leader of Government Business.
You ask us to suspend standing orders, debate legislation from its introduction to the second reading debate and passage without information vital to those considerations and we are meant to say that is okay. You have ignored Territorians who own TIO, and who have overwhelmingly said, ‘Do not sell’. We are meant to say it is okay.
We can see the legislation the afternoon before, but you will not provide us with the KPIs. You have not provided us with the transfer orders list of assets and liabilities but we are meant to say it is okay. We will go on trust, shall we? We will trust that you are doing the right thing. We are meant to trust it will all be okay. We do not trust you, and Territorians do not trust you.
The NT News front page screams the fundamental betrayal of Territorians that the CLP is pursuing with the sale of TIO. We do not trust you. You have proven you cannot be trusted. We will not trust you on the KPIs we do not have and cannot see in regard to the MAC Scheme operations. Territorians who are clients of those compensation schemes will be beholden to the administrative decisions of Allianz, and there is a reason it is a very profitable compensation provider.
We do not trust you. We do not trust you on the transfer orders for assets and liabilities. We want to see it in detail, and if it runs to 700 pages then happy days. Hand it over and we will read it, but to rush it through in the same day – we do not have the information we requested yesterday afternoon, and we do not trust you.
You say this is a business-to-business transaction, and that is where you fundamentally do not understand the impact it has on the livelihoods of Territorians. You fundamentally do not understand the role of a public insurer. You fundamentally do not understand that in a region dealing with flood, cyclone and storm surge a public insurer is crucial. You ignore the recommendations of the Pivot North report that clearly articulated that TIO is a successful public insurer model that needs to be rolled out across northern Australia to ensure the existing impediments to business investment are removed. Read the report; it is very clear.
We love our TIO. We will fight every step of this dastardly day to save our TIO. We love the dedicated staff who are local, who pick up the phone and understand the issues raised by the client calling in and who work with local businesses and industry, from insurance brokers to motor vehicle traders to car repair shops – all of the service and supply industry associated with and reliant on the work flowing from TIO. We love the fact TIO is our great trainer of our financial services sector and that the real brains trust trained and delivered in the financial services sector of the Territory come through TIO. We love the fact it is local and we own it. It is in the public’s hands and that means government has, as the representative shareholder, the seat at the table around policy decisions. We love the fact equalisation is embedded within the policy framework of TIO.
We do not agree with that being torn asunder through the current policy direction of the Northern Territory CLP government, so we will debate and challenge this suspension of standing orders. We are not about trashing TIO or the TIO brand. We are strongly in support of TIO. However, it is not just a brand; it is a public insurer crucial to the needs of vulnerable families and businesses sitting in storm surge and flood areas. Those of us who understand what happens after a natural disaster – as a survivor of Cyclone Tracy I get that.
For timeliness of payment, when you have a public-owned insurer versus a private insurer, they are worlds apart. Public insurers pay up in a timely manner and private insurers quibble and squib for a long time. Every day that goes past is one where you cannot rebuild your business or get on with rebuilding your home and your livelihood. That is what you do not get. That is what Territorians love about our TIO and what you are fundamentally ignoring.
You will crunch the numbers and we will stand against you and challenge the numbers. Why? Because we want a couple of CLP members to cross the floor. We want a couple of CLP members to say, ‘I get it. I get that I am elected to represent my people, and people in my electorate have overwhelmingly said don’t sell.’ If you are not here representing your people you do not deserve to be here. Maybe you think, ‘Don’t look, we will wash this through. We will spend our way through our quick cash grab of $275m. We have $150m up front between now and the election in 2016 and we will pork barrel our votes.’
Territorians are not shallow people. You cannot betray Territorians and regain their trust. On this, we do not trust you. The Chief Minister, throughout the debate – the mature conversation he wanted to have with Territorians – kept saying, publicly and in this Chamber, ‘It will remain Territorian’. That is not true, it is being sold. The banking is being sold to an Australian operator, People’s Choice, and the insurance is being sold to a German operator, Allianz. That is not remaining Territorian, so that fundamental commitment is not true. Will you spin? Will you pretend? You are trying to with, ‘Don’t worry, the TIO brand remains and the products will be the same’. In fact, the spin is it will get better and it is all okay because MAC remains Territory owned.
Let up unpack that. There are no legal guarantees, either in legislation or conditions of sale, that TIO will remain TIO even as a brand. There are no legal guarantees the products offered across cyclone, flood and storm surge will remain as they are. There are no legal guarantees it will remain the same and will provide Territorians with the insurance coverage they need because we are subject to flood, storm surge and cyclones.
Thank you for ensuring the jobs of the 250-odd staff at TIO are transferred on existing conditions. I note seven executives are out of that. They are capable, I hope, of negotiating a good outcome for themselves, but thank you for the provisions guaranteeing job security. However, that ends once sale takes effect on 2 January because Allianz and People’s Choice start making decisions about the size of the staff complement. People’s Choice is a great banker already in the Northern Territory and has a good strong complement of staff. Do you think we all exist in some sort of bubble where we do not know the reality, where we do not understand People’s Choice is already well staffed and is getting a banking book they can significantly absorb within their staffing ratio?
I hope, for the banking staff of TIO, this sale does not go through. If it does, I only have hope left for their future time frame of employment. They are great people and are going into a period of uncertainty.
TIO staff have been well informed by TIO management and I thank them for that, but I also note many have broken down and cried. They know, working in the banking or insurance industry, that their jobs are no longer as secure as they were prior to the sale.
I hope every employee has a job ongoing for the same time frame they would have if TIO had not been sold, but it is just a hope. When you have to meet the livelihood of your family on a hope, things get pretty grim.
Be under no illusion, we will fight every step of the way to save TIO from this sale because too much is at stake. You talk about the need to get on with flood mitigation works in Rapid Creek and Katherine. I have yet to hear anything from government which specifies flood mitigation works for the Darwin rural area. There is no detail on Rapid Creek, no detail on Katherine and not a skerrick of detail on the Darwin rural area …
Mr Chandler: Get a briefing.
Ms LAWRIE: I pick up on the interjection from the member for Brennan, ‘Get a briefing’. Are you missing the point that with solid consultation and forums across the Territory on the proposed sale of TIO all that detail would, should and could have been provided but has not? You are making it up as you go along because, quite frankly, a levee in Katherine? Yesterday I was advised that still will not cover some 20-odd households in Katherine regardless of the extent of the levee. What will happen to them? They are considered uninsurable.
What does Darwin area flood mitigation works mean? Anyone who knows the flow of water – you stop it in one area and it flows to another. What are we talking about? Are we talking huge drains carved through areas of the rural area and land acquisition to allow it to go ahead? We have heard about retention ponds for Rapid Creek. Thank you, but that was part of a pre-existing election commitment for works at Rapid Creek; that is not new and you have not done it. What else are you talking about? What will occur in the Rapid Creek corridor? Will we see roads raised? Is there a bridge for McMillians Road in this?
What do you say to the residents of Coconut Grove, Nightcliff, Cullen Bay, Bayview Haven, Ludmilla, Alice Springs, Daly, Jilkminggan and Ngukurr? What do you say to people who are affected but have not rated a mention in anything you have said to date, and certainly are not on the list set aside for flood mitigation?
These are things Territorians deserve to know and the opposition has to understand for debate and passage of legislation on the same day to give effect to our insurance safety net. I will say that again in case you missed the point: it is our insurance safety net. TIO has provided a product where the private market has failed. We are meant to guess or somehow understand your intentions for that. That is not appropriate when dealing with the proposed sale of a public asset.
ABC news reported today that Allianz has no contractual obligation to maintain insurance premiums at current prices, or offer flood insurance to Territory Insurance Office customers. Thank you for that clarification, Chief Minister.
The Chief Minister told ABC radio that the government had negotiated a purchase agreement but there was no contractual time line to stop Allianz from changing the price of premiums when it took ownership on 2 January 2015.
There is no legally binding condition to provide cyclone, flood and storm surge coverage, and the Chief Minister said Allianz would not change premium prices because they purchased the goodwill of the business and changing prices would mean loss of a fantastic business. That fantastic business is our TIO. That is what you want to do today; you want to rush it through without adequate scrutiny.
The Allianz web replied to overnight inquiries regarding insurance for a home with a tin roof in Darwin:
- We are unable to offer insurance online:
due to the materials used to construct your roof.
- …
Really, tin roofs? That will hurt a lot of people. How will that go?
Mr Styles: Go to TIO.
Ms LAWRIE: Will that change? I pick up on the interjection from the member for Sanderson, ‘Go to TIO’. Member for Sanderson, do I take that as an indication you will cross the floor and support retaining TIO as our public insurer so people with tin roofs are okay?
Mr Styles: You know what assumptions are.
_______________________________
Visitors
Visitors
Madam SPEAKER: Honourable members, I advise of the presence in the gallery of intensive English unit students from Sanderson Middle School, accompanied by Terry Atsas and Elise Smith. On behalf of honourable members, welcome to Parliament House and I hope you enjoy your time here.
Members: Hear, hear!
_______________________________
Ms LAWRIE: The CLP government has completely dismissed out of hand the genuine concern Territorians have based on market failure from private insurers. People are not guessing anymore; the guess work has gone. The Queensland floods and catastrophic cyclones have removed the guess work of how the private market caters for catastrophic events. That is why, Chief Minister and your colleagues, there is such grave and deep-rooted concern about losing our public insurer. It is not about a brand; we love our TIO, but we understand it is our safety net.
On 3 February 2013 the Daily Telegraph reported, ‘Big insurers leave towns high and dry’. It reports that giant insurers Suncorp and Allianz have turned to other regional towns, raising flood insurance premiums by as much as 2000% and refusing outright to do any more business in areas deemed at risk. The article reported that homes in areas such as Ipswich, Gympie and towns in the Lockyer Valley have been added to the insurers’ hit list, even if their homes have never flooded. The article reported Ipswich Mayor Paul Pisasale as saying anyone was fair game, including his own home perched on the highest point in town. He went on to say:
- They’ve made record profits and increased everyone’s premiums based on postcode, so people are paying through the nose.
- ‘I’m seeing increases from 20 per cent to 2000 per cent. My insurance went up $3000 … and I live on top of the highest hill in Ipswich.’
- Maryborough resident Barry Wain’s Allianz premium increased to $14,000 with flood cover. He opted out because despite the town’s tendency to flood, he has been spared. His only claim in six years was a broken shower screen.
Seriously, Chief Minister, are we meant to say, ‘That’s okay, we trust you that nothing will change even though there are no guarantees in the sale contract or in legislation’. We do not. You have betrayed Territorians. You did not even have the decency to front public meetings and forums across the Territory to put the case to Territorians.
I acknowledge the member for Katherine at least did that. The member for Katherine held a public meeting in Katherine, to his credit. He was told by the people he is elected to represent that TIO should not be sold. He is now putting his name to this and not crossing the floor against the sale of TIO. Why, when it is against the interests of the constituents you are elected to represent, are you pursuing the sale of TIO? Here comes the rub: you have billions of dollars of unfunded election commitments across the Territory. You are desperate to create a slush fund to pork barrel your way to the 2016 Territory election. You are desperate to have a $215m infrastructure fund to pay for a plethora of election commitments you will roll out for beyond 2016. You are desperate because you have been the worst government in the Territory’s history. You are so on the nose the only thing you can do now is get the cash grab and run.
Let us look at that cash grab. It is down to $275m, not the $425m reported sale price; you could not be honest there. The Chief Minister repeatedly advised Territorians one of the benefits of the sale of TIO was the 15% recycling program the federal government has as an additional payment for the sale of public assets, but it does not exist. You are selling an asset before the 15% recycling program exists; federal legislation has not been passed.
I cannot remember the exact comment by Senator Dastyari, but essentially he said you were foolish because the fund does not exist and you should get some advice. You will have to go cap in hand to your mates in Canberra if – and it is a big if given the numbers in the Senate – the 15% recycling incentive passes through federal parliament. We do not know when, but if it passes will you ask the federal government to respond to it retrospectively? Get some advice from Treasury on that, Chief Minister, also Treasurer. The Commonwealth is not big on providing retrospective financial payments to states or territories. You are rushing the sale of TIO, having told Territorians it is okay and we will get an extra 15% from the Commonwealth when the recycling program does not exist. Legislation has not been enacted by the federal parliament; it is simply a policy idea of the Liberals.
Again, it makes a mockery of what you have been telling Territorians. You told us it will remain Territorian; it will not. You told us you would get a good sale price. During debate the values varied between $500m and $700m. There was no broken down, concise information. You did not provide the financial advice to Territorians which you now tell the Chamber you received. When did you receive that advice? You could have held forums to inform people about a decision on their asset, not yours.
So many people have said to me, ‘This bloke was not elected Chief Minister’. So many people have said to me, ‘We elected Terry Mills not this bloke’ …
Mr ELFERINK: A point of order, Madam Speaker! This is a suspension of standing orders debate and the argument should be placed within the hardship domain. She has strayed far and wide, and I believe she realises she can say all this in a subsequent debate.
Madam SPEAKER: Opposition Leader, the motion is about giving notice, cognate bills and passage through all stages. Please restrict your comments to those areas. There has been a bit of leniency, but if you could come back to the three areas of notice, cognate bills and passage through all stages.
Ms LAWRIE: Yes, thank you, Madam Speaker. I had hoped there would be willingness, given there is a rush through on the same day, for the government to be open to hearing what Territorians are saying. I take on that advice. I have about three minutes left so I will be wrapping in a moment.
At no point during the briefing did officials advise the opposition the bills would be cognate. That would have been helpful, useful and pertinent information. Why did the Chief of Staff to the Chief Minister not advise us? It is his role. The KPIs on the MAC Scheme are still outstanding. We want to see them; they are pertinent to debate. The transfer orders and the list of assets and liabilities are pertinent to debate; we want to see them. Fundamentally, you have no mandate to sell, and the sale of TIO will perpetrate a great hardship on Territorians who will be hit with escalating insurance premiums across flood and storm surge zones. Those of us with tin roofs are in strife when you consider the Allianz website. TIO must stay with Territorians. We will fight this sale every step of the way.
Mr WOOD (Nelson): Madam Speaker, I asked a question of the Chief Minister today because the crux of what we will debate later today is not so much if TIO should be sold or not. That is a reasonable thing to discuss and people have different points of view on the matter. However, there needs to be an understanding that TIO, as a public insurance company, is regarded by many as our TIO, the people’s insurance company.
One issue I am concerned about is the speed with which the government has moved to sell TIO, not transfer ownership. I had my first briefing around 1 October, which is when I understood the government was serious. I then had someone fly into my office and ask where the posters were from the campaign years ago stopping the sale of TIO, which the CLP supported. Later I had several businessmen ask, ‘What can we do?’
We did not have much time to develop a strategy to take this debate to the people so we could have a reasoned, or as the Chief Minister calls it, a mature debate. We have not had that mature debate. What really irks me is not only have we treated Territorians with contempt, but we are rushing legislation through not only on urgency, which happens occasionally and is normally debated at the end of the sittings, but we do it all on one day. If you wanted to kick people when they were down, you have certainly done it today.
If the message to the public is the government is arrogant by doing what it is today – it has every right to because it has the numbers – it is showing more arrogance because it is not allowing parliament time to look at the legislation.
I will not support this legislation. I received an e-mail yesterday from the chief of staff saying, ‘The Chief Minister would like to provide an advance copy of legislation pertaining to TIO we will introduce tomorrow into parliament’. That is not adequate time for me to look at two bills which have enormous consequences for many people. To say there was a briefing available – that was not in the e-mail.
As an Independent member I am obliged to look at other legislation and get ready for Question Time. I could have asked for a briefing but I have other work to do. What is happening today is, ‘Here is the legislation’ and the next day, ‘’We will pass it through in one day’ – too bad, oh dear, how sad. My view is, big deal.
I do not think the government understands the message it is sending to people. The message people are sending to government is they have not been fully consulted about whether it is a good or bad thing to sell TIO. If you had convinced people – I have heard your arguments and those from TIO – that what you are doing is good for the Northern Territory you would not be getting this reaction.
This government has not consulted with the people, not taken them along in this discussion and not treated them as mature citizens of the Northern Territory. It has told them what the Territory government will do and what the benefits are. It has not asked people what they think, given them the opportunity to have a two-way conversation or see what happens if another company takes over. Will they pay more in premiums? Will they be able to get insurance at all because they are in a high-risk area? We have not allowed people to ask those questions.
By rushing this today you are aggravating the situation, not smoothing it over. People will hear what parliament has said: this government would not let this sit on the table for one day so it could be discussed; it wants to rush it through today. The member for Port Darwin says if we delay it or take it to committee it will trash it. Nothing could be further from the truth. My house and my vehicle are insured with TIO and have been for as long as I can remember.
Two panel beaters and I organised a meeting with a PowerPoint presentation which members of the CLP did not attend. We used the heading, ‘We are for Territorians – TIO’. We listed everything TIO stood for and promoted it. We did not trash it, and I do not intend to trash it.
To use that as an excuse to stop debating the issue is a furphy. It took some time to get the annual report. We debated this in the last sittings of parliament but the annual report was not available. Chairman Mr Bruce Carter – we used this in the meeting the government did not attend – says in his report:
- This is now the fifth consecutive year that TIO has delivered a profit back to Territorians, giving the Board great confidence that the company can continue to provide services that our community needs for many years to come.
That has answered my question. The question then is, why the hurry? The chairman of the board says we have a healthy insurance company for years to come. Why did you not take your time and discuss this with the people?
You will jam this legislation through and have not learnt from what the people are saying. We have not been part of this discussion. I said to someone recently, ‘You can’t talk to a full page ad in the NT News’. That is not a discussion; that is just information you are giving people. When they want to ask a question can they discuss it with the government? You can probably send an e-mail to someone.
I sometimes think people forget we represent our electorates. There are times you have to attend meetings and times you will be told you are a dickhead. You have to put up with that; it is part of being in public office. What is desperately missing in the discussion today is the government has not taken this to the people.
I will not be supporting the motion to suspend standing orders. The government is selling itself out here as well. I have heard government members make grand speeches about the way we should run parliament and the importance of doing things properly. That is not happening today. Why do we need important legislation going through in such a hurry? If the government believes it will win friends and influence people, this is a funny way to do it.
Mr GUNNER (Fannie Bay): Madam Speaker, the CLP is asking us to consider the sale of TIO in one day, from the introduction of the bill to debate and passage. This is urgency on steroids and a mad rush. The CLP is trying to escape the outrage of Territorians by doing it in one day. It is an extraordinary move to have the introduction, debate and passage for the sale of TIO in one day.
This side believes there is no case for urgency, but a clear case for consultation. The proper process of parliament is a bill is introduced and sits on the table for at least a month before it is debated and passed. In this instance, we are in the November sittings and the next sittings are in February. That would give Territorians reasonable time to consider something the size and substance of the sale of TIO. Territorians want to see the detail of the deal and the CLP is doing everything it can to hide it. The CLP is hiding in the Chamber today seeking passage of this bill in one day.
There is no case for urgency, but a clear case for consultation. The CLP has not consulted, to date, on the sale of TIO. It has actively done its best to ignore the voice of Territorians. Conservatively, 80% of Territorians say do not sell, and the CLP is doing its best to ignore the voice of Territorians. This includes trying to pass this bill for the sale of TIO in one day. As parliamentarians and local members we believe there is a clear case for consultation with Territorians.
I disagree with the member for Port Darwin, who said we should be doing the business of business. As local members we represent people in our electorates. They have clearly told us they want the sale of TIO debated and they do not support its sale. They want details of the sale. All this is being denied and legislation is being rushed through by the CLP.
Members of parliament should do the business of members of parliament, and local members should do the business of local members. That includes holding proper debate and consultation on something as big as selling TIO. This is a significant, major decision by the government, and it is being rushed through without adequate consultation with Territorians. Territorians are being put second to a private contractual deal by the CLP; it is deliberately putting Territorians second and denying them access to the detail or any debate. Territorians should be allowed to participate in this debate, and they are being ignored by the CLP. The CLP is trying to escape the outrage of Territorians, but they see through you.
There are reasons beyond consultation as to why this should not be debated on urgency, though consultation is a critical one. The federal government said it may offer a 15% incentive to sell public assets. That incentive has not passed the Senate so does not exist. Why should the federal government provide an incentive to the Territory government if it has already sold TIO? We run the real risk, if you sell early on urgency, of missing out on that 15%.
The Chief Minister said, in the lead-up to the sale, he is interested in the 15% from the asset recycling program. I quote:
- The Federal Government’s Asset Recycling initiative also offers a 15 per cent financial incentive for us to sell eligible assets and re-invest the proceeds in new, economy-growing infrastructure.
The money that is not there is an incentive to sell? What need is there for the federal government to provide an incentive to sell something you have already sold? We run a real risk of losing that 15% by you ramming this through parliament today. Not only are you ignoring Territorians, but in your haste to do this deal you risk the 15%.
This is a bad decision by the CLP on many grounds. The CLP is denying Territorians the opportunity to see details of the deal. This should be debated in the February sittings, which would follow the proper, normal processes of parliament. Territorians should not be treated as second rate; they should be part of this discussion. At the moment they are second to private contractual deals the CLP is making.
This is not good government or a good decision. There is no case for urgency; there is a clear case for consultation and the CLP is denying Territorians a voice.
Local members should be doing the work of local members, and CLP members are not doing that today. They are ignoring the people in their electorates to push this through on urgency.
This is urgency on steroids. We do not believe there is a case for urgency but there is one for consultation. All members of this House should take the detail of this bill to people in their electorates, engage in a two-way conversation and have that debate in February next year. The proper, normal process of parliament should apply to something the size and substance of the sale of TIO. There is a clear case for those processes to apply, and for the detail of the sale to be taken to Territorians and for us to have this debate in the February sittings.
The CLP should not be ignoring Territorians and denying them the chance to participate in debate in this Chamber.
Mr McCARTHY (Barkly): Madam Speaker, I do not support the suspension of standing orders. As the opposition and the Independent member for Nelson have made clear, this matter is far too important to be rushed through.
I take a great interest in the member for Port Darwin, the Leader of Government Business, moving a suspension of standing orders over this important matter on the hardship principle. He wants to rush it through, not take questions, have minimal consultation and minimal debate and it be just a case of ‘trust me’. It is the ‘trust me’ principle again. We hear this time and time again. It is now ramped up with the sale of Territorians’ public assets. ‘Trust me’, said the member for Port Darwin, ‘It is the hardship principle and we need to get it through today. We are not comfortable leaving this in the public domain any longer, we want the contract signed off.’ I do not and cannot support that.
I have constituents in the Barkly engaged in extremely important conversations about this matter, and they want details. The government has operated under a veil of secrecy. We have asked many questions about the sale of public assets on behalf of constituents and there has been a complete denial. There has then been a twist and turn in semantics, then the classic clich of, ‘We don’t rule anything out’, while this deal was being conducted behind the scenes. This deal has been ongoing since the crisis in the CLP, the revolving door of ministers, the three consecutive budgets, the financial mismanagement and now the desperate attempt to be cash-strapped for the 2016 election. They are all reasons why this is not rational or sensible.
The opposition presents a clear alternative to get a hold on this major deal of the possible launch of a sale of public assets over the next two years. This is the test case. This is a sensitive case and the government says, ‘Trust us, we will push this through in one day and it will all be good’.
The public sentiment stands on the side of the opposition in this case. The level of conversation in the electorates is enough evidence for government to be honest, open and accountable and say, ‘Yes, we hear it, we understand it and will follow normal procedures in the parliamentary process to gain the confidence of the electorate and convince people of the mature conversation’.
There was a big media launch yesterday and I received a copy of the pack. I saw one copy of the legislation pushed across the Leader of the Opposition’s desk yesterday. I do not know where I could have seen it prior to that, but that was yesterday.
Chief Minister, I was working yesterday, with two committee meetings, a meeting and a briefing with Major Events, a Caucus meeting and then a briefing from the government on TIO. The following day I am in parliament representing about 7000 people in the Barkly electorate having the government tell me, ‘Trust me, it will go through today and will all be okay’. Any arguments about briefings or whatever are a side issue. This was put on the table yesterday and will be rushed through the parliament today. That is disgraceful for any democratic process.
I will quote from the CLP media pack of 24 November 2014:
- The Territory Insurance Office (TIO) will have new ownership but will remain a stand-alone brand in a deal worth $424 million.
The reality is the TIO is now – as the legislation is rushed through parliament on urgency – an insurance company owned and operated by an international buyer, a global insurance giant ...
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Visitors
Visitors
Madam SPEAKER: Honourable members, I welcome into the gallery the remote area students from St John’s College. Welcome to Parliament House, and I hope you enjoy your time here.
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Mr McCARTHY: It has become very clear from yesterday’s briefing that our TIO, the Territory’s TIO, will now become an insurance company and finance broker owned and operated by an international buyer – a global insurance giant, Allianz, and People’s Choice will now run the banking arm. Essentially we will have new owners, new decision-makers and new corporate businesses taking control of Northern Territory insurance and banking public assets. There is nothing minor in this. This is a major change, a major sale of the public’s assets, and the government is telling us it is a deal to be done in one day in the Northern Territory Legislative Assembly. Also, the branding on the Territory’s public assets will be sold. Legislation rushed through today will enable contracts to be signed by 2 January 2015, and there is a lot of talk about the TIO brand.
The government has made it very clear it is not interested in what I have to say; it is a difficult job in opposition. This morning in Caucus I wondered how the member for Port Darwin would handle this issue if he was in this chair, as I had the pleasure of studying him for four years. His aggression and determination to completely take out any government trying to bluff its way through with a matter of such significance would be enormous. His rage and pursuit of justice for the good people of the Northern Territory would be immeasurable. However, today he has the quiet sedate approach of, ‘Trust me, it will be all right’.
Let us look at somebody the CLP trusts and somebody I monitor for media comments: Ted Dunstan. I will quote from the Northern Territory News of 24 November 2014:
- It is heartbreaking to know the CLP is heading for a one-term defeat at the next election because the antimonies of selling TIO have not been analysed or applied correctly.
The comment they, ‘have not been analysed or applied correctly’ is an interesting comment from an interesting commentator. The letter goes on:
- But the Chief Minister has promoted the sale to the exclusion of the contrary view, the CLP being voted out, the political reality. The case has not nearly been sold properly and the timing is wrong.
Mr Dunstan makes some very strong points. Obviously the member for Port Darwin and Leader of Government Business, the Chief Minister and all those on the other side choose to ignore that comment as they will probably choose to ignore mine.
As the Leader of the Opposition says, it is our responsibility to face this. It is our responsibility to argue the point, to debate with the government and represent Territorians. We have heard the real concern in the electorate and we have a clear alternative which can occur in this House. The processes are there to complete this matter of government business properly in an open and accountable manner, or there is the choice to rush it through on urgency. The decision is with the government. I look forward to continuing the debate because I have more to say about this. I do not support a suspension of standing orders to pass this bill on urgency.
Mr ELFERINK (Leader of Government Business): Madam Speaker, I thank honourable members for their contribution. It was largely predictable, and I understand the repetition of things I once said. However, that does not detract from the observation I made at the outset, which was for us to have made out the case as being argued by members opposite would have placed us in a position of having to be exceedingly critical of the product we were trying to sell. One does not sell a car in a car yard by beating it up with a sledgehammer beforehand.
In part, we have had to fight this fight with one, perhaps two, hands tied behind our back. We, nevertheless, find ourselves in the situation of having to do the business of running a business, even if it is nothing more than selling the business. Nowhere in the business world or business community do you run down your product or allow it to be damaged prior to entering it into the marketplace. It is an important reputational thing you have to protect.
We are talking about a financial services business which is only an asset because it has made a profit in recent times. I pick up on the member for Nelson’s comments, as well as the question during Question Time about the last five years being profitable. That is not surprising considering there have been no substantial disasters. However, if there is a disaster TIO will not be profitable. That is something the taxpayer would have to pick up. I do not want to be responsible for placing the Territory in a position where it has to pay out insurance claims before it rebuilds schools, replaces hospitals and health clinics, and fixes roads.
The exposure the Territory carries will be discussed at some length during the debate to follow. The more immediate problem we have is we owe a duty to the Territory Insurance Office to make sure its reputation is protected, as well as ensuring the Territory taxpayer and government are protected in the same process.
We have thought about this long and hard. This is not something the government does with relish or enjoyment. It is done out of chronic and serious necessity.
Several people have run the argument that this matter needs to be consulted on and how can they possibly deal with a bill they have only just seen. It is clear the members opposite had already determined long before walking into this House they would vote against this bill. What is in front of us is simply a threshold question: do we sell TIO or not? If the answer is no, no matter what is in the bill, no matter how well it is drafted and no matter what is said in the bill, it is of no consequence to a person voting no in this House.
We have made it clear that TIO and the brand need to be protected for the sake of employees, policyholders and the purchasers of the various arms of TIO. For that reason we move to suspend standing orders and find ourselves in the process of doing business. As far as I am concerned, the matter is being dealt with by this House. I look forward to the fulsome debate in relation to passage of the legislation later today.
The Assembly divided.
Ayes 13 Noes 8
- Mr Barrett Ms Fyles
Mr Chandler Mr Gunner
Mr Conlan Ms Lawrie
Mr Elferink Mr McCarthy
Mrs Finocchiaro Ms Manison
Mr Giles Ms Moss
Mr Higgins Mr Vowles
Mr Kurrupuwu Ms Walker
Mrs Lambley
Mrs Price
Mr Styles
Mr Tollner
Mr Westra van Holthe
Motion agreed to.
The Assembly suspended.
PETITIONS
Petition No 40 – Sale of TIO
Petition No 40 – Sale of TIO
Ms PURICK (Goyder): Mr Deputy Speaker, I present a petition from 746 petitioners praying that the Northern Territory government continues to support the retention of TIO in its current legal status. The petition bears the Clerk’s certificate that it conforms with standing orders. I move that the petition be read.
Motion agreed to; petition read:
- To the Honourable the Speaker and members of the Legislative Assembly of the Northern Territory, we the undersigned respectfully showeth that we are seriously concerned with the government’s proposal to sell the Territory Insurance Office (TIO).
TIO provides invaluable services in the fields of insurance, especially flood and cyclone insurance, Motor Accidents Compensation Scheme (MACA) and banking. TIO provides support to senior Territorians by way of discount on premiums and these services may not exist if the TIO is sold to a private operator. Government should consult properly with the people of the Northern Territory and postpone any sale until after the 2016 NT election.
Your petitioners therefore humbly pray that the Northern Territory government continues to support the retention of the TIO in its current legal status so that all Territorians can continue to receive the benefits of a homegrown insurance and financial establishment.
And your petitioners, as in duty bound, will ever pray.
Petition No 39 – Sale of TIO
Mr WOOD (Nelson): Mr Deputy Speaker, I present a petition from 1069 petitioners praying that the Northern Territory government does not sell any part of TIO. The petition bears the Clerk’s certificate that it conforms with standing orders. I move the petition be read.
Motion agreed to; petition read:
- To the Honourable the Speaker and members of the Legislative Assembly of the Northern Territory, we the undersigned respectfully showeth that TIO is an essential Northern Territory asset that provides everyday Territorians with essential and affordable insurance where other insurers do not.
Your petitioners therefore humbly pray that the Northern Territory government does not sell any part of the Territory Insurance Office.
And your petitioners, as in duty bound, will ever pray.
RESPONSE TO PETITION
Petition No 38
Petition No 38
Mr CLERK: Mr Deputy Speaker, pursuant to Standing Order 100A, I inform honourable members that a response to petition No 38 has been received and circulated to honourable members. The text of the response will be placed on the Legislative Assembly website. A copy of the response will be provided to the member who tabled the petition for distribution to the petitioners.
- Petition No 38
Suburban Development in the Holtze/Howard Springs area
Date presented: 27 August 2014
Presented by: Mr Wood
Referred to: Minister for Lands, Planning and the Environment
Date response due: 18 February 2015
Date response received: 4 November 2014
Date response presented: 25 November 2014
Response:
In response, I note the sentiment of the petition to protect the existing lifestyle enjoyed by rural residents. Many of the issues presented appear to arise from the Draft Darwin Regional Land Use Plan prepared by the NT Planning Commission, which endorses the legitimate lifestyle choice people make to live on large parcels of land in the rural area.
Development around the Palmerston hospital is designed to make the best use of public investment in infrastructure and to provide a reliable supply of residential land. An area plan is being developed to guide the development of this area and will provide a clearer understanding of how the transition from urban densities will occur to ensure that there will not be an unreasonable future impact to rural residents. It should be noted that a large proportion of the land identified for development includes the Kowandi Defence facility – an area never zoned or identified as rural land.
‘Palmerston North’ was a term used in ‘Towards a Darwin Regional Land Use Plan’ released by the NT Planning Commission in December 2013. Public feedback at the time indicated a preference for use of ‘Holtze,’ the formal name for the locality and the use of Palmerston North was ceased.
The Darwin Regional Land Use Plan 2014 includes Weddell as an appropriate site for future urban development when the provision of infrastructure becomes cost effective.
Area plans will be developed to give guidance to future development in accordance with the land use structure in the Darwin Regional Land Use Plan 2014, including how the areas will integrate with established localities. The adoption of area plans into the NT Planning Scheme will include a period of public exhibition to allow residents and interested parties to make submissions that will be heard by a reporting body and provided to me for consideration in determining an outcome.
MOTOR ACCIDENTS (COMPENSATION) COMMISSION BILL
(Serial 108)
TERRITORY INSURANCE OFFICE
(SALE) BILL
(Serial 109)
(Serial 108)
TERRITORY INSURANCE OFFICE
(SALE) BILL
(Serial 109)
Bills presented and read a first time.
Mr GILES (Treasurer): Mr Deputy Speaker, I move that the Territory Insurance Office (Sale) Bill (Serial 109) and the Motor Accidents (Compensation) Commission Bill (Serial 108) be now read a second time.
Yesterday the government announced the sale of the insurance and banking business of TIO, subject to the passing of legislation. We also announced the outsourcing of the management of the Motor Accidents Compensation Scheme, or MAC Scheme, to the purchaser of the insurance business for a period of 10 years. The total proceeds from the sale are $424m, consisting of $48m for the banking business, $236m for the insurance business, and a $140m special dividend from MAC. The bills we are introducing today will give effect to this important decision.
TIO has a proud and long history. Our decision to sell TIO will allow the TIO brand to survive and continue its long tradition of serving the needs of Territorians.
Insurance and banking markets in the Territory are very different today than those that existed when TIO was established in 1979. TIO competes against 11 other insurance companies in the Territory, while all the major banks plus a number of second tier banks and credit unions operate in the Territory.
All insurers in the Territory provide cyclone insurance and all but one provide flood insurance. Flood insurance is more readily available and simpler since the Commonwealth introduced reforms after the Queensland floods several years ago, including the National Flood Information Database and a standard definition of flood damage. There is more consistency in flood terminology for those taking out and claiming insurance.
When TIO was established, every state in Australia owned an insurance company. Now TIO is the only remaining state or territory insurer. The reason other state governments sold their insurance companies is their insurance markets reached a state of maturity which meant there was no justification for governments and their taxpayers to risk owning an insurance business. This is the position the Territory finds itself in today.
Insurance companies and banks now operate on a national and international basis, accessing global capital and diversifying risk across a wide range of markets. TIO is required to operate in a market constrained to the Northern Territory against competitors which are many times larger and which operate across national and international borders.
For these reasons Australian governments have come to realise insurance companies and banks are best run by the private sector, and the most effective policy approach is ensuring effective regulatory frameworks are in place to protect the interests of consumers. In this regard, private insurance companies and banks in Australia are required to comply with national regulatory regimes administered by the Australian Prudential Regulatory Authority, or APRA, and the Australian Securities and Investments Commission, better known as ASIC. These regulatory institutions are recognised internationally and have served Australian consumers well, as evidenced by the relative stability of Australian banks and insurance companies during the global financial crisis.
However, TIO is not regulated by APRA or ASIC and is facing ever-increasing competition from much larger and diversified private insurance companies and banks. The situation is not sustainable, and as long as TIO remains in government hands, these risks are ultimately borne by Territorians.
It would be irresponsible for the Territory government to allow the situation to continue. The most appropriate response is to transfer these risks to the private sector where they can be most effectively managed, and to the national regulatory framework.
While removing a substantial risk for Territory taxpayers, the sale of TIO will also provide an important source of funds to invest in new infrastructure to support the ongoing growth and development of the Territory. As such, the sale of TIO will deliver benefits for future generations of Territorians.
The government will be establishing a Northern Territory infrastructure development fund with approximately $215m of TIO proceeds going into the fund immediately. The fund will be administered by a statutory board which will assess projects and make recommendations based on agreed economic criteria.
The remainder of the funds released by the sale of TIO will be used for immediate infrastructure priorities, including investment in flood mitigation initiatives. As I announced last week, the government will be providing $50m for this purpose and will establish advisory committees to inform the development of mitigation strategies for regions of the Territory prone to flooding. This is a much more sustainable approach to ensuring the ongoing affordability and availability of flood cover in the Territory than owning an insurance company. No Territory government has undertaken this level of commitment to ensure flood immunity in any part of the Territory.
The successful purchaser of the TIO insurance business is Allianz Australia. Allianz is committed to keeping and further promoting the TIO brand by using TIO as its premium insurance offering, featuring mandatory flood, storm and cyclone cover.
The head office of TIO will remain in Darwin and the existing branch structure will be maintained. Furthermore, all TIO staff will be offered ongoing employment. All existing community sponsorship initiatives will continue, and TIO will also be providing an additional $200 000 per annum towards a TIO Territory Day celebration for at least the next two years.
Allianz is the largest general insurer in the world and, therefore, TIO now has access to global markets to enable it to grow and compete while remaining a local Territorian institution.
People’s Choice Credit Union will take over the banking business from TIO and will continue to provide all home, personal and commercial loans, credit cards and retail deposit accounts. All TIO banking staff will also be offered employment. People’s Choice will continue to provide substantial community sponsorship for the Territory and will increase that sponsorship by around $50 000 per annum. They have also committed to introduce new banking services at Coolalinga within two years, working with Allianz to ensure the ongoing availability of services in Katherine, and will sponsor three young Territorians in traineeships each year.
With regard to the MAC Scheme, the government has decided to retain ownership of the scheme but outsource management to Allianz for 10 years. If we were simply after a cash grab we would have sold the scheme as well as it has greater value than the other components of the TIO business. However, MAC will continue to remain in the Territory government’s hands.
Part of the legislation I introduce today will establish a MAC commission which will oversee management of the scheme and ensure it is being managed in the best interest of Territorians. The establishment of the commission results in improved governance and management arrangements with the agreement, including a range of performance measures that need to be met.
As part of the sale process, $140m in surplus funds will be withdrawn from the MAC Scheme and used for future infrastructure projects. The special dividend will be paid into the Northern Territory infrastructure development fund. Excessive funds have accumulated in the MAC scheme over recent years on the back of strong investment returns and prudent claims management by TIO. The accumulated funds are substantially higher than necessary to maintain a prudent level of reserves against potential compensation claims, and significantly greater than what is required by the minimum level established for the scheme by regulatory standards.
As at June 2013 the MAC Scheme had the highest capital margin compared to other similar state motor compensation schemes. Even after the withdrawal of these funds the MAC Scheme remains well capitalised compared to motor accidents compensation schemes in other states. Having this level of excess funds locked up in the MAC Scheme presents an inefficient use of capital and it is appropriate to use these funds to invest in infrastructure that can deliver long-term economic benefits for the Territory.
Moving to the legislation, the first bill I am introducing today is the Territory Insurance Office (Sale) Bill. This bill facilitates the sale of the insurance and banking business and outsourcing of the MAC Scheme management. The sale legislation is necessary to facilitate the transfer of the businesses to private sector purchasers. As such, the sale has to be structured as a sale of the assets and liabilities of each business. The actual transfer of the assets and liabilities will be done by transfer order issued by the minister under the act.
Clause 8 of the legislation provides that the minister may sell the insurance business and that the sale will be by an agreement to sell the assets and liabilities of that business. Clause 8 also provides that the sale may involve the minister making a transfer order to facilitate the sale.
