2014-03-25
Madam Speaker Purick took the Chair at 10 am.
Madam SPEAKER: Honourable members, I have received Message No 14 from Her Honour the Administrator notifying assent to the bills passed in the February sittings. The message is dated 24 March 2014.
Madam SPEAKER: Honourable members, I advise of the presence in the gallery of two Year 5/6 classes from Karama Primary School accompanied by Sally Woods, Courtney Bailey and Julie McCourt. On behalf of honourable members, I welcome you to Parliament House and hope you enjoy your time here.
Members: Hear, hear!
Continued from 19 February 2014.
Ms MANISON (Wanguri): Madam Speaker, in regard to the amendments proposed by the government to the Medicines, Poisons and Therapeutic Goods Act, the opposition will be supporting this bill so we can see the changes up and running across the Territory.
I note, by way of introduction, the Medicines, Poisons and Therapeutic Goods Amendment Bill leading to the act this bill seeks to amend was passed by the Assembly in March 2012.
The resulting Medicines, Poisons and Therapeutic Goods Act was an important step forward building on national reforms agreed at COAG in 2005 providing the Territory with a comprehensive and contemporary framework for control of regulated substances in the Northern Territory, in particular improving the availability, accessibility and safe handling of medicines, poisons and therapeutic goods.
One of the provisions included in the act was the capacity for nurse practitioners to prescribe and administer a range of medications. I note the government has recently announced a strategic plan for increasing nurse practitioners in the Territory, particularly those working in primary healthcare.
The minister also announced an additional 25 nurse practitioners by 2016. We will monitor the implementation of that initiative, in particular funding for those new positions and the number allocated to remote health centres.
There is no doubt within the nursing profession there is support to see more nursing practitioner positions in the Territory, as well as the real benefits to our health services of having more nurse practitioners on the job to deliver health services. It also paves more career pathways for our experienced and professional nurses and will, hopefully, keep more of our long-standing passionate nurses in the Territory’s health system.
As the minister outlined in her second reading speech, further amendments to both clarify and enhance the provisions of this legislation have been identified and this bill outlines those additions. In my briefing from staff from the Department of Health, it was very apparent the Medicines, Poisons and Therapeutic Goods Amendment Bill is a broad and complex piece of legislation.
It has been quite a task for the department consulting stakeholders, both in the administrative changes and changes to health practice embodied in the act, but also in developing the complex regulations required to accompany the act.
In the second reading speech at the time of the introduction of the original Medicines, Poisons and Therapeutic Goods Amendment Bill, the former health minister, the member for Casuarina, set out the intention of the legislation:
There are several amendments contained in the bill today. The opposition supports amendments that will strengthen the intent of the act and provide additional measures aimed at benefiting Territorians, including increasing choice in access to vaccinations. The bill removes requirements for registration by manufacturers of some substances such as hair dyes, and the opposition notes this is in line with the recommendations of the 2005 national review legislation subsequently endorsed by COAG.
The bill implements a change in designation, now formally recognising Aboriginal Health Workers as Aboriginal and Torres Strait Islander Health Practitioners. These health workers do a marvellous job in supporting primary healthcare across the Territory, including their work in some our most remote health centres. They often provide much valued continuity of care to their communities and have intimate knowledge of the issues relating to the health and wellbeing of their clients.
The name change reflects the increasing professionalism of this sector and recognises them as health practitioners not just support workers, as some have seen them.
The bill provides for dental therapists and oral health therapists to use some Schedule 4 substances required for their dental health practice, for example local anaesthetics, under conditions and in line with practices in all other jurisdictions. This is a good example of reform meaning these qualified dental professionals can move across jurisdictions and practice their full range of skills in the Territory, as they would in other places already allowing this clinical practice. This will also benefit people seeking these dental services and is a straightforward mechanism to bring the Territory in line with the rest of the nation.
The bill also contains some tidying up of legislation, including the repeal of current provisions relating to paint containing 1% or more of lead. Paint containing 1% or more of lead is now banned nationally, making sections 109 and 110 of the act redundant.
Another provision of this bill is to allow qualified pharmacists to provide emergency supply of unrestricted Schedule 4 substances, provided the supply of those substances is permitted by the Commonwealth National Health Act 1953. The current examples are oral contraceptives and lipid-lowering medications. Other medications could be added over time, in accordance with the checks and balances of the national regulatory arrangement.
Many women take the oral contraceptive pill and many people take lipid-lowering medication. We all appreciate people lead busy lives and sometimes do not get around to booking into the GP to have standard prescriptions refilled. If they run out of medication over the weekend, or are unable to get to a GP on the day they go without.
These changes will have conditions placed on them to ensure there are checks on people trying to access this medication and they must show proof they have been prescribed the medication previously. In theory, they should not be able to present themselves to a pharmacy and ask for the medication if they have not been prescribed it by a doctor. There are also provisions in place to ensure they can only access medication with a prescription a certain amount of times before they must present themselves to a doctor to obtain another prescription.
It would be good to hear from the minister about the exact details of how these changes will work with Territory pharmacies, what measures will be in place to monitor progress and correct dispensing practices when the new system is in place, and to hear about what communication will happen within the Territory to inform people of these changes.
It is also important Territory doctors are across the changes as well as pharmacies. Ultimately, we want to see a system working well together with local doctor services and pharmacy services complementing each other.
Madam SPEAKER: Member for Wanguri, could I ask you to pause so we can welcome some students.
Honourable members, I advise of the presence in the gallery of a Year 3/4 Class and a Year 5/6 Class from St Andrew’s Lutheran Primary School accompanied by Dena Mouton. Welcome, and I hope you enjoy your time at Parliament House.
Members: Hear, hear!
Ms MANISON: Welcome St Andrews, I will see you upstairs soon.
It would be appreciated if the minister could inform the House of what date these changes will take effect.
One provision of the bill which has attracted media comment is allowing appropriately qualified pharmacists to administer vaccines, such as flu or measles vaccinations. Clause 62 of the amendment bill provides for qualified pharmacists to supply and administer Schedule 4 vaccines. This will increase accessibility for Territorians seeking vaccinations. Rather than having to present to specific clinics or general practitioner surgeries, people will be able to attend appropriate qualified chemists for vaccinations. These types of vaccinations could include a flu shot, measles vaccination, typhoid, cholera and so on. Many are injections people have before travelling and, thinking of the recent measles outbreak experienced locally, this presents more opportunities for community vaccinations as part of public health campaigns and the ability to make vaccinations more accessible.
This section of the amendment bill has attracted some questions around practical implementation of how vaccines will be administered within Territory pharmacies. Questions have been raised regarding how the injections will be delivered and how dispensing of this new service will be monitored to ensure appropriate standards of advice and patient care. For example, will a chemist have a private consultation room to give injections or will they take place in a discreet area of the shop? Will there be measures around this and how will the government ensure practices are being conducted to an agreed standard?
I stress the limitation that only pharmacists holding an appropriate qualification can exercise this role. I also understand, on advice from the Pharmacy Guild of Australia, they expect this would be linked to their pharmacy accreditation scheme so the vaccinations are only offered in appropriately accredited pharmacies. It would be good to see some more detail around what an appropriately accredited pharmacy entails and what the accreditation process is. What will pharmacists have to do to become appropriately qualified and will this process be accessible to people right across the Territory?
This initiative provides opportunity for more client choice, easier access to vaccinations in times of requirement for mass vaccinations and, potentially, benefits residents in our regional centres where GP resources are limited.
Regional centres could stand to benefit from this model, so I am keen to hear if there has been interest from pharmacies in those centres to start vaccinations, and also what type of support these pharmacies will get in order to get the appropriate qualifications and training to participate in this initiative.
There are also questions regarding how much this will cost people trying to access vaccinations through pharmacies. It would be great if we could get some information on forecasted costs of getting a flu shot, for example, at your local chemist in the Territory.
This is new and will take time for pharmacies to establish. Does the government have an estimated date for when pharmacies can start vaccinations as well?
In some reporting, you could be mistaken for thinking people could walk into their chemist tomorrow and get a flu shot, so it would be good to hear some more details about the work with pharmacies and when Territorians will be able to access these services.
Overall, we all want more access to vaccinations. Making it easier for people to get them is positive, but it is important good processes are in place to ensure quality of service, patient safety, adequate monitoring and reporting of the new system, so if it is found that improvements or changes to the system need to be made, these can be acted upon.
It is also important there is a clear understanding of the new processes by general practice medical professionals in the Territory so we can see these changes working seamlessly together.
The opposition supports the intent of this amendment, that being further amendments to the Medicines, Poisons and Therapeutic Goods Act. We support the amendments because they will assist in meeting the objective of the act, which is to improve availability, accessibility and safe handling of medicines, poisons and therapeutic goods.
We are aware of concerns expressed by some about the role of pharmacists in administering approved vaccinations, but note only appropriately qualified pharmacists can provide that service, and that the Pharmacy Guild of Australia is intending to ensure such a service is only provided in appropriately accredited pharmacies.
We expect the Pharmacy Guild of Australia and the Department of Health will work with the Australian Medical Association in the NT to ensure all parties have an opportunity to guide the implementation of the new arrangements, and that the new practices are monitored to ensure quality and patient safety is held in the highest regard.
There is also an opportunity to ensure the benefits of access to more services and pharmacies goes well beyond Darwin, Palmerston and Alice Springs, and to ensure our important regional centres also benefit.
There will be a level of public interest in the outcome of this bill today, and expectations within the community are already raised. It will be important to ensure there is an appropriate flow of information to the community regarding these changes so people are informed of the opportunity, in particular, around vaccination access.
I would like to thank Department of Health staff for providing us with a briefing on this bill; it is clear the legislation has been, over time, quite complex. It has a long history and they have put a great deal of effort into it.
I would also like to thank Mr Alex Bruce, from the minister’s office, for providing a briefing in a timely manner. I always appreciate that.
The opposition supports the Medicines, Poisons and Therapeutic Goods Amendment Bill.
Mr HIGGINS (Daly): Madam Speaker, I support the amendment bill.
In regional and remote areas like the Daly, Wadeye and so forth, immunisations are already administered by staff in clinics so we do not visit doctors. I do not see much change in going to a qualified chemist to have needles administered. I, for one, am completely against needles; I do not like needles. The blood bank sent me a letter saying, ‘Don’t bother coming back again, you are too much trouble every time we put a needle in front of you’. The fewer I have the better. However, people need immunisations and I support that.
A question I have asked – and have not received an answer to yet – is if insulin is on the list of scheduled drugs you can pick up with an ongoing prescription. Occasionally I have had a problem with this – I have either had expired insulin or have not had access to insulin. While I have a prescription held by the clinic at Nauiyu, it is not available at any chemist in Darwin. I can get plenty of needles I do not want, but I cannot get the insulin needed to go through them. I am interested to see if that is included in this legislation.
One concern I have around this is tourists. One of the problems at many of the remote community clinics is a constant stream of tourists who want their prescriptions filled and expect to get free medicines and so on. I would like the minister to clarify this will not enable tourists to simply front up at clinics trying to get prescriptions filled.
The other issue I would like some information on is whether, at a clinic like Batchelor, which has a pharmacy attached to it for the locals, people can use these facilities. That also extends to places like Nauiyu, Wadeye and Peppimenarti – if people have prescriptions and they have them faxed or, if they have expired, can they go to remote communities and pick up drugs?
Madam Speaker, with those simple questions, I support the amendments and would be pleased to see them go through today.
Mr ELFERINK (Attorney-General and Justice): Madam Speaker, I particularly want to talk about vaccination because of the importance it has in our community.
We live in an age of miracles and wonder – I do not mean that lightly – because of our technological advancements over the last 200 years, going from a farming society to our highly-industrialised society of today and, moreover, other advancements that have occurred during the period. It is worth contemplating what has happened over recorded human history which goes back about 10 000 years. Prior to that was the prehistoric period, and humanity has probably been around, in its current form, for about 100 000 years. In all that time, it is only in the last 100 to 150 years that we have made substantial inroads in medical treatment.
Today it is worth thinking about what we have left behind in the diseases which are easily treatable and immunised against in our community. We have forgotten how awful and ghastly those diseases were.
Not much changed in the 2500 years since Aristotle walked this planet and 200 years ago. Aristotle described the physical body as containing four humours: blood, phlegm, yellow bile or chole, and black bile, which was sometimes known as melancholia. Aristotle believed those humours, being properly balanced, would lead to a healthy body.
People were still being treated in those terms 200 years ago. That is because for well over 2000 years there was no advancement in medicine at all. Smallpox and diphtheria were still rampant, and consumption was a disease that is still within the memory of people alive today. At the time, the various forms of hepatitis were known as jaundice collectively. These diseases killed many. The Hong Kong flu alone, post-World War I, killed more people twice over than World War I managed to.
We now find ourselves in an environment where people are refusing to immunise their children.
It was in the very early 1800s that a British physician named Edward Jenner noticed some milk maids were not contracting smallpox at all. It was not long before he discovered all these milk maids, at some point or another, had picked up cowpox from the cows they were milking. Edward Jenner decided that was worth further investigation. I am glad he did because he became the father of modern vaccination through that process. However, I suspect his technique of determining the effectiveness of his vaccination would probably not withstand modern ethical practice because he got a young boy, as the story goes, and infected him with cowpox. The boy developed all the mild symptoms of cowpox and then the symptoms went away, thus the boy had healed himself.
His next response was to get active smallpox and infect the boy purely on a whim, for lack of better words. Needless to say, that boy never contracted smallpox and it was not long before everybody who was anybody in the British community was being inoculated with cowpox to ward off smallpox. I invite, as I did last week, any member of this House to Google smallpox and look at the Wikipedia entry which has a photograph of a young girl from 1973, one of the last people on the face of this planet to have contracted smallpox, and you will see what a ghastly disease it is with a mortality rate pushing 40%.
For this reason I am glad we are changing legislation which will enable health practitioners, Aboriginal Health Practitioners included, to hold vaccination qualifications and immunise people. Only over the last few weeks we have had 40 cases, if I am not mistaken, of measles in an outbreak in the Northern Territory. On paper, there should be no such thing as a measles outbreak; it should not happen in the modern world. Yet, to my disappointment and astonishment, there are now sufficiently few people vaccinated against measles to enable the disease to spread in the community in a way that some 40 people have contracted the disease. That is worrying because you are getting awfully close to that critical point where there are now sufficient people not vaccinated to see the beginning of some form of localised epidemic.
Whilst I understand there are parents concerned about the effects some of the vaccinations may have on their children when being vaccinated, those side effects are rarely very serious and, on the occasions they are, are treatable. By not protecting your child against something like polio – whilst it may not exist here, it exists in other parts of the world – there would be nothing more horrifying or debilitating than seeing a person travelling from the First World through parts of India, where polio still exists, only to discover they were never vaccinated against the disease – a simple oral vaccination – and, as a consequence, are not immune to the effects of polio.
Whilst we use the term ‘iron lung’ nowadays with some humour, an iron lung was basically a very simple hyperbaric chamber with a piston at one end a person who had severe polio was placed into, and by changing the pressure inside the chamber air was forced into the lungs and then out again as the person was lying there. They were, essentially, quadriplegics and their only source of entertainment was often a mirror from which they could view the rest of the world above their eyes. Yet we have parents today who will not vaccinate their kids against polio because they believe the vaccination, in some bizarre way, could be worse than the disease. That is just unfathomable to me. My wife and I have been very keen and very anxious to make sure our two little girls have been vaccinated against everything we can get them vaccinated against.
I hope with my two little girls, as they grow older, I can vaccinate them against boyfriends, but perhaps that would be wishful thinking on my part.
When I look at the vaccine side effect advice, which is available on the Department of Health website, and see the diseases being vaccinated against then look at the possible side effects …
Madam SPEAKER: Attorney-General, can you please pause so I can welcome some students.
Honourable members, I advise of the presence in the gallery of two Year 5/6 classes from Woodroffe Primary School, accompanied by Allison Stewart and Rebecca McCasker. On behalf of members, welcome to Parliament House. I hope you enjoy your time here.
Members: Hear, hear!
Mr ELFERINK: May I add my welcome to them all. Good to see you here, kids, I hope you have a great time while you are here.
Let us look at the diseases we vaccinate against in the first instance: diphtheria, tetanus, hepatitis B, polio and haemophilus influenzae type B. The possible side effects from these vaccinations are localised pain, redness and swelling at the injection site and low grade temperature. In children, the following may also occur: irritableness, crying, being unsettled, generally unhappy – that is most kids I know for most of the day – and drowsiness or tiredness. If you compare the effects of something like hepatitis B against those possible side effects, there is no comparison to be had. Hepatitis B and hepatitis C, if left untreated, can lead to things like liver cancer. I would rather have my kid irritated for a couple of hours, or a day or so, than at some point in the future die of a wholly preventable disease.
I mentioned polio before, a ghastly disease. International Rotary clubs have been moving to expunge the disease from the face of the planet. I understand they are making good inroads and I would be delighted to see it deliberately extinguished so we can live without it in the future.
A bit later, as the kids get older, there are immunisations against things like meningococcal disease. We have seen how meningococcal disease – is it viral or bacterial?
Ms Walker: It can be both. It can be bacterial and viral.
Mr ELFERINK: It is bloody nasty, whatever it is. It affects the meninges on the brain, which means the damage left behind is permanent. The trade-off is you may be subject to localised pain, redness and swelling at the injection site, perhaps a loss of appetite – we could all do with that from time to time – and low grade temperature.
It constantly baffles me that parents will not do this for their children. I believe in protecting my children. Sometimes you have to be cruel to be kind, but there is no cruelty like the one you would inflict upon your child should they get polio or meningitis as a result of some peculiar resistance to the vaccination process.
It takes only a short walk around a graveyard in an old English church to discover many of those who occupy space under the headstones were children. As late as 1850, it was not uncommon for a family to have a mortality rate of 50% of their children. By then many medical advances had been made, but so little had been achieved in fighting diseases which were focused, orientated or caused by viruses and bacteria, much of which was at the time germ theory. It is incredible to note in the late 1800s, germ theory was still being spoken about in the medical profession as something which could be hotly contested. As a consequence, many people were arguing about things like vaccination being a waste of time.
If you look at the cholera outbreaks of the 1800s in places like London – cholera is a bacteria found in faecal matter which then finds its way into the water table. When that water is consumed there can be an outbreak of cholera. It is particularly common where latrines are close to water supplies. Outbreaks occurred on a number of occasions in London as late as the 1800s. It was still believed, and discussed in parliament in England at the time, that what was causing the cholera outbreak was bad air. A lot of attention was placed on – I believe there was a parliamentary committee – investigating the bad air of London rather than looking at other possible culprits.
The name of the doctor responsible for identifying the pump which caused the cholera outbreak escapes me, sadly, but, had the Nobel Prize for Medicine existed at the time, he would have doubtlessly received it. It was his simple, statistical research as a doctor operating in the area that enabled him to identify the offending pump which produced the water that led to the cholera outbreak.
When he was finally able to demonstrate it, he was still met with resistance because he was relying on germ theory. Ultimately, when water was boiled, as he suggested, it killed the cholera bacteria, the water became much safer to drink and the medical profession took a leap forward.
The idea that an infection could be transmitted by a small animal, like a bacteria, was wholly novel little more than 130 years ago, a very brief period in human history.
This bill attempts to tell practitioners they do not necessarily have to see their doctor or health clinic, with a fully registered nurse available, to get vaccinations for themselves or their children. This is particularly important in remote Aboriginal communities, where there are still identifiable challenges with certain types of diseases. Common sense would prevail and say the more suitably qualified people we have to vaccinate in our community, the more people we should have vaccinating in our community.
I urge parents, in the strongest possible terms, to have their kids vaccinated. This is not rocket science. It is as cheap as chips, and a squirt on the tongue for a polio vaccine is a whole lot cheaper than a lifetime of medical assistance resulting out of the paralysis which occurs from a polio infection.
I note the legislation intends to allow nurses, midwives and Aboriginal Health Practitioners to hold vaccination qualifications for the purposes of immunising people. This is common sense.
I also note pharmacists will be allowed to immunise people as long as they have the appropriate qualifications for flu vaccines, and other Schedule 4 vaccines in certain circumstances.
Whether they do it in a discreet place in a pharmacy or have a separate room set aside – I am guessing, but it would probably be a matter for the pharmacists themselves, and I suspect the physical circumstances of the pharmacy would determine how this practice was to be applied – allowing pharmacists to issue a number of drugs under the PBS when the customer has run out and cannot see a GP for a new prescription for some time.
In Darwin in particular, where GPs are a bit thinner on the ground than other jurisdictions, this is a commonsense approach and we should be at a point where we can say to the pharmacist, ‘We trust you, with all your qualifications and professional integrity, to make appropriate decisions for certain types of drugs’. Of course we should trust people. We have lived for such a long time where regulation and trying to control people from this place and from the ministerial stroke of a pen has diminished our trust in certain professions. We should trust professions. We should trust doctors, pharmacists, nurses and ambulance officers, because the vast majority of the time they do their job with integrity and professionalism.
Yes, from time to time there are mistakes; that does happen. However, I would rather live in a world where people were prepared to do things in accordance with their training and expertise than where we try to stifle everybody and smother them to death under a pillow of regulations so they become too afraid to do anything. This is not the world I want to live in. I do not want to live in a world which is so afraid of litigation and prosecution for regulatory breaches that we become socially constipated from doing things and making things happen in our community.
I note the opposition has given its support to the bill, and I am grateful for that. They can see common sense and know what common sense dictates. These are commonsense changes before the House and are similar to changes introduced in other jurisdictions. It will give Territorians more choice and more availability when it comes to accessing medicines. As I said, the amendments will allow pharmacists to immunise against conditions such as flu and measles – and thank goodness for that. Surely, that is also common sense.
This is a sensible bill which deserves to be supported by all members in this House, and I am sure it is. However, it is not only us. The Pharmacy Guild of Australia has welcomed the changes. The branch secretary in Darwin, Terry Battalis, has been quoted as saying the legislation is an important step forward for community pharmacies and is of benefit to Territorians. Terry has said:
He on to say:
The Pharmacy Guild of Australia like this, most parents will like this and the approach is straightforward common sense.
We need to occasionally reflect on how much has changed, even within our own lifetime, in medical treatments available to us and, more importantly, to our children. We should embrace medical treatments and medical technology. It has seen more people survive diseases and afflictions now than at any other time in human history.
Mr Deputy Speaker, I am glad we embrace things like germ theory and vaccines today, because to return to the days where treatments involved the bleeding of the humours to re-establish balance in the body is to return to the days of barbarism.
Mrs LAMBLEY (Health): Mr Deputy Speaker, I thank my colleagues for talking to this important amendment to the Medicines, Poisons and Therapeutic Goods Act. There is a little history behind this act. The Medicines, Poisons and Therapeutic Goods Act 2012, which will replace the Poisons and Dangerous Drugs Act of 1983, known as PADA, is a result of extensive consultation with stakeholders addressing identified issues with the Poisons and Dangerous Drug Act of 1983, and the implementation of the nationally agreed Galbally recommendations of June 2005 by the Council of Australian Governments, or COAG, resulting from the national competition policy review of poisons legislation commissioned by COAG.
The act includes provisions from the Poisons and Dangerous Drugs Act, new provisions from the consultation and review, changes required as a result of the national registration scheme for health practitioners that commenced on 1 July 2010, and to the Pharmaceutical Benefits Scheme, PBS, allowing nurse practitioners and eligible midwives access to PBS from 1 November 2010.
The new act, the Medicines, Poisons and Therapeutic Goods Act 2012, was assented to by the Administrator in April 2012. However, the act cannot commence until the regulations to accompany it have been finalised. Ministerial approval was granted on 20 December 2013 to conduct targeted stakeholder consultation on the draft regulations prior to finalising them in readiness for approval by the Executive Council. It is planned to have the legislation package ready for commencement next month. However, since assent of the act it has come to the attention of the Department of Health that many other amendments needed to be made to update the 2012 legislation – Medicines, Poisons and Therapeutic Goods Act.
This bill reflects the many amendments that need to be tidied up, or things that need to be changed in order to make this a very robust piece of legislation. I appreciate the contribution of several members of the House today who have raised some legitimate concerns.
The member for Wanguri spoke about the changing role of pharmacists. She was concerned about the communications strategy, how things will work once this legislation comes to fruition, delivery of vaccinations by pharmacists, what they will cost and how these changes will impact on consumers and other health professionals in the system.
I can advise the House connected to this amendment to the Medicines, Poisons and Therapeutic Goods Act is a communication strategy which involves communicating with all stakeholders affected in any way by these amendments. As part of the communication strategy, we will be sending letters to all Northern Territory nurse practitioners and eligible midwives to inform them of how their role will be changed as a result of this legislation, similarly to podiatrists, pharmacists, veterinarians and holders of licences related to this bill and also health practitioners across the Northern Territory.
I can assure the member for Wanguri all interested parties will be advised of these changes in a timely fashion. We hope this bill will be up and running within the next six months, certainly before the end of the year. The Department of Health is working very hard behind the scenes, and I am told work is well under way in developing the guidelines and time frames around the implementation of these amendments, specifically those pertaining to pharmacists. The Department of Health will be using our Pharmacy Advisory Committee to look at the guidelines and give feedback as to how they think – whether or not they are effective and good enough to then be accepted as the formal guidelines connected to this legislation.
I listened with great interest to the member for Port Darwin. He, in his most eloquent fashion, spoke with great passion about the need for vaccinations and the development of medicines and therapeutic drugs within our society. This legislation affects a number of specific interest groups, one of which is the Aboriginal Health Practitioners since the original legislation of the Medicines, Poisons and Therapeutic Goods Bill was assented to. They have had a name change and have been accepted, or accredited, by AHPRA as medical practitioners. They have gone from being called Aboriginal and Torres Strait Islander health workers to Aboriginal and Torrent Strait Islander Health Practitioners, which is an important development for them as a profession.
I addressed a group of Aboriginal Health Practitioners this morning; they are having a conference of sorts in Darwin. Representatives from across the Northern Territory were looking, yesterday and today, at some of the challenges they face in the health profession. There has been quite a slide in the numbers of Aboriginal Health Practitioners employed in the public sector – a 20% reduction in the number of Aboriginal Health Practitioners across the board.
The Department of Health has 20 vacant Aboriginal Health Practitioner positions. There are currently 75 employed, and there should be around 95 Aboriginal Health Practitioners employed. There is a pending crisis in this profession. The people I spoke to this morning are trying to address some of the problems around recruitment and retention of Aboriginal Health Practitioners and supporting and mentoring them once they are in their positions. All sorts of challenges are faced by this health profession, and they are facing some serious and soul searching questions around how they go about their business. As Health minister, I have thrown my support behind them. There is a lot of hope for this profession. It is far from a dying profession, but is facing some very confronting problems. I urged the people at the conference this morning to do some soul searching and hard work towards fixing the problems.
This legislation pertains to a slightly changing role for nurse practitioners. This is also a very interesting area which, on becoming Minister for Health, I looked into with great interest. Nurse practitioners are highly skilled, highly educated and specialised in certain areas of health practice. There are only three nurse practitioner positions in the Department of Health in the Northern Territory. In other jurisdictions across Australia there are many more employed in the public health systems of other states and territories. We are seriously lagging behind in this area. As Health minister, one of my priorities is to address this problem.
Why do we only have three in the Northern Territory? I know we have a small population – we only have approximately 240 000 people living in the Northern Territory – but only having three nurse practitioner positions is inadequate. I have instructed the Department of Health to get to work on this and try to increase the numbers. We have set a goal of 25 nurse practitioner positions across the Northern Territory by 2016.
This is probably a modest goal, but given the low base we are starting from it will be quite a challenge. Nurse practitioners can take a lot of pressure off health systems and health centres that struggle to employ general practising medical practitioners.
They cannot fully take on the role of a qualified doctor, but can certainly do some of the things doctors do. For example, in remote Aboriginal communities that struggle to attract doctors, a nurse practitioner can prescribe some medications, do limited diagnostic work and step up into some of that space occupied by a fully qualified doctor.
This is an exciting development in the Department of Health. We see the role of nurse practitioners within our health system, and it also provides an important career path for nurses. Nurses, as we know, have gone from being hospital trained – they decided to professionalise probably decades ago and have put themselves on a strong professional trajectory. This is a continuum of that, allowing nurses to increase their level of professionalism, education, become more specialised and more broadly useful within health settings.
It is an exciting development within the nursing profession. Hopefully, within the Aboriginal Health Practitioner profession, we will see a similar continuum of success and development over the years to come. It is very concerning that there seems to have been some deterioration in the Aboriginal Health Practitioner profession.
In regard to vaccinations, the member for Port Darwin has summed up the necessity for vaccinations to be easily accessible to people across the Northern Territory. Vaccinating your child is an essential part of keeping the whole community safe and healthy.
We have very high rates of vaccination in the Northern Territory; pretty much all our children are vaccinated. We have an excellent public health vaccination program, something we should be proud of. The early years of life in the Northern Territory are well catered for by the Department of Health through vaccinations, and ensuring good postnatal care is followed up through the public health system.
Thank you for those comments, member for Port Darwin. The amendments to this bill will enable people to have more access than ever to certain vaccinations.
Exactly how those vaccinations will be dispensed or delivered by pharmacies across the Northern Territory remains to be seen. The precise details are yet to be determined. The member for Wanguri asked if there will be a separate clinic room people go into within a pharmacy where they receive the vaccination in a private setting, or if it will be a discreet corner of the pharmacy. I really do not know; it is a good question. I imagine pharmacists and, certainly, the Department of Health will be advocating it be as professional as possible.
Within some pharmacies space is fairly limited, so there will be a challenge to create that discreet and confidential space to do the new work this legislation will allow them to do.
We hope, once this legislation goes through, the amendments will be quickly brought into effect by the relevant pharmacies and professional groups. I see no reason why there would be any delay or procrastination. The act itself has been sitting unutilised for several years now, and it is time we got on with the business of using this modern legislation to bring us into the modern era.
I thank the Department of Health, my staff, and the people consulted along the way for the work undertaken. The Pharmacy Guild of Australia has been very active in this, as well as the other professional and stakeholder groups.
I thank my colleagues for their support through this process.
Mr Deputy Speaker, I move that the bill be now read a second time.
Motion agreed to; bill read a second time.
Mrs LAMBLEY (Health)(by leave): Mr Deputy Speaker, I move that the bill be now read a third time.
Motion agreed to; bill read a third time.
Mr ELFERINK (Leader of Government Business): Mr Deputy Speaker, whilst there is no question before the Chair, and with the acquiescence of the leader of opposition business, I move that the business of the Assembly be rearranged to enable the ministerial statement circulated last night to be dealt with before Government Business during the course of the day.
Motion agreed to.
Ms MANISON (Wanguri): Madam Speaker, I present a petition from 1220 petitioners praying that a new Henbury School be built incorporating state-of-the-art facilities. The petition bears the Clerk’s certificate that it conforms with the requirements of standing orders. Madam Speaker, I move that the petition be read.
Motion agreed to; petition read.
Mr TOLLNER (Corporate and Information Services): Madam Speaker, today I provide the Assembly with an update on the critical work happening to rectify the mess left by the previous Labor government as a result of the failed Asset Management System or AMS project.
The project to implement a new asset system for government using the SAP software system has been an abject failure. The Labor government budgeted $7.2m for a project which will cost taxpayers of the Northern Territory $70m. The system is fundamentally broken; it simply does not work. All this, for 10 times the original projected costs.
When I last addressed the Assembly on AMS in the December 2013 sittings I undertook to provide a further update in early 2014 once a full assessment of the situation had been undertaken. A significant amount of work has been completed since the December sittings, and today I update the Assembly on what has been achieved.
The project governance arrangements put in place by our government required the AMS project to be subjected to a full, independent stage gate review before any decisions on the future direction of the system were made.
Independent asset management systems experts from KPMG were engaged to undertake this review and provide the government with costed options to sort out this mess and deliver an asset management software system that does the job. The stage gate review found AMS does not meet government’s requirements to effectively manage its assets and is so fundamentally flawed that remedying the situation within the core software product as it is currently designed is simply not feasible.
This reinforces the findings of the health check review undertaken in October 2012 through the Department of Treasury and Finance which found AMS to be only 11% fit-for-purpose. To remedy this situation using the existing AMS software would require it to be effectively rebuilt from scratch, an approach KPMG estimate would cost a further $120m of taxpayers’ dollars and take five years to deliver. Needless to say, we will not be taking that approach and throwing more good money after bad.
The Territory has assets of around $11bn covering a broad spectrum from houses to highways. No one would argue that a reliable, robust and effective ICT system is required to manage an asset portfolio of this magnitude and diversity.
Government was presented with a number of options to consider to get a functioning asset management system in place and extract ourselves from the expensive mess of AMS. After careful consideration, government has decided to discontinue use of the AMS system, take an alternative approach and establish a solution comprising an integrated network of asset systems to be called ASNET.
ASNET will be delivered through updating and reusing a number of component systems which still exist within government, to handle different aspects of asset management processes.
AMS was meant to replace nine other systems related to asset management functions. Due to the complete failure of AMS and gaping deficiencies in its functionality, these former systems were not able to be retired from use.
Seven of the systems previously used to manage government assets are still available. The new solution will incorporate three former systems as the foundation components of ASNET: the Asset Information System (AIS), the Roads Information Management System (RIMS) and the Building Asset Management System (BAMS). A technical review of these systems has found them to be robust, reliable, current and contemporary versions of operating software. Even better, government owns these systems. We are not at the whim of a commercial vendor and can control our costs and systems direction.
Some work will need to be done to bring these systems to a level of currency. That work commences now. Most importantly, these systems are known and reliable. They performed the necessary asset management functions for many years prior to AMS. They need to be supplemented and enhanced to deliver the additional functionality required in 2014, but we have the skills and capability to do this here in the Northern Territory.
The ASNET approach will deliver a cost-effective and fit-for-purpose solution by using contemporary software to integrate the various system components, expanding the business functionality and delivering a modern user interface. Current business functionality will be expanded and integrated through development of a new web-based portal which links the networked systems. This technology approach will enable government officers and contractors to access systems online and will greatly improve data sharing between systems.
ASNET will deliver contemporary systems technology such as mobile applications and spatial data capability. Government officers will be able to access systems and update data while in the field, enabling management of government’s infrastructure assets across the Territory.
ASNET will be linked to the Government Accounting System to ensure effective accounting for government’s assets and enable the government’s annual infrastructure programs to be properly managed. This is critical system functionality which was not delivered in AMS and, without which, full accounting for the Territory’s assets is not possible.
A modern data warehouse will also be a key feature of ASNET, delivering comprehensive and dynamic business intelligence reporting on the Territory’s diverse portfolio of infrastructure assets. This is another area of system functionality promised, as part of the AMS project, but not delivered.
Responsive, detailed and reliable reporting on assets is vital to agencies to maintain service delivery. The technology approach being used to deliver ASNET is innovative and exciting. It is a technology approach which will allow us to navigate a path out of the mess we have been left with in the form of AMS, one with great potential to innovate and improve our ICT systems without the prohibitive costs to the public purse which result from a ‘rip out and replace’ approach to ICT systems.
The use of ‘middleware’ technology will allow us to take the various system components which previously operated in isolation from one another and link them up. It will integrate systems and form a comprehensive network with a single unified offering to system users through a simple ‘point and click’ web browser. This ‘middleware’ approach is increasingly being used by large organisations to enable the life of existing systems to be significantly extended, ensure the systems remain relevant to business requirements and avoid the huge capital cost and high risk of expensive system replacements.
This is a proven technology, one that operates in major commerce, banking and other large enterprises. It is one the NT government is using to integrate various systems, provide more contemporary systems functionality and extend the life of systems we have invested in. This technology will allows us to build and add additional functionality as required in a modular fashion without major, expensive systems upgrades or rewrites.
Additional system components can be introduced seamlessly, such as a property management system for leased assets and housing assets. Best of all, we have the skills and expertise to do this right here in the Territory, providing opportunities for ICT professionals and local businesses to be a part of this exciting new development.
Government is very well positioned to implement the ASNET solution. This decision has not been taken lightly. As part of its consideration of the ASNET solution, government sought a further expert opinion on the proposed technology. An experienced chief information officer from another state government was engaged to undertake this task.
After reviewing the work done by KPMG and the situation the NT government faced with AMS, this expert has agreed with and supported the recommendation to develop ASNET. Dumping AMS and having to write off the cost of this debacle for which Territory taxpayers have had to foot the bill to the tune of $70m is a difficult decision, no question at all about it, but it is the right decision.
While an inexcusable amount of public money has been wasted on this expensive IT experiment, continuing to throw more money at it in the hope things will improve is not the answer. The options provided to government by the stage gate review present a clear path forward for government. The only option that will deliver a functional asset management software solution at a reasonable cost and the lowest risk is ASNET. The decision to ditch AMS may seem a bold stroke, but it is the right decision for Territorians. It will require some additional funding, but the cost will be a fraction of what it would cost to fix the AMS or go to the market for an alternative commercial software product.
ASNET will take three years to implement and additional funding of $12.5m has been approved to deliver the project. Upon completion, the system will operate within the previously approved budget for asset services. Work will begin on ASNET straightaway, starting with essential stabilisation work to get government asset information on a more reliable operating platform before any system enhancements can be developed.
It is important to note that AMS will still be with us for a while yet. It will take some time to decommission AMS and transition to ASNET. Unfortunately, this means AMS needs to remain as the asset system for managing the government’s 2013-14 infrastructure program. Substantial manual work is continuing to reconcile asset data and ensure accounting records are accurate.
The Department of Corporate and Information Services will be responsible for the development and implementation of ASNET. DCIS currently manages many of government’s enterprise-wide business systems and has the skills and expertise to manage this body of work. As the minister responsible, I have put the department on notice that ASNET is to be delivered on time and on budget. No further slippages and waste will be tolerated.
An important benefit of the ASNET solution is the opportunity it presents to engage the local ICT sector in the project. One of the failings of AMS was its reliance on high-end technical specialists in SAP software, resources that are not available in the Territory. Over the life of the AMS project, government has relied on these resources on a fly-in fly-out basis, adding a huge cost burden to the taxpayers of the Northern Territory.
ASNET will use a fundamentally different approach. Government will use local ICT skills and expertise to assist in the development of ASNET. Resources will be accessed via local suppliers, many of them small ICT businesses. Unlike AMS, ASNET will be developed in the Territory by Territorians for the management of Territory assets. ASNET presents the path forward for government to get us out of the diabolical mess we have been left to clean up.
The AMS project has been a case study in failures of management and delivery of an ICT project. The obvious question, the elephant in the room if you like, is how do we prevent this happening again? The single most critical thing we can do to improve the success of ICT projects and initiatives is to put in place a stronger, more robust governance approach and get the right senior people within government participating in it. If we get this foundation layer right, other success factors such as project scoping, operational management, resourcing, procurement and contract management, change management and implementation will be addressed through the governance process.
When I addressed the Assembly on AMS last December, I spoke of work being done by my department to improve management of ICT across government. I am very pleased to report that a new NT government ICT governance framework has been developed that will apply to all agencies and provide a policy framework for how ICT is managed across government. The key features of the new framework include:
an ICT Governance Board chaired by the DCIS Chief Executive, with membership at least at Deputy Chief Executive or equivalent level
a ministerial ICT advisory council comprising experienced and qualified experts from industry sectors to provide external expertise and know-how, drive innovation and new ideas, and act as a ‘sounding board’ for developing technology strategy
The framework will be underpinned by a new series of Treasurer’s Directions under the Financial Management Act that are focused on ICT controls and management. This will provide an explicit legislative basis for specifying ICT requirements and ensuring compliance. The framework provides clear and tangible response to the deficiencies in the management of ICT projects identified by the Auditor-General, the Public Accounts Committee and other independent reviews in response to the troubled ICT systems projects. The new framework has been approved by government, and DCIS is currently in the process of implementing these new arrangements.
Today I demonstrate clearly the decisive and deliberate action this government is taking to clean up the mess left to us in the form of the plagued AMS project, and the steps we have taken to strengthen and improve the management of ICT within government. This important work imbeds solid foundations and sets a new direction for government, not only for a better outcome for assets systems, but for all major ICT investments and projects.
Madam Speaker, I move that the Assembly take note of this statement.
Mr VATSKALIS (Casuarina): Madam Speaker, I respond to the minister’s statement on the Northern Territory’s government Asset Management System, or AMS, and thank him for the update. I note his story has changed quite dramatically from the statement he made to the House last year. It has gone from blaming Labor completely to a more responsible approach of getting the work done. Why is this you may ask? The evidence gathered by the Public Accounts Committee, run by his own party with its own members, has reached a vastly different conclusion than the minister was trying to prosecute last year. Even with the best attempts of his members to force blame on the minister at the time, it has become evident the breakdown of this project occurred at the senior public servant level and information on this project was not adequately or properly passed up the chain.
All evidence points to a cost blowout, but let us examine where the blowout occurred. In today’s newspaper the minister is talking about a blowout of $70m and tried to say it was a Labor mess. Let us look at the figures. The original budget for AMS was $14m, not $7.2m as indicated, incorrectly, in your statement, minister. The Auditor-General notes in his report that $26m had been spent by October 2012. We had an election in August 2012 which the Country Liberals won and took over government. If your figure of $70m is to be believed, it means $44m is a Country Liberals’ mess not a Labor mess. Trying to blame the Labor Party does not work, minister. You should talk to your people again. It is a good idea, if you leak information to a journalist, to advise him the $70m figure is not correct. Apart from the $70m you have said, $44m is your own making.
If you are trying to use this as a political tool to prove Labor waste you cannot, because the majority of the expense came under your watch, minister.
Finally, thankfully, after the overwhelming evidence has been pointed out, you have decided to get on with the job and fix it rather than playing a political blame game and I congratulate you for that; it has to be fixed.
I hope the plan you have outlined works as it is important for government to have an AMS, but I also worry that almost every ICT project across Australia has had some cost blowout. I suggest you keep a close eye on that. Obviously you did not, because $44m out of the $70m came under your government’s watch. In fact, it does not take much research to find IT project cost blowouts in every state in Australia, federally, and even in the commercial sector.
I ask the minister if he has any recourse for recouping any costs from Fujitsu for non-delivery of the project. I am sure the contract would be comprehensive and should have some penalty clauses so the government may have the opportunity to recoup some money.
The government’s plan is to go towards a new project, ASNET, abandoning AMS altogether. Let us hope you have found the right balance and, instead of throwing good money after bad as you say, you are not just throwing good money at something new for the sake of it. I also hope the new government’s framework around this project works and you do not waste another $44m on it. I know you have put yourself right in the middle if it because you formed a ministerial advisory group which puts you completely in charge of the success or failure of this project. I look forward to more updates on this project in the future.
Minister, I know it makes for a good political story to blame the previous government for everything, from $70m as you allege to not raining last year or raining too much this year, but unfortunately, the Auditor-General paints a totally different picture of your allegations. From the $70m you allege was wasted by the previous Labor government, $44m appears to have been wasted by the new government – your government, the Country Liberals.
Mr ELFERINK (Attorney-General and Justice): Four minutes, Madam Speaker, dedicated to $70m worth of expenditure. Most of that was a Pontius Pilate impersonation, and a damn fine one at that. The only thing he stopped shy of was whipping the AMS 39 times before sending it off for crucifixion.
The devil is always in the detail, and I know full well the incoming Northern Territory government was stuck with certain contractual commitments put together by the former government. I get the sense, looking at this issue with my nose pressed to the glass, that the former government was convinced by computer boffins, or whatever, that they needed a Lamborghini. They set about trying to find a Lamborghini for $7m, and the final design and delivery cost of the Lamborghini was 10 times higher than the initial ticket price of the vehicle itself.
The other thing is if you are going to the supermarket to buy groceries you may not need a Lamborghini. We could probably get away with a decent Mercedes station wagon, even a Ford Falcon. Unfortunately, the former government set out to get the whiz-bang AMS system. I find it fascinating, after all the expenditure, cost blowouts and time blowouts, that the former government is still trying to find anybody to blame other than itself for going down this path.
I am grateful for the solution as described by the minister. I hope it works out better than the AMS system did, and I am sure it will ...
Mr Tollner: It could not be worse.
