Senate Finance and Public Administration Legislation Committee, , 47:20 to 1:38:16
Outback Stores addresses remote community food security and ORIC provides updates on the ATLA special administration and Mount Isa housing.
Topics: Food security, Integrity
Speakers: Tricia Stroud, Senator Lidia Thorpe, Mr. Michael Borg, Senator Dave Sharma, Senator The Hon Malarndirri McCarthy, Senator Karen Grogan
Welcome uh Mr. Stroud, registar of the ainal touristra islander corporations and Mr. Borg. Yes, I see you there, Mr. Borg, chief executive officer of the outback stores um appearing on teleconference. Um Mr. Do you have an opening statement?
>> Uh good morning. Uh I do have an opening statement that I've uh tabled and uh for the sake of time I'll um take it as read.
>> Okay. Entirely up to you. Thank you. Uh Mr. Borg, do you have an opening
>> Uh good morning, chair. Um we also have tabled our opening statement already. Um and um yeah, we're happy to take questions this morning. Um the with the already already tabled.
>> Okay, no worries. We're happy if you wanted to give us highlights, but also happy we do have them in front of us. So um we will go to Senator Sharma.
>> Thank you. And look, um good morning. And uh obviously I haven't read your opening statement yet so please forgive me if I um ask some things that are in there but feel free to refer it to me. I was interested to discuss um the lowcost essentials subsidy scheme. Uh now under that scheme as I understand it outback stores operates as a retailer as well as a wholesaler. Someone just help enlighten me a little bit there. Is that you, Mr. B?
>> Yes. Um, Michael B, chief executive officer Outback stores. Um, thanks Senator Sharma for the question. Um, we um um yes, we're a service provider that um provides services for remote communities from a retail environment, but um over the last year, we have been um working on um improved ways to procure goods to service remote communities. um um not only um for the subsist scheme but for outback stores in general. So we we service 60 stores um across the Northern Territory in um mostly in West Australia, Western Australia um a couple um in South Australia, one in North Queensland and and two in New South Wales. So we've been working for some time on um um real ways to impact um and improve affordability in communities noting that traditionally we've been focused on food security um good governance and good retail standards. So you know postco um we've seen a wave of inflationary pressures as we continue to see and a important part of our strategic direction is to focus heavily on affordability and a large piece of that work was to work on how to um um I guess open up some supply chain avenues to um fuel goods at a cheaper cost.
>> Okay. So you provide you said 60 stores. Is that right? Across a number of
>> That's correct. For outback stores.
>> Okay. And is that the um is that just uh you provide them with the essential categories of goods? I think there's like 30. Is there household and retail products that you provide them
>> Yeah, I'll provide a bit of detail for you senator on the subsidy scheme. So, um the subset scheme is an excellent initiative by um the federal government um which has allowed um um remote community stores and I think there's 128 currently listed um to be able to access um products to sell for the same price as um your corporate retailers like Coohl's and Wworth. um Outback Stores is the the enabler and was given the task as a commonwealth entity to um um ensure there's strong governance around the program um and to deliver the program um over um a 3 to 5 year period. So we um on top of the work we're doing for our own stores also supply these goods to remote community stores who are participating in the program and um we're seeing significant benefits around the reduction of sale price um across just about in the most of remote community stores in um the north of the
>> Okay. I just I noticed in the postimplementation review that AC expressed some concerns about the scheme and they said uh they had concerns that um it had the effect of reducing the scale and efficiency of grocery distribution to remote communities which in turn impacts the price quantity and product range of groceries supplied to remote communities that are not included in the scheme. So what's your response to an analysis of that AC concern?
>> Well, you know, there's probably a couple of things there, Senator, to talk through. Firstly, um the government would have been exceptional in their controls and governance of the program to to ensure that um it um it doesn't expand where it's going to impact other wholesalers um across the country, which I thought um um was good framework for the government to put in place. Um um there's certainly different views um from different wholesalers around um and um in relation to the program uh and um they have shared some of those um views with the AC but in general
>> when you say different views Mr. Bur it sounds sounds a little euphemistic. Do they're not supportive of the scheme?
Well, you know, you know, wholesalards have probably lost some volume out of their own um system. So, um um there may be a level of frustration um from their own commercial benefits. I I think what's important here is to remember that um remote communities are um from a retail point of view are very disadvantaged. Um and any any work that can be done um to assist in this space um should be done like like it has been. Um and then we probably should put to one side um you know the commercial um impacts um to multinational c companies around the country.