Clause 9 of the legislation provides that the minister can, in conjunction with the insurance sale agreement, enter into a contract with the purchaser of the insurance business for it to manage part, or all, of the MAC Scheme. The Northern Territory government is not selling the MAC Scheme. The transaction we announced yesterday is for the management of the scheme for 10 years. This contract will allow the purchaser to use its extensive experience to better manage claims under the scheme. The agreement contains extensive performance requirements to ensure claims are handled in a way we expect for a government owned scheme.
Clause 10 provides for the sale of the banking business in a similar way to the insurance business. Clause 11 deals with how the proceeds of the sale will be used. It is the government’s intention that $215m will be held in the Northern Territory infrastructure development fund to be used solely to fund or support future infrastructure projects in the Territory. The balance of the proceeds will be used for more immediate priorities, including flood mitigation, and will be held in the Central Holding Authority until appropriated to an agency.
Clause 12 provides that the minister may do anything necessary or convenient to exercise a power under the act, including anything to facilitate the sales. This will include any and all of the preparatory actions undertaken by the minister and TIO before the commencement of this clause. The minister is also empowered to issue a direction to TIO to do anything necessary to facilitate the sale.
Part 3 of the bill contains provisions relating to making transfer orders to transfer the banking and insurance business to the private purchasers. Under the sale agreements entered into the transfer orders will take effect when the transactions are completed.
There are a number of protections in the bill to ensure the transfers are effective and also to enable any errors to be corrected. Part 4 of the bill deals with the effect of things done under the act. These provisions are designed to provide certain protections from unintended consequences. Part 5 of the bill deals with a range of administrative matters relating to the sales.
Importantly, clause 33 provides for the removal of the statutory guarantees of insurance policies and banking deposits. One of the key sources of risk to the Territory government from its ownership of TIO is that it explicitly guarantees all insurance contracts and banking deposits. The sale of these businesses means these guarantees will be extinguished.
Parts 6 and 7 of the bill deal with the consequential amendments and temporary provisions. It is anticipated the insurance sale and the banking sale will take place on the same date. However, if they do not the order of amendment to provisions of other acts will be affected. For instance, if the insurance sale precedes the banking sale, TIO will have to continue for some time as a banking only business. Part 7 of the bill deals with this eventuality, should it arise.
The Motor Accidents (Compensation) Commission Bill being introduced today will create a new Motor Accidents (Compensation) Commission, or MAC Commission, to own the MAC Scheme on behalf of the Territory. Establishment of the MAC Commission is an important milestone for the Territory. For the first time the Northern Territory will have a government owned entity solely focused on administering the MAC Scheme for the benefit of Territorians. This reform will enable the scheme to better meet the needs of road users in the Territory. The commission will outsource management of claims and management of the scheme’s funds to the purchaser of the insurance business for a period of 10 years. This 10-year management agreement is based on a rigorous set of performance criteria to ensure management of the scheme is in the best interests of scheme participants. This is the first time management of the scheme has been subject to formal performance assessed by government.
The commission we will establish under this legislation will be responsible for ensuring private sector managers do the job. A significant proportion of fees paid under the contract will be at risk. This means the managers will only get paid if they do their job, and they will only get paid the maximum if they do an exceptional job.
Turning to the bill, Part 1 deals with the definitional issues. Part 2 establishes the MAC Commission and sets out its powers and functions. The commission will also be subject to the direction of the minister, with any such directions to be disclosed by the commission in its annual report. There is provision in the bill to have both a commissioner and associate commissioners. At this stage it is the intention of government that there be a single commissioner. All support staff and facilities will be provided by government.
Part 3 of the bill deals with the Motor Accidents (Compensation) Fund. It provides for the receipt of money into the fund in the same way as currently, namely through registration payments and its own earnings. Payments from the fund will be on the same basis as currently exists.
Clause 20 is a new provision providing for the payment of surplus monies from the fund to the Territory. Where such a payment is made a copy of the direction to the commissioner to make the payment must be tabled in the Assembly.
Part 4 of the bill deals with the financial management of the commission, including its accounting and reporting requirements, the prudential supervision of the scheme and the continuation of the government guarantee for claimants. These provisions are a continuation of those already in existence.
Part 5 of the bill deals with the confidentiality of information and provides for an offence for unauthorised disclosure of information. Part 6 deals with the transitional matters required to transfer the operation of the MAC Scheme from TIO to the new MAC Commission.
In conclusion, my government has not taken this decision lightly, but it has been taken in the best interests of all Territorians. We are allowing TIO to continue to grow and support Territorians without being hampered by government ownership. The sale has also realised a pool of funds that can be used for much-needed infrastructure across the Territory, consistent with our developing the north agenda.
I commend these bills to honourable members, and table the explanatory statements to accompany the bills.
Mr McCARTHY (Barkly): Madam Speaker, there it is: the number crunch. We are into it now and it is very interesting. The second reading speech took about 10 or 12 minutes, and that sums it up. I can only wonder at the level of dysfunction in the CLP Cabinet room. I can only wonder that you are being led blindly by this Chief Minister right over the cliff.
We can debate this on various levels so let us look at Cabinet processes, where each Cabinet minister has blindly signed up to this deal. Why? Let us hear it during debate ...
Mr Elferink: No.
Mr McCARTHY: I pick up on the interjection. The member for Port Darwin will lead the CLP Cabinet and each person, one after another, will put their position to the people of the Northern Territory that TIO, since 1979, has been a valued asset, a high-performing company which has made $305m in the last five years and $60m this year, and the Chief Minister has put his hand in the till and taken $10m. However, it is suddenly a major liability. It has not been a liability for the last five years. It is a high-performing company employing many good Territorians. Now the Chief Minister tells you to sign up and you have. The Territory will remember you and Territorians have long memories.
Today in Question Time we had a taste: 4300 Territorians signed our petition, with more signing as we speak. That is in two weeks; that is 300 people a day. That is politics. We polled different CLP seats and 80% were opposed to the sale. The Northern Territory News has been running this debate. Its poll suggests 90% of Territorians are opposed to the sale. Mix 104.9 registered 80% opposed to this sale. Yet the Cabinet room of the CLP has decided, ‘This is good for us. This is a bitter pill, just swallow it. Trust us and get on with it.’ The sale will go through but the question is, what do we have to lose? That is the influence in the CLP Cabinet room led by the Chief Minister because he has the sell strategy and has answered the question, what do we have to lose? It is a shallow answer.
You have your seat to lose, you have government to lose, then, of course, you have TIO to lose. You will lose it. Then we hear the spin about creation of a massive infrastructure fund. We shall do a number crunch on that, shall we? Shall we deconstruct those numbers? Was it done in the Cabinet room? You must have all agreed to the spin as well. ‘No, we will say this and that, it will come out like this and everybody will believe us.’ Nobody is buying your story.
You want to continue this today on urgency. You want to push it through because, as the Leader of Government Business said, you cannot risk damage to the brand. I have heard some things in my time in this parliament, but today will be on a pedestal for many years to come. We will see the outcome of your very shallow decisions. You will reap what you sow. That will live on in the CLP.
We can go back to a litany of broken election promises. The heat now, in the national arena, is the media now aggregating Prime Minister Abbott’s broken promises. You can see this is gaining momentum.
Two years down the track, two years into your dysfunctional government, two years of your revolving ministerial door, two years of your revolving Treasurers – and we are assuming the Chief Minister will retain 13 portfolios, including Treasury, for the rest of the term – we have also seen the knifing of a Chief Minister, the infighting and the chaos. The national heat is now coming to fruition. Broken promises from 2012 are becoming the rhetoric of the media and the rsum of the CLP.
‘We need cash. This is the plan.’ You will lose if you do not pork barrel the electorate. It is the cheapest shot, the last shot in the locker. That is what I assume because you guys do not have anything else to say. However, we will hear each Cabinet minister today and the member for Port Darwin will lead the charge. We will hear each one explain first to their constituency, second to Northern Territorians, and you may as well add your families as well because this is big business. The member for Port Darwin calls it business; this is huge business.
My theory, being left in the dark and having to endure this rush through on urgency – first take of the legislation yesterday where two copies were pushed across the table, one of each bill – I am left to make these assumptions. I am interested in your replies to my assumptions, each and every one of you.
We will go to the big idea from our reactionary Chief Minister, who is now in the second half of the game. The whistle has blown, you are on the field, you have election promises to fund and you will do it with the sale of public assets. I suggest, because you do not inform this House to the contrary, more public assets will be sold. There is more pork barrelling planned, and you believe you will get this across the line. From the lunchtime car rally alone you can see there is a lot of sentiment out there. It was not only the cars, it was on the streets, and the radio and newspaper polls and the opposition petitions show this is a hot issue.
You can play it as cool as you like, but the Territory electorate has a long memory. We have the chaos of the CLP with a caption of ‘mature conversation’. Of course you can have a mature conversation when you garnish $33m from the 2013-14 budget. An amount of $33m went to the Chief Minister’s department to run that glossy advertising campaign. That equates to a mature conversation.
I see the member for Stuart’s ads have dropped off the television lately. That is when I get a chance to watch the television, because mostly I am in the bush having conversations about you guys. Those advertisements tell people in the bush how great it is under the CLP. I talk to people and they are not so enthusiastic. I remind them how much television ads cost, about prime time television and $33m being rolled into the spin machine. That is a lot of money where I come from.
You can say there is a mature conversation carried out with one-way traffic, with $33m worth of high-end advertising telling a one-way story to Territorians who are now questioning the other side of the story. As you know, common sense and good manners dictate there are always two sides to the story, and I spend a lot of time doing many miles to make sure the other side of the story is told in all electorates, not just in the Barkly.
We have the Chief Minister and a $33m mature conversation. We have a one-way dictatorial spray about what is good for you. We have a young Chief Minister who has quite recently joined us in the Northern Territory now telling old Territorians what is good for them and a Cabinet following blindly. We have a government that has signed up to a deal because it can see no alternative. It has backed itself into a corner and is trying to buy its way out. It is about a cash grab and, Chief Minister, you provide that rhetoric. When you read between the lines it is about a cash grab.
You talk about infrastructure funds and having lots of money to do interesting things, but I will remember the list published when this debate started – a swimming pool. The high-performing nation building asset to be achieved from the sale of TIO is a swimming pool. From the embarrassment that statement caused it became an Olympic-size swimming pool, and I challenged that. What economic modelling? Who have you spoken to about this? Where is the negotiation? Who will take ownership of the asset? Who will provide the on costs to manage an Olympic-size swimming pool? In which electorate will an Olympic-size swimming pool capable of holding national competitions be constructed? We are not quite sure. Then there was a pattern of reaction and reaction. Watching it in the media and listening to debate in the House, it became a ‘make it up as you go along’ story.
Finally we get the insurance industry speak around individual risk management. That is the last of the mature conversation: the one-way conversation spun with $33m backing it. The conversation has gone to the heart of the global insurance industry but it took a while to get there. It went through various cheap stages, to promises, to mega-infrastructure projects that had to be – even as late as this morning on ABC radio – curtailed and described as perhaps being pie in the sky.
You are flip-flopping back and forward. Make it up as you go along, reactionary politics, and I do not believe the CLP Cabinet is following this chaos blindly, this cheap shot at pork barrelling an election in 2016, because people know better.
Let us look at a pork-barrel exercise in the seat of Arafura, where 1% could swing the difference in 2016. Will the Chief Minister’s cash grab deliver that 1%, or will the 1% go against the member for Arafura? That question can be answered today. You can tell us what spending you will do for Arafura for 2016.
Let us look at Sanderson at 3.1%. The deal today could deliver 3.1% for the member for Sanderson or it could work against him. He will find out. He is a Cabinet minister following the Chief Minister; he has signed up to this deal and Territorians will judge him accordingly. However, 3.1% is an interesting margin.
In Blain it is 3.2%. I am not sure what Blain has been promised yet other than a swimming pool, but 3.2% could turf him out or keep him in. It is a gamble; he is betting on the Chief Minister’s horse. The Chief Minister owns a race horse. He is a gambling man, knows how to handle the odds and has convinced the member for Blain it is a good bet. ‘Back me and we will be together in 2016’. It certainly is a gamble, member for Blain.
Member for Stuart, you are running on 3.4% odds. It is 4.6% for the member for Daly, but the member for Fong Lim is on the knife’s edge at 7.3%, with radio polls running at 80%, television and newspaper coverage, and people are talking. You are being exposed one step at a time and Territorians will judge. They will get their chance, and I cannot believe you will let this legislation pass. It is a disgrace.
You and your government, Chief Minister, will play this bet. It is a train leaving the station and you are all on board, but we are not sure if it is a train ride or train wreck. The Minister for Infrastructure is an important player; he is the Casey Jones of the train because he will decide where the infrastructure goes. He is at the Cabinet table and will tell you what you can and cannot have. He will do the planning around this infrastructure.
Let us deconstruct a few numbers because I get a little tired of the Chief Minister’s spin. I give him credit; he is the master of spin. In opposition or government he does it so well. It is crafted and designed to convince, but when you are dealing with big issues like this people take notice. It does not just roll off the tongue and go through to the keeper. People have been asking the opposition lots of questions. The first answer is: there was a $424m sale price for the Territory’s public asset but, in reality, $140m should be subtracted because that $140m was surplus capital from the MAC Scheme and a glossy $33m-backed spin document described it as the sale price – rubbish! Tell Territorians the truth. We will subtract $140m straight up.
This is not easy business, as the member for Port Darwin says, as it cost $9m to conduct it. That is a nice price tag. I could do a lot in Ali Curung with $9m. Nine million dollars comes off, so we get to a figure of $275m. I asked a question about that, because in the last few hours people have asked me if it is good price. I said I would ask the Chief Minister for a comment, and he said, ‘Well, maybe, sort of, well’, and did not really provide Territorians with an answer. I was seeking leadership, asking the top man, and I did not get an answer to whether $275m was a good figure. I compared it to what TIO made in the last five years. It made $305m in profit and they sold it for $275m. I do not know where these guys went to school, but Territorians are asking if it is a good deal. I do not know, but the Chief Minister or the string of Cabinet ministers who signed up to the deal can tell us.
The discussion reaches the new infrastructure in relation to the global insurance industry – the individual risk management infrastructure. The Chief Minister spoke about flood mitigation, but that is as good as it gets. A budget figure of $50m has been appropriated with $25m for the Rapid Creek area and $25m for Katherine – big figures, big statement.
Let us deal with Katherine. We can deduct $7.6m from the $25m to relocate the ambulance station. We have seen a fairly significant reduction in flood mitigation money for Katherine, but where is the modelling? Where is the substance to these statements? How we will provide flood mitigation for Katherine? How much will it cost? The member for Katherine is going home with a cheque in his back pocket. He will have $7.6m taken out to relocate the ambulance station – a good project – but then he has to deliver.
For a number of years I tried to deliver a heavy vehicle bypass, and Katherine residents were extremely interested in consulting on that. Finally we developed four different models. It is good to see the minister has picked one of those models but has cut the price by half. It went from $10m to $5m, and it is very much a modified plan for heavy vehicle diversion through Bicentennial Drive. We are not sure where the other $5m went. I congratulate the minister for picking up the work the Department of Transport did. We were very busy working with Katherine on that small project.
The Chief Minister will deliver flood mitigation for Katherine. In the 1970s I lived in a town surrounded by a levee bank. It was on the junction of two rivers, and I came to understand river hydrology, particularly when the levee banks were under threat. The infrastructure was phenomenal, but it was built in the 1960s. I will not hazard a guess at how much that infrastructure in northwest New South Wales would cost today. I cannot guess how much it will cost for Katherine. It is big dollars, a big project with no real modelling or understanding, just throwaway lines. It is a disgrace when we are talking about selling the Territory’s own insurance company. We are talking about a major change of ownership and public assets being controlled by a global giant.
We have heard how this can change and affect middle-income earners, low-income earners and people like me, who have a house with a tin roof and live in the bush.
The Local Government Association of the Northern Territory advised the opposition that around $900m in assets is insured across the Northern Territory, yet this mature conversation has provided no empirical evidence about any changes. They are not sure what will happen and are a little confused. The opposition has outlined other important aspects of our Territory community being in the dark and unsure.
It will be interesting to watch the Katherine flood mitigation progress. If no flood mitigation is provided by government you can bet your bottom dollar the insurer – now a global private company with no conditions to preserve existing policies – will zone in on this new way of doing business across the world. We will have a bulldozer on one side of the fence, a global insurer on the other side, and the Chief Minister is not able to tell Territorians what will meet in the middle. Is this urgent? We are told this is really urgent ...
Mr Elferink: It is.
Mr McCARTHY: I am reminded it is so urgent, yet there are many questions. This is just one aspect of the debate. Hundreds of thousands of Territorians have questions. There has been no mature conversation; it has been one-way traffic.
One of the big complaints I heard was that no CLP members attended the forum held at Charles Darwin University. That is a local member’s job. Where were the Darwin and Palmerston members? Obviously they were told not to attend. They are told what they need to know and patted on the head with a, ‘Trust me’. They should be sitting on this side because that is the way the opposition is treated. I expect CLP backbenchers to be asking questions and getting answers. Hopefully we will hear about that today because they will share that with us.
The real question is: is it a train ride or a train wreck? I always provide a clear alternative and you will hear many. The opposition discussed many alternatives. We believe you guys should stop this train today. It can be stopped in various ways, but it should be stopped. We believe there is a need for real and meaningful consultation relating to the normal passage of legislation. That is not a lot to ask. That assumes the traditions of this parliament, of self-government and the honesty and integrity of the government executive. Let us hear from each Cabinet minister why that is not possible, and from those on the backbench. Let us hear why the process of democracy in the Northern Territory has to be changed today.
Refer this deal to the Public Accounts Committee. That is a simple and pragmatic suggestion, and in the past I have heard strident opposition to that from the government and cannot understand why. Having spent time as Chair of the Public Accounts Committee, with the dynamic member for Port Darwin on that committee, I saw the enthusiasm and shared strength in solidarity that we were all working together to examine important financial issues. What is more important than selling public assets? What is more important than the sale of TIO and the sale of the banking arm to a national credit union? I see contradictions emerging here.
Member for Port Darwin, I learnt from you, took it on board, and you are completely contradicting it. It is one rule for one and one rule for another, when it suits you or when it does not. In that style of governance you lose credibility; you guys are losing credibility with the Territory public at a rate of knots.
What about the senate inquiry. The Leader of the Opposition has taken a lot of time and effort to give another opportunity to Territorians, and there is willingness from Australian Senate representatives to conduct an inquiry to deliver answers. Would Territorians support that? You bet they would. Does the opposition support that? Yes, we do. Will the Independent and members of the Palmer United Party? I am sure they will. Will the government? That is up to you, but it is a credible offering to have this examined by a Senate select committee. Territorians would value having their questions addressed and this would be open, accountable and transparent.
This relates to an insurance safety net for Territorians. This is an important aspect of their lives, their families and their assets. Today it will go through on urgency, and today will decide the fate of what I suggest is a string of public asset sales.
I listened to the Deputy Chief Minister being interviewed on 7.30. Alas, 7.30 in the Northern Territory will be scrapped under the cuts by the Liberal government, but let us cut through the semantics: they are not cuts they are efficiency dividends. It is about making ABC staff more efficient. I did some research because I had to front the constituency of Tennant Creek the following morning and was sure they would have questions on this.
The Deputy Chief Minister, more or less, assured the audience nothing would change for the next three years. I took that to the street the next day and said, ‘That is one glimmer of hope’, then I found out at a briefing that is not true. I will give the guy credit; he either did not know, made a mistake or was telling the yarn he heard in Cabinet. Was he trotting out one-liners from Cabinet, ‘Trust me Deputy Chief Minister, you’ll be right, it’s all okay’, because I did not hear that in the briefing. I heard the opposite. There are no guarantees attached to preserving conditions for Territorians. You hear one thing, you hear another, you try to cut through to the middle and give people the truth. I am now in parliament watching this massive Territory-changing legislation move through at a rate of knots.
I will not take up too much more time because I know government members will use their time to explain this, and I will be scribing at a rate of knots to take the story back to my constituents. At the end of the day the question remains: what do we have to lose?
Mrs LAMBLEY (Health): Madam Speaker, I support the sale of the Territory Insurance Office and support the legislation put forward by the Chief Minister for the sale to proceed.
Listening to the member for Barkly, it is no surprise Labor lost the 2012 election. He clearly illustrated, to each and every one of us in the Northern Territory, a lack of understanding of what it is to run a business. The decision to sell TIO is a business decision we have made. Some would argue reasonably quickly, but it is a sensible decision which has taken great courage, and one no government in the last 35 years was able, or willing, to make.
In 2014 the Territory Insurance Office has been in business for 35 years. In anyone’s estimation, a business that survives and flourishes 35 years has had a good innings. That in itself does not mean it should end, but 35 years is probably longer than 90% of businesses survive in the Northern Territory.
The fictitious story from the member for Barkly – his understanding of why we are selling TIO, the motivation behind it and trying to guess what we are thinking – was pathetic to say the least. He demonstrated, by sprouting some bizarre figures, that he has no understanding of business. He said TIO made a profit of $350m last year …
Mr McCarthy: $305m over five years.
Mrs LAMBLEY: That is incorrect, member for Barkly. I am glad you corrected your own record. The figures are $255m over the last five years, with $181m attributed to the MAC Scheme and $74m attributed to TIO, before tax.
For the record, let us get the figures right. You might have the right figures had you availed yourself of a briefing. No, opposition members think they are beyond a briefing. They think they know what is happening with TIO, and the member for Barkly has proved that is not the case. He does not get it and part of the reason is because he did not get a briefing.
I will not speak for 30 minutes this afternoon; I will keep my comments concise. This is a good business decision. I do not remember the former Labor government, in 11 years, making more than one good business decision. The only good business decision I remember was knuckling down and doing that wonderful deal with INPEX. They can forever hold that high when they leave politics and are forced to look for another job because that is the only one that stands out. They sat on their hands for 11 years in so many ways.
Within the next 12 months we should count all the decisions Labor did not make in 11 years. In two years we have made 10 times the number of big decisions Labor did, even more. Why? Because we are not here to take up room; we are not here to stay in government forever and a day. We are here to make good, responsible fiscally-proven decisions that are good for the Northern Territory.
The opposition remained in power because it was all about political opportunism, expediency and members retaining their seats. I almost fell off my chair earlier when the member for Barkly said, effectively, the only reason we should not support TIO is because we might lose our seat or lose government. That spoke volumes about the motivations of the Labor opposition. That is all you want to do.
Let us put this into perspective. At some point in government you need to make a difficult, perhaps unpopular, decision, but it is the right one. What you see today is a united team. Not one person in the ranks has any misgivings about the decision we made to sell TIO.
All the speculation around the Chief Minister leading us astray – do you think we are that stupid or is that a question I should be asking the Labor opposition? We are not about procrastination. We are not about sitting on our hands and waiting for the next government to make the hard decisions. It is not a money grab either.
We have come to government and pulled in the fiscal situation in record time, despite the sale of TIO. All funds from TIO will essentially go into our Northern Territory infrastructure development fund, apart from funds allocated for flood mitigation. That brings me to my next point.
Flood mitigation: prevention is better than cure. A few years ago the former federal Labor government put money on the table for flood mitigation throughout Australia. The former Labor government of the Northern Territory could not be bothered applying for that funding. It could not be bothered turning its mind to the need for flood mitigation throughout the Northern Territory. When I heard the member for Barkly say, ‘Where is the modelling? Where is the business case and where is the empirical evidence?’ You did not look for it at the time. You had 11 years to flood mitigate Katherine and Rapid Creek, your own electorates. You had ample time to progress flood prevention throughout the Northern Territory and did not do it. What flood mitigation did you create in 11 years, member for Barkly?
Mr McCarthy: I was doing it in the rural area. I can tell you a good story about flood mitigation.
Mrs LAMBLEY: You did not do anything, but you can sit across the Chamber and criticise us for talking about minimising the impact of flooding in Katherine, Rapid Creek, parts of the rural area and part of my electorate in Alice Springs, Araluen. A consideration in the future could be looking at improving flood mitigation in flood-affected areas of Araluen.
These are responsible decisions. These efforts can change people’s lives. The sale of TIO means we can change more people’s lives by spending the proceeds on infrastructure projects such as flood mitigation.
If this risky business remained the responsibility of the Northern Territory we could not embrace the opportunity, as we are doing now, to spend the proceeds on other infrastructure projects. It is important to look at the opportunities the sale of TIO will bring to all Territorians.
We are not about populist government; we are not about trying to bend over backwards to keep the vote. We have proven that time and time again. When we first came to government we made some difficult decisions to restore efficiency to the Power and Water Corporation. All Labor could do was jeer at us and make out we were evil creatures who were leading the Northern Territory into rack and ruin.
We have made some tough decisions and we stand by them because responsible governments make these decisions. We had the courage and leadership skills and will prove to be a strong government in the eyes of the Northern Territory.
Ms LAWRIE (Opposition Leader): Madam Speaker, there was a lot of table thumping from the member for Araluen. I am sure her constituents, whilst they will not get the table thumping, will be interested in her indefensible defence of the sale of TIO the government is today rushing through on its numbers.
The member for Araluen has not secured any commitment from her government to take care of flood mitigation works for the constituents in Araluen she says are affected by flood. You have to ask why not, given the extent of the $150m still not allocated as a result of the rushed sale of TIO. If you have no chance of getting a bite out of that $150m, you have to question how you have managed to fail the constituents of Araluen to such a great extent.
I daresay other members of the Chamber are probably in that same boat. Not to identify your failure, member for Araluen, but the member for Greatorex has significant flooding in his electorate in Alice Springs. The member in this Chamber whose constituents are most affected by floods is the member for Daly. I look forward to hearing his contribution to debate. One of the concerns we have is the worsening effects on Daly in any future mitigation works in Katherine.
TIO has provided Territorians with decades of insurance they need to live and invest here, given our unique circumstances. I heard the Chief Minister hide behind what has occurred elsewhere in the nation. Perhaps he still has an eye on federal parliament so when he is thrown out of office in the Territory he can put his hand up for pre-selection and have another tilt at Lingiari, which, of course, was quite disastrous for him last time. The hide-behind-the-national-skirts routine of your contribution was quite shameful because we are here to represent the constituents of the Northern Territory, just as TIO has done well for decades.
TIO meets our unique insurance needs. It provides no-loophole cyclone, flood and storm surge cover. We know selling TIO risks skyrocketing insurance premiums and less coverage. Listening carefully to the public comments made by the Allianz representative yesterday, he could provide no surety of when insurance premiums would increase. His comments were three to six months. At this stage, Territorians do not know to what extent those insurance premiums will increase. The Chief Minister has referred to increases of some 200%.
Chief Minister, did you bother to consult directly with affected constituents? Surely you have had some analysis done? Surely you know exactly where and who will be affected? Have you spoken to the families or the businesses? You can guess the answer is no because no forums were held throughout the Territory, with the exception of the member for Katherine fronting up with the CEO of TIO in his constituency of Katherine.
Selling TIO risks creating an insurance crisis post a natural disaster as we saw in Queensland. TIO is not just a brand; it is an insurance safety net for Territorians. Until you get your way, it is ours collectively. Imagine not being able to insure your home for cyclone, flood or storm surge in the Territory. With the CLP selling TIO, that may be a future reality as the government will no longer, as it can now, control what level of insurance cover or price settings TIO offers.
Under a deal crafted by the CLP, the new owners of TIO can change our policy cover and insurance premium prices, and could withdraw from providing cyclone, flood and storm surge cover altogether. Why? There are no legal guarantees in the legislation we are debating today or the conditions of sale, despite promises to that effect from the Chief Minister which have been clearly broken. You have cobbled together a dud deal which gives Territorians no guarantee for future insurance coverage, with no mandate and with utter contempt for the will of Territorians.
Territorians and businesses sent the message loud and clear that they did not want TIO sold. Thousands of Territorians signed petitions in just two weeks. Polling showed over 80% of Territorians in Katherine, Port Darwin, Fong Lim, Sanderson, Goyder, Daly and Greatorex opposed the sale. The NT News poll showed 90% were opposed. The Chamber of Commerce surveyed, and the majority of its members strongly opposed the sale. Greg Bicknell from the Chamber of Commerce said businesses have significant concerns about the major impact the sale will have on premiums. Peter Donovan from the Motor Trades Association NT says his members have real concerns about the local impact of the TIO sale. He said publicly that some members have said they will not be able to continue in business if TIO is sold. You have ignored small businesses. You are ignoring Territorians who own this public asset and are selling TIO for a quick cash grab to pork barrel at the next Territory election.
Of course we have the spinner. The Chief Minister told Territorians it is not a sale, it is just a transfer of ownership. Seriously? Did you come up with that line yourself or was it one of your spin advisers, because no one with any sense would have used it. You are happy to spend thousands of dollars on a spin exercise to promote the sale while having no genuine consultation with Territorians. You set up a cynical website promoting the spend fest, but gave Territorians no opportunity to register their views with the government on a sale. What stopped government from an online poll? You did not want to know; you had no intention of listening. You continued with your crash through method of government which, of course, has made you the worst government ever.
Instead, in every way it could, the CLP bombarded Territorians, telling them – despite Territorians not wanting it sold, the CLP went on a spending spree with a whole lot of paraphernalia. Despite being bombarded with the spin from the government, Territorians signed petitions, registered their opposition on radio station polls, in the NT News polls, sent you e-mails, wrote to the newspaper, and commented on social media, yet we continue to have an incredibly arrogant Chief Minister treating Territorians with contempt.
Territorians are saying this is the worst CLP government ever. Even CLP party members are saying that. The CLP campaigned against the sale in the past so Territorians reasonably went to the last general election thinking TIO was not for sale. You have no mandate to sell. Of course, as part of the great spin you have to present the picture that TIO is in dire financial jeopardy and you had no choice. Rubbish.
In a Statement of Corporate Intent both the chairman and CEO of TIO laud the financial position TIO finds itself in after years of hard work to build the business. It is a strong and financially sound business. You need go no further than the Statement of Corporate Intent and read the contributions. I refer you to the Chairman’s report, page four:
- Providing Territorians with a strong, viable and sustainable TIO is the number one priority for our Board. This year we have again delivered good results while also investing back into the community.
Chief Minister, your spin is wrong. Read the chief executive’s report and look at operational profitability. Yes, over five years that totals $305m. It is a fact and appears on page five of the report. TIO was making such a profit the government took a record $10.5m dividend from it this year. The Chairman of the TIO Board, Mr Bruce Carter, in speaking about the financial position said:
- This is now the fifth consecutive year that TIO has delivered a profit back to Territorians, giving the Board great confidence that the company can continue to provide services that our community needs for many years to come.
TIO makes a profit, and funds that could be put towards flood mitigation around the Territory could be through the dividend. Where did the $10.5m just this year go? Chief Minister, you might want to enlighten us when you wrap this debate, or the $140m drawdown facility you have created out of the MAC Scheme. That well and truly covers the $50m you identified for flood mitigation works. You could undertake the flood mitigation works you have signed up to and not sell TIO, but it is not your style to be honest with Territorians is it, Chief Minister?
Territorians should not be forced to have their TIO sold to pay for flood mitigation in these areas. The drawdown facility you are creating in this legislation could easily cover that. The dividends from TIO you are cashing in to God knows what could contribute to flood mitigation, but that is not a story you want to tell because it is far too factual for your spin, Chief Minister.
TIO has greatly improved its profitability over the past five years, returning record profits. The board stated in its recent annual report that it had great confidence TIO could continue to provide services our community needs for many years to come.
That will come to a crashing end once you give effect to the legislation for the sale of TIO, where Allianz will own the insurance, People’s Choice its banking and the compensation scheme will be administered by Allianz.
The CLP government has abandoned the long-standing community service obligation on price equalisation on insurance premiums. You chose to walk away from the equity we had in the insurer representing us to cover people in the most vulnerable areas of the Northern Territory, but that is your style.
You have threatened Territorians. When the debate commenced the Chief Minister would say, ‘If we don’t sell TIO we will face a 30% increase in premiums’. However, the debate rolls on. I participated in the forum the Independent member for Nelson provided, and the CEO of TIO, Richard Harding was there doing his best to put the case for sale. The policy decision to sell had obviously been made by the government by then and it became patently apparent at the forum. He did his best to put the case to sell, representing the policy views of the government. One was around how competitive TIO insurance premiums are and, in some cases, cost more than their competitors.
I stood up because my office had been getting insurance premium quotes for houses valued at $400 000 with contents insurance of $50 000. We did some comparisons between TIO and private operators in the market. There were insurance premium hikes of 200% between the TIO product and the private market.
All of a sudden, perhaps coincidently, the Chief Minister started saying, ‘If we don’t sell TIO we will have to increase insurance premiums by 200%’. Without any explanation of how it went from a 30% scaremongering to a 200% scaremongering from the Chief Minister if we do not sell TIO, the quantum shifted. I suspect the shift was based on the factual information we provided to the community when the Chief Minister failed to show at the community meeting, and was instead seen dining at Hanuman. It is happy days for you, Chief Minister, while Territorians suffer.
You were scaremongering about prices going up but failed to acknowledge that in government’s hands a public insurer can have control over equalisation and the community service obligations we provide to Power and Water to ensure power and water is affordable across the Northern Territory, irrespective of where you live.
Let us not muddy the waters of your spin, Chief Minister. Territorians pitch in and support each other; that is at their core and in the values we share. If you were here for the Katherine floods, the Alice Springs floods or Cyclone Tracy you might understand that, Chief Minister. You did not give Territorians the option of across the board rises to avoid abandoning the equalisation or sale of TIO. Why would you engage Territorians in a mature conversation when you have a spin machine selling your agenda for the quick cash grab you are so desperate to achieve with the sale of TIO?
You sold TIO out from under Territorians and will start your funding and pork barrelling of projects you favour between now and 2016. You will use the $215m infrastructure fund for your next round of pork barrelling.
I note the CEO of the Northern Australia Development Office is today calling for the infrastructure fund to be used for roads. Chief Minister, I invite you to comment, when you wrap debate, on whether the entire $215m will be quarantined for roads for economic productivity purposes. I await advice as to whether you agree with the CEO of your Northern Australia Development Office.
Fundamental to this disaster is the abject failure of the Chief Minister to yield a single cent for additional infrastructure from the Commonwealth. You have been in government for two years and there has been not one cent in additional Commonwealth infrastructure funding – abject and utter failure. You make big announcements about second ports and sealing roads, but I am yet to know the details of the agreement with the member for Arafura to get him back into the CLP fold; it all comes at an infrastructure dollar cost. You have failed to achieve any additional funding from the Commonwealth – abject failure.
Your Infrastructure minister rattled off the projects you are currently spending on which Territory businesses are benefiting from through contracts. They were Labor-agreed projects on the capital works program signed off between Commonwealth and Territory Labor governments. That is embarrassing for you. It is okay because you will spin your way through that one, pretend and brand them as your projects when Labor agreements delivered the funding.
The CLP has no mandate to sell. This process is a sham and has been done behind closed doors. The Chief Minister was too spineless to tell voters before the Casuarina by-election that he was selling them out with a TIO sale. In October, after the Casuarina by-election, he revealed he had been working on the TIO sale since March.
You have deceived Territorians. The fact the Chief Minister has not engaged with Territorians highlights the reasons the sale does not stack up. This government did not have the spine to go to voters on this issue. It did not have the capacity to mount solid evidence in forums around the Territory on this issue. It is a sign of how this CLP government will sell out future public assets of Power and Water, which it has set up for sale with its separation, and attempt to sell our port assets.
Each of these has a profound cost of living impact on Territorians. We have seen the dire cost of living impact from the fattening up of Power and Water for sale approach by this government, with massive tariff hikes causing Territorians to pack up and leave. If you want to sell the crucial asset of the port – even business is saying not to sell it – check out the ENI submission to the development of northern Australia inquiry where they say not to sell it. Small businesses do not want it sold because they know what it will mean to their businesses.
Chief Minister, you have shown us your capacity to completely ignore business when it comes to the sale of TIO. I have genuine concerns that you will completely ignore business pleas not to sell our port assets. Obviously, that raises the significant concerns of which part of our Power and Water assets you are pursuing to sell with your discussions behind closed doors. Is it generation? Is it retail? Is it both? We suspect the cash grab with TIO is not quite enough for you, with just $150m to spend before the next election. Let us face it, that equates to an adjustment in the GST for population growth.
It is not enough for this Chief Minister because he is a greedy man who says, ‘I’ve been forced to offer $50m for flood mitigation. I had to justify it by setting up an infrastructure fund, but that is okay because I can use that to pork barrel announcements at the next election. Damn, it only leaves $150m.’ That will not go very far. It will certainly not pay for a bridge to Mandorah. It is not even a down payment on it, but that is okay. He can tell himself he is a big man with big visions for big projects. Then the reality hits and he is greedy and wants more. What is up next? The port, generation, retail? What public asset sale will we debate next in the Chamber?
Selling our assets goes straight to the cost of living. Commercial rates at the port ratchet up freight increases, which ratchet up the price consumers pay for goods. Selling generation or retail ratchets up tariffs, which ratchets up the price we all pay to live in our magnificent, beautiful Northern Territory under the CLP. That is the sting. We all agree this is the best place to live. We choose to live here; we love our Territory. However, the cost of living under the CLP is starting to kill us.
I do not know if the Chief Minister gets that. He is doing okay. He flies between Darwin and Alice Springs for work, has a place in Alice, a place in Darwin, has cars, drivers and life is pretty good. Do not touch the bubble.
Selling our public assets is a fundamental attack on Territorians. There is no mandate to sell, and as we know, it leads to skyrocketing costs of living. That is one of the reasons this government will not engage and consult with Northern Territory residents affected by these decisions.
I wrote to the chair of the Senate Standing Committees on Economics undertaking forums on proposed public asset sales. I thank Senator Sam Dastyari for accepting referral to the senate inquiry, and look forward to participating in the senate inquiry when it visits the Northern Territory early next year. I look forward to the government spelling out the case for the sale of public assets of TIO and the port, and spelling out its intentions in both generation and retail at Power and Water if members are honest enough to front up and explain their actions. It is a bit of an ‘if’ when it comes to the CLP.
Selling TIO risks skyrocketing premiums and less cover, and risks creating a real insurance crisis post a natural disaster as we saw in Queensland. It is the only insurer in the Territory market that provides our all-important no loophole cyclone, flood and storm surge cover, the cover Territorians need to be fully protected ...
Mr Chandler: And it will continue.
Ms LAWRIE: I pick up on the interjection from the member for Brennan. He says, ‘And it will continue’. Member for Brennan, you have no guarantee in either the conditions of sale or in this legislation. Once you sell it for a price to a private insurer you cannot guarantee it. You failed to get the guarantees in either the conditions of sale agreement or the legislation. We have to trust the member for Brennan, who has been saying on ABC 7.30, as pointed out by my colleague the deputy leader, these things will be there for three years. We were pleased …
Mr CHANDLER: A point of order, Madam Speaker! You can ask me for an explanation, but that is wrong. You need to read the transcript, Leader of the Opposition.
Madam SPEAKER: Member for Brennan, if you want to make a personal statement talk to me later.
Ms LAWRIE: The member for Brennan can explain himself in debate because people watching say, ‘Three years. That’s not what we were looking for, we wanted it ongoing. Three years is better than nothing’, and we got nothing. The guarantees are not there. The three-year guarantee is not there, member for Brennan. You got a two-year commitment for an extra $200 000 for Territory Day celebrations. That is fantastic, but that is all you got. Cracker night will be a bit more fun. It is already a hell of a lot of fun; we love our cracker night. Not everyone wants the crackers, but everybody loves our Territory Day celebrations. Thanks for the $200 000 for Territory Day celebrations, we got that, but we did not get the three-year guarantee you hinted at Territorians in the 7.30 interview. You want to be the good guy. You want to be – when the Chief Minister becomes toxic from the sale of TIO and the party gets nervous and conducts some polling – Chief Minister.
