Page 2421 - Week 07 - Wednesday, 2 August 2017
the public can get across every contract and every process, especially when we get into contracts being negotiated and managed by government-owned business entities that work at arm’s length from the government, and that is where estimates scrutiny comes in. I think that cases like the Icon Water-ActewAGL agreements really show the value of the estimates process.
Perhaps the agreements are best practice and highly cost effective or perhaps they are a cosy relationship with excess costs being passed on to ACT consumers. And this is a critical issue. The amount here is large. We are talking about agreements worth almost $300 million over 11 years. If that amount is inflated, it is a direct transfer of money from the ACT’s water users, which is all of us. And that of course is totally unacceptable.
But it goes further than the money. At the estimates hearings we heard that, while the agreements have performance indicators that ActewAGL have to adhere to, there is no financial or other penalty for not meeting them. And this is really a bit of a worrying sign, because best practice in contracts these days does include financial penalties for underperformance. In Victoria the private bus companies delivering metro bus services can be penalised if too many services do not run. I know, from talking in estimates about the construction of the law courts, that there was a time penalty in that contract; if it is not built, it will cost. It would be quite reasonable that ActewAGL also has some performance hurdles in its contract.
Looking at Mr Coe’s motion, the only way to find out whether these agreements are good or bad is through external scrutiny. When I saw Mr Coe’s motion on Monday, I thought, “Yep, let’s support it. Anything that is too commercially sensitive can be redacted.” In fact, I thought that Mr Coe‘s motion was gentler than it could have been, and, while it meant some political credit for the Liberals, that in the circumstances, of course, was appropriate.
However, matters are often much more complicated than they seem at first blush. I was expecting that this would be a fairly simple matter, much as when the Assembly recently called on the government to provide a large number of LDA documents on the Dickson Tradies land swap and the government provided them. However, I have been told by the government that that is not the case with Icon Water because of the government’s arm’s length shareholder relationship.
I do not, however, think that the territory-owned corporation status should mean that we do not have the issue aired in public. I also do not think that the territory-owned corporation status should automatically mean that documents are hidden. Yes, Icon Water operates commercially but it is still 100 per cent territory owned. This legitimately brings with it requirements that do not apply to private companies. As item 1(c) of Mr Coe‘s motion says, Icon Water is subject to reporting and transparency requirements. This includes freedom of information requirements, annual reports, estimates hearings and scrutiny by the Auditor-General.
However, hopefully correctly, I will take the government’s word on it that Mr Coe’s motion, the thrust of which I support, needs to be done in a different way and therefore I am supporting Mr Barr’s amendment.