Senate Finance and Public Administration Legislation Committee, , 1:38:20 to 2:02:25
ORIC discusses corporate compliance and the ANAO report, followed by Township Leasing's review of home ownership and executive appointments.
Topics: Public service staffing, First Nations
Speakers: Tricia Stroud, Anthony Beven, Speaker 11, Senator Dave Sharma, Senator The Hon Malarndirri McCarthy, Interjection, Nigel Browne, Senator Karen Grogan
>> Thank you very much Chair. Um I want to read from the uh ANAO report that was handed down in June. They said uh compliance with annual reporting a key requirement under the Katsy act is declining for small medium and largesized corporations and was less than 30% overall for 2425 financial year. To some extent, this is attributed to a decision not to dregister non-compliant and disengaged corporations that hold assets because this is resource intensive. The ANAO is saying that compliance is poor uh and that's been made worse by your enforcement approach. Do you think that's appropriate for a regulator?
>> Uh uh thank you for the question uh Senator. uh the um compliance rates that were um uh cited by the ANAO uh and the concerns are ones that we um share also. Uh just recently um we dregistered uh 494 corporations um and uh 469 of those were small corporations. Um there are an additional 162 corporations that have uh avoided dregistration for the time being um but have been referred for other regulatory um action um and those corporations are corporations that uh hold assets. Uh, Senator, there are a number of reasons why we don't uh uh dregister corporations that hold assets um as quickly as we do others. And yes, one is because of the uh resource intensive nature of managing those properties that are then vested uh with the registar when a corporation is dregistered. uh but the other is probably goes to some of the points I just made earlier that uh regulatory action does not uh uh remove debt incurred by uh corporations. So if a corporation with assets is dregistered uh the debts and the costs on those cor uh those assets um are still incurred. uh the Katsy act does not require that Oric uh pays those debts and those uh holding costs. Uh so often it is a uh not just a resource inensive um exercise but it is also um not in the best interest in terms of retaining assets of uh those corporations. So that's why we will exhaust absolutely every other uh avenue before dregistering those corporations. And as I said, there's 169 of those uh currently on our case load
the ANAO said this about the effects. Just give me a sense how many corporations are we talking about here? So said 494 had been dregistered. 162 you're looking at. How many more
corporations are there? Uh so there's uh uh following the uh deregistration of the 494, there are now uh 2,956 corporations registered under the Catsy Act. >> Uh so 162 of those that are in the uh deferred dregistration uh case load if you like uh because they're corporations that if not for having assets would uh be automatically
So the NO said that said this about the effects of your decision and I quote non-compliance with annual reporting impedes Oric's ability to use data to understand the drivers of non-compliance. Due to a lack of evaluation, ORIc does not have a full understanding of the drivers of and harm caused by non-compliance. Without this full understanding, ORIC cannot be certain planned regul regulatory activity is responding to the greatest risks and harm. So, in effect, they're saying that because of your decision about these, >> uh, you don't know why indigenous corporations aren't complying. >> Um, and you don't know what harm this is causing, and you don't know whether you're being effective as a regulator. Is that would you assess that as a fair
uh they're two separate med matters in terms of the the um findings of the uh ANAO. Uh but you're correct. the um ANIO uh did make a um conclusion that we don't conduct exa um an evaluation of uh corporations that are not lodging reports um and that we don't undertake um an assessment as to what are the drivers for why corporations don't lodge reports. uh 7 uh 5% or roughly 75% of corporations that haven't lodged reports are small corporations. So, they're corporations with uh under $100,000 consolidated income and assets and uh uh under five uh staff. Um we uh haven't done an evaluation. We have agreed to the recommendation of the ANAO uh uh audit report to uh do uh conduct an evaluation program. Uh but I think it would be reasonable to assume that non-reporting for small corporations with under $100,000 and uh few if any staff uh is largely down to uh capability and capacity. uh but I have no doubt there is a level of uh apathy we have recently uh built into our uh system uh uh pre-populated general reports um and remembering that small corporations that are the bulk of the non-compliant are only required to to lodge a a general report. Uh so we've now introduced pre-population. We've been conducting workshops uh online workshops for people to step them through and help them do general reports and hope to see an uplift in that. Uh but yes, the the audit report is correct. We don't do a formal evaluation program, but we will uh commence one having accepted that recommendation.