I understand that, and I know you are worried because the member for Fong Lim is making his comeback. He showed up and asked a question. The member for Fong Lim is pretty keen to get back into Cabinet. Will he sit behind you? Will he say, ‘That’s okay, you can be Deputy Chief Minister and I will be below you in the pecking order’. Will he sit behind the Leader of Government Business in the pecking order? Where will the member for Fong Lim sit in Cabinet? Will he be Treasurer because he set this up? He can say,‘Guys, I set up the separation of Power and Water to prepare it for sale, I set up the port to prepare it for sale and I set up TIO to prepare it for sale. I deserve to be Treasurer because I’m the guy getting the cash grabs because the Chief Minister makes promises and someone has to find the money to fund them.’ That is your pitch, member for Fong Lim. Good luck, because in the constituency you are still a man covered in disgrace. You are now joined in disgrace by your entire government. When you betray Territorians – which the sale of TIO does – you have fundamentally broken their trust, and governments that betray and break the trust of constituents in such a way fail.
When given the opportunity to vote on this type of disgraceful behaviour, governments fail. We will not rest on that because that is not what we do in opposition. We will continue to hold the government to account every day, as we already do.
We will communicate across the Territory the actions you have taken and the impact they have on constituents’ lives, because that is what we do. We will continue to write letters to constituents. We have held meetings with constituents and will communicate directly. We do not have the extra $33m the Chief Minister has tucked away in the Department of the Chief Minister to pay for spin and glossy advertising, but we get out there. We will communicate every bit of this to your constituents because you are selling them out today, without a mandate, for a quick cash grab to pork barrel.
You are selling our financially strong, viable and sustainable insurer – as described by its chair of the board in its Statement of Corporate of Intent –for a quick cash grab. This is a shameful day ...
Mr McCARTHY: A point of order, Madam Speaker! Pursuant to Standing Order 77, I request an extension of time for the member.
Motion agreed to.
Ms LAWRIE: Madam Speaker, I thank members of parliament and my deputy leader for the extension of time.
These are cognate bills, it is a significant debate and it takes quite some time to get through it …
Mr Tollner: Particularly when you are dribbling.
Ms LAWRIE: I pick up on the interjection from the member for Fong Lim. You have not changed, member for Fong Lim. You have had your time on the benches, in the sin bin, and you are still offensive. You cannot help yourself. He has not changed; I do not know who was working with him.
Mr Tollner: Dribble on, anything to keep the clock ticking over.
Madam SPEAKER: Order! Member for Fong Lim.
Ms LAWRIE: I Pick up on the interjection from the member for Fong Lim. You really have not changed, have you? One issue here is, ‘Don’t worry that there are no guarantees in the flood, cyclone and storm surge product uniquely provided for TIO because as a public insurer’ – you want us all to say, ‘That’s okay, we trust you because you have chosen Allianz’. Allianz comes with a reputation. Are we meant to pretend we live in a bubble in the Northern Territory and do not understand the insurance debate in northern Australia as a result of floods and cyclones? Do you think we do not read information from elsewhere?
Allianz comes with a reputation and people are genuinely and deeply concerned. Territorians who went on the Allianz website last night were told they were not covered if they had a tin roof. How well was this thought through? How well did you go? ‘We will set Allianz up as the big trust us. Don’t worry, we don’t need guarantees of insurer of choice for Territorians but we better make sure they offer some coverage.’ No, that did not happen.
In Queensland this global insurer is not known for its goodwill and community support. The experience after the floods shows how Allianz responded to Queenslanders’ hour of need. I have already mentioned that the Mayor of Ipswich described them as the worst. Queenslanders, as already mentioned, had their insurance premiums increased by as much as 2000% despite their homes never having flooded. The mayor said he lived on the highest hill and copped a massive insurance premium hike. We are not making this up. This is fact; it is on the record. You are okay with that because we are meant to trust the goodwill – unbelievable. You have left Territorians with no guarantees in their insurance premiums and coverage with Allianz, which has a reputation. Great!. It is little wonder there is such an overwhelming fight to save our TIO.
The CLP is ignoring that all-important recommendation to the Australian government to expand TIO across northern Australia because, ‘It is affordable and consistently available’. It would address the insurance crisis and support developing the north.
That comes directly from the PIVOT NORTH Inquiry into the Development of Northern Australia: Final Report of the Joint Select Committee on Northern Australia from September this year. This is not something we have dug up from years ago. The Chief Minister quoted what TIO was like as an insurer decades ago. No, this is contemporary, factual, evidence-based and a significant recommendation. You are heading in the opposite direction with this proposed sale.
The northern Australian development inquiry head, Coalition MP Warren Entsch, said publicly he warned the Chief Minister against selling TIO. He stated the NT was the only place in northern Australia where insurance was consistently available and affordable, and the sale would risk creating an insurance crisis like that in Queensland. Warren Entsch said selling Suncorp led to market failure and price gouging. Check that, it is from ABC radio. The inquiry heard evidence that insurance was now unaffordable or unavailable as private insurers withdrew, leaving homeowners without access to flood or cyclone cover in north Queensland.
Following the sale of Suncorp and natural disasters in many areas of Queensland, people cannot get or afford home and business cyclone and flood cover.
The Queensland government’s submission – this is an LNP government with similar policies to the CLP – says:
- … ‘if not addressed, the high cost of insurance premiums [is] likely to hinder or slow economic development within the Northern Australian region’.
Regional Development Australia, which is not a leftie organisation, said in its submission:
- Addressing critical issues around high premiums and lack of access to appropriate insurance is a fundamental barrier to investment and a significant burden on industry, small business and homeowners.
This is the crisis the Chief Minister is setting us up for in his betrayal of Territorians. Territorians will get a triple whammy. According to the Chief Minister, there is potentially a 200% increase over the next three years in insurance premiums. Certainty on floods, cyclone and storm surge coverage does not exist for the three years we were led to believe in the 7.30 NT interview with the Deputy Chief Minister. There is no guarantee. We are abandoned to the mercy of the private insurance market which has seen catastrophic market failure in Queensland.
The infrastructure fund will not meet the wish list the Chief Minister included in his media release. It will not fund a bridge to Mandorah or come close to sealing the Tanami. It will not build all the promises or contracts you signed up to in the bush. You are throwing away our insurance safety net for $275m. In context, the Territory’s average infrastructure budget for the four years to the 2012-13 financial year was $1.467bn.
Mr TOLLNER (Fong Lim): Madam Speaker, it was interesting listening to the dribble from the Leader of the Opposition. The Leader of the Opposition finds power in being ignorant of the issues and has demonstrated that quite well today. The Opposition Leader and the opposition find security in ignorance. That is demonstrated by the fact they have failed to attend any briefings and failed to try to understand the issues in relation to TIO.
It is appalling because at one stage the Opposition Leader was Treasurer of the Northern Territory and part of a government that tried to sell TIO, but did not have the ticker to carry it through and capitulated. It was shortly after the 2005 election campaign. If there was ever an opportunity to sell TIO and give them some free air in the lead-up to the election in three years’ time, that was the time to do it.
The opposition, particularly the Opposition Leader, knows the reasons TIO is being sold. They are also reinforced by former Chief Minister Paul Henderson, who has put in writing his support for the sale of TIO and his advice that government should sell TIO.
In this debate you see a group of informed people making informed decisions being opposed by a group of people who feel solid and safe in their ignorance, and try to project that ignorance on to other Territorians.
TIO has been a fabulous insurer for the Northern Territory for a long period of time. It was set up in the late 1970s because no other insurer would come to the Northern Territory. At that time, they pretty well had 100% of the market. I have been a big supporter of TIO for years. I am a customer of TIO and have been for more than two decades. I do my personal banking with TIO, the house and cars are insured through TIO, and I am keen to see TIO continue operating in the Northern Territory. I support this legislation because, fundamentally, TIO is not sustainable in its current form.
When TIO started it had 100% of the marketplace. That has now shrunk to less than 40%. We heard the Chief Minister say this morning that less than 15% of the workers compensation market is going to TIO. That means 85% of businesses are choosing other insurers and we have a competitive marketplace.
TIO does not have the opportunity to increase its market share, and that has been lacking in this debate. TIO, for want of a better term, is not currently a proper insurance company as it is not regulated by APRA. That might come as a surprise to many people, but the Australian Prudential Regulation Authority has no say in the operations of TIO because it sits outside its control. TIO has been set up by an act of the Northern Territory government. It is responsible to the Northern Territory government but it should not be confused with other insurers who have to meet very high prudential regulatory standards. I am not suggesting TIO does not meet those standards, but it cannot go into other marketplaces where APRA regulation is a requirement. It is confined solely to operating within the jurisdiction of the Northern Territory government, which is the Northern Territory, so it finds it difficult to expand its market share. Similarly, with the declining market share, its expenses are increasing.
The Chief Executive of TIO, Mr Richard Harding, said a standard insurer pays less than 10% of its revenue to reinsurance costs. TIO is paying in the order of 30% of its revenue in reinsurance costs. It does not take Einstein to work out as the market share shrinks and expenses grow the business is not sustainable into the long term. The only way to make it sustainable is allow it to diversify its risk – get a bigger pool of customers and share the risk – and, at the same time, be regulated by APRA, and that should not be underestimated.
As a customer of any insurance business you want to make sure it is properly regulated. The Australian Prudential Regulation Authority is the regulator and it is comforting that TIO will be regulated by APRA but, most importantly, it allows TIO to sustain itself into the future. As a proud customer of TIO I want to see it remain in place and continue operating in the Northern Territory for years to come. This legislation ensures that will be the case and the company, the products and the people we have come to know will remain in the Northern Territory.
Obviously the spin-off is it frees up money Territorians have invested in TIO to be used in other north Australian development projects, and that is a good thing. It is an area where you see market failure such as in the Northern Territory in the 1970s, or telecommunications in Australia in the 1950s, 1960s and 1970s – the only investors in that type of infrastructure have been governments. However, as the market picks up and competition starts to occur, governments have to step out of the private sector and let competition run. Competition will ultimately derive the most efficient prices for people ...
Mr Wood: Like fuel. That took some time, didn’t it?
Mr TOLLNER: I pick up on the interjection from the member for Nelson regarding fuel. When people started using their buying power we saw the influence on fuel prices. In years gone by nothing ever happened. I take my hat off to Dr Harry Kypreos; he is a great bloke and he certainly belled the cat and got some action. Government, I am proud to say, responded well and supported him in his campaign to drive down fuel prices. I thought the member for Nelson would celebrate …
Mr Wood: I am.
Mr TOLLNER: … the great initiative by Dr Kypreos. The member for Nelson likes to have it both ways. I asked him this morning if I could go to his lunchtime rally and speak. He said, ‘No, this is not a rally for you guys to speak at. This is a rally for people who oppose the sale of TIO.’ I thought it would be a good opportunity to explain to people why it is in their best interests. You organise a rally, get a crowd out the front and chant and carry on with, ‘Come on minister, come on government member, where are you? Come out and face the crowd.’ The minute a government member wants to face the crowd and give information to people you deny them. I asked if I could attend that rally ...
Mr Wood: Member for Fong Lim, you did not attend the Charles Darwin University meeting.
Mr TOLLNER: Madam Speaker, when does the member for Nelson get pulled up for interjecting? Goodness me?
Madam SPEAKER: Member for Fong Lim, when will you address your comments through the Chair and not across the floor? Address your comments through the Chair please, member for Fong Lim.
Mr TOLLNER: Yes, Madam Speaker.
I was raising the hypocrisy of the member for Nelson and the fact he wants open debate. He says, ‘We must have all the facts on the table’. The first opportunity a member from the government has to say, ‘I’d like to come to your rally to say a few things’, he says, ‘No, we don’t want that information. We want to make sure people are happy in their ignorance and are opposed to the government.’ For the member for Nelson and Labor this is not about policy; this is about politics.
They see some cheapjack politics here. They see a political opportunity to take a populist line, pouring fuel on the fire of populism and trying to elicit a kick for the government. We are ready to explain this to anybody at any time. The member for Nelson should avail himself of a briefing …
Ms Walker interjecting.
Mr TOLLNER: … before he organises rallies and protests because – the member for Nhulunbuy has her fingers in her ears and does not want to hear this ...
Mr Wood: Do you have a pause button.
Ms Walker: You are too loud.
Madam SPEAKER: Order, member for Nelson, member for Nhulunbuy!
Mr TOLLNER: Thank you, Madam Speaker. I can hear them at this end of the Chamber.
The Leader of the Opposition pours a bucket all over Allianz. What a pathetic thing to do. We have a new insurer in the Northern Territory which will pick up TIO, and the Leader of the Opposition wants to make sure it does not get a good start in the Northern Territory and smears it with mud.
Let me tell you about something that happened to me a few years ago. In the mid-1990s I was director of a horticultural business which had to make a claim with TIO. The claim, to my knowledge, was around $120 000; it was a business interruption claim. TIO refused to pay. The business ended up being involved in a five-year court case and eventually a Supreme Court judgment was made and TIO was asked to cough up. Five years after the event the claim, which originally started at $120 000, was $650 000. The five years in court would have cost the business, conservatively, around $1m in legal fees. TIO would have paid between $1m to $1.5m. The claim, which started out at $120 000, finished up costing TIO $650 000.
That was a Supreme Court judgment they refused to pay. I was with the bailiff when we served a warrant of seizure and sale on the chief executive officer of TIO. It was late on a Friday afternoon, the doors of TIO instantly shut and, miraculously, they found a judge late on a Friday afternoon. We ended up in the Supreme Court and TIO was given until 9 am the following Tuesday to pay the $650 000 judgment, otherwise the bailiff would have been well within his rights to start clearing the place out.
We were paid, but it took more than five years with TIO fighting it all the way through the Supreme Court. To suggest TIO is squeaky clean, always looks after Territorians and always pays out on claims – what rot!
Insurance companies have to make judgment calls from time to time about who is paid and who is not. Customers of those insurance companies would expect nothing less. It is not hard to understand how an insurance company works. It operates through a range of actuaries who determine a – the Attorney-General has drawn my attention to a section in the annual financial report of TIO on page 144. It talks about contingent liabilities and contingent assets.
a) Contingent liabilities
TIO Insurance & Banking
The nature of the insurance business is such that in the normal course of operation, rejected claims may be the subject of legal challenges. TIO will defend these vigorously however the outcome and quantum of any liabilities is contingent upon the court’s decisions.
That reinforces the point I made about the company I was involved with. TIO makes that statement, and most customers of insurance companies would expect no less from their insurer because paying claims without checking impacts on every customer of the business. It is important that insurance companies make sure they pay legitimate claims. Every now and then, as I demonstrated with TIO, they get it wrong.
Allianz might have got it wrong, but Allianz will own the Territory Insurance Office. What benefit the Opposition Leader thinks will be derived by pouring a bucket of mud over Allianz is beyond me.
I am a great supporter of TIO, a TIO member, I bank with TIO and have insurance with TIO. I want to make sure TIO is around and stays the distance because I like being a TIO customer and that is why I support this bill. With a shrinking market and increasing expenses it is unsustainable in its current state. To put it into a bigger pool of risk is the most sensible way to go. At the same time, it delivers benefits by liberating the capital Territorians have tied up in the insurance business to use for other Territory building opportunities.
Mr WOOD (Nelson): Madam Speaker, it is wonderful to hear from the member for Fong Lim. He sounds articulate, but he talks a lot of rubbish at times and uses his loud voice to overcome any opposition to what he says. I can use a loud voice too. One uses a loud voice when you do not want to hear any opposition. He will use a loud voice when he does not want to hear the truth.
There was a public meeting some weeks ago to which the CLP was invited, and the member for Fong Lim could have put the case. It was a neutral meeting. I have not said in this debate TIO should never be sold. In fact, those posters do not say that. They say, ‘It is our TIO, Mr Giles not yours’. The inference is the people own TIO, and they would like to be part of this debate and be informed before you sell it.
CLP members had the opportunity but word got out it was hijacked by the unions and the ALP, which is so far from the truth it is not funny. It appeared government members did not want to stand in front of people to put their point of view and answer questions.
Today’s rally was a protest, not a public forum for you to waffle on. It was a protest because opportunities were given to the government to put forward its case a few weeks ago, and it did not take them up. Today was about what people think of the government in relation to TIO. You might laugh, member for Fong Lim, but I have e-mails coming to me from staunch CLP supporters who will never vote CLP again. They might not vote Labor, but they will not vote CLP and will look for independents or some other party. I have not seen so many e-mails before, and people stop me in the street. A small businessman from Cullen Bay e-mailed me yesterday because he is totally disgusted.
You might think that is a laughing matter, but it highlights that you have left the people behind in this debate. Yes, we have two bills before us. They are technical bills to allow both the insurance and banking arms of TIO to be sold and rearrangement of the affairs of the MAC Scheme. These bills were sent to us yesterday with the second reading today. If you want an informed debate on the technicalities of the bills you will not get it from me because I do not have time to look at them and seek advice. We normally get a second opinion.
One of the disappointing facts in this debate is there has been no opportunity for people to discuss what will happen to their insurance. Will we be better off? I had an e-mail today – I will not tell you who it is from as they asked me to keep that private. It was done through an insurance broker and quotes annual workers compensation renewal. These people have been TIO customers for decades. They said the quote is frightening now the sale of TIO appears imminent.
They were happy to provide this information as long as confidentiality was maintained. These are the charges for this company for workers compensation: TIO $106 895; CGU $114 210; QBE $152 091; GIO $165 676; and the company the government has sold to, Allianz, $171 946. There is a difference of around $65 000. Where is the opportunity for that company to ask the government if it is better off under Allianz or TIO? Where in this debate has the public had a chance to see if it will be better off?
The Chief Minister said, in some parts of the Hansard I read, premiums will go up 30% in storm surge areas. Then during debate up comes a figure of 200%. Where that 200% came from I do not know. Figures are being thrown around to make it sound like if TIO is not sold there will still be increases in premiums, but who knows the truth. I am going on the figures in Hansard, where 30% was quoted by the Chief Minister then 200%. People do not know the truth. They do not know where they stand as that debate has not been had.
I am not against this debate, but am against the government rushing this legislation through. This debate has only become serious since the beginning of October. You only need to read the media releases at that time. The government continually said it had not made up its mind. It talked about a mature debate; I am still waiting for the mature debate. It will not be in here; this is the rarefied air of parliament, not where people come to have a debate ...
Mr Elferink: What?
Mr WOOD: They come to debate here, but if you want to debate with the people who own TIO take it to them.
The member for Fong Lim has TIO policies, so have I and so have the people who turned up for the rally today. Who had discussions with them, other than via the media? On 4 October no final decision had been reached. That was good to hear. Then another e-mail saying no final decision had been made – 20 October. Obviously things were happening behind the scenes, but the people missing out on this were the most important ones: the people of the Northern Territory.
I have another e-mail from a local resident who tried to apply through Allianz. I understand Allianz has just moved in, in the sense of taking over TIO, but the e-mail said she rang them. They asked for her postcode and when she gave it they said they would not insure her as it was too high a risk. There might be reasons for that, but again there is no debate. People do not know what is going on. ‘Trust me, we are from the government’. Unfortunately, that is where this debate has gone.
The member for Fong Lim mocks people. The lady rang Allianz at 10 am today about home and contents insurance, gave them the postcode and they said they would not insure her because she lived in a high risk area – Darwin. This is not made up, and there may be very good reasons. This highlights that the debate has been too quick for the average person. It has left the people behind and now they are worried they will not get insurance because with government support of a publicly owned insurance company, people who could not normally get insurance were probably insured. The member for Katherine held a meeting in Katherine, and I am told about 24 houses there are not insurable. They may be insurable under TIO because the government is behind it – the insurer of last resort.
What will happen to those people? Has the government a responsibility – even going back in years – by allowing subdivisions in surge zones and flood areas? Is there retrospective responsibility for allowing those things to occur? Prior to self-government there would have been planning controls as to where you built your house or where you could subdivide. That issue has been raised with me.
It beggars belief in this debate that we have not bothered to take a little time. I, the Chief Minister and Bruce Carter from the board said TIO can provide services our community needs for many years to come. I find it interesting that in the chairman’s report or the chief executive’s report there is no mention of the possibility of selling TIO. A line in the Statement of Corporate Intent says:
- Responding to the current economic climate and the constraints of the market it has been recognised that we need to do things differently to remain a strong and sustainable business.
It does not say sell TIO. It says we should look at those things, and I accept that.
During the last debate I raised the issue of a public company where we could all have shares in TIO. The Chief Minister said, ‘It’s a good idea but we don’t think it would work’. A mature debate over a period of time would have allowed us to see if that was true or not. Experts could have seen if it was possible to form a public company – if there were enough people in the Northern Territory interested in buying shares in TIO. We have not gone down that path …
Mr Elferink: Nothing stops you getting investors and doing it.
Mr WOOD: That may be the case, member for Port Darwin, but I am highlighting the fact there has been no real opportunity for people to hear the options, debate them and find out the consequences of selling TIO.
If you had said during the Casuarina by-election, ‘We are interested in selling TIO to Allianz. If you are looking to get workers compensation you will be paying $55 000 more, but that doesn’t matter.’ Of course it matters. Debate on the effect on businesses and households by the change to Allianz is missing. Will they charge existing TIO prices? Where is the proof it will not change? Is it just goodwill?
I know a company that has been around a long time which would be concerned about the change. I doubt they will use Allianz. The second cheapest is $8000 more; they will go to CGU because Allianz will certainly not get their business if their quote is correct.
The government will hope none of its backbenchers cross the floor. I hope some do because in some of their electorates – I have received copies of e-mails – people are concerned. I wish you could have let this sit on the table and allowed rational discussion in the community. Some of what you put forward today is reasonable, there are some benefits in what you are doing, but you have not convinced the people. That is why so many people are angry.
If you were in the PR business you would be out of business because your public relations in regard to the sale of TIO scores about one out of 10. That is unfortunate because it is good to debate the sale of government assets, whether I agree or not. However, the mature debate has not occurred and the people have not been part of it.
I will not support this bill until the government gets off its bum, goes into the community and talks to the people who own TIO: Territorians.
Mr CHANDLER (Deputy Chief Minister): Madam Speaker, I pick up on what the member for Nelson said. It is clear it has not been a long-term strategy of this government to sell TIO. Many people have said publicly, and behind the scenes, that we have not done a good job of selling the message on this. When governments have a well-defined policy and are going in a particular direction they put together a good public strategy. If there is criticism of the government’s approach to this it is probably a clear indication it was never our intention to sell.
This is a clear demonstration that the board approached the government and identified the problems, just as it did with the previous Labor government. The difference is we had the courage to do something about it.
TIO is an institution loved by all in the Northern Territory. No one in this Chamber or in the Territory wants to see our TIO disappear. The government was faced with two choices: do nothing and let TIO fade into history as something that once was, or take action to secure TIO for future generations.
When you unpack all the information – Territorians may not be aware of much of the information. We put out a lot of information, perhaps too much. Perhaps it reaches a point where a government puts out so much information it becomes white noise and the message is lost. It was the approach of this government to get as much information out as possible to give Territorians an opportunity to understand why the decision was made.
This government has made the tough decisions that will benefit Territorians well into the future. This is the best decision for the long-term sustainability of our TIO; however, it is a difficult decision. We often speak about some of the tough things we have to do, and I assure you politics is a populist game. Politicians like to be popular; they do not like to make unpopular decisions so when they have to you can be damn sure there is a genuine need for it.
How much turmoil has this created in our community? How much pressure have each of us been under from our constituents, friends, family or the rhetoric from a sometimes immature Labor opposition, given they fully understood the position of TIO? As many know, they were about to sell TIO some years ago but did not have the ticker to go through with it.
A decision like this is not made lightly. It has been debated up and down, and each member on this side of the Chamber has spoken candidly about the issues and the political danger involved. It is not popular, but is it the right thing to do? It is the right thing to do if we want to ensure TIO, and the TIO brand, survive into the future.
It would have been easy to do what Labor did some years ago. It lacked the courage to do what was right. This government is faced with the decision to take the easy road or the hard road, the popular road or the right road. This is not something we have done lightly because we know it has upset many people. You can be assured we, on this side of the Chamber, have worked hard. We have stretched the limits of our imagination to find other ways forward, but this is the right way to ensure the long-term future of TIO.
The ALP has no policies to ensure continued growth of the Territory. It is a party bereft of policies and ideas. There is no better example of its lack of policy to ensure the ongoing viability of TIO for Territorians than this issue. Changing ownership of TIO is about securing the future of the TIO brand so Territorians can continue to enjoy an organisation that has become part of us all.
However, there is a fundamental issue with TIO’s business model if it remains under government ownership. TIO is exposed to substantial risk, more than any competitor in the Territory market. In turn, this risk passes to the Northern Territory government. The Opposition Leader knows this because her government tried to sell it, but did not have the character to do what was best for Territorians. Labor took the easy road.
Insurance companies spread their risk over different locations, in different markets and with different types of risk. For example, they could balance flood risk against bushfire risk. TIO is legislated so it can only offer policies in the Northern Territory. This means 80% of its customer base is concentrated in Darwin, where the main risk is cyclone and flood. Unlike other insurers, TIO is unable to offset that risk in different markets. This not only places TIO in a precarious risk position, but reinsurance costs are also increased. It costs TIO three times more to reinsure than it would a company like Allianz, which has a huge portfolio of diverse risk. The difference is about 30c in the dollar compared to about 8c for larger insurers. That means if TIO reinsured to the same extent most insurance companies in this country do, the price of premiums would be so high no Territorian could afford them. Therefore, they would not have a business.
There is a huge gap in the reinsurance market, and it leaves government to pick up that gap. The gap between what is reinsured and what is not is around $603m. If we had another cyclone like Tracy – and I hope to God we do not – TIO would go broke and leave government to pick up the pieces. This would be at a time government infrastructure like roads, schools and hospitals would need to be repaired or replaced. Government should be putting money into those areas in a time of crisis, not propping up an organisation that could be funded by the private sector.
This new ownership is a game changer for TIO. It moves the risk from the public sector to the private sector, allowing government to focus on repairing key public infrastructure in an emergency to get the Territory moving again. Allianz has a worldwide footprint, insuring over 76 million customers in more than 70 countries. That means it can spread its risk cover over a wide range of customers in many markets, with access to global cities.
TIO will be in safe hands. The TIO brand is recognised and loved by Territorians. However, sometimes people can get mixed up in brands. Over the years, businesses change names and other companies own them. I believe many people insured in the Northern Territory do not even realise they are insured by Allianz. How many people in the Territory have boats, particularly in the Top End? Club Marine is an insurer. I have my boat insured through Club Marine …
Mr Elferink: You are an Allianz customer.
Mr CHANDLER: An Allianz customer.
Business works in a strange way. When I first came to the Territory I had a bank account with the NT Credit Union. At one stage it became the Australian Central Credit Union, which is now People’s Choice. One thing that has never changed is my account number. It has remained the same although there have been different owners. As a customer, I have always remained a priority of that company. It is a good company. People should not fear change of ownership because businesses remain because of the way they treats their customers. If they do not treat their customers well they will not be in business for long.
The Leader of the Opposition said there will be major increases in premiums under this model. Allianz will still have to work in a competitive environment. If it tries to increase premiums out of reach, out of kilter with the market, it will lose customers. The company would not spend hundreds of millions of dollars to buy a brand and the loyalty behind that brand to trash it. The company will not spend hundreds of millions of dollars then put premiums out of the reach of the customer base it bought. It will want to protect and serve its customers. The scaremongering from the Labor opposition, and many others at the moment, is wanton destruction of a brand because it is unfair, unwarranted and they know in their hearts it is not true.
The TIO brand is recognised and loved by Territorians. It is associated with community sponsorship such as CareFlight and DriveSafe NT Remote Indigenous Driver Education and Licensing. However, the brand was at risk if the government continued to own TIO. Allianz has not only bought a good insurance company, it has bought a brand that is ingrained in the minds of Territorians. We have heard from those opposite that TIO has gone. They could not be more wrong; TIO is here for the long term.
I know the Leader of the Opposition does not understand much about business, but Allianz has not spent hundreds of millions of dollars on a brand to trash it. It is in Allianz’s interest, like it is in Territorians’ interest, to invest in TIO and grow the brand even further. TIO is here to stay.
The Country Liberals know Territorians are concerned about what the sale of TIO means for them. For that reason in all negotiations the government made a number of things clear to Allianz, as it did to other companies bidding for TIO: flood, cyclone and storm surge insurance must remain; all TIO staff must be protected; the TIO brand must stay; and all sponsorships must stay. These are the things Allianz has agreed to. In addition, Allianz has also agreed to invest a further $200 000 into Territory Day celebrations, further cementing the TIO brand association with the Territory’s rich history.
The sale of TIO has unlocked significant funds to reinvest in the Northern Territory. An amount of $215m will be placed in an infrastructure fund to support the future development of the Northern Territory. This is about unlocking something you guys keep calling an asset. It is more of a liability, but we are turning it into an asset for Territorians’ benefit. The fund will be managed by a statutory board. It can accrue interest, it can levy off the private sector and access contributions from the Commonwealth. The fund will support future infrastructure needs of the Territory, which could be roads, bridges, hospitals or schools. This is turning a risk for Territorians into a saleable asset that will benefit Territorians.
In addition to the infrastructure fund, $200m will be set aside for community infrastructure, beginning with $50m of flood mitigation works in Rapid Creek, Katherine and Darwin’s rural area. Investing in this infrastructure will reduce the risk of flood and storm surge, therefore reducing the premiums TIO will charge. There are real practical benefits to doing this. The experience in Queensland, and since the 2011 floods, is that federally-mandated wording of flood cover has been brought in. Flood mitigation works in Roma alone have brought down premiums by up to 80%. My understanding is the flood mitigation works in Roma cost about $13m. I also understand the rescue element of the last floods cost about $12m for helicopter use.
After the government invested $13m into flood mitigation for Roma insurance companies reacted immediately by dropping their premiums by 80% because a fair business attributes premiums against risk. The risk was lowered in Roma therefore the premiums were reduced. I cannot say for sure, but I suggest the same thing would happen in Katherine, or for people who own homes along Rapid Creek. If mitigation methods, programs and works are put into a particular area, the risk changes and an insurance company will look at the risk and set premiums at an appropriate rate. People living in Katherine, Rapid Creek and other areas where flood mitigation works are undertaken could find, in the near future, their premiums are lower than they are paying today. That can only happen by realising the true benefit TIO can become to Territorians – turning a liability into an asset.
The Leader of the Opposition is being xenophobic suggesting there is something wrong with Allianz, the biggest insurer in the world, because it is German. Australia is one of the last countries with a government owned insurance agency. I have a list of countries that have sold their government owned insurance companies: Belgium, Brazil, Cameroon, China, the Czech Republic, Egypt, Estonia, Finland, France, Germany, Hungary, Ireland, Italy, Kenya, Latvia, Lithuania, Malawi, Mexico, Morocco, Netherlands, Nigeria, Oman, Peru, Philippines, Poland, Portugal, Slovakia, Spain, Sri Lanka, Thailand, Tunisia, Turkey, Uganda, United Kingdom, Venezuela, Vietnam and Zimbabwe. Those countries have done what we are trying to do today.
In 1992 New South Wales sold GIO and Victoria sold SIO. Tasmania sold GIO in 1993, Western Australia sold SGIO in 1994, South Australia sold SGIC in 1995 and Queensland sold Suncorp in 1997.
There is a lot of rhetoric around the sale of TIO and it has stirred up emotive responses from people in the community. I am certain many of these people would change their mind if they fully understood the risk to TIO, its long-term future and the Northern Territory government, ergo the taxpayer.
The real risk associated with the TIO model as it stands, as it has done for years, is to Territorians. In the last few weeks, having the opportunity to openly discuss some of the issues with some very emotional, in some cases angry, people, some my friends – when having the time to talk through the real issues and why government is making this decision, many of them – some are still not happy as they see the TIO as theirs and something they want to protect – understand why we needed to make this decision.
I do not think anybody I spoke to did not understand. I had time to respond and all those people understood why. It still did not appease all and there is still anger out there, but they understood why this decision was made.
While the Leader of the Opposition does nothing but criticise and make outrageous claims without any policies whatsoever, I highlight to the House an important report developed by this government last year. The government put together the Economic Development Advisory Panel the Chief Minister spoke about earlier when he mentioned some of the recommendations of the Northern Territory government’s economic development strategy. The advisory panel was made up of some interesting people and had some interesting conclusions and recommendations. The panel members were, as described by the Chief Minister, Mr Doug McTaggart, Ian Smith and Mr Paul Henderson. I will quote from the Recommendations for the Northern Territory Government’s Economic Development Strategy as it is important this information is placed on the Parliamentary Record:
- Given the financial burden facing the NT Government in terms of meeting current and future infrastructure requirements, and given the current projected level of debt, a new approach to balance sheet management is required. The key considerations a government can bring to bear on balance sheet management are:
Are the assets held by government managed as efficiently as they would be in other hands – i.e. the private sector? There are often impediments confronting governments when it comes to efficiently operating key assets. Management autonomy and flexibility and overall remuneration issues are just two.
More importantly, even if government ownership of any asset is as efficient as private sector ownership, is owning the asset the best way for the government to hold capital. In other words, could the capital locked up in an asset held by the government be put to better use? What is the opportunity cost of asset ownership?
- An important and specific example here is the Darwin Port Corporation. While the commercial aspects of the port appear to be well managed to date, especially with progress made at East Arm Wharf, there are important considerations for the NT Government:
East Arm Wharf requires significant new capital over time for investment to increase capacity. This will add to the Northern Territory debt burden.
Even more capital will be required to develop a new port as East Arm Wharf approaches capacity. Planning must begin soon and significantly more debt will be required.
The Darwin Harbour foreshore on the southern and eastern side of the city is high value waterfront land in low value use, held by the port of Darwin. Noting that Darwin lacks sufficient quality visitor accommodation and will require dense residential accommodation close to the city, along with other potential attractions, the harbour foreshore is an attractive asset for the government to divest.
Bringing these considerations together suggests a strategy of privatising the Darwin Port Corporation provides (1) funds for the future commercial port development; (2) creates opportunity for the development of high quality tourist accommodation and attractions around the harbour; (3) provides scope for inner city residential development; and (4) as importantly, generates funds for other critical infrastructure the NT Government will be required to provide if economic growth is to be accelerated.
A former member of the ALP, the former Chief Minister no less, has put some thought into the efficient use of government assets. This is not unlike other ALP state leaders, but apparently not those opposite. Let me quote further from the report.
- There are other assets on the NT Government’s balance sheet that bring risk by continued ownership and also lock up scarce capital – in other words, bring a high opportunity cost.
Prime amongst these is the Territory Insurance Office (TIO), which is both an insurer and a small bank. The TIO insures some $23 billion in assets with a unique concentration risk. 80% of the insured asset base is exposed to cyclone risk. Should a large cyclone hit central Darwin, as Tropical Cyclone Tracy did in 1974, then the NT Government could be faced with a very significant repair bill. While reinsurance cover picks up most of the liability, the concentration of risk means about $700m in government exposure still remains.
The report continued:
- However, the TIO represents a valuable risk diversifier for an insurance company with exposure outside of the Territory. While valuable work has been undertaken by the TIO Board and management to capture greater efficiencies, in the hands of a larger nationwide company, greater efficiencies could be had, including lower reinsurance costs. Thus, the TIO would be another attractive asset to privatise, allowing the Government to shed significant risk and freeing up valuable capital for other use.
- Recommendations:
24. The Northern Territory government should act immediately to establish a process for privatising the Darwin Port Corporation to release capital to fund future port capacity expansion and the redevelopment of the Darwin port precinct for mixed use activity.
25. The NT Government should act immediately to establish a process for privatising the Territory Insurance Office (TIO), both to release capital but also to remove a significant risk from the Territory’s balance sheet.
26. The NT Government should review ownership of remaining corporations and services with a view to privatising those assets and services operating in sectors where the private sector already operates. Candidates might include government fleet management activities and government printing activities.
- 27. The NT Government should either sell crown land surplus to requirements, or sell it as part of a designated development project.
28. The NT Government should allocate the funds released from the above privatisations and sales for use in higher yielding activities, including partnering with the private and non government sector on new infrastructure investments.
One option for consideration is the establishment of an infrastructure fund. This would have the advantage of ensuring the funds remain allocated to new infrastructure projects.’
This government was elected to fix Labor’s debt and improve the problems the Territory has today. We aim to move forward in the Northern Territory, but there is a lot of angst and community concern about the sale of TIO. We understand. We have listened, and we continue to listen to some of those concerns. However, when you get the opportunity to clearly articulate the risks to Territorians most people come away with a different point of view.
This government has been elected to do the right thing for Territorians. Sometimes that is not popular, but unlike the former Labor government, which lacked the ticker and courage to do the right thing the moment it became a little tough, we know this is the right thing to do to support TIO into the future.
Ms FYLES (Nightcliff): Mr Deputy Speaker, we do not support the suspension of standing orders to rush this sale through on extreme urgency in one day. The last time, I understand, a bill …
Mr ELFERINK: A point of order, Madam Speaker! She is alluding to a debate which has already been dealt with. Under standing orders she cannot return to a debate previously held.
Mr DEPUTY SPEAKER: Member for Nightcliff, the ruling is you should not reflect or speak on a decision that has already been made by the House. You need to be careful with that.
Ms FYLES: My apologies, Mr Deputy Speaker. I understand the last time a bill was rushed through in a day was in 1992. Other bills on urgency take a few days. As the member for Fannie Bay put it, this is urgency on steroids.
One only had to be outside at lunchtime to see the hundreds of people in vehicles circling Parliament House and blocking Mitchell Street to show the frustration in our community that has been evident since the proposed sale was first flagged by the Chief Minister only 34 days ago. It was casually slipped into debate three days after the Casuarina by-election, and 34 days later we are debating it on urgency.
You gagged debate this morning. You have had your head in the sand for the past month, ignoring Territorians, and you will not even follow traditional parliamentary process to debate this legislation. You are ramming it through.
You made the announcement yesterday morning, and 24 hours later we see introduction, debate and a vote taking place. You do not want proper debate on this. Your arrogance and refusal to listen to Territorians is upsetting Territorians.
Chief Minister, you have failed to give Territorians the full information and you simply say, ‘trust us’. We do not trust you, and the lack of trust has been further reinforced today with debate rammed through in one sitting day.
You could easily leave it on the Notice Paper until February, which would allow ample time for people to discuss it. The Deputy Chief Minister claims he talks to people and manages to get the message through, so why not leave it on the Notice Paper?
On 21 October the Chief Minister casually mentioned he was looking to sell TIO. As events rolled on it looked like he was serious and, in fact, a deal had probably been done.
At a Sunday night Cabinet meeting it was agreed to sell TIO. A late night Cabinet meeting seems a little rushed.
If you look back in history to 1979, when TIO was established, you will see why. Perhaps this will help our relatively new Chief Minister. Why was TIO set up? In the wake of Cyclone Tracy our previous parliamentarians, in those early days of the NT Legislative Assembly, put it in place to protect Territorians.
The Territory Insurance Office is a government owned statutory insurance provider which has provided affordable insurance to citizens of the Territory since 1979. It provides a potential model for creation of an insurance office covering northern Australia because other states in recent times have looked towards our model and thought it would be – it has been recommended – helpful.
Growing up after Cyclone Tracy you heard stories of rebuilding, and something that made it easier was insurance and being adequately covered. I have seen the floods in Alice Springs and the devastating damage done to Katherine.
Perhaps the Chief Minister does not understand why we need a TIO model across northern Australia because he has not witnessed these events firsthand. If he spoke to and listened to our community he would understood a little more.
Talking about goodwill, have you seen the track record of Allianz in Queensland? They have not been in our market in recent years. A global company will not look after Territorians the way TIO does.
There were no public forums on this legislation, except the member for Katherine holding a meeting to hear what the people of Katherine had to say. We will wait to see whether he listened to them.
Even this morning the Chief Minister said it will remain Territorian. That is wrong. People’s Choice and Allianz are not Territorian. There are no legal guarantees in legislation or conditions of sale to guarantee TIO will remain as it is, just a simple ‘trust me’ from Adam Giles. People do not trust you. Terry Mills trusted you and look what happened.
Madam Speaker, you read a petition today from 743 people praying we as a parliament leave TIO as it is. The member for Nelson also read a petition from 1069 people. The Labor MLAs also had petitions from 4300 people urging the government not to sell TIO. People signed the petition in a few short weeks. Many others did not quite get there, but their sentiment is there; they do not want TIO sold.
