State disaster hard to pick

by Chris Griffith
Published 2 October 1994 in The Sunday Mail


my face


A state financial disaster - similar to Victoria's Tricontinental debacle, South Australia's State Bank fiasco, and the failure exposed by the W.A. "Inc" Royal Commission - would now be more difficult to predict in Queensland because of corporation changes that took effect yesterday, a legal expert has warned.

As from midnight on Friday, two of the state's leading financial institutions - the Queensland Investment Corporation (QIC) and the Queensland Industry Development Corporation (QIDC) relinquished their status as statutory authorities and became true State Government-owned corporations.

As corporations, they even issue shares - held in trust by nominated State Government ministers. In the case of the QIDC, the ministerial shareholders are Treasurer Keith De Lacy and Business Minister Jim Elder; in the QIC's case they are Mr De Lacy and Health Minister Ken Hayward.

However their new status also heralds their rapidly diminishing accountability, according to Professor Chris Gilbert, the Clayton Utz professor of Law at Queensland University of Technology.

Professor Gilbert, whose speciality is administrative law, yesterday said both financial giants were now largely exempt from the Fitzgerald report's twin- accountability measures of a right of access to documents under freedom of information, and a right for the public to challenge their decisions in the Supreme Court under judicial review law - more so than before.

"These exemptions go beyond protecting their commercial activities from their competitors," Professor Gilbert said.

"The government can also stop the Courts from reviewing even the community service functions of these Government entities, so it goes much further than putting them on a par with private enterprise."

It is understood the diminishing accountability of these financial institutions is the result of two years of lobbying of the State Government by finance and industry- related agencies.

Professor Gilbert said a lack of accountability of these institutions was especially a problem as their failure would sound an early-warning alarm of an impending state economic disaster.

"For a crusading, investigative journalist who smells potential financial disaster in any of those bodies, it's going to make it impossible to use freedom of information to dig documents out of those agencies if those documents may herald some financial disaster," he said.

"It makes it much more difficult for these journalists to sound the whistle and alert the public."

Professor Gilbert said the trend in Government towards corporatisation was whittling away the number of State bodies subject to the accountability measures.

"The potential exists for the Government to immunise much of what it does from Freedom of Information and Judicial review by hiving-off its activities to these corporations and then exempting them from these measures."

"There's no reason you can't turn a huge range of government functions into corporations."

He said the accountability exemptions even applied to newly-corporatised government ports [at Brisbane and Gladstone], and would apply to other Queensland ports as they were brought under the corporation umbrella.

Professor Gilbert said that following the Fitzgerald report, the State Government implemented freedom of information to give the public access to documents held by state instrumentalities.

Similarly, the public was empowered to demand written reasons for decisions made by government bureacrats, and to mount Court challenges to those decisions under the state's Judicial review provisions.

He said that previously only the QIDC's investment functions were immune from Freedom of Information, and that the corporation's decisions could be challenged legally - although there was no requirement it give written reasons for decisions about its competitive commercial activities.

He said that while the QIC was already exempt from Freedom of Information, both the QIC and the QIDC were now fully exempt from Judicial Review of not only their commercial activities, but also non-commercial activities called "community service obligations".

He said the Government now had the power to regulate to extend these exemptions, a power that potentially could be used to head off any impending disaster from public exposure.

by Chris Griffith