>> Yeah. I'm just wondering Mr. Bergen maybe you you've done some work on this um but I guess if if if you're a competing wholesaler um and you're no longer competitive in the 30 subsidized product lines that Outback stores is delivering. Don't you then just push up your prices in the other categories of goods to protect your >> your margin basically? So is it not the situation where you have consumers going to store and they might be paying less for some things like the 30 subsidized categories of goods but they're paying more for the other stuff that you don't provide. What what's what have you done any analysis of whether that's whether this is sort of having a diversionary impact rather than a beneficial impact?
No, that's that's definitely not the case. Um, so and the way the scheme is set up is that um the um the products that are listed on the subsidy scheme um meet a a general practice of a 35% gross profit. Um and um the the the share of the um of the 30 products um it might be 15% roughly of the of the retail sales. So it's not like it's a significant amount um of volume being taken away from other other wholesalers or other components of the market. Um you know I can talk for outback stores um we're aggressively um you know chasing um you know improved cost of goods to continually drive down um lines outside of the subsidy scheme as well. So, we've got a couple of other programs in place um at Outback Stores where um value and affordability um is absolutely um um our focus and um you know holding a a generalized gross profit and return to stores um and with consistency is also key. But certainly um there's no evidence of anyone um putting up prices um to offset the subsidy scheme or um to make more money. I think the the lines that are alliance the subsidy scheme um return a fairly healthy gross profit um for stores not to have to worry about um um playing with margins and other
just of um I mean so our back stores runs you've got 60 retail outlets in
>> um we don't own any retail outlets we um we're a service provider and we and we yeah we partner with um Aboriginal corporations um of the most that um need some support either from a retail point of view um um a lot of them from a commercial point of view and or governance.
>> Okay. But then under the under the scheme itself, you've also got responsibility for running the wholesaler or distribution aspect for a larger number of stores. Is that right?
>> Just so we're clear. Um we run we execute the program for the subsidy scheme for the federal government. So um we've had funding aligned to us. um and um you know a a set of obligations that we need to deliver um and um we manage the scheme on behalf of the Commonwealth government as well as um also service our own stores for other products.
>> Okay, I see. So and how many so putting your own stores to one side, how many other stores are you supplying or running administering the scheme for?
The scheme's got 128 stores um aligned to it at the moment >> which is exceptional. Senator
>> So does that include your 60 or not including your 60?
>> That includes our 60.
>> Right. Okay. And who are the I mean so that means what about half half of the stores in those sort of categories are not participating. Is that right?
>> Yeah. I will share some more information with you Senator. There's about um probably about 150 to 160 real retail stores and remote communities across our country. Um so you you got most um um most stores signed up to the scheme which is excellent. Um there there are certainly um there's some more work to be done with some Homelands and smaller stores um to bring them on online to the scheme um which I think will occur over um the coming months. Um but but in general um there's there's three groups large groups that manage community stores. There's Outback Stores. Um there's Alpa who works closely up in Arnamland. And there's another company called CEQ across in North Queensland. Um and and really that those three companies um are the base of um the majority of remote community stores across the the country. Um and as I said before, yeah, 128 stores in total aligned currently to the scheme.
I'm not not entirely sure where this figure is from, but I thought the the independent review said that of 88 eligible independent stores, >> maybe that's a subcategory, only 15 are participating in the scheme. Is that correct?
>> Is that correct? >> I think it's um maybe 17 now. Um and mostly they're they're larger stores and there there are some independent stores that haven't signed up for the scheme. And just to be clear, there's a um there's a fair um there's a fair list of um requirements to be able to get onto the scheme. So once again, the government have done a good job of setting up the scheme um um to to ensure strong governance. So there are um some social and and some commercial um requirements that you need to meet to be even to be able to apply for the scheme, Senator. So it's not like everyone can just get on the scheme um apply to outback stores and get delivered stock.