These signatures were collected in just a few weeks. People queued at Casuarina Square, they lined up at the Sunday markets, stopped me at the supermarket and on the school run asking where the petition was and how they could sign it. They signed in Katherine, Alice Springs, Tennant Creek and remote communities all saying they did not want TIO sold.
Chief Minister, you have betrayed Territorians in deciding to sell TIO without a mandate and against overwhelming public calls to keep our insurance safety net in place. There is no legal guarantee TIO will remain the same and no legal guarantee insurance cover will remain the same. A simple ‘trust me’ and a measure of goodwill is not enough.
We respect our local TIO staff and feel for them right now. This is their livelihood and does not just impact on their insurance and banking. We know it is a tough time for them. People’s Choice in the Territory is already well staffed and TIO banking staff must be wondering if they will be absorbed into current staff.
In dealing local, you only have to be a Territorian to understand what that means. Who has rung for pizza and ended up trying to order from down south? Occasionally, when trying to order something online, they suggest you pop into the nearest store in Adelaide, Sydney or Brisbane. They do not understand the distance. TIO, as a local insurance provider, does. It means a lot to Territorians but now we have a dud deal with a big German multinational. You sold us out, Chief Minister.
One gentleman came into my office asking if he could take the petition away. He came back with a few sheets filled in. He had taken it to family and friends. This is how much it means to people. In my community we have particular reason to be upset. People started contacting me after the last sittings guessing something was up, not that the Chief Minister had been open and honest. Storm surge is an issue and we only have to remember last Wet Season and the high tides. People are most concerned.
Chief Minister, I will read a letter from a local resident:
- Dear Chief Minister
We urge you not to proceed with the rushed sale of TIO. As long-standing Darwin residents, living in one of Darwin’s many storm surge suburbs, the loss of a government underwritten agency makes us very concerned about the likelihood of the already high insurance premiums soaring to unaffordable levels or, indeed, the ability to insure at all. Many of our neighbours have said to us this sale will impact on their ability to remain living in the Northern Territory.
We urge you to reconsider this possible sale.
Did you respond to that e-mail, Chief Minister, or the hundreds of others you received? We know you received them because people copied us in; they told us about it.
Another e-mail I received was not only about ability to get insurance, but asked if we would really benefit from the infrastructure. The cyclone risk in the Territory is too strong to ignore, but you are denying people’s concerns.
That e-mail said:
- I have lived in the NT for three years and have been a homeowner in Nightcliff for two years. I have my building and contents insurance with TIO. I am concerned about what the sale of TIO might mean for my insurance coverage options, and the premiums that I will need to pay for similar coverage to my existing policies.
In addition to these concerns, I am writing to you to express my objection to the sale of this particular NT government asset in exchange for marginal additional funding from the federal government towards some infrastructure project that is unlikely to bring direct benefit to Territorians. I fail to see, for example, how a gas pipeline will bring substantial return of investment to Territorians. There is a much greater chance of a cyclone hitting the Top End – 31 severe category cyclones in northern Australia in 43 years from BOM.
These concerns are valid. The Chief Minister insists there is only a small level of angst in the community about the sale of TIO. Whilst I have not conducted any community polling on this subject, friends and colleagues I have spoken to express similar concerns to mine.
That is from one resident in Nightcliff. Residents in our community expect TIO to be the insurance safety net providing insurance to those unable to access commercial insurance from other providers. In the Nightcliff, Rapid Creek and Coconut Grove areas there are a number of older properties which may not be cyclone coded. Storm surge is a huge issue.
There is no legal guarantee from Allianz that TIO insurance cover will remain the same. There is only a ‘trust me’ from the Chief Minister and a measure of goodwill. That did not go well for the previous Chief Minister.
Every Wet Season my community faces the impact of our tropical weather. Residents living in older homes not cyclone coded are extremely worried about access to insurance as TIO is currently the only provider. They pay huge insurance premiums and are worried they will be priced out of the market.
Chief Minister, these are real concerns you did not address with the community. Did you have any community meetings? No.
People love living the tropical seaside lifestyle but they need insurance. They understand the hazard of living there. They know they could be impacted any Wet Season, but having insurance will help ease the pain of rebuilding if an unfortunate event occurs.
One resident I know helped in the cleanup after the Katherine floods. Both my parents helped, and I was at school or university. People were bussed down for the day, and both the NT government and private enterprise gave people a day off to go to Katherine and help with the cleanup.
One resident shared her concern because she saw how TIO had assessors on the ground immediately after the floods and was able to get funds through to help people. They were devastated by the floods that had impacted on their homes and businesses. Will we see the same level of support from a big multinational company? This is why TIO is so important.
Member for Katherine, you will have heard those stories and they really hit home. This person had helped someone clean up in their time of grief, knowing it could happen to any of us. We live in a cyclone area in the north, most of our towns face flooding, and Tennant Creek has had an earthquake. We know we are at the mercy of natural disasters, but we want to have protections in place. This is what homeowners and businesses are most concerned about and why they do not want TIO sold.
This government does not have a mandate to sell TIO. If you are genuine you should take it to the next election as a policy. You campaigned against it in the mid-2000s so most people thought your policy position was against a sale. People are shocked by the speed of this. You are arrogantly rushing through a sale behind closed doors without any consultation with Territorians.
We risk skyrocketing premiums and less cover. Selling TIO will create an insurance crisis, as seen in Queensland. The north Australia development inquiry head, Coalition MP Warren Entsch, warned you against selling TIO. He said the NT was the only place in northern Australia where insurance was constantly available and affordable, and a sale would risk creating an insurance crisis like Queensland.
He is one of your own. You do not have to listen to us, but why not listen to him? He said selling Suncorp led to market failure and price gouging. Townsville said in its submission that the cost and availability of insurance in north Queensland inhibits investment and increases costs for businesses and residents.
You say we are the last state and must sell. We heard about every country in the world but, Chief Minister, we have unique climatic conditions in the Territory. TIO protects Territorians. Talk to Queenslanders who were not covered after the floods and Cyclone Yasi – the insurance companies that changed their mind about certain things. People know when they insure with TIO they are insuring with a Territory-based company that understands our conditions and will not suddenly say, ‘No, that storm surge was not caused by the cyclone, it was the storm before it so you are not technically covered’.
Insurance companies will use things like that and people will be delayed in receiving payments or will not be paid at all. These were real concerns after the Katherine floods, which was our most recent natural disaster.
People would say, ‘I am with TIO. I have been paid out and am getting on with my life. Yes, it was horrible, but I am getting on with it.’ Others had to take legal action or just gave up altogether. This is why Territorians feel so strongly about TIO. TIO provides disaster cover to mitigate potential profiteering from rebuilding efforts after major disasters. Other insurance companies do this as well, but the unique factors have to be accommodated. Keeping TIO in public hands is critical to ensuring timely insurance payouts for flood and cyclone insurance, to and avoid the crisis seen in other states, like Queensland, after the floods.
The Chief Minister and government members tell us TIO is a liability. Over the last five years TIO has made a $305m profit. This is a short-sighted sale. In the last year alone $10m was given back to the Northern Territory government.
Chief Minister, you sold it for $424m which, after you deduct the $9m fee and the $140m drawdown, equals $275m not the $500m to $700m you talked about. You like to talk big but you cannot deliver. You only got $275m for our TIO, with no consultation and not one community meeting, forum or engagement – whatever you want to call it – apart from the one the member for Katherine held. It is a $275m quick money grab for the next election, leaving Territorians at risk of no insurance or being priced out.
This debate has been going on for the last month. Territorians are not only frustrated TIO is being sold when they thought it was safe, but are unhappy with the speed of the sale and lack of consultation. Clearly things were happening behind the scenes but we were not informed. Do you think people would not have noticed or cared? We are not even having a proper review of the legislation in this House, where we, as elected members of our community, can debate points. There has been no opportunity as we were e-mailed the legislation yesterday afternoon. Apart from the few people we are in contact with on a regular basis – even if they could respond in less than 24 hours – there has been no opportunity to meet stakeholders and hold community meetings. These are things we typically do with legislation, as constantly advised from your side of the House.
It is extremely frustrating for our community not only to be facing the sale of TIO, but not to have the opportunity to consult. It is not too late to leave it on the Notice Paper until February. We have a Christmas break. Perhaps you are hoping we go away for Christmas, have a good time then come back and forget you sold it. That must be what you are hoping because no one can work your plans out.
I give credit to the member for Katherine for meeting with his electorate. Will he listen and vote against this? I look forward to hearing him justify his reasons for the sale.
Chief Minister, I know your head is in the sand but you received e-mails – we were copied into them and people told us about them. You say you have advice but you have not met with Territorians to share it in public forums. You are not interested in talking to or listening to Territorians. Your little circle of Yes, Minister people might be telling you it is a good move, but Territorians are waiting for the chance to tell you what they think of this decision. You will hear them clearly.
TIO makes a profit, so much so that your government took a $10m dividend this year. These funds could go into flood mitigation, your unfunded election commitment. Territorians should not be forced to sell TIO to pay for your unfunded election promises.
TIO has greatly improved its profitability over the past five years, returning record profits. The board stated in the recent annual report that it had great confidence TIO could continue to provide services our community needs for many years. We have an insurance company, our community wants and needs it and it is profitable.
If you bothered to listen and visited communities to share your plans of selling TIO, you would have heard the stories of hardship Territorians have faced over many years. If you had your ‘mature conversation’ you would have heard why TIO is so important to Territorians. Perhaps you could learn why.
The Territory has had more than its fair share of natural disasters and we will face more. Territorians are a tough, special breed, and perhaps you should speak to some of them and hear their stories. Madam Speaker, growing up you would have heard stories. I grew up hearing stories of surviving natural disasters and rebuilding, and this is why TIO is so important. Territorians are prepared to pick themselves up and rebuild, but they need the support of a local TIO to do so, not a big multinational based thousands of kilometres away.
The member for Fong Lim laughs and thinks it is a big joke. He said the government is ready to explain what is happening – so ready we have had no forums apart from the one in Katherine.
Chief Minister, your government and the CLP has abandoned the insurance equalisation policy making TIO pursue premium increases in flood and storm surge zones, something you have conveniently forgotten. This allows an insurer to charge different rates depending on where you live, and it is the same policy that has seen homeowners in Weipa, north Queensland, pay $10 000 to insure their homes compared with $2000 in Brisbane. The pricing model is a key factor in the insurance crisis in north Queensland.
Member for Braitling, you are the unelected Chief Minister. You do not care about representing Territorians who are overwhelmingly and strongly opposed to the sale of TIO. That was evident today and has been evident over the past few weeks. I was at the petition stand at Casuarina Square and people were lining up to sign it. It is not like the show where you have to grab their attention; they come to you. I have had people ask, ‘Where is the petition? How can I get my hands on it?’
This sale is motivated by greed, with your CLP government desperate for a quick cash grab to splash $150m around prior to the next election, hoping we forget everything.
Today will see passage of this legislation and the CLP tearing up democracy to pursue profits before people. You have no mandate to sell TIO and are ignoring the impact it will have on families and businesses across the Territory. TIO is a profitable business which provides insurance safety nets for families and businesses in high-risk areas of flood and storm surge, and a competitive product which keeps cyclone coverage affordable.
Show us the details of the sale. No, you are rushing it through talking about goodwill. Can you explain how goodwill works in the tough world of business?
Chief Minister, you have ignored thousands of Territorians, the Chamber of Commerce, the Motor Trades Association and the federal government’s Pivot North report, all arguments against the sale of TIO. Why have you not held forums across the Territory and explained the sale to people? Why are you rushing it through? Why not take it to the 2016 election?
Your arrogance is astounding. Social media – you must have seen it, you cannot ignore it. There are comments on friends’ pages and some of the local media outlets.
Someone said this morning, ‘I rang Allianz to get a quote. I got someone who did not know what to do who forwarded me to someone else who put me in the too hard basket and forwarded me to someone else. I explained I wanted a quote because of the sale of TIO. They suddenly became hesitant to talk, recommended I talk to TIO and would not give me a quote.’
This morning were heard what it meant to have a tin roof. Another person said they were disappointed such an important Territory icon has gone into foreign hands.
The timing could not be worse considering this Christmas is the 40th anniversary of Cyclone Tracy, a period of heartbreak and financial despair for many. To face the prospect of a Wet Season with potential damage from a major cyclone without the reinsurance and backing of TIO by the NT government worries me no end, especially considering what could happen with a privately-owned insurance company with such high stakeholder interest. Approximately 90% of residents may have everything they own – private and business – insured with TIO. The decisions it may make in the face of a major disaster – potential bankruptcy, delaying payments, etcetera. As much as I love Darwin, it may be time to consider moving south.
These are some of the posts we see on Facebook: ‘TIO supported the people not insured for floods in Katherine’. ‘Allianz was the worst payer for the Brisbane floods.’ ‘Watch out people.’ The NT News poll showed 90% opposition to the sale.
How could you miss the front page of last Friday’s paper? Did you literally put you head in the sand?
Thirty-four days ago this was raised in a very casual manner in the Chamber. It was only after the public started asking questions that the Chief Minister started revealing details. It was a case of another question was asked and we got another media release. It was like being drip fed. When the opposition, the member for Nelson and the community started asking questions we found out a bit more. This is not how government should operate, but this is how the Giles government operates.
Territorians are staunchly opposed to the sale of TIO. TIO belongs to Territorians not the CLP government, and they should be given a chance to say what happens with their TIO. No, you are rushing it through.
A public meeting was organised but the CLP did not turn up.
The community has an expectation of the government of the day, which has a responsibility to protect public assets, particularly where monopolies exist in small jurisdictions. Public assets like TIO belong to Territorians, not the government. Once they are sold you cannot ensure they protect Territorians.
You talk about goodwill, Chief Minister. Territorians trusted the CLP by voting for it at the last election. There was goodwill you would look after the Territory, but look what has happened. The unelected Chief Minister is selling public assets without consultation.
Considering you have thought about how things will be once the sale is over and we have an international global company, how will it treat a small number of Territory-based insurance policies?
It is happy days at the moment. We are told about all the things we can buy with the money, but once the money runs out and the happy days are gone, what will we be left with? When Allianz decides the cyclone and storm surge risk is too much, what do we do then? What if the people of Coconut Grove, who live in a primary storm surge zone and may already pay thousands of dollars to insure their homes, cannot get insurance at an affordable rate? What about residents along Casuarina Drive?
One retired gentleman spent quite a bit of time getting quotes. His quotes were $5000 to $6000 more than he is currently paying with TIO and the storm surge section was variable; he could not get assurance on that.
Chief Minister, you might not care too much. I am not sure what your long-term plans are, but I love this place and am passionate about the Territory, Territorians and ensuring they have protection. TIO is currently the only insurer in the Territory market which provides the cover Territorians need to be fully protected against cyclone, flood and storm surge. It also provides disaster cover to mitigate against potential profiteering from rebuilding efforts after major natural disasters.
The member for Araluen said it is 35 years old and we should sell it; it has had a good innings. If that is how Cabinet makes decisions it shows you do not understand Territorians. What will you say to your constituents in the Alice Springs CBD and The Gap, all at huge risk from floods? Prevention is better than cure you might say, but not a cent is mentioned for flood mitigation in Alice Springs. Under the previous Labor government the Alice Springs Town Council received funding to carry out rechanneling and sand removal in the Todd River and for storm water drains. This helped redirect flood water and reduce the chance of flash floods impacting the town.
The CLP government has not committed one cent to flood mitigation, and we have not seen one cent for this infrastructure fund either. Chief Minister, you say it is a good deal because we get money for Territory Day celebrations for two years. Are you serious? Is that what we get for selling TIO? Can you be more insulting? There was also a $50 000 sponsorship and a few traineeships. Somehow we are meant to go away for Christmas, come back and just forget about it. Five minutes into your speech today you were talking about what we could do with the money, not answering the questions people are raising.
The Labor opposition demands the CLP reveals the terms of sale. Does it include a restraint of trade clause which will prevent the federal government from establishing a TIO government owned model of insurance being established in the Northern Territory?
It is appalling the CLP government is not only selling TIO off without a mandate, but we have the unelected Chief Minister selling something that is not his. It is a public asset and you do not have a mandate to sell it. We have heard an outcry from Territorians that they do not want TIO sold. Businesses, families and our community are staunchly opposed to this sale but are being arrogantly ignored by this government.
Territorians rely on the specific coverage provided by TIO against our unique conditions. Chief Minister Giles, you do not get it.
Ms LEE (Arnhem): Mr Deputy Speaker, TIO is Territory owned and I support TIO remaining owned by every Territorian. The sale of TIO is putting all Territorians at risk of expensive flood insurance, especially those in the Katherine and Daly regions. Many members in your area have rung me, Facebooked me and sent me a text in regard to the sale of TIO.
Remote communities come into this as well. Insurance cover with TIO has always been available for remote communities; they rely on it heavily. There has been no consultation in the remote areas except for Katherine, where people have said we should not go along with the wishes of the government. I wonder if the member for Katherine will do anything about that. Will he cross the floor? Will he support the people who voted him in or will he go along with the Chief Minister?
The unelected Chief Minister is a blow-in to the Northern Territory and, all of a sudden, thinks he can make decisions and everybody just follows the leader. It is a day of disgrace for the Northern Territory. The CLP government put TIO in place, and the CLP government will take it out. I was born four years after TIO was established. I have insurance with TIO. I now have to deal with Germany and Allianz to talk about my car insurance and everything else.
The office in Katherine …
Mr Chandler interjecting.
Ms LEE: The member for Brennan has something to say but he has had his turn. It is our turn now. If you do not want to listen, there is the door. You obviously did not listen to the people of the Northern Territory. No one is stopping you. Eighty per cent of people in the Northern Territory voted against this; they said no. They are the same people who will throw you out of government in 2016. Believe me, it will happen.
Bush seats on that side will go. That is not a joke any more. This government is a joke. That is the reason my colleague and I walked out, and we are more than happy to do it all over again. You can always rub lemon into the scar.
Territorians who own it do not want to sell it. I do not know if that has got through to you. What gives the Giles government the right to arrogantly ignore the wishes of Territorians and sell people’s assets? It has not listened to people.
The sale of TIO has 700 signatures against it from Madam Speaker’s Goyder electorate alone. If you do the maths, 700 people is approximately 15%. That is a lot of unhappy people in one electorate alone. I trust these people will have the final say during the next Territory election.
Any risk to Territorians which increases the cost of insurance premiums will have a knock-on effect and will damage the Northern Territory economy. Expensive insurance premiums mean expensive body corporate fees. Expensive body corporate fees mean a risk of devalued property markets. Devaluing property markets means property investors will lose millions of dollars across the Northern Territory, but you had that all figured out with your spin doctors.
The story speaks for itself, and when the truth comes out in 10 years it will be a shame. The people had their say but they were never heard. Is that not what we were elected to parliament for? Yes, you have to make hard decisions sometimes, we all understand that. No one wants to be unpopular. When it comes to something Territorians value so much, that they have grown up with and has been there during hard times, including the major loss in Katherine – I was there in 1998 when the flood came in and my father’s house was totally trashed. We had to strip the carpet out. Kids in bush communities like Barunga and Beswick were starving. Who will go there to support them? Who will help with the cleanup? Will people from Germany come to Australia? Will you go there, Deputy Chief Minister? Will you go to Katherine or these remote communities to help people? Will any of you go there? I live in my community and will definitely be there. I was there in 1998, I was there in 2008 and I will always be there. It is a shame for the people of the Northern Territory, especially people in the bush, who know TIO is theirs.
I know how arrogant this Chief Minister is, but I do not know if he gets the point or not. That is not for me to decide, because in 2016 it will be laid on your head, not mine. Yes, some of you will make it back in. You can smile about it, but it will not be for long. Being a politician does not mean you are here to grow bigger than this House. We are politicians because people believe in us to make the right decisions. Be humble enough to understand that. Be humble enough to speak from your heart. I cannot say much for the other side; I do not know if there are any souls left there. Everything has been stripped out and thrown onto the verandah.
This is a bad deal for the Territory and Territorians, full stop. The Chief Minister has described Allianz as one of the world’s largest insurance companies. The member for Nightcliff said someone called Allianz to get an insurance quote and they would not help them. I have seen the ads on television. I am happy with TIO; I will stick by my own. Everybody will have the same problem, not just the person who commented on the Facebook page. It will affect everybody who has insurance with TIO.
How does the Chief Minister think they became so big and successful? They reached this position by making a profit in the business. TIO did not get to be this big by being a charity. How does the Chief Minister think they will run this business? Of course they will run it at a profit! Chief Minister, who will pay for the profit? Territorians will pay that profit and foot the bill, as always. Territorians have this to look forward to, especially the people in the bush who voted this government in. They are now footing the bill but they do not get any support there. ABA is building the road at Gapuwiyak; it is their money. It is not government money; it is royalties from soils dug out of our ground.
High insurance premiums will line the pockets of new owners who are only interested in high profits. Shareholders want a profit; they are not here for Territorians and neither are politicians on the opposite side. Territorians own it. The Giles government has no mandate to sell off Territory assets. The sale of TIO is not in the best interests of Territorians. It puts in jeopardy affordable flood risk insurance plans which will further expose Territorians’ homes and personal assets to be lost without any risk mitigation insurance in place if it becomes unaffordable.
When making a high-level corporate decision business always seeks shareholders’ support. Where is the support to sell TIO from Territorians? It is probably a few CLP members who are left, not a lot. You definitely do not have the bush, you lost that bat.
The equivalent shareholder of TIO is currently every Territorian, young and old. The sale is high risk to those of Katherine, Rapid Creek and Indigenous communities like Daly River, Barunga and Beswick that are under flood risk. The Chief Minister’s arrogance has been shown by ignoring the 89% of Territorians who are opposed to the sale of TIO, as quoted in the NT News.
The sale of TIO is not in the best interests of Territorians, me, my colleagues or the Labor members. At the end of the day, at least we listen to the people. Even if we were in government we would still listen to the people.
When the member for Namatjira and I were on the other side we tried to tell them in the wings, so many times, what people were saying. That did not get through to anybody. Here we go again, another blow-in with another big idea because he wants to follow the world. We are already 10 years behind the world. What else do you want to follow? Will you try to keep up with them? We do not have enough money so how is that helping anybody in the Northern Territory, especially people in my electorate or those in the Katherine electorate? You will have to do a lot of convincing there, and in Daly and Stuart, because I know where they stand.
We all live with our choices at the end of the day, but the one that means so much to us is something you cannot take away. You made a decision on Sunday night to say, ‘Yes, we decided this’. We may as well go to the Blue Mountains and take away the Three Sisters. How would he feel?
No, he comes to the Northern Territory and wants to take everything away. You do not want to recognise it is Territory owned.
Ms ANDERSON (Namatjira): Mr Deputy Speaker, I speak against the sale of TIO and the fact it has been brought into this Chamber on urgency.
As everybody has been saying, there should have been a two-way conversation and a discussion in this House. It is only appropriate that there is appropriate debate on any legislation. The fact there was not a two-way conversation between the people of the Northern Territory and this government is of huge concern to many of us.
The sale was not explained to Territorians. You can see from the many polls media outlets have conducted – ABC, NT News, and I can quote many more.
The complaints to our office in Alice Springs – I have had people from Alice Springs and businesses e-mail or text me to say they do not support the sale of TIO. As my colleague has said, you have to be a born and bred Territorian to understand the importance of owning something.
The member for Barkly put it well: we are old Territorians, born and bred in the Northern Territory so we understand the Territory, the climate and exactly where each of us fit in. We understand businesses born in the Northern Territory, and as Territorians we cherish them and like to hold on to what we own. The member for Barkly hit the nail on the head. It is like a young person coming to the Northern Territory overnight, trying to educate born and bred staunch Territorians on what should stay in the Northern Territory and what should go.
It is really inappropriate and distasteful to Territorians to have someone, who is not duly elected by the way, try to get rid of something that is real Territorian, something like the first people, Aboriginals, born and bred and owning the country.
TIO was owned by the people of the Northern Territory. Territorians do not like a stranger trying to take something away without talking to them. Territorians like to be consulted. Territorians want people to say, ‘I want a two-way conversation with you. I want you to tell me what you think is appropriate. These are the ideas of the government of the day, and we will be in for the next 15 months or 16 months. What do you think we should do? This is the information from people who know the industry and we want to know what you think?’
It is only appropriate that Territorians are included in any discussion. By the way, you have always said you were about openness, transparency and want to be on this journey with Territorians. It is always best to take Territorians on a journey with you. It is all of us jumping on the truck, the train or the plane travelling together and making decisions and listening to each other.
One side says 80% of people say no. Perhaps we need to ask why 80% of Territorians disagree with the sale of TIO.
Perhaps we need to put the brakes on and start listening to people who were born here and will die here, not people coming to make a quick buck then leaving the Northern Territory. These people will live here forever, like us.
Territorians do not like being excluded from the debate. They want to be on this journey with politicians, with the government of the day. The Chief Minister has been open with the media in saying he wants to develop the north, but he wants to make sure there is a conversation with the people, engaging the people to make sure he is driving with all Territorians on board and that there are economic opportunities for everybody in the Northern Territory, whether they are in remote or rural areas, or in our major towns. People want to be part of that journey. With the sale of TIO, you have left people behind.
The Speaker presented a petition from 700 people. As my colleague said, that is 15% of people in her electorate. The member for Nightcliff presented a petition, as did the member for Nelson. Thousands of people have said, ‘Listen to us. Please stop. Make sure we are on this journey with you.’ Pushing it through on urgency is what we do not like.
This is a house of debate and we should debate these issues. We do not like that it has been rammed through parliament without any consultation. There has been no conversation with people. If we need to take people with us we need to make sure we are involved in the journey. It is sad when thousands of people in the Northern Territory say no to the sale of TIO and an arrogant government says, ‘There’s no use screaming and yelling. We will ride all over you and do what we think is appropriate.’ I hope you are right.
I hope you are getting the e-mails and text messages we are from small businesses, from people who have gone to my office, people who have our e-mail address, ordinary people. They are not people in my electorate, they are people from Darwin e-mailing us saying, ‘Please vote against the sale of TIO’. They are pleading with us knowing we are not government. You will win anyway. You will ram it through parliament and win on numbers. I hope to God you are right because many of your colleagues will not be here come 2016 because of TIO.
We are not talking bush seats; we are talking about northern suburbs seats. People in the northern suburbs are complaining about the sale of TIO. These people have not been included in the debate. Why the hurry? Why are you ramming this important legislation through this so-called House of debate? We are supposed to have our debates in this House, the House where we can be outspoken and where we make rules that embrace and encompass Territorians. The government is saying, ‘We’re not listening to you. We are the government of the day. I am the unelected Chief Minister and I decide what happens in the Northern Territory.’ It is really sad to see some of my former colleagues go along with this. We have seen floods in Alice Springs and in Darwin.
The Chief Minister was not here in 1974 when Cyclone Tracy hit Darwin. He was nowhere near Alice Springs when the floods happened, and he was just coming into Alice Springs when the Katherine floods occurred. There was devastation everywhere. People’s marriages broke up because of the insurance processes and people found it very hard to go through the things they needed to. Many people attended counselling.
These are real concerns and issues the government should take notice of. These are real people in the northern suburbs, across the Daly region, Goyder, Katherine, Alice Springs and Barkly. These people voted us in and want to hear our voices in this Chamber. We oppose this bill and the sale of TIO, Mr Deputy Speaker. It is important that people like you listen to your constituents and hear the voice of Territorians who live in your electorate. They are calling on you to vote against the government, speak up and hold the reins of this fresh, new chum Territorian who has come to the Territory and started pushing us around. Do we, as Territorians, want someone else coming in to push us around? Of course we do not.
That is the concern of ordinary long-term Territorians. They are saying, ‘This is our TIO and you are not selling it’. They are pleading with us, but they know only certain members on this side of the Chamber will vote against this. There are eight members in the Labor Party, one Independent and my colleague, the member for Arnhem, and me. We will be taking what we have heard and seen back to Territorians. We will take most of the comments from Hansard, reprint them and give them to people. We will make sure we expose what you have said in the Chamber to people who might not have heard it or read Hansard. People will know if you have backed the sale or said it should not go ahead. ‘Who gives a damn about your cries? We won’t listen to you.’ We will be passing that around.
Mr WESTRA van HOLTHE (Primary Industry and Fisheries): Mr Deputy Speaker, today is perhaps one of the most significant days in the history of the Northern Territory parliament. Today this parliament will pass, or otherwise, legislation that will give effect to the decision Cabinet, the executive arm of government, made on Sunday to approve the sale of the Territory Insurance Office.
As a Katherine resident and local member for Katherine, my initial response to the sale was one of great concern. I was quoted in the media as having major concerns about the sale, and at the time that was true. However, it did not mean I was against the sale, and I will be happy to explain.
As much as anywhere in the Territory, I believed a change of ownership for TIO may have adverse impacts on many TIO policy holders in Katherine, and I wanted to make sure I fully understood the real implications of such a change for and on behalf of those policyholders. More broadly, as one who represents not only my electorate, but as a minister of the government representing the interests of all Territorians, I had concerns about the impact such a sale might have on TIO policyholders in other areas. These areas include Darwin’s cyclone-affected areas and parts of Alice Springs affected by occasional flooding.
I have experienced all those things. I have lived in Darwin and been through cyclones. I have lived in Alice Springs and seen the Todd River flood and seen it flow many times. I was in Katherine during the 2006 flood, where some of my property was inundated to a depth of 2 m. I am not new to the Territory’s major natural disasters and the potential risk they present to property owners in the NT.
Anyone who has been in the Territory for a significant length of time would know the major reason for my hesitation, and the hesitation of Katherine residents, in supporting the sale of TIO. It is because of the devastating floods that caused significant property damage in Katherine.
The first of these was in 1998, which was the worst as the majority of Katherine homes and businesses were affected. Floodwaters swamped just about everything in town. In that time of despair, having adequate and comprehensive insurance helped Katherine repair and rebuild. However, there was a significant contrast between locals insured with TIO and those not.
Residents insured with TIO received compassionate and helpful advice, their claims were paid in a timely fashion and they could start the massive job of rebuilding and repairing. Allianz would be well served by taking note of the lessons TIO learned during that period.
As the prevailing headline issue for Katherine residents, it was for this reason I was reluctant to throw my full support behind the sale of TIO before knowing all the facts. I was not Robinson Crusoe in that regard. I assure all members in this House and all Territorians that every minister and member on this side of the House shared a greater or lesser degree of concern about the sale of TIO and the implications that come with it.
As a local, and after talking to Katherine locals, I knew the two main issues causing major concern were that the sale might cause premiums to rise, and flood insurance for Katherine residents would be adversely affected. So I joined the CEO of TIO, Richard Harding, at a public meeting I called in Katherine to have these concerns addressed, find out the facts and gain reassurance – if Mr Harding was able to provide it – that the sale is the best option for the Northern Territory and for policyholders of Katherine.
The meeting was fairly well attended with about 50 locals in the meeting room at Knotts Crossing Resort. To be honest, I was a little surprised the bleachers were not filled to overflowing, but it was what it was. Mr Harding did a great job in presenting the facts to some very concerned people. He also did a great job answering questions about the potential sale. What became apparent was things were about to change if TIO was not sold and retained its current structure.
I am not giving away any secrets, but Mr Harding said – he said it in the media as well – under a new approach to the insurance business premiums for flood cover in Katherine would rise significantly in 2015. With flooding data now available to insurance companies they can better target high risk areas. He said since the 2011 floods in Brisbane the industry in general had adopted a consistent definition of flooding. Mr Harding said TIO would have put up premiums to better reflect the insurance risk in high-risk areas.
In one graphic, Mr Harding showed the average premium for flood cover for companies other than TIO was around $6000. His indications were TIO would be moving premiums to more closely reflect that average cost. If TIO is not sold, that is the fate in store for flood policyholders.
Mr Harding also detailed a number of other realities about TIO’s place in the insurance market. TIO spends about 30% of its premium revenue on reinsurance compared to the industry norm of between 6% and 8%. TIO’s reinsurance covers a much smaller percentage of TIO’s risk compared to other insurance companies. This raises, for me, a serious concern for the Northern Territory government, and, more importantly, Territory taxpayers. If there was a shortfall in TIO’s capacity to pay out in a major disaster the Northern Territory government would carry the risk. In other words, Territory taxpayers would bear the risk of underwriting loss payouts beyond TIO’s ability to make the payments, even with reinsurance.
The question in my mind, be it a philosophical one, is why should people who do not live in a flood or cyclone-affected area underwrite those who do? Moreover, with current pricing policies adopted, policyholders need to know non-flood premiums are subsidising flood premiums. Someone who lives on Maluka Road, which is not subject to flooding, is subsidising the premium of someone who lives on Riverbank Drive, which is subject to flooding. In my view, this is not fair.
I have now seen the details behind the sale. I have spoken at length to the TIO CEO, Richard Harding. I have met with executives of both Allianz and People’s Choice Credit Union and am confident Allianz and People’s Choice will continue to do the good work done by TIO.
I have been unequivocal in my position in relation to conditions a prospective new owner of TIO would have to adopt if it were to receive my support for the sale. Things like the continuation of flood cover, cyclone cover, local branches, especially in Katherine, and security of jobs for current TIO staff.
All those things are important to me personally, and on behalf of my constituents in Katherine and more broadly. All the conditions I considered vital and needed to be protected are in the contract of sale. My colleagues and I have been successful in negotiating the best outcome for TIO customers.
Like the member for Fong Lim, I am a TIO policyholder and I live in a flood-affected zone in Katherine. I have two properties in Katherine that are potentially flood-affected. Does anyone think I would sell myself out by endorsing a change of ownership for TIO that would not be in my best interests?
Politicians are often accused of all sorts of things, many of which relate to self-interest. I will not be lectured by a bunch of lily-livered ideologues on the other side of this House accusing us of blindly following the Chief Minister. Each one of us critically examined the pros and cons of selling TIO. We all critically examined TIO’s current position financially and as it sits in the greater insurance market. We all critically examined the politics of this.
Does anyone really think we want this fight? Does anyone think we enjoy the criticism being levelled at us as a government or individually? Does anyone think I enjoy good Katherine people railing against the government and me as their local member? Of course not.
This is not about having a fight; this is about doing the right thing. Selling TIO is the right thing to do. Suggesting we on this side of the House have simply rolled over, are taking a quick cash grab or are motivated by greed is another example of the opposition measuring us by its standards.
I will not reflect too much on the opposition’s contributions because they were pretty much the same bile and vitriol we are used to, but I pick up on a couple of comments, the first made by the member for Namatjira. I hope she does not mind that I paraphrase what she said. The member for Namatjira effectively said she hopes to God this is the right thing to do. I believe it is and, at the end of the day, history will judge if the decision to sell TIO was the right thing to do.
It is important to point out some major things that are critically important for Territorians. The TIO name remains, branches stay open, policies stay the same, flood and storm surge cover continues and staff will keep their jobs. When people wake up next Monday, after a relaxing weekend, TIO will still be there. Their policies will be there, the branches will be there and the jobs will still be there. When people come back from school holidays in January, TIO will still be there. Their policies will still be there, the branches will still be there and the jobs will still be there.
The sale of TIO will provide an injection of funds that will be used to secure the Territory’s economic future by building vital economy-building infrastructure that will open up the Territory’s full potential.
I did my homework; I acted on behalf of my electorate. Unlike the opposition, I did not use this to score cheap political shots. In fact, the opposite is probably true. All members on this side of the House have put themselves in the firing line from constituents not only in our own electorates but broadly across the Territory who disagree with the sale of TIO. Did we do it willingly? Yes. Do you think we enjoy the position we are in? No, but at the end of the day the test is whether this is the right thing to do for Territorians.
Unlike the opposition, I did not scaremonger Territorians; I did not put up signs opposing the sale on every road in town. Those actions would have been a disservice to the people in my electorate and Territorians in general. I am confident the sale of TIO is in the best interest of all Territorians. The benefits of selling TIO far outweigh the negatives and the reasons to sell far outweigh the reasons not to.
The sale will transfer the risks currently borne by Territory taxpayers to the private sector, where they can be more effectively and efficiently managed. The new arrangements for insurance will see the iconic TIO brand retained along with flood, storm surge and cyclone cover.
I pick up on contributions from members opposite – I cannot remember which ones specifically – but there was talk about phone calls being made to Allianz about flood cover and the response received being, ‘Sorry, Allianz does not cover flood in that area’. I cannot verify the veracity of those calls, but TIO remains regardless of what Allianz does with the remainder of its business. TIO remains along with the conditions set down in the sale. That includes flood cover in Katherine, cyclone cover in Darwin, and – the Alice Springs members would know better – flood cover in Alice Springs. It certainly covers storm surge in Darwin.
That is another example of the opposition playing cheap politics without the benefit of the requisite knowledge to bring sensible debate to this House. Allianz has a number of business divisions which all operate slightly differently. TIO will, as a new part of its stock, operate differently from other parts of its stock and other business divisions it has. TIO in these conditions will in many ways be independent of the remainder of Allianz’s operating conditions. That is critically important for people to know. The opposition either does not know or does not want to know that so it can bring cheap, political and spurious arguments into this House, trying to diminish the good name of TIO and Allianz.
The funds raised from the sale of TIO will enable this government to invest in infrastructure needed to unlock the full potential of the Northern Territory, creating jobs and opportunity. Every region in the Northern Territory will benefit.
The $25m set aside for Katherine includes $7.6m to move Katherine’s ambulance centre out of the flood zone, with the remainder to be used for other flood mitigation works. The aim of flood mitigation works is to reduce the risk faced by individual properties and the community in the long term, thereby keeping premium price rises to a minimum. Flood mitigation is not about flood prevention. There is probably no way to prevent Katherine from flooding. You cannot block up water that easily and stop it coming into town; it is not the nature of the beast. Mitigation is about providing resilience, preparing people and doing what we can to minimise the impact of flooding when it comes. This is bearing in mind much of Katherine is built on the floodplain of the Katherine River.
I look forward to working with the Katherine Town Council, emergency service providers, insurance companies, local business owners and the community as a whole to advance any projects to help make Katherine more resilient to flooding. This includes flood mitigation, drainage measures, flood preparedness, safety and recovery, and understanding our flood risk.
This is expensive work. Twenty-five million dollars rolls off the tongue easily, but it is a lot of money. It is expensive work that has never been considered and acted upon by any previous government. Regardless of who owns TIO, pricing for flood cover is a difficult issue. Indeed, TIO has been examining how it should price flood cover into the future in light of significant increases in global reinsurance costs and developments in flood insurance nationally. These changes are due to changes in flood pricing nationally and are unrelated to ownership. While the ownership of TIO will change, TIO will remain in the Territory and the Territory will remain in TIO. It will maintain local services but ensure a global spread of risk. If the Northern Territory government remained as the owner of TIO, Territory taxpayers would continue to be exposed to significant financial risk.
If the Territory government remained ownership of TIO the company would be forever constrained and held back by the Northern Territory border, because no Territory government would underwrite the risk outside our borders. This is unacceptable for Territory taxpayers and counterproductive for TIO. Larger diversified insurers have a much bigger capital base than TIO. Those insurers are much more capable of holding the risks TIO is exposed to, like flood and cyclone. In reality, government ownership was strangling TIO not helping it.
The sale of TIO will provide funding that will be put to good use in building and upgrading key infrastructure in the Northern Territory. If the Northern Territory government remained the owner of TIO we would not have this major injection of funds to help build our future. The sale of TIO is not a quick grab for cash, as has been suggested by members opposite. This government is getting out of running an insurance and banking business and getting on with building the Territory.
What is highly questionable in this whole debate, and a threshold question, is why a government should be involved in an insurance industry? Even more so, why should a government be involved in the financial services industry? Again, I say it should not.
The sale has converted a high-risk locked asset into a cash asset that will help the Northern Territory reach its full potential and ensure jobs and prosperity in the future. It will be a Territory that has immediate infrastructure priorities where safer communities, new jobs and economic opportunity can be created for Territorians.
Mr Deputy Speaker, I support passage of this bill through the House. I implore my good friends and neighbours in Katherine and across the Territory to take an objective view of this matter and put aside their emotional attachment to two businesses that should not be run by government and would be better run by the private sector.