Mr ELFERINK: This is true. I am not setting a particularly high benchmark by saying that. This approach could have been taken in the first instance if people had not – I suspect the former government – pitched this product to be the ants pants of computer systems. I do not claim to be a computer boffin but I am a taxpayer, as is everybody else in this room and in the Northern Territory who holds down a job or purchases any product off the shop shelf other than food. Those taxpayers have the privilege of shelling out a lot of money to support a computer system which, after blowing out at 10 times its original amount, ended up being 11% operational and nothing shy of a Lazarian-type response, and was never going to become much more.
The idea of having to spend $70m on a $7m project, only to find we need to spend $120m more to fix the $70m screw up on the $7m project is a reason to hit the abort button. The only problem with hitting the abort button is, initially, somebody pressed the go button. I remember raising this issue in opposition, repeatedly, because I first became aware of this not as a result of announcements by the former government outlining some of the problems it had run into, but I was sitting at my stall at Parap markets and someone said, ‘You want to have a close look at the AMS system the government is rolling out, mate, because I think it has problems’. By that stage it had only consumed $30m.
Members opposite are trying to say the $44m was this government’s spend, but we were bound to a system which was never going to meet expectations. I wonder how much sooner the abort button could have been pushed by the former government. It is what it is, and in the process we have deprived ourselves of one new primary school or middle school, any number of nurse positions, a number of new police stations in remote communities, housing which could have been built in a remote community or, alternatively, better childcare facilities.
In the Corrections department and bringing our juvenile facilities up to speed, I could easily have dealt with only a fraction of the money to do much more than we are doing at the moment. We have foregone hundreds of police cars and any number of other things. It is frustrating to an extraordinary degree to have seen this spiral out of control.
This has to be, genuinely, one of the great scandals of the last 10 years in this jurisdiction. To see so much money poured into something and walk away with zilch, nada, nothing – $70m in any other jurisdiction would be a scandal of biblical proportions. Whilst it has the front page today, I suspect tomorrow it will not be high on people’s list of priorities. Tomorrow, we will find something else to distract us, but I am deeply frustrated that we have lost so much money in pursuit of this goal. If you think about it, the extra $12m we put into ASNET will be an added expense because there should be no need to spend the money in the first place. AMS was supposed to lead us to a position where the fix was not necessary because the system was the fix.
You can say $82.5m of taxpayers’ money has been spent to get a $7m result and it is years late. Unfortunately, that is where we find ourselves. It is indicative of one of the reasons I was grateful for the change of government in August 2012. We must ask ourselves hard questions in government and I suspect, after eleven-and-a-half years, the Labor government had stopped asking hard questions. Everything was seen through a political lens and had to be dealt with through a political lens; everything was politics, not whether it was good or bad spending, just the political result being pursued.
That type of thinking gets you to a point where you think, as a government, to do nothing is the best thing, but to do nothing expensively is better still. We see that in a range of areas in the former government’s expenditure, which had them saying in this House on repeated occasions, ‘We are throwing more money at the problem, therefore we have the solution’.
We know there is resistance in education, but we stand by the decisions we must take. In education, the answer from the previous government was to throw more money at the problem. ‘We haven’t got the result. Throw more money at the problem and we’ll get the result’, but that was not happening. We were throwing more money at it, employing more people and seeing no change in results.
It was similar in child protection. ‘Throw more money at it and we’ll get better results’. The previous government created all types of fancy machines in the child protection domain, not least of which was SAF,T – noble in intent and ghastly in execution. Not a single child was protected through SAF,T, despite the fact we spent $1.5m on it. We spent $1.5m on child protection and it failed to protect kids. There is something fundamentally wrong with that type of expenditure. The reason expenditure became the solution was so ministers of the Crown could say, ‘We are throwing more money at it, that is our effort’. This is the fundamental difference, I suspect, between the former government’s approach and the new government’s approach.
For me, it is not necessarily throwing more money at it, it is the attitude that we are responsible for what happens within our portfolio domains. As a consequence of that, we take interest and are driven in those areas. I, for one, continue to be driven in all my portfolio areas trying to find ways to do things more effectively, and often for less money. If you look at what we have done in Pillars of Justice under the umbrella of the Attorney-Generalship – I note, with some gratitude, the Chief Magistrate has started implementing the pre-trial disclosure policy he knows we are working on within the justice framework. The reason we want to do that in the lower courts is for the same reason it was done in the civil courts: to make the system more effective.
Where pre-trial disclosure has been legislated for in other jurisdictions, such as the lower courts in Victoria, they went from some 7000 to about 3500 hearings in 12 months. By changing process and system, there are substantial savings to be made in the court system. We will get better results with just as much justice being dispensed. In fact, I argue even greater justice will be dispensed in the lower courts at a substantially reduced cost. Part of being a competent and capable minister – I hope I can make a shallow impersonation of one – is you can do things better for less money.
The argument you hear from the education union is you cannot do things better for less money. We were not doing things better for a whole lot more money. I suggest we can do things much better for less money, and that is what we are attempting to do in a number of areas of government. I make no bones about that. My own Attorney-General’s department is a much leaner animal today than it was when we came to government. Yet, it continues to function effectively and do all the things we ask of it in a practical and timely fashion.
Similarly, in Corrections, whilst there has been enormous upward pressure on this demand-driven area, the growth in expenditure on Corrections has been restrained to the point of almost no growth at all. There is now room, as a result of the question I answered in this House recently, to review how we project expenditure in the Corrections environment because our prisoner numbers do not reflect the original projections put together in July 2010.
As a consequence, the projections which were quite reliable until the change of government are no longer that reliable. We have some 200 fewer prisoners in custody than the original projection four years ago. This means we are able to do more with less. Part of that is we have been prepared to spend money in the front end of criminal conduct; for example, more police officers.
The general rule of thumb in the past has been more police officers will generate more prisoners. That is true if you have a reactive response to crime in our community. However, we have taken an approach where we say to police officers, ‘Start to engage in preventative behaviour’. That is why you see police officers standing in front of bottle shops. Whilst people might object to that in truth it has led, almost directly – along with several other policies – to a substantial drop in liquor being sold in our community. The Alice Springs statistics show a drop of 7% of pure alcohol at the wholesale level, and that is the lowest figure on record. That is partly because we have attacked the marketplace which, for much of the consumption of alcohol, is the drunks who hang around our parks and gardens, and who were there despite the Banned Drinker Register. Many of those people are now in custody under our mandatory alcohol rehabilitation legislation. That is pushing down consumption, as well as the fact people know they are not allowed to drink in our streets.
In Alice Springs we have seen a 39% drop, year-on-year, in property crime. We have nearly halved property crime in Alice Springs. Why? Because many of the people who turn to property crime to support their drinking habits are either in custody or, in some other way – perhaps through an alcohol protection order – restrained from conduct. Those who come into the custodial environment despite these improvements are expected to behave in a fashion which shows they are genuinely responsible for their conduct.
The effect of this, collectively, is, as a government, looking into the future we can spend $500m less over the forward projections than the former government did, drive down property crime in particular, push down prisoner numbers and have a sober, safer community overall.
The challenge for the government in these circumstances is saying. ‘We will draw a line in the sand and say this is not good enough’. That is what we have done. Members opposite, and many people in the community, scream from the rafters that we had the audacity to make people accountable for themselves and their conduct and put pressure on individuals in the community who cause problems.
Nevertheless, we can take some comfort that the policies we put in place have achieved better results for less expenditure. That is the difference between the former government’s approach and the current government’s approach to dealing with all types of things. What is the most critical comment we received from members opposite? Despite this substantial body of evidence that spending more is not necessarily the answer it is, ‘Why aren’t you spending more?’
I heard the Leader of the Opposition utter a, ‘Hear, hear’ when the Henbury School petition was read out. Is that a commitment from the Leader of the Opposition to spend money on a new school? If it is that is fine, but I ask the Leader of the Opposition to announce the costing for it and where the money will come from.
The Leader of the Opposition drives the speedboat of opposition which can change direction any time it pleases, no matter which way the winds and tides are blowing. We have inherited the ship of state, which is a little bit like an oil tanker. If you want to change direction you turn the wheel and wait for a response from the rudder. That is the nature of opposition, that is the nature of government, but the difference between us and the former government is we are prepared to manage, to get involved in the management of our jurisdiction and the forces available to us, namely 20 000 full-time equivalent public servants, and use them for better results in our community.
That is what we have done with the police. We are encouraging the courts to adopt better practices, and full credit to the Chief Magistrate for the approach he is taking. I am enormously grateful to Dr Lowndes and his efforts, the Corrections system, the Education system and Health system for working in tandem and in cooperation with each other. Soon, hopefully, there will be an announcement of a domestic violence policy to augment what is already being done by this government in the area of domestic violence, particularly in relation to the criminalisation of domestic violence, as well as a juvenile justice policy which will also augment the work being done across government. That is the multilayered, multifaceted approach which will be targeting individuals to say, ‘You will be more responsible. If you beat your wife you will be held accountable. If you are a criminal we will hold you accountable, but if you do the right thing and contribute to the community we will make sure you have as much liberty as you can.’
This AMS statement is reflective of the difference between the two governments: the previous government, which thought spending was the answer to everything, and the current government which believes sound management and good practice is the answer to everything. We believe in sound management, good practice, accountability, we are accountable and our answer to a problem is not necessarily, ‘We will spend more money’.
I commend the minister for his statement and wish him well in development of the ASNET response to the AMS debacle.
Mr STYLES (Transport): Madam Speaker, I am stunned there are no more speakers from the other side given this was an Australian Labor Party government initiative. The previous opposition speaker spoke for four minutes on something that was budgeted for $7m and will cost more than $70m. Sadly, today’s newspaper headline says, ‘$70m of Your Cash Wasted’ – an amazing figure.
An interesting saying most people know is: an elephant is a committee-built mouse. The previous government had committees and kept tipping money into them. I reflect on the words used by my colleague, the member for Port Darwin that when we were in opposition we found, through information flowing around the community, a big bucket of money was being tipped into the Asset Management System.
It is like a hole in the ocean; you kept tipping money into it and it kept disappearing. Sadly, it reflects badly not only on the people involved in it, but the Territory in general. This saddens me, because we would like to demonstrate, all over this country and internationally, that the Territory is a great place. The Country Liberals have a plan to make it happen; however, we have been nobbled a little by the inherited $5.5m debt we have to deal with and by incompetency with something budgeted for $7.5m and costing $70m. We still do not have a fixed system; we have a broken system.
It saddens me when I think about people down south looking at statehood for the Northern Territory. We, in this House, would be very grateful to support the Minister for Statehood and say, ‘Yes, we are a competent government, we are a competent people in the Northern Territory’. Those on this side of the House can say that to our parliamentary colleagues around the country when statehood comes on the agenda again. In the meantime, we have to demonstrate we can fix the mess the Territory has been placed in by the former government and have a plan to do it. Part of the plan is already coming to fruition.
Can I enlighten those listening and watching on some facts? The Territory’s economy grew by 5.6% to $19.9bn in 2012-13. This is the highest growth rate of all jurisdictions and well above the national growth rate of 2.6%. I was in Singapore recently talking to some business people and the word is the Territory is open for business and the government is looking at opportunities for investment. The catch cry, ‘We are open for business’ is now echoing throughout the world. I believe people from Canada and the Middle East visited recently; these are people with huge amounts of money to invest in places with no sovereign risk where they will get a reasonable return for their money.
Because of the efforts of various ministers, along with the Chief Minister and Deputy Chief Minister of the Northern Territory government, the message is getting out and across the world. We do not have to go to investors; we have people coming here. This is an excellent problem to have – people turning up with buckets of money to invest in the Territory. We are struggling to meet with all of them. I had a meeting after Question Time this morning with a group of people who want to invest in the Territory. They have some novel ways of how the government and private enterprise, together, might generate economic wealth and job opportunities for Territorians, which will increase the economic growth of the Northern Territory.
One thing you can do to get out of debt is put up taxes. This side of politics would rather not do that. You can also reduce services, and we would rather not do that. However, we can work smarter with services.
The third option for getting out of debt, or changing your debt to income ratio, is a combination of those two, and we have had to do a small amount of this.
The fourth option, and the big one, is economic growth. What people in this House have been informed of – I hope people who watch parliament, listen to it or read Hansard have seen plans from various ministers on this side of the House about generating wealth, because without generating wealth you cannot pay for anything.
Everything comes at a cost; that is the way the world works. To do great things for the Territory you need money to pay your way. Sadly, at the moment, we have a debt we must deal with, but we have a plan to deal with that. We will deal with it and fix it because we are, sadly, the only ones in this House who have plans of how to get out of the economic mess we inherited.
I will move on from growth to some Sensis figures I read recently. In the December 2013 Sensis Business Index, more Territory small and medium enterprises believed Territory government policies are supportive of small businesses rather than against. That is clear to see by the international investors knocking on our door. The Chief Minister and Deputy Chief Minister cannot keep up with the number of people who want to invest, and everything starts with an idea and meeting and sharing the ideas both parties have.
This all goes towards the image of the Northern Territory. When I talk to people in various parts of the world, and here, they say it is refreshing to have people who will talk to them, who they can meet with in a fairly short period of time and who are open to the idea of working in partnership to generate good results for all parties concerned.
Going back to the Sensis Business Index, it reported the Territory had the second highest positive attitude towards government policies of all states. I want to repeat that: the Sensis Business Index reported that the Territory had the second highest positive attitude towards government policies of all states, and was equal with Victoria and behind Queensland in the December quarter 2013.
That is a fantastic result for a government that has, as you can see with the AMS situation, another mess to clean up. There are others I am sure will be discussed in this House over the next six to 12 months. It is a hard job, but we have a plan to fix it. The Sensis Business Index says support for Territory government policies rose by four percentage points in the December 2013 quarter. That is another indication that we have a plan, are on track and we will keep playing the game and making sure all Territorians benefit.
Further, the Sensis Business Index reported Territory business confidence grew by 11 percentage points to 37% in the December quarter 2013, slightly below the national average of 38%, which increased by 21 percentage points over the quarter. In retail trade, the Territory has recorded nine consecutive months of growth in trend retail trade turnover to January 2014. These are great indicators we are on the right track. It is sad we are pulled down by things we inherited, but we have a plan to get things back on track.
Further indicators we are following that plan and are on track are the ANZ jobs ads. The latest ANZ jobs ads figures show that weekly newspaper job ads in the Territory were up 1.2% in February 2014. The national average was up 0.2% over the same period.
Engineering construction is great news for the Territory and activity is at an historical high level. In 2013 – I quote from a number of documents – engineering construction activity in the Territory increased by 47.9% to $4.5bn, the highest annual level on record. The increase was driven by work on several major projects, including the Ichthys project, the Marine Supply Base and mine expansions and developments throughout the Territory.
Over the lunch recess I heard of other mining ventures which are about to start. I am sure the responsible minister will be bringing those announcements to this House in due course.
Labour force figures are another good indicator. The Territory recorded the highest employment growth of all jurisdictions in February 2014, increasing by 2.7% in the year and by 0.7% in trend monthly terms.
The Territory’s trend employment increased by seven percentage points between 2013 and February 2014, representing an increase of about 8700. Of this amount, about 97%, or 8400, were in full-time employment.
In February 2014 the Territory’s trend unemployment rate declined by 0.2% to 3.7%. The Territory has the second lowest unemployment rate of all jurisdictions above the Australian Capital Territory and well below the national trend unemployment rate of 6%. The Territory’s trend unemployment rate has fallen for seven consecutive months to February 2014.
Another great point is the building activity and approvals. You would have heard my colleague, the Minister for Lands, Planning and the Environment is fast-tracking land release, something the previous government failed to grasp. I have quoted these figures before, and I am happy for the opposition to correct me if they wish because they are rough figures. I have not looked at the graph for quite some time, but I am happy for them to correct what I am quoting. In the last three years of the Labor government their own Treasury officials said they needed around 2000 blocks per year so they could keep pace with demand. In the previous three years they went from 1100 down to 920, down to about 570 or 520 – somewhere around there. It was a downward trend which indicated to me they took the foot of the accelerator and allowed things to slow down, which is a bit sad because that put pressure on existing and new homes prices.
Sadly, those who could not afford to build a home were forced into the rental market. Competition in the rental market pushed rents up to an extremely high level where we had the highest rents in the country. What does that do to population stability? What does it do for our young people?
When in opposition, as shadow minister for youth and, now, Minister for Young Territorians, I have a constant stream of young people expressing their concerns over their inability to afford a house.
One of my own children has a couple of kids and is desperately trying to buy a house. It is a real battle. I am acutely aware of the problems young people have in the environment left to us.
I am grateful to the Minister for Lands, Planning and the Environment for the hard work he is doing to ensure we have land released faster than it was prior to us taking government in 2012 ...
Mr Chandler: Hear, hear!
Mr STYLES: Yes, everyone agrees with that statement, member for Brennan.
Talking about building activity and approvals, residential building approvals in the year January 2014 increased by 21.8% to 2294. That is an impressive increase. Another area where this government has achieved those percentages is the decrease in crime. This demonstrates the government not only has plans but is implementing successful plans to reduce crime, reduce violent assaults, alcohol consumption and a whole range of things. However, economic activity is increasing.
It is important we have economic activity to generate not only GST and stamp duty, but government needs an income if it is to continue supplying services at a level commensurate with our income. I say commensurate with our income because, sadly, the previous government spent way more than its income. Its idea was to throw money at things. Of course, the AMS scheme discussed in the House this afternoon is an example of where government threw money at a problem and expected it to go away.
I remind the opposition, not much has changed from when we were in opposition – money is an input not an outcome. You cannot continue to throw money at a problem and hope it will go away. You need to implement a plan that will work.
I ask the opposition: where was the plan in relation to the AMS and where was the plan in relation to the budget deficit? Where was the plan in relation to the debt? Perhaps there was no plan, perhaps it was just a group of people saying, ‘This will be a good idea, let’s do that’. Was there any due diligence? Where was the due diligence on the AMS? I suggest there was not a lot from those who should have.
The Treasurer, in his statement on the AMS, spoke about the good people here in the IT industry and public servants. It was a complex system, a …
Mr GILES: A point of order, Madam Speaker! Pursuant to Standing Order 77, I ask for an extension of time for the minister.
Motion agreed to.
Mr STYLES: Thank you, Madam Speaker and member for Braitling, for the extension.
As Minister for Infrastructure I had this for a while and it was a nightmare trying to figure out where it had reached. Basically, the previous government wanted a gold-plated scheme and was sold a lemon. How did that happen? How do we prevent that from happening again? It is about due diligence; about looking at what occurs and when alarm bells start ringing loudly you take hold of it and say someone has to do something about it.
I had the unenviable task of looking at it when it was with the Department of Infrastructure. Of course, the Department of Infrastructure is a great user of the AMS given it does a lot of the maintenance and is responsible for a lot of minor new works. Good people in the Department of Infrastructure were tearing their hair out because they were getting phone calls day in, day out, and had been since the system was turned on in April 2012.
In hindsight everything is great, but I was told by numerous people it was recommended not to turn the system on. It was not ready, checks still needed to be done; however it appears someone made the decision to turn the system on and go live before it was ready. It is like trying to put a big piece of machinery together where you do all the nuts and bolts up but not tight enough, the braces are not in, but you start turning the machinery and it explodes and there are bits everywhere.
It is a bit like that. We have an asset management system which is supposed to be a gold-plated version, as the member for Port Darwin described in his contribution to the debate, but it has not worked.
The information I received, as a result of investigations to try to figure out how to fix it, was so many people were in damage control – it had been costing a fortune since the day they turned it on just to pull the system together. Sadly, we had to employ numerous people in the Department of Infrastructure to cover the things this system is not doing.
When you ask the system to automatically generate a report it will not do it. We have had to employ many people, costing a great deal of money, to retrieve the information manually so we can give invoices and accounts to people.
A number of people have phoned me saying, ‘This is a complete disaster. I would like to talk to you about what could and should happen.’ When it was turned on too early contractors could log into the system and look at what other contractors were doing – an appalling state of affairs where security on the IT system was not in place when they went live. Whose decision was it to go live? This is one of the big questions. Was it someone in government, in the bureaucracy? Was it Cabinet? Was it a minister? Was it the Chief Minister at the time? Who said, ‘Push the button to start?’ Perhaps it was the current Leader of the Opposition, perhaps not.
What a disaster to preside over – pushing the button on something not ready to go. It reminds me of when someone said, ‘Push the start button’ for the Weddell Power Station, when information was to hand saying not to start the power station. The gas going down the pipeline had not been cleaned properly to take solids and liquids out of it. My understanding is – I would like someone to tell me if I am wrong – the current Leader of the Opposition indicated to someone, ‘You should start it, let it come down the pipeline’.
I am happy to be corrected, but my understanding is the order was given, ‘Start the generator, let the gas come down’. ENI sent the gas down, it went into the generator and the generator had a huge failure due to solids and liquids being in the gas. ENI put their hands in the air and said, ‘Not our problem. We gave you the information, you fix it.’
I understand that cost millions of dollars. That is all right because you put it on the never-never plan and the Power and Water MasterCard, which still has an enormous amount of money sitting on it. Power and Water Corporation is not out of the woods yet, there are serious financial problems. You add millions of dollars because of – correct me if I am wrong – due diligence.
It went live too soon and was given to good local people who believed they could do the job. I believe some local people have been set up to fail. The integrators and contractors on this project had more people coming here, and at one stage there were 92 engineers on the job. Many people have been in charge of it over a number of years, and someone should have realised they had a problem because they sent expert engineers here who did not last long and did not seem to fix it. They had engineer after engineer, so many people were in charge of this, and so many people were swapping and changing and coming and going. They were all contributing to accommodation in hotel suites and expensive units, but they were, as the Treasurer said, the fly-in fly-out IT people. When were questions asked?
In the Department of Infrastructure we still have an enormous number of people working manually on the system so when contractors contact the department we can give them information. We saw so many people not being paid and had phone calls from people in the business community who rely on government to pay within the 30-day window, and this was not happening. We would say, ‘How much do we owe you?’ and they would say so much. We had no way of checking, and at one stage there were between 15 and 20 people trying to extract information from a broken system to see how much we owed. I believe they still do not have an exact figure of how much we owe, how much is coming in and who owes who what.
Irrespective of what is said here, behind the scenes there are people in the Department of Infrastructure trying to find out who owes who what and this is a major headache for them. I commend people in the local IT industry who worked hard to fix the system. They were obviously under the direction of the integrators and contractors. I was staggered at some of the figures being paid on a quarterly basis to contractors for I do not know what. I received information from people in the IT industry who were asking, ‘What are we getting for our money?’
This is not last week; this is back to when we were in opposition. I thank the public servants who are working hard with a broken system. On behalf of the former government, we apologise for a broken system. We are doing everything we can to fix this and, as the Treasurer pointed out, we have a plan. It will not cost $110m to fix this system. It was a simplistic system to fix in the first place, and we will now fix it.
I commend the statement to the House. Thank you, Madam Speaker.
Mr HIGGINS (Daly): Madam Speaker, it was interesting listening to the member for Sanderson talking about assets. I realised he is older than me so probably has a little less knowledge of the computer systems side of it. We will leave that, Pete, to the younger people like me. I think I am six months younger ...
Mr Elferink: In this day and age, that matters?
Mr HIGGINS: At this this stage, it does not matter.
My background with computer technology goes back to the mid or early 1970s. I first came to the Territory in the mid-1980s and was employed by NCOM, so I sympathise with the people involved with this computer system. When I look at what has occurred, it seems members opposite lit a bushfire which would burn out $7.2m of Territory funding. That bushfire was not put out until we reached $70m. The key point is we are saving $120m in the process, but one thing I found when I worked for NCOM – that was where I first met the previous Chief Minister, Paul Henderson, his wife, Stacey, and Natasha Griggs. All three, at some stage, worked for me.
One of the things that struck me when I first came to the Territory was why we were employing so many people from down south. The local computer people were very highly skilled. For some reason, we had people from down south who thought they were better off continuing to employ people from down south. Out of all the people who came with me, I think I am the only one who stayed.
When we look at the locally developed computer systems, there are two types you would implement. One is a package system – I mention PROMIS, the Prosecutions Management Information System – which was implemented in the early 1970s. The way we looked at packaged like that was it fitted into a whole stack of environments and, provided it met about 80% of the requirements, it was a good fit and you would adjust the other 20%.
Another system similar to PROMIS I had a lot to do with – I mention Geoff Fanning and Computer Power. They had a lot to do with that system and employed many local people.
That other system was IJIS, the Integrated Justice Information System. The concept of that was first conceived by a fellow in Corrections named Alan Vanzel, who is still around somewhere. There was Bill Wilson, who is now at the university, and Peter Conran from the Department of Law, who did some work with it. I was given carriage of the original design of the IJIS system. IJIS was developed from the ground up. The project manager on that was local woman Gaye Long, who was very good.
When I read through this speech, one thing I notice is the AMS does not meet government requirements to effectively manage the asset and is only 11% fit-for-purpose. My question straight off is: what happened from the mid-1970s and 1980s when these packages had to meet 80% of the requirements? We have gone to something that only meets 11% of the requirements. I question who allowed such a system like that to be progressed. It was possibly money, I do not know. However, $7.2m seems a lot to spend on a system to look after the assets of the NT government. Irrespective of the value of the assets, it is the functionality of the system.
The solution espoused today – I have never heard of middleware but have a feeling of what it is. I go back to the early 1970s. I started my career in banks, and banks used old batch processing systems not online systems, and most of these programs were written in COBOL.
At the turn of the century – the year 2000 – I started in the bank in the 1970s so almost 30 years later – I was astounded to find banks still used COBOL programs. They had put front-end software on these so they would become online systems. I have made some inquiries in the last few days and found these old systems are still there. I presume – I have not had a chance to get a brief on this – this middleware approach is the same thing banks have been using for the last 30 or 40 years. If it is, it is a very good decision.
I applaud the option to get someone from interstate to look at this system and identify the projects. It is always good to get someone from outside. That is about the only time I would support the Territory going interstate for these people. The end result will be more jobs for local computer people. I have complete faith in the university producing people with the right skills to do this work. I have yet to see anyone from down south who is any better than local computer people. After this debacle, they are the ones I feel sorry for. These people need to be defended, and someone who has made the decisions higher up should take the blame for this.
Other concerns I have had with computer systems over my years of working with them is people think a computer system will solve all the problems and a lot of people develop systems simply to computerise. I know the member for Goyder still uses the archaic pencil and diary and does not use an online diary system such as Outlook. I applaud that because the member for Nelson uses a pen, which is a bit more permanent showing more confidence in the bookings he makes. People who use pencils are a little less confident and use rubbers to erase. I applaud the member for Nelson for being so confident.
I hold the strong view a lot of people use computer systems because a computer is there. They have a computer sitting in front of them so they use it to do everything and anything. One of the problems coming out of AMS, after speaking to people – there are many people in Treasury – a lot of people came to me prior to me being elected complaining about this system. They said, ‘Gary, if you get into government can you do something about it?’ I am happy something has happened with it.
One thing mentioned to me was a lot of the systems did not have anything wrong with them. I have not heard mentioned today – I would be interested to hear an answer – the justification for this. I have heard a lot about them being assets and their value. I am not too sure and would have to find it in the speech – we are talking millions of dollars’ worth of assets and that is the justification. As a computer person, I do not see that as justification. It is a bit like a doctor and a person – what is the cost of saving someone’s life? You do not put a value on it.
The world today is far too dependent on computer systems. Look at our reliance. I do not know how many people had problems with their mobile phone or how many people could not use their computer during the recent power outage, and people need to bear this in mind. I am sure the member for Goyder could still check her diary appointments, so would the member for Nelson, but I would have had a bit of trouble.
I wanted to raise those issues. I am not here to point the finger at people, but there are questions I would like answered. I would appreciate it if the minister could give some commitment to finding the justification for this system, what it would achieve for us and what savings there would be? Were there staff savings? I do not think any of that has been mentioned in speeches to this point. There has been a lot of, ‘You caused this, you caused that. We spent this, you spent that.’
My view is a fire was lit, that fire has been put out, and the person who lit the fire is the one who should go to gaol.
Thank you very much, Madam Speaker.
Mr WOOD (Nelson): Madam Speaker, the Minister for Infrastructure mentioned a few things about a gas pipeline and Weddell Power Station. The member for Daly raised some good issues because, from my point of view, one of the things coming out of the Public Accounts Committee investigations into this is we presume change will bring better service to the community. After all, that is why we have the public service. We say, ‘We think if we spend this much money we will have improved the service we give to the people of the Northern Territory’. I sometimes wonder if we bother to ask, ‘Is this the case?’
Are the systems we have, although perhaps a bit more tedious, sufficient to do the job or can we afford – now we talk about $70m – the cost of the change? Will it make a lot of difference? I think we need the cost benefit analysis at the beginning. We all get caught up with the latest gizmos, otherwise IT companies would not make any money because we would not upgrade our computers. If we did not upgrade our computers the office would go broke. They gave us an upgrade, which I interpret as a downgrade because it is slower than the previous model but someone has made a few quid out it.
I did not need an upgrade. It still writes letters, checks Google, collects and sends my e-mails and I can do my newsletter on it. I do not want it for anything else. It is a working thing and I do not need a change, but we have to be up with the Joneses otherwise there will be nobody to repair this old-fashioned computer of mine. We seem to think upgrading is a good thing.
When we discuss the AMS – there were also grants programs for the hospital and other programs encountering difficulty. Right at the beginning, if we are heading down this path, can you show me if it will make any difference to the person in the street? Will it get them to a hospital bed quicker? Will they get their planning information faster, and have you asked the people who have to deal with this on the ground? Often that is the person on the front desk who has to check the information. Has it made it any easier or were there any great benefits from these changes?
I know the PAC is still looking at this. I do not know where we go now government has pulled the pin. We are not the only place in Australia where this has happened. It is an expensive case of learn by your mistakes, but we have had to pull the pin because if the advice from the department is there is no end to it, the government has made the right decision.
We have looked at other states and they have the same problem. Queensland had similar problems. Hopefully, one thing to come out of the Public Accounts Committee will be a set of guidelines which, if followed, will make the risk of this happening again nearly nil. You cannot say it will never happen.
The member for Sanderson mentioned the gas pipeline, and the member for Port Darwin, at the time, wanted the PAC investigate it. When the PAC has a moment to spare perhaps it should look at the latest power generation failure …
Mr Elferink: It has a capacity to self-refer now.
Mr WOOD: It should not be power generation. It was a power failure; there is nothing wrong with the generators.
In relation to the gas pipeline, on 23 November, as the member would know, about 14 000 Darwin and Katherine households lost electricity for about two hours due to a gas supply problem to the Weddell Power Station. Using its self-referring powers, which we now have for the PAC, the Council of Territory Cooperation decided to inquire into the Northern Territory’s power generation network and what led to the outage of 14 000 households on 23 November 2009. It was put forward by the member for Port Darwin, who was keen to discover what happened. It was an interesting investigation.
Reading from page 4 of the second report of the Council of Territory Cooperation under the heading ‘PWC and NT Gas Hearings’ quote:
This is the important part:
Darwin City Gate is not the front entrance to Darwin city; it is a place near Weddell Power Station.
Mr Ohl was Director of NT Gas:
I suppose liquid water is right:
My understanding is these things filled up. It goes on:
I do not want to read the whole lot; I will give you part of the Findings, on page 7 of the report:
It was also to do with the cost of providing diesel to power houses while we were waiting for the supply of gas. People took a gamble in a sense they believed that gas would still be okay. Luckily, we had some very good people on the job at Weddell who saw something happening and were able to flick the switch.
I do not want to go on about it too much, but if the minister wants to see the full report we have it. There were a number of other reports, and I think Power and Water Corporation brought out its own because there were concerns the generators had been damaged. One generator had a problem, but it was eventually found that was not the problem. That generator had to be repaired.
I wanted to give a brief outline as the Minister for Transport raised the issue. It would not be unfair of me to say, if we are talking about computer systems, these generators require very high-tech computer systems to make sure they balance the power and the amount of gas being used – the output – and ensure if there is a problem with supply these engines are closed down. I imagine that is what happened. I am not pre-empting any inquiry into our latest blackout, but I imagine there was a system meant to protect those generators – a computer system that ensured they were protected which shut them down and saved a great deal of money.
I realise we are talking about another issue, but it was raised by the Minster for Infrastructure, who is also Minister for Transport. I hope that straightened it out.
I am on the Public Accounts Committee, which is looking at this issue. It behoves the Public Accounts Committee to come up with some real, down-to-earth, practical ways to ensure this does not happen again. We cannot afford to have this happen too often.
As I said, we learn by our mistakes. Unfortunately, it was a very expensive mistake to learn from. If we have to start again, let us hope we do it under a new set of guidelines so we do not waste money.
Mr CHANDLER (Education): Madam Speaker, the previous Cabinet fell for a fun-filled lollipop dipped in techno-chocolate systems, didn’t it? Many IT systems are sold that way today because we all like to have the best and the latest gadgets. This one has cost taxpayers $70m – a mistake from the start.
When I was Minister for Housing I know the pain it caused the department at the time. What I am discouraged about is the opposition, the former Labor government members, had their hands all over this system. The shadow minister provided four minutes as a way of response from the Labor Party, which had its hands on what has been $70m thrown down the drain. That breaks down to approximately $17.5m per minute. Of that speech, I reckon three minutes was sarcasm. That is $52 000 500 worth of sarcasm – $17.5m a minute.
Fear not, member for Casuarina, I was listening because nothing is more discouraging than unappreciated sarcasm. I was listening to your four minutes, three minutes of which was to take no responsibility. Had you said mistakes had been made and new lessons were being learnt every day, you were trying to fix the problem, that might have been slightly different. Wanting to shift the blame fairly and squarely to this government, which is trying to fix the mess we picked up when we took over, is pretty poor form.
I thank the Minister for Corporate and Information Services for this statement. It highlights the waste of the former Labor government, and is one of the many things we are dealing with as we continue to clean up the mess left behind.
The idea was sold to us that the AMS would replace nine existing systems at a cost of $7.2m, and we would recoup through efficiency. It was all very good in theory, but when the roll-out was bungled it became a very bad idea, very quickly, and has cost, to date, around $70m. It still does not deliver what it is supposed to; the system is about 11% fit-for-purpose. That is $70m for a system which is basically useless to us. It involved constant fly-in fly-out technicians from south to maintain the system, and KPMG advise it will cost $120m and five years to fix. That is why this government has decided to scrap it and revert to a number of old systems which have proven to work and we own.
It makes me sick to hear of this waste. We just sat through Budget Cabinet, where every minister has had to fight tooth and nail for every dollar in their budget portfolios. There is the former government wasting $70m on what is, basically, incompetence. I think of what $70m would mean for my portfolios and the good things we could do with that money.
Before I do, I want to reflect on the pain and suffering which occurred in the Department of Housing when I was Housing minister and we looked at security of the system. The Transport minister mentioned people from outside government could get into the government computer system and find out who had tendered for works through this failed computer system.
There was no way to reconcile whether a bill had been paid or not. Sometimes small companies waited months for payment from this government. In some cases, the government thought it had paid the bill but had not and small companies suffered. Again, the former government has not acknowledged the pain this system created. As mentioned before, payments had been made and in some cases made again and again. Some companies had been paid more than once for an invoice, but because the system was not robust enough to recognise it payments continued being made whilst other companies went without payment.
A number of staff were going through manual transactions trying to find whether money had or had not been paid because of a computer system that, in the early stages, set the government up to fail.
We all know what IT systems are like. The biggest thing in recent times would be the year 2000 and the millennium bug. Hundreds of billions of dollars was spent around the world to make sure computer systems were ready for the changeover. Of course, many older systems needed to be upgraded, but computer systems are usually replaced every few years because they need to be updated. Many companies, governments included, spent hundreds of billions of dollars at that time.
I recall the night of 1999-2000. I had a Ford Falcon station wagon with a trip computer, and we were wondering, after midnight, if it would start. The only thing that happened was the trip computer, instead of going from 1999 to 2000, went back to 1978. There was a glitch; however it did not prevent the car from starting and I got home safely that night. A lot of computer systems were upgraded at that time. There were also recent changes in the Brennan electorate office, where IT upgrades had to be done.
I agree with the member for Nelson, sometimes when upgrades are seen as essential we end up with systems worse than the original one. The same thing happened out there. Cabling was done and we were hooked up to the Power and Water system, which has an office at the other end of the building. On Saturday morning IT speed in the office is hopeless until after about 12 noon or 1 pm, when Power and Water closes its office. All of a sudden it speeds up in the electorate office. I am not sure what is going on, but I agree with the member for Nelson, sometimes you upgrade, spend a lot of money on systems and see no benefit.
Instead of building a system from the top down this government will build it from the ground up, talking to people who use the system. That was the failure of the previous government and the AMS. The people doing the work every day – there was not much consultation to make sure the new system could do what they do, to understand, and the IT people did not understand the business government undertook every day. Unless you understand the business you cannot design a computer system.
Back to what $70m would do. In Education, if we had $70m I could build more primary schools, special education schools, a couple of large high schools and probably a pool in almost every community school. We could completely repaint 82 separate schools, inside and out. It would provide 58 separate preschool expansions, like the one we announced in Rosebery last week. The list continues.
What would $70m give the Department of Lands, Planning and the Environment? It could provide headworks – power, water, sewerage and roads for an entire suburb.
In excess of 2000 homes could be serviced with the same amount of money Labor spent servicing a dodgy computer system. You talk about the cost of living and we hear about decisions like this. The opposition asks what this government is doing about the cost of living and never once looks at itself and wonders how it managed taxpayers’ money whilst it had the Treasury benches.
Territorians need to know the truth. The truth is they mishandled the money badly, and each and every one of us is today paying the price for the pain left by the former Labor government.
This is one example of Labor waste we have identified since taking government. We will continue to wipe out the waste to get better deals for Territorians, which is why we were voted to govern for Territorians.
The Leader of the Opposition asked why we continued to spend money on the system. That is pretty unfair when you are given a basket case you need to learn about. We are taking information from experts in the field to see the best way we can – we were not about to walk away from a $40m investment in the system. It was not the time to make the decision, but, as Abba Eban once said:
In this case we have exhausted all other alternatives and this was the wise decision to make. Turn off the system and let us look at what will work today.
Mr WESTRA van HOLTHE (Essential Services): Madam Speaker, I support this statement on replacement of the Northern Territory government’s Asset Management System and to let Territorians know about the disgraceful waste of money by the former Labor government. Sadly, despite the huge amount of money, resources and expertise thrown at this system across government, there is still no light at the end of the tunnel regarding a fully functional asset management system. The Northern Territory government has no option but to turn off the tap, or in this case the flood, of money which has been poured into the AMS and start again.
My ministerial responsibility of Essential Services covers the operational aspects of the Power and Water Corporation. The Power and Water Corporation has also had to invest heavily, much more than the initial estimates, to implement its asset management system, which differs to the system implemented by the NT government. However, at this late stage it seems there will be no benefit or cost saving to Power and Water in dumping its AMS, and the corporation will soldier on with it.
In 2006 the Power and Water Corporation, in line with moves by the Northern Territory government, also initiated a project to enhance its asset management capabilities, including the upgrade of asset-related management systems. As was the case with the Northern Territory government, the key driver was to replace or upgrade the suite of old systems which were no longer supported, poorly integrated and beyond their economic life. The initial objective was to implement a standard ‘off the shelf’ asset system, using the standardised processes within that system, integrated to a new geographical information system – GIS – and the existing financial system.
In 2008, a review endorsed by the then Power and Water Board of Management moved the planned solution to a more sophisticated asset management system capability. This was based on a revised regulatory and operating environment. An implementation partner and project planning and process design partner were subsequently appointed in early 2009 through a tender process.
A revised business case was developed and approved in 2010 based on a completed design. From 2010 to 2012, the solution was further developed and changes were made to the project to compensate for issues regarding data cleansing, testing, business readiness and defects.
Changes were also made to the project as a result of the Casuarina zone substation failure and associated recommendations from the Mervyn Davies report supporting the impact in changed asset management capabilities.
The Power and Water Corporation’s asset management system finally went live in August 2012, with initial work on the project having begun in 2006. Almost a year later, in July 2013, a project was established to address high priority deficiencies, defects and data issues within the asset management system.
However, despite these faults, the asset management system is now currently used across all Power and Water business units. In a nutshell, the scope and implementation of the corporation’s asset management system covers: the creation, management and disposal of all assets; works management including identifying, planning, scheduling and completing works; project management, faults and outages, including managing planned and unplanned events and internal service requests; inventory management, ordering, receiving and issues stock into warehouses; procurement and contract management including the full procurement cycle of assets; geographic information system; the geographic display of all assets; and all reporting.
The benefits of installing such a system, on paper, are quite attractive. The broad scope of Power and Water’s asset management business would be provided through a single integrated system. All high level asset management processes would be consistent across Power and Water. The AMS would essentially establish a reporting base for assets. However, in reality, the downfalls far and away outweighed the benefits.
The key downfalls have been around the assumptions and choices made when implementing the system and include that users would be happy to move from existing, highly customised systems, based on Power and Water’s existing processes, to an off-the-shelf system with standardised processes, but anything related to assets should be part of the scope of the single asset management system. Therefore, a high-end system was used where other solutions may have been chosen for components, and choices regarding the implementation of less stringent business rules would be applied within the asset system, which drives consistency of data.
Customisation of the core asset management system, which was supposed to provide functionality closer to original business processes rather than new standardised processes, has led to a higher than expected system operating cost. The current integration between the core asset management system, the GIS system and the financial management system needs improvement, and there are data quality issues with information transferred from the old systems into the new system.
It must be acknowledged that not all functionality, productivity gains and value envisaged in the original business case were realised. An independent review had just been completed by KPMG into Power and Water’s asset management system. The scope of the KPMG review was to conduct a check of asset management processes across Power and Water, analyse the suitability of current AMC systems in respect of those processes and define a road map and future directions for the asset management processes and system.
In a nutshell, the review found the most appropriate and cost efficient path forward for the Power and Water Corporation was to stay with the asset management system, as moving to an alternative system would not provide any advantage. This was the best of a bad case versus worst case scenario.
Power and Water has had no option but to continue to improve the Power and Water asset management capability, where it is hoped appropriate business value can be eventually clawed back from this massive investment.
I commend the minister for bringing the dismal state of the Northern Territory’s AMS to light, and for the explanation to Territorians of this complete and utter waste of taxpayers’ money.
Madam Speaker, I support the statement.
Mr GILES (Chief Minister): Madam Speaker, I reiterate the comments made by my colleagues in relation to the asset management system, and pass on a thank you to the Minister for Corporate and Information Services, who is also the Treasurer, and acknowledge the tough decision to terminate the asset management system – something that has been contemplated for a long time.
I was a previous Minister for Infrastructure, minister Styles is the current Minister for Infrastructure, which is where the asset management system was once held. We have both had a lot to do with the asset management system identifying the needs, concerns and problems that date back quite a long time, and working out ways to bring a resolution to the ridiculous expenditure which occurred throughout the program.
The fact remains that we, as a government, inherited this legacy, as has been described by previous speakers – what the program was supposed to do, what it did and the expense to date. It is unfortunate it has taken so long for a decision to be made; however, we were contractually bound until now and unable to terminate the program.
It is correct the program was supposed to cost around $7.5m and initially designed to bring a range of other programs together. However, to date they have spent $70m, throwing good money after bad trying to fix what is, fundamentally, a Labor mess.
I remember being in opposition talking to a range of private companies – providers of government services – particularly the repairs and maintenance industry for public housing. They told me about concerns with the roll-out of the asset management system. The concerns were about its application, usability and the functionality for the end user and departments. At that point – the member for Port Darwin also raised a concern – we knew it was an endless bucket of money causing great concern and not resolving problems.
Coming to government, we sought to identify ways to fix a continuous and ongoing concern with the asset management system, but to no avail.
I briefly highlight the concerns about the asset management system. It is true that approximately $70m has been spent on this system. It will now be closed down and a cheaper alternative model put in place. Trying to get the old system back up and running is, in many ways, a significant problem.
To see the shadow minister, who has been lumped with this basket case, speak for a little more than four minutes shows Labor’s contempt. To see the Leader of the Opposition not even speak to this – a former Minister for Infrastructure, former Minister for Corporate and Information Services, former Treasurer, someone who oversaw expenditure for this program – is a sad day. Clearly, she wants to take no responsibility. She is Leader of the Opposition, until recently was Treasurer, who handballed the shadow Treasury portfolio to the member for Barkly because she knew how much pain it was causing her because she is the instigator of Labor’s $5.5bn debt legacy that hangs around Labor’s neck like a bad clove of garlic.
