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Only one of 76 contracts marked 'Do Not Disclose'
As most members will be aware the Audit Review Panel has reported to the Premier and recommended that the main Grand Prix contract not be disclosed. There are three possible interpretations for this recommendation not to disclose that are worth considering.
First interpretation
First, have we got it wrong? Is it after all reasonable for government to spend public money in secrecy and then protect that secrecy through legislation?
I think the experience of the Kennett years gives us a resounding 'no' to this. The Audit Review itself totally rejects this view, and recommends that all but one of the existing government contracts be fully disclosed or that negotiations with interested parties proceed for full or partial disclosure.
It further recommends that any future Grand Prix contracts should be as open as possible. It is one of the great ironies that our group, which perhaps contributed most to the creation of public pressure for a more open governmental process, should be the only loser in the Audit Review recommendations.
Second interpretation
The second interpretation is that the Panel has not produced an independent report in relation to the Grand Prix contract.
This would mean that there has been either an explicit direction from Government, or an implicit understanding with Government, not to recommend disclosure as the decision had already been made to keep the deal secret. While we have no direct evidence for this contention, it is very difficult to understand why else the Panel has treated this government contract differently from all others.
The Panel's recommendation not to disclose directly contradicts their own unqualified general recommendation that 'where existing government contracts contain confidentiality clauses which prevent their being disclosed in full, the government should negotiate with the relevant contractors to secure their consent to disclosing as much of the contract as possible' (vol.1, p.4).
The reason cited for non-disclosure of the Grand Prix contract is that parties would then be entitled to end the contract. Presumably other contracts have penalty clauses but that did not prevent a recommendation for negotiating at least partial disclosure.
It is also hard to understand why the Panel has apparently accepted as gospel much of the information from the Australian Grand Prix Corporation. As one example, we are on the public record challenging the attendance numbers of the Grand Prix Corporation and have produced our own more reliable method of determining attendance numbers. Yet, the Panel members have ignored the well-publicised questioning of the official figures.
Third interpretation
The third interpretation is that the Panel did not have time to do the job properly, but did it anyway in a half-baked way.
This would certainly appear to be true regardless of one's view on the degree of independence of the review. Why else did they not meet with us as they did with others, such as representatives of the Public Transport Users Association? Why did they quote contested Australian Grand Prix Corporation information as if there was no doubt about its truth? How can they in all honesty reach the extremely dubious conclusion that the Government has met its three objectives when they appear to have ignored contrary information which was on the public record?
The first objective is the generation of economic benefits. The Panel effectively dismissed the findings of Francis Grey that the official figures were grossly excessive as 'not independently audited', but did not acknowledge that others have also been sceptical about the official claims.
The second objective is 'showcasing' Melbourne to the world. There are no studies of what the economic benefit of such 'showcasing' might be, yet it is repeated as a mantra in this report, based apparently on television numbers. I personally doubt that most watchers of the event could remember the name of our city, let alone want to come here.
The third is the revitalisation of Albert Park. How many times do we have to say that there was already a plan in place for improving Albert Park before we are listened to?
The lake, for example, was drained and refilled before the race was announced. Whether or not the Government was to spend money on the park and associated sporting facilities is surely a matter of government policy, regardless of motor racing. However, chopping down over 1000 trees was directly due to the race. Is the Audit Review suggesting that this is the normal part of revitalisation of parks? We certainly hope not.
The Audit Review was part of what the ALP Government has presented as a new era of open and accountable government. The recommendation on the Grand Prix contract ruins what would otherwise be regarded as a sound and just document. We call on the Premier and the three Independents to reject this recommendation of the Audit Review and enter into negotiation for full or at least partial disclosure of the contract details.
Tim Gilley, Convenor
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Grand Prix case study
Volume 2 of the Audit Review of Government Contracts contains case studies into seven contracts which 'cover a broad enough range of contracts to allow for the production of meaningful guidelines and recommendations for the future'.
The Grand Prix Case Study is disappointing at best. It is not a systematic audit, nor does it suggest any avenues for further investigation. The result appears to uncritically accept the 'official' line. It fails to raise any of the serious current issues about continuing to stage the event in public parkland. It has nothing to add to the information contained in previous reports of the Auditor-General on the contract and risks and obligations carried by the State Government. The Report states:
'This Case Study was prepared solely on the basis of information in the public domain'.