Ms MANISON (Wanguri): Mr Deputy Speaker, I contribute to this debate regarding the bills before the Chamber to sell TIO. This is a sad day for the Northern Territory. It is not only sad because we are losing TIO, it is sad to see the process followed in selling TIO. For the government to announce sale of TIO on Monday then ram through legislation to sell it the following day, not allowing proper scrutiny, is a disgrace.
We just heard the contribution from the member for Katherine. He has been under a lot of pressure. He said history will judge if selling TIO was the right thing to do. One thing is for sure, history will not look back kindly on the process followed by the CLP government in selling TIO. That is fact. It is arrogance to sell the people of the Territory’s public asset without allowing proper scrutiny or debate around the sale of that asset. That is a disgrace.
I have seen members of the government hold their heads down because they know it is a hard deal to sell two assets belonging to Territorians. According to them, it is the right thing to announce the sale of TIO on Monday, come into parliament on Tuesday, introduce the bills, not allow for proper scrutiny or debate and ram through passage of those bills. That is a disgrace. You should be ashamed if you vote for these bills in the way they have been presented.
I believe history will judge this government very poorly for how it handled the sale of TIO. From the start it has not been up front or honest with Territorians about its plans for TIO. Let us be clear about that. After the last sittings the Chief Minister said the CLP government had been in discussions on the sale of TIO since March. We are now at the end of November. Cabinet has been discussing the sale of TIO since March.
The opposition got word of this and started asking some important questions of the government about the possible sale of TIO. The answer from the government was nothing was on or off the table. It was not a clear or up-front answer for Territorians.
What have we seen happen in the Territory since March? We have had two by-elections, with the people of Blain and Casuarina going to the polls. When did we see the government come clean with Territorians about its agenda to sell TIO? Two days after the Casuarina by-election result came through.
If selling TIO was such a good idea the government should have been up front and honest with Territorians. It should have allowed due time for debate and scrutiny of the sale of TIO across the Territory. The government should have provided more information about why it decided to sell TIO rather than bombarding Territorians with full-page expensive adverts in newspapers and a high rotation of television advertising.
The government did not ask the question regarding the sale of TIO. It did not present an argument to people as to why it believed TIO should be sold. Instead, it arrogantly put to Territorians, ‘If we sell TIO, and we are sure we will, what would you like to spend the money on?’
That is not how you do business. That is not good government. People can see through the spin. Territorians think the way you ran the campaign was arrogant.
It was a terrible communications campaign. You have been told this, I am sure. There are some fantastic communications professionals in the Department of the Chief Minister, outstanding people who have been working in communications for a long time. They would have been horrified at having to put some of those adverts together, knowing it was not a good way to communicate with people.
It was not good to treat Territorians the way you did and not ask them the fundamental question, ‘Do you want TIO sold, yes or no?’ It was not seen as genuine and people thought it was a disgrace.
This week the Giles government will finally execute its plan to sell TIO despite overwhelming opposition from Territorians. I find it ironic that only a few days ago the government asked people to reflect on the tragedy that unfolded almost 40 years ago when Cyclone Tracy wiped out this great city. We have seen devastation from natural disasters in this city and the Territory, but it seems the CLP has learned little from that.
Despite knowing what cyclones can do to Territorians the government is still selling the insurer that has stood by us through thick and thin since 1979, and abandoning Territorians who will need the support of an organisation like TIO in the future.
The Giles government has not listened to the views of Territorians on the sale of TIO, and the way it executed plans to sell it is disgraceful. It has been a fundamental betrayal of Territorians and their needs. The Giles government has let Territorians down again and shown its arrogance by not listening. Unfortunately we have all become accustomed to that. Territorians do not trust the CLP government and have good reason not to. Look at the track record so far.
In the 2012 election you told Territorians you would reduce the cost of living. What did we see straight after that? The price of power and water went through the roof and there is another 5% coming on top of that on 1 January.
CPI has increased. The government promised not to sack public servants, especially vital frontline workers, but we have seen instability throughout the public service and big cuts to frontline services, including teachers and education, a critical area for the Territory.
Last sittings the CLP government made a commitment to bus drivers that privatisation of the Darwin bus service would not mean loss of entitlements. Their entitlements are already being stripped away.
You cannot trust this lot, and people are sceptical about your promises around TIO. This is not just as a result of the government’s broken promises and appalling track record to date, but because of the process the CLP government has followed.
Despite months of questions from the opposition the government only came clean on the agenda to sell TIO two days after the Casuarina by-election, even though it had been discussing it since March. The Chief Minister came clean on that as well.
The effort from the government to communicate with people on the sale of TIO and why it is going down that path shows arrogance. Rather than asking questions and engaging people in meaningful debate and two-way communication about the pros and cons of the sale we had, ‘What would you like us to spend the money on when we sell it?’ The government treated Territorians like idiots, and people are not happy to say the least.
To tell people you wanted a mature debate on TIO then drive a costly campaign where you failed to ask if they supported the sale infuriated people more. To now ram the sale through and do your best to silence debate in parliament is beyond arrogant, it is betrayal. It is disloyal to Territorians, and many Territorians will now face skyrocketing insurance premiums in their future, that is if they can get insurance. People have been abandoned by this government.
It is disgraceful. You should think hard before you vote on this bill. You have failed to listen to your constituents and stand up for them. You will fail to do your job as a member of parliament if you support this bill because Territorians across every electorate said loudly and clearly they do not support the sale of TIO.
This is another disgraceful part of the way the Giles government has gone about selling TIO. Because you understand what an unpopular decision it is you have decided on swift execution of the sale. By passing this bill on urgency you are not allowing for due process. This is arrogant and you know it. We have seen this government ram things through on urgency, but to do it in one day is outrageous.
Some members on your side respect the job they do and the importance of following the processes of the Westminster system. Those processes have come about for good reason: to enhance democracy, transparency and appropriate scrutiny of government. You are making a mockery of this. Why rush? Why not allow for passage of this bill and a sale in February? Why are you being so arrogant by announcing the details of the sale of TIO yesterday and executing the sale by legislation today? That is the day after! You have not given Territorians the opportunity to see the details of this legislation or ask questions before debate so there is proper scrutiny of it.
You would be horrified if you were on this side of the Chamber watching the process taking place now. I can only begin to imagine the reaction we would have seen from government members when in opposition several years ago. They would have been astounded and fighting this all the way. I hope every government member supporting this bill understands what they are doing and justifies their decision so constituents can see why they are voting to sell TIO. I remind you once it is gone, it is gone forever.
Everyone can see the Giles government is ramming this through in one day to minimise scrutiny and debate. Quite simply, the government has decided it wants to minimise the pain over a few days rather than a few months if these bills were properly debated in February. By doing it quickly, just before Christmas and the school holiday break, you hope people will forget. When we see big spending budgets, particularly in 2016, you will hope people have forgotten the controversy surrounding the sale of TIO. This again demonstrates what an arrogant government you are and that you treat Territorians like idiots.
Just like the massive power and water price hikes in 2012, you hope people will forget by 2016. People face another 5% on 1 January and are feeling the ongoing pain of power and water price hikes and the sacrifices families have to make to pay those bills. People have not forgotten.
I want to be clear and remind parliament what the sale of TIO is about. This is simply a way for the CLP government to get its hands on money. This is a cash grab for the 2016 election campaign. This government is hoping the big spending promises it can make with the money will be enough to make people forget about the disgraceful process it followed to get there.
The government will also be hoping insurance premiums do not increase until after 2016 so it does not have to cop a further backlash as a result of that. What is concerning about this move by the government is it flies in the face of recent recommendations to keep an insurer like TIO the way it is, that is, not privatise it as there has been significant market failure on the east coast of northern Australia.
Recommendation 6 point 5.30 of the PIVOT NORTH Inquiry into the Development of Northern Australia: Final Report says:
- The Committee believes that more needs to be done. The Territory Insurance Office (TIO) in the Northern Territory is a government owned statutory insurance provider that has provided affordable insurance to citizens of the Territory since 1979. It provides a potential model for the creation of an insurance office covering Northern Australia.
TIO has worked and has even been profitable. The government is selling a sustainable insurer that works, gives families and business affordable insurance and makes money. Over the last five years TIO has made a $305m profit. The CLP even took a $10m dividend this year. Now it has sold it for $424m, which equates to $275m after you take out the $9m fees and the $140m drawdown, less than the five-year operational profit of $305m. This is another indication of how short-sighted this sale is and how desperate the government is to get quick cash to bankroll and pork barrel during your 2016 campaign.
People are concerned about what will happen to insurance premiums. The Pivot North report shows in Queensland there are huge differences in insurance premiums between the south and the north. In Brisbane you could pay $2000 whilst in Cairns about $9000.
We looked at the Allianz website last night to see what home insurance premiums were like in Cairns. The page said, ‘Your home insurance quote. We are unable to offer you insurance online due to a change in our underwriting guidelines. Allianz is no longer able to provide home insurance in this area. We apologise for any inconvenience this may cause.’
As somebody who uses TIO insurance looking at renewal this year, I found TIO was the cheapest by $800 a year to the next insurer. I live in sunny Leanyer in a cyclone-coded home and am not in a storm surge area, so I dread to think what people in Katherine, The Gap in Alice, Coconut Grove, Cullen Bay or Rapid Creek may feel like. What happens to businesses and households that may become uninsurable because of the sale of TIO?
There will be big losers in this, yet you will not allow proper debate or consultation on the sale of TIO when you know people stand to lose so much. This is an appalling way to go about the sale of a major public asset like TIO.
For those who can get insurance, what they will pay in the future is a huge concern. We cannot see any conditions requiring Allianz to keep prices reasonable and affordable for Territorians.
After watching the member for Brennan on 7.30 NT on Friday, I am concerned there is a misunderstanding in Cabinet about what the sale means to premiums. He spoke about premiums staying down for three years. We saw the details of the sale yesterday, questions have been asked, and there are no assurances that premiums will remain at an affordable level for Territorians.
This seems to be based on goodwill and on promises the CLP government has been making to Territorians about the future of TIO. However, we cannot see protections in place. We must talk straight here; we are talking about a global insurance company that has purchased TIO. You have sold an essential Territory-owned business to a German global giant. It does not get on top of the game by going down the goodwill road. We heard about some of the horrid insurance hikes in Ipswich at the hands of insurers like Allianz, and the huge insurance burden people are now carrying.
Territorians are now in the hands of a global insurer, not a local they trust. There are no guarantees around the future of premiums. Territorians are feeling exposed. As much as the government tries to argue market forces will guarantee enough competition to drive premiums down, members clearly live in a different reality to everyone else. The government needs to look at what is happening in northern Queensland for an example of market failure in the insurance sector hitting the hip pockets of people hard. The Pivot North report acknowledged the problem yet the CLP seems to think the Territory, with a small and isolated population coupled with extreme weather events, is an attractive market for insurers. It has the same idea for Power and Water.
This shows the government is desperate to get its hands on cash from the sale of TIO and will try to spin new realities. Despite the huge effort and excessive money it has thrown into the spin trying to convince Territorians about premiums, nobody believes it. The CLP understands this now, and that is another reason this legislation is being rammed through today. This is a sad day for the parliament and for government members. Not only will they be marked in history as the people who sold TIO, but as the ones who passed the bill in a day, demonstrating how arrogant they are. You have failed to listen to Territorians.
Since the opposition got word you were looking at selling TIO we have asked the hard questions, and asked Territorians if they wanted to see TIO sold. People have signed petitions in droves because they do not want TIO sold. You have failed to listen to those people. Almost 4500 people have signed petitions. Leaving mine outside my office, it has not been hard to get it signed.
You failed to listen to the member for Goyder and constituents who signed her petition. You have failed to listen to the member for Nelson and his constituents. Together, several thousand people have signed those petitions. You have failed to listen to the messages coming through loud and clear from local media.
The Northern Territory News has seen a huge amount of comment and debate regarding the sale of TIO. Its polls showed an overwhelming response – about nine in every 10 – saying, ‘Don’t sell TIO’. It has been the topic of talkback on Mix 104.9 with Pete Davies, where people were ringing in saying they thought the sale of TIO was outrageous. Their poll had over 80% saying, ‘Don’t sell TIO’. Calls have been made to CLP seats across the Territory and 80% of people said, ‘Don’t sell TIO’. In social media there is 9 News, the Northern Territory News and Mix Online where the comments are loud and clear on the sale of TIO. People are not mincing words; they are saying it is outrageous. I am sure when you doorknock your constituents, as I do, they tell you not to sell TIO.
The back yard barbecue topics are the ones people take heed of in politics because they know people are talking about them. The sale of TIO is a subject of debate across the Territory. In workplaces and socially people are talking about this because they do not agree with what the government is doing.
Another issue they are upset about is you did not come clean with voters about the sale of TIO prior to the 2012 election. You had a chance to do that in Blain and Casuarina and develop some type of mandate with regard to the sale by asking voters, ‘Do you want to sell TIO, yes or no?’ Territorians have not had an opportunity to have a say. You have not listened to them; they have no voice in this debate. That is seen today with the speed of this legislation – one day.
Territorians deserve to have a say on their assets. It will take 13 members to pass this bill. We know the Cabinet ministers have signed off on this and will have to live with that decision.
Backbenchers, you have an opportunity to stand up today, but from the tone of the debate you will not. You will side with the CLP government. You are not listening to Territorians, certainly not listening to your constituents and this sale is happening.
This is a sad day in the history of the Territory. The front page of today’s Northern Territory News is right, ‘Rest in Peace TIO, 1/7/97 to 24/11/14, beloved by Territorians, taken suddenly before its time’.
The members of government have ignored Territorians and let them down. Territorians have no guarantees in the sale of TIO that they will have the insurance protections they need in the future. They can see through the sale and see this is a cash grab and is pork barrelling in electorates in 2016. Many people will watch with great interest to see how that money is spent in 2016 and see how you try to sandbag some of the more vulnerable seats. People feel they have been treated with contempt.
To ram this legislation through in one day – make an announcement on Monday, introduce legislation on Tuesday, debate it and give it passage in one day is wrong and you know it. You know that is not the way this parliament should operate. You are making a mockery of being in government. It is the height of arrogance to pass legislation in one day for a publicly owned asset like TIO. It is a disgrace.
You have let Territorians down today. Seeing how you handled the sale of TIO and passage of this legislation is not a good day in the history of this parliament.
Mr KURRUPUWU (Arafura): Mr Deputy Speaker, I support both these bills. I will not hold the call for too long. After the previous address from my colleague there is not much more I can add. I would like to start by addressing comments made by the current Leader of the Opposition and her deputy, the member for Barkly.
Earlier in this debate, the member for Barkly spent a considerable amount of time mentioning margins in electorates Labor lost in the last election. One of those he mentioned was my electorate of Arafura.
I suggest the member for Barkly concentrate on his own electorate. After all, he had a swing of about 8% against him and Labor lost government after that election.
We heard the member for Karama making accusations and personally attacking members on this side. Her contribution was full of venom and spite. She suggested the Chief Minister and I had made some type of deal. The truth is I came back to the Country Liberals because I realised what could be achieved as a part of this government.
The work and economic development occurring in my electorate, as a direct result of our government working for people and communities, is something those opposite are unable to comprehend. Look at the economic development happening on the Tiwi Islands. The barge landing is about to start.
After 11 years in government Labor achieved nothing for people in the bush and that is why we are here to vote them out.
The Opposition Leader has accused this government of a cash grab for pork barrelling in 2016. She already makes excuses for an election loss under her leadership. I can hear it now, ‘We only lost because they are pork barrelling with our TIO money’. Perhaps she will not be leader in 2016.
Let me turn to the sale of TIO. Insurance is based on pooling of risk to share the cost of this risk across a large group of individuals or companies. The share of risk works best when risks are different. In the case of TIO, over 80% of this pool is one risk: a Darwin cyclone. This is simply untenable. Allowing a company as large as Allianz to purchase TIO allows them to diversify that risk across the globe. This has potential to affect premiums in a positive way for policyholders. A sale will also unlock funding for important infrastructure work that can go towards economic development in remote communities, like communities in my electorate.
I make this commitment: I will be fighting hard to get as much as I can for my constituents. On top of that, the new Territory infrastructure development fund is a great way of ensuring any benefits from the sale are preserved for our kids and future generations of Territorians.
At yesterday’s media conference we heard the brand name will remain as TIO, the TIO branches will remain open, and local jobs will be maintained. A commitment was also given to continue supporting local and community events.
Members of this House have two options: we can sit on our hands and watch as TIO fades into oblivion, or we can do the right thing and allow TIO to change and adapt to our current circumstances so it is around for future generations of Territorians. The first is easy and a popular choice; however, it is not the right one for the Northern Territory. The second is hard and tough, but it is the right one for TIO and the Northern Territory.
I argue that all members make the hard, but right, decision and support these bills.
Ms WALKER (Nhulunbuy): Mr Deputy Speaker, I oppose the bills the Chief Minister – also as acting Treasurer – is rushing through the House to sell off a publicly owned asset, a unique and irreplaceable asset, the Territory Insurance Office. Once it is sold we will not get it back. This is a betrayal of Territorians and one the CLP government and its elected members will pay for dearly.
Somehow the CLP has managed to completely ignore the voice of the overwhelming number of Territorians – between 80% and 90% – who have made it clear they do not want the Territory Insurance Office sold. Somehow the CLP has managed to break every election promise it made in the lead-up to the 2012 election on coming into government. However, the biggest betrayal of all is selling the government owned insurer without a mandate, without engaging with Territorians in a two-way meaningful conversation about what the sale means, without observing proper democratic process or without referring this to the normal legislative process. That should have been preceded by a period of consultation and, given the scale, a parliamentary inquiry or, as the Leader of the Opposition called for, a Senate inquiry. Today in this Chamber CLP members are putting forward their position on this sale to not only Territorians, but to their constituents, explaining why they are selling TIO, shafting their constituents and hanging them out to dry.
A forum was held at Charles Darwin University a few weeks ago, but no one from the CLP saw fit to attend. They were not interested, not feeling there was an onus or responsibility on their part to show their faces, listen, speak up or be prepared to tell people why they made this decision. They were not prepared to have the courage of their convictions and defend their position. That evening the Chief Minister chose to attend a dinner at the Hanuman restaurant for the local government sector. I saw him there.
I noticed the first person who made a beeline for him was a former member of this House, Ms Fay Miller, Mayor of Katherine. I have no doubt she gave the Chief Minister a strong message, but one that has clearly fallen on deaf and arrogant ears.
The Mayor of Katherine, a long-term resident, knows only too well what is at stake in Katherine, a community very vulnerable to flooding and with businesses and residents with long memories. They remember how the last major flood in 1998 devastated their town and how many insurers did not pay out. Only the Territory Insurance Office stuck by Territorians, honoured policies and paid out, and helped people get back on their feet and recover. As we heard from the member for Katherine, TIO was the only insurer to deal with people in a compassionate and timely manner when working through claims.
I give credit to the member for Katherine for attending the public meeting in Katherine recently. Indeed, he called it. He has gone up in my estimation a notch. He was caught between a rock and a hard place, and to not show his face would have been a bad look for the local member who knows his re-election prospects in 2016 are tarnished with this decision to sell TIO. He even went to the media to voice his concerns and make it known he had major concerns about the sale of Territorians’ public insurer. He is a little sensitive to criticism and bad decision-making, unlike the rest on that side. They are unflinching in the face of a tsunami of criticism and vitriol, and an outpouring of anger that puts all their re-election prospects at risk come 2016.
I suspect some are putting on a brave public face, but away from the public glare of angry Territorians they must be having some sleepless nights. The member for Brennan’s contribution to this debate alluded to that personal level of discomfort.
Let us talk about people in the regions who know the CLP does not care about them despite its spin. It was sad to hear the member for Arafura had returned to the ranks, believing the government cares about him and his region.
People in the regions are no different to Territorians in our urban centres in this dreadful situation. They are alarmed this train wreck of a government is selling a public asset which has served Territorians, no matter where they live, for more than 30 years. It is their access to a unique and proven insurance business in particular which provides a product for those living in areas where flood and cyclone threats are a way of life every Wet Season.
I live in the Top End and represent a constituency in the Nhulunbuy electorate in beautiful northeast Arnhem Land. It is, of course, a region subject to cyclones. We have weathered a few of those in the almost 25 years I have lived there.
We all know it is not just a big blow that can wreak havoc. The lower rated cyclones or low pressure systems bring floods and inundation which can be just as damaging. These threats are real, which is why the Chamber of Commerce surveyed its members. The result was they told the CLP their members did not want the Territory Insurance Office sold. I know members of the East Arnhem Chamber of Commerce received that survey and that feedback was provided.
My constituents, like everyone else in the Territory who is so angry about this decision, have been active on Facebook and in letters to the editor, including one I would like to place on the record from Mr David Mitchell from Nhulunbuy, who is not a member of the Labor Party. His letter was sent to the Arafura Times, our local weekly paper, and was also published in the NT News:
- Dear Sir
Having just seen the latest Giles spin doctor creation on television, I have a suggestion. Instead of saying, ‘We should sell TIO and unlock the future of the Territory’, it should say, ‘Sell TIO and give the profits to our mates in the silver circle and rob young Territorians of their future’.
This is about more than the certainty of increased premiums and Territorians being unable to get insurance cover. This is a large-scale deception being perpetrated by a gang of businessmen who are upset they didn’t get their snouts into the public trough a bit deeper the last time the CLP was in power.
Our kids’ future is being raffled here people and we need to start taking a stand against the greedy, born-to-rule among us.
My constituents are, sadly, all too familiar with the modus operandi of the Chief Minister and his arrogance, incompetence, inability to listen and predisposition to shaft and betray hard-working Territorians. Nhulunbuy and the Gove region is on the cusp of its first anniversary of Rio Tinto’s announcement to close its alumina refinery operations, a decision it made as a direct result of the betrayal of the Chief Minister, who trashed a deal to provide gas to Gove.
On 26 July 2013 the Chief Minister announced the gas deal was off. Single-handedly he overturned an agreement to on-sell contracted gas to Rio Tinto, a deal which had been brokered by his predecessor, Terry Mills, months earlier and then trashed by the current Chief Minister. He pulled up his big boy pants, took on Rio Tinto and lost. As a result we lost more than 1100 jobs, an economy and a bright future which was guaranteed for 20-plus years, not to mention a reduction by 2% of GSP to the Northern Territory’s economy. It is small wonder he is trying to flog off our public insurer to make up for that disastrous mistake and the loss of dollars into the Territory economy, not to mention jobs. In Nhulunbuy we know all about betrayal from this Chief Minister, where people take it personally.
Let us fast forward to where we are now in Nhulunbuy, thanks in no small part to the resilience of locals, residents and businesses who survived despite the mismanagement of the whole affair by the unelected Chief Minister. Last Friday we saw the launch of the new development corporation called Developing East Arnhem, no doubt a name to link in with the brand Developing the North. It is, I acknowledge, an important step forward.
However, at a time when the CLP is trying to attract new enterprise to the region, prospective investors may well be nervous about doing so in the wake of this decision to sell the government owned insurer. We need to look no further than the federal Coalition’s report into developing the north and comments about insurance. The report, Pivot North, is clear about the need for a government owned insurer for northern Australia. The CLP is ignoring a recommendation to the Australian government to expand the Territory Insurance Office across northern Australia because, as it said in its report, it is affordable, consistently available, would address the insurance crisis and support developing the north.
Northern Australia development inquiry head, Coalition MP Warren Entsch, said he warned the Chief Minister against selling TIO stating the Northern Territory was the only place in northern Australia where insurance was consistently available and affordable, and a sale of TIO would risk creating an insurance crisis like the one in Queensland. It does not matter who you are – a conservative colleague of the Chief Minister or a Territorian – you are ignored if you have a view contrary to the Chief Minister on the sale of the asset.
Keeping TIO in public hands is critical to ensuring timely insurance payments for flood and cyclone insurance, avoiding the crisis seen in other states, like Queensland after the floods.
Further, I heard on ABC radio yesterday morning an independent insurance analyst saying remote communities in the Northern Territory will be hit hard by the sale of the Territory Insurance Office. The analyst, Mr Brett Hagan, said many insurance companies will not insure clients in remote and regional areas, and the public insurer filled that gap by providing cost-effective insurance packages. He said after the sale – today – remote communities may find it impossible to get insurance. He said:
- TIO are known to insure a lot of businesses and communities in remote areas and the new purchasers may not have that same view, which will put those business owners and communities in a difficult situation seeking out an alternative insurer at an affordable cost.
We all know a hastily hobbled together program for home ownership in the Northern Territory’s remote communities was launched mid-year whereby eligible tenants can purchase the Territory housing asset they rent. It would be irresponsible of government, in supporting these potential homeowners, to not ensure they have access to secure home and contents insurance.
With that in mind, I will quote from the Pivot North report and a submission from the City of Townsville. I know other colleagues have made reference to this report and the phenomenal hike in insurance costs the further north you go in Queensland. It is less than $2000 a year for a standard house worth just under $400 000 in Brisbane rising to about $9000 once you get to Cairns. I quote:
- Only a small number of insurers are engaged in the market in North Queensland, and potential mergers and acquisitions will reduce competitiveness further. In addition, some insurers refuse to insure certain properties based on location – for example the area may be deemed an island risk (i.e. including Magnetic Island) or the risk of flood/cyclone/natural disaster is considered too high.
What does that mean? How does that translate to the Northern Territory, for instance in the member for Arafura’s electorate of the Tiwi Islands or Groote Eylandt? These remote Indigenous communities have houses available for purchase by people wanting to enter the housing market.
After the experiences in Queensland, what comfort can people have in remote island communities knowing when they purchase a property – if people take up the government’s offer, what access will they have to an affordable insurer? If they need $9000 a year to insure their home it may kill off the home ownership program. I bet the member for Arafura was not told that in his briefing, if he had one, from his CLP colleagues.
On a different note, I have spoken with several health professionals today, one a doctor the other a physiotherapist. Both were concerned about what the sale of TIO means for workers compensation cases and their patients. The doctor said, ‘All our long-term TIO cases are being finalised rapidly and closed, obviously to decrease liability. I hope this can be put forward in the parliamentary discussion.
My discussion with the physio focused on the concerns she has dealing with the new insurer to the Territory market. She said she had no problems dealing with TIO; they were by far the easiest to work with and supportive of her patients.’
By contrast, she said Allianz was terrible to deal with and slow to pay. She is owed thousands by Allianz and their customer service treatment of individuals was pretty ordinary. People’s recovery from physical injury was hampered by the constant worry of having to deal with Allianz as the insurer for workers compensation. The physio was also referring to patients she currently treats under TIO motor vehicle accident coverage.
I am concerned about the Chief Minister’s statement later this evening on workers compensation. I would like to quote from a media release the member for Nightcliff put out as our shadow Attorney-General. She said:
- ‘Is it a coincidence that the changes – which will benefit Allianz who are already a major worker’s compensation player in the Territory – are being tabled today?’
‘Will the government come clean about what discussions were held with Allianz about these changes in the negotiations to sell TIO?’
‘Once Allianz acquires TIO it will dominate the worker’s compensation insurance business in the Territory’.
We should be concerned about the moves afoot today, quite apart from legislation with two cognate bills being rammed through this parliament. We see moves afoot that threaten to compromise workers compensation, particularly as it pertains to motor vehicle accident cover knowing Allianz will be brought in as the new administrator for the scheme.
In another life I worked for Alcan and its successor Rio Tinto Alcan, where the company’s insurer for workers compensation was and still is, I believe, Allianz. I worked in the human resources department and though not involved with workers compensation cases, in my communications role I saw firsthand some of the results of workplace accidents. Of course, an alumina refinery is a dangerous place to work as there is no shortage of hazards, but I know employees going through workers compensation, some with terrible injuries, battled the insurer and, to a degree, their employer.
A former executor of Alcan I worked with and spoke with today dealt with workers compensation cases regularly as the HR manager. He said they were a nightmare and dogmatic and difficult to deal with.
There is much at stake with this forced sale of the Territory Insurance Office. As the Leader of the Opposition stated in a media release this afternoon:
- ‘Bitter experience elsewhere has shown private market insurance failure and Territorians face the very real prospect of massive insurance premium hikes in vulnerable areas where we need affordable insurance the most’.
‘The actions of the CLP to ram through sale legislation on urgency today are unconscionable and against the will of Territorians’.
Let us see this for what it is: a sale driven by greed, a quick grab for cash so the CLP can splash $150m in the lead-up to the next general election and pork barrel its electorates. The CLP mistakes Territorians for fools. They are not. They are angry, outraged and have made it plain, overwhelming so, this public asset, the public insurer, should not be sold.
I have been to rallies in the last two years in Darwin, and a few in Nhulunbuy, since the CLP came to government. That is more rallies than I can remember, and I was pleased to be part of the ‘Toot for TIO’ car rally today. I thank the member for Nelson, who was the key driver for that protest. No one in the city would have missed it, and who did I see as we were doing the lap of parliament but the former member for Drysdale, Ross Bohlin. I thought he might have been in a truck, knowing he likes trucks, but he was in his four-wheel drive and good on him. He was shafted by the CLP, spat out, and knows all about betrayal. I understand he was interviewed by 9News this evening, so good on him. Anybody like him, who has been treated as badly as the rest of the Territory, should be dishing it out to the CLP.
While the CLP so arrogantly ignores the voices and protests of Territorians time and time again, there is one protest it cannot ignore. I do not know the date, but it will a Saturday in mid to late August 2016 when Territorians have the opportunity for the ultimate protest. It is will one the CLP cannot ignore and one the members for Brennan and Sanderson, the member for Katherine in particular, the member for Greatorex and everyone on that side should be anxious about. You will not be able to ignore that protest.
Territorians will go to the ballot box and cast a vote. It will be the test of the CLP’s arrogance and woeful performance not just on the sale of TIO, but the many other terrible decisions of this government which have hurt Territorians.
CLP members of this House and their arrogant upstart of a Chief Minister should not forget that forthcoming protest. Shame on the CLP, it has hit an all-time low. I do not support the move to sell TIO. Territorians do not support this sale without a mandate, and I do not support these bills.
Mr GUNNER (Fannie Bay): Mr Deputy Speaker, this is a serious and significant debate about the sale of the Territory Insurance Office. The circumstances in which we come together to see this passed in one day are extraordinary.
We believe in affordable insurance which recognises the special conditions of the Northern Territory and is there when you need it. The best way to deliver that is through the Territory Insurance Office, and we are not alone in believing that. Community leaders, business leaders, the general public and the Pivot North committee have all spoken in favour of the Territory Insurance Office and its model. There are good reasons for that. This is not just an argument about sentiment; business has overwhelmingly said it wants to retain TIO.
The government says this is a business decision, yet only 25% of businesses have said TIO should be sold. The remainder do not support the sale. Business disagrees this is a business decision and says TIO should not be sold.
The Pivot North northern development committee said we have a competitive advantage in the Northern Territory based on our insurance. Far north Queensland, for example, is struggling to facilitate development because of insurance costs. We have a competitive advantage and the CLP wants to take it away. The Pivot North committee report recommended the TIO model, others have spoken about that today, and we spoke to that during the last sittings as well. The TIO model has worked to provide development but, unfortunately, the CLP is selling that off.
Conservatively, 80% of Territorians have said, ‘Don’t sell TIO’. It is not often you can call 80% a conservative number, but we found 80% through our polling, the NT News found 89% and I believe Mix FM had high 80s. People say that because they believe in affordable insurance which recognises the special conditions of the Northern Territory and is there when you need it. The TIO model is a proven one for Territorians.
We believe a genuine measure of whether a public asset should be sold is whether the public wants it sold. It is clear, if you engage with the community, people do not want their asset sold. The CLP has not engaged with the community. As the member for Nelson said, you cannot talk to an ad in the paper. There has been no effort, apart from the member for Katherine, to actively engage with the community on this issue. The way the government is ramming this through parliament today takes the opportunity to look at the details of this deal away from the community.
This debate can, in some respects, be broken into two questions. Should TIO be sold? We say no, the Independent says no, PUP says no, 80% of the public say no and community and business leaders say no. Many of the reasons the CLP gave for selling TIO are answered in TIO’s annual report.
If you think it should be sold – the CLP has made it clear it does – 20% are unsure or would sell TIO for a good deal. The question then is: is this a good deal? No, this is not a good deal; $285m is not a good deal for TIO.
Only a month ago the Chief Minister said TIO could be worth well over $500m, and now we have sold it for $284m, minus $9m in fees. That is $275m, a bad deal. This is a poor return and half what the Chief Minister said he expected. You only have to look at the annual report to see this is a bad deal. Turn to the Chief Executive’s Report on page five of the 2013-14 annual report to see the money TIO has made over the last five years. There are several different columns.
Operational Profitability has seen $305m delivered to Territorians over the last five years. The net profit after tax is $234m. Either way, it puts the $275m sale figure into context. This is not a good deal or a good return for Territorians. Why do 80% of Territorians believe TIO should be retained? Why is the CLP wrong to sell TIO? This has not been taken to the public to discuss and engage on.
The member for Fong Lim mentioned risk. He was not untruthful but mischievous when he said TIO is not regulated by APRA. Page 3 of the 2013-14 annual report says:
- While TIO is ‘guaranteed’ by the Government, the organisation operates on a commercial basis and is committed to complying with Australian Prudential Regulation Authority (APRA) standards and achieving key industry benchmarks.
- TIO is not regulated by APRA as it is Government owned and regulated by the Treasurer, however it is applying the Basel III regulatory adjustments for prudential disclosures as outlined in APS 330 by APRA.
It is regulated by the Treasurer as it is owned by government, but it complies with APRA.
Also, the most recent annual report shows it reinsures. The APRA guideline is for a one-in-200-year event. According to its most recent annual report, it reinsures based on a one-in-250-year event. We know it reinsures, it complies with APRA, is a sound business and has delivered a profit for five years. The money it has made puts into context the sale figure, showing the sale figure is not a good return to Territory taxpayers. Should it be sold? We believe not, and many others agree. If you want to sell it, should you not sell it for a good price and get a good deal?
I encourage any Territorian concerned about the sale of TIO, who has heard the concerns of the CLP, to look to the latest annual report and see the returns TIO has delivered over the last five years, how it reinsures and how it complies with the Australian Prudential Regulation Authority. They will know much of what the CLP is saying are furphies or mischievous.
It is a shame we have not had a proper debate about this. The member for Nelson put this point clumsily when he said, ‘This House of debate is not the house for this debate’, because there needs to be a conversation with Territorians which the CLP has avoided. The reason the government wants to ram this through today is to not have a conversation with Territorians over the Christmas period and leading into February. It knows the reasons it is spruiking for the sale do not stack up and are answered in the TIO’s most recent annual report.
It is not a good deal and we believe TIO should not be sold. We believe the CLP is failing Territorians around the principle of affordable insurance which recognises the Territory’s special conditions and is there when you need it. TIO guarantees a good insurance product in the Northern Territory with good terms and conditions at a competitive rate. The most recent inquiry into conditions in the north found the TIO model delivered a competitive advantage to the Territory. We support the TIO model.
Australians, Territorians in particular, have a good, finely-tuned bulldust meter. Without doubt, it has been going off during the recent conversations around TIO. They may not know everything about the insurance industry, but they know bulldust when they hear it, and their bulldust meters have gone off lately. When the Chief Minister said, ‘We are not selling TIO, we are just transferring ownership’, their bulldust meter went through the roof. Apparently our Chief Minister does not buy a beer he transfers ownership, he does not buy coffee he transfers ownership. It will be interesting to see if Casuarina picks up on this change of phrase. Instead of seeing ‘Christmas Sales’ or ‘Boxing Day Sales’, we might see the ‘Christmas Transfer of Ownership Event’ or the ‘Boxing Day Transfer of Ownership Event’.
It was nonsense to say, ‘We are not selling TIO, we are just transferring ownership’. Love or hate the member for Fong Lim, he is a straight shooter and I doubt he would say anything like that. He would have said straight up, ‘We are selling it’ or ‘We are not selling it’. I doubt he would say, We are just transferring ownership, don’t you worry about that son’.
I think the bulldust meter also went off when the Chief Minister started saying, almost hysterically, ‘We will see a 200% increase in premiums’. When you say that to justify a sale people say, ‘Hang on a second, you’re not convincing me at all’.
The arguments the CLP made regarding risk are worth looking at and answering, and are answered in the latest annual report. However, some of what they are running does not sit right with Territorians.
The member for Port Darwin said self-government was in danger if we did not sell TIO and we would go the way of Norfolk Island. He compared the Territory to Norfolk Island.
We know from the tragedies and disasters in Queensland and Victoria that the federal government has a responsibility when disaster hits. We are part of Australia and, when a major cyclone hits or flooding or bushfires occur, the federal government has a role.
If the federal government came in under those circumstances, which is expected and justified, self-government would not suffer. When we heard the rather hysterical statement that self-government could be at risk, Territorians’ bulldust meters said, ‘That won’t happen. We are not buying the reason to sell TIO is because we will suddenly not be a self-governed Territory anymore.’ That does not pass the common sense test. The federal government will and should be involved. We are the Northern Territory of Australia and a natural disaster will not affect self-government. That will not happen so the argument does not work.
Let us put this sale figure in context, this great deal the CLP has delivered for the Territory. The Chief Minister will buy the Territory billions of dollars’ worth of new infrastructure and we will build our children’s future.
We have $275m. The last infrastructure budget for the Northern Territory was $1.1bn, so this is a fraction of the Territory’s annual infrastructure budget. Earlier this month the Chief Minister said:
- ‘Through this proposed Infrastructure Development Fund, a proportion of the proceeds from any sale would be set aside for longer-term infrastructure projects that benefit our children and grandchildren.
We want to create an infrastructure nest-egg which is invested and grows over time, ensuring TIO’s legacy is felt by Territorians long into the future.’
‘Through its possible sale, TIO could serve all Territorians in a new way, by providing us with the funds to unlock our potential, creating the jobs and industry of the future’.
That is a fantastic value statement. It is good in theory, but $215m is going into that fund. This year the NT government’s infrastructure repairs and maintenance budget is $335m. That is how much we spend to maintain our infrastructure to current standards. This sale has delivered less than what we are spending on potholes. This is not a good deal for Territorians. It sounds great in theory, ‘Let’s create a fund for our children and grandchildren’, but the money is less than we will spend on repairs and maintenance this year.
You still have the two questions: should we sell it? Eighty per cent of Territorians say not to sell it, we say do not sell it, PUP says do not sell it and the Independent says not to sell it. Eighty per cent of Territorians, community leaders, business leaders and the Pivot North community say do not sell it, and they all have good reasons.
We also have the other side of the argument: if you sell it, get a good deal. We do not have a good deal. The CLP has failed 100% of Territorians. It has failed the 80% who do not want to sell it, and the 20% who said they were not sure but if you do get a good price. It has failed everyone except the elected members opposite, who all think it is a fantastic result for the Territory.
The CLP has no mandate to sell TIO. In fact, it has a mandate to not sell it. Before the election they said, ‘The CLP stands firmly opposed to the sale of TIO and will fight to see it retained’. Instead of fighting to retain TIO, we see introduction, debate and passage of the bill to sell TIO all in one day.
The government is hoping people will forget and it can ram this through, go into Christmas and New Year and come out the other side thinking people will have moved on. I doubt that will happen.
It is ironic the banking arm of TIO has been sold to People’s Choice, because if people had a choice TIO would not be sold. People will not forgive or forget. This is a public asset, and a genuine measure of whether a public asset should be sold is whether the public want it sold for good reason. It provides affordable insurance which recognises the Territory’s special conditions and it is there for us when we need it. That has been proven year after year. We do not believe TIO is a broken model; we have seen the returns it delivers government and how it reinsures risk.
You have not proven to us or the public why suddenly the TIO model is broken and needs to be sold. There has been no engagement with Territorians on the points you are making. Territorians say it works, we have seen it work and seen the report saying it will work in the future. In the latest annual report the chairman quite clearly states TIO is healthy and can succeed for years to come:
This is now the fifth consecutive year that TIO has delivered a profit back to Territorians, giving the Board great confidence that the company can continue to provide service, that our community needs for many years to come.
That is the chairman of the board. We have a proven model that works and the CLP has not convinced the public the TIO model is broken and should be sold. Instead, it is ramming legislation through today because it has not been able to make the argument.