>> Okay.
>> Yeah. Senator Collins, can I ask how you're going here? your colleague had advised me. You guys had one question. I'm just trying to manage our time and our next witnesses. How much longer do you think you need with these witnesses?
>> I could just round it off with one final question so I can understand, get a bit of clarity. Thank you. >> Um just just so I can understand that there you you decided not to stop enforcing government standards by dregistering non-compliant disengaged indigenous corporations and you the ANO report has been handed down but you haven't reser reversed that decision. and instead you are taking a recommendation to conduct evaluation. So why have you not reversed the decision and instead going down the evaluation >> That's how I understand it. Yeah.
>> So Senator not dregistering a corporation for failing to lodge reports doesn't mean that regulatory uh that compliance responsibilities on the corporations um have been uh forgiven if you like. So even those 169 corporations um are still required to lodge reports uh they still have other regulatory um action that could be taken including uh prosecution. Uh but yes, the automatic dregistration of those uh is something that we've not uh shifted to. Uh but it's certainly not been uh ruled out and it will be considered after we have um uh exhausted all other avenues to get those 169 corporations um uh compliant. Um and also the other uh ground for dregistering a corporation is that the corporation is um uh in our view not conducting business. So not lodging annual reports is only one grounds for dregistration of a a corporation. They have to have also not lodged uh anything with Oric uh in an 18-month period. And they have to also uh in our view not be conducting business, not be contactable, not be responsive to to anything. So
>> just just to just to you mentioned prosecutions there. There's a potential avenue. At what point do you um refer corporations to be prosecuted?
>> So we resume
>> how often would you do that?
>> Uh so we resumed and uh the prosecution of corporations for failing to lodge reports in uh 23. Uh our practice is that when they're uh two years uh having not yet uh lot having with outstanding reports uh we had been not uh referring small corporations for prosecution. Um again noting that they have uh minimal funds. Uh they typically don't get uh government funding. So in terms of the the public interest uh factor uh but we have made a public statement that we now will consider referring small corporations for prosecution for failing to lodge reports.
>> Okay. And does that public statement have the the threshold under which you would refer to for prosecution?
>> Uh I'd have to take on notice whether our website and public information explicitly says uh two years. Uh
>> but that threshold is established.
>> Yeah, I'd have to take that on on notice. That's a internal uh policy uh two years. Uh under the cats, we could prosecute sooner than that.
>> Okay. All right. Thank you very much. Thank you for your time. Thank you, chair.
>> Thank you. Thank you so much for your time to the Outback Stores and to Oric. Um we appreciate you spending time with us this morning and answering our questions. Um we will now let you go. Um as people may notice we are running a little bit behind. We will break now uh well actually no we will go directly to our next session which is the indigenous land and sea corporation and the office of township leasing. Um we are aware we have uh limited questions for these two witnesses because a couple of the key senators who had requested you um unfortunately due to other circumstances are not able to attend this morning. So it will be a short session but please don't interpret that as any less uh interest in um your work at all. Um so I'd like to welcome maybe my list doesn't line up Mr. Morrison from the Indigenous Land and Sea Corporation. I believe you're on.
>> I am online.
>> Sorry, [laughter] you're pointing over there. I'm thinking >> um yes, I can see him online. Um and um from the township leasing we have Mr. Anthony Beavenon. Lovely. Would either of you like to make an opening statement? We'll start with Mr.
>> Um I I do not uh chair, but I'd just like to acknowledge the traditional owners uh on the land we're meeting on, but uh also particularly pay respect to the traditional owners we work with in the Northern Territory. Um um particularly our town where our township leases are on the Tiwi Islands and in Majulu in Central Australia.
>> Thank you very much. Mr. Morrison, would you care to make an opening statement?
Uh >> I do not. um chair but again I would like to acknowledge the traditional owners of the land and waters that this meeting is taking place on.