This methodology guarantees that it has nothing new to say about costs to the public sector, unpublished government data on tourist benefits or Treasury assessments of the benefits. In particular, it does not attempt to substantiate the report that in 1998 the Cabinet had seriously considered not extending the contract beyond 2001 because of the financial risks of a contract written in US dollars. (Herald Sun, 18/7/98, Adelaide Advertiser, 18/7/98)
Other aspects of the methodology warrant criticism. While the Panel held meetings with Ron Walker and two executives of the Australian Grand Prix Corporation, Save Albert Park was not informed that the GP had been selected as a case study and were not invited to submit any material or respond to the material provided by the AGPC. The Review does not acknowledge either the SAP Post-Race Report on the park or reports of attendance counts in its list of references.
The Case Study reports without comment the findings of the NIEIR report on the 1996 Grand Prix despite publicly-available questioning of the benefits by authorities who have no vested interest in the event (Rassaby Report; Industry Commission). There is no recognition that the Review's inability to report on the financial obligations of the contracts is relevant to the Case Study's assessment of the value of the contract.
Overall, the Review accepts uncritically the tired claims of the Kennett Government on the net benefits, the showcasing of Melbourne and the upgrade of Albert Park. The Case Study does not report the totality of known public sector expenditures and ignores the more controversial social and environmental costs, while reporting negative impacts which are not central to the real controversy about the Albert Park venue.
It makes no reference to:
The Review avoids the very issue on which it is critical in respect of the process - the environmental impact of the event - and ignores the issue of the appropriation of public land for commercial use.
What next?
The Review has done its job in relation to retention of the Grand Prix; it reports nothing which might endanger the event. However, it recommends a policy process and disclosure standards, to which the Government must respond:
In addition, the general thrust of the Review raises a reasonable expectation that the Government and the AGPC should be attempting to negotiate an agreement with the Formula One promoters to release more details of the present contract.
The public should most certainly expect the release of details of the licence fees of the present contract if any new one is to be signed. The importance placed on an environment effects study as part of the policy process, which is consistent with the Govern-ment's commitments, puts the onus on the Government to undertake an EES, as well as a review of the future of the park, before any contract renewal is considered.
The Grand Prix contract now stands out as the most secret of all government contracts; one which apparently requires exemptions from the general ban on tobacco sponsorship and probably will need to be exempt from any moves to restrict the advertising of alcohol; and one which is in conflict with many of the more admirable Government commitments and policy objectives.
We thank all members and supporters across Victoria who made submissions. The Review notes that the majority of submissions were about the Grand Prix contracts. The Executive would be very interested to receive any comments on the Review's report from those who made submissions.
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Save Albert Park elections
Elections for the new Save Albert Park Executive will held at the Annual General Meeting on Tuesday, 1 August.
The Executive is one of two principal organising bodies, the other being the SAP Council. It consists of the President/Convenor and six Vice-Presidents. The Executive meets twice a month, manages the day-to-day running of the organisation, liaises with the Working Groups, and organises the General Meetings, but does not determine the strategic direction of the campaign. Responsibility for planning and policy matters rests with the SAP Council, which is made up of the Executive, plus a representative of each Working Group.
Nominations for President and six Vice-Presidents must be made on the appropriate form and returned to the SAP office by 5pm, Friday, 28 July. Nomination forms can be obtained from the office.
A member may nominate for the positions of President/Convenor and Vice-President. The position of President will be determined first. If there are more nominations than positions available, there will be a secret ballot of members at the Annual General Meeting.
Please think about nominating even if you think the organisation is well managed by the present team, for two very good reasons. Firstly, the current members of the Executive need a well-earned break. Secondly, new blood which brings fresh ideas and different perspectives is necessary to the health of any community group.
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Grand Prix contract still secret
Before last year's election Mr Bracks promised a review of all contracts signed by the previous Government. The report of the Audit Review Panel was released on 1 June. It is entitled 'Contracting, Privatisation Probity and Disclosure in Victoria 1992-1999: An independent report to Government'.
The Terms of Reference were to investigate and report on:
The Review was unable to meet Terms of Reference 1 and 3 in respect of the international Formula One Grand Prix contract. The Review confirms Save Albert Park's criticisms of the process leading up to the signing of the contract and the start of capital works, and recommends more disclosure of any future contract. However, it is careful to avoid any serious criticism of the staging of the event or disclosure of any aspect of the international contracts.
The Review recommends that more than 50 contracts from the Kennett period be released, and that another 26 contracts be either disclosed subject to privacy obligations, or negotiated for disclosure.
Only one contract is marked with a simple 'do not disclose' - the international Grand Prix contract.
