Andrew Murray (WA, Australian Democrats) Share this | Link to this | Hansard source

The Australian Wine and Brandy Corporation Amendment Bill (No. 1) 2007 amends the Australian Wine and Brandy Corporation Act 1980 to implement changes to the Australian Wine and Brandy Corporation’s governance arrangements in line with recommendations of the Uhrig review. In particular, the bill’s amendments propose to discontinue the appointment of government members to the Australian Wine and Brandy Corporation board.

The Australian Democrats support this bill but are taking the opportunity of this debate to point out that it could go much further. This bill does away with the procedure of appointing a government member to the board of the AWBC, which generally, but not always, is a good thing. Boards of authorities should in general be as free from government interference as possible, but there should be a transparent process for appointments on merit against set criteria. This bill does not in any way set out procedures for appointments on merit; it simply does away with the requirement that there be a government appointee to the board.

The criteria for the selection of someone to the AWBC board are set out in section 13 of the act. Although the amendment does away with a government member, the members are still appointed by the minister in writing and the criteria, set out in that section, are simply that they have must have knowledge of or experience in winemaking, grape growing, marketing, finance, administration or business management. This bill now adds knowledge of or experience in ‘government policy processes and public administration’.

The argument is that this will increase the transparency of the AWBC operations. I am not convinced, as the minister will still have the final say—it is up to him or her to sign off on appointments, and while the criteria cover a broad skills set they do not prevent the appointment of mates and the use of patronage. It is easy for the minister to simply appoint a person that he wants to the board—a mate. That is not an arms-length appointment on merit. And I am not persuaded that the role of the selection committee—which is made up of ministerially appointed members of the AWBC board—will make the appointments at arms length from the board or the minister.

I note that the committee must report to the minister and their report must be tabled in parliament. That too does not guarantee appointments on merit. It just means we get told of the decision, not that a fully transparent and accountable appointments on merit process took place. During the inquiry by the Senate Rural and Regional Affairs and Transport References Committee into the operation of the wine industry, which reported in October 2005, it became apparent that there is a great divide between the interests of winemakers and those of grape growers. Section 13 of the act specifically states that a person nominated for the board must have knowledge of or experience in winemaking, grape growing, marketing finance et cetera; however, it does not specify that there must be representatives from each of those areas. Therefore, you may have a board that does not have a representative from grape growers on it. I am sure that is not what is intended, but I do not see any safeguards to stop the board from being stacked with boffins or persons from a particular sector rather than those with practical experience.

For over a decade I and the Democrats have noted many times in this chamber that appointment on merit was extensively investigated by the Nolan committee, appointed by the United Kingdom parliament, which in 1995 set out the following principles to guide and inform the making of such appointments: a minister should not be involved in an appointment where he or she has a financial or personal interest; ministers must act within the law, including the safeguards against discrimination on grounds of gender or race; all public appointments should be governed by the overriding principle of appointment on merit; except in limited circumstances, political affiliation should not be a criterion for appointment; selection on merit should take account of the need to appoint boards that include a balance of skills and backgrounds; the basis on which members are appointed and how they are expected to fulfil their roles should be explicit; and the range of skills and backgrounds that are sought should be clearly specified.

The United Kingdom government fully accepted the committee’s recommendations at the time and have maintained those principles on appointments. The Office of the Commissioner for Public Appointments in the United Kingdom was created subsequent to the Nolan report, with a similar level of independence from the government to that of the Auditor-General, to provide an effective avenue of external scrutiny. The Democrats have used the Nolan committee’s recommendations in our persistent and long-term campaign for appointment-on-merit amendments in various items of legislation, because those Nolan recommendations are tried and tested. I would remind the chamber that we have moved those amendments more than 30 times, and more than 30 times the coalition government have rejected them because they prefer patronage to appointments on merit in many cases—not in all cases, I might add.

While I have the opportunity I want to cover a second matter concerning the wine industry. Whenever I speak to bills that deal with the Australian wine industry, I am reminded of my work on the Senate Rural and Regional Affairs and Transport References Committee and the work of other senators on that committee and the report into the operation of the wine-making industry, which reported in October 2005. In that report, the committee referred to the discussion of unconscionable conduct in the Senate Economics References Committee’s 2004 report The effectiveness of the Trade Practices Act 1974 in protecting small business. That report considered the evils of ‘unilateral variation’ clauses—contract conditions which allow one of the parties to vary the contract without further negotiation or without the other party’s agreement. During the Senate Economics References Committee’s inquiry, the ACCC itself voiced concern that unilateral clauses could be unreasonably exploited by the stronger party, and it was the recommendation of the ACCC, followed by the Senate economics committee in its March 2004 report, that unilateral variation clauses should be added to the list of matters which a court may have regard to in deciding whether conduct is unconscionable. I refer to the Trade Practices Act 1974, sections 51AC(3) and 51AC(4).

In the government’s response to the Senate economics committee it agreed to the need for the amendment. In the 2005 report into the operation of the wine-making industry, the rural and regional committee reiterated the sentiment of the Senate economics committee in recommendation 2. It stated:

The committee recommends that the Government should give priority to amending the Trade Practices Act 1974 to add ‘unilateral variation’ clauses in contracts to the list of matters which a court may have regard to in deciding whether conduct is unconscionable.

After the rural and regional committee’s report into the wine industry, I was heartened by the government’s response which stated:

The Government notes the Senate Economics References Committee, in its report on the effectiveness of the Trade Practices Act 1974 in protecting small business, recommended that section 51AC of the Trade Practices Act 1974 be amended to provide that unilateral variation clauses should be added to the list of matters which a court may have regard to in deciding whether conduct is unconscionable. The Government has accepted the Senate Economic References Committee’s recommendation in full and is progressing legislation for its implementation.

As Australians say, ‘Yeah, right!’ I am willing to work through things with the government to bring about good and effective outcomes for the Australian people, but I have to say I am losing all hope of the government ever amending section 51AC of the Trade Practices Act. I could understand it if it were adamantly opposed to the amendment, but the government has said it is willing to do it and it is progressing legislation. Years ago it said that.

This is a government that, in a ridiculous farce, can recall the entire parliament to change ‘a’ to ‘the’ in one piece of legislation, but when it comes to the Trade Practices Act and small business it moves with the speed of treacle. The government has said since 2005 that it would do something about section 51AC of the Trade Practices Act. It is now 2007. So even though the government accepts the recommendation made by two committees, and the amendment has the support of the ACCC, the progress is abysmally slow. You have to ask yourself why. I ask you that, Minister: why? Whatever the reason, it stinks.

Question agreed to.

Bill read a second time.