>> Lovely. Thank you so much. Uh we will go directly to questions and we'll go to Senator Charlotte.
>> Yeah please. Thank you. Uh thanks and good morning. Thank you for joining us today. Um Mr. Beavenon if we could start with you. Just wanted to ask a basic question. Um we know that town camps originally sprang out of discriminatory We know and the evidence has become [clears throat] quite clear over the last 12 months in particular that there are widespread widespread problems within town camps. From the perspective of the office of township leasing in the long term should town camps continue to
>> Um thank you Senator Anthony Beavenon acting executive director of township leasing. Um that uh in relation to your question, Senator, that's a that's a a matter for government. That's a matter for the housing associations that that hold the special purpose leases and crown leases uh for the Ella Springs Town camps. Our role is to ensure secure tenure for government investment in town camps. But in terms of the policy decisions around whether they should continue that that's a matter for government but also more importantly for the housing associate the Aboriginal housing associations that hold those leases.
>> Minister since you're here and part of the government could I ask for your view on that um should town camps continue to
Well, absolutely. These uh there are presidents and boards of each of these town camps, especially in central Australia. In Alice Springs, we're talking about 16 town camps. I think it would be uh uh pretty uh a pretty bad position to be in to to say to get rid of them when we have uh governance groups arrangements in these town camps. Uh like all things under the national agreement on closing the gap, it's about working with Aboriginal people and ainal organizations and that's precisely what we're doing. Uh it is really up to those uh presidents and the members of those town camps to determine what their future is uh alongside of governments and and this is what we're trying to do.
>> Um Mr. Mr. Bever, can I ask how many families have become homeowners through the township leasing system? You got the figures on that?
>> Um, Senator, in total um 15 uh we've had uh 15 people move to home ownership.
>> So 15 over how many years?
>> Uh since uh 2007.
>> Sorry. So almost 20 years. What's the eligible population if you like like who who could have moved who are potentially eligible to become homeowners?
>> So in terms of the the township leases that we manage, we have uh four township leases. Uh three of those on the the Tiwi Islands and and one in Majulu in central Australia. Uh the 15 U families that have moved to home ownership were all on the the Tiwi Islands. Um in terms of uh um our approach, we we make that option available through the township the secure tenure that township leasing does provide. [snorts] But uh in terms of uh uh it's voluntary. So in terms of whether families want to take that up, that's obviously a matter of being able to access uh um uh capital for for the per purchase of the home, the maintenance of the home. Um and uh um most of the the families that we do deal with don't have large disposable incomes uh that would uh be able to secure or uh service a mortgage for home ownership. So the aim is and we want to make that available to families but there hasn't been a large uptake uh since township leasing was introduced. It
>> still seems a very low figure. I mean, have you got a is there a benchmark figure or you said the aim? I mean, I presume the aim is for there to be a higher number of people who become homeowners.
>> Um, we don't have an aim or a target, Senator. Uh, what we want to do is provide the mechanism for those people that do want to move to to home ownership, but uh it's voluntary. We we don't have a target that we're we're moving towards or aiming for. uh we just want to have the mechanism in place for families that that do want to take up that option.
>> What are the main obstacles though because 15's very low number. So anecdotally or otherwise, what are the obstacles you've heard that have prevented people from
>> As I said, Senator, uh poverty, disadvantage, all of the issues that uh uh we're all trying to address in terms of the national agreement on closing the gap, uh improving employment outcomes. uh uh target 9A and 9B is about improving housing options and availability, but uh uh all of the issues that are covered off in the national agreement on on closing the gap are the factors that that are inhibiting people moving to to home ownership in remote communities. Uh but what we're trying to do is resolve the tenure issue that has prevented people moving to home ownership uh on those township leases. But in terms of the other factors, uh there's there's many many factors that contribute to a low take up in home ownership.
>> Can you just expand on that point resolving the tenure issue? >> Just explain to me what that means. Exactly.
>> Uh so for instance, Senator, in the Yala Springs town camps, uh home ownership is not possible, uh largely because of the legislation that the town camps were established under.