Having seen the member for Casuarina’s contribution to this debate, albeit a mere four minutes, I looked through some simple things that could be conducted in a four-minute time frame. I am not suggesting the member for Casuarina is an athlete – I am not saying he is not, but not suggesting he is. I compared what he might be like if he stood next to Roger Bannister – see if he could run a four-minute mile, but I do not think he could do that.
I thought about what else you could do in four minutes. The Minister for Lands, Planning and the Environment gave a very good breakdown of how much money was being whittled away per minute during the member for Casuarina’s speech. For two minutes it was $35m, and we wondered what you could do with $35m. He wondered what you could do with $70m or $16.5m.
Do you know what else you can do in four minutes? You can swim 400 m at the Olympics. I could not see the member for Casuarina standing alongside Roger Bannister, or the Leader of the Opposition for that matter, but there are many things you can do in four minutes apart from wasting away $70m. You could seal 100 km of road in bush communities. You could build 140 new houses under the debacle of a program known as SIHIP. You could have $70m into repairs and maintenance in the housing industry. You could sit around, you could buy two packets of two minute noodles and cook both of them, one after the other, or like the member for Casuarina, you could waste away $70m.
You could eat a watermelon and spit the seeds out in four minutes, or you could whittle away $70m – a big Territory watermelon. You could watch the 2006 movie called Four Minutes by Chris Kraus. You could count to 500. If you wanted to think about, ‘Should I waste $70m of taxpayers’ money or count to 100?’ you could do both at the same time. You can count to 500 and waste away $70m under the asset management system according to the shadow minister, the member for Casuarina, but at least he took four minutes.
The Leader of the Opposition, the former Minister for Infrastructure, former Minister for Corporate and Information Services, former Treasurer and former Deputy Chief Minister failed to speak on this because she is quite happy to see $70m wasted away. Four minutes – you could climb the world’s tallest building in the elevator. You could go up and down in four minutes. You could save the Territory a whole lot of money or you could spend $70m.
The average time for a competent person to build a website these days is four minutes. In four minutes you could build a website or you could waste away $70m, like the Leader of the Opposition and the member for Casuarina have. You could twerk along to Miley Cyrus and Wrecking Ball for four minutes, or you could listen to the member for Casuarina whittle away $70m. You could break the four minutes down into one minute intervals. You could conduct a one-minute intelligence test five times if you were the member for Johnston, and four times if you were the member for Casuarina.
You could sit up late at night – I have done this many times over many years and remember when the infomercials came on late at night. One of the first infomercials I remember seeing was about 10-minute abs. Six months later you would be sitting up late at night – nine-minute abs. Then, all of a sudden, eight-minute abs and seven-minute abs would come on. You could imagine people sitting up at night, normally after a big night out, watching the seven-minute abs show and thinking, ‘I have to buy that video on seven-minute abs’. I have not sat up late at night watching the infomercials, but surely we have reached a point where there are four-minute abs.
I recommend to the member for Casuarina and the Leader of the Opposition, sit up late at night. You might be able to spend $5.95 and buy a four-minute abs video. The member for Casuarina and the Leader of the Opposition might be able to do the four-minute abs routine instead of wasting away $70m, quite a …
Mr Tollner: A few hands of Euchre.
Mr GILES: You could play two hands of Euchre in four minutes.
In all seriousness, this is not a laughing matter. This is $70m wasted away on implementation of a program with poor governance and oversight at the ministerial level. It has seen money flow out the door. As the Treasurer, the Minister for Corporate and Information Services said, the money has flown out the door to mainly interstate companies or consultants. It has not been reinvested in the Northern Territory or on fundamental pieces of infrastructure which can help build our economy or support development in the education sector. Is has not helped provide the long required repairs and maintenance to Royal Darwin Hospital, or put new beds in Royal Darwin Hospital, which costs around $1m per year to run. We could have 70 beds out of that loss. It is a complete travesty.
I think of the irony in some of the commentary from the Leader of the Opposition and Labor – the party which does not have a policy or a plan, unlike the Country Liberals – of them raising questions about a few thousand dollars but can whittle away $70m in a poorly-formed, poorly-crafted speech which lasted four minutes and not recognise they have made a mistake, provided poor governance and not apologised for what they have done to the Northern Territory through lack of investment and resources of $70m. They have not even apologised for increasing the debt level by $70m for the expenditure. The Leader of the Opposition has not apologised for her role in wasting the $70m, which I find extraordinary – $70m forgotten. Nothing was done in that regard, and I find the way she goes about her business on an everyday basis completely hypocritical.
I commend this good statement to the House. It corrects the record and provides information about how the government is accelerating deconstruction of the asset management system. It will cost us a lot of money to go back to the old system, albeit with middleware technology, and get us back to a basic system not as competitive as we would like to be on a national standing, but one which will allow us to get on and do business.
Unfortunately, I commend this statement to the House but wish we were not in this position. I wish we had $70m more in our bank account to spend on much needed infrastructure for Territorians.
Mr TOLLNER (Corporate and Information Services): Madam Speaker, I thank everybody who has contributed to this debate, including the member for Casuarina who contributed in a small way.
Someone gave this poster to me on the way down today, the headline on the front page of the NT News. It talks about ‘$70m of your Cash Wasted’. For future reference, it is a good thing if I table this so future Territorians can see how Labor governments wantonly throw around other peoples’ money.
It was disappointing listening to the member for Casuarina, and I appreciate the lighthearted approach the Chief Minister took in explaining what you could do in four minutes. He, somewhat, made light of a very difficult decision for government. Scrapping the AMS has been a difficult decision. When you spend $70m on something, to throw it away is not an easy decision to make but staring down the barrel of the alternative – to fix it knowing the cost was another $120m and five years of work – one quickly came to the conclusion we were throwing good money after bad given there would be no guarantee we could get the system operating.
This project was a dog from the start. The idea was to combine nine perfectly functioning systems into one, and that one system had to be the biggest and best in the world at the time. We engaged a mob called SAP who, without a doubt, is a market leader in this type of system around the world. The problem, which has been highlighted, is there was no expertise in the Northern Territory to implement such a system, which means we are left at the mercy of IT specialists and experts interstate. The problem with SAP is it is used by a number of governments and large organisations around the country, and the amount of expertise available to the Northern Territory government, being a very small jurisdiction, is limited.
Consequently, as speakers have said, we have seen a myriad of different advisors, experts, consultants, engineers and the like flown in from all parts of the country to fix a system they were not very familiar with in the first place. That added to the cost substantially but, irrespective of that, the system would never fit the Territory situation.
I was having a conversation with a good mate only a couple of minutes ago, an old pastoralist from Borroloola, and he was trying to get his head around this. I said, ‘Mate, it’s like this. You have a choice between a Landcruiser ute and a Porsche SUV’. You look at the Porsche SUV and think you would not mind it to do the fencing on your property. You buy the Porsche SUV and, without a doubt, it is one of the great cars of the world, but when you need it for a fencing contract, it is probably not so suitable.
The first thing you discover is it bottoms out on some of the big hills, in ditches and gullies, the tyres are not made for the terrain and it is difficult to get in and out of when you are running a fencing outfit. Some of the star pickets do not fit in the back, the barbed wire scratches the upholstery, and you have a mess of problems and expenses because, lo and behold, the local mechanic at Borroloola does not know a damn thing about servicing a Porsche SUV. You throw your hands in the air and say, ‘I have the best car, why aren’t I getting the best result from it?’
He acknowledged he would never buy a Porsche SUV to do his …
Madam SPEAKER: Honourable members, I advise of the presence in the gallery of a Scout group from Humpty Doo, accompanied by their leader, George Kasparek. Welcome to Parliament House, we hope you enjoy your time here.
Members: Hear, hear!
Mr TOLLNER: Madam Speaker, I would like to acknowledge the Scouts. I was a Scout for a long period of time. I love the Scouts; they are a great bunch of people. It is a good thing to do and you learn lifelong skills in the Scouts. I encourage you to stick with it and do a good job. It is a great pastime.
I was talking about the pastoralist who buys a Porsche to do his fencing contract and this old fellow, a friend of mine, said, ‘I would never buy a Porsche SUV to do the fencing. I would much rather the old Cruiser ute because it is made for the job.’ That is what we are looking at here.
We have the expertise and ability in the Territory to provide the solution the Territory government needs. Not only that, but we build capacity and capability in our IT businesses. That is vitally important if we are to grow and develop the Northern Territory. IT is an enabler of business and, as such, you want to make sure you have a strong, vibrant, and efficient IT sector to help business grow and develop into the future.
The member for Casuarina tried to suggest this is the current government’s problem because most of the costs have arisen whilst this government has been in power. It is an interesting point to make. The fact is, it was right in the middle of the former Labor government’s period – about 2006 or 2007 – when the decision was made to go down this path, and contracts were signed and deals were done to put this AMS in place.
It is not possible for an incoming government to unwind or get out of contracts entered into by a former government. That is obvious. Tomorrow, I am sure we will hear more about situations where the previous government created conditions that are impossible for the next government to change or turn around.
This AMS belongs wholly, solely and squarely on the shoulders of the former government which, I hesitate to suggest, is why we only heard one speaker from the other side who only managed a four minute contribution. The fact is Labor opposition members are hanging their heads in shame on this. They know they let down Territorians and made poor decisions.
I remember a similar statement I delivered in December last year on the AMS. The member for Casuarina gave a similar explanation in a similarly short period of time then quickly sat down. His premise, at that time, was ‘None of us in government are IT experts, these things are extraordinarily complicated. You cannot blame us; this was the fault of the bureaucracy and the people advising us.’
That is almost emblematic of the entire time the previous government was in operation. It had no oversight of practically anything it was doing. It was like government was on a remote control. People say to me, ‘We do not see too many CLP ministers at functions in the community these days, what’s going on?’ My response is CLP ministers are working. They are in their office doing their best to make sure they have their hand on the lever controlling what government does and taking an active interest in government. Yes, it is a failing of this government that we are not out in the community more. However, when you have the mess to fix up we have been left with, it is difficult to extricate yourself from the office and make decisions that will see better government in the Northern Territory.
The previous government, by the admission of the member for Casuarina, did not have the time, expertise, or inclination to be involved in its first priority, which is running the executive level of government. That sums up the previous government to a ‘T’; it was all about ‘being in’ government not ‘operating in’ government. Holding the levers of power was all they were interested in not taking an interest in what they were doing. It was more government for government sake than getting the government operating the way it should be.
Mr Deputy Speaker, I thank everybody for their contribution to this debate. It will be testing times ahead. Obviously, a lot of money still has to be committed to make sure our asset management systems, through ASNET, are working properly. However, I have full confidence our public servants have the capability required to manage this process, and full confidence that private sector businesses in the Northern Territory have the capability and intelligence to manage this new way forward. The new way forward offers enormous opportunities for the way we do business in the Northern Territory. It will allow people to operate remotely from their office. People will be able to operate from iPads, iPhones, smartphones and other devices. We can add programs to it as time goes on, and we can start moving in a very structured way towards a one-stop virtual portal.
The AMS has been a sad and sorry saga. I am glad we can put it behind us and move on to something that might work.
Motion agreed to; statement noted.
Continued from 20 February 2014.
Mr ELFERINK (Attorney-General and Justice): Mr Deputy Speaker, planning has to consistently be one of the greatest bugbears for any government. Planning will throw up more contested space than any other decision-making process of government, which is why this government went through the exercise of creating a new Planning Commission to enable us to look more broadly at what is proposed or what could be proposed for the future development of Darwin.
Planning, unfortunately, if not done well, becomes an ad hoc process in which things are rolled out piecemeal and not reflective of any necessary planning philosophy so you end up with products where planning has given way to expediency and those types of things. The nature of planning is such that we seem to be returning to something that was around a long time ago.
In the 1950s, particularly with the advent of the internal combustion engine becoming a cheap commodity available to almost anybody who had a few shekels to rub together in the western world, we ended up creating an environment which saw everybody getting their little quarter acre block of land. That is also true for Darwin. The northern suburbs were created in the halcyon days of cheap transport and cheap fuel to move us around. Fuel, however, is no longer the plentiful cheap commodity it used to be. I remember car parks were built to accommodate large cars and, for some strange reason I still have trouble fathoming, the larger the car the less doors it would have.
One might remember vehicles such as those built by Ford, particularly in the United States, where the cars could be measured in acres yet only had two doors. If you climbed into the back seat you could have been climbing into a king size bed considering the amount of space in the back. I too enjoyed those halcyon days. One of the first cars I owned was an old YZ Fairlane, which had a 351 cubic inch V8 to push it along. On top of it, I had mounted four barrels of Holley carburation. To enhance its forward propulsion I had a twin two-inch exhaust system with spectacular extractors looking like so much metal spaghetti hanging out the sides of the exhaust manifolds. It was truly a fine car to drive. Merely filling up the carburettor reservoir nowadays would be enough to keep a Toyota Prius on the road for several weeks.
That is the nature of those times, and planning in our cities reflected those times. We think nothing of sitting in a car for many hours in larger cities around Australia and in the world, then commuting tens of kilometres to get to the workplace. This is a new manifestation of our civilisation, because, prior to the plentiful abundance of gasoline and the cars to put it in, people lived very close to their workplace.
It seems we have come full circle, because nowadays the price of gasoline means we have to be far more efficient in the way we use it. One of those ways is to revisit what we do with our cities because cheap locomotion, until such time as we get on to an electrical grid driven by something like fusion energy, will be a thing of the past.
It is interesting to look at places like Europe. I encourage members, the next time they are in Europe, to look at the old cities of Paris, Barcelona, Madrid, London – Berlin not so much because it has a habit of getting wiped out, but the older city centres. The first thing you will notice is it is almost impossible to get a car into some of those places, particularly Italy, where the Vespa scooter has found its reason to exist. It is no surprise, on our broad roads designed to take very large cars, we see more 50cc type motorcycles getting around for the reasons I have just described.
The other thing you will notice in that environment is the substantial amount of mixed use of land, and there is a lot to be learnt from that philosophy. I find it unfathomable that a CBD should have to drain itself every day only to be filled up the next day. A city is not a city until it is full of people. Until it is full of people it is a large pile of concrete, steel and glass. What makes a city work and display a character is the nature of the people who occupy it and the things they do there. I was often struck by the manifestation in the 1980s of a style of architecture which was exclusive to people. If you look at the 1980s, when the corporate monolith, especially in the United States, wanted to express the heights of its power, it tried to express it in a form of architectural exclusivity with mirrored glass all the way to the footpath saying, ‘I am excluding you’. More than that, the architectural style of exclusion gives you the strange sense, when you walk past, of being watched from within. It gives me a sense of disquiet that not only am I excluded, but I am observed by some other unseen person on the other side of the mirrored glass.
A streetscape of exclusion is one which quickly drains itself of people. People will move past this environment; they will not stay. They will go places they feel comfortable, and people are comfortable in not necessarily quiet places, but places where they are included.
I ask honourable members to cast their mind back to the old European cities I just described. If you walk down a street in Barcelona, the first thing you notice is there is no clear distinction between where the street stops and the footpath starts, then where the footpath stops and the shop – and on occasions people’s homes – starts because what goes on in those homes and shops spills out onto the street. You see this in places which have not been designed around the motor car, so older cities demonstrate it particularly well.
I love the fact that increasingly in the architecture of Darwin more and more people are living in the CBD in buildings of mixed use, which means you can go to a number of buildings in Darwin, travel down the lift from your flat and walk past shops and offices in the same building. This is good because it creates the belief we are living in a metropolis in the traditional definition of what metropolis means. The ‘polis’ refers to a city, but it is also a reference to where we get the root word for population, because the two are not immediately separable.
That being the case, I welcome any plan which encourages a merger between the streetscape and the shopscape at the street level. I do not like mirrored glass street levels, I like coffee shops, pizza barns, dress shops – well, not so much dress shops, gentlemen’s clothing stores, I do not want people to get the wrong idea – and I want an interaction, increasingly, between those shops and the streetscape itself. In Europe you see it, and we are just starting to see it here.
Melbourne, a number of years ago, went through this problem. In the 1980s you could have discharged a Howitzer down Collins Street on a Sunday and not alerted a single person to your presence, because Melbourne would drain of people every day. It left Melbourne with a sense of emptiness, which is a shame because it is a vibrant, almost intimate city, with all the little channels and walkways that creep their way through in different directions. Now many people have been encouraged to return to the Melbourne CBD to live there. People are increasingly doing that because it is cheaper to live inside the Melbourne CBD – buy a unit or flat and walk to work, and Melbourne is a walkable city.
Darwin, particularly during the Wet Season, is less walkable, but is a city that should invite taller buildings than it currently has. I know the minister has explored the idea of speaking to the – I think the Defence authorities have placed the 90 m AGL cap on Darwin. I welcome that because where casting shadows may not be a good thing in a place like Melbourne or New York City, casting large shadows across the CBD of Darwin, I suspect, would be welcome, particularly in the hotter months where we would like shadows to appear on our streets. I would like taller buildings to do that.
As a consequence, I understand that is one of the reasons we want to seriously look at changing the height limits in Darwin. I would approve of that because Darwin should reflect it is growing up in the 21st century.
To speak more specifically about my electorate of Port Darwin, I wait with bated breath for a response or suggestion from the Planning Commissioner, Mr Gary Nairn, in relation to what we are doing with the old hospital site, also Flagstaff Park. I believe the time has come to bite the bullet on both these sites and start seriously looking at what could be done with them, balancing the needs of a growing city with the needs of an existing city in how much we maintain for parkland and how much for some other form of development.
Whatever it is, I pray it will be done tastefully and well. I believe – I am looking at the Planning minister who will either nod or shake his head – the report from the Planning Commissioner is due in April, and I look forward to it because I know a great deal of consideration has gone into what we can do in both locations. I am sure no matter what is suggested, it will be controversial.
The old Darwin hospital site has been controversial for a number of reasons. Some people feel it is a source of controversy because nothing has been done on the site, others if anything is suggested for the site. Some people will find it a source of controversy that buildings have been proposed for the site, as the former government discovered. Others will find it a source of controversy that anything but a park be considered. I have had other people complain to me that it will be wasted on parkland. There are a divergent number of opinions.
I understand and accept no matter what is proposed for that site, and the Flagstaff Park site, it will be a source of controversy. Therefore, as local member, whatever we do with that site and whatever is recommended by the Planning Commissioner, I hope it is both tasteful and respectful of the site in the sense it acknowledges the unique nature of it and the Flagstaff Park site.
Every city needs a plan. The former Planning minister, Tim Baldwin, was excellent in land use objective plans and created them for Darwin and Alice Springs. I was particularly familiar with the Alice Springs land use objective plan when it was created. Nothing like those plans has come into existence since that time.
I expect the plans being put together by the Planning Commissioner will help fill that void. Tim Baldwin, the former Planning minister under the CLP government, was probably the most thoughtful Planning minister we ever had in land use objectives. They were clearly defined plans which reflected a good approach in clarity of thought. I miss those plans because they were replaced with a system be best described as ad hoc and, at worst, unfortunate.
I remember the Gotham structure suggested by Tim Baldwin at the time – keeping the taller buildings along the spine of the city with shorter buildings towards the edge of the city. Once that was made clear to the community it was generally accepted. The former Labor government scrapped the idea of the Gotham style and basically said 90 m AGL, pretty much to the edge of the city. The risk they ran – and it has become manifest with the passage of time – is the best blocks would be developed first. They were on the outer ring of the city, which means rather than having the taller buildings in the spine of the city they are around the rim of the city with infill occurring later.
That seems to have occurred, so blocks like the old Woolworths site on the corner of Smith and Knuckey Streets has been an idle eyesore for a number of years, and has been mentioned in this House on a number of occasions. A sale was recently reported on ABC from the previous owner, Kerry Manolas, to Gwelo, if I understand it correctly. I hope what is placed on that site – I acknowledge Even Lynne’s contribution to the development of Darwin – is worthy of a site of that size in the middle of a capital city.
Darwin is no longer the city I grew up in. That city was a country town perched on the edges of a British Empire which had only just wound up. The tallest building in Darwin in 1969 was the old Post Office at three storeys high, and there was no elevator in town. I remember when the T&G Building was constructed my father drove the family into town to look at this six-storey finger of humanity pointing at the gods above, marvelling at the height of this enormous building. The Travelodge soon came along and, once again, we got to marvel at this enormous structure of some 10 or 12 storeys.
Since that time Darwin has developed rapidly and continues to do so today. As I drive through my electorate of Port Darwin and look left and right, I see cranes everywhere. There are 15 or 16 buildings under construction in the CBD at the moment, with as many again to be approved for construction in the not-so-distant future.
Some architecture I am not happy with. Synergy Square is neither synergist nor square, and has too much of the worst parts of Hong Kong’s architecture captured in it.
Nevertheless, there are other buildings. Whilst it was controversial, 130 The Esplanade has demonstrated to the community it was a good and worthwhile building to have constructed. Evolution and Mantra Pandanus are two other worthwhile buildings, and a number of other buildings are looking good. Under construction right now is the Paspaley Building on the corner of Bennett Street and the Smith Street Mall. I look forward to seeing that completed because it will be a fine building, and I look forward to what is being done on the ground level there too.
During the luncheon period I had cause to drive past The Avenue, currently under construction. I noticed the area out the front is already open to and used by the coffee shop being built there, and that looks like a good way to have a synergy between the streetscape and the building behind it. It is the epitome of what I like in planning overall.
However, we need a plan and a philosophy which understands the modern world. One thing we have to understand in the modern world is fuel is more expensive. I note the former Planning minister, now Leader of the Opposition, suggested a number of years ago densification was the way to go into the future – I have to declare an interest, I have a 1400 m2 block in The Narrows – but that densification was never achieved under the former government. This government will have to look at it eventually, and we are waiting for the Planning Commissioner’s report in regard to that.
Blocks of 800m2 and larger will be an anachronism; a hangover from the urban sprawl environment of the past and will no longer suit modern planning approaches because urban sprawl is resource intensive in how you service it with headworks and those things, how you live in it and how you travel to and from work when you go from a residential area back into a city.
I look forward to a future where cities reflect the confusion and hubbub of the human condition and we do not have this stale approach of commerce here, residential here and retail there. I would like to see an environment where commerce, retail, offices and residential enjoys an amalgamation which captures the spirit of what people are. They are multifaceted, often confused, loud, brash and they give a sense of real humanity occupying a metropolis. A metropolis, of course, is a place where a lot of people live.
Mr CHANDLER (Lands, Planning and the Environment): Mr Deputy Speaker, I thank all members who have contributed to this debate. Probably nothing is more important, from a government perspective when it comes to infrastructure and planning, as planning. I have to beat my colleagues down with a stick to keep them away from Lands and Planning. A few would love to take the reins of Lands and Planning, and I am reminded of that from time to time, because it is an exciting new era of government business.
My father asked what I would like to be remembered for in politics. It would have to be good planning, and that we have to forget about planning for election cycles and have a bipartisan approach to a plan which is 20, 30, 40 or 50 years out from where we are today. I have said time and time again, every time I drive through a tunnel under a city in other parts of the country, whether it is Sydney or Melbourne, it always amazes me. If people had the fortitude and foresight to plan better corridors we would not need as many tunnels today.
We have a blank canvas in the Northern Territory, with a small population in the land size we occupy. With it we have some marvellous opportunities to get the planning right for generations to come. This is why we have been working damn hard to find not only infill sites for residential developments, but looking at future greenfield sites, together with industrial sites and commercial land we can use not just in the greater Darwin area, but in other cities and town across the Northern Territory. Looking at places like Katherine, Pine Creek, Tennant Creek, Alice Springs and all the Indigenous communities I believe, from a development and prosperous economy point of view, the Aboriginal Land Rights (Northern Territory) Act has hamstrung development for years. Whilst well-intentioned, Indigenous land rights have curtailed many opportunities for Indigenous people to grow their businesses and prosper. They should have every opportunity to that.
We are working on that at the moment trying to sign off on land agreements and putting in place, in many communities, the opportunity for people to buy their home for the first time. This can only happen when we solve some of the land tenure issues. There is so much to offer in some of our remote areas, but you cannot get there with the land tenure system in place.
It will be fantastic the day Indigenous people living in any part of the Northern Territory can approach a bank to borrow money and purchase their home or a business, whether it be a butcher or baker shop, a tourism venture they want to provide for not only the economy of the community they live in, but jobs for their people and families. As Territorians, we should all look forward to that day. It takes good planning for that to occur, and at the moment we are looking at current legislation and how we can improve the processes.
It is all vitally important and, as the member for Port Darwin said earlier, even looking at things like building heights in town. There are some great examples of buildings around town and some poor examples, but I do not want to see buildings back-to-back providing a lack of flow-through for breezes.
I would like to see buildings, and the set-back on the land they occupy, be lessened to allow fantastic streetscapes of walkability between buildings. If you take away the developers’ ability to capitalise on every aspect of the land, you need a little give in other areas, and the time is right to look at building heights in Darwin. The Evolution building has been the mark for some time at the level it is – about 90 m – and we are in discussions with Defence. We will continue discussions with Darwin airport and those involved with the safety of aircraft in and around Darwin. It has a great deal to do with that, but there is no reason many parts of our city could not go beyond 90 m. If memory serves me it is 116 m above sea level, but I am not saying I have someone knocking down my door wanting to build a 60 or 70 storey building today, far from it.
The market should be driving building heights. As the member for Port Darwin mentioned earlier, the iconic Woolworths site in the middle of the CBD, probably the most important site, location wise, this city has – we should look at having something special built there, whether or not 90 m can be looked at, and any potential building could be more than the 30-odd storeys we allow today.
Planning must include not only election cycles, but 20, 30, 50 years from now. That is why we are talking with Defence about acquiring certain land it has today to allow space for future corridors, talking with landowners surrounding Darwin about how we can secure some of their land to ensure we have future freeway corridors and corridors for railway extensions, and that we get the planning right.
I become frustrated when the STPs – the same 10 people who always complain about every development in the Darwin area. Sometimes you must remind people even Nightcliff, for instance, grew peanuts at one stage. If you look at aerial shots of Nightcliff years ago, you see shrubbery and trees. It is not houses, but at some stage it was developed. Often people who live in houses today are the ones who complain about development, preventing other people from living in houses which they have the right to.
People complain about water supply and dams. ‘There will be no dams for water in Darwin’. I sometimes remind people when they turn the tap on in their house today they expect potable water to come out. In 20 or 50 years from now people living in Darwin will have the same expectation. Can we teach Territorians to be water-wise? Absolutely
Compared to southeast Queensland and Victoria, we are big wasters of water. We use about three times the amount of water per person someone living in Melbourne or southeast Queensland does. Yes, we can be more water-wise, but we will still reach a point, whether it is 10, 20 or 50 years from now, where we will require new dams because people expect to turn the tap on and have potable water. We cannot do that without planning for new dams, and we must get on with it. We must have the courage to stand up to the STPs every time they complain that we are doing something a little different.
Half the suburbs existing today, even Palmerston, 40 years ago did not exist. They were paddocks, and today we have a vibrant city because of planning and development, and that will continue into the future. We must plan well for development.
Alice Springs is a fantastic city, one of my all-time favourite cities in the world, although it is one size bigger. Last year we had the opportunity to go to the United States and transited through Phoenix. Phoenix reminded me of Alice Springs. It was amazing, except it was Alice Springs on steroids. It was enormous and the freeway systems went forever, but the landscape, rocks and hills really reminded me of Alice Springs.
Even in Alice Springs, whilst not having the same expectation of growth the greater Darwin area has, we need commercial and residential land available. It has to be delivered in such a way that we do not drip feed the market and push prices above the reach of average Territorians. That takes good planning. That is why we are working in Kilgariff and other areas of Alice Springs. There is so much potential in that city. Again, we need to ensure good planning for a growing region. That goes for Tennant Creek and Katherine, and every other community to ensure Indigenous people have the same opportunity to buy their own home, or invest in a business on a remote community, just as they can in town. We have to get land tenure sorted through good planning.
In much of the debate we heard how the previous government worked hard to get companies like INPEX to town, which is great. We will continue to see the oil and gas industry grow in the Northern Territory. I would like to think more onshore than offshore because there is a great deal of potential there.
However, residential land sales and land release have not kept up with demand. The only way we can build some robustness into the future of land sales and – I will not use the word cap – temper the market is through land release. It has to speed up; we have to release more land.
The new hospital in Palmerston is a great initiative of the Country Liberals. Moving the hospital to a better site to allow for further growth for the next 50 years is a wise move. The Health minister should be congratulated for that.
We, in the Department of Lands, Planning and the Environment, are looking at the land use capability directly surrounding the new hospital site and the area of Kowandi north, which is the old aerial farm for the RAAF. That land is perfect for subdivision into future housing estates and suburbs. Close to a hospital would be A-grade land. It will border a rural community, a hospital and a city the size of Palmerston. It takes good planning to get that right.
In education, which is close to my heart, John Glasby worked on a schedule of what infrastructure will be required for the next 10 years in education. ‘Glas’ has done a wonderful job in looking at demographics across the Northern Territory and working out where we need future schools. We have identified potential hot spots like the suburbs around Lyons and Muirhead and in the CBD. The number of units in town will not always be filled with either older people or people working in the oil and gas industry. Young families will move into these units, putting pressure on the school system in the CBD.
My home town of Palmerston is where growth is happening right now. That is why we are building new preschools there, and why we will build new primary schools and new special education units. The work John Glasby has done demonstrates, quite clearly – using indicators from the Bureau of Statistics and within government departments – future growth and where we need infrastructure through good planning.
This is an important statement because it clearly articulates the vision this government has about the Northern Territory and defines it as a good planner. That is what we need to do. Whether or not the Country Liberals are in government after the next election, or the next two or three elections, whatever we do today must ensure we are assisting future governments of the Northern Territory of whatever political persuasion. What we do today will make a difference to what happens in 10, 20, 30, 40 and 50 years from now.
It is important to keep up our infrastructure, keep up our land release programs and change the legislation wherever we can to ensure we get rid of red tape and duplication. That is so important if we really want to assist the Northern Territory to develop well into the future.
Some of the things I found in old legislation of the Department of Lands, Planning and the Environment – the duplication that exists. You shake your head thinking, ‘Why is this not looked at? Why has this not changed?’ I have a perfect project for the Planning Commissioner: pull apart the current legislation and work with developers and people who have been in the system for many years to uncover areas for improvement, whether it is duplication or legislation that is well past its use-by date.
One thing I think former ministers would agree with is spot rezoning. You cannot stop somebody applying for it, but it always irks you because it is outside the planning scheme. When you have a number of spot rezones in one area you know it is time to look at the whole area and provide master planning. The CBD requires it, areas around Parap and other inner suburbs require it, even older areas of Palmerston and the northern suburbs could benefit from some changes, so we are looking at that now. We are ensuring we set future Territorians up with a robust government which has streamlined legislation and done things to benefit Territorians into the future.
From my point of view, getting the corridors right, putting land aside now we do not have to buy in the future – things like the Towards a Darwin Regional Land Use Plan caused some debate over Elizabeth River. That is what it was designed to do, because the Planning Commissioner’s job is to come up with concepts and ideas for this government to consider. That is what we will do, we will consider. However, until we make a decision it is not government policy. It is an idea from the Planning Commission, and that is what we want from our Planning Commission.
This government has its eye squarely on the ball when it comes to future planning for the Northern Territory. We have the right team in place. John Coleman and the rest of the team in Lands and Planning have a focus on the Northern Territory. They can see clearly what we can achieve through good planning, good leadership and a Country Liberals government fulfilling the dreams of Territorians through good planning.
To all those who contributed to the debate, thank you.
Motion agreed to; statement noted.
Mr DEPUTY SPEAKER: Honourable members, the Speaker has received the following letter from the Leader of the Opposition which reads:
Is the proposed discussion supported? I call on the member for Karama.
Ms LAWRIE (Opposition Leader): Mr Deputy Speaker, I thank my colleagues in the opposition for supporting this matter of public importance. Ever since we became aware of the government’s agenda to split Power and Water we have been deeply and gravely concerned about the impact it would have on the delivery of essential services across the Territory.
Members of this House would be aware the opposition, on numerous occasions, has called for the legislation to be fully scrutinised by a committee of parliament with the ability to draw experts before it. One reason we continue to call for scrutiny at such a level is the far-reaching impact any dramatic changes to our utility, our essential services, would have on Territorians. In this instance I refer particularly to Indigenous Essential Services. It took an admission before the energy committee on Thursday, by the Chair of Power and Water Corporation about the under-funding of Indigenous Essential Services, to throw somewhat of a spanner in the works of the Treasurer, Dave Tollner, and his head-long pursuit to split up Power and Water.
We had been warning for some time that Power and Water being run on a profitable basis, the current policy of the CLP government, means one thing for Territorians: dramatic tariff increases. We have seen that happen, and although the current Chief Minister would like to pretend otherwise, the real and stark facts are there.
Since the CLP came to government, electricity tariffs have increased by 25%, water tariffs have increased by 30% and sewerage tariffs have increased by 25%. That is just within 18 months.
We saw a 5% increase in January this year. Despite denial by the current Chief Minister in Question Time today, a CPI gazetted increase in the electricity tariff will occur in July. CPI is currently running at 4.4%, so even if you are generous and round that down Territorians are facing another 4% increase in July, and there has already been a signed off decision by the Treasurer for a further 5% increase next January. Do your maths on that. Another 9% on electricity tariffs will hit the pockets of Territorians, irrespective of where they live, including small businesses.
In total, that will mean a 34% increase in electricity tariffs since the CLP came to government under a cost of living reduction core promise. Why does this pertain to concerns around the split of the Power and Water entity? Splits that occur with a utility have led, uniformly in other jurisdictions, to privatisation sale of assets. The government pretends its agenda is not privatisation but it is pretence, because the way they are splitting the corporation is by taking out the two profitable entities – generation and retail – and creating corporations called GenCorp and Retail Corp.
GenCorp is the one most primed and likely to be sold. The Treasurer is on the record saying they are already in discussions with a commercial generator who is looking at establishing land adjacent to the existing Weddell Power Station. You do not have to be a Rhodes scholar to work out what will come next with the acquisition of GenCorp.
Contained in the legislation that would have been before the House tomorrow had it not been for the infighting the CLP is embroiled in – the government has lost the numbers to pass the legislation, prompting them to defer it until the May sittings – are a few interesting things. One is the government maintains there cannot be a merging of generation and retail – a gentailer – for five years, unless, within the fine print in the legislation, the shareholding minister, the Treasurer, signs off on a merger. The pretence there will be a five-year evening and smoothing out of a competitive marketplace is simply that: pretence. There could be a gentailer much earlier than five years.
There are many concerns buried within the detail of the legislation and we will make sure the public is fully informed of them. The CLP has done everything it can to hide the real information and detail of this Power and Water split from the public, and that, fundamentally, is our gravest concern.
If the CLP believes so fulsomely splitting Power and Water is in the best interests of Territorians – hence they had the legislation before the parliament – why is there no expert report in the public domain so Territorians can consider all the facts and information in this proposed split? There is no expert report. There are musings of the government that say, ‘When you have the committee of the whole and the parliament you get to scrutinise it’. Politicians get to scrutinise it, but the public or the experts are not having their say. That is why, consistently, the opposition, and the Independent member for Nelson, have been calling for separate scrutiny of such a very important body of work the government is proposing.
This is a body of work it has no mandate to do. You did not go to the general election in 2012 saying, ‘If you elect us, we will embark on an electricity reform agenda which includes splitting your utility’. Let us put that aside for the moment. My concern is the nature of the split. Putting the profitable GenCorp into its own entity, and the profitable Retail Corp into its own entity, leaves networks in what I describe as the unprofitable elements of Power and Water. What would be left is the Power and Water Corporation.
The unprofitable elements are water, sewerage and Indigenous Essential Services. One small profitable element they will put into the Power and Water Corporation is the gas sales unit. That is a coincidence – not. The Utilities Commission has a report on the proposed network price increase. Power and Water Corporation sought an increase of about 58% to the network’s price, which consists of about 25% of your electricity bill. That was considered by the Utilities Commission, which has recommended a 43% increase to the network’s price. That is a 43% increase on about 25% of your bill, coming in addition to the CPI increase in July and the 5% in January.
On some very generous low base, conservative calculations that equals about $1000 extra on a large household bill. That is $1000 families will have to find, on top of the $2000 for the large household bill families need to find under this government that sought a mandate to reduce the cost of living. It is extraordinary because the government has done what it can to avoid scrutiny of this.
I wonder to what extent members of government have been briefed about the impact on Indigenous Essential Services, for example. Have members of government been advised by the Chairman of Power and Water Corporation, Ken Clarke, that it is already running at about a $5m per annum shortfall in meeting service demand and service growth is increasing exponentially? Were members of government briefed on that? I doubt it. There has been no acknowledgement from members opposite they are aware of the impact of Indigenous Essential Services being kept within the entity called the Power and Water Corporation, while the profitable entities of generation and retail are carved out. Therefore, folks, there is a revenue reduction to Power and Water Corporation which impacts on any government’s ability or, Power and Water Corporation’s ability in this instance, to ensure it meets increasing service demand.
Instead, what you hear is hollow and empty rhetoric, words around reform agenda, efficiencies and downward pressure on tariffs. The facts speak for themselves. Through every split of any utility across our nation, there has been no downward pressure on tariffs. The exact opposite has occurred. Tariffs have increased between 20% and 30% across each jurisdiction. We have already had a 25% increase, and are staring at another 5% in January and 4% in July. That is before it starts to move into the realm of commercial profit, which, at a guess, is in the vicinity of a 40% to 50% tariff increase again.
These are my guesstimates. The Treasurer will rant and rave at me as he always does, but they are guesstimates based on conversations with experts who operate within the essential services industry around the nation. Treasurer, if you truly want to contest it put the information into the public domain, have it tested rigorously and let it be debated and discussed in public hearings before a committee of this parliament which, up until today, you have steadfastly refused to do.
What has changed? What is the new dynamic? Why do we have, at the last minute, a backflip from the Treasurer in his stated intention of pursuing the passage of legislation during these sittings? What has changed is the decision by the members for Arnhem, Namatjira and Arafura to go into what they describe as ‘negotiations’ with their government around their position because they are dissatisfied with the failure of the CLP to deliver on its bush election commitments. They publicly stated that.
Mr Deputy Speaker, I acknowledge and thank you for your contribution to the 7.30 Report, which was quite illuminating, where you pointed out quite rigorously you wanted Alison Anderson out of the party; you did not want the member for Namatjira in the party, let alone sitting in your parliamentary wing.
Until that point your Chief Minister pretended he was just chatting with them, as he likes to chat with all members of his parliamentary wing, and you blew the cover on that. Thank you for your contribution to that public debate, member for Daly. At least you say what you see and feel. You are clearly not into the game of pretence to the extent the Chief Minister and Treasurer; they have more at stake than you. You are a backbencher and a change of leadership, a reshuffle, who knows, you might be in Cabinet. That might be a good outcome ...
Mr Vowles: Should be in Cabinet.
Ms LAWRIE: The member for Johnston says you should be in Cabinet, member for Daly and Deputy Speaker. That is a voice of support from the hard-working member for Johnston, who likes to see regional representation in Cabinet.
The people with a great deal at stake are the current Chief Minister and the current Treasurer because they are clinging by a thread, very tenuously, to power. People are totally dissatisfied with their performance. A shambolic a performance as any has been the way the Treasurer has tried to rush and ram through some incredibly important reforms to split the Power and Water Corporation into three entities.
Your chickens have come home to roost. You were running around the bush in the lead-up to the 2012 election promising communities everything they wanted. They were not just promises, but elaborate written contracts the then Leader of the Opposition, the former member for Blain, Terry Mills, signed. Communities the size of Katherine, as well as Wadeye, Borroloola – across the Territory received a contract, ‘Our commitment to you fully funded and fully costed’, a stamped, signed commitment by the former member for Blain, the person who become Chief Minister because of the gammon bush promises. They were not fully funded or costed, and did not exist in the election commitments submitted to Northern Territory Treasury by the then Country Liberals opposition in the lead-up the election.
What did they inherit? You won off the back of bush promises. On radio this morning the Chief Minister used a figure of $5bn describing what people would want to see put into the bush. Perhaps they had a list and sent it to Treasury after they won government, and perhaps they got the $5bn back, because I had conservatively estimated the promises I was aware of at about $2bn.
By all means, Chief Minister, thank you for admitting on radio this morning the total was in the vicinity of $5bn. That is interesting and useful new information you provided, while rattled, to Julia Christensen.
What is the take out of that? The Centralian Advocate says the CLP is cursed. I say cursed by its own hand; cursed by promises that were not fully funded or costed and part of the commitments submitted to Treasury in the lead-up to the 2012 election.
After 18 months in government, the NT News reports parliament is in uproar as the Conlan row rift deepens. Eighteen months into government you have a rift over abusive language deepening, your chickens coming home to roost with none of your bush commitments commenced, and a trio of bush members saying they have had enough, ‘You were elected off the back of these promises in the bush, it’s time to deliver’.
We now see the personal enmities, the infighting, the total disunity and lack of direction all coming home to roost because this government is being led by the current Chief Minister on the basis of taking care of former CLP candidates, such as Tina MacFarlane and the granting of water licences worth a couple of million dollars. He is appointing party members to plum jobs and making sure, in his own words, ‘They are having a fun time’. This is his way of operating, rather than understanding all the time he is turning the Territory, and the disunity seen in this government, into a national laughing stock.
Your antics have shred our reputation locally, nationally and, I fear, globally. This government is currently in paralysis. A government in paralysis that cannot even pursue its legislative agenda is unable to govern on behalf of Territorians. The current Chief Minister needs to hang his head in shame at the shambolic situation he has created.
If it was not such a tragedy it would be a comedy, but it is a tragedy because the public service is operating without real direction. People have been demoralised by the weak and ineffective government, and by an incredibly arrogant Chief Minister who has been completely contemptuous of the everyday needs of the Territorians. When I say contemptuous, who can forget the current Chief Minister laughing at the clinical nurses from Royal Darwin Hospital who had signed a petition seeking to draw to the government’s attention the very dire situation of double-bunking at the emergency department?
When we raise the cost of living – I have heard public comments from the current Chief Minister saying, ‘That’s just a great term designed for oppositions to use’, and we get a completely dismissive and arrogant response. I have challenged the current Chief Minister, and will continue to challenge him, to spend some time with working families who charities in the Northern Territory describe as the ‘working poor’. They are under the breadline and seek charitable assistance literally to put food on the table even though they hold down a job because the cost of living is out-stripping there household budget. You cannot sustain a 25% increase in electricity, a 30% increase in water and a 25% increase in sewerage as dramatically and quickly as has occurred and not get a financial shock in your household budget.
Members opposite would have us believe nothing had happened in tariffs previously so this shock had to occur. Nothing could be further from the truth with the 2009 reformed tariffs. The tariff increases in 2009 took the luxury out of the household in power, water and sewage usage. People amended their habits with the 2009 tariffs shock then. With the tariff shock under the CLP we now have people, in many instances, packing up to leave. I know the CLP laughs when we raise this. Evidently it is just a figment of our imagination, but when doorknocking in Blain so many people talk about families who have packed up and left their streets and headed south because they cannot afford the cost of living.
Within the component of the cost of living is housing. This was another major broken election commitment by the CLP. The CLP pretended, ‘We will provide a whole lot of affordable housing for Territorians’. You have not provided any affordable housing for Territorians in 18 months. The first affordable housing unit development starts construction in May and is off the back of a medium-density block identified for affordable housing under the previous Labor government. It is off the back of a 20% Labor funded NRAS affordable rental scheme you will top up by 10%. It is after you axed My New Home and HOMESTART Extra, two home finance schemes designed to get people off the rental roundabout, into home ownership.
There is no land release under the CLP for housing. The land being constructed on was turned off by the previous Labor government and funded through Labor budgets you decry and shout at as being bad management, yet you will claim the land which has been serviced under those Labor budgets.