>> So how give me an situation where a store would not be eligible to participate in the scheme like what what would it have failed to meet in terms of your requirements? What what are some of the requirements that these stores that aren't participating have not been able
>> Probably probably a question for NIAA. um they they developed the the scheme but I
>> sorry Mr. Borg I can jump in there if you like um to assist. We we don't have NIA at the table but I can give some assistance. Is there a bit of feedback there? >> Okay. Yeah. Um thank you Senator Sharma for the question. Uh this these stores are for remote stores. So some of the uh difficulties that we've certainly found uh is those stores who are in regional areas have wanted to sign up but because we've focused specifically on remote for now um we're hoping to roll out to at least 150 stores but it's completely voluntary and those stores can put their hands up for applying on the code of um conduct scheme uh with NIAA. So, so far my understanding is there's around 120 stores that have signed up. So, that there could be those 30 items of essential items that are at 50% of the price um or closest to the nearest Woollies or Coohl's in whatever regional or city uh is closest to them.
>> Okay. Minister, I mean, have you, >> cuz my colleagues have. Um, have you had um independent retailers and wholesalers come to you and say they're being squeezed out of the market because of this scheme? Come to you or your office?
>> There's only been there there certainly has been uh an issue raised in Central Australia. So, we had a review uh conducted. So that review is now um available so that I could understand uh what some of the issues are and have that with me. Uh in this is the first time we've ever done a policy like this. Uh so it's all completely new. So of course there will be uh things that we have to learn throughout the process. It was important at the outset, Senator, that I had the AC uh give guidance as to how we roll this policy out, conscious of the competitive nature of the business and conscious that there are businesses who who are there to make a profit. Uh but the the call from communities was that they needed these stores to be cheaper and that's why we've rolled this policy out.
>> Okay. The just I'm so clear that the review is that the review done by your own business services. It's on the NIAA
>> that's correct.
>> website. Okay. just have you will the government be providing a response to that independent review because there's obviously there's a whole there's a number of um I think key challenges that outline.
>> Sure. Look, we've accepted all eight recommendations. Okay. Senator Sharma and we're committed to strengthening the delivery of this scheme.
>> Okay. >> Yeah. >> Thanks, Minister. I'm happy to see the call. Chair, thank you.
>> Senator Thorpe,
appearing today. Um, bear with me. I have lots of questions. Firstly, So, uh, ATLA has been under special administration since 26th of March 2020. It's a long time. Um I be I believe this is now the longest special administration ever conducted. Sorry. Can I just um pass the call and come back? I think this is a wrong so ATLA administration. Yeah. I'll start again. ATLA's been under special administration since 26th March 2020 and I believe it's now the longest special administration ever conducted under the Katsy act. Is that correct?
>> Uh Trisha Straad register of a touristra corporations. Uh yes senator I can confirm that the Atlas special administration is to date the longest special administration uh under the
>> Thank you. So what specific problems identified with ATLA um was placed into administration in March 2020 remain unresolved today.
Uh Senator, there are um a number of outstanding matters uh that remain with Atla which unfortunately are largely caused by an ongoing legal dispute between Atla as the uh native title uh body for um Ajimatner common law holders um and its trustee which is Rangely uh uh Proprietary Limited. Uh we have a uh commitment under special administration to return a corporation back to member control when it has strong sustainable governance and financial uh security and where there are no administrative legal or um uh financial burdens on the corporation. Uh it is my view to hand Atla back to members and to common law holders with a lengthy and complex legal battle um a foot would be um unethical and irresponsible to leave a corporation
you said that it's um important to have strong governance be before handing it back. Did um the examination that led to special administration identify fraud, theft, misappropriation of funds, or criminal wrongdoing by ATLA
Uh Senator, the examination found um significant uh serious and systemic breaches of the the Catsy Act and the Corporation's rule book. uh uh many of those governance failings but fundamentally the greatest failing of the corporation was its financial uh management uh practices. uh as to whether there were criminal um matters found. Um uh the most I can say is that a uh the fact that there has been no uh Oric investigation and criminal uh prosecution or civil prosecution would tell you that uh there was not sufficient evidence [snorts] uh to meet a threshold to pursue uh prosecution of individuals. But the fact that the corporation did end in special administration largely because of its financial management practices uh is uh and it's on the public register uh tells the public that the manner in which the board at the time the directors at the time were managing the finances of the corporation uh was poor and there was significant failing in director's duties.
Uh so what measurable criteria must ATLA satisfy before the registar will return the corporation to its members? Surely after 6 years [clears throat] matters should be able to be resolved and I'm sure I mean how much does the administrator cost for over six years who's paying for that?