The member for Port Darwin, a strident advocate for democracy when in opposition, has become a strident hypocrite in government by pushing this through in one day. The member for Port Darwin spoke passionately on this side of the Chamber, about processes, procedures and giving people the opportunity to talk. I do not believe in my heart the member for Port Darwin agrees with the approach of ramming this through in one day. He has done his job as Leader of Government Business, he has spoken to it and led the debate on urgency, but I do not believe in his heart of hearts he supports ramming this through in one day. The things he said in opposition he must no longer believe. I refuse to believe what he said about this needing to be pushed through in one day. I think he would say, ‘I’m happy to have the debate. We will introduce it today, let the public have their say and come back in February. We will debate it and pass it because we are the CLP and have the numbers.’ I do not believe he would run from a fight, and that is essentially what the CLP is trying to do in ramming it through in one day. It is disappointing.
The CLP has flagged its priorities during its limited conversation with the public around this issue. It asked, ‘How would you spend the money?’ The government did not ask, ‘Should it be sold? On what grounds should it be sold?’ The government should not be surprised people think this is a cash grab for pre-election money because it led with, ‘How would you spend this? We will get some money and want to know what you want so we know what to deliver in the goodies bag.’
The public and the opposition do not want TIO sold. The CLP is walking away from something which provides affordable insurance to Territorians, recognises the Northern Territory’s special conditions and is there when people need it. The Pivot North report showed this was critical to developing the north. We are now handicapping development of the north. The report said the TIO model should exist in other parts of Australia because it delivers infrastructure. We have a competitive advantage and the government that wants to develop the north is removing that advantage, which is a mistake. Should it be sold? No. If you do sell it, should it not be a good deal? This is not a good deal because we are not getting value for money.
The return TIO has delivered over the last five years, compared to the sale price, shows this is not a good deal. When you compare the sale price with what we spend on infrastructure every year, this deal will not suddenly change the face of the Northern Territory.
Rapid Creek was promised flood mitigation at the last election not contingent on the sale of TIO. From within the CLP’s $1.1bn infrastructure budget Rapid Creek could have flood mitigation works if the government had prioritised it. You made an election promise and have not delivered on it. You now say flood mitigation at Rapid Creek is contingent on the sale of TIO. You have a $1.1bn infrastructure budget and $215m is going into the infrastructure fund. The proceeds from the sale are $275m. This is not a good deal for Territorians; it does not stack up.
The amount you will deliver from the sale, in the context of the Northern Territory budget, will not suddenly change the Northern Territory. That amount will not build a future for our children or our grandchildren when the Northern Territory’s infrastructure budget of $1.1bn a year is four times the size. This is a fraction of what we spend every year on infrastructure, so let us look at it again ...
Mr Barrett interjecting.
Mr GUNNER: The repairs and maintenance budget is $335m. What the CLP will deliver from the sale of TIO is less than pothole money. This is not a good deal for Territorians, and I look forward to the member for Blain explaining why he thinks TIO should be sold, how its annual report is wrong on the profits and proceeds returned to Territorians, how it reinsures for risk and the chair’s statement that it is fine to operate for years to come. Where is this imperative to sell TIO?
The CLP has not convinced the public about this sale mainly because it has not even engaged with it, which is disappointing.
It is a sad day in the parliament’s history to see this rammed through in one day. Territorians have been treated as second rate to a private contract the CLP has made. We do not support the sale of TIO. Should TIO be sold? No. If you sell it, should you not get a good deal? This is not a good deal. We do not support these bills or the sale of TIO.
Mr BARRETT (Blain): Mr Deputy Speaker, I support this legislation and hope the member for Fannie Bay takes note since he said he was looking forward to my response.
I will look you in the eye, straight across the Chamber – through the Chair of course – and say I sincerely, from the bottom of my heart, completely and utterly believe this is the right move for the people of the Northern Territory. It is the most rational, sensible thing to do, member for Fannie Bay.
You said this is a bad deal. You said how glowing the annual report was so there must not be issues with TIO and therefore no reason to sell it. The information I received from Treasury, and in talking to management and the chief executive officer of this entity, is that there are issues with TIO. I believe members opposite have a good understanding of those issues and are playing populist politics. It is easy to jump on the bandwagon and support something that is not right but is popular at the time.
Albert Einstein said, ‘Things that are right are not always popular, and things that are popular are not always right’.
The member for Fannie Bay mentioned the speed at which this has happened and how the government is being deceitful – not being a straight shooter. In the world where this is no government owned entity there is an announcement on the Australian Stock Exchange before it opens saying stock XYZ will open in a trading halt. At some point during the day there will be an announcement saying, ‘Your $4.20 stock was bought for $5.60, expect a cheque’.
There are reasons why transactions happen with speed. It is about making sure the company, between the time it is sold and transactions taking place, is like for like. You are not committing to buy something which over time dwindles down to something which was not what you thought. That is damaging, particularly for financial companies.
It is important for us to make sure this transition happens as effectively and smoothly as possible. This highlights why government should not be in this type of business, because it creates issues where it could be easy to level accusations of dishonesty, such as those levelled at us this evening. We are trying to conduct a financial transaction that happens in the real world quickly, in a way that melds with the way parliament works. These two systems do not work well together, which is why governments should not be in these industries.
Talking about economic fundamentals, economics is about scarcity. It is about looking at the allocation of resources, individual utility as opposed to the government’s greatest good for the greatest number. Individuals will always go for that which gives them the greatest utility at any given time given the resources available. Governments look for the greatest good for the greatest number. We hear small scope things like, ‘This may or may not be better for this small group of Territorians’. I am cognisant of that and sensitive to the issues people are raising – businesses working with TIO. People living in risky areas are sensitive to these issues because prices can vary largely between insurance companies.
At the end of the day, we were elected to govern and to do the right thing. Given the risk profile Territory taxpayers hold by hanging on to this company, it makes no sense to retain it. I would be derelict in my fiduciary duty to the people of the Northern Territory if I did not say this is the right thing to do.
I have looked at the reasons and I have listened. I have had discussions with people on the board of TIO, with management of TIO and with people who work in Treasury who analyse the numbers. I can say, hand on heart, this is the right thing.
What are the pros? Is this a risk-averse move by the Giles government? This gets taxpayers off the hook of having to pay astronomic figures in the event something nasty happens. It means taxpayers can move forward without that risk over their head and without playing Russian roulette every cyclone season.
The cons I understand. My constituents say they are concerned about the loss of direct market control and worried about leaving things to market forces. I encourage people concerned to remember almost all markets in Australia operate under a system where there is competition for consumers’ dollars. This is no different.
A market exists. We talk about market failure like it is a magic thing. If you say ‘market failure’ you justify anything you do. The term ‘market failure’ has very specific connotations in economics and means the market has no way of price allocating some type of good or service.
An example is the Australian Army. My colleagues and I could probably not get together and buy an F/A-18 Hornet, a tank and get a few guys to drive it and fix it. That is market failure. If I was responsible for my own defence, I could not do it nor would I. Collectively, as Australia, we put all our tax money together in order to achieve this.
This is the type of thing governments should be in – areas where there is a market failure. There is not a market failure here. There are many players in this industry all competing for consumers’ dollars.
Many of the reasons I hear for this being a bad idea come down to specific cases. We need to look at these and understand, but at the end of the day this government is for the greatest good for the greatest number. This is the right thing for the people of the Northern Territory.
I will not go over it because many people have already spoken. The Deputy Chief Minister has spoken eloquently tonight and I could not have put it better. I am proud to support this and will not take a backward step because this is the right thing to do. I support these bills.
Mr VOWLES (Johnston): Madam Speaker, I have a list of key messages that pretty much sum this up: Territorians and businesses do not want TIO sold; the CLP has no mandate to sell TIO and should take its privatisation plans to the next election so voters can have their say; the CLP is arrogantly rushing through a sale behind closed doors without any consultation with Territorians; selling TIO risks skyrocketing premiums and less cover; selling TIO risks creating an insurance crisis like that in Queensland; TIO is the only insurer in the Territory market that provides no loophole cyclone, flood and storm surge cover to cover Territorians’ need to be fully protected; TIO also provides disaster cover to mitigate against potential profiteering from rebuilding efforts after major disasters; over the last five years TIO has made a $305m profit; this is a short-sighted sale; and Territorians should not be forced to sell TIO for flood mitigation or the CLP’s unfunded 2012 election promises.
This gets me to my electorate of Johnston, the residents of Millner and flooding along Rapid Creek. I have spoken about my constituents and their concerns many times. The Minister for Lands, Planning and the Environment has been working with the residents group and that is a good thing. I am kept in the loop with that and have attended three or four briefings on Rapid Creek. To hold the residents of Millner, in the electorate of Johnston, to ransom by saying the government must sell TIO if they want flood mitigation works done, and for the Chief Minister to then promise $50m in flood mitigation works across the Northern Territory – I was confused in Question Time this morning when the Chief Minister said on two occasions $25m will be spent on Rapid Creek.
In his announcement last week he said around $25m would include Rapid Creek and parts of the rural area. I would like the Chief Minister to clarify that, or perhaps the Minister for Infrastructure, the member for Sanderson, could clarify that. Is $25m being spent on flood mitigation along Rapid Creek, or is the $25m, as per his media release last week, for Rapid Creek and parts of the rural area? I would like some clarification, as would the constituents of Millner affected by that.
The opposition will be talking about the impacts on Territorians and what TIO means to born and bred Territorians as well as new Territorians. Everybody says not to sell TIO and I agree.
I have said I will not bag government just for being government. If something good happens I will say it is a good thing. This is not right. If you have to make a big decision you need to take people on the journey, and it has become apparent you have not done that. Territorians have voiced their concerns about selling TIO, especially to a foreign company. It is Territorian.
I have a vested interest in this. My insurance is through TIO and my sister works for TIO. I agree with the member for Karama, it is a good thing people’s jobs have been guaranteed for a little while.
I get back to the $50m commitment. In 2012 there was an election commitment to do this work. The then Opposition Leader, Terry Mills, along with the CLP candidate, Ms Sangster, held a media conference where they said, ‘Here is $1.5m for commencement of the works. This is a down payment for more works.’ Labor had already committed $2.5m as a down payment because the 2010 floods in that area were significant and we needed to do something.
Both parties at the time, I thought, had done the right thing for affected residents by making commitments. The people of Millner already had a commitment the work would be done and that $1.5m would be spent initially then the remainder of the work would be done. To date, not one cent has been spent on flood mitigation for Rapid Creek Road.
When the Chief Minister said he would commit $25m initially the phone started ringing. People said, ‘How can we trust this bloke? It’s been over two years and the $1.5m commitment as a start has not been given. Now he offers us $25m if they sell TIO, which insures us. We are stuck in a pocket, jammed in a corner. How do we do this? We will be touched up either way. If they sell TIO our insurance will go through the roof. If they sell TIO we might get some flood mitigation works as the Chief Minister has said there will be $25m.’
The end result is premiums for people along Rapid Creek Road will, at a minimum, double. The cost of living for people in that area, and other areas across the Northern Territory affected by flooding, will be severely impacted. They will go to insurance premium assessments of individual risk, and the cost will go through the roof. The impact of the north Queensland floods and what that meant for insurance has been mentioned by opposition members as well as the Independent and Palmer United Party representatives.
I have announced a working party of residents as well as the Rapid Creek Landcare Group. A Rapid Creek Catchment Advisory Committee had already been set up. Ian Kew, from the airport, said it was a great committee but this government decided it was not and removed it. This committee has reformed and will start consulting with people, which should have already been happening. If you want to make big decisions you have to bring people along with you. You have to explain what you want to do and give people the opportunity to voice their concerns then address those concerns. You have not given Territorians that opportunity.
I give the member for Katherine credit for holding a public meeting because he would have known he would get a caning. However, he gave his constituents the opportunity to have their say and to hear from him, as a Cabinet minister, what he would do. I take my hat off to that; it is a good thing.
From media reports we know the member for Katherine promised $20m in flood mitigation works and $8m to move the ambulance service. That is $28m. The Chief Minister announced $25m for Katherine flood works. The member for Katherine has already lost $3m for his constituents. Is there any more for the people of Katherine? Will some be taken from the residents along Rapid Creek for flood works? Twice in Question Time the Chief Minister mentioned $25m for Rapid Creek. If that is just for Rapid Creek I would love it. I have been working hard with government to make sure we hold it to the election commitment of $25m.
How much will go to the rural area? Is that included or not? I hope the Minister for Infrastructure will contribute to this debate. What is the government considering along Rapid Creek?
The Chief Minister held a media conference on the side of Jingili Water Gardens which does not flood, which was interesting. I assume, and seek clarification, that the $25m would pretty much be taken up by raising the Trower Road bridge. A report I saw a few years ago suggested it would be in the vicinity of $20m.
I would like three questions about flood mitigation works in Rapid Creek answered. Will any works lower insurance premiums for residents in that area? How many homes will the $25m works take off the flood map? How many homes will not be affected? How will it lessen flooding?
In the last report I saw, raising Trower Road bridge was more of a transport issue and access to the hospital. Last time access to the hospital was cut off. Raising the Trower Road bridge will give Police, Fire and Emergency Services and the ambulance access to the hospital. Those works will be done. In the report I saw 10 homes out of the 68 would not be affected if Trower Road bridge was raised. I am happy for the government to clarify that.
Not all Cabinet ministers who decided to sell our TIO have spoken so far, and I look forward to hearing from them. Perhaps they could get some advice from the relevant minister. Perhaps the Minister for Lands, Planning and the Environment could provide that to the next Cabinet minister to contribute to this debate. It is obviously a serious issue. Raising Trower Road bridge will mean only 10 homes will not be affected.
The issue around flooding, Millner and the flood mitigation works is the safety of residents. The second thing is to keep premiums down. In a briefing with the Lands and Planning minister’s office they were looking at areas – I thank the Minister for Lands, Planning and the Environment because every time I request a briefing it is organised quickly and I appreciate that. That is how government and opposition should work. The briefings are always informative.
I was told they are looking at rezoning some of the homes at the bottom corner of Rapid Creek Road that would be severely impacted by another flood. Obviously the issue with the new insurer will be whether they will be uninsurable, like some of the homes in Katherine. What happens to residents who have bought homes? What will happen to their premium, if they can get one? Also, what will happen to the residents along there who have had surveyors in regarding the level of flooding? Some are only 10 cm or 15 cm deep. Could the flood mitigation works include a flood mitigation fund? People could apply for a fence to be put up in their front yard preventing their properties being flooded?
Not many people have mentioned it, but I have seen the Alice Springs flood map. This is a huge issue considering most of Alice Springs is Flood Level E, a major flooding area. I do not know how many TIO clients or businesses in Alice Springs are insured with TIO, but looking at the flood map I have the mall, Telegraph Terrace and most of the east side near Centralian College is classified Flood Level E, which is a major flood. I would like to know how many TIO clients have flood insurance because they would be impacted. How much will their premiums increase?
We are nervous with both the government and Allianz, which has said some people will take a big hit in their premiums. My phone has been running hot from Rapid Creek Road residents and others in the area asking, ‘Are they talking about us?’ We will wait to see.
I place on the record several letters sent to the NT News:
‘It’s our Future’, NT News 13 November 2014:
- No sale of TIO will continue to generate ongoing funds of millions of dollars for years to come to support local community groups.
It’s our TIO.
It’s our profits made from the investment of Territorians, for Territorians, to stay Territorian.
It’s our families’ futures. TIO is not for sale.
‘CLP backlash’, NT News 11 November 2014:
- Chandler, Elferink, Lambley, Westra van Holthe, Conlan and Styles – if you let Giles sell TIO, you better start thinking about your future.
I have been an apathetic voter in the past, but if this goes ahead I will put all my efforts into getting the CLP out of office, which means targeting your seats and reminding voters next election that you allowed Giles to sell off our TIO. Look at what happened in Queensland when GIO got sold.
To the member for Katherine, ‘Party v people’, NT News 18 November this year:
- The member for Katherine convened a meeting in Katherine recently to outline the government’s proposal to sell TIO. It is commonly perceived in Katherine that the NT government will sell its insurance company regardless of the concerns of many Territorians.
MLA Willem Westra van Holthe was asked at the meeting whether he would support his constituents or the Country Liberal Party if the sale of TIO continued to generate hostility in Katherine. He informed the public that he would always support his constituents. It remains to be seen if he is prepared to honour this commitment.
If the sale of this publicly owned asset remains a matter of major concern in Katherine, would the member for Katherine be willing to cross the floor and vote against his own party? I certainly don’t believe that he would.
We are asking ourselves the same question. Several government members have said publicly they are concerned about TIO being sold.
The member for Katherine has, according to this, publicly stated he will support his constituents. Of all areas in the Northern Territory severely impacted by the sale of TIO leading to an increase in insurance premiums, non-insurance of some homes – 20 was mentioned earlier – it is time for the member for Katherine to stand up for his constituents, the people who voted him in. They are the people he looked in the eye on election day, or who perhaps he doorknocked or met in the street and said, ‘Please vote for me, I will always look after you. I will represent your best interests.’
It is time for the member for Katherine to walk the walk of the talk he told people. It is time for the member for Katherine to stand up for the people he represents. I urge the member for Katherine, if he wants to continue in this parliament after 2016, to do the right thing by his constituents and cross the floor to vote against this sale. Everybody in Cabinet – I assume this is a unanimous decision because if it is not we will find out.
The members for Katherine and Sanderson have a lot to lose. They asked people to vote for them. It is time to do the right thing and represent the people who voted you in and gave you an opportunity to be a Cabinet minister. They gave you the honour of representing them in this House, although the powers have been abused today by ramming this legislation through.
We cannot believe the member for Port Darwin has allowed this to happen. He has done his job. The member for Port Darwin must be thinking he would kick this off and it will be such a bad thing for the Chief Minister that the one man wolf pack will have an opportunity to take over when it all falls down, as happened with the elected Chief Minister, Terry Mills, when he increased power prices, which Cabinet supported. In the meantime you were sharpening the knives to remove him, which you did. Perhaps that is what the member for Port Darwin is doing. Kick it off so the Chief Minister can fail and then he can launch a challenge. I believe that is about to happen.
I do not know what cave you are living in but the public sentiment around not selling this public asset Territorians own has been unbelievable. Many people have come to our offices or stopped us in Casuarina. Member for Port Darwin, we were in the mall at lunchtime for two weeks straight. Guess who was not there for those two weeks? The member for Port Darwin was missing.
He is famous for being accessible in the mall during the lunch break. For two weeks we did not see him. I wonder why. No accountability. He does not want to listen to the hundreds of people signing our petition and complaining about this government, how out of touch and arrogant it is and how it does not listen. Not once did you give people an opportunity to vote no. If you think this is the right thing I do not know how you sleep at night, member for Port Darwin.
You have some morals, some ethics somewhere deep inside you that would be totally against the way this has been rammed through parliament today without process and without listening to people.
I always said when I drove past, ‘Look at that idiot on the side of the road’, but I respect it because you gave people the opportunity to chat to you. During the two weeks we were in the mall I said, ‘Let’s see if the member for Port Darwin rocks up in his normal spot’, because we were about 3 m from it. I wondered what sort of bloke you were. We did not see you or any government ministers as they did not want to be accountable for this stinker of a decision to sell TIO, or to hear Territorians.
I have said things about the member for Katherine today, but he gave his constituents the opportunity to listen to his side of the story and face them. No one else in Cabinet has done that. I did not see public meetings at Hibiscus. I did not see any public meetings with government members. I did not hear the members for Sanderson, Brennan, Stuart or Port Darwin – he could have consulted in the mall. Cullen Bay might be in the storm surge zone or subject to a cyclone or flooding. Some of your constituents might have wanted to talk to you. You are normally in the mall; you would have listened, but for the two weeks we were there for nearly three hours and there was nothing …
Mr Styles: Having three-hour lunches every day.
Mr VOWLES: No, member for Sanderson. The difference is we were not having three-hour lunches; we were manning our TIO stalls and listening to Territorians. Some said it was a good idea. That was rare, but we gave Territorians, especially in Darwin, the opportunity to have their say. I copped it a couple of times from people at the markets saying, ‘You are a bunch of bloody bastards. You pollies are all the same. You just collect your big fat pay cheques and piss all over us.’
Mr ELFERINK: A point of order, Madam Speaker!
Madam SPEAKER: Member for Johnston, could you withdraw that language please.
Mr Elferink: For God’s sake, it is infantile enough.
Madam SPEAKER: Member for Port Darwin, sit down. Do not blaspheme
Mr VOWLES: It is not infantile, I was quoting somebody, but I withdraw. Sorry, Madam Speaker.
I have had people at the markets on Sunday, where I am from 8 am to 12 noon, say it is a good idea and Labor tried to do it. We would have a conversation. They would thank me for having that conversation and being accessible. As I said earlier, to make such a big decision you have to bring people with you. You have to give people the opportunity to have their say, listen to their concerns and take them on the journey. If it is good or bad, that is what we are supposed to do.
Governments make tough decisions; this is a bad decision. There is a difference between a tough decision and a bad decision. On this side we are united in fighting the sale of TIO and will always keep you accountable. Warren Entsch warning Adam Giles against selling TIO is at the back of my mind. He said the NT was the only place in northern Australia where insurance was consistently available and affordable, and the sale would risk creating insurance prices like those in Queensland.
At some stage we will hear whether it was a unanimous Cabinet decision or not. There are many leaks from that side of the House. We will find out, do not worry. When you took it to the party wing, what were the other …
Mr McCARTHY: A point of order, Madam Speaker! Pursuant to Standing Order 77, I seek an extension of time for the member.
Motion agreed to.
Mr Elferink: I would not mind if you were making a contribution that mattered.
Madam SPEAKER: Member for Port Darwin, cease interjecting. Member for Johnston, you have the call.
Mr VOWLES: The member for Port Darwin was missing in action in the mall for two weeks. I am sure he is being contacted by the people of Cullen Bay about their issues and concerns. He is either a good local member or not. He is either taking those concerns on or ignoring them like the rest of his government.
When it went to the party wing after the Cabinet decision, what was the reaction there? We know the member for Goyder presented a petition to parliament today signed by over 700 people. Many people in her electorate have visited her. I know many people in her electorate as well, and there is a certain undertaking she will stand up for her constituents. The member for Nelson has collected nearly 1000 signatures. There is a lot of concern.
You can say, ‘You’re setting your own agenda, you are being political about this’. It is our job to represent people and that is what we have done. I do not know where you were at lunchtime, but several hundred people took time out to drive their car around Parliament House and voice their concerns by beeping the horn. I was interested to see the former member for Drysdale, who was interviewed on 9News about this. There are some …
Ms Lawrie: Called them arrogant!
Mr VOWLES: Yes, he called them arrogant. Thank you, member for Karama. It is all about representing the people who voted for us and listening to the voices of Territorians, which you are not doing.
We believe this sale is part of a fund to pork barrel all the way through into 2016 and find things to win votes. Like power price increases, you think this will go away after a while. We will not forget, and will remind Territorians power prices will increase by 5% on 1 January. We will remind Territorians and they will remind us how you sold their asset.
As soon as premiums go through the roof, or even increase by $50, I am sure people will contact us after they contact you. We represent small electorates and are accountable to our constituents. If people come to see me they must be seeing you. They must be e-mailing you, knocking on your door, demanding meetings and trying to voice their concern.
I said at the last sittings this was a done deal. A few of you threw sledges. It might have been the member for Port Darwin having a sly crack at me. There is no way this was not a done deal. You were discussing it. It has already been sold; you are just finalising it. I said you would ram it through on the first day of sittings, and here we are on the first day of sittings ramming it through.
I will not support this and will hold this government to account for the $25m the Chief Minister said, on two occasions during Question Time, is for Rapid Creek flood mitigation works. As an opposition we are united against the sale of TIO. It will be voted on this evening. I urge some members on the other side to vote with the constituents who elected them. Hear their concerns and vote. I urge the members for Katherine, Goyder, Blain and Daly to cross the floor and not allow this sale to go through. At least delay it so you can explain to Territorians who are feeling ripped off because you have sold their asset and not asked their opinion of why you are selling TIO.
Vote against it today, bring it back in February, talk about it, give Caucus an opportunity to discuss it, your party wing, your Cabinet, your Chief Minister, your ministers and local members to talk to constituents and hear their concerns. Then take it from there. This is being rushed through and it does not need to be ...
Madam SPEAKER: Your time has expired, member for Johnston.
Mrs PRICE (Community Services): Madam Speaker, it is important we get back to the facts of this debate. The members opposite speak as if TIO is about to vanish, dissolve, become extinct or disappear. TIO will not disappear; TIO will remain in the Territory with all its current offices, shopfronts, staff, products and its name. TIO will remain in the Territory and the Territory will remain in TIO. It will maintain local services to Territorians but will be able to spread its risk.
I do not believe government should keep part of its assets locked into a financial company; government should be investing in infrastructure. Infrastructure is what is needed to develop the north and infrastructure is what is needed to build our Territory and improve the quality of life in remote areas.
I am pleased a substantial portion of the proceeds from the sale; $215m, will go into a long-term infrastructure development fund. The fund will promote investment in significant environmental, social and infrastructure projects supporting economic growth and the social wellbeing of Territorians.
In addition, $25m will be spent in Katherine for flood mitigation works. This includes over $7m to move the ambulance centre out of the flood zone, and another $25m will be set aside for works in Rapid Creek and the Darwin rural area.
This government will establish the Territory infrastructure development fund through legislation introduced in parliament early in the new year. An amount of $215m of the TIO sales proceeds will be transferred to the fund to build infrastructure. This will support economic growth and the social wellbeing of Territorians.
The fund will be managed by a board which will assess potential projects and make recommendations to Cabinet. It could also leverage private investment where viable, and access contributions from available Commonwealth funding for infrastructure purposes.
The Northern Territory government cannot rely on the Commonwealth government and expect to be part of a nation building future if it does not make the most of its own opportunities to create economic activity. Improved economic activity and infrastructure in the bush means more jobs and a stronger economy.
When I am travelling in my electorate the issues people raise are not about who owns TIO. What they care about is major life-changing infrastructure of roads, bridges, schools and sporting precincts, youth centres, oval upgrades and training centres.
The people of the bush care about getting between major centres and their homes. Upgrades to key roads such as the Buntine Highway mean better access for our remote communities and more opportunities and jobs, driving development in northern Australia.
The Buntine Highway is the major transport route for my electorate and provides vital access to Indigenous communities such as Kalkarindji, Timber Creek and Mistake Creek. It is also a key access route for the cattle industry and upgrades would ensure it is safe and accessible for truck drivers and pastoralists.
Better roads create better health opportunities, better education opportunities and better social opportunities. The money from the sale of TIO will provide resources to further develop northern Australia and secure a bright future for current and future generations of Territory children.
The Territory has tens of thousands of kilometres of roads, many unsealed. People in major towns often take good, safe, sealed roads for granted – an everyday luxury. This money could go towards sealing parts of the Central Arnhem Highway to provide safer travel conditions and greater flood resilience.
The Tanami Road is another key road for pastoralists, tourists and local communities in the electorate of Stuart. Sealing parts of this road would greatly improve the lives of those Territorians who live and play in this remote part of the world.
The Country Liberals government is working to make the Territory a better place to live, work, invest and play. This government is planning ahead. The government wants to create an infrastructure nest egg which is invested and grows over time, ensuring TIO’s legacy is felt by Territorians long into the future.
Having lived in a remote community I know how tough it can be and the major issues faced every day. Investment in our bush areas creates real jobs for Territorians and real change for those living in the communities.
Water concerns severely limit housing, community and commercial development opportunities. Funding towards improving water infrastructure ensures remote Territorians have a secure water supply into the future. It is so important we keep focusing on the bush and providing vital infrastructure needs.
The Giles government has seen the problems ahead for the business and made the difficult decision to act and secure TIO’s future. I fully support the sale of TIO because I am passionate about building community infrastructure and improving the lives of those living remotely.
Ms MOSS (Casuarina): Madam Speaker, I am deeply disappointment in the government and am against the sale of TIO. I am appalled at the way this has unfolded and the way Territorians have been ignored. This is about respect, and we should be showing people the respect they deserve in this debate. It has been interesting for me to watch this. Questions were raised about this in the lead-up to the Casuarina by-election and TIO was neither on nor off the table. Two days after the Casuarina by-election it was clearly on the table. Two weeks later we were looking at final offers for TIO, and four weeks later we are discussing the sale and trying to push through the legislation in one day.
A number of members on the other side of the House spoke about the need to make a business decision. It seems bizarre to me, when making a business decision of this size, to ignore not only the advice of a number of major stakeholders but circumnavigate the concerns of the biggest stakeholder of all: Territorians. For a decision of this magnitude to be made on a Sunday night, with legislation to be rammed through on Tuesday to avoid full and proper debate, is as astounding as it is disgraceful. On Sunday night while you were discussing and deciding the sell-off of this public asset, people were still asking me for the petition at my mobile office, as I know, they were my colleagues, even as recently as yesterday and still signing the electronic petition today.
The member for Araluen referred to the need for leadership, something we can all agree on. I believe leadership should involve the facilitation of meaningful dialogue to take people with you, but not in this case. In this case it has involved one-way, expensive, full page ads in the Northern Territory News and television advertisements.
Providing information does not replace the need to have meaningful conversations with your constituents. The sale of TIO flies in the face of the Territory community, which made it clear it is strongly opposed to the sale of this asset. People have been unequivocal and strident in their opposition.
Page 6 of the TIO Statement of Corporate Intent says:
- This next phase of our strategy is an evolution of the journey we have been on for the past four years and aims to leverage the work which has been achieved to date in terms of building and creating capability, changing the culture and establishing a more sustainable business model.
In doing this we recognise that TIO, as a result of its government ownership, has a unique opportunity and place in the market.
A number of polls, including those done by the media, show an 80% to 90% objection. Territorians have put their own signs up, signed petitions, written to the editor of the Northern Territory News day after day and written to and called members of parliament. Today they tooted car horns and I am sure everybody heard that. Many of us were at the rally with Territorians, who have been ignored. They do not want TIO sold.
For several weeks I have been collecting signatures at Casuarina Square for Labor’s petition against the sale of TIO, and I have been overwhelmed by the response of residents from all over the Territory. Residents from Katherine and Darwin’s rural area have been particularly vocal, but so too have residents from Rapid Creek, Nightcliff, Coconut Grove, Bayview, Cullen Bay and my constituents from Brinkin and Tiwi, who live in vulnerable areas along the Casuarina coast – and everywhere in between. All these residents have stories to tell. ‘TIO helped me buy my first home’, ‘TIO helped me after the Katherine floods’, or ‘TIO helped my son play for his local footy team.’ Territorians young and old, even those who do not bank or insure with TIO, have had their lives made a little easier by the Territory Insurance Office, owned and run by Territorians for Territorians. Territorians have a strong affinity with the publicly owned insurer. They do not want TIO sold.
TIO will not remain Territorian if it is owned by a multinational company from Europe. There are no contractual obligations for the conditions the CLP promised would be in place. It is just based on goodwill.
In some cases, TIO saved lives. In 1998, in the aftermath of the Katherine floods, TIO paid out to policyholders within days when other insurers took weeks or months.
TIO has always provided peace of mind for Territorians who might face similar situations, which we often do. It is this peace of mind residents value so highly and makes living in our harsh environment, which is prone to cyclones, flood and fires easier to cope with.
The point of a government owned insurer was the government taking into account the unique situation in the Territory. TIO continues to provide packages based on our unique needs to provide Territorians with the cover they need.
TIO has provided much support to hundreds of young Territorians on the sporting field, in sporting clubs, community groups and for community awareness initiatives. Goodwill guarantees for two or three years, no further, offer little comfort to Territorians.
It has become clear how many Territorians’ lives are affected by TIO and how far-reaching the decision to sell this is. Huge numbers of Territorians will be affected: car owners, homeowners, business owners and, potentially, those involved in community groups too. They want to have a say and do not want TIO sold.
The Chief Minister said this level of community support will remain intact despite the sale. Let us face it; we may no longer have control over a lot of these decisions. We are taking a multinational company at its word, and I wonder how much influence we will have over these decisions five or 10 years down the line when they are made in Munich by people who are in no way answerable to the people of the Northern Territory.
This year TIO again generously supported the NT Automotive Apprentice of the Year Awards. It was bittersweet, I imagine, for businesses in the automotive industry. They often deal with insurance claims and are deeply concerned about the ramifications of this sale on their businesses.
This brings me to the big problem in this debate. Territorians, our businesses and service providers have not been provided with information needed to have a say in a meaningful way, or the mechanisms.
The CLP says this is not rushed; however, from days after the Casuarina by-election just over a month ago to today, TIO has gone from safe to sold.
There is no mandate. Public comments from every direction are telling you that. Dozens of letters to the editor, thousands of signatures, and clearly expressed concerns from the Chamber of Commerce, the Property Council and the Motor Trades Association have all gone unheard, as has Coalition MP Warren Entsch, and the Pivot North report. They have all been ignored and are all warning against the sale of TIO.
A public forum was held in Katherine by the local member. We would have hoped more were conducted across the Northern Territory given the apparent urgency and considerable concern, but no, of course not.
The forum held at CDU was attended by people from across Darwin and Palmerston. Not one CLP government member was present. This was a good opportunity to answer questions and concerns Territorians have and present your case to them. You did not show up.
To not attend was a slap in the face for Territorians. The consultation presented to the people of Casuarina amounted to one A4 flyer, letterboxed, which gave one side of the story and referred to a change of ownership for TIO.
The people of Casuarina are smart enough to see through such wording and are left wondering why their TIO has been sold with minimal consultation. I know the people of Sanderson and Alice Springs are also wondering, because they have been writing, calling and e-mailing me too during this period, expressing their views and trying to find more information on why this is being done so hastily and asking for proper and full public debate.
My opposition to the sale is not just about the sentimental value of TIO or the lack of consultation or a mandate. I question the need to do this and whether it will benefit Territorians long term. Many questions are unanswered. Flood mitigation in Rapid Creek should not be reliant on the sale of TIO. There are many questions about the sale. Why does an asset providing the government with an annual dividend of roughly $10m need to be sold for a one-off cash splash? What happens when the money runs out and Territorians no longer own TIO? I question the Chief Minister’s extremely convenient figure of a 200% rise in premiums if TIO was not sold. How far will the money go long term?
Yesterday the Managing Director of Allianz Australia acknowledged some TIO customers will see high increases in their premiums. Again, I question the need to force more pain on Territory families already struggling with the cost of living.
As a first homebuyer I have insurance with TIO. My partner works on cars. Often the cars he works on are insured by TIO. This decision hits home, as I know it does for other members of this Chamber. It says this government is forgetting that its power comes from the people. It is disappointing to see how you are ignoring them.
Territorians could not have been clearer or their voices louder in opposition to this sale even though they were not given a mechanism by the CLP government to do so. This government has been derelict in its duty to consult and to listen to the concerns of the Northern Territory electorate. People have been ignored.
Madam Speaker, it is a disgraceful day and I oppose the bills and this sale.
Mrs FINOCCHIARO (Drysdale): Madam Speaker, I speak to this bill, but more importantly, I speak to each and every one of my constituents.
Since the discussion began about the future of TIO, many people have contacted my office for different reasons. Some people wanted to voice their support for the change of ownership of TIO and others wanted more information. Many people were opposed to the sale.
I cannot deny I have taken many calls and replied to many e-mails on this matter in recent weeks. I also met with a Palmerston business owner who is one of the organisers of the ‘Don’t Sell TIO’ campaign to discuss the issues of paramount concern to business and the motor repair industry.
I feel proud so many people have raised their voice, whether for the sale or against. There are many passionate people, and it is a great reminder to us that Territorians are engaged, care about the decisions we make and have the means to make their case heard. For many who contacted my office a simple, helpful question and answer sheet detailing the facts was enough to help allay their concerns. For some people no amount of information was enough to convince them the sale was a good thing.
I have not been happy with the speed and way the sale has been communicated; however, I understand the commercial limitations placed on Cabinet, which have been discussed at great length tonight. I appreciate the limitations placed on our communications strategy.
Throughout this public debate my primary focus has been to ensure current TIO customers will not be affected by any sale. I also regularly updated the Chief Minister and my Cabinet colleagues when comments were received from the public to convey community sentiment. In speaking with my colleagues, I know not everyone has been fielding as high a number of constituent concerns as I have, and I am comforted that my constituents and other Territorians have felt comfortable to share their questions, comments and concerns with me.
Over the previous few weeks a decision to sell TIO had not yet been made. I spent my time disseminating the information I had about the government’s terms and conditions of any sale. These conditions included ensuring the TIO brand and products remained the same, there were no job cuts, community sponsorship remained the same and prices do not skyrocket.
Yesterday it was announced the sale of TIO would proceed and greater detail around the terms of the sale are now in the public domain, which I am grateful for. Just as my constituents let me know how they feel about the sale, I am now able to let them know my position on the sale, having been appraised of the full detail. As a member of parliament, I am compelled to look at long-term benefits to the Territory and make sure we govern on behalf of all Territorians. I have now formed the view that Cabinet made the right decision to sell TIO, not just on the economic arguments which cannot be disputed, but on a range of broader social policy objectives.
I will outline the distinguishing factors that have given me comfort that the future of TIO is secure and future insurance cover for Territorians is secure. I note all my personal insurance is with TIO and always has been.
Perhaps the most alarming detail and compelling argument for the sale is if there was a cyclone the size and magnitude of Cyclone Tracy, Territorians would not be insured to cover the cost of the damage. I understand TIO was only ever able to cover approximately $677m worth of insurance to home and business owners. The predicted cost of insurance payouts in the event of a cyclone is closer to $1.28bn.
With the sale of TIO Allianz is able to provide insurance to Territorians in excess of $4bn. This fact alarmed me and should alarm Territorians. The great divide of nearly $600m will now be mended.
Imagine as a loyal TIO customer waking up the day after a catastrophic event to realise TIO is not able to financially cover the damage. Imagine seeing TIO collapse into financial oblivion due to an inability to reinsure its liability to sufficient levels. We live in a disaster prone part of the world, and the financial backing of one of the world’s largest insurers is a good thing for Territorians provided the spirit and direction of TIO is maintained for the benefit of Territorians.
Further to that spirit and direction it has now been confirmed Allianz will:
preserve and promote TIO’s brand throughout the Northern Territory in the long term
These are important attributes of the sale which cover off on many of the concerns my constituents had which I could not respond to prior to today. In particular, the investment in flood mitigation is critical, and the member for Katherine, more than anyone in this House, knows how important and meaningful flood mitigation is.
The retention of staff is also a key factor in forming my decision to support the sale. I was concerned there would be job cuts as a result of the sale. It is now confirmed there will be no job cuts and all accrued employment benefits will be recognised.
The fact there will be no closure of TIO branches, and the maintenance of community sponsorships, which will be increased, is hugely important in forming one’s decision.
We heard People’s Choice Credit Union will own the banking component of TIO. Key features that assisted me in forming my decision include that People’s Choice will:
acquire all TIO Bank home loan, personal loan, commercial loan, credit card and retail deposit accounts
I also understand People’s Choice Credit Union today announced it would pass on its low interest rates to TIO customers, which will deliver immediate and real financial relief for Territorians who bank with TIO. That is a genuine offering from People’s Choice to give Territorians who bank with TIO better interest rates.
Again, there will be no job cuts to the banking arm of TIO, community sponsorship will be enhanced and a new office in Coolalinga will be opened. These factors are reassuring.
There are many reasons Territorians are worried or opposed to the sale of TIO, just as there are many reasons Territorians are in favour of the sale. I am sure many Territorians are also indifferent and may not insure with TIO.
To those opposed to the sale, I understand your concerns and have heard and communicated them at the highest levels. Having reviewed the detail provided to me recently, I feel comfortable the sale is the right decision for the benefit of Territorians now and into the future. I look forward to a stronger, more competitive TIO which can fully protect all Territorians.
Insurance is a complicated area and I do not profess to be an expert. However, I am comforted by the words of Allan Manning, Adjunct Professor at Victoria University and author of nine books on insurance. He wrote the article ‘Will the Territory Insurance Office sale push up premiums?’ dated 25 November 2014 published on The Conversation and I quote:
- In summary, I see no difference in increase in pricing due to the sale of TIO to Allianz. Over time, the cost of insurance may well be reduced, as there will be some economies of scale with TIO not having to stand alone as a relatively small insurer. Allianz, one of the world’s largest insurers, has greater capacity to hold risk itself and greater buying power when it comes to re-insurance.