The way you have chosen to break every core commitment you have made to Northern Territory voters is a disgrace, and the Blain by-election is upon you. For a seat you have never lost and hold by 13.4%, you are starting to panic. The signs of panic are there and large, because you have lost control of the numbers in parliament. You have had to withdraw all contentious legislation, such as the Power and Water split. You have, all of a sudden, jettisoned the regional land use plan put out by the Planning Commission, which, in large part relied on damming the Elizabeth River to create Lake Elizabeth to provide for new housing.
Asked in Question Time today, ‘What now, Chief Minister?’ after he hit the panic button on Saturday and jettisoned the Planning Commission’s regional land use plan, there was no response.
The Chief Minister was not able to say, ‘Yes, we have stopped that; however, here are the greenfields to turn off for land release, and these are the alternative views, visions and plans we have’. There was no such response from the Chief Minister. What now, Treasurer, for your regional land use plan after you completely trashed the Planning Commission’s plan which relied on damming the Elizabeth River, in large part.
At the forefront of these failures is the total mismanagement, chaos and confusion caused right through your flawed strategies. The impact it has had on Territorians has been quite savage, whether they are families or small businesses. When you look at the attitude the current shambolic government takes, it is pretty concerning, to say the least.
After the significant blackout which occurred recently the government said, ‘We will reimburse consumers $80’. And everyone said, ‘Gee, that’s all right, $80. That is pretty fair, I’ll take it’. Until you read the fine print which said, ‘If you were disconnected for 12 hours or more’. Most people said, ‘Hardly anyone was disconnected for 12 or more hours. The majority of us were turned on in tranches leading up to 12 hours.’ The original announcement sounded good – $80. ‘That is fair compensation for the fact I lost everything in my fridge and freezer. I probably had a bit more in there, but $80 is reasonable.’ When you read the fine print, it is if you were disconnected for more than 12 hours.
Small businesses lost a lot of stock and the best part of a day’s trade and what did they get? They were told, ‘If you were disconnected for more than 12 hours you’ll receive $80’. That is it. The Treasurer - the Minister for Business - said, ‘Jump on your horse guys and go for a ride, because that’s all you’ll get from us’. For most it was nothing. They were told, ‘Talk to your insurance company’. The insurance companies said, ‘It was not off for 48 hours so insurance does not apply’. That is unbelievable. This is the party which proudly says it is here for small business. It was a complete and utter farce.
The Treasurer has been all over the place in his response to the debate around the Power and Water split. It took until the February sittings for him to start opening up and being a bit more honest with Territorians about the intention. We kept saying, ‘You have no mandate for privatisation’. In the February sittings the Treasurer said there were four options: raising taxes, cutting spending, increasing debt or selling assets. In a rare moment of frankness with the community, the Treasurer said the government would consider all options.
As I said, Treasurer, you did not like the fact Ken Clarke, Board Chairman of Power and Water Corporation, fessed up on Thursday, during the energy committee meeting, that Indigenous Essential Services has a shortfall of $5m per annum which you are not meeting. Ken Clarke also fessed up that revenue would be reduced with the split of Power and Water. How on earth will they meet the future growth needs of Indigenous Essential Services? You referred to that as ‘misinformation’. You are saying the Chair of Power and Water Corporation, the former Under Treasurer of the Northern Territory who you handpicked, was misinforming people. I think not. He was being honest; you have failed to be.
You do not want this debate right now. It is bad timing for you; you have lost the numbers in parliament. You also need the Independent member for Nelson to be more of a friend in case you lose the seat of Blain, just in case things do not go your way and you cannot pack together a deal with your three bush colleagues who are saying, ‘When will you deliver on the election commitments for the bush?’ All of a sudden, you have gone from screaming, ranting and raving at the member for Nelson, Treasurer, to saying, ‘If you want to look at things you can’. There has been a complete and utter turnaround in just 24 hours. How curious!
Your predecessor, the former Treasurer, when she did something would at least put the information on the record and, in all honesty, told Territorians when she raised power tariffs it would be another $2000 on the household budget. She, in all honesty, told small businesses it would be another $4000 on the small business budget. You, Treasurer, do not have the decency to do that. You do not have the decency to be honest to Territorians with the numbers.
People can see straight through you. They have had enough of you saying one thing and doing another. They feel the pain every time they get the household power and water bill. People in remote communities are feeling the pain because their tokens are burning through at twice the rate since the CLP has been in government. You can tell whatever stories you want, but people in the real world who get real bills can see through what you are saying. They know what is happening and do not like it.
People in Blain are telling us they will not cop more pain in the cost of living through tariff increases. They did not know about the CPI increase, and did not know about the extra 5%. Treasurer, you and the Chief Minister stake your reputations on splitting up Power and Water and ramming it through, but the in-fighting means you have lost the numbers to do it. You have been attempting to hide the full impact. You are still not being honest with Territorians about the full impact.
You have been attempting to hide the privatisation agenda: GenCorp and Retail Corp up for sale under Treasurer, Dave Tollner. Make that commitment here. Do not only commit to not selling Power and Water Corporation, commit to not selling GenCorp or Retail Corp because you have always refused to say that in this Chamber. At the end of the day, Treasurer, no one believes you. You have gone against every word said to Territorians and people are sick and tired of it and fed up.
You have jettisoned Elizabeth River dam. Put these bills off until May and we will continue to seek full and total scrutiny of them.
Mr TOLLNER (Treasurer): Mr Deputy Speaker, I say here and now, the government commits to not selling GenCorp or Retail Corp. I hope that clears up the matter for the Leader of the Opposition. I hope now we have committed to saying we will not sell Power and Water Corporation, Retail Corp or GenCorp the Opposition Leader might let this matter drop and stop trying to fill the heads of Territorians with misinformation. Clearly, that is what the Opposition Leader is trying to do.
The other thing which has come up today is Indigenous Essential Services. Indigenous Essential Services will not be affected, in any way, shape or form, by the structural separation or the market reforms we are putting in place for Power and Water in the Northern Territory. For the record, Indigenous Essential Services is a not-for-profit wholly-owned subsidiary of Power and Water Corporation. It is funded entirely through the sale of power tokens in Indigenous communities and taxpayer subsidies, full stop. It is not a burden in any way, shape or form to its parent organisation, the Power and Water Corporation. The Opposition Leader, having been the shareholding minister of Power and Water Corporation, knows this but chooses to play political games for her own political ends.
This matter of public importance allows the Power and Water Corporation bills to sit on the Notice Paper for the next few weeks. The Leader of the Opposition sees some mischief in this; she sees it as a sign of a government divided and all sorts of funny things. Last night the shadow minister for government accountability, the member for Johnston, issued a media release titled ‘End the Farce and End the Power and Water Split’. That media release says that Labor has called on the government to refer these bills to the Public Accounts Committee for a thorough investigation, instead of rushing through legislation this week.
That is what they called for yesterday. Similarly, the member for Nelson called for the same thing. He asked for the bills to be put on hold while the community and committee discussed the matter.
Last night I phoned Alan Tregilgas, who is heading up these reforms for the government, and asked him what impact delaying the legislation until the May sittings would have on the start date for the new corporations, being 1 July 2014. His response was, ‘It will not make any difference. It will be cutting things tight, but if we were to leave it on the Notice Paper for the May sittings it is still achievable’. I then said to the Independent member for Nelson, ‘Gerry, I understand you are still confused about this’. His media release pointed out a number of unanswered questions, despite the fact he has received briefings and sits on the energy committee which questioned the Power and Water board last Thursday. However, he still has misgivings.
I am keen to let people look at this as much as possible. I saw no problem in acquiescing to the opposition’s or Independent member’s ask but, the very next day, and during Question Time today, they saw some mischief in this. ‘This is no good. We should have been debating Power and Water today,’ is what they are saying even though last night they were asking us to hold off. I quote again, ‘Instead of rushing through legislation this week’. We are not rushing through legislation this week; we are giving people a chance look at it, suss it out and come to grips with what is happening. For some reason the opposition thinks this is a wonderful tactic they can play and suggests, for some reason, the government is divided and has concerns about getting these bills through. That is not the case.
In Delia’s world – that parallel universe – you are buggered if you do and buggered if you don’t. If we debated these bills today we would be the worst government in the Territory’s history for rushing it through ...
Ms LAWRIE: A point of order, Mr Deputy Speaker! Is that language parliamentary? I guess you could use damned if you do and damned if you don’t instead.
Mr DEPUTY SPEAKER: Sorry, what was the word he used?
Ms LAWRIE: He can repeat it, I will not.
Mr TOLLNER: I am sorry, I did not realise their ears were so sensitive. I will withdraw that. In the Opposition Leader’s world you are damned if you do and damned if you don’t.
Had I pushed through the bills today they would have been screaming and carrying on that no one has had time to look at anything, we have not explained anything and there is no opportunity for a committee to look at anything, Mr Deputy Speaker, as you and others in this Chamber well know, last week in General Business Day we allowed the Public Accounts Committee to self-reference.
It if wants to self-reference a quick fire inquiry into Power and Water – goodness me, I do not know how many days we have until the May sittings, probably four to six weeks – they could have a meeting every day for the next four to six weeks. If this is such a big issue you have to get your head around, you cannot possibly understand what it is all about, self-reference it, call a daily meeting of the Public Accounts Committee and call in witnesses from wherever you like. It does not bother me. These reforms are old hat; a bit of yawn. They have been happening all around the country for quite some time now.
In that regard, this matter of public importance is nothing but a bit of political muckraking to say the least. This is the Opposition Leader at her best saying, ‘We’ve got them now. If they agree to a delay we’ll say they’re divided. If they don’t agree we’ll say they are rushing bills through.’ As I say, we are damned if we do and damned if we don’t. That is the weird world of the Opposition Leader …
Mr McCarthy: Where did all the goodwill come from, Dave? I like your sudden goodwill.
Mr TOLLNER: It is not sudden goodwill. I will take the interjection ...
Mr McCarthy: I have been listening to you for five years.
Mr TOLLNER: I will take the interjection, this is not sudden goodwill. I, and the government, have nothing to hide on these reforms whatsoever.
I would like to step through the way we see these reforms and what this is all about. Electricity, rightly, is an entitlement to all Territorians. This government is committed to providing safe, reliable and least cost energy to all Territorians in a fair and equitable manner. However, the way in which the current system in the NT is working is not sustainable. It needs to be brought into line with what has been happening in other states as part of national reform, like national reform in road, rail, ports and airports. We need to stop taxpayers’ money being wasted on a government monopoly and use it for things like schools, hospitals and police stations.
Reforming the Australian energy market started in 1991 and has been through a massive amount of vigorous and detailed work by governments and the private sector, to now have one of the largest electricity networks in the world. This robust model generates, transmits and retails energy in a very efficient manner. The Nobel Prize winner for Economic Sciences, Vernon Smith, was one of the first to be engaged to develop the model for Australia’s energy markets. The Northern Territory was part of the early reform process, but this was stalled by the NT Labor Party when in government. This government has restarted the reform, because we need to ensure our energy demands meet the future needs of our rapidly expanding economy.
I will turn to the recent power blackout. This was an event 10 years in the making. As you would be aware, the blackout caused considerable disruption to the NT, especially Darwin. I believe this situation was met with professionalism and calm by Territorians. The Managing Director of PWC, John Baskerville was phoned four minutes after the event. The emergency services and PWC, in conjunction with the Chief Minister and me, met at 6.15 am and, shortly after, our decisions were announced on the radio and our plan of action swung into gear. In anyone’s mind, it was a calm and measured response by all people in our great Territory.
The Chief Minister directed me to provide a report on the cause within 24 hours. I tabled the report. The Chief Minister further directed me to conduct an independent inquiry within two weeks. I have directed the Utilities Commission to oversee this independent inquiry. I announced the terms of reference for the inquiry and tabled those terms of reference.
I advise the House there are three important parts of this inquiry. The first is the Utilities Commission has engaged an international, independent firm, Evans & Peck. The second point is the inquiry will be supported by the Australian Energy Market Operator, an independent government agency. The third point is the government reserves a right to undertake additional inquiries if there is a need.
The wider issue with the power blackout is the lack of action by the former Labor government and the Leader of the Opposition. I remind the House, the Leader of the Opposition, when she was Treasurer, was the Northern Territory’s representative on the Ministerial Council on Energy, from November 2007 to August 2012. During that time, many decisions on reforms were made by the council. Did the Northern Territory Labor government do anything? No. All other Labor states continued with national energy reform processes, which started way back in 1991. The NT Labor government stalled the process for the entire time it was in government.
I remind the House this 22-year energy market reform process included the intergovernmental agreements on electricity, which governments undertook prior to joining the National Energy Market, to structurally separate the monopoly electricity transmission function and competitive generation activities and ring fence distribution businesses.
The major undertaking was the agreement to establish the National Electricity Market – the NEM – in southern and eastern Australia. The NEM was to have been implemented from 1 July 1995, or on such other date agreed by the party. In December 1996, the implementation was changed to early 1998 and commenced on 13 December 1998. The NEM operates in New South Wales, Victoria, Queensland, South Australia, Tasmania and the ACT. Western Australia and the NT are not part of the NEM because of the distances between their load centres and the interconnected electricity network in the southern and eastern states. Both jurisdictions committed to apply all other electricity sector reforms.
The national electricity agreements set the following objectives for the competitive electricity market:
The Labor Party stalled those reform processes in the Northern Territory, and this is the root cause of the problems with the Power and Water Corporation. However, there is a much more important reason for making changes to this government-owned monopoly: it is costing every individual person in the Northern Territory $650 per year to subsidise electricity. This adds up to approximately $1.3bn of taxpayers’ money going into the Power and Water Corporation over the last 10 years instead of into roads, schools, hospitals and police stations.
Under the NT government’s reform process, we will still own the new Power and Water Corporations and the government will still set electricity prices for small consumers. This will not change, and no one has suggested a change except the Leader of the Opposition, who wants to play political games on this matter.
We will continue to provide electricity, under the current arrangements, to remote communities; this will not change. The IES will stay in place and those subsidies for remote communities to maintain the uniform tariff will remain; it will not change. We will continue to set the price for electricity, water and sewerage; this will not change.
Eligible senior citizens will continue to be entitled to discounts; this will not change. What will change is the generation division and the retail division of Power and Water Corporation will be made into two new government-owned corporations. Sewerage, water, gas sales and essential services will continue unchanged.
The Northern Territory is set for a massive expansion in the coming years, and the government is changing a whole range of policies and regulations to ensure we are in the best shape to meet these demands and challenges into the future.
The Northern Territory Labor Party sat on its hands for 10 years and spent all that money. In addition, the Northern Territory has been slugged with a $20m carbon tax which NT Labor did nothing to stop, despite a motion that was supported by a majority of parliamentarians in this Chamber voting to have the Northern Territory exempted from the carbon tax. NT Labor government members at the time would still not meet the wishes of the parliament and contact colleagues interstate. It was shameful. Even now they have not contacted their Canberra Labor colleagues in the Senate urging them to get rid of the carbon tax.
The NT uses gas to generate electricity, which is also half the carbon produced by coal-fired power plants. In the southern states, do they expect Territorians to live in the dark? Goodness me, might I remind Territorians this reform has been going on under other Labor states and federal governments for the past 22 years.
What happens when we announce a restart of the reform process? The business sector looks at the Territory differently and here are some examples.
The APA group has announced a $2m feasibility study into building a new pipeline to the Northern Territory and joining us with the rest of Australia’s gas network. APA is Australia’s largest natural gas infrastructure business, owning and or operating $12bn of energy assets. Its gas transmission pipelines span every state and territory in mainland Australia, delivering approximately half the nation’s gas usage.
This has enormous implications and opportunities for the Northern Territory’s future. The Northern Territory has massive reserves of gas while reserves in the southern states are declining and prices increasing. You do not have to be Einstein to realise one day Northern Territory gas will flow to southern states, while at the same time continue to be exported to other parts of the world. This cannot happen without the AER as our regulator. This will open lots of opportunities for gas exploration and production, and encourage smaller generation opportunities for the demands of mineral mines and remote agriculture businesses and remote communities.
The Northern Territory government is planning well in advance for the northern strategy, which will form a single national push for northern Australia, and this government is prepared for it. Look at the world demand for food. When the Northern Territory expands into wider agribusinesses we will need power. The private sector will build these energy needs not government money. Government money is better spent on schools, roads, hospitals and police. These reforms allow greater flexibility by the private sector to satisfy future demands.
There is another example. The Northern Territory’s Armour Energy has already begun exploring reserves in the east of the Territory and needs to get the gas to market. If the private sector connects the gas pipelines to the southern networks this will expand that business as well.
I turn to another example of how the Northern Territory Labor Party’s inaction has caused an outrageous outcome in the cost of transmitting electricity in the Northern Territory. The Labor Party had the chance to join the Northern Territory into the national regulation system for energy. In all other eastern states Labor governments removed their local regulators and put them into the Australian Energy Market Commission, which sets the rules, and the Australian Energy Regulator (AER), which it administers, and oversees these rules and regulations.
Recently – I note the Opposition Leader mentioned this in her statement as well – the Northern Territory Utilities Commission announced PWC would be able to charge an increase of 43% in the cost of transmitting electricity for the first year of a five-year determination period. If the Northern Territory Labor Party had joined the AER years ago, like its Labor comrades in other states did, then the national regulator would have made a determination based on different factors. Because the AER uses a standard method of determining transmission costs there is no way this would have been a 43% increase, it would have been more like 5%.
In the Northern Territory domestic or small customers are not affected by this increase as price rises are subsidised by the taxpayer. However, large electricity customers will eventually see their electricity costs rise with new contracts. This will put pressure on those businesses and will almost certainly see jobs limited, or reduced, in those businesses as electricity costs increase. It is one thing to say, ‘We will subsidise the small end of town’, but at times we have to have an eye on the big end of town too because their inputs and costs ultimately impact on the smaller end of town.
These reforms are well and truly overdue. We have seen what has happened in every state and territory around Australia with the national market reforms, and we have the ability to use the benefit of hindsight. We are not leading the charge in this. In fact, we are a very distant last. We can use the experiences of the other states and territories to make sure we get it right, and I can assure this Chamber that is exactly what we are doing. We have a lot of history to look to make sure we get it right the first time.
This government is committed to the future and putting the building blocks in place which will see the Northern Territory grow and prosper into the future. The Northern Territory Labor Party needs to back these reforms and the legislation, get out of the way and let us make this Territory great once again. These mindless objections you come up with, ‘It’s being fattened for sale. These price increases. Oh, this, oh that.’ It is nonsense and you guys know it.
This has been happening in Australia for 22 years and, in the main, has been driven by Labor governments to the point it is so ingrained it has bipartisan support except for the Northern Territory. The Northern Territory Labor Party would rather come into this House and play silly, mindless political games rather than letting the Territory develop. Shame on you guys. Shame for playing politics with this and shame for not supporting it, it is wrong.
You know these reforms have to take place. You know we have to join the National Electricity Market, adopt their rules and adopt their regulator. If we want to develop pipelines, develop business, develop a strong economy and move in the north Australia age we have to do this. This is a key block to building north Australia into the future, and seeing the continual escalation of taxpayers’ dollars to prop this organisation up is wrong. There are organisations around the country which do it far more efficiently, far more effectively and make sure reliability is a hell of a lot better than in the Northern Territory.
These reforms need to take place and I will fight all the way to make sure we push them through. The decision to hold off the legislation until the May sittings was made to get you guys into the loop, have a good look at what is happening around Australia and what should be happening in the Northern Territory because there is nothing to be afraid of with this legislation.
You might put your petty political gains ahead of good policy; that is a decision for you guys to make. I am sure, in the first sittings in May, we will know whether you are committed to putting petty politics ahead of good policy or are in it for the Northern Territory. This is your decision. You can play political games now, but in May the rubber will hit the road and you will be called on to make a decision. I bet it will be to oppose it because it is good and needed legislation. We are setting the Northern Territory on a footing to drive into the future, embrace future development in the north and we need this to occur. It is a minimum of 10 years too late.
I thank the Chamber for taking the time to hear this. I hope, throughout my contribution, members on the other side listened and tried to get their head around this because it is nothing new. This is old hat. It is new in the Territory because Labor governments sat on their hands for 10 years, but nationally this is old hat. This has been around for 22 years. There is no political fight over this; there is bipartisanship on this and I urge members on the other side to get on board or get out of the way.
Ms MANISON (Wanguri): Mr Deputy Speaker, what we have seen in the last 24 hours has been extraordinary – three major government bills pulled at the last minute is something you do not see very often in parliament.
We have heard from this government, for a long time, about its determination to split Power and Water. From day one the CLP government has been clear about its thoughts on Power and Water and how it operates as an organisation. It has, from day one, trashed the business, the organisation and the reputation of the workers.
It has used many opportunities to call the place a basket case, bloated, inefficient – dogs breakfast is another one which often comes up. Staff morale within Power and Water is at an all-time low. If you speak to people within the organisation it is not the same and they have had a rough 18 months. They do not see much going forward in the future; they are not sure what is happening within the organisation. They have been left feeling unappreciated for the vital and essential services they deliver to Territorians. Rain, hail, shine, lighting or floods they are some of the first people on the job when things go wrong and they do an incredible job.
After the huge power and water price increases under this government we heard stories of staff members wearing uniforms being abused in the community for simply doing their job. People on the phones in the retail section, taking the calls, have got it. They have received very little support from this government, and the Treasurer has made it clear he feels there are too many staff in Power and Water and they have far too much equipment to do the job. He believes structural separation will mean less staff. The future for many people is looking uncertain, and it has not been a good time so far.
We know the government is determined to split Power and Water, and the Treasurer made that clear today in his reply to this matter of public importance. He is determined to ram this through and, so far, has been, with no consultation with Territorians and no mandate from the people.
Going into the 2012 election, there was no discussion up-front with Territorians saying a CLP government would do this. It has not consulted with Territorians about the structural separation of Power and Water but, more to the point, we have not seen any solid analysis, public reports, proof or research to say what the government is doing will deliver the things it believes. It says this is all about splitting up accounting lines, making things a bit more financially transparent and attracting private operators into the Territory. It says this is about more competitive markets and, ultimately, this is about making pricing better for Territorians. However, this is a tried and tested model. It has happened down south, in other jurisdictions and overseas, and we have not seen any work, analysis or research from this government to support this will deliver better outcomes for Territorians. We all have an interest in this debate, and the split in Power and Water, because it will impact every Territorian.
The government is looking to structurally separate the organisation to create a new Power and Water Corporation which will maintain some of the core essential services within Power and Water, including water services, which also includes sewerage services, system control and the gas unit. We will also see remote operations, the critical section that delivers remote power, water and sewerage services into remote communities.
The government is proposing to set up the Power Generation Corporation, which will take the generation business unit with it, including the assets within the power generation business unit. We are talking about generators and power stations going with the generation business unit. It also wants to proceed with the structural separation and create the new Power Retail Corporation, which is theoretically meant to take over all retail customers, including those big, lucrative contestable customers – the big business end of town.
At the moment that split is as clear as mud. At present, the retail section has different sections including billing, connections, disconnections and call centres. People are doing credit control, front counter staff, people doing a whole raft of jobs within Power and Water and it is still not clear where those staff will go.
The structural separation – if the government rams these bills through in the May sittings, which it has indicated is the intent – is meant to be in place from 1 July 2014. That is three months away, and people still do not know where they are going in the organisation or how those shared service arrangements will work within Power and Water. In briefings you have made it clear you will not completely pull retail out from day one; there will be some shared corporate services. Among those will be the Power and Water monopoly corporation and the Power Retail Corporation, and it is not clear what is happening there.
What is clear is in the split you are creating two new government-owned corporations for the two sections of Power and Water, which is certainly more attractive in the sense of selling, being able to make some money and being able to put some money back into the essential services of Power and Water. You said you will not sell off Power Corp or Retail Corp, but your language around the sale of assets needs to be looked at. We know there are some customer assets and generation assets in the two new government-owned corporations you are establishing.
What is being left in the Power and Water Corporation are essential services to everyone. They are water, sewerage, and delivering power, water and sewerage services to our remote communities, which is a challenging task. They will stay within the Power and Water monopoly corporation, as you like to call it. These sections are not profit driven, not able to get the big bucks and will be left needing investment.
There was an admission by your Power and Water Chairman last Thursday at the energy future committee hearing that there is a shortfall in remote Indigenous Essential Services. There is a shortfall of money so how will that work out under this new arrangement?
Structural separation is a tried and tested model elsewhere and we have seen the results. What happens when you structurally separate is extremely clear: it leads down the path of privatisation and sell-off of assets. It also tends to lead to higher prices for consumers. If having power and water bills already go through the roof under this government is not enough, structural separation will push that further. It leads to less investment in repairs and maintenance and infrastructure. What happens when you do not invest in repairs and maintenance? There will be less reliability and other problems, particularly if you have less staff in the organisation.
Everybody has already shouldered the massive 25 % electricity increases so far, and Territorians have not been consulted about this split or this privatisation agenda.
One thing made clear in the briefings we received is they are not ready for the split; there is still much work to do and the government is ramming this legislation through without the required scrutiny. We need a far deeper analysis to look at what the numbers really are, how this will stack up, what it will mean to the long-term future of the Territory and the cost of delivering power, water and sewerage and, most of all, what people have to pay for those services. There are plenty of case studies around and it needs to be looked at.
Another thing the government has not outlined, or has plucked a number out of thin air, is what this will cost Territorians. Under these new arrangements, with all the work involved in structural separation and what you are proceeding with, how much will this cost Territorians? You know the figure. We know, under the new governance framework, budgets have been set for each new government-owned corporation in what it costs to backfill positions, what it would cost for consultants and what it would cost to put all this together. We know there are costs and we know if those budgets are modified the shareholding minister has to sign off on any modified budget. We know a figure of $2m was pulled out of thin air recently, but we need evidence on the table to see what those budgets really are.
There is no doubt the move to split Power and Water, from the feedback I am receiving, is not popular. It is creating unrest among your own ranks. In Blain, this must be creating a few issues to the point where we are discussing it today because it is incredibly unpopular. It is extremely unpopular in the community and you have not consulted Territorians. You have not asked what they think about structural separation and the path towards privatisation.
This, in itself, is creating chaos among your ranks. Everybody knows this is a not a popular move by government because people see it for what it is. It will be a sell-off, privatisation, and will mean higher power and water prices for all and less reliability. There will be less investment into infrastructure and repairs and maintenance in the future. That message must be coming loud and clear to you because we can see the deep divisions forming. To pull these bills, after the determination to put this legislation through, shows some serious problems and people have questions about what is happening.
It seems time is extremely limited between now and May. You are pushing this off until May. I believe you are trying to pass it off so it does not become a huge issue in Blain, or among your ranks, and creates even more instability and chaos than we see at the moment. People in the community are talking about what is happening on your side, what the Power and Water separation will mean, and people believe this is about selling off Power and Water and their tariffs for power, water and sewerage will increase. In this time we need to see some real evidence, real analysis and real numbers around what structural separation will mean, what it will cost and proof that it will work in the best interests of the Territory.
We have not seen any proof in the public domain and some work needs to be done. The government has not consulted with Territorians over splitting up Power and Water. It has been determined to ram this through, and the only thing that has stopped it during this week of parliament has been internal unrest and chaos, and the voice is coming loud and clear from Blain telling you not to do it. It is not a popular decision. People do not want to see their power and water bills increase more than they have, and they have no evidence to show this will work for the benefit of the Territory.
Mr ELFERINK (Attorney-General and Justice): Mr Deputy Speaker, it is highly unlikely power or water prices will ever come down. Whilst that might sadden a lot of people, it is the truth because prices, as a general rule as time passes, increase ...
Ms Lawrie: A bit of downward pressure.
Mr ELFERINK: I will pick up on that interjection, thank you. Downward pressure on future price increases is what we would like to see on this side of the House ...
Mr Vowles: Elf said …
Mr ELFERINK: … downward pressure on future price increases. Would you like me to spell it, member for Johnston? I am happy to say it because power will not get cheaper into the future ...
Ms Lawrie: That is not what Dave has been saying.
Mr ELFERINK: It is a …
Mr Tollner: If we got rid of the carbon tax it might.
Mr ELFERINK: Well, that is true. If you get rid of the carbon tax – of course, that is not a cost of generation – that will make it come down. What any government would seek to do is create an environment where the cost of power, or any product, goes up less than it otherwise would have into the future. That is something worth striving for.
The challenges for the Power and Water Corporation are well-known to the Leader of the Opposition. The Leader of the Opposition made it clear she understands this when confronted with the difficult decision of whether or not to make Power and Water Corporation sustainable or commercially viable. Having underwritten the Power and Water Corporation with excess GST funds which were streaming into her coffers, she determined to subsidise Power and Water Corporation’s customers and continued maintaining an environment where she was, effectively, applying price controls through subsidisation. Upon coming to government, we discovered how critical the position of Power and Water Corporation was, and we would like to keep downward pressure on future price increases. That is not an awful thing to want to achieve.
The best way to drive down prices is to introduce a bill into the Senate to get rid of the carbon tax. Let us examine what the government is trying to achieve. Something we need to demonstrate to the public is we anticipate future downward pressure because of competition in the marketplace. I ask honourable members to cast – those who can cast their mind back to the 1970s – and I heard reference in Question Time today from the Treasurer to the Postmaster-General’s office, or the PMG as it was known at the time. The Postmaster-General was responsible, essentially, through the morphing of the functions of government, for all communications available in the country at the time. I must be getting old, but I remember being taken to Winnellie Post Office as a young kid and shown how to fill out a telegram. It was an expensive exercise I can tell you. Sending a telegram at that time cost about 2c or 3c a word, and a word was limited to five digits and a space. Allowing for inflation, that is equivalent to 25c or 30c per word today.
If that is true, the cost of sending a telegram of 100 words was several dollars at a time when the average income was around $100 a week. Compare that to the cost of sending an e-mail today, with so much information you can send a movie as an attachment for a negligible sum of money as to effectively say you can do it for free.
Imagine if we went back to telecommunications in a way the Labor Party is arguing for with power generation and dissemination through a network to retail customers. What they are arguing for, if you were to apply it to telecommunications on a national level, is the reintroduction of the Postmaster-General. Then you can collapse into it all the private providers, such as DHL, FedEx, Kwikasair, any number of other private providers, and all the post offices which are now franchises of the government-owned corporation, as well as all Telstra products. You can get rid of Optus and any number of telecommunications providers. You can collapse it all under the one roof and have it run by a general. Like an Attorney-General you would have a Postmaster-General. They would probably be called a Postmaster Telecommunications General today.
The Postmaster-General stoped operating as the Postmaster-General because a new environment was being created. To understand why the Postmaster-Generalship was becoming redundant is to understand the history of the Postmaster-General. There was a time when the empire, the Crown, established a postal system in an effort to create effective communications across the empire. That was handed down to the colonies, and the Postmaster-General was responsible for what was exclusively an expensive government service.
The telegram example is a suggestion of how expensive it was. Whilst letters were relatively cheap to send, they were nowhere near as cheap as it is to communicate nowadays. I would hate to have a 55c bill every time I pressed send on an e-mail. The point is, to a large degree the Postmaster-General’s role became redundant because commercial operators were prepared to compete directly with Australia Post.
The response of the federal government has historically been, and remains to this day, not to privatise Australia Post. It has not been privatised; Australia Post exists as a government-owned entity. However, it looks nothing like it did 30 years ago.
If you go to one of the local franchisees with a slice of the Australia Post action and the right to plaque up the Australia Post symbol above their shop, you will deal with the owner of the business. That person will have a commercial shop available to you with all manner of product available for your purchase, and a fundamental change in customer service. You now have different counters that purvey different products in accordance with your needs when you walk into the post office. If you have a parcel to collect there is a counter. If you wish you engage in retail or transmission of postal items there is another counter. It is very efficient and post offices today look nothing like the quasi-Stalinist Soviet buildings they looked like in the 1970s and 1980s.
They are shops, they are commercial, they are retail and they do not even tie the pens down with chains anymore. In this environment you also have a number of other competitors ...
Members interjecting.
Mr ELFERINK: The problem with members opposite is when they are presented with an argument that is both reasonable and sound, their response is to belittle the speaker. That is typical of the Labor Party because that is all they are capable of. We have heard today, in this House, diatribe and whingeing about the people in this House.
This whole MPI is focused on what is happening in this Chamber. I ask members opposite: do you genuinely listen to the prayer we start every day with which asks for guidance to serve the people of the Northern Territory? Not a chance ...
Ms Lawrie: You are not serving them.
Mr ELFERINK: There is no evidence whatsoever they intend to serve the people of the Northern Territory. They only wish to serve the interests of the Labor Party, and they do not care who they damage in the process. The Leader of the Opposition is more than happy to diminish people, slander people under the cover of this Chamber and attack public servants in pursuit of her goals ...
Ms Lawrie: You go to personal attacks straightaway.
Mr ELFERINK: It is a ghastly way to behave and behoves the Leader of the Opposition, the alternative Chief Minister, very poorly indeed ...
Ms Lawrie: Now I am the alternative Chief Minister?
Mr ELFERINK: All she can offer is vitriol and bile, and guess what? The whole time I have been on my feet she has been interjecting because she cannot abide hearing an argument which might challenge some of the presumptions she carries ...
Ms Lawrie interjecting.
Mr ELFERINK: See, she is still going. She cannot help herself. It is sad to listen to.
If you were to draw a parallel between Australia Post and the Power and Water Corporation, the PWC is now a long way behind. I pick up on the comments from the member of Wanguri, who said what is being attempted by this government is tried and tested. Yes, it is. It is tried and tested, and the assertion is it will push up prices.
If the experience of other government-owned corporations which have allowed competition in their environment is to see prices go down, why would we be afraid if there was a generator who could do it cheaper than us? Essentially, the opposition is arguing if a generator can do it cheaper than us – we have set the price. We know what the price is, what the increases will be and when they will occur. That is well-known.
Imagine if through these changes, you could introduce a competitor who could generate electricity cheaper than we do and retail it for less than what is currently charged. If we could achieve that and had a competitor in the retail environment, even, God forbid, the domestic retail environment – we are talking about your tranche five customers – it would be horrid if we had a retailer prepared to come into the environment and say, ‘We know what the government’s prices are and we can come in at less’. If they cannot do it, they will not come. If they can do it, because there is a contestable environment for generation, they will come. We owe it to the people of the Northern Territory to make that opportunity available. If we separate out the different functions and allow generators to compete with our generation system, we know what the retail benchmark will be into the medium future.
If they can do it more cheaply, why not give them the option? Why would we say no? Essentially, members opposite are arguing, ‘Say no to competition. Say no to the potential for cheaper power.’ We know what our generation costs are, but let us say somebody can come in and, through different technology, different staffing models or whatever, produce a different cost when you turn on the light in the lounge room. Surely, we would invite that to occur.
It was tried about 15 years ago and, for various reasons, did not go ahead. However, if it was looked at once it will be looked at again by other people entering the marketplace. If that possibility is available we should allow it to occur.
I understand members want to talk more about this, and I have listened to the member for Nelson on this. We have to approach this with an open mind, and what I get from the members opposite is not a hint of an open mind. What I see is an opportunity to attack government and belittle people rather than ask the serious question that this is worthwhile; maybe it is worth exploring or worth looking at. It would be a very poor result for the people of the Northern Territory if the Labor opposition, the alternative government of the Northern Territory, was prepared to throw an opportunity for less expensive power in the future away for the sake of scoring a political point today.
Mr WOOD (Nelson): Madam Speaker, I listened to the member for Fong Lim speak today on this matter and honestly thank him for recognising that this issue is very important and we need to be careful about going down a path some of us have concerns about. It is good it has been put off until the next sittings, and I hope at least one of our committees – I do not want both of them and we might need some discussion on that – will look at this. In the meantime, and much as I would have preferred it had the backing of the House, either the Territory’s energy future committee or the Public Accounts Committee, with its new powers, can look at this issue.
I am not an expert on power generation, power retail or power network, but I have been doing my homework, as most people in this parliament should. I met with the Utilities Commission, had a briefing, and also had a one-hour meeting with the board and some of the people involved in Power and Water who were at the last energy future committee meeting.. That is good, but many questions still need to be answered. I had an e-mail from someone very much involved in Power and Water who has grave concerns about what is happening.
My concerns are not that we should not explore other ways of making Power and Water a better corporation. I agree there are opportunities to make Power and Water more efficient, but it is up to the government to show us where the inefficiencies are. If they claim these changes to the law will make Power and Water more efficient, we have seen no proof that is the case except this is what happened down south and this has been going on for the last 20 years and the Northern Territory is just catching up. Several things need to be clarified: are we the same as down south? We have 225 000 people. How many come under the area Power and Water cover? If you take Darwin, Katherine, Tennant Creek and Alice Springs you would probably get between 150 000 and 170 000 people.
In the broad scheme of things that is a very small market and a very small company. Opening up for competition …
Mr Elferink: They will not come.
Mr WOOD: They may not come, that is fair enough, but opening it up for competition has the danger of killing Power and Water. Someone will come in – a big provider – and we know Northern Power wants to come in ...
Mr Elferink: We are not for sale.
Mr WOOD: Hang on …
Mr Tollner: I think he is worried they will come in with a cheaper price.
Mr WOOD: They come in and buy gas for exactly the same price Power and Water buys gas and they have the latest you-beaut new machines which can recycle the energy produced – the heat – and they will be much more efficient. You might say that is terrific, that is fantastic, but Power and Water cannot buy any more generators. Part of the reason they are in debt is because they spent a lot of money on capital upgrades. If that company comes in and says, ‘I will offer that company, that company and that company a better price than Power and Water can offer’ and they take that market, Power and Water is left with the householders and lots of small business.
There is the issue of Power and Water having to use its gas. If it does not use all its gas, does it still have to pay for it? What is the story? Perhaps it gets its money back from the other company when it comes to gas, I do not know. The question is: what happens to the generators? This concern has come from a person in Power and Water saying you would have idle generators worth a lot of money doing nothing still needing to be maintained – you cannot leave a diesel engine sitting around doing nothing, it has to work. What would happen there? It would end up with Power and Water getting the crumbs and the big company, with far more efficient machines, taking the juicy bits out of the market. If that happens, Power and Water will have less revenue, the government will receive less revenue and it might say, ‘This is all too hard. How about we sell Power and Water?’
The minister said it is not for sale. It may not be for sale at the moment, but my concern is what will happen if certain things happen? Would it be worth the government hanging on?
The minister said there is no connection with Indigenous Essential Services. There probably is not a direct connection, but there is a connection in the amount of money the government earns from the production of electricity. If it loses some of that revenue, does that have an indirect effect on other areas of government expenditure? It obviously does not have a direct effect, but it is less money in the bank.
I raised a few of those issues in my media release not just for the sake of making a media statement, but because people have mentioned their concerns. I would like to hear a lot more from people who have been working with Power and Water for a long time because we are breaking this corporation up into three separate lots. It is already broken up, to some extent, into three divisions. We are breaking it up because the government says it will create efficiency and a more transparent approach to finding out how much …
Mr Tollner interjecting.
Mr WOOD: I am working my way through it. It is a very important issue and a lot of people are concerned. You will break it up so you know exactly how much money each division – I will call them divisions – or GOCs cost to run. Of course, what comes with that is a lot of other expenditure and I will not go into that now. The question for me is if you say each one will be more efficient, it is up to the government to say why the generating system will be more efficient, why the networking will be more efficient and why the retail will be more efficient because that is the catchcry here.
If you read books, as I have, about one of the catchcries of privatisation, it is ‘efficiency’ and that word worries me. That word has been used all along to argue the case for the changes to Power and Water.
The onus is on the government to show us where the efficiencies will come from and where inefficiencies are at present. You might create something more open and transparent on the basis you are trying to show where waste is, but in the process you will spend an awful lot of money having a board for each section. There will also be different billings, which will create a new administration for each new section.
There will be lots of other costs. Has anyone looked at a cost benefit analysis of the breakup? Have they shown the cost of breaking it up will be cheaper than leaving it as is and trying to bring reforms in? It is not about which side is better. The onus is on the government to prove its argument stands up to scrutiny, which is why we need to take it to a committee where the minister could appear, which is what happened in the CTC in its later life – you could ask the minister to attend a meeting. You can ask the minister to show the facts and figures which make a difference. The concern of a lot of people is this is the long range vision that competition is great, but eventually Power and Water will disappear into the hands of a private company, and that is my concern.
One big issue the member for Wanguri mentioned was the cost of the breakup. Has anyone done this? I felt from the briefing – I will not speak for other people – a lot of the necessary work has not been done. In other words, we have a philosophy based on it being done in other states, we need to catch up and this will make it more open and transparent. When we ask to see details of the cost of transferring ownership of billing and administration, where people will be situated, what building they will be in and will it all change, it is not there. Are those things being costed?
How much will the boards cost? Will they need administration? It may not be a big deal, but it is the nitty gritty the committee had to drag out.
I hope if one of the committees takes on the role of questioning the government regarding these proposals it is able to pull in experts – those people who have worked with Power and Water for a long time and have the knowledge. I hope we do not just pull in the Chairman or some CEO, but people who have the practical knowledge of Power and Water over many years. We may pull in some experts from south.
Minister, you said a report was done last year – I am not sure of the company’s name …
Mr Tollner: KPMG.
Mr WOOD: Is the document available for scrutiny?
Mr Tollner: I tabled it. I will dig it up for you.
Mr WOOD: KPMG would be the author. Let us bring them before the committee and ask if the results of the report are relevant to what we want to do. If you are right, I am happy to say we have shown this is of benefit to the people of the Northern Territory and there is a chance we will have cheaper tariffs, or at least they will not increase by the margin they may have had we not made the change.
On the other hand, if I feel there are too many questions still to be answered, if there is not solid proof efficiencies will be gained by this change, I will not support it.
I do not want us doing something just because someone else has done it. At the moment, the arguments put out by the government do not have the detail behind them to convince me this is worth supporting. The minister says, ‘We need to have an open mind’, and I am happy to do that, but I will be questioning the government on whether its arguments stand up to scrutiny. The only way to do that is through the committee system.
I thank the opposition for bringing on this matter of public importance.
Mr ELFERINK (Leader of Government Business): I move that the Assembly do now adjourn.
Motion agreed to; the Assembly adjourned.
MESSAGE FROM ADMINISTRATOR
Message No 14
Message No 14
Madam SPEAKER: Honourable members, I have received Message No 14 from Her Honour the Administrator notifying assent to the bills passed in the February sittings. The message is dated 24 March 2014.
VISITORS
Madam SPEAKER: Honourable members, I advise of the presence in the gallery of two Year 5/6 classes from Karama Primary School accompanied by Sally Woods, Courtney Bailey and Julie McCourt. On behalf of honourable members, I welcome you to Parliament House and hope you enjoy your time here.
Members: Hear, hear!
MEDICINES, POISONS AND THERAPEUTIC GOODS AMENDMENT BILL
(Serial 66)
(Serial 66)
Continued from 19 February 2014.
Ms MANISON (Wanguri): Madam Speaker, in regard to the amendments proposed by the government to the Medicines, Poisons and Therapeutic Goods Act, the opposition will be supporting this bill so we can see the changes up and running across the Territory.
I note, by way of introduction, the Medicines, Poisons and Therapeutic Goods Amendment Bill leading to the act this bill seeks to amend was passed by the Assembly in March 2012.
The resulting Medicines, Poisons and Therapeutic Goods Act was an important step forward building on national reforms agreed at COAG in 2005 providing the Territory with a comprehensive and contemporary framework for control of regulated substances in the Northern Territory, in particular improving the availability, accessibility and safe handling of medicines, poisons and therapeutic goods.
One of the provisions included in the act was the capacity for nurse practitioners to prescribe and administer a range of medications. I note the government has recently announced a strategic plan for increasing nurse practitioners in the Territory, particularly those working in primary healthcare.
The minister also announced an additional 25 nurse practitioners by 2016. We will monitor the implementation of that initiative, in particular funding for those new positions and the number allocated to remote health centres.
There is no doubt within the nursing profession there is support to see more nursing practitioner positions in the Territory, as well as the real benefits to our health services of having more nurse practitioners on the job to deliver health services. It also paves more career pathways for our experienced and professional nurses and will, hopefully, keep more of our long-standing passionate nurses in the Territory’s health system.
As the minister outlined in her second reading speech, further amendments to both clarify and enhance the provisions of this legislation have been identified and this bill outlines those additions. In my briefing from staff from the Department of Health, it was very apparent the Medicines, Poisons and Therapeutic Goods Amendment Bill is a broad and complex piece of legislation.