>> Uh Oreic's paying for the uh special administrator. I'd have to take on notice how much the uh total cost of that is. Uh Senator, can I just um I think it would be important to lay out that uh during special administration uh it's my practice to attend the corporation uh AGMs and information uh meetings. Uh the next one uh will be towards the end of uh November um with the ATLA AGMs. I and my colleagues and the special administrator um ensure that someone is at each of the three locations uh that common law holders and members uh sorry members um it is quite common for me to receive uh requests and be approached at AGMs with a request to maintain special administration until the legal matter is resolved. There is um evidence of general fear amongst the members um and the broader common law holder group that if the legal matters which go to the common law holders rights to transparency and accountability of how their native title money is spent that until that matter is resolved and the outcome achieved for common law holders there is genuine fear amongst the ATLA members that ORIC would be in their words abandoning them by ending special admin administration. The other point that I think is probably important to um outlay is that while it's not required under the cats act, it is our practice to establish what we call a corporation advisory group which for one of a better term is a quasi board. So, Ajamatner people have members on the corporation advisory group. The special administrator engages regularly and conducts those advisory groups as if they were a board. Uh they are heavily consulted and at the same time building their knowledge and skills to become the incoming board when the uh corporation is returned to members. We're hopeful by the end of this year that the uh inspector that was appointed by the the courts. We're hopeful that the final inspector's reports into the Rangely Holdings Proprietary Limited accounts and how Ajamatner's uh native title monies has been distributed um uh over the years will be made public. Uh once that's made public, common law holders will have a meeting. they will make their own decision as to whether Rangely has been uh responsible or otherwise uh in the management and distribution of their common law holder their native title money. Um once that is dealt with um and common law holders have made uh their own informed decision uh and the legal matter is dealt with we think it would be responsible to hand the corporation back to the members then.
>> Yeah. because a bit bit of mission management here I think um if we talk about self-determination six years under mission management is pretty um doesn't it flies in the face of self-determination so how many native title decisions have been made by or through ATLA since the elected board was removed in March 2020 uh Senator I'd
have to take that on notice uh but it's important to note that whether the corporations uh under member control with the board of directors or under special administration. The native title requirements under the PBC regs remain. So the special administrator uh acts as the board but he is still bound by the same native title requirements to consult and get native title uh consent for uh any native title decisions. Uh but I'd have to take on notice how many uh decisions have been made.
>> Thank you. So um if you don't know how many decisions this um mission manager is making on behalf of the people whose land it is then uh are there any decisions which I've been told there have been uh that are related to mining exploration uranium mining heritage land access agreements illers compensation or other development proposals. proposals. So, how much are they trying to suck out of the people and the land and the resources in the six years that they've been there?
I know that there have been native title meetings held. Um and again uh I can uh assure the committee that the special administrator is bound by the same requirements as a board would be in terms of uh proper consultation and the um security of securing of consent from common law holders before any native title decisions um are made. Uh, Senator, I think um the fact that a special administrator is really just uh replaces directors but is bound by the same level of member engagement and common law hold engagement. >> Uh would be probably uh put us at odds in terms of our definition of a special administrator. Um and I don't think we or the many people that uh have asked us to stay there and um need our support would describe that special administrator as a mission manager.
>> Well, I have different mob talking to me from there. So I'm hearing different and I'm hearing that common law holders have not been consulted or required to consent to any of the native title decisions made in the last six years. And I understand administrators know all about them how they fly in control the community make their money and then fly out. They don't consult. They don't do the right thing. Mission Lake Tires Mission had an administrator. They don't talk to no one. So whilst they've got rules, they don't abide by them. So can you explain how all of these people that have come to me have not had FPIC applied or even spoken about as common law
Uh Senator, I would again have to take on notice how many native title uh meetings and consultations uh have been I I can't answer as to people that are agreed that they haven't been uh consulted. The only thing I would add that uh of the reports of concerns that ORIC receives uh uh generally across corporations um a significant number of those are related to native title matters. It is not uncommon in native title space whether a PBC is member controlled or under special administration. It is not uncommon for Oric to receive complaints from common law holders that they are not being consulted or not engaged or a native title decision has been made not to their liking. Uh they're not matters regulated under the Catsy Act. If common law holders are agreved about a native title decision or a native title process, regardless of whether the corporation is in special admin or not, then native title matters that they would need to take to the native title
tribunal. Yep. So, are you responsible for the administrator?
>> Uh, I appoint the special administrator. Uh, we set out in charge of the
administrator.