While the TIO was originally established due to insurers being reluctant to offer workers’ compensation cover in the Territory, today it is serviced by 12 insurers. All offer cyclone cover and only one does not provide flood cover.
All other states have sold their general insurance companies. As the Territory matures and its economy grows, it does seem right for the government to move out of this area and concentrate on other areas where government is the most appropriate supplier of the service. In my view, the government achieved a very good price on the sale for the benefit for all Territorians.
Mr STYLES (Transport): Madam Speaker, I support this bill. Insurance is about risk management and that is what insurance companies do. They have some really good people and experts assessing those risks. When you participate in this argument, it is about risk management. I thought those opposite might have done some risk management of their own and had some briefings, but when I checked this evening they had not asked for briefings.
It was not until it was announced. The Leader of the Opposition said she heard a decision had been made by Cabinet on Sunday night to sell TIO. Why did she not get up early on Monday and ask for a briefing? There were no briefings before the announcement …
Mr Conlan: Got it from the NT News.
Mr STYLES: It is a bit sad getting information from the NT News. If you look at the front page of today’s paper ...
Ms Walker: You are dreaming; you are gone!
Madam SPEAKER: Member for Nhulunbuy.
Mr STYLES: Members on the other side have come into this debate with assumptions, and we know where assumptions lead.
It was not until after the press conference that the deputy opposition leader asked for a briefing. I am reliably informed the briefing was about the media release, not necessarily what is being debated today, and it did not go for long.
Mr McCarthy: I was a witness.
Mr STYLES: Why do you try to trash a good company based on incorrect information? I have made notes of wild statements. The member for Barkly said hundreds of thousands of people want an answer. There are only about 30 000 policyholders. I note the member for Barkly is a policyholder, as are many on this side. I am also a TIO policyholder.
The member for Casuarina mentioned respect. Before I made a decision I asked questions, made sure I received briefings and got information about the risk. I respect my constituents, unlike those opposite who do not believe in respect because they did not get any information. You did not get the facts. You went off into fantasyland about what would happen and said the sky would fall in. It is Tuesday and the sky has not fallen in.
I do not think members opposite understand business. I will give you an example. My brother-in-law bought a mobile coffee van. When he bought the van he did not double the price of coffee because he understands – he has been in business all his life – you have to remain competitive.
TIO has 39% of the market. I cannot believe members opposite do not understand business basics. Perhaps they have never been in business; perhaps they do not understand or do not want to understand. Perhaps they want to create fear and whip up emotion about TIO. Several hundred thousand people want an answer, obviously they are not all TIO policyholders because there are just over 30 000 in the Northern Territory. Not everyone has insurance with TIO; they go to the other 11 companies in the Northern Territory that offer flood and cyclone insurance.
The member for Johnston said how terrible things are in Queensland. If you bothered to get a briefing you would know after the 2011 Queensland floods the federal government stepped in. We now have consistent wording for flood insurance across Australia. He should also know in Queensland premiums went up because many homes are not built to code.
Since Cyclone Tracy we have a cyclone code and houses are built differently. They cost a bit more to build, but they are built to a higher code than those in Queensland. If you have a home in Queensland not built to code you say, ‘I live in a cyclone area. I have a nice old Queenslander on stilts not built to code. The roof is not tied down but has a couple of straps on it and I want to insure it.’
This morning on ABC radio the presenter said, ‘I rang Allianz in Queensland and asked for a price to do this’. Allianz has partners there. Allianz in the Northern Territory has 1% of the insurance market and wants to buy a good, strong entity. One Allianz board member said, ‘The reason we want to buy it is exactly the problem you are having. People love TIO. We want to get hold of that book and we want those customers. We want to retain them.’
As with the coffee van, you do not kick the living daylights out of the coffee van then charge double; you would go broke. Allianz is in the risk management business. It has offered a fair price. Mr Jan Van Der Schalk, a senior insurance analyst with stockbroking firm CLSA, Credit Lyonnais Securities Asia, one of the top insurance analysts in the world, said, ‘Based on TIO’s last annual report, it appeared the sale price for the insurance business was about 10 times annual earning, making it a good deal’.
I do not have time to quote all the figures the opposition should have seen prior to running the debate in this House. They based their arguments on misinformation.
In 2006 the Labor government went against the board and the management committee. It wanted to offload TIO. I am told in 2006 – this is from people currently on the board – it was not in a very good position. A new CEO came in just after that, but the Labor government wanted to sell TIO. I do not know what it planned for the MAC Scheme or what funds were there. I understand, and am happy to be corrected, the member for Nelson was leading the charge with 23 000 petitioners opposed to the sale. The Country Liberal Party spoke to the board, probably spoke to some of the management, who said, ‘It’s not ready to be sold, you can’t sell it. It would be a disaster.’ The government wanted to go against the board.
The difference this time is the board approached the government. The fiduciary duty that board members and directors have is when they see a looming problem they are obliged to advise shareholders on what they should or should not do. What the shareholders do with that information is up to them. The shareholder of TIO is the Northern Territory Treasurer. In 2006 Labor knew TIO had a total aggregate risk of approximately $30bn and 80% of that was concentrated in Darwin and exposed to cyclone risk.
TIO currently, because it is government backed, only insures to about $700m. If you wipe out 700 $1m homes – there are many in the Territory these days – that is it. What do the rest of the people do?
I have not heard about statehood in this debate. If we were to keep TIO, having been advised of the contingent liability and the exposure the Northern Territory taxpayer has by the directors – that is all of us and our constituents. You may not even be a customer of TIO, but you are exposed to carrying the risk of TIO. We are seriously exposed and have been told to sell it. What happens if we have a catastrophe? This is about managing risk. If we have a catastrophe and the government still owns it, TIO pays out $700m and we have guaranteed the extras. Where do we get the extra money?
There is not much risk management when you look at debt levels racked up by the former Treasurer, the current Leader of the Opposition. We have a projected debt of $5.5bn and the opposition thinks that is all right. That is a 98% debt to income ratio. If we went to the federal government and said, ‘We were silly and did not protect the taxpayers of the Northern Territory. We exposed them to risk when we did not have to. We could have reduced and managed our risk.’ –not to manage our risk would be totally irresponsible. There are members on the other side who are happy to expose every taxpayer in the Northern Territory to perhaps $300 000.
We would have to go cap in hand to the Commonwealth and say …
Members interjecting.
Madam SPEAKER: Members for Greatorex and Nhulunbuy, cease talking across the Chamber.
Mr STYLES: … we are dumb because we exposed everyone to this massive debt’. Look at Norfolk Island at the moment …
Mr Conlan interjecting.
Mr McCARTHY: A point of order, Madam Speaker! Standing Order 51. The member for Greatorex is interrupting debate.
Madam SPEAKER: Member for Greatorex, member for Nhulunbuy, cease interjecting and talking across the Chamber floor otherwise you will be asked to leave the Chamber. Minister, you have the call.
Mr STYLES: We would have to go to Canberra and ask for billions of dollars. I cannot imagine what the Treasurer and Prime Minister would say if we had the opportunity to take that risk factor away from Territory taxpayers and shift it to the world’s largest insurer, which is far better at managing risk than the Northern Territory government, and did not.
I take on board what the member for Port Darwin said when he quoted Dr Neil Conn: government in business is government in the wrong business. That is right, we are seriously exposed.
The federal government could say, ‘We have to invest billions of dollars to fix your mess, we don’t think the Northern Territory is capable of self-government’.
Norfolk Island is about to lose self-government because they messed it up. I moved here 33 years ago and have put a lot in. My kids and grandkids are here and we are not going anywhere.
I do not want to see the federal government bail us out because we did not do the right thing. We are saving TIO. TIO cannot expand.
Warren Entsch was mentioned. Of course he would want us in Queensland because he would say that is the federal government. We cannot underwrite everything in Queensland.
The Leader of the Opposition said we need an affordable safety net. TIO is not the cheapest; other companies offer flood and cyclone insurance at a much cheaper rate.
The Leader of the Opposition said we have sold out Territorians. The opposition has sold out Territorians by failing to get the facts on this and being prepared to expose Territory taxpayers to this massive debt. I am not surprised that is the attitude when I look at the debt we inherited when we came to government. Debt does not seem to worry the opposition because members do not seem to understand someone has to pay it back.
You heard a business case from this side of the Chamber. We understand companies can do this far better than the government because it cannot offload billions of dollars’ worth of risk.
In the Territory we self-insure our infrastructure. On top of $30bn, which is the total aggregate risk, we still have schools, hospitals, roads and government owned infrastructure. We also self-insure this building.
Where is the opposition’s business case? It says, ‘We want to keep our Territory Insurance Office’. I wonder if members have explained what people are exposed to when they have been talking to them.
A delegation came to my office a week ago. These people were putting posters on the side of the road about TIO ownership. They walked out of the meeting pretty satisfied with the explanation I gave them.
People may scoff, but I also spoke to the ABC in Alice Springs on the morning of 14 November. I explained what was happening and at the end they said, ‘You have virtually convinced us’. This was an ABC reporter and ABC cameraman, and I was quite surprised they had gone a long way to saying it sounded reasonable and fair. Why? Because they had the information.
It is disgraceful that members of the opposition say premiums will double or triple. Gerry Wood said someone rang TIO this morning about workers compensation and received a quote for $106 000, GIO was another $3000 or $4000, another one a bit more then Allianz was $161 000. The member for Nelson said there was a difference of $55 000.
What he did not say is go with TIO, because TIO is an entity and will remain an entity. Allianz will have its business – it has a different portfolio – and TIO will still operate.
My advice to the member for Nelson is tell that person to go to TIO because $106 000 is the best deal. If he had attended a briefing he would know what was happening, but he wanted to spread rumours and scaremonger in the community.
If you had a briefing and continued scaremongering in the community you would be lying and would be caught out at some stage. ‘We can’t get a briefing because then we would have to tell fibs.’ You just make it up as you go.
I have so much more to say but time is rolling on and there are other speakers. I have another nine pages, plus four-and-a-half pages of notes in relation to the hypocrisy from the other side. I wish I had more time, but will pass on to other speakers so we can all have a turn then get on with saving the Northern Territory, saving TIO and allowing it to expand.
The member for Nightcliff has said in the past if you buy a house or a business premise in Nightcliff and want to rent it out you do not trash it to get less rent.
I congratulate the staff of TIO because when Richard Harding took up his position TIO was in a lot of trouble. Government had been putting money into it. He has turned it around and taken it to a point where it needs to grow further. It is now being restricted and strangled by the fact government owns it. It cannot go interstate, it cannot increase its business, government is seriously exposed and it is like the humble tomato – you plant the seed.
In 2007 Richard Harding planted a seed. He, his executives and the staff have done a great job – all 259 of them – of the tomato being on the vine, ripening and needing to be picked. The board has recommended we pick the tomato. If you leave it on the vine we all know it will wither away and be useless for consumption.
The time is right, the evidence is right. Jan van der Schalk says the time is right, and he is one of the most eminent insurance specialists in the world. I trust him, I trust the board of TIO and I trust TIO management for giving us the best advice for the Territory. I trust the excellent consultants from around the world who have given us the best information and I accept it. The information I do not accept is from the uninformed opposition.
Mr CONLAN (Central Australia): Madam Speaker, this is a fantastic day to be a member of a government prepared to put its foot down and do something right for the Northern Territory and Territorians. A day like today makes seven years sitting opposite this mob almost bearable and worthwhile. I have listened to these guys, watched them perform and lurch from one disaster to another for seven years, five in government and the rest in opposition. They are a hopeless case and full of haters.
The member for Nhulunbuy is a case in point. She is a hater. She does not like much. Unlike the member for Nhulunbuy, and contrary to popular belief, I do not hate anyone on the other side of the Chamber. In fact, I quite like you all. I know in this Chamber we try it on every now and then; we have to go to battle, draw our swords, pretend to dislike and engage in some fairly robust warfare. However, I do not dislike anyone on the other side of the Chamber. I will make sure when I retire from parliament I have no deep down dislike and do not harbour any resentment for anyone on the opposite side of the Chamber, unlike the member for Nhulunbuy, who seems to be a hater. She dislikes people, and I think she particularly dislikes me. Being on this side of the Chamber …
Mr McCARTHY: A point of order, Madam Speaker! Standing Order 113: relevance. The debate is about the sale of TIO.
Madam SPEAKER: That is not a point of order. There is latitude, minister, but if you could please address the topic.
Mr CONLAN: Yes, Madam Speaker. It was simply an introduction to the 30 minutes I am allowed in the TIO debate. Being on this side of the Chamber I regularly hear the member for Nhulunbuy. It is quite annoying but, notwithstanding that, I do not hate her.
It is great to be part of a government prepared to do something significant for Territorians. I have looked back at the 11 years of Labor, which I remember every day of. For five of those years I watched members lurch from one disaster to another. I wonder if they made a significant decision. What did they do that took some intestinal fortitude? Did they do anything? I find it hard to put my finger on anything Labor did. All they did was run 100 miles from decisions. The moment something became tough and might invoke an unpopular opinion, Labor ran. They were like the ostrich that stuck its head in the sand.
Labor could have made this decision in 2005 but did not. They had the biggest landslide victory in the history of the Northern Territory with a 19-seat majority. It still was not enough to convince a Labor Chief Minister to make a tough decision and deal with TIO.
All we have heard today is the pontificating holier-than-thou garbage of, ‘You are selling something so endearing and so important to the people of the Northern Territory’. That is your only argument. Let us look at assets. We live in a global world not a closed cocoon like mushrooms, as you would like us to. This is a global economy and a worldwide environment. Look at some of the other iconic assets that no longer belong to their original owner.
I am from the great state of Queensland. The member for Karama likes to depict that as a disadvantage, that I am a second-rate person and she is so much better than everyone else because she was born and bred in the Northern Territory. She makes no allowance for the fact importing skills into the Northern Territory makes it what it is today. People moving from interstate or overseas have made the Northern Territory what it is today.
The member for Barkly is a New South Wales boy who moved to the Northern Territory 35 years ago, as he keeps telling us. How do you feel when the member for Karama beats her chest and says, ‘You are a second-rate citizen. I’m better than you because I was born here.’
I am from the great state of Queensland and am proud of my heritage. Most of my family still live there. My in-laws live in the other great part of Australia, Western Australia. I choose to live here, my kids were born here and I love the Northern Territory. I do not know where I will end up. Many people say, ‘I’m going to stay here for the rest of my life’. I will not make that commitment. I love Australia, I love travelling and I love the world. I might end up anywhere. Who knows? For the moment, I am a committed Territorian, my kids go to school here and we have a lovely life in Alice Springs.
Let us look at that great icon from Queensland, XXXX. It is one of my favourites – XXXX Gold, XXXX Bitter and XXXX Heavy. It is now owned by the Kiwis – Lion Nathan. It is the same great taste and the same great looking can. It is still one of Australia’s most popular beers, but it is owned by the Kiwis …
Mr Styles: Did it double in price?
Mr CONLAN: It did not double in price. In fact, the price might have gone down. Vegemite is another great Australian icon now foreign-owned. Budweiser, that great American brand is no longer owned by the Americans. Rolls Royce, one of the great British icons, is no longer owned by the Brits. You do not get much more Australian than Billabong. Guess what? It is no longer owned by Australia. RM Williams is now owned by the French. Another iconic Australian brand is Victa, which is now owned by Briggs and Stratton.
They are examples of companies that have gone from strength to strength. Their iconic status, the quality of service, the quality of the brand and the brand recognition has not been lost. In fact, it has been enhanced. These companies have rescued most of these organisations and put them on the path of financial success. This will happen with TIO under ownership of one of the biggest organisations in the world, Allianz. Yes, it is foreign owned, no doubt about it; however, this is the right decision and it has to happen.
We have watched this mob for seven years. We watched you never make a hard decision, only run from them. You guys would be happy to let TIO stay exactly where it is and allow Darwin to be wiped out once again by a cyclone, with no propensity or capacity to rebuild the community as a result of the financial situation that will become TIO’s if we did nothing ...
Mr ELFERINK: You could rebuild your house with the insurance money but there would be no sewerage system.
Mr CONLAN: Yes, another great quote from the member for Port Darwin. He put it beautifully.
This decision has to be made. It is a decision to save TIO from oblivion, let alone Darwin if it were wiped out once again by a cyclone; it is coming, do not worry. You would have us do nothing. Come that day the government of the day – whoever that might be – is left holding the can. ‘I am sorry Territorians, we can’t rebuild your police station, the hospital or the school. We are flat out paying out your insurance claim as a result.’
I ask the opposition if that is where you want us to be? It is a question the opposition should answer. They cannot and will not answer that question. They tug on the heart strings and make up this pontificating, holier-than-thou argument about how important it is this organisation remains in Territory hands. It is a completely flawed argument. I know you believe it, and that is the problem I have with the Northern Territory Labor Party opposition. The Labor Party under Prime Minister Paul Keating would have had a coronary at the argument you tried to mount with regard to saving TIO. He was a Labor Prime Minister who did something, unlike the Labor government of the past and now the Labor opposition.
The insurance industry is facing global changes. We live in a global environment. The increase in the number of large violent natural disasters has put pressure on insurance companies around the world. TIO and the Northern Territory are no different. According to the Labor opposition, that is not the case. It is the case and why we have made this monumental decision. Yes, we might face electoral oblivion. I am quite prepared to lose my seat over the fact this is the right decision to make. It is the right decision and that may happen.
You wave that in front of us as if to run from that threat: that we do not have the intestinal fortitude to stand up for what we believe in based on, whether or not we will have another four years employment. That is not the case, unlike you. That is what you did and what you will continue to do. You will not make a decision if you fear you will be out of a job at the next election. Do you have that few job prospects? Is your future so bleak you must stay in this Chamber for the next 20 years until you retire? It seems like it. We can do other things. We are prepared to throw caution to the wind, roll the dice and back ourselves.
If we face electoral annihilation and lose our seats, if I am despised in my electorate as you say – I do not get that feeling. We are midterm. This government has made several big bold decisions.
Any polling usually indicates a run against the sitting member. If that is the case I am prepared for it and will stand by that decision. If I am defeated on election night 2016 I will not regret making that decision and being part of a Cabinet that made one of the most important decisions in the history of the Northern Territory. However, that will not happen. This is crucial for the future of the Northern Territory, and it does not surprise me you have taken this path. It has been a pretty lame argument all day long from the Territory opposition.
You know this is the right thing to do. You wanted to do it in 2005 but could not because you did not have the guts then or now.
The infrastructure program was raised tonight – what will happen to the money? The money will go into building significant long-term infrastructure for Territorians. Yes, it may go into building a football stadium. What is wrong with that? The Northern Territory is becoming a proving ground for national sporting events. We have shown we can host some of the biggest international sporting events in the world. Between Alice Springs and Darwin we can do it, so why not have a stadium commensurate with what we want to host?
You talk about a swimming pool; it is called an aquatic centre. What is wrong with an Olympic standard aquatic centre, something lacking in the Top End? We also lack a tennis centre.
We have so much talent, so many people, organisations and peak sporting bodies across the world that want to bring first-class competition to the Territory, but we are limited because we lack infrastructure. If we can set things up for the future the Territory will be a better place.
The member for Casuarina asked what will happen to the money. That is what will happen to some of the money. Katherine, Darwin, Palmerston and the Barkly will benefit from the money.
This government has already done more in two years than you could ever have hoped to do in your term for under four years, let alone what the previous government did in 11.
The turnaround in the community has been remarkable thanks to the policies of this government. We will continue to invest in the Barkly, Alice Springs, Katherine and the Top End. We will set up a legacy for future generations of the Northern Territory.
This is a monumental day and it makes me proud to be a member of parliament. It makes sitting here for seven years looking at this defunct, lost opposition, formerly government, worthwhile. I hope once some of the heat dies down, which may be tomorrow, Thursday, another month or even six months, people will say, ‘Those guys did what we elected them to: make a tough decision. We do not expect politicians to live on the gravy train, run from decisions and play a popularity contest all the time.’ That is what the opposition does. To you it is a popularity contest. ‘If they don’t like me what can I do to re-shape the message so they do?’
It is not that easy in the real world, where you have to make decisions. That is what we have done today. We will do it again tomorrow, on Thursday, and every day we are in government we will make decisions to benefit the Northern Territory. These are great bills, it is a great day, it is great for TIO and great for the Northern Territory.
Mr ELFERINK (Attorney-General and Justice): Madam Speaker, TIO has not lived up to expectations. I will read something from 8 March 1979, where Chief Minister Paul Everingham introduced the TIO Insurance Office Bill to create the Territory Insurance Office, which says, inter alia:
- There would be few major developments which have taken place in the thriving state of Queensland where the State Government Insurance Office has not been involved of some of the funding. Indeed, just to mention a less well known instance of its involvement, in Brisbane the SGIO theatre is an ultra-modern community facility which provides, amongst other things, a home for the Queensland Opera and Queensland Theatre Company.
I ask that honourable members read that second reading speech in relation to TIO’s creation then compare it what it has done in building theatres – we are a bit light on for theatres built by TIO. In fact, the only concrete bricks and mortar asset TIO has is part of the MAC Scheme, which is the TIO building itself. The TIO building will remain as part of the MAC Scheme asset base and, for the first time, rent will be paid by TIO into the MAC Scheme because TIO will be owned by somebody other than the Northern Territory government. As a consequence it will support the MAC Scheme, which we are not selling. We have passed that scheme on to Allianz to manage.
I have heard people say, particularly the Leader of the Opposition, they love TIO. I understand the emotional argument, but to love an insurance company is a rare thing. I believe people are saying they like the security of an insurance company they own. ‘It’s our TIO’. I understand that. I am scared senseless nearly every morning I get out of bed because of all the things that could go wrong in my life but I refuse, point blank, to allow my fears to govern common sense. Perhaps that is the difference between members opposite and me; they trade on fear.
Every media release the opposition has put out in relation to TIO trades on fear. It is not a rational debate they are pursuing; it is irrational and they are trying to goad people into a state of angst over TIO. What is implied is if TIO fails to pay for itself the government will fix it. That is typical of members opposite. At the end of the day government is an amorphous blob of goodness that floats around in the socialist mind manifesting itself to make people happy. That is not the role of government, and if you wait for government to make you happy I suspect you will be waiting a long time.
Government has some very important functions but running financial institutions is no longer one of them. It was perhaps in the post-Keynesian world of the late 1970s, but that world is fundamentally different, which is why other jurisdictions have moved on. Finally, we walk to the edge of the precipice and today we jump off so that insurance company can take flight.
TIO will continue, and we hear from members opposite, ‘There is a risk TIO will not exist’. Allianz is purchasing the goodwill of the company. Why on earth would you purchase the goodwill of a company if you wanted to move in and compete directly? Why not just compete directly? You could buy a lot of advertising for $424m. You could probably muscle out most of your competition if you wanted to. For $424m you could pretty much subsidise your way through the whole insurance industry in the Northern Territory.
Allianz has chosen not to run with the Allianz brand; it wants to run with a local boutique brand. This is part of the marketing strategy. It is looking to pick up more boutique insurers because boutique insurers are trusted names. It looks at the business model of boutique insurers and, rather than applying the Allianz model, applies the TIO model because the TIO model has been successful. It will continue to apply the TIO model and that is what it has signalled.
It is mere puffery and nonsense to suggest otherwise. You would be a moron if you decided, in business, to take over a small boutique company to get its goodwill then take that goodwill into the public domain and shoot it in the back of the head. It does not make sense and is nonsense. Unfortunately, opposition members cannot help themselves.
We also heard tonight, repeatedly, the suggestion that in the last five years TIO has done well. That is not so surprising because in the last five years there has not been a GFC or a major disaster, and there has been no major reason to pay out. The opposition made reference to the most recent annual financial report, but I suggest members read TIO’s annual report from 2005 at page 26. A graph on that page shows the MAC Scheme spent $30m in two years. Much of that had to be paid out from subsequent years and prior to make the MAC Scheme float.
It may be a great surprise, but since 1979 the Northern Territory government has extracted about $18.5m from TIO. It has, however, at various other times, been required to put in about $20m to keep TIO solvent. Seeing the headline in today’s paper with the tombstone of TIO – it has had two heart attacks in that time. Who resuscitated it? The taxpayer! If we offered that to any insurance company in the world – to say we would subsidise insurance premiums with taxpayers insurance, what would the chances of the taxpayer sitting on the sidelines and applauding be? I suggest somewhere between Buckleys and none.
Page 26 of the 2005 annual report says:
- Despite the excellent result for 2004/2005, the Scheme remains under pressure from increasing reinsurance costs, escalating costs of medical care and substantial growth in the Northern Territory’s average weekly earnings against which many benefits are indexed.
What was the response of the Labor government when it had to deal with increasing pressure on the MAC Scheme? It changed the law and the methodology of payouts so it could limit payouts. It was the only way it could manage the risk. What did TIO do? It did what all insurance companies do and mitigated its risk, limited its expenses and, therefore, was able to trade out of the hole it was slipping into. In other words, it gave less back to the insured. That is not ‘our TIO’. That is an insurance company doing what insurance companies do.
Let us go forward to the report often quoted today, the annual financial report for 2013. I draw honourable members’ attention to page 111. Whilst I have heard members repeatedly quote this report saying how rosy TIO’s future is, they do not refer to the financial notes at the back of the document. These talk about the risk exposure and put qualifiers on the risk exposures, so a person reading this report from cover to cover knows they feel confident about the future. However, any number of things could occur which would expose us to risk. Page 111 says:
- The nature of the insurance business is such that in normal course of operation, rejected claims may be the subject of legal challenges. TIO will defend these vigorously …
Vigorously. In other words, the attitude of TIO is like that of any other insurance company. ‘If we don’t believe your claim we will take you to court. See you in court.’ That will be the way it approaches its business because it is an insurance company. Tonight we have heard examples of claims being rejected and people having to fight through the court system.
It is tempting to romanticise TIO. There is no doubt it has provided a good service to the people of the Northern Territory. Nevertheless, we should not convince ourselves this institution is an unregistered public benevolent organisation. It is not a charity; it makes a profit.
From time to time it did not make a profit and had to be put on life support by the taxpayer. This is what bothers me the most. Two members have touched on it already, but I must mention that if we were to have another calamitous disaster the exposure of TIO, with its limited footprint of reinsurance, means the taxpayer would again have to come to its rescue. If that calamity was one of substantial consequence – a cyclone through Darwin where the vast majority of this organisation’s risk sits – the taxpayer would have to come – after $680m-odd worth of reinsurance payments – to government saying, ‘Please can we have some more?’ If the damage to Darwin was substantial the effect would be the taxpayer would be racking up debt to cover taxpayers’ contingent liability to TIO. That means no schools. We would be paying people’s insurance claims before we rebuild schools, fix bridges, roads or houses. It is not government’s job to underwrite insurance companies, and that is the frustrating, sad truth.
I will finish with an observation made by the member for Fannie Bay, ‘I bet this process of jamming it through sticks in the craw of the member for Port Darwin’. Yes, it does. I do not like going through this process. As I said during the debate on urgency, unless we go through this process today, more of those headlines will be seen day in and day out. People will lose confidence with either their banking or insurance investments with TIO. They will go elsewhere as confidence dwindles, because that is not how businesses do their business. Businesses make quick decisions which can be executed quickly. That is a necessity of business.
You cannot run businesses through committees. You cannot run businesses as a democracy because businesses would cease to operate in that environment. They are run by a board which is rarely elected. The policies are set by the board and executed by the CEO, who is never elected. That person is headhunted and purchased for the job. They then have to respond to the business environment they are in.
How we go about dealing with this business is placing us, as a government, in the position of having to make a business decision and behave like a business. That gives me all the reasons it is wrong to continue running it as a business. It belongs in the business environment.
I prefer to bring bills into the House and let them go through the normal passage. As Attorney-General I have tried to consult widely on most of the legislation I bring into this House if it is substantial legislation. I hear, from time to time, members opposite acknowledge that truth.
Yes, I feel uncomfortable with this process, but it reflects the nature of the organisation we are dealing with. It is a business and this has to be done quickly otherwise it will be damaged by ongoing debate and dispute. This is the nature of what we do. We need to leave business to businesses and we will do government.
I support this bill not because I relish the political difficulties involved – I could not have said it better than the member for Greatorex, ‘From time to time government is not about listening to polls or becoming sensitive to complaint and criticism. From time to time government is about making decisions that matter for the people we serve, the people of the Northern Territory.’
There could not be a more calamitous failure than a government that can see a problem such as its exposure to a contingent liability of the nature TIO exposes the Territory to and not respond. That contingent liability may not become manifest this year, next year or in 10 years’ time, but at some point consistent with the behaviour of cyclones in the Northern Territory in the late 1800s, 1937 and in 1974, there will be another blow that damages or destroys this city. It will probably only be damage because of housing construction now, but the damage will be substantial. People will have long forgotten this debate, but a government of the future will know it has to touch its savings or borrow to repair the damage to schools, hospitals, roads and bridges. However, it will not have to bail out an insurance company it should not have been involved with in the first place.
Mr GILES (Business): Madam Speaker, I thank everyone who has spoken on the second reading of two cognate bills. I have appreciated most of the debate, particularly that from this side of the Chamber.
I also reflect on the summation by the member for Greatorex. It spoke about leadership, decision-making and great team effort in standing up for the Northern Territory.
The government will continue to make decisions for the benefit of all Territorians. The TIO decision has been made for the benefit of Territorians. We carefully considered all the options and decided to allow TIO to be competitive in the future and to unlock $424m of vital infrastructure for projects.
TIO ownership had to change because, as the Leader of the Opposition well knows, TIO was at risk, as were Territory taxpayers. It is a decision we did not crash through. TIO is 35 years old and the community has been debating its future for at least a third of its life. It is a decision we have been up front about, much more than any of the Labor Party decisions ever made.
Let me remind the House that TIO raised its concerns with the previous Labor government. I will quote current TIO CEO Richard Harding, speaking on the Darwin Mix FM program on Tuesday 11 November 2014:
- … I said to you before, our Chairman Bruce Carter, you know, in 2006, he was one of the people who wrote the original report to …
… government, he wasn’t part of our board back then, but Syd Stirling appointed him after the last – last sale process fell over, and the community, yeah, with the community response at that stage, so it’s been – it’s been talked about, right, and it’s been a topic of conversation, I’ve been there for seven years, as I’ve said, every Treasurer and every Chief Minister that has been in the seat since then has had a conversation and we’ve advised them and given them input on this issue.
Mr Harding went on:
- It’s not so much a case of who recommended it and to who, it’s a case of our job as a company is to give advice to the shareholder about the risks and the challenges of managing that business, and then the role of government is to work out what they want to do about that and how they can go forward, so we’re here because that conversation’s been ongoing for, you know, for eight years at least.
The Labor Party, the former Treasurer and current Leader of the Opposition knew in 2006 that TIO faced challenges of risk and uncertainty over its future. I believe the Leader of the Opposition knew about the challenge TIO faced before 2005.
Let me quote from the Parliamentary Record of 12 October 2005 and an answer to a question without notice to then Treasurer Syd Stirling:
- What we are doing is embarking on a study, which will probably take two to three months, to fully inform government as to the best way forward for TIO. We have done a lot of work in the last couple of years around TIO.
There is another hint the Leader of the Opposition knew what was going on. Here is another gem from the Parliamentary Record from the then Chief Minister, Clare Martin, on 14 February 2006 in answer to a question:
- Over the last four years, we have conducted a number of investigations into the TIO … those reports that came to government were from diverse organisations such as Trowbridge Deloitte in 2002. In 2003, we tasked Ferrier Hodgson with looking at another aspect of the sustainability of the TIO. We also put significant capital into the TIO. Finally, we asked Rothschild to give us a view of where TIO sat in a national, international and very competitive insurance market ...
I believe the current Leader of the Opposition was, at that time, a member of the ministry. She must have known about TIO’s situation then but lacked the courage to make the hard decisions. In fact, she made reckless decisions and spent the money running up debt on the Labor credit card to the tune of $5.5bn. The level of debt and the rapid rate it was racked up by the former Labor government, and the Leader of the Opposition, is nothing short of breathtaking. What happened to the money? What do Territorians have to show for the Opposition Leader’s mad recklessness?
This government saw the problems ahead for TIO and made the difficult decision to secure TIO’s future. As the House knows, I have been clear about the sale and its process. We did not hide it; we were completely up front about it. At every opportunity I raised the issues, debated the issues and answered every media and opposition question. The opposition brought on a matter of public importance. The government had a motion on TIO the following week which allowed everyone in the Chamber to debate it. The opposition had a petition on TIO which commenced before the Casuarina by-election. At the Casuarina by-election they had signs up saying, ‘Don’t sell TIO’. It is outrageous for the new member for Casuarina to mislead the House on that.
The Leader of the Opposition has been outside Parliament House with her union mates demonstrating. She attended the old Town Hall meeting. That is what democracy is.
One thing the Leader of the Opposition has not done is present one good argument or alternative to the TIO challenge. She has whinged, whined and complained without presenting an alternative. I said at the start we wanted a mature debate. I really wanted people to come up with solutions and opportunities for the way forward. I wanted people to come forward with criteria that could fit the sale. Not once did anyone from the other side of the Chamber come forward with a viable alternative, apart from sending it to a committee because you do not have the guts to make a decision.
We put up the criteria for the sale while you sat there whingeing. You could have been part of leadership in trying to find a way through, but nothing. ‘I didn’t know anything about it until after the Casuarina by-election.’ You were protesting at the by-election. Are you that forgetful? It is outrageous.
We have spoken about this issue for months, not like the Leader of the Opposition and the dodgy Deputy Leader of the Opposition – the people who rushed through a Stella Maris deal in the blink of an eye, under a shadow, before the last Territory election. Was there talk about that, member for Barkly?
I would like to again spell out to the House the pressing needs that brought about a change in TIO ownership. The strategic imperatives for the creation of TIO no longer exist. The Territory insurance industry is vibrant and competitive, with 12 insurers competing for customers. TIO can only operate within the NT if it is owned by the government. Its customer base is small and there are risks. Here are a few numbers that, if you sought briefings, you might understand about the industry: total aggregate exposure is $23bn, which includes $19bn worth of cyclone risk and $16bn worth of risk in Darwin alone; it has only paid a $13m dividend to the government over 10 years; it lost $40m in the GFC; TIO has only $100m in prudential capital to back that risk and the rest would have to come from NT taxpayers, but we do not hear a peep from anyone on the other side ...
Mr Wood: You did not attend the meeting and explain that.
Mr GILES: It was your meeting. We sent Richard Harding, the expert on the matter ...
Mr Wood: We invited you. It is politics.
Mr GILES: It was your meeting. That is what you are playing here. You are a populist, Gerry.
Richard Harding from TIO said in that same radio interview:
- I have about $102m in capital. If you look at QBE, CGU or one of the other major national players you are talking about companies that have $4bn to $8bn worth of capital exposure, but they also then have access to financial markets, right. Their shareholders are financial markets and they can gain access to more capital so the market capitalisation of those businesses listed on the stock exchange is $13bn or $15bn so they are very big institutions, very able to absorb risk, very able to manage risk and to do it without passing on the sort of huge impacts to customers.
TIO was and always will be Territorian. I will spell out what will not change. We would never agree to new ownership rules had certain sacred elements to Territorians not remained, the TIO name will continue serving Territorians; the products stay the same and flood insurance is automatically included in all TIO policies from now on; all TIO staff will be retained; the MAC Scheme will remain in government hands, one third of the insurance business in government. We could have realised more for the sale if we had included the MAC Scheme as part of it. We believe this is the right outcome at the right time. The new owners of the insurance and banking industries are good corporate citizens and have willingly pledged to continue all TIO’s community support programs such as the CareFlight helicopter, DriveSafe NT Remote and the sports stadium sponsorship. In fact, the new owners of TIO’s insurance business are expanding community involvement by $200 000 a year for a significant Territory Day event.
It was clear TIO was coming under increasing competition. However, there are some other interesting aspects in changing TIO’s ownership. If a cyclone caused major damage, the NT government would have had to cover the shortfall in TIO payments to TIO policyholders, which are around 40% of the market in the NT.
Every Territorian would have to pay for TIO policyholders. NT government payments to TIO policyholders would not be eligible for funding from the federal government under its post-disaster funding arrangements. The NT government is only eligible for federal government post-disaster funding when NT taxpayer money is spent on public infrastructure like schools, hospitals and roads not privately-owned homes and businesses.
Turning to the issue of mitigation, we have committed $50m for flood and storm surge mitigation in Rapid Creek and the Katherine area, as well as parts of the Darwin rural area. This is completely in line with the federal government’s push for changes to disaster funding the draft recommendations from the Productivity Commission. A stitch in time saves nine.
My colleagues have spelt out the reports on and benefits to the community of flood mitigation. As TIO moves more into a local risk area assessment, this $50m of mitigation will go a long way to easing price increases on home insurance premiums. As Mr Harding said at the Katherine public meeting and in the media, TIO has historically community-rated flood risk the same way for everyone in the NT. Whether TIO was sold or not, the CEO of TIO publicly announced TIO would move to risk pricing. For 70% of TIO customers Mr Harding estimated there would be no price change. For 300 TIO customers there will be an increase of more than $1000, and some customers will be uninsurable under TIO. I repeat, some customers under the current TIO regime would not get insurance had we not made these changes.
The Country Liberals government is determined to undertake mitigation in the most at-risk areas to ease pressure on prices and price increases and ensure houses unable to be insured by TIO will now be able to.
There has been a lot of hysteria in some of the opposition’s commentary about price increases in north Queensland. My colleagues have spelled out why this will not happen in the Northern Territory. Basically, our cyclone building code has been in place since the mid-1970s post-Cyclone Tracy, which wiped out almost all substandard housing in the Territory. About 99% of all stock in the Top End is now built to cyclone code as opposed to Queensland, particularly regional and remote Queensland, which was built before a building code was introduced and much later than the code in the Northern Territory.
We have a long-term plan from an economic and social point of view, particularly with infrastructure. An important component on the TIO change is the introduction of a Northern Territory infrastructure development fund. The government is giving Territorians certainty that revenue from the sale will be used strategically to build the Territory’s future, not just frittered away. It will not pay off Labor debt, as has been done in other jurisdictions. The government is putting it back into the Territory through community and social infrastructure. A total of $215m from the sale will be held in the long-term infrastructure development fund and be set aside for longer-term infrastructure projects which benefit our children and our children’s children.
The government is creating an infrastructure nest egg for Territorians which will be invested and will grow over time, ensuring TIO’s legacy is felt by Territorians long into the future. The fund will be administered by a statutory board appointed by Cabinet once the legislation is introduced and passed. The money will be used for investment in economic and social infrastructure in the Northern Territory. It will also be used to leverage private investment where viable, and access contributions from available Commonwealth funding for infrastructure purposes.
The board will assess potential projects then make recommendations to the Treasurer applying the following economic criteria: the nature and direct economic costs and benefits of the proposal, including potential returns to private investors; the investment risk for private proponents and government; the wider economic benefits of the proposal, including the scope to unlock longer-term economic development prospects through the Territory and facilitate private investment in downstream markets; the potential to establish new industries in the Territory and support economic development in regional and remote areas; and the capacity to promote defined public policy objectives such as improved education, health and housing outcomes.
Legislation establishing the fund will be introduced into parliament early next year, with operation of the fund set to begin around the second quarter of 2015. The remainder of the proceeds will be available for more immediate community infrastructure projects including $50m, as mentioned, set aside for flood mitigation in Katherine and the wider Darwin area, particularly Rapid Creek. We are also implementing a growth plan to build the Territory by a continued pro-development policy with sustained economic growth and a focus on our north Australia development strategy.
The Northern Territory government cannot rely on the Commonwealth and expect to be part of a nation building future if it does not maximise its opportunities to create economic activity. When the current NT government was elected just over two years ago it faced a $5.5bn Labor debt legacy. Through good management, cutting government waste, innovative policies and focusing on support for private business development, there has been a dramatic change in the Territory’s debt projections.