It has been quite a task for the department consulting stakeholders, both in the administrative changes and changes to health practice embodied in the act, but also in developing the complex regulations required to accompany the act.
In the second reading speech at the time of the introduction of the original Medicines, Poisons and Therapeutic Goods Amendment Bill, the former health minister, the member for Casuarina, set out the intention of the legislation:
- Its purpose is to provide contemporary, harmonised medicines, poisons, and therapeutic goods legislation to protect and promote the health and wellbeing of the community by setting the framework for controlled measures to ensure public safety by minimising poisoning, medicinal misadventure, and diversion of substances to the illegal drug market. The new legislation will provide a comprehensive framework for the control of regulated substances in the Territory.
There are several amendments contained in the bill today. The opposition supports amendments that will strengthen the intent of the act and provide additional measures aimed at benefiting Territorians, including increasing choice in access to vaccinations. The bill removes requirements for registration by manufacturers of some substances such as hair dyes, and the opposition notes this is in line with the recommendations of the 2005 national review legislation subsequently endorsed by COAG.
The bill implements a change in designation, now formally recognising Aboriginal Health Workers as Aboriginal and Torres Strait Islander Health Practitioners. These health workers do a marvellous job in supporting primary healthcare across the Territory, including their work in some our most remote health centres. They often provide much valued continuity of care to their communities and have intimate knowledge of the issues relating to the health and wellbeing of their clients.
The name change reflects the increasing professionalism of this sector and recognises them as health practitioners not just support workers, as some have seen them.
The bill provides for dental therapists and oral health therapists to use some Schedule 4 substances required for their dental health practice, for example local anaesthetics, under conditions and in line with practices in all other jurisdictions. This is a good example of reform meaning these qualified dental professionals can move across jurisdictions and practice their full range of skills in the Territory, as they would in other places already allowing this clinical practice. This will also benefit people seeking these dental services and is a straightforward mechanism to bring the Territory in line with the rest of the nation.
The bill also contains some tidying up of legislation, including the repeal of current provisions relating to paint containing 1% or more of lead. Paint containing 1% or more of lead is now banned nationally, making sections 109 and 110 of the act redundant.
Another provision of this bill is to allow qualified pharmacists to provide emergency supply of unrestricted Schedule 4 substances, provided the supply of those substances is permitted by the Commonwealth National Health Act 1953. The current examples are oral contraceptives and lipid-lowering medications. Other medications could be added over time, in accordance with the checks and balances of the national regulatory arrangement.
Many women take the oral contraceptive pill and many people take lipid-lowering medication. We all appreciate people lead busy lives and sometimes do not get around to booking into the GP to have standard prescriptions refilled. If they run out of medication over the weekend, or are unable to get to a GP on the day they go without.
These changes will have conditions placed on them to ensure there are checks on people trying to access this medication and they must show proof they have been prescribed the medication previously. In theory, they should not be able to present themselves to a pharmacy and ask for the medication if they have not been prescribed it by a doctor. There are also provisions in place to ensure they can only access medication with a prescription a certain amount of times before they must present themselves to a doctor to obtain another prescription.
It would be good to hear from the minister about the exact details of how these changes will work with Territory pharmacies, what measures will be in place to monitor progress and correct dispensing practices when the new system is in place, and to hear about what communication will happen within the Territory to inform people of these changes.
It is also important Territory doctors are across the changes as well as pharmacies. Ultimately, we want to see a system working well together with local doctor services and pharmacy services complementing each other.
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Visitors
Visitors
Madam SPEAKER: Member for Wanguri, could I ask you to pause so we can welcome some students.
Honourable members, I advise of the presence in the gallery of a Year 3/4 Class and a Year 5/6 Class from St Andrew’s Lutheran Primary School accompanied by Dena Mouton. Welcome, and I hope you enjoy your time at Parliament House.
Members: Hear, hear!
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Ms MANISON: Welcome St Andrews, I will see you upstairs soon.
It would be appreciated if the minister could inform the House of what date these changes will take effect.
One provision of the bill which has attracted media comment is allowing appropriately qualified pharmacists to administer vaccines, such as flu or measles vaccinations. Clause 62 of the amendment bill provides for qualified pharmacists to supply and administer Schedule 4 vaccines. This will increase accessibility for Territorians seeking vaccinations. Rather than having to present to specific clinics or general practitioner surgeries, people will be able to attend appropriate qualified chemists for vaccinations. These types of vaccinations could include a flu shot, measles vaccination, typhoid, cholera and so on. Many are injections people have before travelling and, thinking of the recent measles outbreak experienced locally, this presents more opportunities for community vaccinations as part of public health campaigns and the ability to make vaccinations more accessible.
This section of the amendment bill has attracted some questions around practical implementation of how vaccines will be administered within Territory pharmacies. Questions have been raised regarding how the injections will be delivered and how dispensing of this new service will be monitored to ensure appropriate standards of advice and patient care. For example, will a chemist have a private consultation room to give injections or will they take place in a discreet area of the shop? Will there be measures around this and how will the government ensure practices are being conducted to an agreed standard?
I stress the limitation that only pharmacists holding an appropriate qualification can exercise this role. I also understand, on advice from the Pharmacy Guild of Australia, they expect this would be linked to their pharmacy accreditation scheme so the vaccinations are only offered in appropriately accredited pharmacies. It would be good to see some more detail around what an appropriately accredited pharmacy entails and what the accreditation process is. What will pharmacists have to do to become appropriately qualified and will this process be accessible to people right across the Territory?
This initiative provides opportunity for more client choice, easier access to vaccinations in times of requirement for mass vaccinations and, potentially, benefits residents in our regional centres where GP resources are limited.
Regional centres could stand to benefit from this model, so I am keen to hear if there has been interest from pharmacies in those centres to start vaccinations, and also what type of support these pharmacies will get in order to get the appropriate qualifications and training to participate in this initiative.
There are also questions regarding how much this will cost people trying to access vaccinations through pharmacies. It would be great if we could get some information on forecasted costs of getting a flu shot, for example, at your local chemist in the Territory.
This is new and will take time for pharmacies to establish. Does the government have an estimated date for when pharmacies can start vaccinations as well?
In some reporting, you could be mistaken for thinking people could walk into their chemist tomorrow and get a flu shot, so it would be good to hear some more details about the work with pharmacies and when Territorians will be able to access these services.
Overall, we all want more access to vaccinations. Making it easier for people to get them is positive, but it is important good processes are in place to ensure quality of service, patient safety, adequate monitoring and reporting of the new system, so if it is found that improvements or changes to the system need to be made, these can be acted upon.
It is also important there is a clear understanding of the new processes by general practice medical professionals in the Territory so we can see these changes working seamlessly together.
The opposition supports the intent of this amendment, that being further amendments to the Medicines, Poisons and Therapeutic Goods Act. We support the amendments because they will assist in meeting the objective of the act, which is to improve availability, accessibility and safe handling of medicines, poisons and therapeutic goods.
We are aware of concerns expressed by some about the role of pharmacists in administering approved vaccinations, but note only appropriately qualified pharmacists can provide that service, and that the Pharmacy Guild of Australia is intending to ensure such a service is only provided in appropriately accredited pharmacies.
We expect the Pharmacy Guild of Australia and the Department of Health will work with the Australian Medical Association in the NT to ensure all parties have an opportunity to guide the implementation of the new arrangements, and that the new practices are monitored to ensure quality and patient safety is held in the highest regard.
There is also an opportunity to ensure the benefits of access to more services and pharmacies goes well beyond Darwin, Palmerston and Alice Springs, and to ensure our important regional centres also benefit.
There will be a level of public interest in the outcome of this bill today, and expectations within the community are already raised. It will be important to ensure there is an appropriate flow of information to the community regarding these changes so people are informed of the opportunity, in particular, around vaccination access.
I would like to thank Department of Health staff for providing us with a briefing on this bill; it is clear the legislation has been, over time, quite complex. It has a long history and they have put a great deal of effort into it.
I would also like to thank Mr Alex Bruce, from the minister’s office, for providing a briefing in a timely manner. I always appreciate that.
The opposition supports the Medicines, Poisons and Therapeutic Goods Amendment Bill.
Mr HIGGINS (Daly): Madam Speaker, I support the amendment bill.
In regional and remote areas like the Daly, Wadeye and so forth, immunisations are already administered by staff in clinics so we do not visit doctors. I do not see much change in going to a qualified chemist to have needles administered. I, for one, am completely against needles; I do not like needles. The blood bank sent me a letter saying, ‘Don’t bother coming back again, you are too much trouble every time we put a needle in front of you’. The fewer I have the better. However, people need immunisations and I support that.
A question I have asked – and have not received an answer to yet – is if insulin is on the list of scheduled drugs you can pick up with an ongoing prescription. Occasionally I have had a problem with this – I have either had expired insulin or have not had access to insulin. While I have a prescription held by the clinic at Nauiyu, it is not available at any chemist in Darwin. I can get plenty of needles I do not want, but I cannot get the insulin needed to go through them. I am interested to see if that is included in this legislation.
One concern I have around this is tourists. One of the problems at many of the remote community clinics is a constant stream of tourists who want their prescriptions filled and expect to get free medicines and so on. I would like the minister to clarify this will not enable tourists to simply front up at clinics trying to get prescriptions filled.
The other issue I would like some information on is whether, at a clinic like Batchelor, which has a pharmacy attached to it for the locals, people can use these facilities. That also extends to places like Nauiyu, Wadeye and Peppimenarti – if people have prescriptions and they have them faxed or, if they have expired, can they go to remote communities and pick up drugs?
Madam Speaker, with those simple questions, I support the amendments and would be pleased to see them go through today.
Mr ELFERINK (Attorney-General and Justice): Madam Speaker, I particularly want to talk about vaccination because of the importance it has in our community.
We live in an age of miracles and wonder – I do not mean that lightly – because of our technological advancements over the last 200 years, going from a farming society to our highly-industrialised society of today and, moreover, other advancements that have occurred during the period. It is worth contemplating what has happened over recorded human history which goes back about 10 000 years. Prior to that was the prehistoric period, and humanity has probably been around, in its current form, for about 100 000 years. In all that time, it is only in the last 100 to 150 years that we have made substantial inroads in medical treatment.
Today it is worth thinking about what we have left behind in the diseases which are easily treatable and immunised against in our community. We have forgotten how awful and ghastly those diseases were.
Not much changed in the 2500 years since Aristotle walked this planet and 200 years ago. Aristotle described the physical body as containing four humours: blood, phlegm, yellow bile or chole, and black bile, which was sometimes known as melancholia. Aristotle believed those humours, being properly balanced, would lead to a healthy body.
People were still being treated in those terms 200 years ago. That is because for well over 2000 years there was no advancement in medicine at all. Smallpox and diphtheria were still rampant, and consumption was a disease that is still within the memory of people alive today. At the time, the various forms of hepatitis were known as jaundice collectively. These diseases killed many. The Hong Kong flu alone, post-World War I, killed more people twice over than World War I managed to.
We now find ourselves in an environment where people are refusing to immunise their children.
It was in the very early 1800s that a British physician named Edward Jenner noticed some milk maids were not contracting smallpox at all. It was not long before he discovered all these milk maids, at some point or another, had picked up cowpox from the cows they were milking. Edward Jenner decided that was worth further investigation. I am glad he did because he became the father of modern vaccination through that process. However, I suspect his technique of determining the effectiveness of his vaccination would probably not withstand modern ethical practice because he got a young boy, as the story goes, and infected him with cowpox. The boy developed all the mild symptoms of cowpox and then the symptoms went away, thus the boy had healed himself.
His next response was to get active smallpox and infect the boy purely on a whim, for lack of better words. Needless to say, that boy never contracted smallpox and it was not long before everybody who was anybody in the British community was being inoculated with cowpox to ward off smallpox. I invite, as I did last week, any member of this House to Google smallpox and look at the Wikipedia entry which has a photograph of a young girl from 1973, one of the last people on the face of this planet to have contracted smallpox, and you will see what a ghastly disease it is with a mortality rate pushing 40%.
For this reason I am glad we are changing legislation which will enable health practitioners, Aboriginal Health Practitioners included, to hold vaccination qualifications and immunise people. Only over the last few weeks we have had 40 cases, if I am not mistaken, of measles in an outbreak in the Northern Territory. On paper, there should be no such thing as a measles outbreak; it should not happen in the modern world. Yet, to my disappointment and astonishment, there are now sufficiently few people vaccinated against measles to enable the disease to spread in the community in a way that some 40 people have contracted the disease. That is worrying because you are getting awfully close to that critical point where there are now sufficient people not vaccinated to see the beginning of some form of localised epidemic.
Whilst I understand there are parents concerned about the effects some of the vaccinations may have on their children when being vaccinated, those side effects are rarely very serious and, on the occasions they are, are treatable. By not protecting your child against something like polio – whilst it may not exist here, it exists in other parts of the world – there would be nothing more horrifying or debilitating than seeing a person travelling from the First World through parts of India, where polio still exists, only to discover they were never vaccinated against the disease – a simple oral vaccination – and, as a consequence, are not immune to the effects of polio.
Whilst we use the term ‘iron lung’ nowadays with some humour, an iron lung was basically a very simple hyperbaric chamber with a piston at one end a person who had severe polio was placed into, and by changing the pressure inside the chamber air was forced into the lungs and then out again as the person was lying there. They were, essentially, quadriplegics and their only source of entertainment was often a mirror from which they could view the rest of the world above their eyes. Yet we have parents today who will not vaccinate their kids against polio because they believe the vaccination, in some bizarre way, could be worse than the disease. That is just unfathomable to me. My wife and I have been very keen and very anxious to make sure our two little girls have been vaccinated against everything we can get them vaccinated against.
I hope with my two little girls, as they grow older, I can vaccinate them against boyfriends, but perhaps that would be wishful thinking on my part.
When I look at the vaccine side effect advice, which is available on the Department of Health website, and see the diseases being vaccinated against then look at the possible side effects …
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Visitors
Visitors
Madam SPEAKER: Attorney-General, can you please pause so I can welcome some students.
Honourable members, I advise of the presence in the gallery of two Year 5/6 classes from Woodroffe Primary School, accompanied by Allison Stewart and Rebecca McCasker. On behalf of members, welcome to Parliament House. I hope you enjoy your time here.
Members: Hear, hear!
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Mr ELFERINK: May I add my welcome to them all. Good to see you here, kids, I hope you have a great time while you are here.
Let us look at the diseases we vaccinate against in the first instance: diphtheria, tetanus, hepatitis B, polio and haemophilus influenzae type B. The possible side effects from these vaccinations are localised pain, redness and swelling at the injection site and low grade temperature. In children, the following may also occur: irritableness, crying, being unsettled, generally unhappy – that is most kids I know for most of the day – and drowsiness or tiredness. If you compare the effects of something like hepatitis B against those possible side effects, there is no comparison to be had. Hepatitis B and hepatitis C, if left untreated, can lead to things like liver cancer. I would rather have my kid irritated for a couple of hours, or a day or so, than at some point in the future die of a wholly preventable disease.
I mentioned polio before, a ghastly disease. International Rotary clubs have been moving to expunge the disease from the face of the planet. I understand they are making good inroads and I would be delighted to see it deliberately extinguished so we can live without it in the future.
A bit later, as the kids get older, there are immunisations against things like meningococcal disease. We have seen how meningococcal disease – is it viral or bacterial?
Ms Walker: It can be both. It can be bacterial and viral.
Mr ELFERINK: It is bloody nasty, whatever it is. It affects the meninges on the brain, which means the damage left behind is permanent. The trade-off is you may be subject to localised pain, redness and swelling at the injection site, perhaps a loss of appetite – we could all do with that from time to time – and low grade temperature.
It constantly baffles me that parents will not do this for their children. I believe in protecting my children. Sometimes you have to be cruel to be kind, but there is no cruelty like the one you would inflict upon your child should they get polio or meningitis as a result of some peculiar resistance to the vaccination process.
It takes only a short walk around a graveyard in an old English church to discover many of those who occupy space under the headstones were children. As late as 1850, it was not uncommon for a family to have a mortality rate of 50% of their children. By then many medical advances had been made, but so little had been achieved in fighting diseases which were focused, orientated or caused by viruses and bacteria, much of which was at the time germ theory. It is incredible to note in the late 1800s, germ theory was still being spoken about in the medical profession as something which could be hotly contested. As a consequence, many people were arguing about things like vaccination being a waste of time.
If you look at the cholera outbreaks of the 1800s in places like London – cholera is a bacteria found in faecal matter which then finds its way into the water table. When that water is consumed there can be an outbreak of cholera. It is particularly common where latrines are close to water supplies. Outbreaks occurred on a number of occasions in London as late as the 1800s. It was still believed, and discussed in parliament in England at the time, that what was causing the cholera outbreak was bad air. A lot of attention was placed on – I believe there was a parliamentary committee – investigating the bad air of London rather than looking at other possible culprits.
The name of the doctor responsible for identifying the pump which caused the cholera outbreak escapes me, sadly, but, had the Nobel Prize for Medicine existed at the time, he would have doubtlessly received it. It was his simple, statistical research as a doctor operating in the area that enabled him to identify the offending pump which produced the water that led to the cholera outbreak.
When he was finally able to demonstrate it, he was still met with resistance because he was relying on germ theory. Ultimately, when water was boiled, as he suggested, it killed the cholera bacteria, the water became much safer to drink and the medical profession took a leap forward.
The idea that an infection could be transmitted by a small animal, like a bacteria, was wholly novel little more than 130 years ago, a very brief period in human history.
This bill attempts to tell practitioners they do not necessarily have to see their doctor or health clinic, with a fully registered nurse available, to get vaccinations for themselves or their children. This is particularly important in remote Aboriginal communities, where there are still identifiable challenges with certain types of diseases. Common sense would prevail and say the more suitably qualified people we have to vaccinate in our community, the more people we should have vaccinating in our community.
I urge parents, in the strongest possible terms, to have their kids vaccinated. This is not rocket science. It is as cheap as chips, and a squirt on the tongue for a polio vaccine is a whole lot cheaper than a lifetime of medical assistance resulting out of the paralysis which occurs from a polio infection.
I note the legislation intends to allow nurses, midwives and Aboriginal Health Practitioners to hold vaccination qualifications for the purposes of immunising people. This is common sense.
I also note pharmacists will be allowed to immunise people as long as they have the appropriate qualifications for flu vaccines, and other Schedule 4 vaccines in certain circumstances.
Whether they do it in a discreet place in a pharmacy or have a separate room set aside – I am guessing, but it would probably be a matter for the pharmacists themselves, and I suspect the physical circumstances of the pharmacy would determine how this practice was to be applied – allowing pharmacists to issue a number of drugs under the PBS when the customer has run out and cannot see a GP for a new prescription for some time.
In Darwin in particular, where GPs are a bit thinner on the ground than other jurisdictions, this is a commonsense approach and we should be at a point where we can say to the pharmacist, ‘We trust you, with all your qualifications and professional integrity, to make appropriate decisions for certain types of drugs’. Of course we should trust people. We have lived for such a long time where regulation and trying to control people from this place and from the ministerial stroke of a pen has diminished our trust in certain professions. We should trust professions. We should trust doctors, pharmacists, nurses and ambulance officers, because the vast majority of the time they do their job with integrity and professionalism.
Yes, from time to time there are mistakes; that does happen. However, I would rather live in a world where people were prepared to do things in accordance with their training and expertise than where we try to stifle everybody and smother them to death under a pillow of regulations so they become too afraid to do anything. This is not the world I want to live in. I do not want to live in a world which is so afraid of litigation and prosecution for regulatory breaches that we become socially constipated from doing things and making things happen in our community.
I note the opposition has given its support to the bill, and I am grateful for that. They can see common sense and know what common sense dictates. These are commonsense changes before the House and are similar to changes introduced in other jurisdictions. It will give Territorians more choice and more availability when it comes to accessing medicines. As I said, the amendments will allow pharmacists to immunise against conditions such as flu and measles – and thank goodness for that. Surely, that is also common sense.
This is a sensible bill which deserves to be supported by all members in this House, and I am sure it is. However, it is not only us. The Pharmacy Guild of Australia has welcomed the changes. The branch secretary in Darwin, Terry Battalis, has been quoted as saying the legislation is an important step forward for community pharmacies and is of benefit to Territorians. Terry has said:
- We acknowledge the firm support of Minister Lambley and the Government.
He on to say:
- This is a common sense measure which will be delivered safely and appropriately by trained pharmacists.
This is about getting the best value from community pharmacy for the benefit of patients and will complement the hard work of doctors and other health professionals.
The Pharmacy Guild of Australia like this, most parents will like this and the approach is straightforward common sense.
We need to occasionally reflect on how much has changed, even within our own lifetime, in medical treatments available to us and, more importantly, to our children. We should embrace medical treatments and medical technology. It has seen more people survive diseases and afflictions now than at any other time in human history.
Mr Deputy Speaker, I am glad we embrace things like germ theory and vaccines today, because to return to the days where treatments involved the bleeding of the humours to re-establish balance in the body is to return to the days of barbarism.
Mrs LAMBLEY (Health): Mr Deputy Speaker, I thank my colleagues for talking to this important amendment to the Medicines, Poisons and Therapeutic Goods Act. There is a little history behind this act. The Medicines, Poisons and Therapeutic Goods Act 2012, which will replace the Poisons and Dangerous Drugs Act of 1983, known as PADA, is a result of extensive consultation with stakeholders addressing identified issues with the Poisons and Dangerous Drug Act of 1983, and the implementation of the nationally agreed Galbally recommendations of June 2005 by the Council of Australian Governments, or COAG, resulting from the national competition policy review of poisons legislation commissioned by COAG.
The act includes provisions from the Poisons and Dangerous Drugs Act, new provisions from the consultation and review, changes required as a result of the national registration scheme for health practitioners that commenced on 1 July 2010, and to the Pharmaceutical Benefits Scheme, PBS, allowing nurse practitioners and eligible midwives access to PBS from 1 November 2010.
The new act, the Medicines, Poisons and Therapeutic Goods Act 2012, was assented to by the Administrator in April 2012. However, the act cannot commence until the regulations to accompany it have been finalised. Ministerial approval was granted on 20 December 2013 to conduct targeted stakeholder consultation on the draft regulations prior to finalising them in readiness for approval by the Executive Council. It is planned to have the legislation package ready for commencement next month. However, since assent of the act it has come to the attention of the Department of Health that many other amendments needed to be made to update the 2012 legislation – Medicines, Poisons and Therapeutic Goods Act.
This bill reflects the many amendments that need to be tidied up, or things that need to be changed in order to make this a very robust piece of legislation. I appreciate the contribution of several members of the House today who have raised some legitimate concerns.
The member for Wanguri spoke about the changing role of pharmacists. She was concerned about the communications strategy, how things will work once this legislation comes to fruition, delivery of vaccinations by pharmacists, what they will cost and how these changes will impact on consumers and other health professionals in the system.
I can advise the House connected to this amendment to the Medicines, Poisons and Therapeutic Goods Act is a communication strategy which involves communicating with all stakeholders affected in any way by these amendments. As part of the communication strategy, we will be sending letters to all Northern Territory nurse practitioners and eligible midwives to inform them of how their role will be changed as a result of this legislation, similarly to podiatrists, pharmacists, veterinarians and holders of licences related to this bill and also health practitioners across the Northern Territory.
I can assure the member for Wanguri all interested parties will be advised of these changes in a timely fashion. We hope this bill will be up and running within the next six months, certainly before the end of the year. The Department of Health is working very hard behind the scenes, and I am told work is well under way in developing the guidelines and time frames around the implementation of these amendments, specifically those pertaining to pharmacists. The Department of Health will be using our Pharmacy Advisory Committee to look at the guidelines and give feedback as to how they think – whether or not they are effective and good enough to then be accepted as the formal guidelines connected to this legislation.
I listened with great interest to the member for Port Darwin. He, in his most eloquent fashion, spoke with great passion about the need for vaccinations and the development of medicines and therapeutic drugs within our society. This legislation affects a number of specific interest groups, one of which is the Aboriginal Health Practitioners since the original legislation of the Medicines, Poisons and Therapeutic Goods Bill was assented to. They have had a name change and have been accepted, or accredited, by AHPRA as medical practitioners. They have gone from being called Aboriginal and Torres Strait Islander health workers to Aboriginal and Torrent Strait Islander Health Practitioners, which is an important development for them as a profession.
I addressed a group of Aboriginal Health Practitioners this morning; they are having a conference of sorts in Darwin. Representatives from across the Northern Territory were looking, yesterday and today, at some of the challenges they face in the health profession. There has been quite a slide in the numbers of Aboriginal Health Practitioners employed in the public sector – a 20% reduction in the number of Aboriginal Health Practitioners across the board.
The Department of Health has 20 vacant Aboriginal Health Practitioner positions. There are currently 75 employed, and there should be around 95 Aboriginal Health Practitioners employed. There is a pending crisis in this profession. The people I spoke to this morning are trying to address some of the problems around recruitment and retention of Aboriginal Health Practitioners and supporting and mentoring them once they are in their positions. All sorts of challenges are faced by this health profession, and they are facing some serious and soul searching questions around how they go about their business. As Health minister, I have thrown my support behind them. There is a lot of hope for this profession. It is far from a dying profession, but is facing some very confronting problems. I urged the people at the conference this morning to do some soul searching and hard work towards fixing the problems.
This legislation pertains to a slightly changing role for nurse practitioners. This is also a very interesting area which, on becoming Minister for Health, I looked into with great interest. Nurse practitioners are highly skilled, highly educated and specialised in certain areas of health practice. There are only three nurse practitioner positions in the Department of Health in the Northern Territory. In other jurisdictions across Australia there are many more employed in the public health systems of other states and territories. We are seriously lagging behind in this area. As Health minister, one of my priorities is to address this problem.
Why do we only have three in the Northern Territory? I know we have a small population – we only have approximately 240 000 people living in the Northern Territory – but only having three nurse practitioner positions is inadequate. I have instructed the Department of Health to get to work on this and try to increase the numbers. We have set a goal of 25 nurse practitioner positions across the Northern Territory by 2016.
This is probably a modest goal, but given the low base we are starting from it will be quite a challenge. Nurse practitioners can take a lot of pressure off health systems and health centres that struggle to employ general practising medical practitioners.
They cannot fully take on the role of a qualified doctor, but can certainly do some of the things doctors do. For example, in remote Aboriginal communities that struggle to attract doctors, a nurse practitioner can prescribe some medications, do limited diagnostic work and step up into some of that space occupied by a fully qualified doctor.
This is an exciting development in the Department of Health. We see the role of nurse practitioners within our health system, and it also provides an important career path for nurses. Nurses, as we know, have gone from being hospital trained – they decided to professionalise probably decades ago and have put themselves on a strong professional trajectory. This is a continuum of that, allowing nurses to increase their level of professionalism, education, become more specialised and more broadly useful within health settings.
It is an exciting development within the nursing profession. Hopefully, within the Aboriginal Health Practitioner profession, we will see a similar continuum of success and development over the years to come. It is very concerning that there seems to have been some deterioration in the Aboriginal Health Practitioner profession.
In regard to vaccinations, the member for Port Darwin has summed up the necessity for vaccinations to be easily accessible to people across the Northern Territory. Vaccinating your child is an essential part of keeping the whole community safe and healthy.
We have very high rates of vaccination in the Northern Territory; pretty much all our children are vaccinated. We have an excellent public health vaccination program, something we should be proud of. The early years of life in the Northern Territory are well catered for by the Department of Health through vaccinations, and ensuring good postnatal care is followed up through the public health system.
Thank you for those comments, member for Port Darwin. The amendments to this bill will enable people to have more access than ever to certain vaccinations.
Exactly how those vaccinations will be dispensed or delivered by pharmacies across the Northern Territory remains to be seen. The precise details are yet to be determined. The member for Wanguri asked if there will be a separate clinic room people go into within a pharmacy where they receive the vaccination in a private setting, or if it will be a discreet corner of the pharmacy. I really do not know; it is a good question. I imagine pharmacists and, certainly, the Department of Health will be advocating it be as professional as possible.
Within some pharmacies space is fairly limited, so there will be a challenge to create that discreet and confidential space to do the new work this legislation will allow them to do.
We hope, once this legislation goes through, the amendments will be quickly brought into effect by the relevant pharmacies and professional groups. I see no reason why there would be any delay or procrastination. The act itself has been sitting unutilised for several years now, and it is time we got on with the business of using this modern legislation to bring us into the modern era.
I thank the Department of Health, my staff, and the people consulted along the way for the work undertaken. The Pharmacy Guild of Australia has been very active in this, as well as the other professional and stakeholder groups.
I thank my colleagues for their support through this process.
Mr Deputy Speaker, I move that the bill be now read a second time.
Motion agreed to; bill read a second time.
Mrs LAMBLEY (Health)(by leave): Mr Deputy Speaker, I move that the bill be now read a third time.
Motion agreed to; bill read a third time.
REORDER OF BUSINESS
Mr ELFERINK (Leader of Government Business): Mr Deputy Speaker, whilst there is no question before the Chair, and with the acquiescence of the leader of opposition business, I move that the business of the Assembly be rearranged to enable the ministerial statement circulated last night to be dealt with before Government Business during the course of the day.
Motion agreed to.
PETITION
Henbury School
Henbury School
Ms MANISON (Wanguri): Madam Speaker, I present a petition from 1220 petitioners praying that a new Henbury School be built incorporating state-of-the-art facilities. The petition bears the Clerk’s certificate that it conforms with the requirements of standing orders. Madam Speaker, 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 as the Northern Territory’s only secondary school for students with special needs, Henbury School is seriously overcrowded within all learning areas and offices, has completely inadequate outdoor play areas and no longer meets with national standards.
Your petitioners therefore humbly pray that the Northern Territory government builds a new Henbury School.
A new Henbury School should be custom designed incorporating state-of-the-art facilities to ensure that students receive the best education, training, support and care to which they are entitled. It is essential that it be built to meet the rapidly increasing demands for the future.
And your petitioners, as in duty bound, will ever pray.
MINISTERIAL STATEMENT
Asset Management System
Asset Management System
Mr TOLLNER (Corporate and Information Services): Madam Speaker, today I provide the Assembly with an update on the critical work happening to rectify the mess left by the previous Labor government as a result of the failed Asset Management System or AMS project.
The project to implement a new asset system for government using the SAP software system has been an abject failure. The Labor government budgeted $7.2m for a project which will cost taxpayers of the Northern Territory $70m. The system is fundamentally broken; it simply does not work. All this, for 10 times the original projected costs.
When I last addressed the Assembly on AMS in the December 2013 sittings I undertook to provide a further update in early 2014 once a full assessment of the situation had been undertaken. A significant amount of work has been completed since the December sittings, and today I update the Assembly on what has been achieved.
The project governance arrangements put in place by our government required the AMS project to be subjected to a full, independent stage gate review before any decisions on the future direction of the system were made.
Independent asset management systems experts from KPMG were engaged to undertake this review and provide the government with costed options to sort out this mess and deliver an asset management software system that does the job. The stage gate review found AMS does not meet government’s requirements to effectively manage its assets and is so fundamentally flawed that remedying the situation within the core software product as it is currently designed is simply not feasible.
This reinforces the findings of the health check review undertaken in October 2012 through the Department of Treasury and Finance which found AMS to be only 11% fit-for-purpose. To remedy this situation using the existing AMS software would require it to be effectively rebuilt from scratch, an approach KPMG estimate would cost a further $120m of taxpayers’ dollars and take five years to deliver. Needless to say, we will not be taking that approach and throwing more good money after bad.
The Territory has assets of around $11bn covering a broad spectrum from houses to highways. No one would argue that a reliable, robust and effective ICT system is required to manage an asset portfolio of this magnitude and diversity.
Government was presented with a number of options to consider to get a functioning asset management system in place and extract ourselves from the expensive mess of AMS. After careful consideration, government has decided to discontinue use of the AMS system, take an alternative approach and establish a solution comprising an integrated network of asset systems to be called ASNET.
ASNET will be delivered through updating and reusing a number of component systems which still exist within government, to handle different aspects of asset management processes.
AMS was meant to replace nine other systems related to asset management functions. Due to the complete failure of AMS and gaping deficiencies in its functionality, these former systems were not able to be retired from use.
Seven of the systems previously used to manage government assets are still available. The new solution will incorporate three former systems as the foundation components of ASNET: the Asset Information System (AIS), the Roads Information Management System (RIMS) and the Building Asset Management System (BAMS). A technical review of these systems has found them to be robust, reliable, current and contemporary versions of operating software. Even better, government owns these systems. We are not at the whim of a commercial vendor and can control our costs and systems direction.
Some work will need to be done to bring these systems to a level of currency. That work commences now. Most importantly, these systems are known and reliable. They performed the necessary asset management functions for many years prior to AMS. They need to be supplemented and enhanced to deliver the additional functionality required in 2014, but we have the skills and capability to do this here in the Northern Territory.
The ASNET approach will deliver a cost-effective and fit-for-purpose solution by using contemporary software to integrate the various system components, expanding the business functionality and delivering a modern user interface. Current business functionality will be expanded and integrated through development of a new web-based portal which links the networked systems. This technology approach will enable government officers and contractors to access systems online and will greatly improve data sharing between systems.
ASNET will deliver contemporary systems technology such as mobile applications and spatial data capability. Government officers will be able to access systems and update data while in the field, enabling management of government’s infrastructure assets across the Territory.
ASNET will be linked to the Government Accounting System to ensure effective accounting for government’s assets and enable the government’s annual infrastructure programs to be properly managed. This is critical system functionality which was not delivered in AMS and, without which, full accounting for the Territory’s assets is not possible.
A modern data warehouse will also be a key feature of ASNET, delivering comprehensive and dynamic business intelligence reporting on the Territory’s diverse portfolio of infrastructure assets. This is another area of system functionality promised, as part of the AMS project, but not delivered.
Responsive, detailed and reliable reporting on assets is vital to agencies to maintain service delivery. The technology approach being used to deliver ASNET is innovative and exciting. It is a technology approach which will allow us to navigate a path out of the mess we have been left with in the form of AMS, one with great potential to innovate and improve our ICT systems without the prohibitive costs to the public purse which result from a ‘rip out and replace’ approach to ICT systems.
The use of ‘middleware’ technology will allow us to take the various system components which previously operated in isolation from one another and link them up. It will integrate systems and form a comprehensive network with a single unified offering to system users through a simple ‘point and click’ web browser. This ‘middleware’ approach is increasingly being used by large organisations to enable the life of existing systems to be significantly extended, ensure the systems remain relevant to business requirements and avoid the huge capital cost and high risk of expensive system replacements.
This is a proven technology, one that operates in major commerce, banking and other large enterprises. It is one the NT government is using to integrate various systems, provide more contemporary systems functionality and extend the life of systems we have invested in. This technology will allows us to build and add additional functionality as required in a modular fashion without major, expensive systems upgrades or rewrites.
Additional system components can be introduced seamlessly, such as a property management system for leased assets and housing assets. Best of all, we have the skills and expertise to do this right here in the Territory, providing opportunities for ICT professionals and local businesses to be a part of this exciting new development.
Government is very well positioned to implement the ASNET solution. This decision has not been taken lightly. As part of its consideration of the ASNET solution, government sought a further expert opinion on the proposed technology. An experienced chief information officer from another state government was engaged to undertake this task.
After reviewing the work done by KPMG and the situation the NT government faced with AMS, this expert has agreed with and supported the recommendation to develop ASNET. Dumping AMS and having to write off the cost of this debacle for which Territory taxpayers have had to foot the bill to the tune of $70m is a difficult decision, no question at all about it, but it is the right decision.
While an inexcusable amount of public money has been wasted on this expensive IT experiment, continuing to throw more money at it in the hope things will improve is not the answer. The options provided to government by the stage gate review present a clear path forward for government. The only option that will deliver a functional asset management software solution at a reasonable cost and the lowest risk is ASNET. The decision to ditch AMS may seem a bold stroke, but it is the right decision for Territorians. It will require some additional funding, but the cost will be a fraction of what it would cost to fix the AMS or go to the market for an alternative commercial software product.
ASNET will take three years to implement and additional funding of $12.5m has been approved to deliver the project. Upon completion, the system will operate within the previously approved budget for asset services. Work will begin on ASNET straightaway, starting with essential stabilisation work to get government asset information on a more reliable operating platform before any system enhancements can be developed.
It is important to note that AMS will still be with us for a while yet. It will take some time to decommission AMS and transition to ASNET. Unfortunately, this means AMS needs to remain as the asset system for managing the government’s 2013-14 infrastructure program. Substantial manual work is continuing to reconcile asset data and ensure accounting records are accurate.
The Department of Corporate and Information Services will be responsible for the development and implementation of ASNET. DCIS currently manages many of government’s enterprise-wide business systems and has the skills and expertise to manage this body of work. As the minister responsible, I have put the department on notice that ASNET is to be delivered on time and on budget. No further slippages and waste will be tolerated.
An important benefit of the ASNET solution is the opportunity it presents to engage the local ICT sector in the project. One of the failings of AMS was its reliance on high-end technical specialists in SAP software, resources that are not available in the Territory. Over the life of the AMS project, government has relied on these resources on a fly-in fly-out basis, adding a huge cost burden to the taxpayers of the Northern Territory.
ASNET will use a fundamentally different approach. Government will use local ICT skills and expertise to assist in the development of ASNET. Resources will be accessed via local suppliers, many of them small ICT businesses. Unlike AMS, ASNET will be developed in the Territory by Territorians for the management of Territory assets. ASNET presents the path forward for government to get us out of the diabolical mess we have been left to clean up.
The AMS project has been a case study in failures of management and delivery of an ICT project. The obvious question, the elephant in the room if you like, is how do we prevent this happening again? The single most critical thing we can do to improve the success of ICT projects and initiatives is to put in place a stronger, more robust governance approach and get the right senior people within government participating in it. If we get this foundation layer right, other success factors such as project scoping, operational management, resourcing, procurement and contract management, change management and implementation will be addressed through the governance process.
When I addressed the Assembly on AMS last December, I spoke of work being done by my department to improve management of ICT across government. I am very pleased to report that a new NT government ICT governance framework has been developed that will apply to all agencies and provide a policy framework for how ICT is managed across government. The key features of the new framework include:
an ICT Governance Board chaired by the DCIS Chief Executive, with membership at least at Deputy Chief Executive or equivalent level
a ministerial ICT advisory council comprising experienced and qualified experts from industry sectors to provide external expertise and know-how, drive innovation and new ideas, and act as a ‘sounding board’ for developing technology strategy
The framework will be underpinned by a new series of Treasurer’s Directions under the Financial Management Act that are focused on ICT controls and management. This will provide an explicit legislative basis for specifying ICT requirements and ensuring compliance. The framework provides clear and tangible response to the deficiencies in the management of ICT projects identified by the Auditor-General, the Public Accounts Committee and other independent reviews in response to the troubled ICT systems projects. The new framework has been approved by government, and DCIS is currently in the process of implementing these new arrangements.
Today I demonstrate clearly the decisive and deliberate action this government is taking to clean up the mess left to us in the form of the plagued AMS project, and the steps we have taken to strengthen and improve the management of ICT within government. This important work imbeds solid foundations and sets a new direction for government, not only for a better outcome for assets systems, but for all major ICT investments and projects.
Madam Speaker, I move that the Assembly take note of this statement.
Mr VATSKALIS (Casuarina): Madam Speaker, I respond to the minister’s statement on the Northern Territory’s government Asset Management System, or AMS, and thank him for the update. I note his story has changed quite dramatically from the statement he made to the House last year. It has gone from blaming Labor completely to a more responsible approach of getting the work done. Why is this you may ask? The evidence gathered by the Public Accounts Committee, run by his own party with its own members, has reached a vastly different conclusion than the minister was trying to prosecute last year. Even with the best attempts of his members to force blame on the minister at the time, it has become evident the breakdown of this project occurred at the senior public servant level and information on this project was not adequately or properly passed up the chain.
All evidence points to a cost blowout, but let us examine where the blowout occurred. In today’s newspaper the minister is talking about a blowout of $70m and tried to say it was a Labor mess. Let us look at the figures. The original budget for AMS was $14m, not $7.2m as indicated, incorrectly, in your statement, minister. The Auditor-General notes in his report that $26m had been spent by October 2012. We had an election in August 2012 which the Country Liberals won and took over government. If your figure of $70m is to be believed, it means $44m is a Country Liberals’ mess not a Labor mess. Trying to blame the Labor Party does not work, minister. You should talk to your people again. It is a good idea, if you leak information to a journalist, to advise him the $70m figure is not correct. Apart from the $70m you have said, $44m is your own making.
If you are trying to use this as a political tool to prove Labor waste you cannot, because the majority of the expense came under your watch, minister.
Finally, thankfully, after the overwhelming evidence has been pointed out, you have decided to get on with the job and fix it rather than playing a political blame game and I congratulate you for that; it has to be fixed.
I hope the plan you have outlined works as it is important for government to have an AMS, but I also worry that almost every ICT project across Australia has had some cost blowout. I suggest you keep a close eye on that. Obviously you did not, because $44m out of the $70m came under your government’s watch. In fact, it does not take much research to find IT project cost blowouts in every state in Australia, federally, and even in the commercial sector.
I ask the minister if he has any recourse for recouping any costs from Fujitsu for non-delivery of the project. I am sure the contract would be comprehensive and should have some penalty clauses so the government may have the opportunity to recoup some money.
The government’s plan is to go towards a new project, ASNET, abandoning AMS altogether. Let us hope you have found the right balance and, instead of throwing good money after bad as you say, you are not just throwing good money at something new for the sake of it. I also hope the new government’s framework around this project works and you do not waste another $44m on it. I know you have put yourself right in the middle if it because you formed a ministerial advisory group which puts you completely in charge of the success or failure of this project. I look forward to more updates on this project in the future.
Minister, I know it makes for a good political story to blame the previous government for everything, from $70m as you allege to not raining last year or raining too much this year, but unfortunately, the Auditor-General paints a totally different picture of your allegations. From the $70m you allege was wasted by the previous Labor government, $44m appears to have been wasted by the new government – your government, the Country Liberals.
Mr ELFERINK (Attorney-General and Justice): Four minutes, Madam Speaker, dedicated to $70m worth of expenditure. Most of that was a Pontius Pilate impersonation, and a damn fine one at that. The only thing he stopped shy of was whipping the AMS 39 times before sending it off for crucifixion.
The devil is always in the detail, and I know full well the incoming Northern Territory government was stuck with certain contractual commitments put together by the former government. I get the sense, looking at this issue with my nose pressed to the glass, that the former government was convinced by computer boffins, or whatever, that they needed a Lamborghini. They set about trying to find a Lamborghini for $7m, and the final design and delivery cost of the Lamborghini was 10 times higher than the initial ticket price of the vehicle itself.
The other thing is if you are going to the supermarket to buy groceries you may not need a Lamborghini. We could probably get away with a decent Mercedes station wagon, even a Ford Falcon. Unfortunately, the former government set out to get the whiz-bang AMS system. I find it fascinating, after all the expenditure, cost blowouts and time blowouts, that the former government is still trying to find anybody to blame other than itself for going down this path.
I am grateful for the solution as described by the minister. I hope it works out better than the AMS system did, and I am sure it will ...
Mr Tollner: It could not be worse.
Mr ELFERINK: This is true. I am not setting a particularly high benchmark by saying that. This approach could have been taken in the first instance if people had not – I suspect the former government – pitched this product to be the ants pants of computer systems. I do not claim to be a computer boffin but I am a taxpayer, as is everybody else in this room and in the Northern Territory who holds down a job or purchases any product off the shop shelf other than food. Those taxpayers have the privilege of shelling out a lot of money to support a computer system which, after blowing out at 10 times its original amount, ended up being 11% operational and nothing shy of a Lazarian-type response, and was never going to become much more.
The idea of having to spend $70m on a $7m project, only to find we need to spend $120m more to fix the $70m screw up on the $7m project is a reason to hit the abort button. The only problem with hitting the abort button is, initially, somebody pressed the go button. I remember raising this issue in opposition, repeatedly, because I first became aware of this not as a result of announcements by the former government outlining some of the problems it had run into, but I was sitting at my stall at Parap markets and someone said, ‘You want to have a close look at the AMS system the government is rolling out, mate, because I think it has problems’. By that stage it had only consumed $30m.