>> Is that the Aboriginal land rights act or
>> No, no, it's it's Northern Territory legislation. the special purposes leases act and the crown leases act which are northern territory legislation.
>> Okay. Sorry I interrupted you. Go ahead.
>> So in terms of the uh in terms of the township leases um uh the underlying tenure is Aboriginal land which is communally held. So the the township leases provide a mechanism where my office takes a long-term lease uh from the land trust and that enables us just like here in Canberra where there's uh there's no freehold title it's it's long-term leases so we provide that secure tenure that enables businesses to have long-term tenure home ownership to be a potential option um u and addresses the issue of um uh Aboriginal um community tenure.
>> Are there any issues with federal legislation that would help you solve some of these tenure issues or make it easier to basically deal in and dispose of
minister may jump in is that uh the minister's announced a review of of my office and so one of the things that uh uh may come up in in relation to that may be uh legislative reform but at this stage where where we don't see any any uh any major hurdles uh other than as I said the underlying issues around the national agreement on closing the gap and improving and and uplifting Aboriginal people in terms of employment, education, economic development, housing, uh health, all of those things so that they're in a position to take up home ownership if if that's a uh if that's something that uh they would like to advance.
>> Can can I just ask of the 15 who become homeowners, when was when was the 15th party? Uh when did they become a homeowner?
>> I'd have to take that on notice. S
>> in the last year, last 5 years ago. I'm
not not certain, Senator.
>> Okay. If you could just take my notice, I guess I I'd be interested in the time distribution of the 15 who've become homeowners since 2007. I mean, were they all in the 2010s or
>> My understanding is they were fairly close together. Um um but I'll I'll take that on notice and and give you the exact dates.
>> Okay. Thank you. Um I didn't have any further questions and I I do thank Indigenous Land and Sea Corporation. We might put in some questions on notice, but just in the interest in in keeping us on time,
>> we'll go to Senator Collins.
>> Thank you. Thank you, Chair. Um, uh, Mr. Burman, congratulations on your recent appointment.
>> Thank you.
>> Um, uh, I understand, uh, this, what's the tenure of your appointment?
>> Uh, 12 months.
>> 12 months. And this change occurred recently. Um, was there a formal minister, Minister, I might direct this question to you. Was there a formal recruitment process that was undertaken
>> Thank you uh for the question. Um we certainly uh identified uh a number of uh applicants for this particular role and the reason being is we wanted to have a review of the executive office uh over the next 12 months. So what we've done is appoint uh Mr. Anthony Beavenon as the uh acting executive director uh at in parallel with a review that's going on uh in terms of the township
>> Okay. So it's a temporary role. So would
>> 12 months.
>> Okay. 12 months. Uh and you invited a few people for interview and then or did you just appoint? How do what was the process?
>> We we have appointed uh Mr. Anthony Beavenon as the acting uh executive director.
>> Okay. So there was no there was no interview process. It was just you spoke with appointed for act. Okay. So does that mean that over the next 12 months there will be a formal recruitment process?
>> At this particular point in time we are focused on the review Senator. So I'm the review of what >> the review of the township leasing in terms of across the country as Senator Sharma has pointed out uh looking at uh the the role of the EDTL and what kind of success or otherwise we've had and also in consultation with the land councils.
>> Okay. How how many people did you have on the list for potential people for the
>> Uh Mr. Beavenon was really direct directly approached. Yeah.
>> Okay. All right. Um and would would this be a usual process? Um I understand it's temporary appointment and you're focused on the review, but um in 12 months time, how when were you appointed?
>> Uh 30th of September.
>> 30th se. So by September next year, I mean take a long time to do a formal recruitment process, I would have thought. How long would that usually take for um the something like the When would you need to start that?
>> What I've certainly found in the past is uh with general recruitment, ordinarily you'd give 3 months. Uh it may take longer, but at this particular point in time, uh we're not looking at recruitment at this at this stage. We're very very happy to have Mr. Beaven.
>> Okay. Um All right. I I think that's it from me. Thank you very much for your time and congratulations on your