>> Uh, I appoint the special administrator. He sets out terms and references. Uh, but the expectation is that they are independent. They are employ they are engaged uh as the board if you like and their [clears throat] sole responsibility is the interests of the corporation. >> They're not directed or influenced by
Oric. So, has Oric ever audited ATLA's consultation in decision-making processes during special administration to determine whether they provide genuine informed consent?
>> Uh, no, Senator, because I wouldn't do that for a PBC not in special administration either. Again, their native title matters. So, if the
administrator is not talking to the mob about doing a a dirty deal with a mining company, he hasn't cons they haven't consulted at all, then that's not an or that's not your problem because he's your administrative, but it's not your problem because he's independent, >> but they may not be do like what do you do when they're not cons doing the job properly?
>> So, Senator, I'd have to take on notice. [clears throat] Uh, but I am not aware of one native title complaint we've received. uh regarding ATLA. Uh if I was to receive a complaint about a native title matter with ATLA, uh yes, largely it would not be a matter that I would regulate and the uh agrieved uh native title holder would be directed to the National Native Title Tribunal. Uh but yes, naturally in terms of the quality and the integrity and the performance of a special administrator, naturally I would ask the special administrator uh to provide advice about their native title uh processes. I'd have to take on notice, but the fact that I haven't asked the special administrator that I would be uh fairly confident that we've not received a um a native title complaint from a native title holder.
Well, they're coming to me, so there's clearly a problem, right? So, what person or body can independently examine the merits of the continuing decision to keep ATL under special administration?
>> So, special administration is a reviewable decision. Um, so that means that under the Katsy act, uh, an interested party can seek a review of a decision to appoint a special administrator. uh they can seek a registar review, an internal review and if they're not happy with that a review at the administrative review tribunal and if they're unhappy with that they could naturally um seek judicial review. Uh we have over the times received internal reviews of the decisions to extend the special administrator. I'd have to take on notice and happy to give you a brief on uh which special administration decisions since uh relating to appointment and extensions have been subject to a review
>> and is the continuation or repeated extension of a special administration subject to mandatory independent merits review? continuation or repeated extension. This this person's obviously on a gravy train here, six years in a community being the mission manager. Um, so is the continuation or repeated extension of a special administration subject to mandatory independent merits
In terms of who the special administrator is,
>> no continuation and re So obviously someone's making a decision. Oh, yep. Stay there for another year. You're right. You know, mining companies are happy. Everyone's happy. >> where's the mandatory independent is there subject to a mandatory independent merits review about making those constant?
>> Yep. So, Senator um uh as I laid out uh the appointment of a special administrator and the extension of a special administrator uh is a reviewable decision. So at the time that uh Atlas special administration was extended uh the last time it was extended uh any interested party could have sought an internal review or an administrative reviews tribunal review or if they really wanted a judicial review which they didn't. Uh in addition to that uh Oric has a complaints handling policy. Uh so members and interested parties of a corporation in special administration can lodge complaints about a special administrator. Um and then I guess above all that is a complaint to the ombbudsman. So if there is a complaint about the special administrator uh that can be lodged with me. Um there are no active complaints or recent complaints about the ATLA special administrator. If people are agreed that special administration was extended, uh they had a period of time after the extension they could have sought um a review. Uh they didn't do that. Um and there is also the avenue that if people are agrieved about a native title decision or action taken by uh ATLA uh they could instigate a process with the National Native Tribunal which I'm not aware of uh any uh mindful that the special administrators engagement with members and native title holders is done with the advice the guidance and um in support of the cultural the community advisory group which is made up of Ajamatner representatives.
>> Do I need to share cuz I've got another topic I want to ask about um the Nunga Charitable Trust Misuse.
>> Please go right ahead.
>> Thank you. Um okay. So um in 2023 the Nunga Charitable Trust was referred by the WA ombbudsman to the charitable trust commission and found that equity trustees breached its duties as trustee of the Nunga Charitable Trust. The trustees owed to the Nunga people the obligation of examining a proposal to purchase several properties in some depth but this obligation was not met. The loss and damage to the Nunga people is estimated at $22 million. Throughout the commission's investigation, various concerns have been raised by community members and on information at hand about the conduct of current and former office holders of the Southwest Ainal Land and Sea Council which established the trust. The commission referred these matters to Oric for investigation. This was over a year ago and we haven't heard anything from Oric. So, has Oric concluded its investigation?