Members opposite are trying to say the $44m was this government’s spend, but we were bound to a system which was never going to meet expectations. I wonder how much sooner the abort button could have been pushed by the former government. It is what it is, and in the process we have deprived ourselves of one new primary school or middle school, any number of nurse positions, a number of new police stations in remote communities, housing which could have been built in a remote community or, alternatively, better childcare facilities.
In the Corrections department and bringing our juvenile facilities up to speed, I could easily have dealt with only a fraction of the money to do much more than we are doing at the moment. We have foregone hundreds of police cars and any number of other things. It is frustrating to an extraordinary degree to have seen this spiral out of control.
This has to be, genuinely, one of the great scandals of the last 10 years in this jurisdiction. To see so much money poured into something and walk away with zilch, nada, nothing – $70m in any other jurisdiction would be a scandal of biblical proportions. Whilst it has the front page today, I suspect tomorrow it will not be high on people’s list of priorities. Tomorrow, we will find something else to distract us, but I am deeply frustrated that we have lost so much money in pursuit of this goal. If you think about it, the extra $12m we put into ASNET will be an added expense because there should be no need to spend the money in the first place. AMS was supposed to lead us to a position where the fix was not necessary because the system was the fix.
You can say $82.5m of taxpayers’ money has been spent to get a $7m result and it is years late. Unfortunately, that is where we find ourselves. It is indicative of one of the reasons I was grateful for the change of government in August 2012. We must ask ourselves hard questions in government and I suspect, after eleven-and-a-half years, the Labor government had stopped asking hard questions. Everything was seen through a political lens and had to be dealt with through a political lens; everything was politics, not whether it was good or bad spending, just the political result being pursued.
That type of thinking gets you to a point where you think, as a government, to do nothing is the best thing, but to do nothing expensively is better still. We see that in a range of areas in the former government’s expenditure, which had them saying in this House on repeated occasions, ‘We are throwing more money at the problem, therefore we have the solution’.
We know there is resistance in education, but we stand by the decisions we must take. In education, the answer from the previous government was to throw more money at the problem. ‘We haven’t got the result. Throw more money at the problem and we’ll get the result’, but that was not happening. We were throwing more money at it, employing more people and seeing no change in results.
It was similar in child protection. ‘Throw more money at it and we’ll get better results’. The previous government created all types of fancy machines in the child protection domain, not least of which was SAF,T – noble in intent and ghastly in execution. Not a single child was protected through SAF,T, despite the fact we spent $1.5m on it. We spent $1.5m on child protection and it failed to protect kids. There is something fundamentally wrong with that type of expenditure. The reason expenditure became the solution was so ministers of the Crown could say, ‘We are throwing more money at it, that is our effort’. This is the fundamental difference, I suspect, between the former government’s approach and the new government’s approach.
For me, it is not necessarily throwing more money at it, it is the attitude that we are responsible for what happens within our portfolio domains. As a consequence of that, we take interest and are driven in those areas. I, for one, continue to be driven in all my portfolio areas trying to find ways to do things more effectively, and often for less money. If you look at what we have done in Pillars of Justice under the umbrella of the Attorney-Generalship – I note, with some gratitude, the Chief Magistrate has started implementing the pre-trial disclosure policy he knows we are working on within the justice framework. The reason we want to do that in the lower courts is for the same reason it was done in the civil courts: to make the system more effective.
Where pre-trial disclosure has been legislated for in other jurisdictions, such as the lower courts in Victoria, they went from some 7000 to about 3500 hearings in 12 months. By changing process and system, there are substantial savings to be made in the court system. We will get better results with just as much justice being dispensed. In fact, I argue even greater justice will be dispensed in the lower courts at a substantially reduced cost. Part of being a competent and capable minister – I hope I can make a shallow impersonation of one – is you can do things better for less money.
The argument you hear from the education union is you cannot do things better for less money. We were not doing things better for a whole lot more money. I suggest we can do things much better for less money, and that is what we are attempting to do in a number of areas of government. I make no bones about that. My own Attorney-General’s department is a much leaner animal today than it was when we came to government. Yet, it continues to function effectively and do all the things we ask of it in a practical and timely fashion.
Similarly, in Corrections, whilst there has been enormous upward pressure on this demand-driven area, the growth in expenditure on Corrections has been restrained to the point of almost no growth at all. There is now room, as a result of the question I answered in this House recently, to review how we project expenditure in the Corrections environment because our prisoner numbers do not reflect the original projections put together in July 2010.
As a consequence, the projections which were quite reliable until the change of government are no longer that reliable. We have some 200 fewer prisoners in custody than the original projection four years ago. This means we are able to do more with less. Part of that is we have been prepared to spend money in the front end of criminal conduct; for example, more police officers.
The general rule of thumb in the past has been more police officers will generate more prisoners. That is true if you have a reactive response to crime in our community. However, we have taken an approach where we say to police officers, ‘Start to engage in preventative behaviour’. That is why you see police officers standing in front of bottle shops. Whilst people might object to that in truth it has led, almost directly – along with several other policies – to a substantial drop in liquor being sold in our community. The Alice Springs statistics show a drop of 7% of pure alcohol at the wholesale level, and that is the lowest figure on record. That is partly because we have attacked the marketplace which, for much of the consumption of alcohol, is the drunks who hang around our parks and gardens, and who were there despite the Banned Drinker Register. Many of those people are now in custody under our mandatory alcohol rehabilitation legislation. That is pushing down consumption, as well as the fact people know they are not allowed to drink in our streets.
In Alice Springs we have seen a 39% drop, year-on-year, in property crime. We have nearly halved property crime in Alice Springs. Why? Because many of the people who turn to property crime to support their drinking habits are either in custody or, in some other way – perhaps through an alcohol protection order – restrained from conduct. Those who come into the custodial environment despite these improvements are expected to behave in a fashion which shows they are genuinely responsible for their conduct.
The effect of this, collectively, is, as a government, looking into the future we can spend $500m less over the forward projections than the former government did, drive down property crime in particular, push down prisoner numbers and have a sober, safer community overall.
The challenge for the government in these circumstances is saying. ‘We will draw a line in the sand and say this is not good enough’. That is what we have done. Members opposite, and many people in the community, scream from the rafters that we had the audacity to make people accountable for themselves and their conduct and put pressure on individuals in the community who cause problems.
Nevertheless, we can take some comfort that the policies we put in place have achieved better results for less expenditure. That is the difference between the former government’s approach and the current government’s approach to dealing with all types of things. What is the most critical comment we received from members opposite? Despite this substantial body of evidence that spending more is not necessarily the answer it is, ‘Why aren’t you spending more?’
I heard the Leader of the Opposition utter a, ‘Hear, hear’ when the Henbury School petition was read out. Is that a commitment from the Leader of the Opposition to spend money on a new school? If it is that is fine, but I ask the Leader of the Opposition to announce the costing for it and where the money will come from.
The Leader of the Opposition drives the speedboat of opposition which can change direction any time it pleases, no matter which way the winds and tides are blowing. We have inherited the ship of state, which is a little bit like an oil tanker. If you want to change direction you turn the wheel and wait for a response from the rudder. That is the nature of opposition, that is the nature of government, but the difference between us and the former government is we are prepared to manage, to get involved in the management of our jurisdiction and the forces available to us, namely 20 000 full-time equivalent public servants, and use them for better results in our community.
That is what we have done with the police. We are encouraging the courts to adopt better practices, and full credit to the Chief Magistrate for the approach he is taking. I am enormously grateful to Dr Lowndes and his efforts, the Corrections system, the Education system and Health system for working in tandem and in cooperation with each other. Soon, hopefully, there will be an announcement of a domestic violence policy to augment what is already being done by this government in the area of domestic violence, particularly in relation to the criminalisation of domestic violence, as well as a juvenile justice policy which will also augment the work being done across government. That is the multilayered, multifaceted approach which will be targeting individuals to say, ‘You will be more responsible. If you beat your wife you will be held accountable. If you are a criminal we will hold you accountable, but if you do the right thing and contribute to the community we will make sure you have as much liberty as you can.’
This AMS statement is reflective of the difference between the two governments: the previous government, which thought spending was the answer to everything, and the current government which believes sound management and good practice is the answer to everything. We believe in sound management, good practice, accountability, we are accountable and our answer to a problem is not necessarily, ‘We will spend more money’.
I commend the minister for his statement and wish him well in development of the ASNET response to the AMS debacle.
Mr STYLES (Transport): Madam Speaker, I am stunned there are no more speakers from the other side given this was an Australian Labor Party government initiative. The previous opposition speaker spoke for four minutes on something that was budgeted for $7m and will cost more than $70m. Sadly, today’s newspaper headline says, ‘$70m of Your Cash Wasted’ – an amazing figure.
An interesting saying most people know is: an elephant is a committee-built mouse. The previous government had committees and kept tipping money into them. I reflect on the words used by my colleague, the member for Port Darwin that when we were in opposition we found, through information flowing around the community, a big bucket of money was being tipped into the Asset Management System.
It is like a hole in the ocean; you kept tipping money into it and it kept disappearing. Sadly, it reflects badly not only on the people involved in it, but the Territory in general. This saddens me, because we would like to demonstrate, all over this country and internationally, that the Territory is a great place. The Country Liberals have a plan to make it happen; however, we have been nobbled a little by the inherited $5.5m debt we have to deal with and by incompetency with something budgeted for $7.5m and costing $70m. We still do not have a fixed system; we have a broken system.
It saddens me when I think about people down south looking at statehood for the Northern Territory. We, in this House, would be very grateful to support the Minister for Statehood and say, ‘Yes, we are a competent government, we are a competent people in the Northern Territory’. Those on this side of the House can say that to our parliamentary colleagues around the country when statehood comes on the agenda again. In the meantime, we have to demonstrate we can fix the mess the Territory has been placed in by the former government and have a plan to do it. Part of the plan is already coming to fruition.
Can I enlighten those listening and watching on some facts? The Territory’s economy grew by 5.6% to $19.9bn in 2012-13. This is the highest growth rate of all jurisdictions and well above the national growth rate of 2.6%. I was in Singapore recently talking to some business people and the word is the Territory is open for business and the government is looking at opportunities for investment. The catch cry, ‘We are open for business’ is now echoing throughout the world. I believe people from Canada and the Middle East visited recently; these are people with huge amounts of money to invest in places with no sovereign risk where they will get a reasonable return for their money.
Because of the efforts of various ministers, along with the Chief Minister and Deputy Chief Minister of the Northern Territory government, the message is getting out and across the world. We do not have to go to investors; we have people coming here. This is an excellent problem to have – people turning up with buckets of money to invest in the Territory. We are struggling to meet with all of them. I had a meeting after Question Time this morning with a group of people who want to invest in the Territory. They have some novel ways of how the government and private enterprise, together, might generate economic wealth and job opportunities for Territorians, which will increase the economic growth of the Northern Territory.
One thing you can do to get out of debt is put up taxes. This side of politics would rather not do that. You can also reduce services, and we would rather not do that. However, we can work smarter with services.
The third option for getting out of debt, or changing your debt to income ratio, is a combination of those two, and we have had to do a small amount of this.
The fourth option, and the big one, is economic growth. What people in this House have been informed of – I hope people who watch parliament, listen to it or read Hansard have seen plans from various ministers on this side of the House about generating wealth, because without generating wealth you cannot pay for anything.
Everything comes at a cost; that is the way the world works. To do great things for the Territory you need money to pay your way. Sadly, at the moment, we have a debt we must deal with, but we have a plan to deal with that. We will deal with it and fix it because we are, sadly, the only ones in this House who have plans of how to get out of the economic mess we inherited.
I will move on from growth to some Sensis figures I read recently. In the December 2013 Sensis Business Index, more Territory small and medium enterprises believed Territory government policies are supportive of small businesses rather than against. That is clear to see by the international investors knocking on our door. The Chief Minister and Deputy Chief Minister cannot keep up with the number of people who want to invest, and everything starts with an idea and meeting and sharing the ideas both parties have.
This all goes towards the image of the Northern Territory. When I talk to people in various parts of the world, and here, they say it is refreshing to have people who will talk to them, who they can meet with in a fairly short period of time and who are open to the idea of working in partnership to generate good results for all parties concerned.
Going back to the Sensis Business Index, it reported the Territory had the second highest positive attitude towards government policies of all states. I want to repeat that: the Sensis Business Index reported that the Territory had the second highest positive attitude towards government policies of all states, and was equal with Victoria and behind Queensland in the December quarter 2013.
That is a fantastic result for a government that has, as you can see with the AMS situation, another mess to clean up. There are others I am sure will be discussed in this House over the next six to 12 months. It is a hard job, but we have a plan to fix it. The Sensis Business Index says support for Territory government policies rose by four percentage points in the December 2013 quarter. That is another indication that we have a plan, are on track and we will keep playing the game and making sure all Territorians benefit.
Further, the Sensis Business Index reported Territory business confidence grew by 11 percentage points to 37% in the December quarter 2013, slightly below the national average of 38%, which increased by 21 percentage points over the quarter. In retail trade, the Territory has recorded nine consecutive months of growth in trend retail trade turnover to January 2014. These are great indicators we are on the right track. It is sad we are pulled down by things we inherited, but we have a plan to get things back on track.
Further indicators we are following that plan and are on track are the ANZ jobs ads. The latest ANZ jobs ads figures show that weekly newspaper job ads in the Territory were up 1.2% in February 2014. The national average was up 0.2% over the same period.
Engineering construction is great news for the Territory and activity is at an historical high level. In 2013 – I quote from a number of documents – engineering construction activity in the Territory increased by 47.9% to $4.5bn, the highest annual level on record. The increase was driven by work on several major projects, including the Ichthys project, the Marine Supply Base and mine expansions and developments throughout the Territory.
Over the lunch recess I heard of other mining ventures which are about to start. I am sure the responsible minister will be bringing those announcements to this House in due course.
Labour force figures are another good indicator. The Territory recorded the highest employment growth of all jurisdictions in February 2014, increasing by 2.7% in the year and by 0.7% in trend monthly terms.
The Territory’s trend employment increased by seven percentage points between 2013 and February 2014, representing an increase of about 8700. Of this amount, about 97%, or 8400, were in full-time employment.
In February 2014 the Territory’s trend unemployment rate declined by 0.2% to 3.7%. The Territory has the second lowest unemployment rate of all jurisdictions above the Australian Capital Territory and well below the national trend unemployment rate of 6%. The Territory’s trend unemployment rate has fallen for seven consecutive months to February 2014.
Another great point is the building activity and approvals. You would have heard my colleague, the Minister for Lands, Planning and the Environment is fast-tracking land release, something the previous government failed to grasp. I have quoted these figures before, and I am happy for the opposition to correct me if they wish because they are rough figures. I have not looked at the graph for quite some time, but I am happy for them to correct what I am quoting. In the last three years of the Labor government their own Treasury officials said they needed around 2000 blocks per year so they could keep pace with demand. In the previous three years they went from 1100 down to 920, down to about 570 or 520 – somewhere around there. It was a downward trend which indicated to me they took the foot of the accelerator and allowed things to slow down, which is a bit sad because that put pressure on existing and new homes prices.
Sadly, those who could not afford to build a home were forced into the rental market. Competition in the rental market pushed rents up to an extremely high level where we had the highest rents in the country. What does that do to population stability? What does it do for our young people?
When in opposition, as shadow minister for youth and, now, Minister for Young Territorians, I have a constant stream of young people expressing their concerns over their inability to afford a house.
One of my own children has a couple of kids and is desperately trying to buy a house. It is a real battle. I am acutely aware of the problems young people have in the environment left to us.
I am grateful to the Minister for Lands, Planning and the Environment for the hard work he is doing to ensure we have land released faster than it was prior to us taking government in 2012 ...
Mr Chandler: Hear, hear!
Mr STYLES: Yes, everyone agrees with that statement, member for Brennan.
Talking about building activity and approvals, residential building approvals in the year January 2014 increased by 21.8% to 2294. That is an impressive increase. Another area where this government has achieved those percentages is the decrease in crime. This demonstrates the government not only has plans but is implementing successful plans to reduce crime, reduce violent assaults, alcohol consumption and a whole range of things. However, economic activity is increasing.
It is important we have economic activity to generate not only GST and stamp duty, but government needs an income if it is to continue supplying services at a level commensurate with our income. I say commensurate with our income because, sadly, the previous government spent way more than its income. Its idea was to throw money at things. Of course, the AMS scheme discussed in the House this afternoon is an example of where government threw money at a problem and expected it to go away.
I remind the opposition, not much has changed from when we were in opposition – money is an input not an outcome. You cannot continue to throw money at a problem and hope it will go away. You need to implement a plan that will work.
I ask the opposition: where was the plan in relation to the AMS and where was the plan in relation to the budget deficit? Where was the plan in relation to the debt? Perhaps there was no plan, perhaps it was just a group of people saying, ‘This will be a good idea, let’s do that’. Was there any due diligence? Where was the due diligence on the AMS? I suggest there was not a lot from those who should have.
The Treasurer, in his statement on the AMS, spoke about the good people here in the IT industry and public servants. It was a complex system, a …
Mr GILES: A point of order, Madam Speaker! Pursuant to Standing Order 77, I ask for an extension of time for the minister.
Motion agreed to.
Mr STYLES: Thank you, Madam Speaker and member for Braitling, for the extension.
As Minister for Infrastructure I had this for a while and it was a nightmare trying to figure out where it had reached. Basically, the previous government wanted a gold-plated scheme and was sold a lemon. How did that happen? How do we prevent that from happening again? It is about due diligence; about looking at what occurs and when alarm bells start ringing loudly you take hold of it and say someone has to do something about it.
I had the unenviable task of looking at it when it was with the Department of Infrastructure. Of course, the Department of Infrastructure is a great user of the AMS given it does a lot of the maintenance and is responsible for a lot of minor new works. Good people in the Department of Infrastructure were tearing their hair out because they were getting phone calls day in, day out, and had been since the system was turned on in April 2012.
In hindsight everything is great, but I was told by numerous people it was recommended not to turn the system on. It was not ready, checks still needed to be done; however it appears someone made the decision to turn the system on and go live before it was ready. It is like trying to put a big piece of machinery together where you do all the nuts and bolts up but not tight enough, the braces are not in, but you start turning the machinery and it explodes and there are bits everywhere.
It is a bit like that. We have an asset management system which is supposed to be a gold-plated version, as the member for Port Darwin described in his contribution to the debate, but it has not worked.
The information I received, as a result of investigations to try to figure out how to fix it, was so many people were in damage control – it had been costing a fortune since the day they turned it on just to pull the system together. Sadly, we had to employ numerous people in the Department of Infrastructure to cover the things this system is not doing.
When you ask the system to automatically generate a report it will not do it. We have had to employ many people, costing a great deal of money, to retrieve the information manually so we can give invoices and accounts to people.
A number of people have phoned me saying, ‘This is a complete disaster. I would like to talk to you about what could and should happen.’ When it was turned on too early contractors could log into the system and look at what other contractors were doing – an appalling state of affairs where security on the IT system was not in place when they went live. Whose decision was it to go live? This is one of the big questions. Was it someone in government, in the bureaucracy? Was it Cabinet? Was it a minister? Was it the Chief Minister at the time? Who said, ‘Push the button to start?’ Perhaps it was the current Leader of the Opposition, perhaps not.
What a disaster to preside over – pushing the button on something not ready to go. It reminds me of when someone said, ‘Push the start button’ for the Weddell Power Station, when information was to hand saying not to start the power station. The gas going down the pipeline had not been cleaned properly to take solids and liquids out of it. My understanding is – I would like someone to tell me if I am wrong – the current Leader of the Opposition indicated to someone, ‘You should start it, let it come down the pipeline’.
I am happy to be corrected, but my understanding is the order was given, ‘Start the generator, let the gas come down’. ENI sent the gas down, it went into the generator and the generator had a huge failure due to solids and liquids being in the gas. ENI put their hands in the air and said, ‘Not our problem. We gave you the information, you fix it.’
I understand that cost millions of dollars. That is all right because you put it on the never-never plan and the Power and Water MasterCard, which still has an enormous amount of money sitting on it. Power and Water Corporation is not out of the woods yet, there are serious financial problems. You add millions of dollars because of – correct me if I am wrong – due diligence.
It went live too soon and was given to good local people who believed they could do the job. I believe some local people have been set up to fail. The integrators and contractors on this project had more people coming here, and at one stage there were 92 engineers on the job. Many people have been in charge of it over a number of years, and someone should have realised they had a problem because they sent expert engineers here who did not last long and did not seem to fix it. They had engineer after engineer, so many people were in charge of this, and so many people were swapping and changing and coming and going. They were all contributing to accommodation in hotel suites and expensive units, but they were, as the Treasurer said, the fly-in fly-out IT people. When were questions asked?
In the Department of Infrastructure we still have an enormous number of people working manually on the system so when contractors contact the department we can give them information. We saw so many people not being paid and had phone calls from people in the business community who rely on government to pay within the 30-day window, and this was not happening. We would say, ‘How much do we owe you?’ and they would say so much. We had no way of checking, and at one stage there were between 15 and 20 people trying to extract information from a broken system to see how much we owed. I believe they still do not have an exact figure of how much we owe, how much is coming in and who owes who what.
Irrespective of what is said here, behind the scenes there are people in the Department of Infrastructure trying to find out who owes who what and this is a major headache for them. I commend people in the local IT industry who worked hard to fix the system. They were obviously under the direction of the integrators and contractors. I was staggered at some of the figures being paid on a quarterly basis to contractors for I do not know what. I received information from people in the IT industry who were asking, ‘What are we getting for our money?’
This is not last week; this is back to when we were in opposition. I thank the public servants who are working hard with a broken system. On behalf of the former government, we apologise for a broken system. We are doing everything we can to fix this and, as the Treasurer pointed out, we have a plan. It will not cost $110m to fix this system. It was a simplistic system to fix in the first place, and we will now fix it.
I commend the statement to the House. Thank you, Madam Speaker.
Mr HIGGINS (Daly): Madam Speaker, it was interesting listening to the member for Sanderson talking about assets. I realised he is older than me so probably has a little less knowledge of the computer systems side of it. We will leave that, Pete, to the younger people like me. I think I am six months younger ...
Mr Elferink: In this day and age, that matters?
Mr HIGGINS: At this this stage, it does not matter.
My background with computer technology goes back to the mid or early 1970s. I first came to the Territory in the mid-1980s and was employed by NCOM, so I sympathise with the people involved with this computer system. When I look at what has occurred, it seems members opposite lit a bushfire which would burn out $7.2m of Territory funding. That bushfire was not put out until we reached $70m. The key point is we are saving $120m in the process, but one thing I found when I worked for NCOM – that was where I first met the previous Chief Minister, Paul Henderson, his wife, Stacey, and Natasha Griggs. All three, at some stage, worked for me.
One of the things that struck me when I first came to the Territory was why we were employing so many people from down south. The local computer people were very highly skilled. For some reason, we had people from down south who thought they were better off continuing to employ people from down south. Out of all the people who came with me, I think I am the only one who stayed.
When we look at the locally developed computer systems, there are two types you would implement. One is a package system – I mention PROMIS, the Prosecutions Management Information System – which was implemented in the early 1970s. The way we looked at packaged like that was it fitted into a whole stack of environments and, provided it met about 80% of the requirements, it was a good fit and you would adjust the other 20%.
Another system similar to PROMIS I had a lot to do with – I mention Geoff Fanning and Computer Power. They had a lot to do with that system and employed many local people.
That other system was IJIS, the Integrated Justice Information System. The concept of that was first conceived by a fellow in Corrections named Alan Vanzel, who is still around somewhere. There was Bill Wilson, who is now at the university, and Peter Conran from the Department of Law, who did some work with it. I was given carriage of the original design of the IJIS system. IJIS was developed from the ground up. The project manager on that was local woman Gaye Long, who was very good.
When I read through this speech, one thing I notice is the AMS does not meet government requirements to effectively manage the asset and is only 11% fit-for-purpose. My question straight off is: what happened from the mid-1970s and 1980s when these packages had to meet 80% of the requirements? We have gone to something that only meets 11% of the requirements. I question who allowed such a system like that to be progressed. It was possibly money, I do not know. However, $7.2m seems a lot to spend on a system to look after the assets of the NT government. Irrespective of the value of the assets, it is the functionality of the system.
The solution espoused today – I have never heard of middleware but have a feeling of what it is. I go back to the early 1970s. I started my career in banks, and banks used old batch processing systems not online systems, and most of these programs were written in COBOL.
At the turn of the century – the year 2000 – I started in the bank in the 1970s so almost 30 years later – I was astounded to find banks still used COBOL programs. They had put front-end software on these so they would become online systems. I have made some inquiries in the last few days and found these old systems are still there. I presume – I have not had a chance to get a brief on this – this middleware approach is the same thing banks have been using for the last 30 or 40 years. If it is, it is a very good decision.
I applaud the option to get someone from interstate to look at this system and identify the projects. It is always good to get someone from outside. That is about the only time I would support the Territory going interstate for these people. The end result will be more jobs for local computer people. I have complete faith in the university producing people with the right skills to do this work. I have yet to see anyone from down south who is any better than local computer people. After this debacle, they are the ones I feel sorry for. These people need to be defended, and someone who has made the decisions higher up should take the blame for this.
Other concerns I have had with computer systems over my years of working with them is people think a computer system will solve all the problems and a lot of people develop systems simply to computerise. I know the member for Goyder still uses the archaic pencil and diary and does not use an online diary system such as Outlook. I applaud that because the member for Nelson uses a pen, which is a bit more permanent showing more confidence in the bookings he makes. People who use pencils are a little less confident and use rubbers to erase. I applaud the member for Nelson for being so confident.
I hold the strong view a lot of people use computer systems because a computer is there. They have a computer sitting in front of them so they use it to do everything and anything. One of the problems coming out of AMS, after speaking to people – there are many people in Treasury – a lot of people came to me prior to me being elected complaining about this system. They said, ‘Gary, if you get into government can you do something about it?’ I am happy something has happened with it.
One thing mentioned to me was a lot of the systems did not have anything wrong with them. I have not heard mentioned today – I would be interested to hear an answer – the justification for this. I have heard a lot about them being assets and their value. I am not too sure and would have to find it in the speech – we are talking millions of dollars’ worth of assets and that is the justification. As a computer person, I do not see that as justification. It is a bit like a doctor and a person – what is the cost of saving someone’s life? You do not put a value on it.
The world today is far too dependent on computer systems. Look at our reliance. I do not know how many people had problems with their mobile phone or how many people could not use their computer during the recent power outage, and people need to bear this in mind. I am sure the member for Goyder could still check her diary appointments, so would the member for Nelson, but I would have had a bit of trouble.
I wanted to raise those issues. I am not here to point the finger at people, but there are questions I would like answered. I would appreciate it if the minister could give some commitment to finding the justification for this system, what it would achieve for us and what savings there would be? Were there staff savings? I do not think any of that has been mentioned in speeches to this point. There has been a lot of, ‘You caused this, you caused that. We spent this, you spent that.’
My view is a fire was lit, that fire has been put out, and the person who lit the fire is the one who should go to gaol.
Thank you very much, Madam Speaker.
Mr WOOD (Nelson): Madam Speaker, the Minister for Infrastructure mentioned a few things about a gas pipeline and Weddell Power Station. The member for Daly raised some good issues because, from my point of view, one of the things coming out of the Public Accounts Committee investigations into this is we presume change will bring better service to the community. After all, that is why we have the public service. We say, ‘We think if we spend this much money we will have improved the service we give to the people of the Northern Territory’. I sometimes wonder if we bother to ask, ‘Is this the case?’
Are the systems we have, although perhaps a bit more tedious, sufficient to do the job or can we afford – now we talk about $70m – the cost of the change? Will it make a lot of difference? I think we need the cost benefit analysis at the beginning. We all get caught up with the latest gizmos, otherwise IT companies would not make any money because we would not upgrade our computers. If we did not upgrade our computers the office would go broke. They gave us an upgrade, which I interpret as a downgrade because it is slower than the previous model but someone has made a few quid out it.
I did not need an upgrade. It still writes letters, checks Google, collects and sends my e-mails and I can do my newsletter on it. I do not want it for anything else. It is a working thing and I do not need a change, but we have to be up with the Joneses otherwise there will be nobody to repair this old-fashioned computer of mine. We seem to think upgrading is a good thing.
When we discuss the AMS – there were also grants programs for the hospital and other programs encountering difficulty. Right at the beginning, if we are heading down this path, can you show me if it will make any difference to the person in the street? Will it get them to a hospital bed quicker? Will they get their planning information faster, and have you asked the people who have to deal with this on the ground? Often that is the person on the front desk who has to check the information. Has it made it any easier or were there any great benefits from these changes?
I know the PAC is still looking at this. I do not know where we go now government has pulled the pin. We are not the only place in Australia where this has happened. It is an expensive case of learn by your mistakes, but we have had to pull the pin because if the advice from the department is there is no end to it, the government has made the right decision.
We have looked at other states and they have the same problem. Queensland had similar problems. Hopefully, one thing to come out of the Public Accounts Committee will be a set of guidelines which, if followed, will make the risk of this happening again nearly nil. You cannot say it will never happen.
The member for Sanderson mentioned the gas pipeline, and the member for Port Darwin, at the time, wanted the PAC investigate it. When the PAC has a moment to spare perhaps it should look at the latest power generation failure …
Mr Elferink: It has a capacity to self-refer now.
Mr WOOD: It should not be power generation. It was a power failure; there is nothing wrong with the generators.
In relation to the gas pipeline, on 23 November, as the member would know, about 14 000 Darwin and Katherine households lost electricity for about two hours due to a gas supply problem to the Weddell Power Station. Using its self-referring powers, which we now have for the PAC, the Council of Territory Cooperation decided to inquire into the Northern Territory’s power generation network and what led to the outage of 14 000 households on 23 November 2009. It was put forward by the member for Port Darwin, who was keen to discover what happened. It was an interesting investigation.
Reading from page 4 of the second report of the Council of Territory Cooperation under the heading ‘PWC and NT Gas Hearings’ quote:
- The Weddell Power Station was completed in 2008 and is a base or intermediate load station with two General Electric gas turbines, remotely controlled from Channel Island. In June 2006, the Power and Water Corporation and Eni executed an agreement for the supply of gas over 25 years from 2009. Earlier in 2006, an agreement was reached between PWC and NT Gas to construct a gas pipeline from Wadeye to Ban Ban Springs, south of Darwin, to transport gas from the Blacktip gas field.
This is the important part:
- Following delays in availability of the first gas under the agreement, Eni proposed the sale of early off-specification gas (EOSG) to the PWC. This was agreed in August 2009 after a review and study into the viability of using EOSG. The first EOSG was supplied to the PWC by Eni through NT Gas’ Bonaparte Gas Pipeline to Weddell and Channel Island Power Stations in September 2009, along with gas from the Mereenie/Palm Valley fields.
On 23 November 2009, the supply of gas was stopped to the Weddell Power Station by NT Gas, causing power outages. Investigation by the PWC and NT Gas continues into the cause of the failure of the gas supply system.
- At the facilities at Ban Ban Springs and Darwin City Gate, …
Darwin City Gate is not the front entrance to Darwin city; it is a place near Weddell Power Station.
- … where there is pressure reduction, filter coalescers were installed to capture excess liquids. Gas chromatographs were located at inlets and major outlets on the pipeline system to measure hydrocarbon content, including hydrocarbon vapours in the gas stream, but not liquid.
In response to questioning by the CTC, Mr Ohl …
Mr Ohl was Director of NT Gas:
- … agreed that it was possible for liquid hydrocarbons and liquid water …
I suppose liquid water is right:
… to enter the pipeline at Wadeye and pass through Ban Ban Springs and reach Darwin City Gate without being detected, however, it was expected to accumulate in the Ban Ban Springs liquid separation system.
My understanding is these things filled up. It goes on:
- Following questioning, Mr Ohl clarified that the Weddell off-take comes at point before the filter coalescer at Darwin City Gate.
I do not want to read the whole lot; I will give you part of the Findings, on page 7 of the report:
- A number of matters became clearer when considering the PWC’s and NT Gas’ evidence together. The first is that there was some urgency for the PWC to move to using EOSG, rather than to burn diesel. The cost of diesel, rather than the cost of EOSG may be at least part of the reason.
The CTC believes the introduction of EOSG was essentially a gamble.
It was also to do with the cost of providing diesel to power houses while we were waiting for the supply of gas. People took a gamble in a sense they believed that gas would still be okay. Luckily, we had some very good people on the job at Weddell who saw something happening and were able to flick the switch.
I do not want to go on about it too much, but if the minister wants to see the full report we have it. There were a number of other reports, and I think Power and Water Corporation brought out its own because there were concerns the generators had been damaged. One generator had a problem, but it was eventually found that was not the problem. That generator had to be repaired.
I wanted to give a brief outline as the Minister for Transport raised the issue. It would not be unfair of me to say, if we are talking about computer systems, these generators require very high-tech computer systems to make sure they balance the power and the amount of gas being used – the output – and ensure if there is a problem with supply these engines are closed down. I imagine that is what happened. I am not pre-empting any inquiry into our latest blackout, but I imagine there was a system meant to protect those generators – a computer system that ensured they were protected which shut them down and saved a great deal of money.
I realise we are talking about another issue, but it was raised by the Minster for Infrastructure, who is also Minister for Transport. I hope that straightened it out.
I am on the Public Accounts Committee, which is looking at this issue. It behoves the Public Accounts Committee to come up with some real, down-to-earth, practical ways to ensure this does not happen again. We cannot afford to have this happen too often.
As I said, we learn by our mistakes. Unfortunately, it was a very expensive mistake to learn from. If we have to start again, let us hope we do it under a new set of guidelines so we do not waste money.
Mr CHANDLER (Education): Madam Speaker, the previous Cabinet fell for a fun-filled lollipop dipped in techno-chocolate systems, didn’t it? Many IT systems are sold that way today because we all like to have the best and the latest gadgets. This one has cost taxpayers $70m – a mistake from the start.
When I was Minister for Housing I know the pain it caused the department at the time. What I am discouraged about is the opposition, the former Labor government members, had their hands all over this system. The shadow minister provided four minutes as a way of response from the Labor Party, which had its hands on what has been $70m thrown down the drain. That breaks down to approximately $17.5m per minute. Of that speech, I reckon three minutes was sarcasm. That is $52 000 500 worth of sarcasm – $17.5m a minute.
Fear not, member for Casuarina, I was listening because nothing is more discouraging than unappreciated sarcasm. I was listening to your four minutes, three minutes of which was to take no responsibility. Had you said mistakes had been made and new lessons were being learnt every day, you were trying to fix the problem, that might have been slightly different. Wanting to shift the blame fairly and squarely to this government, which is trying to fix the mess we picked up when we took over, is pretty poor form.
I thank the Minister for Corporate and Information Services for this statement. It highlights the waste of the former Labor government, and is one of the many things we are dealing with as we continue to clean up the mess left behind.
The idea was sold to us that the AMS would replace nine existing systems at a cost of $7.2m, and we would recoup through efficiency. It was all very good in theory, but when the roll-out was bungled it became a very bad idea, very quickly, and has cost, to date, around $70m. It still does not deliver what it is supposed to; the system is about 11% fit-for-purpose. That is $70m for a system which is basically useless to us. It involved constant fly-in fly-out technicians from south to maintain the system, and KPMG advise it will cost $120m and five years to fix. That is why this government has decided to scrap it and revert to a number of old systems which have proven to work and we own.
It makes me sick to hear of this waste. We just sat through Budget Cabinet, where every minister has had to fight tooth and nail for every dollar in their budget portfolios. There is the former government wasting $70m on what is, basically, incompetence. I think of what $70m would mean for my portfolios and the good things we could do with that money.
Before I do, I want to reflect on the pain and suffering which occurred in the Department of Housing when I was Housing minister and we looked at security of the system. The Transport minister mentioned people from outside government could get into the government computer system and find out who had tendered for works through this failed computer system.
There was no way to reconcile whether a bill had been paid or not. Sometimes small companies waited months for payment from this government. In some cases, the government thought it had paid the bill but had not and small companies suffered. Again, the former government has not acknowledged the pain this system created. As mentioned before, payments had been made and in some cases made again and again. Some companies had been paid more than once for an invoice, but because the system was not robust enough to recognise it payments continued being made whilst other companies went without payment.
A number of staff were going through manual transactions trying to find whether money had or had not been paid because of a computer system that, in the early stages, set the government up to fail.
We all know what IT systems are like. The biggest thing in recent times would be the year 2000 and the millennium bug. Hundreds of billions of dollars was spent around the world to make sure computer systems were ready for the changeover. Of course, many older systems needed to be upgraded, but computer systems are usually replaced every few years because they need to be updated. Many companies, governments included, spent hundreds of billions of dollars at that time.
I recall the night of 1999-2000. I had a Ford Falcon station wagon with a trip computer, and we were wondering, after midnight, if it would start. The only thing that happened was the trip computer, instead of going from 1999 to 2000, went back to 1978. There was a glitch; however it did not prevent the car from starting and I got home safely that night. A lot of computer systems were upgraded at that time. There were also recent changes in the Brennan electorate office, where IT upgrades had to be done.
I agree with the member for Nelson, sometimes when upgrades are seen as essential we end up with systems worse than the original one. The same thing happened out there. Cabling was done and we were hooked up to the Power and Water system, which has an office at the other end of the building. On Saturday morning IT speed in the office is hopeless until after about 12 noon or 1 pm, when Power and Water closes its office. All of a sudden it speeds up in the electorate office. I am not sure what is going on, but I agree with the member for Nelson, sometimes you upgrade, spend a lot of money on systems and see no benefit.
Instead of building a system from the top down this government will build it from the ground up, talking to people who use the system. That was the failure of the previous government and the AMS. The people doing the work every day – there was not much consultation to make sure the new system could do what they do, to understand, and the IT people did not understand the business government undertook every day. Unless you understand the business you cannot design a computer system.
Back to what $70m would do. In Education, if we had $70m I could build more primary schools, special education schools, a couple of large high schools and probably a pool in almost every community school. We could completely repaint 82 separate schools, inside and out. It would provide 58 separate preschool expansions, like the one we announced in Rosebery last week. The list continues.
What would $70m give the Department of Lands, Planning and the Environment? It could provide headworks – power, water, sewerage and roads for an entire suburb.
In excess of 2000 homes could be serviced with the same amount of money Labor spent servicing a dodgy computer system. You talk about the cost of living and we hear about decisions like this. The opposition asks what this government is doing about the cost of living and never once looks at itself and wonders how it managed taxpayers’ money whilst it had the Treasury benches.
Territorians need to know the truth. The truth is they mishandled the money badly, and each and every one of us is today paying the price for the pain left by the former Labor government.
This is one example of Labor waste we have identified since taking government. We will continue to wipe out the waste to get better deals for Territorians, which is why we were voted to govern for Territorians.
The Leader of the Opposition asked why we continued to spend money on the system. That is pretty unfair when you are given a basket case you need to learn about. We are taking information from experts in the field to see the best way we can – we were not about to walk away from a $40m investment in the system. It was not the time to make the decision, but, as Abba Eban once said:
- History teaches us that men and nations behave wisely once they have exhausted all other alternatives.
In this case we have exhausted all other alternatives and this was the wise decision to make. Turn off the system and let us look at what will work today.
Mr WESTRA van HOLTHE (Essential Services): Madam Speaker, I support this statement on replacement of the Northern Territory government’s Asset Management System and to let Territorians know about the disgraceful waste of money by the former Labor government. Sadly, despite the huge amount of money, resources and expertise thrown at this system across government, there is still no light at the end of the tunnel regarding a fully functional asset management system. The Northern Territory government has no option but to turn off the tap, or in this case the flood, of money which has been poured into the AMS and start again.
My ministerial responsibility of Essential Services covers the operational aspects of the Power and Water Corporation. The Power and Water Corporation has also had to invest heavily, much more than the initial estimates, to implement its asset management system, which differs to the system implemented by the NT government. However, at this late stage it seems there will be no benefit or cost saving to Power and Water in dumping its AMS, and the corporation will soldier on with it.
In 2006 the Power and Water Corporation, in line with moves by the Northern Territory government, also initiated a project to enhance its asset management capabilities, including the upgrade of asset-related management systems. As was the case with the Northern Territory government, the key driver was to replace or upgrade the suite of old systems which were no longer supported, poorly integrated and beyond their economic life. The initial objective was to implement a standard ‘off the shelf’ asset system, using the standardised processes within that system, integrated to a new geographical information system – GIS – and the existing financial system.
In 2008, a review endorsed by the then Power and Water Board of Management moved the planned solution to a more sophisticated asset management system capability. This was based on a revised regulatory and operating environment. An implementation partner and project planning and process design partner were subsequently appointed in early 2009 through a tender process.
A revised business case was developed and approved in 2010 based on a completed design. From 2010 to 2012, the solution was further developed and changes were made to the project to compensate for issues regarding data cleansing, testing, business readiness and defects.
Changes were also made to the project as a result of the Casuarina zone substation failure and associated recommendations from the Mervyn Davies report supporting the impact in changed asset management capabilities.
The Power and Water Corporation’s asset management system finally went live in August 2012, with initial work on the project having begun in 2006. Almost a year later, in July 2013, a project was established to address high priority deficiencies, defects and data issues within the asset management system.
However, despite these faults, the asset management system is now currently used across all Power and Water business units. In a nutshell, the scope and implementation of the corporation’s asset management system covers: the creation, management and disposal of all assets; works management including identifying, planning, scheduling and completing works; project management, faults and outages, including managing planned and unplanned events and internal service requests; inventory management, ordering, receiving and issues stock into warehouses; procurement and contract management including the full procurement cycle of assets; geographic information system; the geographic display of all assets; and all reporting.
The benefits of installing such a system, on paper, are quite attractive. The broad scope of Power and Water’s asset management business would be provided through a single integrated system. All high level asset management processes would be consistent across Power and Water. The AMS would essentially establish a reporting base for assets. However, in reality, the downfalls far and away outweighed the benefits.
The key downfalls have been around the assumptions and choices made when implementing the system and include that users would be happy to move from existing, highly customised systems, based on Power and Water’s existing processes, to an off-the-shelf system with standardised processes, but anything related to assets should be part of the scope of the single asset management system. Therefore, a high-end system was used where other solutions may have been chosen for components, and choices regarding the implementation of less stringent business rules would be applied within the asset system, which drives consistency of data.
Customisation of the core asset management system, which was supposed to provide functionality closer to original business processes rather than new standardised processes, has led to a higher than expected system operating cost. The current integration between the core asset management system, the GIS system and the financial management system needs improvement, and there are data quality issues with information transferred from the old systems into the new system.
It must be acknowledged that not all functionality, productivity gains and value envisaged in the original business case were realised. An independent review had just been completed by KPMG into Power and Water’s asset management system. The scope of the KPMG review was to conduct a check of asset management processes across Power and Water, analyse the suitability of current AMC systems in respect of those processes and define a road map and future directions for the asset management processes and system.
In a nutshell, the review found the most appropriate and cost efficient path forward for the Power and Water Corporation was to stay with the asset management system, as moving to an alternative system would not provide any advantage. This was the best of a bad case versus worst case scenario.
Power and Water has had no option but to continue to improve the Power and Water asset management capability, where it is hoped appropriate business value can be eventually clawed back from this massive investment.
I commend the minister for bringing the dismal state of the Northern Territory’s AMS to light, and for the explanation to Territorians of this complete and utter waste of taxpayers’ money.
Madam Speaker, I support the statement.
Mr GILES (Chief Minister): Madam Speaker, I reiterate the comments made by my colleagues in relation to the asset management system, and pass on a thank you to the Minister for Corporate and Information Services, who is also the Treasurer, and acknowledge the tough decision to terminate the asset management system – something that has been contemplated for a long time.
I was a previous Minister for Infrastructure, minister Styles is the current Minister for Infrastructure, which is where the asset management system was once held. We have both had a lot to do with the asset management system identifying the needs, concerns and problems that date back quite a long time, and working out ways to bring a resolution to the ridiculous expenditure which occurred throughout the program.
The fact remains that we, as a government, inherited this legacy, as has been described by previous speakers – what the program was supposed to do, what it did and the expense to date. It is unfortunate it has taken so long for a decision to be made; however, we were contractually bound until now and unable to terminate the program.