'Disclosure of any commercial aspect of the arrangement is a breach which may occasion termination by the counterparties.' (vol. 1, p.159)
'Due to confidentiality obligations undertaken by the Corporation, the Review is unable to report further on significant ongoing obligations and liabilities arising from these arrangements.' (vol. 1, p. 72)
'The existing contract places significant obstacles (most notably the threat of cancellation of the contract) before a Government wishing now to disclose the terms agreed by the previous Government.' (vol. 2, p.208)
In other confidential contracts, the Review is able to report details of the clauses which require 'the agreement' to be kept confidential, the terms of the confidentiality obligations, and a description of the matters covered by these clauses. It is remarkable that the Review does not even bother to recommend any negotiations with the international F1 contractors for consent to a partial disclosure of the contracts, as it did in the case of numerous other contracts. The report notes that the international promoters were responsible for the degree of secrecy, and that 'significant obstacles are placed in the way of government personnel (including those working on this Review) wishing to have access to, let alone wishing to disclose, particular details of the contract.' (vol. 1, p. 106)
The Panel was unable or unwilling to provide any indication of the nature and scope of the confidentiality obligations (what are the 'significant obstacles'?), the termination provisions in the contracts, or any information on the contract (such as any requirement for a specific venue or for tobacco advertising).
The Save Albert Park submission to the Review said:
'If the Audit Review is constrained by existing clauses and penalties that prevent the disclosure of the contracts or any part of them, then the Panel has a clear responsibility to report the details of those clauses and penalties. The Panel's final report should also provide some reasonable account of the matters which cannot be disclosed.'
The Report contains a statement which raises very serious questions about whether the members of the Review Panel actually saw the international contract at all:
'The Review has been afforded the opportunity to examine the contract, but the Review has not been authorised to disclose its terms as to do so would conflict with the Government's wish to continue to stage the event.
The Review has been informed by the AGPC that a term of the contract provides that if the details of the contract are disclosed, the international contracting parties are entitled to terminate the contract.' (vol. 2, p. 202)
If the Review Panel did not actually sight any confidentiality clause, and had to rely on the word of the Australian Grand Prix Corporation, one could speculate that the obstacles to disclosure may not be legal ones. Does a second contract exist which the Review was unable to access? Such obstacles to disclosure may simply be commercial blackmail by the monopoly international contractors or an unwillingness by the AGPC or the Government to reveal commitments to unreasonable obligations. If the Review was not provided with details of the financial obligations, the Review cannot confidently claim that 'None of the contracts entered into by the previous Government imposed any unreasonable financial obligations on the State'.
The report provides the public with no additional information and we are no wiser as to the financial obligations undertaken by the State. The fees payable to Mr Ecclestone, widely rumoured to be at least $20 million, are equivalent to import costs and must, as Louise Asher admitted in 1996, be deducted from any estimated gross economic benefit.
In the present climate, any renewal of the contract can be expected to involve a significant increase in the current licence fees. In the UK the owners of Donnington Park are reported to have offered the equivalent of $29 million for the race. We can only echo Rob Hulls who said in March 1997 that 'the Government must immediately open up the books and tell us how much we've paid to secure the event'. (The Age, 7/3/97)
However, the Review does put the present Government on notice in recommending that:
'In future negotiations for the renewal of the contract, the Victorian Government and its agents should signal a clear intention to proceed on the basis that as much as possible of the new contracts would be publicly disclosed. To the extent that it can be negotiated in the context of the Government's wish not to put the race at risk, exclusions should be limited to narrow and specific issues of commercial confidentiality.' (vol 2, p. 208)
It goes on to say 'In this context, the Review accepts that fees payable to the international contracting parties could come under this heading for the duration of the contract, but that previous fees should be disclosed at a later date.'
The Review comes out in favour of maximum disclosure of contracts and recommends that the policy and principles of the amended Freedom of Information Act should be applied to these and other contracts. Consequently, the Review recommends that the two categories of contracts between the AGPC and Parks Victoria - the recurrent works licence for 1998-2001 and various capital works licences - should be disclosed.
In the past Save Albert Park was denied access to these licences on grounds of 'commercial-in-confidence'. The report contains very little about these contracts, but reveals that for a maximum rental payment of $100,000, Parks Victoria is required to clean and maintain certain Grand Prix facilities during each year for the term of the licence agreement.
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From the vigil
"Thank you Jeff Kennett and Ron Walker for giving us the opportunity to bask in the glorious afternoon sunshine. Otherwise we'd probably be at home doing housework." (Wilma J.)