Uh so senator people don't usually hear of an outcome or action taken by Oric until it is placed on the public register. Uh and that is important to maintain the integrity of uh our regulatory considerations um or an investigation. Uh I can confirm that on the 13th of August 25 the commission referred certain information to my information uh to my office for consideration. Uh this was the referral that was publicly disclosed. Uh I acknowledged reced that the following uh day we undertook an assessment of the uh report referred to us um and based on the limited information in that report determined that there was no further action required uh under the Catsy Act but did seek uh additional information from the Western Australian Charitable Trust Commission. To this to this date, we have not received any further information from the commission uh that would give us reason to further assess and determine if there are matters they identified that fall in the remitt of but remain open to any further information that they might have.
so how come there's no investigation? Uh the Charitable Trust Commission specifically stated in its report in August last year that it was referring the matter to Oric given that information obtained during its investigation warranted a proactive referral to Oric.
What? Yep. Uh again, Senator, the information provided was uh vague. Um there was no detailed specific information or evidence that would give us um sufficient information to assess um an investigation uh to assess whether it warranted an investigation. Again, we've sought uh or provided an invitation to provide us with further information. Uh if I am completely honest with this committee, the public uh notice that a referral has been made to Oric with a vague description that there are matters that might fall within Oric's um uh remit is not the manner in which we conduct referrals. uh we wouldn't make a public announcement nor make an assumption that matters do fall into another uh regulator's uh remit but the matters raised didn't fall within our remit and there was not enough evidence for us to even make an assessment as to whether the matter would be investigated. Uh at the moment it is on the charitable trust to provide that information that we might make a determination as to whether it warrants a formal investigation.
The the commission's investigation showed various concerns have been raised by community members and the conduct of current and former office holders of SWAL. SWAL is a regul is regulated by you. So do you agree as the regulator it is your role to ensure that corporations registered under the Katsy act comply
uh I I do agree, Senator. It is uh my responsibility to investigate director duties that go to breaches of the Katsy Act. Uh but to do so, I need sufficient information uh or evidence to make grounds for an investigation. uh noting that an investigation is undertaken where there is uh enough evidence to uh provide a uh likely acceptance of a referral by CDP that it meets the CDP prosecution policy and that there are chances of um a successful prosecution. So even if we receive enough information and enough evidence to warrant an investigation, there is still not always a guarantee that an investigation will result in the evidence brief being accepted by CDP and a successful uh prosecution. Um again there for offenses under the Catsy Act but the referral from uh the charitable uh commission again senator lacked enough information uh or evidence to even give us grounds for an
>> Thank you. Um Mount Isa. Yep. uh given our people were kicked out of their homes and no one came to their aid, elders with disabilities, 15 families, a developer goes in and buys 12 of those homes. So thanks for nothing to those families. Under section 487-5 of the catsiac you are you as a register of oric can place a corporation under administration if a corporation has failed to comply cats failed to comply with internal governance rule failed to comply with reporting obligation. Do you agree that each of these applied in the first half of this year in the case of the aberinal and touristra islander corporation for welfare services?
Uh, Senator, I do agree that those grounds were uh met in order to appoint a special administrator. However, the uh the reason a special administrator wasn't appointed uh to the corporation this year and noting the corporation had previously been in special administration uh was because the corporation was or was very likely to be insolvent. So directors of a corporation carry duties to not trade while insolvent. They also carry legal ob um obligations and liabilities for trading whilst insolvent or conducting uh business activities that might be considered creditor defeating. When a special administrator is appointed, uh that person, as I uh set out before, replaces the board. They then uh carry the same director responsibilities and liabilities. So a special admin, >> so a special administrator in this instance would have uh been appointed to a corporation that was or was very likely to be insolvent and would have then carried those duties. a special administrator would have then been required to apply to the courts to have the corporation wound up and a liquidator appointed which is what uh I myself have done. So a perception out there in the community or hope at the time that a special administrator would have prevented the sale of the the properties uh is uh is not the case. uh a special administrator does not suppress creditors rights. It does not suppress the statutory rights of the council to sell those uh properties. So the properties would have still been sold even with a special administrator
>> really even though it was $600,000 of rates overdue because the dodgy corporation didn't pay it. >> Yeah. And you're saying to me that having an administrator appointed wouldn't have sorted that out way back and we get to a situation where people are homeless.