It is correct the program was supposed to cost around $7.5m and initially designed to bring a range of other programs together. However, to date they have spent $70m, throwing good money after bad trying to fix what is, fundamentally, a Labor mess.
I remember being in opposition talking to a range of private companies – providers of government services – particularly the repairs and maintenance industry for public housing. They told me about concerns with the roll-out of the asset management system. The concerns were about its application, usability and the functionality for the end user and departments. At that point – the member for Port Darwin also raised a concern – we knew it was an endless bucket of money causing great concern and not resolving problems.
Coming to government, we sought to identify ways to fix a continuous and ongoing concern with the asset management system, but to no avail.
I briefly highlight the concerns about the asset management system. It is true that approximately $70m has been spent on this system. It will now be closed down and a cheaper alternative model put in place. Trying to get the old system back up and running is, in many ways, a significant problem.
To see the shadow minister, who has been lumped with this basket case, speak for a little more than four minutes shows Labor’s contempt. To see the Leader of the Opposition not even speak to this – a former Minister for Infrastructure, former Minister for Corporate and Information Services, former Treasurer, someone who oversaw expenditure for this program – is a sad day. Clearly, she wants to take no responsibility. She is Leader of the Opposition, until recently was Treasurer, who handballed the shadow Treasury portfolio to the member for Barkly because she knew how much pain it was causing her because she is the instigator of Labor’s $5.5bn debt legacy that hangs around Labor’s neck like a bad clove of garlic.
Having seen the member for Casuarina’s contribution to this debate, albeit a mere four minutes, I looked through some simple things that could be conducted in a four-minute time frame. I am not suggesting the member for Casuarina is an athlete – I am not saying he is not, but not suggesting he is. I compared what he might be like if he stood next to Roger Bannister – see if he could run a four-minute mile, but I do not think he could do that.
I thought about what else you could do in four minutes. The Minister for Lands, Planning and the Environment gave a very good breakdown of how much money was being whittled away per minute during the member for Casuarina’s speech. For two minutes it was $35m, and we wondered what you could do with $35m. He wondered what you could do with $70m or $16.5m.
Do you know what else you can do in four minutes? You can swim 400 m at the Olympics. I could not see the member for Casuarina standing alongside Roger Bannister, or the Leader of the Opposition for that matter, but there are many things you can do in four minutes apart from wasting away $70m. You could seal 100 km of road in bush communities. You could build 140 new houses under the debacle of a program known as SIHIP. You could have $70m into repairs and maintenance in the housing industry. You could sit around, you could buy two packets of two minute noodles and cook both of them, one after the other, or like the member for Casuarina, you could waste away $70m.
You could eat a watermelon and spit the seeds out in four minutes, or you could whittle away $70m – a big Territory watermelon. You could watch the 2006 movie called Four Minutes by Chris Kraus. You could count to 500. If you wanted to think about, ‘Should I waste $70m of taxpayers’ money or count to 100?’ you could do both at the same time. You can count to 500 and waste away $70m under the asset management system according to the shadow minister, the member for Casuarina, but at least he took four minutes.
The Leader of the Opposition, the former Minister for Infrastructure, former Minister for Corporate and Information Services, former Treasurer and former Deputy Chief Minister failed to speak on this because she is quite happy to see $70m wasted away. Four minutes – you could climb the world’s tallest building in the elevator. You could go up and down in four minutes. You could save the Territory a whole lot of money or you could spend $70m.
The average time for a competent person to build a website these days is four minutes. In four minutes you could build a website or you could waste away $70m, like the Leader of the Opposition and the member for Casuarina have. You could twerk along to Miley Cyrus and Wrecking Ball for four minutes, or you could listen to the member for Casuarina whittle away $70m. You could break the four minutes down into one minute intervals. You could conduct a one-minute intelligence test five times if you were the member for Johnston, and four times if you were the member for Casuarina.
You could sit up late at night – I have done this many times over many years and remember when the infomercials came on late at night. One of the first infomercials I remember seeing was about 10-minute abs. Six months later you would be sitting up late at night – nine-minute abs. Then, all of a sudden, eight-minute abs and seven-minute abs would come on. You could imagine people sitting up at night, normally after a big night out, watching the seven-minute abs show and thinking, ‘I have to buy that video on seven-minute abs’. I have not sat up late at night watching the infomercials, but surely we have reached a point where there are four-minute abs.
I recommend to the member for Casuarina and the Leader of the Opposition, sit up late at night. You might be able to spend $5.95 and buy a four-minute abs video. The member for Casuarina and the Leader of the Opposition might be able to do the four-minute abs routine instead of wasting away $70m, quite a …
Mr Tollner: A few hands of Euchre.
Mr GILES: You could play two hands of Euchre in four minutes.
In all seriousness, this is not a laughing matter. This is $70m wasted away on implementation of a program with poor governance and oversight at the ministerial level. It has seen money flow out the door. As the Treasurer, the Minister for Corporate and Information Services said, the money has flown out the door to mainly interstate companies or consultants. It has not been reinvested in the Northern Territory or on fundamental pieces of infrastructure which can help build our economy or support development in the education sector. Is has not helped provide the long required repairs and maintenance to Royal Darwin Hospital, or put new beds in Royal Darwin Hospital, which costs around $1m per year to run. We could have 70 beds out of that loss. It is a complete travesty.
I think of the irony in some of the commentary from the Leader of the Opposition and Labor – the party which does not have a policy or a plan, unlike the Country Liberals – of them raising questions about a few thousand dollars but can whittle away $70m in a poorly-formed, poorly-crafted speech which lasted four minutes and not recognise they have made a mistake, provided poor governance and not apologised for what they have done to the Northern Territory through lack of investment and resources of $70m. They have not even apologised for increasing the debt level by $70m for the expenditure. The Leader of the Opposition has not apologised for her role in wasting the $70m, which I find extraordinary – $70m forgotten. Nothing was done in that regard, and I find the way she goes about her business on an everyday basis completely hypocritical.
I commend this good statement to the House. It corrects the record and provides information about how the government is accelerating deconstruction of the asset management system. It will cost us a lot of money to go back to the old system, albeit with middleware technology, and get us back to a basic system not as competitive as we would like to be on a national standing, but one which will allow us to get on and do business.
Unfortunately, I commend this statement to the House but wish we were not in this position. I wish we had $70m more in our bank account to spend on much needed infrastructure for Territorians.
Mr TOLLNER (Corporate and Information Services): Madam Speaker, I thank everybody who has contributed to this debate, including the member for Casuarina who contributed in a small way.
Someone gave this poster to me on the way down today, the headline on the front page of the NT News. It talks about ‘$70m of your Cash Wasted’. For future reference, it is a good thing if I table this so future Territorians can see how Labor governments wantonly throw around other peoples’ money.
It was disappointing listening to the member for Casuarina, and I appreciate the lighthearted approach the Chief Minister took in explaining what you could do in four minutes. He, somewhat, made light of a very difficult decision for government. Scrapping the AMS has been a difficult decision. When you spend $70m on something, to throw it away is not an easy decision to make but staring down the barrel of the alternative – to fix it knowing the cost was another $120m and five years of work – one quickly came to the conclusion we were throwing good money after bad given there would be no guarantee we could get the system operating.
This project was a dog from the start. The idea was to combine nine perfectly functioning systems into one, and that one system had to be the biggest and best in the world at the time. We engaged a mob called SAP who, without a doubt, is a market leader in this type of system around the world. The problem, which has been highlighted, is there was no expertise in the Northern Territory to implement such a system, which means we are left at the mercy of IT specialists and experts interstate. The problem with SAP is it is used by a number of governments and large organisations around the country, and the amount of expertise available to the Northern Territory government, being a very small jurisdiction, is limited.
Consequently, as speakers have said, we have seen a myriad of different advisors, experts, consultants, engineers and the like flown in from all parts of the country to fix a system they were not very familiar with in the first place. That added to the cost substantially but, irrespective of that, the system would never fit the Territory situation.
I was having a conversation with a good mate only a couple of minutes ago, an old pastoralist from Borroloola, and he was trying to get his head around this. I said, ‘Mate, it’s like this. You have a choice between a Landcruiser ute and a Porsche SUV’. You look at the Porsche SUV and think you would not mind it to do the fencing on your property. You buy the Porsche SUV and, without a doubt, it is one of the great cars of the world, but when you need it for a fencing contract, it is probably not so suitable.
The first thing you discover is it bottoms out on some of the big hills, in ditches and gullies, the tyres are not made for the terrain and it is difficult to get in and out of when you are running a fencing outfit. Some of the star pickets do not fit in the back, the barbed wire scratches the upholstery, and you have a mess of problems and expenses because, lo and behold, the local mechanic at Borroloola does not know a damn thing about servicing a Porsche SUV. You throw your hands in the air and say, ‘I have the best car, why aren’t I getting the best result from it?’
He acknowledged he would never buy a Porsche SUV to do his …
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Visitors
Madam SPEAKER: Honourable members, I advise of the presence in the gallery of a Scout group from Humpty Doo, accompanied by their leader, George Kasparek. Welcome to Parliament House, we hope you enjoy your time here.
Members: Hear, hear!
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Mr TOLLNER: Madam Speaker, I would like to acknowledge the Scouts. I was a Scout for a long period of time. I love the Scouts; they are a great bunch of people. It is a good thing to do and you learn lifelong skills in the Scouts. I encourage you to stick with it and do a good job. It is a great pastime.
I was talking about the pastoralist who buys a Porsche to do his fencing contract and this old fellow, a friend of mine, said, ‘I would never buy a Porsche SUV to do the fencing. I would much rather the old Cruiser ute because it is made for the job.’ That is what we are looking at here.
We have the expertise and ability in the Territory to provide the solution the Territory government needs. Not only that, but we build capacity and capability in our IT businesses. That is vitally important if we are to grow and develop the Northern Territory. IT is an enabler of business and, as such, you want to make sure you have a strong, vibrant, and efficient IT sector to help business grow and develop into the future.
The member for Casuarina tried to suggest this is the current government’s problem because most of the costs have arisen whilst this government has been in power. It is an interesting point to make. The fact is, it was right in the middle of the former Labor government’s period – about 2006 or 2007 – when the decision was made to go down this path, and contracts were signed and deals were done to put this AMS in place.
It is not possible for an incoming government to unwind or get out of contracts entered into by a former government. That is obvious. Tomorrow, I am sure we will hear more about situations where the previous government created conditions that are impossible for the next government to change or turn around.
This AMS belongs wholly, solely and squarely on the shoulders of the former government which, I hesitate to suggest, is why we only heard one speaker from the other side who only managed a four minute contribution. The fact is Labor opposition members are hanging their heads in shame on this. They know they let down Territorians and made poor decisions.
I remember a similar statement I delivered in December last year on the AMS. The member for Casuarina gave a similar explanation in a similarly short period of time then quickly sat down. His premise, at that time, was ‘None of us in government are IT experts, these things are extraordinarily complicated. You cannot blame us; this was the fault of the bureaucracy and the people advising us.’
That is almost emblematic of the entire time the previous government was in operation. It had no oversight of practically anything it was doing. It was like government was on a remote control. People say to me, ‘We do not see too many CLP ministers at functions in the community these days, what’s going on?’ My response is CLP ministers are working. They are in their office doing their best to make sure they have their hand on the lever controlling what government does and taking an active interest in government. Yes, it is a failing of this government that we are not out in the community more. However, when you have the mess to fix up we have been left with, it is difficult to extricate yourself from the office and make decisions that will see better government in the Northern Territory.
The previous government, by the admission of the member for Casuarina, did not have the time, expertise, or inclination to be involved in its first priority, which is running the executive level of government. That sums up the previous government to a ‘T’; it was all about ‘being in’ government not ‘operating in’ government. Holding the levers of power was all they were interested in not taking an interest in what they were doing. It was more government for government sake than getting the government operating the way it should be.
Mr Deputy Speaker, I thank everybody for their contribution to this debate. It will be testing times ahead. Obviously, a lot of money still has to be committed to make sure our asset management systems, through ASNET, are working properly. However, I have full confidence our public servants have the capability required to manage this process, and full confidence that private sector businesses in the Northern Territory have the capability and intelligence to manage this new way forward. The new way forward offers enormous opportunities for the way we do business in the Northern Territory. It will allow people to operate remotely from their office. People will be able to operate from iPads, iPhones, smartphones and other devices. We can add programs to it as time goes on, and we can start moving in a very structured way towards a one-stop virtual portal.
The AMS has been a sad and sorry saga. I am glad we can put it behind us and move on to something that might work.
Motion agreed to; statement noted.
MOTION
Note Statement – Planning for the Future
Note Statement – Planning for the Future
Continued from 20 February 2014.
Mr ELFERINK (Attorney-General and Justice): Mr Deputy Speaker, planning has to consistently be one of the greatest bugbears for any government. Planning will throw up more contested space than any other decision-making process of government, which is why this government went through the exercise of creating a new Planning Commission to enable us to look more broadly at what is proposed or what could be proposed for the future development of Darwin.
Planning, unfortunately, if not done well, becomes an ad hoc process in which things are rolled out piecemeal and not reflective of any necessary planning philosophy so you end up with products where planning has given way to expediency and those types of things. The nature of planning is such that we seem to be returning to something that was around a long time ago.
In the 1950s, particularly with the advent of the internal combustion engine becoming a cheap commodity available to almost anybody who had a few shekels to rub together in the western world, we ended up creating an environment which saw everybody getting their little quarter acre block of land. That is also true for Darwin. The northern suburbs were created in the halcyon days of cheap transport and cheap fuel to move us around. Fuel, however, is no longer the plentiful cheap commodity it used to be. I remember car parks were built to accommodate large cars and, for some strange reason I still have trouble fathoming, the larger the car the less doors it would have.
One might remember vehicles such as those built by Ford, particularly in the United States, where the cars could be measured in acres yet only had two doors. If you climbed into the back seat you could have been climbing into a king size bed considering the amount of space in the back. I too enjoyed those halcyon days. One of the first cars I owned was an old YZ Fairlane, which had a 351 cubic inch V8 to push it along. On top of it, I had mounted four barrels of Holley carburation. To enhance its forward propulsion I had a twin two-inch exhaust system with spectacular extractors looking like so much metal spaghetti hanging out the sides of the exhaust manifolds. It was truly a fine car to drive. Merely filling up the carburettor reservoir nowadays would be enough to keep a Toyota Prius on the road for several weeks.
That is the nature of those times, and planning in our cities reflected those times. We think nothing of sitting in a car for many hours in larger cities around Australia and in the world, then commuting tens of kilometres to get to the workplace. This is a new manifestation of our civilisation, because, prior to the plentiful abundance of gasoline and the cars to put it in, people lived very close to their workplace.
It seems we have come full circle, because nowadays the price of gasoline means we have to be far more efficient in the way we use it. One of those ways is to revisit what we do with our cities because cheap locomotion, until such time as we get on to an electrical grid driven by something like fusion energy, will be a thing of the past.
It is interesting to look at places like Europe. I encourage members, the next time they are in Europe, to look at the old cities of Paris, Barcelona, Madrid, London – Berlin not so much because it has a habit of getting wiped out, but the older city centres. The first thing you will notice is it is almost impossible to get a car into some of those places, particularly Italy, where the Vespa scooter has found its reason to exist. It is no surprise, on our broad roads designed to take very large cars, we see more 50cc type motorcycles getting around for the reasons I have just described.
The other thing you will notice in that environment is the substantial amount of mixed use of land, and there is a lot to be learnt from that philosophy. I find it unfathomable that a CBD should have to drain itself every day only to be filled up the next day. A city is not a city until it is full of people. Until it is full of people it is a large pile of concrete, steel and glass. What makes a city work and display a character is the nature of the people who occupy it and the things they do there. I was often struck by the manifestation in the 1980s of a style of architecture which was exclusive to people. If you look at the 1980s, when the corporate monolith, especially in the United States, wanted to express the heights of its power, it tried to express it in a form of architectural exclusivity with mirrored glass all the way to the footpath saying, ‘I am excluding you’. More than that, the architectural style of exclusion gives you the strange sense, when you walk past, of being watched from within. It gives me a sense of disquiet that not only am I excluded, but I am observed by some other unseen person on the other side of the mirrored glass.
A streetscape of exclusion is one which quickly drains itself of people. People will move past this environment; they will not stay. They will go places they feel comfortable, and people are comfortable in not necessarily quiet places, but places where they are included.
I ask honourable members to cast their mind back to the old European cities I just described. If you walk down a street in Barcelona, the first thing you notice is there is no clear distinction between where the street stops and the footpath starts, then where the footpath stops and the shop – and on occasions people’s homes – starts because what goes on in those homes and shops spills out onto the street. You see this in places which have not been designed around the motor car, so older cities demonstrate it particularly well.
I love the fact that increasingly in the architecture of Darwin more and more people are living in the CBD in buildings of mixed use, which means you can go to a number of buildings in Darwin, travel down the lift from your flat and walk past shops and offices in the same building. This is good because it creates the belief we are living in a metropolis in the traditional definition of what metropolis means. The ‘polis’ refers to a city, but it is also a reference to where we get the root word for population, because the two are not immediately separable.
That being the case, I welcome any plan which encourages a merger between the streetscape and the shopscape at the street level. I do not like mirrored glass street levels, I like coffee shops, pizza barns, dress shops – well, not so much dress shops, gentlemen’s clothing stores, I do not want people to get the wrong idea – and I want an interaction, increasingly, between those shops and the streetscape itself. In Europe you see it, and we are just starting to see it here.
Melbourne, a number of years ago, went through this problem. In the 1980s you could have discharged a Howitzer down Collins Street on a Sunday and not alerted a single person to your presence, because Melbourne would drain of people every day. It left Melbourne with a sense of emptiness, which is a shame because it is a vibrant, almost intimate city, with all the little channels and walkways that creep their way through in different directions. Now many people have been encouraged to return to the Melbourne CBD to live there. People are increasingly doing that because it is cheaper to live inside the Melbourne CBD – buy a unit or flat and walk to work, and Melbourne is a walkable city.
Darwin, particularly during the Wet Season, is less walkable, but is a city that should invite taller buildings than it currently has. I know the minister has explored the idea of speaking to the – I think the Defence authorities have placed the 90 m AGL cap on Darwin. I welcome that because where casting shadows may not be a good thing in a place like Melbourne or New York City, casting large shadows across the CBD of Darwin, I suspect, would be welcome, particularly in the hotter months where we would like shadows to appear on our streets. I would like taller buildings to do that.
As a consequence, I understand that is one of the reasons we want to seriously look at changing the height limits in Darwin. I would approve of that because Darwin should reflect it is growing up in the 21st century.
To speak more specifically about my electorate of Port Darwin, I wait with bated breath for a response or suggestion from the Planning Commissioner, Mr Gary Nairn, in relation to what we are doing with the old hospital site, also Flagstaff Park. I believe the time has come to bite the bullet on both these sites and start seriously looking at what could be done with them, balancing the needs of a growing city with the needs of an existing city in how much we maintain for parkland and how much for some other form of development.
Whatever it is, I pray it will be done tastefully and well. I believe – I am looking at the Planning minister who will either nod or shake his head – the report from the Planning Commissioner is due in April, and I look forward to it because I know a great deal of consideration has gone into what we can do in both locations. I am sure no matter what is suggested, it will be controversial.
The old Darwin hospital site has been controversial for a number of reasons. Some people feel it is a source of controversy because nothing has been done on the site, others if anything is suggested for the site. Some people will find it a source of controversy that buildings have been proposed for the site, as the former government discovered. Others will find it a source of controversy that anything but a park be considered. I have had other people complain to me that it will be wasted on parkland. There are a divergent number of opinions.
I understand and accept no matter what is proposed for that site, and the Flagstaff Park site, it will be a source of controversy. Therefore, as local member, whatever we do with that site and whatever is recommended by the Planning Commissioner, I hope it is both tasteful and respectful of the site in the sense it acknowledges the unique nature of it and the Flagstaff Park site.
Every city needs a plan. The former Planning minister, Tim Baldwin, was excellent in land use objective plans and created them for Darwin and Alice Springs. I was particularly familiar with the Alice Springs land use objective plan when it was created. Nothing like those plans has come into existence since that time.
I expect the plans being put together by the Planning Commissioner will help fill that void. Tim Baldwin, the former Planning minister under the CLP government, was probably the most thoughtful Planning minister we ever had in land use objectives. They were clearly defined plans which reflected a good approach in clarity of thought. I miss those plans because they were replaced with a system be best described as ad hoc and, at worst, unfortunate.
I remember the Gotham structure suggested by Tim Baldwin at the time – keeping the taller buildings along the spine of the city with shorter buildings towards the edge of the city. Once that was made clear to the community it was generally accepted. The former Labor government scrapped the idea of the Gotham style and basically said 90 m AGL, pretty much to the edge of the city. The risk they ran – and it has become manifest with the passage of time – is the best blocks would be developed first. They were on the outer ring of the city, which means rather than having the taller buildings in the spine of the city they are around the rim of the city with infill occurring later.
That seems to have occurred, so blocks like the old Woolworths site on the corner of Smith and Knuckey Streets has been an idle eyesore for a number of years, and has been mentioned in this House on a number of occasions. A sale was recently reported on ABC from the previous owner, Kerry Manolas, to Gwelo, if I understand it correctly. I hope what is placed on that site – I acknowledge Even Lynne’s contribution to the development of Darwin – is worthy of a site of that size in the middle of a capital city.
Darwin is no longer the city I grew up in. That city was a country town perched on the edges of a British Empire which had only just wound up. The tallest building in Darwin in 1969 was the old Post Office at three storeys high, and there was no elevator in town. I remember when the T&G Building was constructed my father drove the family into town to look at this six-storey finger of humanity pointing at the gods above, marvelling at the height of this enormous building. The Travelodge soon came along and, once again, we got to marvel at this enormous structure of some 10 or 12 storeys.
Since that time Darwin has developed rapidly and continues to do so today. As I drive through my electorate of Port Darwin and look left and right, I see cranes everywhere. There are 15 or 16 buildings under construction in the CBD at the moment, with as many again to be approved for construction in the not-so-distant future.
Some architecture I am not happy with. Synergy Square is neither synergist nor square, and has too much of the worst parts of Hong Kong’s architecture captured in it.
Nevertheless, there are other buildings. Whilst it was controversial, 130 The Esplanade has demonstrated to the community it was a good and worthwhile building to have constructed. Evolution and Mantra Pandanus are two other worthwhile buildings, and a number of other buildings are looking good. Under construction right now is the Paspaley Building on the corner of Bennett Street and the Smith Street Mall. I look forward to seeing that completed because it will be a fine building, and I look forward to what is being done on the ground level there too.
During the luncheon period I had cause to drive past The Avenue, currently under construction. I noticed the area out the front is already open to and used by the coffee shop being built there, and that looks like a good way to have a synergy between the streetscape and the building behind it. It is the epitome of what I like in planning overall.
However, we need a plan and a philosophy which understands the modern world. One thing we have to understand in the modern world is fuel is more expensive. I note the former Planning minister, now Leader of the Opposition, suggested a number of years ago densification was the way to go into the future – I have to declare an interest, I have a 1400 m2 block in The Narrows – but that densification was never achieved under the former government. This government will have to look at it eventually, and we are waiting for the Planning Commissioner’s report in regard to that.
Blocks of 800m2 and larger will be an anachronism; a hangover from the urban sprawl environment of the past and will no longer suit modern planning approaches because urban sprawl is resource intensive in how you service it with headworks and those things, how you live in it and how you travel to and from work when you go from a residential area back into a city.
I look forward to a future where cities reflect the confusion and hubbub of the human condition and we do not have this stale approach of commerce here, residential here and retail there. I would like to see an environment where commerce, retail, offices and residential enjoys an amalgamation which captures the spirit of what people are. They are multifaceted, often confused, loud, brash and they give a sense of real humanity occupying a metropolis. A metropolis, of course, is a place where a lot of people live.
Mr CHANDLER (Lands, Planning and the Environment): Mr Deputy Speaker, I thank all members who have contributed to this debate. Probably nothing is more important, from a government perspective when it comes to infrastructure and planning, as planning. I have to beat my colleagues down with a stick to keep them away from Lands and Planning. A few would love to take the reins of Lands and Planning, and I am reminded of that from time to time, because it is an exciting new era of government business.
My father asked what I would like to be remembered for in politics. It would have to be good planning, and that we have to forget about planning for election cycles and have a bipartisan approach to a plan which is 20, 30, 40 or 50 years out from where we are today. I have said time and time again, every time I drive through a tunnel under a city in other parts of the country, whether it is Sydney or Melbourne, it always amazes me. If people had the fortitude and foresight to plan better corridors we would not need as many tunnels today.
We have a blank canvas in the Northern Territory, with a small population in the land size we occupy. With it we have some marvellous opportunities to get the planning right for generations to come. This is why we have been working damn hard to find not only infill sites for residential developments, but looking at future greenfield sites, together with industrial sites and commercial land we can use not just in the greater Darwin area, but in other cities and town across the Northern Territory. Looking at places like Katherine, Pine Creek, Tennant Creek, Alice Springs and all the Indigenous communities I believe, from a development and prosperous economy point of view, the Aboriginal Land Rights (Northern Territory) Act has hamstrung development for years. Whilst well-intentioned, Indigenous land rights have curtailed many opportunities for Indigenous people to grow their businesses and prosper. They should have every opportunity to that.
We are working on that at the moment trying to sign off on land agreements and putting in place, in many communities, the opportunity for people to buy their home for the first time. This can only happen when we solve some of the land tenure issues. There is so much to offer in some of our remote areas, but you cannot get there with the land tenure system in place.
It will be fantastic the day Indigenous people living in any part of the Northern Territory can approach a bank to borrow money and purchase their home or a business, whether it be a butcher or baker shop, a tourism venture they want to provide for not only the economy of the community they live in, but jobs for their people and families. As Territorians, we should all look forward to that day. It takes good planning for that to occur, and at the moment we are looking at current legislation and how we can improve the processes.
It is all vitally important and, as the member for Port Darwin said earlier, even looking at things like building heights in town. There are some great examples of buildings around town and some poor examples, but I do not want to see buildings back-to-back providing a lack of flow-through for breezes.
I would like to see buildings, and the set-back on the land they occupy, be lessened to allow fantastic streetscapes of walkability between buildings. If you take away the developers’ ability to capitalise on every aspect of the land, you need a little give in other areas, and the time is right to look at building heights in Darwin. The Evolution building has been the mark for some time at the level it is – about 90 m – and we are in discussions with Defence. We will continue discussions with Darwin airport and those involved with the safety of aircraft in and around Darwin. It has a great deal to do with that, but there is no reason many parts of our city could not go beyond 90 m. If memory serves me it is 116 m above sea level, but I am not saying I have someone knocking down my door wanting to build a 60 or 70 storey building today, far from it.
The market should be driving building heights. As the member for Port Darwin mentioned earlier, the iconic Woolworths site in the middle of the CBD, probably the most important site, location wise, this city has – we should look at having something special built there, whether or not 90 m can be looked at, and any potential building could be more than the 30-odd storeys we allow today.
Planning must include not only election cycles, but 20, 30, 50 years from now. That is why we are talking with Defence about acquiring certain land it has today to allow space for future corridors, talking with landowners surrounding Darwin about how we can secure some of their land to ensure we have future freeway corridors and corridors for railway extensions, and that we get the planning right.
I become frustrated when the STPs – the same 10 people who always complain about every development in the Darwin area. Sometimes you must remind people even Nightcliff, for instance, grew peanuts at one stage. If you look at aerial shots of Nightcliff years ago, you see shrubbery and trees. It is not houses, but at some stage it was developed. Often people who live in houses today are the ones who complain about development, preventing other people from living in houses which they have the right to.
People complain about water supply and dams. ‘There will be no dams for water in Darwin’. I sometimes remind people when they turn the tap on in their house today they expect potable water to come out. In 20 or 50 years from now people living in Darwin will have the same expectation. Can we teach Territorians to be water-wise? Absolutely
Compared to southeast Queensland and Victoria, we are big wasters of water. We use about three times the amount of water per person someone living in Melbourne or southeast Queensland does. Yes, we can be more water-wise, but we will still reach a point, whether it is 10, 20 or 50 years from now, where we will require new dams because people expect to turn the tap on and have potable water. We cannot do that without planning for new dams, and we must get on with it. We must have the courage to stand up to the STPs every time they complain that we are doing something a little different.
Half the suburbs existing today, even Palmerston, 40 years ago did not exist. They were paddocks, and today we have a vibrant city because of planning and development, and that will continue into the future. We must plan well for development.
Alice Springs is a fantastic city, one of my all-time favourite cities in the world, although it is one size bigger. Last year we had the opportunity to go to the United States and transited through Phoenix. Phoenix reminded me of Alice Springs. It was amazing, except it was Alice Springs on steroids. It was enormous and the freeway systems went forever, but the landscape, rocks and hills really reminded me of Alice Springs.
Even in Alice Springs, whilst not having the same expectation of growth the greater Darwin area has, we need commercial and residential land available. It has to be delivered in such a way that we do not drip feed the market and push prices above the reach of average Territorians. That takes good planning. That is why we are working in Kilgariff and other areas of Alice Springs. There is so much potential in that city. Again, we need to ensure good planning for a growing region. That goes for Tennant Creek and Katherine, and every other community to ensure Indigenous people have the same opportunity to buy their own home, or invest in a business on a remote community, just as they can in town. We have to get land tenure sorted through good planning.
In much of the debate we heard how the previous government worked hard to get companies like INPEX to town, which is great. We will continue to see the oil and gas industry grow in the Northern Territory. I would like to think more onshore than offshore because there is a great deal of potential there.
However, residential land sales and land release have not kept up with demand. The only way we can build some robustness into the future of land sales and – I will not use the word cap – temper the market is through land release. It has to speed up; we have to release more land.
The new hospital in Palmerston is a great initiative of the Country Liberals. Moving the hospital to a better site to allow for further growth for the next 50 years is a wise move. The Health minister should be congratulated for that.
We, in the Department of Lands, Planning and the Environment, are looking at the land use capability directly surrounding the new hospital site and the area of Kowandi north, which is the old aerial farm for the RAAF. That land is perfect for subdivision into future housing estates and suburbs. Close to a hospital would be A-grade land. It will border a rural community, a hospital and a city the size of Palmerston. It takes good planning to get that right.
In education, which is close to my heart, John Glasby worked on a schedule of what infrastructure will be required for the next 10 years in education. ‘Glas’ has done a wonderful job in looking at demographics across the Northern Territory and working out where we need future schools. We have identified potential hot spots like the suburbs around Lyons and Muirhead and in the CBD. The number of units in town will not always be filled with either older people or people working in the oil and gas industry. Young families will move into these units, putting pressure on the school system in the CBD.
My home town of Palmerston is where growth is happening right now. That is why we are building new preschools there, and why we will build new primary schools and new special education units. The work John Glasby has done demonstrates, quite clearly – using indicators from the Bureau of Statistics and within government departments – future growth and where we need infrastructure through good planning.
This is an important statement because it clearly articulates the vision this government has about the Northern Territory and defines it as a good planner. That is what we need to do. Whether or not the Country Liberals are in government after the next election, or the next two or three elections, whatever we do today must ensure we are assisting future governments of the Northern Territory of whatever political persuasion. What we do today will make a difference to what happens in 10, 20, 30, 40 and 50 years from now.
It is important to keep up our infrastructure, keep up our land release programs and change the legislation wherever we can to ensure we get rid of red tape and duplication. That is so important if we really want to assist the Northern Territory to develop well into the future.
Some of the things I found in old legislation of the Department of Lands, Planning and the Environment – the duplication that exists. You shake your head thinking, ‘Why is this not looked at? Why has this not changed?’ I have a perfect project for the Planning Commissioner: pull apart the current legislation and work with developers and people who have been in the system for many years to uncover areas for improvement, whether it is duplication or legislation that is well past its use-by date.
One thing I think former ministers would agree with is spot rezoning. You cannot stop somebody applying for it, but it always irks you because it is outside the planning scheme. When you have a number of spot rezones in one area you know it is time to look at the whole area and provide master planning. The CBD requires it, areas around Parap and other inner suburbs require it, even older areas of Palmerston and the northern suburbs could benefit from some changes, so we are looking at that now. We are ensuring we set future Territorians up with a robust government which has streamlined legislation and done things to benefit Territorians into the future.
From my point of view, getting the corridors right, putting land aside now we do not have to buy in the future – things like the Towards a Darwin Regional Land Use Plan caused some debate over Elizabeth River. That is what it was designed to do, because the Planning Commissioner’s job is to come up with concepts and ideas for this government to consider. That is what we will do, we will consider. However, until we make a decision it is not government policy. It is an idea from the Planning Commission, and that is what we want from our Planning Commission.
This government has its eye squarely on the ball when it comes to future planning for the Northern Territory. We have the right team in place. John Coleman and the rest of the team in Lands and Planning have a focus on the Northern Territory. They can see clearly what we can achieve through good planning, good leadership and a Country Liberals government fulfilling the dreams of Territorians through good planning.
To all those who contributed to the debate, thank you.
Motion agreed to; statement noted.
MATTER OF PUBLIC IMPORTANCE
Splitting of Power and Water Corporation
Splitting of Power and Water Corporation
Mr DEPUTY SPEAKER: Honourable members, the Speaker has received the following letter from the Leader of the Opposition which reads:
- Madam Speaker
I propose for discussion this day the following Definite Matter of Public Importance:
‘The failure of the Government for its inability to govern in the interest of Territorians. Despite staking its reputation on splitting the PowerWater Corporation, the Government is now so divided and paralysed with infighting that it cannot proceed with the legislation. The Government is attempting to hide the full impact of this legislation and their privatisation agenda from the voters of Blain by delaying the Bills until after the Blain by election.’
Yours sincerely
DELIA LAWRIE
Leader of the Opposition
Is the proposed discussion supported? I call on the member for Karama.
Ms LAWRIE (Opposition Leader): Mr Deputy Speaker, I thank my colleagues in the opposition for supporting this matter of public importance. Ever since we became aware of the government’s agenda to split Power and Water we have been deeply and gravely concerned about the impact it would have on the delivery of essential services across the Territory.
Members of this House would be aware the opposition, on numerous occasions, has called for the legislation to be fully scrutinised by a committee of parliament with the ability to draw experts before it. One reason we continue to call for scrutiny at such a level is the far-reaching impact any dramatic changes to our utility, our essential services, would have on Territorians. In this instance I refer particularly to Indigenous Essential Services. It took an admission before the energy committee on Thursday, by the Chair of Power and Water Corporation about the under-funding of Indigenous Essential Services, to throw somewhat of a spanner in the works of the Treasurer, Dave Tollner, and his head-long pursuit to split up Power and Water.
We had been warning for some time that Power and Water being run on a profitable basis, the current policy of the CLP government, means one thing for Territorians: dramatic tariff increases. We have seen that happen, and although the current Chief Minister would like to pretend otherwise, the real and stark facts are there.
Since the CLP came to government, electricity tariffs have increased by 25%, water tariffs have increased by 30% and sewerage tariffs have increased by 25%. That is just within 18 months.
We saw a 5% increase in January this year. Despite denial by the current Chief Minister in Question Time today, a CPI gazetted increase in the electricity tariff will occur in July. CPI is currently running at 4.4%, so even if you are generous and round that down Territorians are facing another 4% increase in July, and there has already been a signed off decision by the Treasurer for a further 5% increase next January. Do your maths on that. Another 9% on electricity tariffs will hit the pockets of Territorians, irrespective of where they live, including small businesses.
In total, that will mean a 34% increase in electricity tariffs since the CLP came to government under a cost of living reduction core promise. Why does this pertain to concerns around the split of the Power and Water entity? Splits that occur with a utility have led, uniformly in other jurisdictions, to privatisation sale of assets. The government pretends its agenda is not privatisation but it is pretence, because the way they are splitting the corporation is by taking out the two profitable entities – generation and retail – and creating corporations called GenCorp and Retail Corp.
GenCorp is the one most primed and likely to be sold. The Treasurer is on the record saying they are already in discussions with a commercial generator who is looking at establishing land adjacent to the existing Weddell Power Station. You do not have to be a Rhodes scholar to work out what will come next with the acquisition of GenCorp.
Contained in the legislation that would have been before the House tomorrow had it not been for the infighting the CLP is embroiled in – the government has lost the numbers to pass the legislation, prompting them to defer it until the May sittings – are a few interesting things. One is the government maintains there cannot be a merging of generation and retail – a gentailer – for five years, unless, within the fine print in the legislation, the shareholding minister, the Treasurer, signs off on a merger. The pretence there will be a five-year evening and smoothing out of a competitive marketplace is simply that: pretence. There could be a gentailer much earlier than five years.
There are many concerns buried within the detail of the legislation and we will make sure the public is fully informed of them. The CLP has done everything it can to hide the real information and detail of this Power and Water split from the public, and that, fundamentally, is our gravest concern.
If the CLP believes so fulsomely splitting Power and Water is in the best interests of Territorians – hence they had the legislation before the parliament – why is there no expert report in the public domain so Territorians can consider all the facts and information in this proposed split? There is no expert report. There are musings of the government that say, ‘When you have the committee of the whole and the parliament you get to scrutinise it’. Politicians get to scrutinise it, but the public or the experts are not having their say. That is why, consistently, the opposition, and the Independent member for Nelson, have been calling for separate scrutiny of such a very important body of work the government is proposing.
This is a body of work it has no mandate to do. You did not go to the general election in 2012 saying, ‘If you elect us, we will embark on an electricity reform agenda which includes splitting your utility’. Let us put that aside for the moment. My concern is the nature of the split. Putting the profitable GenCorp into its own entity, and the profitable Retail Corp into its own entity, leaves networks in what I describe as the unprofitable elements of Power and Water. What would be left is the Power and Water Corporation.
The unprofitable elements are water, sewerage and Indigenous Essential Services. One small profitable element they will put into the Power and Water Corporation is the gas sales unit. That is a coincidence – not. The Utilities Commission has a report on the proposed network price increase. Power and Water Corporation sought an increase of about 58% to the network’s price, which consists of about 25% of your electricity bill. That was considered by the Utilities Commission, which has recommended a 43% increase to the network’s price. That is a 43% increase on about 25% of your bill, coming in addition to the CPI increase in July and the 5% in January.
On some very generous low base, conservative calculations that equals about $1000 extra on a large household bill. That is $1000 families will have to find, on top of the $2000 for the large household bill families need to find under this government that sought a mandate to reduce the cost of living. It is extraordinary because the government has done what it can to avoid scrutiny of this.
I wonder to what extent members of government have been briefed about the impact on Indigenous Essential Services, for example. Have members of government been advised by the Chairman of Power and Water Corporation, Ken Clarke, that it is already running at about a $5m per annum shortfall in meeting service demand and service growth is increasing exponentially? Were members of government briefed on that? I doubt it. There has been no acknowledgement from members opposite they are aware of the impact of Indigenous Essential Services being kept within the entity called the Power and Water Corporation, while the profitable entities of generation and retail are carved out. Therefore, folks, there is a revenue reduction to Power and Water Corporation which impacts on any government’s ability or, Power and Water Corporation’s ability in this instance, to ensure it meets increasing service demand.
Instead, what you hear is hollow and empty rhetoric, words around reform agenda, efficiencies and downward pressure on tariffs. The facts speak for themselves. Through every split of any utility across our nation, there has been no downward pressure on tariffs. The exact opposite has occurred. Tariffs have increased between 20% and 30% across each jurisdiction. We have already had a 25% increase, and are staring at another 5% in January and 4% in July. That is before it starts to move into the realm of commercial profit, which, at a guess, is in the vicinity of a 40% to 50% tariff increase again.
These are my guesstimates. The Treasurer will rant and rave at me as he always does, but they are guesstimates based on conversations with experts who operate within the essential services industry around the nation. Treasurer, if you truly want to contest it put the information into the public domain, have it tested rigorously and let it be debated and discussed in public hearings before a committee of this parliament which, up until today, you have steadfastly refused to do.
What has changed? What is the new dynamic? Why do we have, at the last minute, a backflip from the Treasurer in his stated intention of pursuing the passage of legislation during these sittings? What has changed is the decision by the members for Arnhem, Namatjira and Arafura to go into what they describe as ‘negotiations’ with their government around their position because they are dissatisfied with the failure of the CLP to deliver on its bush election commitments. They publicly stated that.
Mr Deputy Speaker, I acknowledge and thank you for your contribution to the 7.30 Report, which was quite illuminating, where you pointed out quite rigorously you wanted Alison Anderson out of the party; you did not want the member for Namatjira in the party, let alone sitting in your parliamentary wing.
Until that point your Chief Minister pretended he was just chatting with them, as he likes to chat with all members of his parliamentary wing, and you blew the cover on that. Thank you for your contribution to that public debate, member for Daly. At least you say what you see and feel. You are clearly not into the game of pretence to the extent the Chief Minister and Treasurer; they have more at stake than you. You are a backbencher and a change of leadership, a reshuffle, who knows, you might be in Cabinet. That might be a good outcome ...
Mr Vowles: Should be in Cabinet.
Ms LAWRIE: The member for Johnston says you should be in Cabinet, member for Daly and Deputy Speaker. That is a voice of support from the hard-working member for Johnston, who likes to see regional representation in Cabinet.
The people with a great deal at stake are the current Chief Minister and the current Treasurer because they are clinging by a thread, very tenuously, to power. People are totally dissatisfied with their performance. A shambolic a performance as any has been the way the Treasurer has tried to rush and ram through some incredibly important reforms to split the Power and Water Corporation into three entities.
Your chickens have come home to roost. You were running around the bush in the lead-up to the 2012 election promising communities everything they wanted. They were not just promises, but elaborate written contracts the then Leader of the Opposition, the former member for Blain, Terry Mills, signed. Communities the size of Katherine, as well as Wadeye, Borroloola – across the Territory received a contract, ‘Our commitment to you fully funded and fully costed’, a stamped, signed commitment by the former member for Blain, the person who become Chief Minister because of the gammon bush promises. They were not fully funded or costed, and did not exist in the election commitments submitted to Northern Territory Treasury by the then Country Liberals opposition in the lead-up the election.
What did they inherit? You won off the back of bush promises. On radio this morning the Chief Minister used a figure of $5bn describing what people would want to see put into the bush. Perhaps they had a list and sent it to Treasury after they won government, and perhaps they got the $5bn back, because I had conservatively estimated the promises I was aware of at about $2bn.
By all means, Chief Minister, thank you for admitting on radio this morning the total was in the vicinity of $5bn. That is interesting and useful new information you provided, while rattled, to Julia Christensen.
What is the take out of that? The Centralian Advocate says the CLP is cursed. I say cursed by its own hand; cursed by promises that were not fully funded or costed and part of the commitments submitted to Treasury in the lead-up to the 2012 election.
After 18 months in government, the NT News reports parliament is in uproar as the Conlan row rift deepens. Eighteen months into government you have a rift over abusive language deepening, your chickens coming home to roost with none of your bush commitments commenced, and a trio of bush members saying they have had enough, ‘You were elected off the back of these promises in the bush, it’s time to deliver’.
We now see the personal enmities, the infighting, the total disunity and lack of direction all coming home to roost because this government is being led by the current Chief Minister on the basis of taking care of former CLP candidates, such as Tina MacFarlane and the granting of water licences worth a couple of million dollars. He is appointing party members to plum jobs and making sure, in his own words, ‘They are having a fun time’. This is his way of operating, rather than understanding all the time he is turning the Territory, and the disunity seen in this government, into a national laughing stock.
Your antics have shred our reputation locally, nationally and, I fear, globally. This government is currently in paralysis. A government in paralysis that cannot even pursue its legislative agenda is unable to govern on behalf of Territorians. The current Chief Minister needs to hang his head in shame at the shambolic situation he has created.
If it was not such a tragedy it would be a comedy, but it is a tragedy because the public service is operating without real direction. People have been demoralised by the weak and ineffective government, and by an incredibly arrogant Chief Minister who has been completely contemptuous of the everyday needs of the Territorians. When I say contemptuous, who can forget the current Chief Minister laughing at the clinical nurses from Royal Darwin Hospital who had signed a petition seeking to draw to the government’s attention the very dire situation of double-bunking at the emergency department?
