Legislative Assembly for the ACT: 2009 Week 11 Hansard (Tuesday, 15 Sept 2009) . . Page.. 3978 ..
importance be submitted to the Assembly. In accordance with standing order 79, Mr Speaker has determined that the matter proposed by Mr Doszpot be submitted to the Assembly, namely:
Management of statutory authorities and territory-owned corporations.
MR DOSZPOT (Brindabella) (3.22): The management of statutory authorities and territory-owned corporations is a subject that warrants some attention by this place, and I am very pleased to bring this subject here today in the form of this matter of public importance.
Section 7 of the Territory-owned Corporations Act states that the main objectives of a territory-owned corporation are:
(a) to operate at least as efficiently as any comparable business; and
(b) to maximise the sustainable return to the Territory on its investment in the corporation or subsidiary in accordance with the performance targets in the latest statement of corporate intent of the corporation; and
(c) to show a sense of social responsibility by having regard to the interests of the community in which it operates, and by trying to accommodate or encourage those interests; and
(d) if its activities affect the environment—to operate in accordance with the object of ecologically sustainable development.
We have seen numerous examples of well-run statutory authorities and territory-owned corporations throughout the history of self-government, but recent times have seen some incredible management failures. It seems that the current government has seen fit to interfere, as shareholder, only when it suits it. The bottom line is that the government can claim responsibility for failures and successes equally, as the major shareholders. There is a litany of cost blow-outs and debacles associated with territory-owned corporations for which the government must take responsibility.
One such case is Rhodium. In 2006 the ACT Auditor-General’s report into Rhodium Asset Solutions stated that the shareholders, being the Chief Minister and Deputy Chief Minister, failed to provide clear direction, which in turn made it difficult for the board to provide and commit to appropriate long-term business strategies.
In 2008 the Legislative Assembly’s public accounts committee’s report on the ACT Auditor-General’s inquiry into Rhodium Asset Solutions presented a unanimous report that drove the final nail into the coffin and laid the blame with all involved, including the shareholders. I quote from the conclusion of the report:
Management, led by the former CEO, engaged in ill-advised spending, treated company assets and business as personal benefits and failed to establish policies and practices of even a basic acceptable standard. The Board failed in its duty to supervise management and did not place any priority on addressing key areas where they were aware of weaknesses. The shareholders, while not directly responsible for the day to day failures and questionable behaviour at Rhodium, failed to establish and communicate its expectations to the company.