>> So, Senator, the the debt on the houses was in the vicinity of a million dollars. Um, and it was already um,
>> initially it was, but it wasn't in the because I checked with the Mount Isa Council myself and I have a letter and they said if the rates were paid, people could stay. I even asked the Brisbane Broncos for the money.
>> So, Senator, the council is correct. Uh, if the rates had been paid, the houses wouldn't have been sold. uh but uh I wouldn't describe the corporation uh as uh as dodgy but most certainly the corporation failed its uh its tenants uh regular
and doing the wrong thing with the money. Let's face it, the person running it >> was doing the wrong thing with the money because they were not well. So that's dodgy when you're using the money for your own purposes and not paying the rates.
>> That's a separate matter and I'm not at liberty to to talk about that specific matter uh today. But um essentially a corporation uh has been abandoned by its members and its directors and in doing so has failed those people that it serves. the matter of the outstanding rates. The only way that those houses were not going to be sold was for the rates to be paid. >> The corporation uh at the time the the growing rates debt uh became uh known by uh my office and others. Uh at that time the corporation had $8,000 in the bank. The corporation itself had no capacity to pay those debts. The Katsy act does not is not well actually no uh reg corporate regulatory framework uh is designed that a corporate regulator is um resume assumes responsibility for debts that a corporation has incurred. So
>> yeah that's not what I'm saying. I'm saying that if Oric had have intervened earlier when the red flags were waving at you, could have gone in then and saved 15 homes for our people. But that didn't happen in this case, did it?
>> No. and Senator, um I think that uh my uh my view and my application of the Katsy Act uh would uh differ to that uh public narrative that Oric could have uh prevented this. Uh, Oric became aware of this situation when the council alerted people in March that it was going to sell properties. Despite the public narrative that Oric was advised um and knew of the red flags, I can confirm that from 2019 until 2026, Oric received one phone call about the corporation and that was an anonymous phone call about a matter that was not within uh the Katsy Act uh remitt. So unfortunately, like many others, uh Oric didn't become aware of this debt until March. Um, and again, Senator, I would assert that by that time there was nothing that special administrator could have done to have prevented the sale of those properties because the special administrator would have been dealing with an insolvent corporation. The corporation didn't have the money to pay the debts. >> Uh, the only way the council was going to stop the sales was with the debt paid. >> I said that before. Katsi Act does not suppress the council's right to sell those assets. So without a million dollars, the special administrator would have had no way of keeping the corporation solvent and preventing the sale of the houses.
Well, >> you goten up the special administrator that you put into the last community and couldn't put one in here. And the special administrators, aren't they like big shot accountants that come from big accounting firms and and know how to just fix stuff? >> Isn't that what their role is?
>> So, Senator, the difference between uh Mount Eiza and Atla is that ATLA wasn't insolvent when a special administrator was appointed. uh as skilled um and as committed and as professional as a special administrator might be, they like directors carry legal obligations around trading in solvent.
>> Yeah, I I get that. Like I know that.
>> So a special administrator was not going to be appointed and be able to change the fact that the corporation was insolvent or very likely to be
insolvent. Did you take them to court >> for failure of governments and lack of reporting?
>> Uh they were prosecuted for failing to lodge their annual reports.
>> So was there red flags for you then >> that [clears throat] that 15 houses were about to be taken again from our people? Did you
certainly there were concerns with the the corporation, the fact that it hadn't been lodging its reports and uh had been prosecuted. Uh but noting that even if the corporation had been lodging its annual reports, the corporation is not required to report to Oric about its tenency management uh uh services nor about the state uh of its uh houses. the Catsy Act and Oric does not regulate tenency management.
>> I think it's a real Yep. Just one one last. I It's really disappointing to hear this because you got the minister, you got Oric, and you got all these deadly departments in NA, and you couldn't all just get together to save 15 homes for our people. You couldn't do that. And it was less than a million dollars. It was less. It was more like 600. So no doubt there were a number of people or agencies who could have taken some action to avoid the loss of homes under the management of this corporation. Can you suggest any better place than you to have taken action earlier this year with all the departments that you work with? Couldn't you have
Senator, the unfortunate and sad uh circumstances here go to the heart of corporations registered under the Catsy Act. The corporation is member controlled. Unfortunately, in this instance, members and directors who carry obligations as well as rights uh failed the corporation. They abandoned the corporation and as a result those people served by the corporation uh were um abandoned.
>> Yeah. 15 families were abandoned. Yep. >> And and some could be still homeless. So well done guys. Well done. >> Handing over.