At the same time, the Northern Territory government inherited inefficient and costly government utilities. The government has reorganised the Power and Water Corporation to bring it into line with the rest of the nation’s energy reform process to enable it to be more efficient and transparent. It has also tackled red tape head on. Since being elected in 2012, more than 200 pieces of red tape have been removed, making it easier to do business in the Northern Territory.
More work can be done, but coming out of the TIO change of ownership process is the freeing up of TIO to have a long and sustainable future, the protection of customers and employees, and the investment of funds into much-needed flood mitigation work which could not have been undertaken had this decision not been made.
There is an opportunity for us to realise capital investment through an asset recycling model, some of which may receive 15% from the federal government, but it is an opportunity to give that back to Territorians.
Opposition members have spoken about pork barrelling. There are two options here: we spend the money on community infrastructure or pay off Labor debt. Our choice is not to pay off Labor debt but spend it in the community. Call it what you like, we will spend it and will make sure it is used for the long-term future of all Territorians, whether it is community infrastructure or economic infrastructure in roads, bridges, hospitals or otherwise. It is about giving back to Territorians. That is where it came from and where it should go.
I commend the bills to the House and look forward to any further debate that may come.
Motion agreed to; bills read a second time
In committee:
Mr CHAIR: The committee has before it the Motor Accidents (Compensation) Commission Bill 2014 (Serial 108).
Mr McCARTHY: Clause 9 of the MAC bill gives the commission power to delegate powers and functions under the act. Clause 9(d) says:
- with the approval of the Minister, any other person (a non-government delegate).
Who do you envisage delegations being made to?
Mr GILES: That would be through the people we contract to provide the service over the 10-year period.
Mr McCARTHY: Clause 14, Staff and facilities, says:
- (1) The Chief Executive Officer must provide the Commission with staff and facilities to enable it to:
- (a) properly carry on the MAC business; and
(b) properly perform its other functions.
Where will the commission staff be located, when will they be appointed and what is the estimated cost of employing commission staff?
Mr GILES: Those answers will be determined when this bill has passed and we appoint a commissioner to facilitate that role.
Mr McCARTHY: Do you have any idea where they will be located?
Mr GILES: At this point no, but we can identify that once we get the process under way. In regard to cost, obviously a budgetary decision will be made to set aside costs to employ staff. We will make that decision when we need to.
Mr McCARTHY: Clause 22 …
Mr GILES: Can I interrupt, Mr Chair. I take it we are not going backwards and forwards all the time.
Mr ELFERINK: What clause, member for Barkly?
Mr McCARTHY: Clause 22.
Mr GILES: We are not going backwards and forwards now, but I take it in the future we are not go backwards and forwards.
Mr CHAIR: No. Standing orders provide we work through the sequence and do not go back.
Mr McCARTHY: Thank you, Mr Chair.
Clause 22 makes provision for an annual report and audit. In a briefing yesterday we were advised the key performance indicators would be developed between the commission and MAC. Chief Minister, could you provide the KPIs or an indication of what they might cover?
Mr GILES: As provided in the brief yesterday, they will be developed between the commission and MAC, and the commission has not been developed. That is what this bill is developing. When the commission is developed it will form a relationship and set the KPIs.
As you would understand, setting the regulatory framework is a process we go through to establish the commission and the rules under which it operates. Those KPIs have not been drawn as yet.
Mr McCARTHY: Mr Chair, that is it for the MAC bill. Could we go to the TIO sale bill?
Bill taken as a whole and agreed to.
Mr CHAIR: I will hold reporting until we finish the second bill.
The committee has before it the Territory Insurance Office (Sale) Bill 2014 (Serial 109).
Mr McCARTHY: Chief Minister, I will read from parts of the bill then ask a question. Clause 11 provides for sale of TIO insurance and banking divisions with monies transferred to the Central Holding Authority. Clause 12 provides for the transfer and sale of assets and gives the minister power to do all things necessary to facilitate a sale. Clause 14 provides for the transfer of assets. In essence, once a transfer order is made, registration can be immediate.
There are also provisions in the sale act dealing with remedial issues on transfer and reversal orders, clause 25, as well as joint ownership issues, clause 28. There is no mention of indemnity being offered to any vendor.
In many large scale commercial sales, particularly involving government, there are indemnity provisions in the contract for the incoming purchaser who wants protection from any liability that may exist or be created due to the sale. Given the nature of this legislation, the opposition expected a mention of indemnity. It could also be that avoiding mention avoids any publicity. In any event, there would be an expectation of indemnity. Without offering it the government risks litigation against it at a later date if the sale, or aspects of it, becomes problematic.
Chief Minister, why is there no provision for indemnity in the bill?
Mr GILES: Which clause are we talking about?
Mr McCARTHY: The provisions of the sale act dealing with remedial issues on transfer and reversal orders, clause 25, as well as joint ownership issues, clause 28. There is no mention of indemnity. Given the nature of this legislation, the opposition expected a mention of indemnity. Why is there no provision for indemnity in this bill?
Mr GILES: Because we have chosen not to put indemnity in the bill. That is the main reason, to be frank without being smart. We are not seeking to indemnify the purchaser. It is to our advantage to not have indemnity there. I am not sure how you would like us to indemnify Allianz or People’s Choice. If you could provide a hypothetical on indemnifying Allianz or People’s Choice I might have a greater understanding of your question.
Mr McCARTHY: It goes to protecting the government in case there are any problems as the sale goes through. In my briefing I understood it would be completed by 2 January, but if there are any problems on that journey is there anything to protect the government?
Mr GILES: Between now and 2 January, assuming these bills go through, the Northern Territory government still retains all financial risk by owning TIO. Should a cyclone come through on 1 January we would maintain all level of risk until midnight. We still own it until 2 January and cover all risk and liability until then. After 2 January it becomes the business of the two purchasers and they take on all risk and liability.
Mr McCARTHY: That is up to the sale contract being signed. What about if there was any contest from the purchaser after that?
Mr GILES: The purchasers take on all risk and liability from that point. Anything beyond that would be subject to any litigation that may present itself, but the purchasers take on ownership and responsibility of the assets they are purchasing.
Mr McCARTHY: That is probably enough on the record for us to have analysed.
Clause 16 provides for the transfer of assets and liabilities. Would you provide a list of assets and liabilities being transferred to both People’s Choice and Allianz? If not, how can Territorians be confident the numbers are right and TIO has been sold for the appropriate price?
Mr GILES: That is commercial-in-confidence as part of contractual agreements, member for Barkly.
Mr McCARTHY: The answer is they cannot be disclosed?
Mr GILES: It is commercial-in-confidence. I have said publicly the TIO building remains owned by MAC, which is a part of government, if that is where your question is going.
Mr McCARTHY: It was general, Chief Minister.
Mr Chair, those are all the questions the opposition had.
Mr WOOD: I understood from my briefing that the TIO building was a TIO asset. Are you saying it is not?
Mr GILES: No, it is a MAC asset. The building – I do not know the street number – we are talking about across the road was 75% owned by MAC and 25% owned by TIO. As part of this transaction it becomes 100% owned by MAC and fully retained by government.
Bill taken as a whole and agreed to.
Bills reported; reports adopted.
Mr GILES (Business): Madam Speaker, I move that the bills be now read a third time.
The Assembly divided:
- Ayes 13 Noes 11
Mr Barrett Ms Anderson
Mr Chandler Ms Fyles
Mr Conlan Mr Gunner
Mr Elferink Ms Lawrie
Mrs Finocchiaro Ms Lee
Mr Giles Mr McCarthy
Mr Higgins Ms Manison
Mr Kurrupuwu Ms Moss
Mrs Lambley Mr Vowles
Mrs Price Ms Walker
Mr Styles Mr Wood
Mr Tollner
Mr Westra van Holthe
Motion agreed to; bills read a third time.
TABLED PAPER
Darwin Port Corporation Annual Report
Darwin Port Corporation Annual Report
Mr GILES (Chief Minister): Madam Speaker, the Darwin Port Corporation has completed some of its biggest infrastructure projects and recorded some of its greatest results over the past financial year.
The 2013-14 year has seen significant milestone achievements, record profits, new and efficient business models, and large successful capital projects delivering efficiencies and costs savings for customers. Positive economic benefits for all Territorians form the basis for this year’s Darwin Port Corporation annual report.
The corporation’s performance as Australia’s northern gateway is not just a catchcry. The port is a cornerstone asset in developing northern Australia and its potential to further service Southeast Asia’s growing demand for food presents an immediate opportunity along with other successful port industry sectors.
The highlights in this year’s annual report are small in number but enormous in accomplishment. Darwin Port Corporation continues to punch above its weight despite its small scale and relatively small trade volumes. It has a mandate to be commercial and competitive. This year’s results are a credit to the corporation’s management and staff.
Some of the highlights of the annual report are as follows. East Arm recorded the highest trade results across the board at 4.6m tonnes, a 7% increase on the previous year. This is significant in the face of a major downturn in iron ore exports and the result of bolstering project cargo and significantly increased vessel calls to the port of Darwin.
Live cattle exports set another Australian record, with a whopping 47% increase on the previous year and over 406 000 head exported to Indonesia and new markets in Vietnam. Also, 22 more cattle ships visited Darwin last financial year. The forecast demand for cattle from Indonesia, Vietnam and our huge prospective market in China looks certain to ensure Darwin remains the cattle export capital of Australia long into the future.
There was a 53% increase in container trade on the previous year with new services from ANL, a former government owned company which purchased Perkins.
Darwin has a low volume of trade in its general containerised cargo but huge potential to expand in this sector. The Territory government continues to work on ways to reduce freight costs in its bid to lower the cost of living for Territorians.
Darwin Port Corporation has achieved a record profit of $17m before tax. This is a tremendous achievement, particularly in the face of diminishing iron ore exports, significant operational changes to infrastructure, record expenditure in infrastructure and technology improvements, and channel dredging.
The $17m profit was accompanied by a 14% growth in revenue, or a total of $58m, exceeding the corporation’s forecast income target by 11%. This was due to a significant increase in berthage of 29% or $9m, and a 15% increase in vessel visits and revised pricing in key sectors.
Staff training was a key investment with an average of $2200 per FTE in specialised training, with a focus on pilotage training for the additional LNG vessels for future INPEX operations and new facilities such as a module offload facility at Blaydin Point and the Marine Supply Base at East Arm.
Darwin Port Corporation’s safety and environmental management systems proved valuable in the reclamation of its retention ponds with the use of quality dredge material from the construction of the MSB, or Marine Supply Base, channel.
The commencement of two privatised commercial operators at East Arm occurred over the period: the operation of the Marine Supply Base by ASCO and the operation of two crane services by Patrick Stevedores and Qube.
The opening of the Darwin Harbour Control Centre and the $8.2m vessel traffic system, the first fully integrated vessel, traffic and port management system in the world, positions the port of Darwin at the forefront of technology and provides the world’s best practice in efficient and safe management of vessel traffic. It was great to showcase this vessel traffic management system to the Prime Minister in his February visit. I have no hesitation in commending this report to the Legislative Assembly today and I congratulate the port on its ongoing achievements.
TABLED PAPER
Subordinate Legislation and Publications Committee Report on the Motor Accidents (Compensation) Amendment Regulations 2014
Subordinate Legislation and Publications Committee Report on the Motor Accidents (Compensation) Amendment Regulations 2014
Mr BARRETT (Blain): Madam Speaker, I table the Subordinate Legislation and Publications Committee report on the Motor Accidents (Compensation) Amendment Regulations 2014. The committee routinely scrutinises all rules, regulations and by-laws tabled in the Assembly subject to disallowance to ensure they are fit for purpose.
Standing orders require that where the committee is of the opinion that an instrument or provision of an instrument ought to be disallowed or disapproved it is to report the matter to the Assembly within the disallowance period. Based on the advice of its independent legal counsel, Professor Ned Aughterson, the committee is of the view regulation 4N(2) of the Motor Accidents (Compensation) Amendment Regulations 2014 is a case in point.
The Motor Accidents (Compensation) Amendment Regulations support the operation of national injury insurance scheme benefits under the Northern Territory’s compulsory Motor Accidents Compensation Scheme. Tabled on 20 August 2014, I note the disallowance period for these regulations expires tomorrow, Wednesday 26 November 2014. As detailed in the committee’s report, Professor Aughterson has advised regulation 4N(2) goes beyond the power conferred by section 20A Part 5 of the Motor Accidents (Compensation) Act under which it is made.
Section 20A of the act sets out the circumstances under which benefits payable in respect of the death of qualifying persons may be reduced, for example, the influence of alcohol, and the process for determining any reduction in benefits. Section 20A(4) provides any reduction of benefits is to be a proportion of the benefits otherwise payable considered appropriate by the Territory Insurance Office, having regard to the extent to which the influence of alcohol contributed to the accident. Where it is determined benefits are to be reduced, Section 20A(5) provides they are to be reduced in accordance with the regulations.
However, as Professor Aughterson points out, regulation 4N(2) incorrectly assumes a correlation necessarily exists between an alcohol concentration reading and the extent to which that alcohol contributed to the accident, thus an alcohol concentration range of 0.08 to 0.133 gives rise to a 30% reduction in benefits. Consequently, the regulation impermissibly avoids the statutory requirement of TIO making a determination in each case as to the extent to which the influence of alcohol contributed to the accident.
As is the case whenever the committee has concerns about a regulation, this advice was forwarded to the Treasurer as the responsible minister for his consideration and comment. Following consultation with the Department of Treasury and Finance, TIO and the Office of Parliamentary Counsel, the Treasurer advised that, as agreed, regulation 4N goes beyond the power conferred by its enabling legislation and proposed that regulation 4N be repealed at the Executive Council meeting on 16 December 2014. Since the offending regulation 4N(2) is neither self-contained nor capable of standing or falling alone, I note it is proposed regulation 4N be repealed in its entirety.
A regulation that purports to go beyond the power under which it is made has no effect in law and may not be enforced by a court. However, until it is ruled to be beyond power by a court it will be treated as being law. As a matter of principle, the committee is of the view any regulation purporting to go beyond its power should be removed at the earliest opportunity.
While the committee welcomes the Treasurer’s advice and proposed course of action to remedy this matter, the committee is of the view that, as a matter of principle, it should not allow its jurisdiction over the regulation to expire before the matter is finally resolved. To ensure the regulation’s disallowance period does not expire prior to its repeal, tomorrow I will give notice of a motion to disallow on behalf of the committee to be moved on 17 February 2015.
The committee proposes that the notice of motion to disallow the regulation be withdrawn following repeal of the regulation and prior to it being moved in the 2015 sittings. Given the above, the committee recommends that the Assembly:
a) agrees that as regulations should not purport to go beyond the power under which they are made, Regulation 4N should not be allowed to stand; and
On behalf of the committee I thank Professor Aughterson for his attention to detail and diligence in advising the committee. I would also like to thank the Treasurer and members of the committee for their bipartisan approach in seeking to assure regulations in the Northern Territory are of the standard the Assembly requires under standing orders.
MOTION
Print Paper – Subordinate Legislation and Publications Committee Report on the Motor Accidents (Compensation) Amendment Regulations 2014
Print Paper – Subordinate Legislation and Publications Committee Report on the Motor Accidents (Compensation) Amendment Regulations 2014
Mr BARRETT (Blain): Madam Speaker, I move that the report be printed.
Motion agreed to.
MOTION
Note Paper – Subordinate Legislation and Publications Committee Report on the Motor Accidents (Compensation) Amendment Regulations 2014
Note Paper – Subordinate Legislation and Publications Committee Report on the Motor Accidents (Compensation) Amendment Regulations 2014
Mr BARRETT (Blain): Madam Speaker, I move that the report be noted and seek leave to continue my remarks at a later time.
Leave granted.
TABLED PAPERS
Travel Reports for members for Stuart, Daly and Arnhem
Travel Reports for members for Stuart, Daly and Arnhem
Madam SPEAKER: Honourable members, I table four travel reports from the members for Stuart, Daly and Arnhem pursuant to clause 4.1 of the Remuneration Tribunal Determination.
Northern Territory Electoral Commission Annual Report 2013-2014
Madam SPEAKER: Honourable members, I also table the Northern Territory Electoral Commission’s Annual Report 2013-2014.
ADJOURNMENT
Mr CHANDLER (Deputy Chief Minister): Madam Speaker, I move that the House do now adjourn.
It has reached that time of year when the parliamentary calendar is winding down. I know we will all have a few kind words to say about our staff, family and friends. I would like to do that now, being the last week of parliament for the year.
I feel my constituents in Brennan are like part of a big family. We never see ourselves as just member for a certain electorate in Palmerston. Lia, Nathan, Natasha and I see ourselves as Team Palmerston, trying to do everything together and sharing the city we love so dearly.
Thank you to my office staff in Brennan, Ben, Brandon and Robyn, who have done an amazing job this year. Thank you to my ministerial office staff, Anthony – before Anthony, I had Lawson – Jarrad, Lorne, Renee, Alana, Corina, jolly Jess, as we will call her tonight, and Jess before her, and of course, the first PA I had, Kerry, who has been taken by another department – damn!
Thank you to the Legislative Assembly staff, you have been tremendous this year. Michael and his team have done an amazing job. Thank you to the Hansard staff upstairs and everyone who works in Parliament House, from security through to our amazing drivers who get us to and from places safely.
To my department staff: Education under the stewardship of Ken Davies and the rest of the senior team; I wish everyone a Merry Christmas there. Thank you to Lands and Planning under John Coleman, the team there is amazing. We have seen some great reforms in not only Lands and Planning, but also Education. Merry Christmas to Bill Freeland from the EPA, and also our Planning Commissioner, Gary Nairn.
We might forget them every year, but they do an amazing job of keeping us fat – Karen’s kitchen. Their food is tremendous and I am sure they will be with us next year.
To my parliamentary colleagues, we do not always agree and sometimes have different ideologies, but everyone is in this House to do the right thing for Territorians. I wish you and your families all the best for Christmas and hope you can spend time with them. This is such a busy job and takes up so much time. This includes you, Gerry – Merry Christmas.
To my family, none of us could do this job without the support, love and affection of our families. They are the losers in the role we undertake because we cannot be there for special occasions. Last week, having my second son pass a CDU course and not being there on the night was disappointing. He knows the job is important. He appreciates that mum could be there but dad could not. They are some of the things you miss from a family perspective in this job. I wish my wonderful wife, Robyn, and of course, my children a wonderful Christmas.
To you, Madam Speaker and all your staff, thank you for another wonderful 12 months and here’s to a big 2015. Thank you.
Mr WOOD (Nelson): Madam Speaker, I have to mention this otherwise I will be in trouble. If anyone wants to go to a restaurant play at Taminmin College on 4 and 5 December called Harem Scarem, teachers at Taminmin College are putting it on as part of the Rural Amateur Theatre Society, known as RATS. You are most welcome to attend. There is a three-course meal, which I presume is being put together by Taminmin College students. It will cost you $80, but it will be a night of great fun.
I know we only have three days in these sittings but I want to talk about, believe it or not, banana freckle. People have spoken to me about it recently, and there was a small protest outside today. I ask the minister to look at matters which require attention and how the situation is being handled.
Reading some of the documents on the website about banana freckle, one says banana stumps must be treated with a suitable commercially available herbicide in accordance with label instructions. Some people in the rural area, and possibly the Darwin area, do not like to use herbicides. This document says you must use it. People know you can use kerosene or just dig them out. People who do not want to use chemicals on their property have come to see me. The department needs to make sure there are other alternatives besides herbicides.
Also, a gentleman who grows a particular species of bananas came to see me. The species came from the Philippines many years ago through the right channels and is a particularly nice cooking variety. He has a shop at Rapid Creek Shopping Centre where he sells a range of foods, one of which is banana fritters, and he makes a reasonable income from that. He is not a big commercial grower, but he makes money out of selling bananas.
I plead with the government to deal with these people in a fair way. You cannot say, ‘We’re going to give you one fruit tree’. People are losing their livelihood. They might not be signed up for the banana industry levy, but the government has made a decision to destroy part or, in some cases, all of a person’s livelihood. The government needs to work out some form of compensation for these people.
If this person loses several hundred bananas it will break his heart. He has not been well for some time, and he and his wife keep themselves occupied with the shop in Rapid Creek. This is an important part of their living. I ask the minister to look at that.
I would like the government to seriously think about the other matter I raised before. There are varieties of bananas in the rural area and the city which are not normal. You can take tissue samples and grow them in a quarantine area. I understand there is a quarantine area at Berrimah Farm. If you took tissue samples you could set up a place in Katherine where bananas could be grown for the next three or four years, with the owner’s name attached and perhaps the variety. People with special varieties could retain them. If we wipe out all bananas how can different varieties be brought to Darwin? We will just have Cavendish and Lady Fingers. There are many more varieties and people enjoy a range of tastes when it comes to bananas.
Some people might say it is not a big deal. It is a big deal for many people, especially in this part of the world where people enjoy growing bananas for cooking, for the markets, or eating. The government has a role to investigate if it is possible, before these plants are destroyed in April next year, that people can apply for tissue culture propagation of plants and they can be removed to a quarantine site. I would like the government to give serious thought to that.
This is a sad day. The selling of TIO, especially in the way it has happened today, is disheartening. I do not accept it when the minister says, ‘If you don’t agree with it what alternative do you have?’
Some of us did not agree with it being sold. You decided it should, and that is fair enough. However, if your idea was so good why not take it to the people? I found that most disappointing.
I presented a petition today with a little over 1000 names from a table at Howard Springs and one at Humpty Doo. No one sat at those tables, no one asked people to sign the petition, but people did. They are the people I am concerned about. The government’s argument to sell TIO did not convince them. I heard rhetoric this afternoon from most government members about why we should sell it, but you did not convince the people it was a good thing?
I become annoyed when I hear the Chief Minister, who did not attend a meeting, go crook at me. If you want to be the leader do not blame Richard Harding, the CE of TIO. The shareholder is the Chief Minister as the Treasurer, and he is making a political and economic decision to sell TIO. It was his responsibility to attend that meeting to discuss the future of TIO.
It is good to have a discussion about the future of TIO, but the government could not be bothered doing the hard yards. It pushed this through much quicker than it claims. It pushed it through from October to now in a total of seven or eight weeks.
Have we had enough time to have a mature debate? No, we have not. We have not had time to bring in experts to challenge what the government says, to question what TIO might have said and look at things like workers compensation.
A rural company that has been in the Northern Territory for years will now have to pay $56 000 more for workers compensation if it wants to use Allianz, because that is the difference between Allianz and TIO premiums.
People on that side might think they are tough, have shown leadership and are doing what they are paid to. You have made the decision. The problem is you left the people behind, and you have to live with that.
Ms FINOCCHIARO (Drysdale): Madam Speaker, tonight I recap on the year and thank many people in the Drysdale community who do such a wonderful job to help make Palmerston the beautiful city it is.
I will start by thanking Driver Primary School Council, a fantastic group of people. This year it was made up of Principal Rob Presswell, Council Chair Tracey Johnston, Rosalina Burrowes, Liz Ganley, Jewelil Riley, Kylie Hide, Richelle Kent, Sharon Keats, Magdeline Mahomet and Mandy Hart. The preschool representative on the school council this year was Dianne Morrison.
Driver Primary School has a very active school council which delivers working bees and fundraisers throughout the year. One of the biggest efforts is delivering the Food and Fun Festival, which was fantastic this year and the main fundraiser for Driver Primary School. Congratulations to the school council on that.
This year they have been working hard to transition to global budgeting, and made the decision not to apply for independent public school status. I respect and understand that.
I want to thank them all for their hard work. I thank acting Principals, Robyn and Allie. They do a wonderful job, especially at assembly when they are getting the kids revved up for a big day at school. I would also like to thank all the teachers and staff who make Driver Primary School such a wonderful community of learners.
I also, sadly, say farewell to Sherrida Edgecombe. Sherrida is a garden specialist and a teacher at Driver Primary School in the senior leadership team. She will be sorely missed by everyone in the Driver Primary School community. I got to know Sherrida through working at the Stephanie Alexander farm and she is also a constituent. I will miss her twofold but wish her and her family all the best in the new life they are about to start. Thank you very much to everyone at Driver Primary School and best of luck to Sherrida for the future.
Durack Primary School Council has a wonderful group of people. This year it was chaired by Wally Mauger. Principal Sheila Delahay was also part of the school council. Pat Coleman, Lyndell Nichols, Angelina Lee, Bindi Johnston, Kylie Akers, Libby Ferguson, Heather Steadmans, Simone Tims and Peta Pollock made up Durack Primary School Council.
The school council is extremely active. Durack runs fundraisers throughout the year and is very good at creating fun events which engage with the school community and raise a lot of money as well.
This year the school ran its spell-a-thon, its primary fundraiser for the year. It was enormously successful. As a result of running the spell-a-thon, Durack Wheel-a-thon was scaled to Durack on Wheels. There was less focus on raising money, but nonetheless it was a hugely successful event and the school council should be proud. The school council ran the barbecue and did all the hard work, as usual.
Another fundraiser the council organised this year was the car boot sale.
I thank all the staff at Durack Primary School for being so wonderful and taking such good care of our children. The ladies in the front office have to deal with me lumping piles of letters for students on their desk. They disseminate them ever so graciously to the students and I am grateful for that.
Durack Primary School Council has been transitioning to global budgets and doing really well. Durack applied to become an independent public school and I was excited by that. Unfortunately, it missed out in the first round, but received some constructive feedback and is looking forward to reassessing its position and moving forward. Congratulations, I know it gained a lot from the interviewing and panelling involved in the independent public school process. Durack Primary School has done a wonderful job in 2014 and I look forward to working with staff in 2015.
Gray Primary School Council is made up of Principal Sue Beynon, Merrilyn Lo, Anita Wickremasena, Jodie Speed, Kylie Granger, Kylie O’Keefe, Genna Smiley, Sharon Chin, Phil Taylor, Sarah Schubert and Jenny Washington.
Gray Primary School had a huge year and a lot of the focus for the council was keeping its eye on the school’s 30th birthday celebrations. This year Gray Primary School turned 30 a few days after I turned 30. It was nice, being a former student of Gray, to have shared a special birthday with Gray Primary School.
It was a fantastic evening and many teachers and staff put in long hours to make it as special as it was. I thank everyone at Gray Primary involved in putting together the 30th birthday celebrations. It was magnificent and will be remembered by everyone for eternity. I wish Gray Primary School all the best for its next 30 years.
The school council was also busy with the Halloween disco, its Mother’s and Father’s Day fundraisers and transitioning to global budgets. It has transitioned really well and Jenny Washington, the finance officer, is a whiz at this and perfectly placed to guide the school through this transition.
I thank all staff and students at Gray Primary School; it is a wonderful school. I love visiting you guys and look forward to working with you in 2015.
Good Shepherd Lutheran College, in my electorate, is a wonderful school. Principal of both the Howard Springs and Gray campus, Julian Denholm, is leaving us so I wish Julian and his wonderful family all the best for their change. They are moving to Murray Bridge. Julian is a valuable individual who has done a wonderful job at Good Shepherd and will do a wonderful job at Murray Bridge. We will miss him.
I thank Lynne Pokela, head of the junior school, for being so wonderful and welcoming. We have worked on extension of the Howard Springs campus. I always visit Good Shepherd campus at Gray to give my Drysdale all-round excellence awards. I brought several cakes for teachers at the junior school to enjoy on World Teachers’ Day. Thank you Good Shepherd. Julian, best of luck and I look forward to working with Lynne and her team in 2015.
Ms MANISON (Wanguri): Madam Speaker, I place on the record my thanks to the wonderful people working hard around the Wanguri electorate. First I thank my electorate officers. I left them until last in 2013, which was a mistake because I did not get to say exactly how much they mean to me and the community. To Chris Grace and Jenny Djerrkura, you are champions of the community. You work so hard and I feel lucky to have you as part of the team. Nothing I ask is too much, you both put such a huge effort into your job and I feel so lucky to have you.
I cannot wait for another year of hard work. I love it when we all get together to achieve something for someone, and when we have helped someone else. We have had a few situations where we have said, ‘That was well worth the time and effort we put into it. We made a positive change in someone’s life.’ It is wonderful to see how much they enjoy that sense of satisfaction knowing they have made a difference. I look forward to another year of hard work team.
Thank you to Leanyer Primary School and hard-working Principal Anne Tonkin, her Assistant Principal team of Tania Kolomitsev and Louise Corrigan, Maria Albion who departed in Term 3, as well as school council Chair Neale Cooper. They are an extremely hard-working team always striving for excellence in education and wanting to be a role model school. I congratulate them on another excellent year.
From Wanguri Primary School I thank Principal Gail Quigley and Assistant Principal Michael Calwell for their excellent work as a new leadership team at the school. Wanguri Primary School is a wonderful community school, and Gail has brought some new energy into the school which has been wonderful to see.
I say a special thanks to school council Chair Andrew Green, a passionate advocate of public education. It makes me so proud seeing parents like Andrew and Neale go on school councils because they want to ensure their children get a great public education that will continue well into the future.
I say a special thank you to Rachel Dolan, the Defence Force Transition Aide at Wanguri Primary School. She has done an outstanding job and organised the best Anzac Day and Remembrance Day assemblies I have ever seen at a school. Wanguri Primary School is a Defence community, and Rachel will be sorely missed next year as she heads off to another posting with her family. I thank her for the outstanding contribution she has made to the Wanguri school community.
To Dripstone Middle School Principal Jodie Green and school council Chair Melissa Reid, thank you for all your hard work this year, your contribution to educating children in the vital middle years and preparing them for their senior years of education. You do a great job and I love seeing the assemblies and how talented the students at Dripstone Middle School are.
St Andrew Lutheran School is going through quite significant growth at the moment because it comes under Good Shepherd Lutheran College now. It has been wonderful to see the growth under the leadership of Principal Karen Koehler, who has been doing a wonderful job. It is clear the partnership with the Good Shepherd Lutheran College is taking the school to some great new places. It was already a good school, but this is helping make the school community even stronger and it is wonderful to see.
To Holy Spirit Primary School and the new Principal Simon Duffy, congratulations on doing a great job with the students. It is always great to go to Holy Spirit and see how well the students are performing.
I place on the record a special thanks to the Henbury School community, Principal Carolyn Edwards and Assistant Principal Brenda Moore for their outstanding leadership and hard work for the students at Henbury School. Well done to school council Chair Paula Callaghan and school council members Robyne Jhowry, Sharon Campbell, Noel van Kleef, Dee-Ann Vahlberg, Jenny Dignan and Jane Boydell. You have secured a new Henbury School. This is a wonderful achievement for children with special needs attending senior school in Darwin. All your hard work, effort, advocacy, petitions and lobbying government finally secured a new school. I am proud of the work you have done and the difference you are making in the lives of those children.
It will be great to see the planning work commence early next year. I understand it will be open in the second semester of 2016. It is great work. Thank you for your dedication and hard work.
I also thank all the local businesses I work with every day at Hibiscus. When you work at a shopping centre the shopkeepers become part of your working life. They are wonderful people. Gabby and Laurie, the cleaners, are always there to talk and keep an eye on everyone. They are real members of our community. I thank Laura and the management of Hibiscus. Joan and the ladies at Strawberry Fields are a great help to us in the office. We adore you Joan, you are a wonderful lady.
I thank Nelson and his team, Matthew and the team, Lim our local chemist; Tracy and staff at the pet shop next door to me; Paul, Sarah and Tenelle at Dolly’s; Baby at Moneygram; Robyn at the newsagents; Tracy, Renee and the girls at Lime Hair; Tania at the beauticians; and, of course, the boys at Jamie’s Tender Meats. It is a great team to work with. Charlie on the checkout at Woolworths, who can forget you? You are a great person and keep an eye on everybody in the community.
Vim Sharma at Wanguri shops is not only a shopkeeper but somebody who advocates for the community, keeps an eye out for people, and is always telling me what we need to do and how to make things even better around Wanguri.
I also say a big thanks to Tracy Dale Middleton from Neighbourhood Watch and Bob Maxwell from Wanguri. He said he wanted to see community safety improved in Wanguri after he had experienced break-ins. He has helped reactivate Neighbourhood Watch in Wanguri, which has been great to see. Thank you for all the hard work.
Kerry Hoskins, Officer in Charge at Casuarina Police Station, is always an incredible help.
I also thank some of the people who drop by who I appreciate listening to and chatting with: Mr Henry Gray, Dotty Darby, Hazel Glencross, Rob Porteous, Barb Kiiver and Isabelle and Johnny Walker. How can I forget the wonderful former member for Johnston, Chris Burns, and the wonderful former member for Nhulunbuy, Syd Stirling. It is always great to catch up and chat. It is wonderful to have such experienced ex-members of this Chamber I can run ideas past.
I also thank the investor team from Muirhead for keeping up their good work, local aldermen Rebecca Want de Rowe, George Lambrinidis and Garry Lambert, especially Rebecca, who works very hard for our community and does a great job.
To the Labor team, particularly my Caucus colleagues, I hope you have a very merry Christmas. To the hard-working staff of the Leader of the Opposition’s office, you do a terrific job. We cannot do this gig without you guys, so thank you so much.
To the Legislative Assembly staff, thank you for all your advice and hard work. The security staff at Parliament House are great. I love chatting to the cleaners year after year, and thank you for all your hard work every night. Of course, to Hansard for putting up with all of us.
I thank my family, the MacNeills, my brother Luke, and my mum and dad especially for moving all the way from Perth back to Darwin. Being a member of parliament and a mum, to have your support here is wonderful. It is great to have you back in the electorate living across from an excellent spot for me to do roadside. Thank you mum and dad, and of course Scott and Aiden, thank you for all your love and support and for making my life so happy.
Ms WALKER (Nhulunbuy): Madam Speaker, today I have been looking at this magnificent crocodile skin sitting on the table which holds the dispatch boxes. I want to acknowledge it because it is a sacred totem to at least two of the clan groups in my electorate, the Madarrpa clan and the Gumatj. I daresay it is a sacred item to clan groups around the Darwin region as well.
It is truly a magnificent object but also a sacred object. One similar to this was gifted to the Leader of the Opposition, Bill Shorten, when he came to the Garma festival in August. I acknowledged at that time the significance of the gift in a conversation with Djawa Yunupingu, who said it was indeed a very powerful totem and the giving and display is quite significant. I wanted to make that acknowledgement.
I would like to talk about some of the good things happening in my electorate and acknowledge all the teachers and school staff in the Arnhem region who were acknowledged and their efforts celebrated on World Teachers’ Day.
Celebrations were held at the Arnhem Club Bali Pavilion on Friday 31 October 2014 to recognise all in our schools who contribute to education. Lots of teachers turned up; I think they enjoyed the hospitality laid on by the department, and that is a great thing.
There were many excellent nominees from Arnhem region schools, and I will rattle through those who received awards and, where I can remember, who the nominees were.
The support staff member of the year went to the wonderful Mary Manager, who works in the Arnhem education office. Also nominated were Glenda Birch, Terrie Pollard and Cynthia May all from Nhulunbuy Primary School. Well done to those wonderful ladies.
The winner of Leader in Indigenous Education was Selena Uibo from Numbulwar School, who also won that recognition at Northern Territory level. She is an incredible teacher. I enjoyed meeting her when I made my first visit there in July.
Primary Teacher of the Year went to Rachel Blundell from Nhulunbuy Primary School, another amazing teacher. I have known Rachel since she was about 13 years old when I was teaching at Nhulunbuy high. I note Laura Wecket was nominated also.
Secondary Teacher of the Year went to Jodie Beauchamp from Nhulunbuy High School, and Principal of the Year for the region went to Joanne Jefferson from Alyangula School. Early Childhood Teacher of the year for the Arnhem region went to Jenny Martin at Nhulunbuy Primary School.
There is no doubt our teachers and school support staff do an amazing job in educating our kids despite some increasingly tough conditions. I am not talking about just the decline in the number of people in Nhulunbuy, but in an environment where there are declining budgets and resources and I know our teachers are doing it really tough.
Make no mistake, these global budgets are a con job. Our teachers know that, our principals know that and I wish them well, along with the good support of COGSO, in battling the department to get what they need to run their schools.
Territory Tidy Town Awards – Nhulunbuy won the Territory’s Tidy Town Best Large Community award for 2014 and the community of Nhulunbuy was the Territory’s Tidy Town finalist taking the Best Large Community award for 2014. These were announced in Darwin on Friday 24 October 2014 by the Keep Australia Beautiful Council Northern Territory.
I offer congratulations to Nhulunbuy Corporation for its involvement and support role. The Nhulunbuy community is looking pretty good and I think the corporation can take great pride in its achievements as provider of municipal services in Nhulunbuy.
I want to acknowledge the good work the new CEO of Nhulunbuy Corporation, Angela MacMillan, does. She has been in the role for a few months. She stepped in to a big job but she is determined to do it well and make a difference. She is doing so at a time when Nhulunbuy is going through a difficult period. Congratulations to Jodie Trew, who represented the corporation at the Keep Australia Beautiful Awards on behalf of Nhulunbuy Corporation. It was lovely to see Jodie at Speaker’s Corner Caf when parliament was sitting at that time.
Last Saturday, 22 November, the Year 12 formal for Nhulunbuy High School students was held in our town hall. I acknowledge the parent committee headed by the marvellous Fiona Pearce, who was tireless in her efforts to work with the community and do stuff for kids. Fiona was well supported by Catherine Rutishauser, Kylie Farnsworth, Alison Thomas and Raewyn Huddy. There is a special acknowledgement to Raewyn who was unable to be there on the night with her daughter Lauren. She put her heart and soul into organising and designing the amazing decorations in the hall. Sadly, she is another great Gove woman who had departed because her husband lost his job.
I also acknowledge the efforts of the Rotary Club which ran the bar, Walkabout Lodge which provided the catering and also a volunteer group of high school parents who did the waitressing as a fundraiser to support a group of senior students travelling in the Over the Top Tour to England and Europe in 2015.
Importantly, I put on the record the names of these fabulous young people who were presented on the evening. The girls looked stunning – makeup, hair and beautiful gowns. Right alongside them were some very handsome young men who also scrubbed up pretty well and looked very smart in suits and ties. Congratulations to Tim Baxter, Rochelle Briston, Te Amai Campbell, Crystal Carr, Trecia-Ann Cummings, Latryce Douglas, Rachel Dunn, Pietro Elford, Zoe Farnsworth, Monique Gilmore, Matthew Groom, Sabrina Hunter, Peter Jacobs, Luan Jongedyk, Erin Keeley, Ashleigh Lewis, Joseph Lluch, Jude Lluch, Pia Lynch, Tupou Malupo, Maddison McSherry, Sarah Pearce, Tylar Short, Jason Spivey, Tara Thomas-Doyle and Harry Walker.
There were some magnificent speeches during the night; some made us laugh and some made us cry. All in all it was a fantastic evening. I send my best wishes to these young people as they move on to the next chapter of their lives.
I also acknowledge sponsors for that evening, which included, apart from me, Nhulunbuy Corporation, Walkabout Lodge, Rio Tinto, Kansas, Gove Combined Unions, Blue and Evelyn Douglas, Maria Slatter, Robyn Pellenat and Gove Peninsula Surf Life Saving Club.
I also place on the record the Northern Territory Star of the Community Award. I had not heard of this award until I saw a media release from Northern Territory Medicare Local. It was awarded to long-term resident Mr Paul Mastin, who has worked at Rio for many years as an engineer. He has recently been recognised as the winner of the inaugural Star of the Community Award. This award is through Northern Territory Medicare Local and aims to recognise and reward the vital role of GP spouses in remote Northern Territory communities. Paul is the other half of our long-term GP, Dr Wendy Page, who works at Miwatj Health.
Paul was nominated for this award by members of the Nhulunbuy community, including Northern Territory Emergency Services for whom he volunteers a lot of his time and energy, for his positive attitude, his willingness to assist, help or lead, and for being a good team player. He has been a part of many other community groups during his 21 years in Nhulunbuy including Runners North, Gove Peninsula Surf Life Saving Club, Gove Yacht Club and the Ultimate Top End Adventure. I know him to be a very keen bushwalker. My husband has been on a couple of trips with Paul. On those trips – because my husband tells me – Paul talks about his wife’s work. He, obviously, shows a keen interest in the work Wendy does, particularly around Indigenous health issues and, most notably, with strongyloides.
Motion agreed to; the Assembly adjourned.
Last updated: 04 Aug 2016