Reading Wilma's comment in the Vigil diary reminds us that the last month hasn't been totally bleak. Winter has hit with a vengeance though, and a few particularly nasty days tested the ingenuity of the setting-up team. Especially the morning of the 'big wet' when our Vigil spot was surrounded by a two foot deep lake. But maybe the sight of us stubbornly maintaining our Vigil - rain, hail or snow - inspires a bit of grudging admiration from people who don't normally give us much encouragement. The worse the weather, the more friendly toots we seem to get.
A regular stream of passers-by keep telling us we're doing a great job, and during the past week or two we've had visitors drop in from China, India, New Zealand as well as interstate. One woman from Tasmania told us she'd been following our campaign right from the start. Oh, and our opponents have finally come up with a new line of abuse. After six years of 'Get a life' and 'Get a job', two of our lady vigillers were quite taken aback recently when a young man opened his car window and yelled 'Lesbians!' at them.
Stop Press:
The Vigil's own Pam Denton is holding an art exhibition at Artistcare Gallery, 276 Park Street (just around the corner from the SAP office) from 27 June to 16 July. Pop in and admire Pam's wonderful work.
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Recovery of GP costs
Members may be interested to learn that the City of Port Phillip Council is seeking to recoup all its Grand Prix-related costs (almost $100,000) from the Grand Prix Corporation. Under present arrangements, any additional parking fines are considered to be 'compensation' and deducted from the costs.
To quote the Mayor, 'Why should the Grand Prix benefit from something that inconveniences our residents?' On the other side of the ledger, the Council estimates it loses $30,000 in paid-parking revenue over the 4-day race period, which is some measure of the negative impact on normal traffic movements and on local traders.
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The Bracks gag
SAP members have not been impressed by the identical replies they have been receiving from Ministers and other parliamentarians regarding extension of the GP contract, and it hasn't impressed journalist Terry Lane either.
His Sunday Age 'Perspective' (4/6/00) was devoted to discussing the 'standard letter' method of handling difficult constituents. 'They (MPs) are supposed to represent their constituents and not simply trot out the party line. So these identical letters suggest that they are either bone lazy or that the Premier is a control freak who does not permit members on his side of the house to express individual views'.
It is a sad day when Ministers and back-benchers cannot be trusted to defend government policy themselves. Terry Lane's suggestion that the letters are 'a variation on the famous Kennett gag on ministers' is a criticism the Premier should take seriously.
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A healthy environment?
Mayne Logistics, (one of the Mayne Nickless group) which has one of the 'recurrent engineering contracts', undertakes over 900 trips to truck in and out the 2800 concrete barriers installed alongside the track for the GP. Mayne Logistics also has the contract to install 200 concrete stands. This is the tip of the iceberg of the set-up and take-down works of the Grand Prix. These trips affect not only the retail/small business strips and residents of South Melbourne, but also the rest of the city en route to the storage depot at Spotswood.
While the contractors may see this task as a challenge, those who are more concerned with air pollution, traffic management and a sustainable environment will recognise it as another negative aspect of using a temporary motor racing circuit. The City of Port Phillip has a key strategy of building a sustainable environment, but inevitably the best efforts of a well-intended local government to manage its local environment are dependent on the policy commitments of State and Comm-onwealth Governments. The City and residents would hence have welcomed the incoming Labor Government's election commitment to 'to reduce all forms of air pollution to safe levels'.
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Yellow ribbons in Canberra
The community group, Defending Public Spaces, protested against the take-over of Canberra's Parliamentary triangle for a V8 Supercar race by tying yellow ribbons along the track. The maze of concrete-and-wire barriers and advertising hoardings surrounded the nation's major public buildings - Old Parliament House, the National Library and National Gallery.
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Help! Storage space needed
SAP urgently needs storage space, preferably in the South Melbourne, Albert Park, Middle Park, St Kilda area. Shed or garage would be suitable. If you can help, please phone the office on 9690 3855.
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Decorative Arts Auction
Gasworks Park, Graham Street, Albert Park
Friday 7 July, 7.00pm
Fundraising auction for the newly-independent Gasworks Arts Park. Paintings, prints, sculpture, ceramics, glass, china, silver, jewellery and furniture.
Celebrity auctioneers.
Admission by catalogue purchase ($5).
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Gilbert & Sullivan's 'Ruddygore'
Directed by Diana Burleigh
Phoenix Theatre, Deakin Uni, Burwood Highway, Burwood
GROUP BOOKING FOR SAP ON Friday 21 July - ring the SAP office for details.
Discount tickets for other performances are available if you book through the SAP office. Book before 14 July.
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SAP memberships
From 1 July the annual SAP membership fee will be $12 and $6 concession.
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