When we raise the cost of living – I have heard public comments from the current Chief Minister saying, ‘That’s just a great term designed for oppositions to use’, and we get a completely dismissive and arrogant response. I have challenged the current Chief Minister, and will continue to challenge him, to spend some time with working families who charities in the Northern Territory describe as the ‘working poor’. They are under the breadline and seek charitable assistance literally to put food on the table even though they hold down a job because the cost of living is out-stripping there household budget. You cannot sustain a 25% increase in electricity, a 30% increase in water and a 25% increase in sewerage as dramatically and quickly as has occurred and not get a financial shock in your household budget.
Members opposite would have us believe nothing had happened in tariffs previously so this shock had to occur. Nothing could be further from the truth with the 2009 reformed tariffs. The tariff increases in 2009 took the luxury out of the household in power, water and sewage usage. People amended their habits with the 2009 tariffs shock then. With the tariff shock under the CLP we now have people, in many instances, packing up to leave. I know the CLP laughs when we raise this. Evidently it is just a figment of our imagination, but when doorknocking in Blain so many people talk about families who have packed up and left their streets and headed south because they cannot afford the cost of living.
Within the component of the cost of living is housing. This was another major broken election commitment by the CLP. The CLP pretended, ‘We will provide a whole lot of affordable housing for Territorians’. You have not provided any affordable housing for Territorians in 18 months. The first affordable housing unit development starts construction in May and is off the back of a medium-density block identified for affordable housing under the previous Labor government. It is off the back of a 20% Labor funded NRAS affordable rental scheme you will top up by 10%. It is after you axed My New Home and HOMESTART Extra, two home finance schemes designed to get people off the rental roundabout, into home ownership.
There is no land release under the CLP for housing. The land being constructed on was turned off by the previous Labor government and funded through Labor budgets you decry and shout at as being bad management, yet you will claim the land which has been serviced under those Labor budgets.
The way you have chosen to break every core commitment you have made to Northern Territory voters is a disgrace, and the Blain by-election is upon you. For a seat you have never lost and hold by 13.4%, you are starting to panic. The signs of panic are there and large, because you have lost control of the numbers in parliament. You have had to withdraw all contentious legislation, such as the Power and Water split. You have, all of a sudden, jettisoned the regional land use plan put out by the Planning Commission, which, in large part relied on damming the Elizabeth River to create Lake Elizabeth to provide for new housing.
Asked in Question Time today, ‘What now, Chief Minister?’ after he hit the panic button on Saturday and jettisoned the Planning Commission’s regional land use plan, there was no response.
The Chief Minister was not able to say, ‘Yes, we have stopped that; however, here are the greenfields to turn off for land release, and these are the alternative views, visions and plans we have’. There was no such response from the Chief Minister. What now, Treasurer, for your regional land use plan after you completely trashed the Planning Commission’s plan which relied on damming the Elizabeth River, in large part.
At the forefront of these failures is the total mismanagement, chaos and confusion caused right through your flawed strategies. The impact it has had on Territorians has been quite savage, whether they are families or small businesses. When you look at the attitude the current shambolic government takes, it is pretty concerning, to say the least.
After the significant blackout which occurred recently the government said, ‘We will reimburse consumers $80’. And everyone said, ‘Gee, that’s all right, $80. That is pretty fair, I’ll take it’. Until you read the fine print which said, ‘If you were disconnected for 12 hours or more’. Most people said, ‘Hardly anyone was disconnected for 12 or more hours. The majority of us were turned on in tranches leading up to 12 hours.’ The original announcement sounded good – $80. ‘That is fair compensation for the fact I lost everything in my fridge and freezer. I probably had a bit more in there, but $80 is reasonable.’ When you read the fine print, it is if you were disconnected for more than 12 hours.
Small businesses lost a lot of stock and the best part of a day’s trade and what did they get? They were told, ‘If you were disconnected for more than 12 hours you’ll receive $80’. That is it. The Treasurer - the Minister for Business - said, ‘Jump on your horse guys and go for a ride, because that’s all you’ll get from us’. For most it was nothing. They were told, ‘Talk to your insurance company’. The insurance companies said, ‘It was not off for 48 hours so insurance does not apply’. That is unbelievable. This is the party which proudly says it is here for small business. It was a complete and utter farce.
The Treasurer has been all over the place in his response to the debate around the Power and Water split. It took until the February sittings for him to start opening up and being a bit more honest with Territorians about the intention. We kept saying, ‘You have no mandate for privatisation’. In the February sittings the Treasurer said there were four options: raising taxes, cutting spending, increasing debt or selling assets. In a rare moment of frankness with the community, the Treasurer said the government would consider all options.
As I said, Treasurer, you did not like the fact Ken Clarke, Board Chairman of Power and Water Corporation, fessed up on Thursday, during the energy committee meeting, that Indigenous Essential Services has a shortfall of $5m per annum which you are not meeting. Ken Clarke also fessed up that revenue would be reduced with the split of Power and Water. How on earth will they meet the future growth needs of Indigenous Essential Services? You referred to that as ‘misinformation’. You are saying the Chair of Power and Water Corporation, the former Under Treasurer of the Northern Territory who you handpicked, was misinforming people. I think not. He was being honest; you have failed to be.
You do not want this debate right now. It is bad timing for you; you have lost the numbers in parliament. You also need the Independent member for Nelson to be more of a friend in case you lose the seat of Blain, just in case things do not go your way and you cannot pack together a deal with your three bush colleagues who are saying, ‘When will you deliver on the election commitments for the bush?’ All of a sudden, you have gone from screaming, ranting and raving at the member for Nelson, Treasurer, to saying, ‘If you want to look at things you can’. There has been a complete and utter turnaround in just 24 hours. How curious!
Your predecessor, the former Treasurer, when she did something would at least put the information on the record and, in all honesty, told Territorians when she raised power tariffs it would be another $2000 on the household budget. She, in all honesty, told small businesses it would be another $4000 on the small business budget. You, Treasurer, do not have the decency to do that. You do not have the decency to be honest to Territorians with the numbers.
People can see straight through you. They have had enough of you saying one thing and doing another. They feel the pain every time they get the household power and water bill. People in remote communities are feeling the pain because their tokens are burning through at twice the rate since the CLP has been in government. You can tell whatever stories you want, but people in the real world who get real bills can see through what you are saying. They know what is happening and do not like it.
People in Blain are telling us they will not cop more pain in the cost of living through tariff increases. They did not know about the CPI increase, and did not know about the extra 5%. Treasurer, you and the Chief Minister stake your reputations on splitting up Power and Water and ramming it through, but the in-fighting means you have lost the numbers to do it. You have been attempting to hide the full impact. You are still not being honest with Territorians about the full impact.
You have been attempting to hide the privatisation agenda: GenCorp and Retail Corp up for sale under Treasurer, Dave Tollner. Make that commitment here. Do not only commit to not selling Power and Water Corporation, commit to not selling GenCorp or Retail Corp because you have always refused to say that in this Chamber. At the end of the day, Treasurer, no one believes you. You have gone against every word said to Territorians and people are sick and tired of it and fed up.
You have jettisoned Elizabeth River dam. Put these bills off until May and we will continue to seek full and total scrutiny of them.
Mr TOLLNER (Treasurer): Mr Deputy Speaker, I say here and now, the government commits to not selling GenCorp or Retail Corp. I hope that clears up the matter for the Leader of the Opposition. I hope now we have committed to saying we will not sell Power and Water Corporation, Retail Corp or GenCorp the Opposition Leader might let this matter drop and stop trying to fill the heads of Territorians with misinformation. Clearly, that is what the Opposition Leader is trying to do.
The other thing which has come up today is Indigenous Essential Services. Indigenous Essential Services will not be affected, in any way, shape or form, by the structural separation or the market reforms we are putting in place for Power and Water in the Northern Territory. For the record, Indigenous Essential Services is a not-for-profit wholly-owned subsidiary of Power and Water Corporation. It is funded entirely through the sale of power tokens in Indigenous communities and taxpayer subsidies, full stop. It is not a burden in any way, shape or form to its parent organisation, the Power and Water Corporation. The Opposition Leader, having been the shareholding minister of Power and Water Corporation, knows this but chooses to play political games for her own political ends.
This matter of public importance allows the Power and Water Corporation bills to sit on the Notice Paper for the next few weeks. The Leader of the Opposition sees some mischief in this; she sees it as a sign of a government divided and all sorts of funny things. Last night the shadow minister for government accountability, the member for Johnston, issued a media release titled ‘End the Farce and End the Power and Water Split’. That media release says that Labor has called on the government to refer these bills to the Public Accounts Committee for a thorough investigation, instead of rushing through legislation this week.
That is what they called for yesterday. Similarly, the member for Nelson called for the same thing. He asked for the bills to be put on hold while the community and committee discussed the matter.
Last night I phoned Alan Tregilgas, who is heading up these reforms for the government, and asked him what impact delaying the legislation until the May sittings would have on the start date for the new corporations, being 1 July 2014. His response was, ‘It will not make any difference. It will be cutting things tight, but if we were to leave it on the Notice Paper for the May sittings it is still achievable’. I then said to the Independent member for Nelson, ‘Gerry, I understand you are still confused about this’. His media release pointed out a number of unanswered questions, despite the fact he has received briefings and sits on the energy committee which questioned the Power and Water board last Thursday. However, he still has misgivings.
I am keen to let people look at this as much as possible. I saw no problem in acquiescing to the opposition’s or Independent member’s ask but, the very next day, and during Question Time today, they saw some mischief in this. ‘This is no good. We should have been debating Power and Water today,’ is what they are saying even though last night they were asking us to hold off. I quote again, ‘Instead of rushing through legislation this week’. We are not rushing through legislation this week; we are giving people a chance look at it, suss it out and come to grips with what is happening. For some reason the opposition thinks this is a wonderful tactic they can play and suggests, for some reason, the government is divided and has concerns about getting these bills through. That is not the case.
In Delia’s world – that parallel universe – you are buggered if you do and buggered if you don’t. If we debated these bills today we would be the worst government in the Territory’s history for rushing it through ...
Ms LAWRIE: A point of order, Mr Deputy Speaker! Is that language parliamentary? I guess you could use damned if you do and damned if you don’t instead.
Mr DEPUTY SPEAKER: Sorry, what was the word he used?
Ms LAWRIE: He can repeat it, I will not.
Mr TOLLNER: I am sorry, I did not realise their ears were so sensitive. I will withdraw that. In the Opposition Leader’s world you are damned if you do and damned if you don’t.
Had I pushed through the bills today they would have been screaming and carrying on that no one has had time to look at anything, we have not explained anything and there is no opportunity for a committee to look at anything, Mr Deputy Speaker, as you and others in this Chamber well know, last week in General Business Day we allowed the Public Accounts Committee to self-reference.
It if wants to self-reference a quick fire inquiry into Power and Water – goodness me, I do not know how many days we have until the May sittings, probably four to six weeks – they could have a meeting every day for the next four to six weeks. If this is such a big issue you have to get your head around, you cannot possibly understand what it is all about, self-reference it, call a daily meeting of the Public Accounts Committee and call in witnesses from wherever you like. It does not bother me. These reforms are old hat; a bit of yawn. They have been happening all around the country for quite some time now.
In that regard, this matter of public importance is nothing but a bit of political muckraking to say the least. This is the Opposition Leader at her best saying, ‘We’ve got them now. If they agree to a delay we’ll say they’re divided. If they don’t agree we’ll say they are rushing bills through.’ As I say, we are damned if we do and damned if we don’t. That is the weird world of the Opposition Leader …
Mr McCarthy: Where did all the goodwill come from, Dave? I like your sudden goodwill.
Mr TOLLNER: It is not sudden goodwill. I will take the interjection ...
Mr McCarthy: I have been listening to you for five years.
Mr TOLLNER: I will take the interjection, this is not sudden goodwill. I, and the government, have nothing to hide on these reforms whatsoever.
I would like to step through the way we see these reforms and what this is all about. Electricity, rightly, is an entitlement to all Territorians. This government is committed to providing safe, reliable and least cost energy to all Territorians in a fair and equitable manner. However, the way in which the current system in the NT is working is not sustainable. It needs to be brought into line with what has been happening in other states as part of national reform, like national reform in road, rail, ports and airports. We need to stop taxpayers’ money being wasted on a government monopoly and use it for things like schools, hospitals and police stations.
Reforming the Australian energy market started in 1991 and has been through a massive amount of vigorous and detailed work by governments and the private sector, to now have one of the largest electricity networks in the world. This robust model generates, transmits and retails energy in a very efficient manner. The Nobel Prize winner for Economic Sciences, Vernon Smith, was one of the first to be engaged to develop the model for Australia’s energy markets. The Northern Territory was part of the early reform process, but this was stalled by the NT Labor Party when in government. This government has restarted the reform, because we need to ensure our energy demands meet the future needs of our rapidly expanding economy.
I will turn to the recent power blackout. This was an event 10 years in the making. As you would be aware, the blackout caused considerable disruption to the NT, especially Darwin. I believe this situation was met with professionalism and calm by Territorians. The Managing Director of PWC, John Baskerville was phoned four minutes after the event. The emergency services and PWC, in conjunction with the Chief Minister and me, met at 6.15 am and, shortly after, our decisions were announced on the radio and our plan of action swung into gear. In anyone’s mind, it was a calm and measured response by all people in our great Territory.
The Chief Minister directed me to provide a report on the cause within 24 hours. I tabled the report. The Chief Minister further directed me to conduct an independent inquiry within two weeks. I have directed the Utilities Commission to oversee this independent inquiry. I announced the terms of reference for the inquiry and tabled those terms of reference.
I advise the House there are three important parts of this inquiry. The first is the Utilities Commission has engaged an international, independent firm, Evans & Peck. The second point is the inquiry will be supported by the Australian Energy Market Operator, an independent government agency. The third point is the government reserves a right to undertake additional inquiries if there is a need.
The wider issue with the power blackout is the lack of action by the former Labor government and the Leader of the Opposition. I remind the House, the Leader of the Opposition, when she was Treasurer, was the Northern Territory’s representative on the Ministerial Council on Energy, from November 2007 to August 2012. During that time, many decisions on reforms were made by the council. Did the Northern Territory Labor government do anything? No. All other Labor states continued with national energy reform processes, which started way back in 1991. The NT Labor government stalled the process for the entire time it was in government.
I remind the House this 22-year energy market reform process included the intergovernmental agreements on electricity, which governments undertook prior to joining the National Energy Market, to structurally separate the monopoly electricity transmission function and competitive generation activities and ring fence distribution businesses.
The major undertaking was the agreement to establish the National Electricity Market – the NEM – in southern and eastern Australia. The NEM was to have been implemented from 1 July 1995, or on such other date agreed by the party. In December 1996, the implementation was changed to early 1998 and commenced on 13 December 1998. The NEM operates in New South Wales, Victoria, Queensland, South Australia, Tasmania and the ACT. Western Australia and the NT are not part of the NEM because of the distances between their load centres and the interconnected electricity network in the southern and eastern states. Both jurisdictions committed to apply all other electricity sector reforms.
The national electricity agreements set the following objectives for the competitive electricity market:
- the ability for customers to choose the supplier, including generators, retailers and traders, with which they will trade (full contestability)
non-discriminatory access to the interconnected transmission and distribution network
non-discriminatory legislative or regulatory barriers to interstate and/or intrastate trade.
The Labor Party stalled those reform processes in the Northern Territory, and this is the root cause of the problems with the Power and Water Corporation. However, there is a much more important reason for making changes to this government-owned monopoly: it is costing every individual person in the Northern Territory $650 per year to subsidise electricity. This adds up to approximately $1.3bn of taxpayers’ money going into the Power and Water Corporation over the last 10 years instead of into roads, schools, hospitals and police stations.
Under the NT government’s reform process, we will still own the new Power and Water Corporations and the government will still set electricity prices for small consumers. This will not change, and no one has suggested a change except the Leader of the Opposition, who wants to play political games on this matter.
We will continue to provide electricity, under the current arrangements, to remote communities; this will not change. The IES will stay in place and those subsidies for remote communities to maintain the uniform tariff will remain; it will not change. We will continue to set the price for electricity, water and sewerage; this will not change.
Eligible senior citizens will continue to be entitled to discounts; this will not change. What will change is the generation division and the retail division of Power and Water Corporation will be made into two new government-owned corporations. Sewerage, water, gas sales and essential services will continue unchanged.
The Northern Territory is set for a massive expansion in the coming years, and the government is changing a whole range of policies and regulations to ensure we are in the best shape to meet these demands and challenges into the future.
The Northern Territory Labor Party sat on its hands for 10 years and spent all that money. In addition, the Northern Territory has been slugged with a $20m carbon tax which NT Labor did nothing to stop, despite a motion that was supported by a majority of parliamentarians in this Chamber voting to have the Northern Territory exempted from the carbon tax. NT Labor government members at the time would still not meet the wishes of the parliament and contact colleagues interstate. It was shameful. Even now they have not contacted their Canberra Labor colleagues in the Senate urging them to get rid of the carbon tax.
The NT uses gas to generate electricity, which is also half the carbon produced by coal-fired power plants. In the southern states, do they expect Territorians to live in the dark? Goodness me, might I remind Territorians this reform has been going on under other Labor states and federal governments for the past 22 years.
What happens when we announce a restart of the reform process? The business sector looks at the Territory differently and here are some examples.
The APA group has announced a $2m feasibility study into building a new pipeline to the Northern Territory and joining us with the rest of Australia’s gas network. APA is Australia’s largest natural gas infrastructure business, owning and or operating $12bn of energy assets. Its gas transmission pipelines span every state and territory in mainland Australia, delivering approximately half the nation’s gas usage.
This has enormous implications and opportunities for the Northern Territory’s future. The Northern Territory has massive reserves of gas while reserves in the southern states are declining and prices increasing. You do not have to be Einstein to realise one day Northern Territory gas will flow to southern states, while at the same time continue to be exported to other parts of the world. This cannot happen without the AER as our regulator. This will open lots of opportunities for gas exploration and production, and encourage smaller generation opportunities for the demands of mineral mines and remote agriculture businesses and remote communities.
The Northern Territory government is planning well in advance for the northern strategy, which will form a single national push for northern Australia, and this government is prepared for it. Look at the world demand for food. When the Northern Territory expands into wider agribusinesses we will need power. The private sector will build these energy needs not government money. Government money is better spent on schools, roads, hospitals and police. These reforms allow greater flexibility by the private sector to satisfy future demands.
There is another example. The Northern Territory’s Armour Energy has already begun exploring reserves in the east of the Territory and needs to get the gas to market. If the private sector connects the gas pipelines to the southern networks this will expand that business as well.
I turn to another example of how the Northern Territory Labor Party’s inaction has caused an outrageous outcome in the cost of transmitting electricity in the Northern Territory. The Labor Party had the chance to join the Northern Territory into the national regulation system for energy. In all other eastern states Labor governments removed their local regulators and put them into the Australian Energy Market Commission, which sets the rules, and the Australian Energy Regulator (AER), which it administers, and oversees these rules and regulations.
Recently – I note the Opposition Leader mentioned this in her statement as well – the Northern Territory Utilities Commission announced PWC would be able to charge an increase of 43% in the cost of transmitting electricity for the first year of a five-year determination period. If the Northern Territory Labor Party had joined the AER years ago, like its Labor comrades in other states did, then the national regulator would have made a determination based on different factors. Because the AER uses a standard method of determining transmission costs there is no way this would have been a 43% increase, it would have been more like 5%.
In the Northern Territory domestic or small customers are not affected by this increase as price rises are subsidised by the taxpayer. However, large electricity customers will eventually see their electricity costs rise with new contracts. This will put pressure on those businesses and will almost certainly see jobs limited, or reduced, in those businesses as electricity costs increase. It is one thing to say, ‘We will subsidise the small end of town’, but at times we have to have an eye on the big end of town too because their inputs and costs ultimately impact on the smaller end of town.
These reforms are well and truly overdue. We have seen what has happened in every state and territory around Australia with the national market reforms, and we have the ability to use the benefit of hindsight. We are not leading the charge in this. In fact, we are a very distant last. We can use the experiences of the other states and territories to make sure we get it right, and I can assure this Chamber that is exactly what we are doing. We have a lot of history to look to make sure we get it right the first time.
This government is committed to the future and putting the building blocks in place which will see the Northern Territory grow and prosper into the future. The Northern Territory Labor Party needs to back these reforms and the legislation, get out of the way and let us make this Territory great once again. These mindless objections you come up with, ‘It’s being fattened for sale. These price increases. Oh, this, oh that.’ It is nonsense and you guys know it.
This has been happening in Australia for 22 years and, in the main, has been driven by Labor governments to the point it is so ingrained it has bipartisan support except for the Northern Territory. The Northern Territory Labor Party would rather come into this House and play silly, mindless political games rather than letting the Territory develop. Shame on you guys. Shame for playing politics with this and shame for not supporting it, it is wrong.
You know these reforms have to take place. You know we have to join the National Electricity Market, adopt their rules and adopt their regulator. If we want to develop pipelines, develop business, develop a strong economy and move in the north Australia age we have to do this. This is a key block to building north Australia into the future, and seeing the continual escalation of taxpayers’ dollars to prop this organisation up is wrong. There are organisations around the country which do it far more efficiently, far more effectively and make sure reliability is a hell of a lot better than in the Northern Territory.
These reforms need to take place and I will fight all the way to make sure we push them through. The decision to hold off the legislation until the May sittings was made to get you guys into the loop, have a good look at what is happening around Australia and what should be happening in the Northern Territory because there is nothing to be afraid of with this legislation.
You might put your petty political gains ahead of good policy; that is a decision for you guys to make. I am sure, in the first sittings in May, we will know whether you are committed to putting petty politics ahead of good policy or are in it for the Northern Territory. This is your decision. You can play political games now, but in May the rubber will hit the road and you will be called on to make a decision. I bet it will be to oppose it because it is good and needed legislation. We are setting the Northern Territory on a footing to drive into the future, embrace future development in the north and we need this to occur. It is a minimum of 10 years too late.
I thank the Chamber for taking the time to hear this. I hope, throughout my contribution, members on the other side listened and tried to get their head around this because it is nothing new. This is old hat. It is new in the Territory because Labor governments sat on their hands for 10 years, but nationally this is old hat. This has been around for 22 years. There is no political fight over this; there is bipartisanship on this and I urge members on the other side to get on board or get out of the way.
Ms MANISON (Wanguri): Mr Deputy Speaker, what we have seen in the last 24 hours has been extraordinary – three major government bills pulled at the last minute is something you do not see very often in parliament.
We have heard from this government, for a long time, about its determination to split Power and Water. From day one the CLP government has been clear about its thoughts on Power and Water and how it operates as an organisation. It has, from day one, trashed the business, the organisation and the reputation of the workers.
It has used many opportunities to call the place a basket case, bloated, inefficient – dogs breakfast is another one which often comes up. Staff morale within Power and Water is at an all-time low. If you speak to people within the organisation it is not the same and they have had a rough 18 months. They do not see much going forward in the future; they are not sure what is happening within the organisation. They have been left feeling unappreciated for the vital and essential services they deliver to Territorians. Rain, hail, shine, lighting or floods they are some of the first people on the job when things go wrong and they do an incredible job.
After the huge power and water price increases under this government we heard stories of staff members wearing uniforms being abused in the community for simply doing their job. People on the phones in the retail section, taking the calls, have got it. They have received very little support from this government, and the Treasurer has made it clear he feels there are too many staff in Power and Water and they have far too much equipment to do the job. He believes structural separation will mean less staff. The future for many people is looking uncertain, and it has not been a good time so far.
We know the government is determined to split Power and Water, and the Treasurer made that clear today in his reply to this matter of public importance. He is determined to ram this through and, so far, has been, with no consultation with Territorians and no mandate from the people.
Going into the 2012 election, there was no discussion up-front with Territorians saying a CLP government would do this. It has not consulted with Territorians about the structural separation of Power and Water but, more to the point, we have not seen any solid analysis, public reports, proof or research to say what the government is doing will deliver the things it believes. It says this is all about splitting up accounting lines, making things a bit more financially transparent and attracting private operators into the Territory. It says this is about more competitive markets and, ultimately, this is about making pricing better for Territorians. However, this is a tried and tested model. It has happened down south, in other jurisdictions and overseas, and we have not seen any work, analysis or research from this government to support this will deliver better outcomes for Territorians. We all have an interest in this debate, and the split in Power and Water, because it will impact every Territorian.
The government is looking to structurally separate the organisation to create a new Power and Water Corporation which will maintain some of the core essential services within Power and Water, including water services, which also includes sewerage services, system control and the gas unit. We will also see remote operations, the critical section that delivers remote power, water and sewerage services into remote communities.
The government is proposing to set up the Power Generation Corporation, which will take the generation business unit with it, including the assets within the power generation business unit. We are talking about generators and power stations going with the generation business unit. It also wants to proceed with the structural separation and create the new Power Retail Corporation, which is theoretically meant to take over all retail customers, including those big, lucrative contestable customers – the big business end of town.
At the moment that split is as clear as mud. At present, the retail section has different sections including billing, connections, disconnections and call centres. People are doing credit control, front counter staff, people doing a whole raft of jobs within Power and Water and it is still not clear where those staff will go.
The structural separation – if the government rams these bills through in the May sittings, which it has indicated is the intent – is meant to be in place from 1 July 2014. That is three months away, and people still do not know where they are going in the organisation or how those shared service arrangements will work within Power and Water. In briefings you have made it clear you will not completely pull retail out from day one; there will be some shared corporate services. Among those will be the Power and Water monopoly corporation and the Power Retail Corporation, and it is not clear what is happening there.
What is clear is in the split you are creating two new government-owned corporations for the two sections of Power and Water, which is certainly more attractive in the sense of selling, being able to make some money and being able to put some money back into the essential services of Power and Water. You said you will not sell off Power Corp or Retail Corp, but your language around the sale of assets needs to be looked at. We know there are some customer assets and generation assets in the two new government-owned corporations you are establishing.
What is being left in the Power and Water Corporation are essential services to everyone. They are water, sewerage, and delivering power, water and sewerage services to our remote communities, which is a challenging task. They will stay within the Power and Water monopoly corporation, as you like to call it. These sections are not profit driven, not able to get the big bucks and will be left needing investment.
There was an admission by your Power and Water Chairman last Thursday at the energy future committee hearing that there is a shortfall in remote Indigenous Essential Services. There is a shortfall of money so how will that work out under this new arrangement?
Structural separation is a tried and tested model elsewhere and we have seen the results. What happens when you structurally separate is extremely clear: it leads down the path of privatisation and sell-off of assets. It also tends to lead to higher prices for consumers. If having power and water bills already go through the roof under this government is not enough, structural separation will push that further. It leads to less investment in repairs and maintenance and infrastructure. What happens when you do not invest in repairs and maintenance? There will be less reliability and other problems, particularly if you have less staff in the organisation.
Everybody has already shouldered the massive 25 % electricity increases so far, and Territorians have not been consulted about this split or this privatisation agenda.
One thing made clear in the briefings we received is they are not ready for the split; there is still much work to do and the government is ramming this legislation through without the required scrutiny. We need a far deeper analysis to look at what the numbers really are, how this will stack up, what it will mean to the long-term future of the Territory and the cost of delivering power, water and sewerage and, most of all, what people have to pay for those services. There are plenty of case studies around and it needs to be looked at.
Another thing the government has not outlined, or has plucked a number out of thin air, is what this will cost Territorians. Under these new arrangements, with all the work involved in structural separation and what you are proceeding with, how much will this cost Territorians? You know the figure. We know, under the new governance framework, budgets have been set for each new government-owned corporation in what it costs to backfill positions, what it would cost for consultants and what it would cost to put all this together. We know there are costs and we know if those budgets are modified the shareholding minister has to sign off on any modified budget. We know a figure of $2m was pulled out of thin air recently, but we need evidence on the table to see what those budgets really are.
There is no doubt the move to split Power and Water, from the feedback I am receiving, is not popular. It is creating unrest among your own ranks. In Blain, this must be creating a few issues to the point where we are discussing it today because it is incredibly unpopular. It is extremely unpopular in the community and you have not consulted Territorians. You have not asked what they think about structural separation and the path towards privatisation.
This, in itself, is creating chaos among your ranks. Everybody knows this is a not a popular move by government because people see it for what it is. It will be a sell-off, privatisation, and will mean higher power and water prices for all and less reliability. There will be less investment into infrastructure and repairs and maintenance in the future. That message must be coming loud and clear to you because we can see the deep divisions forming. To pull these bills, after the determination to put this legislation through, shows some serious problems and people have questions about what is happening.
It seems time is extremely limited between now and May. You are pushing this off until May. I believe you are trying to pass it off so it does not become a huge issue in Blain, or among your ranks, and creates even more instability and chaos than we see at the moment. People in the community are talking about what is happening on your side, what the Power and Water separation will mean, and people believe this is about selling off Power and Water and their tariffs for power, water and sewerage will increase. In this time we need to see some real evidence, real analysis and real numbers around what structural separation will mean, what it will cost and proof that it will work in the best interests of the Territory.
We have not seen any proof in the public domain and some work needs to be done. The government has not consulted with Territorians over splitting up Power and Water. It has been determined to ram this through, and the only thing that has stopped it during this week of parliament has been internal unrest and chaos, and the voice is coming loud and clear from Blain telling you not to do it. It is not a popular decision. People do not want to see their power and water bills increase more than they have, and they have no evidence to show this will work for the benefit of the Territory.
Mr ELFERINK (Attorney-General and Justice): Mr Deputy Speaker, it is highly unlikely power or water prices will ever come down. Whilst that might sadden a lot of people, it is the truth because prices, as a general rule as time passes, increase ...
Ms Lawrie: A bit of downward pressure.
Mr ELFERINK: I will pick up on that interjection, thank you. Downward pressure on future price increases is what we would like to see on this side of the House ...
Mr Vowles: Elf said …
Mr ELFERINK: … downward pressure on future price increases. Would you like me to spell it, member for Johnston? I am happy to say it because power will not get cheaper into the future ...
Ms Lawrie: That is not what Dave has been saying.
Mr ELFERINK: It is a …
Mr Tollner: If we got rid of the carbon tax it might.
Mr ELFERINK: Well, that is true. If you get rid of the carbon tax – of course, that is not a cost of generation – that will make it come down. What any government would seek to do is create an environment where the cost of power, or any product, goes up less than it otherwise would have into the future. That is something worth striving for.
The challenges for the Power and Water Corporation are well-known to the Leader of the Opposition. The Leader of the Opposition made it clear she understands this when confronted with the difficult decision of whether or not to make Power and Water Corporation sustainable or commercially viable. Having underwritten the Power and Water Corporation with excess GST funds which were streaming into her coffers, she determined to subsidise Power and Water Corporation’s customers and continued maintaining an environment where she was, effectively, applying price controls through subsidisation. Upon coming to government, we discovered how critical the position of Power and Water Corporation was, and we would like to keep downward pressure on future price increases. That is not an awful thing to want to achieve.
The best way to drive down prices is to introduce a bill into the Senate to get rid of the carbon tax. Let us examine what the government is trying to achieve. Something we need to demonstrate to the public is we anticipate future downward pressure because of competition in the marketplace. I ask honourable members to cast – those who can cast their mind back to the 1970s – and I heard reference in Question Time today from the Treasurer to the Postmaster-General’s office, or the PMG as it was known at the time. The Postmaster-General was responsible, essentially, through the morphing of the functions of government, for all communications available in the country at the time. I must be getting old, but I remember being taken to Winnellie Post Office as a young kid and shown how to fill out a telegram. It was an expensive exercise I can tell you. Sending a telegram at that time cost about 2c or 3c a word, and a word was limited to five digits and a space. Allowing for inflation, that is equivalent to 25c or 30c per word today.
If that is true, the cost of sending a telegram of 100 words was several dollars at a time when the average income was around $100 a week. Compare that to the cost of sending an e-mail today, with so much information you can send a movie as an attachment for a negligible sum of money as to effectively say you can do it for free.
Imagine if we went back to telecommunications in a way the Labor Party is arguing for with power generation and dissemination through a network to retail customers. What they are arguing for, if you were to apply it to telecommunications on a national level, is the reintroduction of the Postmaster-General. Then you can collapse into it all the private providers, such as DHL, FedEx, Kwikasair, any number of other private providers, and all the post offices which are now franchises of the government-owned corporation, as well as all Telstra products. You can get rid of Optus and any number of telecommunications providers. You can collapse it all under the one roof and have it run by a general. Like an Attorney-General you would have a Postmaster-General. They would probably be called a Postmaster Telecommunications General today.
The Postmaster-General stoped operating as the Postmaster-General because a new environment was being created. To understand why the Postmaster-Generalship was becoming redundant is to understand the history of the Postmaster-General. There was a time when the empire, the Crown, established a postal system in an effort to create effective communications across the empire. That was handed down to the colonies, and the Postmaster-General was responsible for what was exclusively an expensive government service.
The telegram example is a suggestion of how expensive it was. Whilst letters were relatively cheap to send, they were nowhere near as cheap as it is to communicate nowadays. I would hate to have a 55c bill every time I pressed send on an e-mail. The point is, to a large degree the Postmaster-General’s role became redundant because commercial operators were prepared to compete directly with Australia Post.
The response of the federal government has historically been, and remains to this day, not to privatise Australia Post. It has not been privatised; Australia Post exists as a government-owned entity. However, it looks nothing like it did 30 years ago.
If you go to one of the local franchisees with a slice of the Australia Post action and the right to plaque up the Australia Post symbol above their shop, you will deal with the owner of the business. That person will have a commercial shop available to you with all manner of product available for your purchase, and a fundamental change in customer service. You now have different counters that purvey different products in accordance with your needs when you walk into the post office. If you have a parcel to collect there is a counter. If you wish you engage in retail or transmission of postal items there is another counter. It is very efficient and post offices today look nothing like the quasi-Stalinist Soviet buildings they looked like in the 1970s and 1980s.
They are shops, they are commercial, they are retail and they do not even tie the pens down with chains anymore. In this environment you also have a number of other competitors ...
Members interjecting.
Mr ELFERINK: The problem with members opposite is when they are presented with an argument that is both reasonable and sound, their response is to belittle the speaker. That is typical of the Labor Party because that is all they are capable of. We have heard today, in this House, diatribe and whingeing about the people in this House.
This whole MPI is focused on what is happening in this Chamber. I ask members opposite: do you genuinely listen to the prayer we start every day with which asks for guidance to serve the people of the Northern Territory? Not a chance ...
Ms Lawrie: You are not serving them.
Mr ELFERINK: There is no evidence whatsoever they intend to serve the people of the Northern Territory. They only wish to serve the interests of the Labor Party, and they do not care who they damage in the process. The Leader of the Opposition is more than happy to diminish people, slander people under the cover of this Chamber and attack public servants in pursuit of her goals ...
Ms Lawrie: You go to personal attacks straightaway.
Mr ELFERINK: It is a ghastly way to behave and behoves the Leader of the Opposition, the alternative Chief Minister, very poorly indeed ...
Ms Lawrie: Now I am the alternative Chief Minister?
Mr ELFERINK: All she can offer is vitriol and bile, and guess what? The whole time I have been on my feet she has been interjecting because she cannot abide hearing an argument which might challenge some of the presumptions she carries ...
Ms Lawrie interjecting.
Mr ELFERINK: See, she is still going. She cannot help herself. It is sad to listen to.
If you were to draw a parallel between Australia Post and the Power and Water Corporation, the PWC is now a long way behind. I pick up on the comments from the member of Wanguri, who said what is being attempted by this government is tried and tested. Yes, it is. It is tried and tested, and the assertion is it will push up prices.
If the experience of other government-owned corporations which have allowed competition in their environment is to see prices go down, why would we be afraid if there was a generator who could do it cheaper than us? Essentially, the opposition is arguing if a generator can do it cheaper than us – we have set the price. We know what the price is, what the increases will be and when they will occur. That is well-known.
Imagine if through these changes, you could introduce a competitor who could generate electricity cheaper than we do and retail it for less than what is currently charged. If we could achieve that and had a competitor in the retail environment, even, God forbid, the domestic retail environment – we are talking about your tranche five customers – it would be horrid if we had a retailer prepared to come into the environment and say, ‘We know what the government’s prices are and we can come in at less’. If they cannot do it, they will not come. If they can do it, because there is a contestable environment for generation, they will come. We owe it to the people of the Northern Territory to make that opportunity available. If we separate out the different functions and allow generators to compete with our generation system, we know what the retail benchmark will be into the medium future.
If they can do it more cheaply, why not give them the option? Why would we say no? Essentially, members opposite are arguing, ‘Say no to competition. Say no to the potential for cheaper power.’ We know what our generation costs are, but let us say somebody can come in and, through different technology, different staffing models or whatever, produce a different cost when you turn on the light in the lounge room. Surely, we would invite that to occur.
It was tried about 15 years ago and, for various reasons, did not go ahead. However, if it was looked at once it will be looked at again by other people entering the marketplace. If that possibility is available we should allow it to occur.
I understand members want to talk more about this, and I have listened to the member for Nelson on this. We have to approach this with an open mind, and what I get from the members opposite is not a hint of an open mind. What I see is an opportunity to attack government and belittle people rather than ask the serious question that this is worthwhile; maybe it is worth exploring or worth looking at. It would be a very poor result for the people of the Northern Territory if the Labor opposition, the alternative government of the Northern Territory, was prepared to throw an opportunity for less expensive power in the future away for the sake of scoring a political point today.
Mr WOOD (Nelson): Madam Speaker, I listened to the member for Fong Lim speak today on this matter and honestly thank him for recognising that this issue is very important and we need to be careful about going down a path some of us have concerns about. It is good it has been put off until the next sittings, and I hope at least one of our committees – I do not want both of them and we might need some discussion on that – will look at this. In the meantime, and much as I would have preferred it had the backing of the House, either the Territory’s energy future committee or the Public Accounts Committee, with its new powers, can look at this issue.
I am not an expert on power generation, power retail or power network, but I have been doing my homework, as most people in this parliament should. I met with the Utilities Commission, had a briefing, and also had a one-hour meeting with the board and some of the people involved in Power and Water who were at the last energy future committee meeting.. That is good, but many questions still need to be answered. I had an e-mail from someone very much involved in Power and Water who has grave concerns about what is happening.
My concerns are not that we should not explore other ways of making Power and Water a better corporation. I agree there are opportunities to make Power and Water more efficient, but it is up to the government to show us where the inefficiencies are. If they claim these changes to the law will make Power and Water more efficient, we have seen no proof that is the case except this is what happened down south and this has been going on for the last 20 years and the Northern Territory is just catching up. Several things need to be clarified: are we the same as down south? We have 225 000 people. How many come under the area Power and Water cover? If you take Darwin, Katherine, Tennant Creek and Alice Springs you would probably get between 150 000 and 170 000 people.
In the broad scheme of things that is a very small market and a very small company. Opening up for competition …
Mr Elferink: They will not come.
Mr WOOD: They may not come, that is fair enough, but opening it up for competition has the danger of killing Power and Water. Someone will come in – a big provider – and we know Northern Power wants to come in ...
Mr Elferink: We are not for sale.
Mr WOOD: Hang on …
Mr Tollner: I think he is worried they will come in with a cheaper price.
Mr WOOD: They come in and buy gas for exactly the same price Power and Water buys gas and they have the latest you-beaut new machines which can recycle the energy produced – the heat – and they will be much more efficient. You might say that is terrific, that is fantastic, but Power and Water cannot buy any more generators. Part of the reason they are in debt is because they spent a lot of money on capital upgrades. If that company comes in and says, ‘I will offer that company, that company and that company a better price than Power and Water can offer’ and they take that market, Power and Water is left with the householders and lots of small business.
There is the issue of Power and Water having to use its gas. If it does not use all its gas, does it still have to pay for it? What is the story? Perhaps it gets its money back from the other company when it comes to gas, I do not know. The question is: what happens to the generators? This concern has come from a person in Power and Water saying you would have idle generators worth a lot of money doing nothing still needing to be maintained – you cannot leave a diesel engine sitting around doing nothing, it has to work. What would happen there? It would end up with Power and Water getting the crumbs and the big company, with far more efficient machines, taking the juicy bits out of the market. If that happens, Power and Water will have less revenue, the government will receive less revenue and it might say, ‘This is all too hard. How about we sell Power and Water?’
The minister said it is not for sale. It may not be for sale at the moment, but my concern is what will happen if certain things happen? Would it be worth the government hanging on?
The minister said there is no connection with Indigenous Essential Services. There probably is not a direct connection, but there is a connection in the amount of money the government earns from the production of electricity. If it loses some of that revenue, does that have an indirect effect on other areas of government expenditure? It obviously does not have a direct effect, but it is less money in the bank.
I raised a few of those issues in my media release not just for the sake of making a media statement, but because people have mentioned their concerns. I would like to hear a lot more from people who have been working with Power and Water for a long time because we are breaking this corporation up into three separate lots. It is already broken up, to some extent, into three divisions. We are breaking it up because the government says it will create efficiency and a more transparent approach to finding out how much …
Mr Tollner interjecting.
Mr WOOD: I am working my way through it. It is a very important issue and a lot of people are concerned. You will break it up so you know exactly how much money each division – I will call them divisions – or GOCs cost to run. Of course, what comes with that is a lot of other expenditure and I will not go into that now. The question for me is if you say each one will be more efficient, it is up to the government to say why the generating system will be more efficient, why the networking will be more efficient and why the retail will be more efficient because that is the catchcry here.
If you read books, as I have, about one of the catchcries of privatisation, it is ‘efficiency’ and that word worries me. That word has been used all along to argue the case for the changes to Power and Water.
The onus is on the government to show us where the efficiencies will come from and where inefficiencies are at present. You might create something more open and transparent on the basis you are trying to show where waste is, but in the process you will spend an awful lot of money having a board for each section. There will also be different billings, which will create a new administration for each new section.
There will be lots of other costs. Has anyone looked at a cost benefit analysis of the breakup? Have they shown the cost of breaking it up will be cheaper than leaving it as is and trying to bring reforms in? It is not about which side is better. The onus is on the government to prove its argument stands up to scrutiny, which is why we need to take it to a committee where the minister could appear, which is what happened in the CTC in its later life – you could ask the minister to attend a meeting. You can ask the minister to show the facts and figures which make a difference. The concern of a lot of people is this is the long range vision that competition is great, but eventually Power and Water will disappear into the hands of a private company, and that is my concern.
One big issue the member for Wanguri mentioned was the cost of the breakup. Has anyone done this? I felt from the briefing – I will not speak for other people – a lot of the necessary work has not been done. In other words, we have a philosophy based on it being done in other states, we need to catch up and this will make it more open and transparent. When we ask to see details of the cost of transferring ownership of billing and administration, where people will be situated, what building they will be in and will it all change, it is not there. Are those things being costed?
How much will the boards cost? Will they need administration? It may not be a big deal, but it is the nitty gritty the committee had to drag out.
I hope if one of the committees takes on the role of questioning the government regarding these proposals it is able to pull in experts – those people who have worked with Power and Water for a long time and have the knowledge. I hope we do not just pull in the Chairman or some CEO, but people who have the practical knowledge of Power and Water over many years. We may pull in some experts from south.
Minister, you said a report was done last year – I am not sure of the company’s name …
Mr Tollner: KPMG.
Mr WOOD: Is the document available for scrutiny?
Mr Tollner: I tabled it. I will dig it up for you.
Mr WOOD: KPMG would be the author. Let us bring them before the committee and ask if the results of the report are relevant to what we want to do. If you are right, I am happy to say we have shown this is of benefit to the people of the Northern Territory and there is a chance we will have cheaper tariffs, or at least they will not increase by the margin they may have had we not made the change.
On the other hand, if I feel there are too many questions still to be answered, if there is not solid proof efficiencies will be gained by this change, I will not support it.
I do not want us doing something just because someone else has done it. At the moment, the arguments put out by the government do not have the detail behind them to convince me this is worth supporting. The minister says, ‘We need to have an open mind’, and I am happy to do that, but I will be questioning the government on whether its arguments stand up to scrutiny. The only way to do that is through the committee system.
I thank the opposition for bringing on this matter of public importance.
ADJOURNMENT
Mr ELFERINK (Leader of Government Business): I move that the Assembly do now adjourn.
Motion agreed to; the Assembly adjourned.
Last updated: 04 Aug 2016