Clubs, Liquor and Gaming Machines Legislation Amen

Hansard & Papers » Legislative Assembly » 18 October 2011 » Full Day Hansard Transcript » Item 7 of 52 »

Clubs, Liquor and Gaming Machines Legislation Amendment Bill 2011 (Proof)
About this Item
Speakers - Lynch Mr Paul; Barilaro Mr John; Notley-Smith Mr Bruce; Watson Ms Anna; Assistant-Speaker (Mr Andrew Fraser); Acting-Speaker (Mr Lee Evans); Fraser Mr Andrew; Parker Mr Jamie; Owen Mr Tim; Torbay Mr Richard; Souris Mr George
Business - Bill, Message, Agreement in Principle, Passing of the Bill, Motion
CLUBS, LIQUOR AND GAMING MACHINES LEGISLATION AMENDMENT BILL 2011
Page: 15


Agreement in Principle

Debate resumed from 17 October 2011.

Mr PAUL LYNCH (Liverpool) [11.22 a.m.]: I lead for the Opposition in this place on the Clubs, Liquor and Gaming Machines Legislation Amendment Bill 2011. Shadow Minister the Hon. Steve Whan has responsibility for this matter in the other place. We saw this bill for the first time when it was introduced yesterday. It is proceeding under the suspension of standing orders moved yesterday. This is the only time in 16 years that I have seen a suspension such as that. It reminds me of the enabling legislation of the Reichstag in 1933. Because of this, obviously, the Opposition will consider the matter further and perhaps put up amendments if appropriate in the other place. We will not oppose the passage of the legislation in this Chamber.

The object of the bill is to make a range of miscellaneous amendments to a number of pieces of legislation, including the Registered Clubs Act, the Liquor Act and the Gaming Machines Act. There are a significant number of amendments which are fairly complex in some cases. It is certainly a cumbersome piece of legislation. Amongst other things, the amendments seek to: include additional requirements in relation to corporate governance that will apply to clubs; modify the manner in which clubs can amalgamate and to provide a process under which amalgamated clubs can subsequently de-amalgamate; provide additional rules for clubs in relation to the election and membership of their governing bodies; confer honorary membership of all RSL or services clubs on former Defence Force personnel who are service members of the RSL; impose requirements in relation to certain loan contracts that are entered into by clubs and contracts involving the management of the affairs of a club by private persons or businesses; delete provisions relating to the holding of formal inquiries about corrupt or improper conduct in relation to clubs; modify the current exemption under which liquor may be sold or supplied without a licence when it is part of a gift; and enable hotels to continue to provide services or facilities, including gambling and entertainment, during periods when liquor is not being sold or supplied in the hotel.

The amendments also seek to: provide that it is a defence for club managers accused of certain liquor-related offences if it is proven that they took reasonable precautions to avoid the commission of the offence concerned; modify arrangements relating to gaming machine entitlements and permits that are held in respect of hotels and clubs; remove, in the case of a club that has more than one set of premises, the forfeiture requirements for gaming machine entitlement transfers between the different club premises; exempt de-amalgamating clubs from the local impact assessment process and from forfeiture requirements when gaming machine entitlements are being transferred to club premises as part of the de-amalgamation process; enable the director-general to approve of arrangements for the transfer of permits that were issued under the former Liquor Act and continue to be held in respect of hotel licences; remove provisions relating to the approval of "hardship" gaming machines and the keeping of approved amusement devices; rename the Casino, Liquor and Gaming Control Authority as the Independent Liquor and Gaming Authority; rename the Act under which the authority is constituted and make some other consequential amendments.

A number of issues have emerged within the 24 hours since the introduction of this bill, a couple of which relate to de-amalgamation. The bill contains a large degree of material about what happens to clubs when they de-amalgamate but there seems to be little detail about what happens to employees. What happens to their ongoing entitlements? Is this simply a mechanism to allow various employers who happen to be clubs to dud their employees by not giving them their ongoing entitlements? That must be clarified.

There is also an issue about poker machine numbers and forfeitures. As we understand the legislation, the forfeiture does not apply to de-amalgamated clubs. Is it simply the case that machines can remain in the clubs they were in before they were amalgamated, or is the bill allowing forfeiture to be avoided by permitting machines to be retained but then moved anywhere that one of the clubs happens to want them? I request that the Minister clarify that.

We are a little uncertain about some of the trading hours provisions. The concept of decoupling liquor from gaming is not something that we necessarily have a problem with—for obvious reasons. It makes some sense on the face of it. Our concern is that if this bill allows a mechanism to extend trading hours to provide breakfast, for example, is it really just a backdoor way of expanding the capacity for gaming? It is not clear from the legislation that that is not the case. We have concerns if in fact it is a backdoor way of extending gambling. If it simply means that clubs do not have to serve alcohol during existing hours without those hours being extended we do not have a difficulty with that on the face of it.

We are also a little concerned about the removal of the inquiry provisions contained in part 4A, division 6 of the Registered Clubs Act. Given the scale and the size of the clubs and ongoing community concern, one would think that a much more powerful case would be needed than has been made to date to remove those inquiry powers. At the least the Minister in reply should clearly indicate what inquiry powers there are. If in fact it is safe to get rid of those inquiry powers, nonetheless there must be rigorous process for those sorts of issues to be resolved to everyone's satisfaction. As I indicated, at this stage we do not oppose the bill here but we reserve our position in the other place.

Mr JOHN BARILARO (Monaro) [11.28 a.m.]: I support the Clubs, Liquor and Gaming Machines Legislation Amendment Bill 2011. This bill yet again demonstrates the Government's commitment towards securing the long-term financial viability and sustainability of New South Wales registered clubs. It builds on the reforms already implemented by this Government to assist clubs and the communities they support. Those reforms resulted in a reduction in gaming machine taxation rates from 1 September and the establishment of the new club grants scheme that are expected to benefit clubs by around $300 million over the next four years.

The key elements of the bill that I will focus on will help ensure the long-term future of clubs through better corporate governance and management. Improving club corporate governance structures, viability and sustainability were key issues identified in the memorandum of understanding signed between the New South Wales Liberals and Nationals and Clubs NSW last year.

The need for reform in these areas was first acknowledged in the 2008 review into the New South Wales registered clubs industry by the Independent Pricing and Regulatory Tribunal. In its review, the Independent Pricing and Regulatory Tribunal reported that stakeholders had expressed concern about deficiencies in the skills of some board directors, including that some directors did not have a strong grasp of financial concepts and lacked business acumen, did not clearly understand their role and responsibilities, and did not have a strategic focus but instead opted to deal with more minor operational matters. To address these deficiencies the Independent Pricing and Regulatory Tribunal recommended that directors be required to complete appropriate training. Mandatory training for club directors as well as club managers is strongly supported by ClubsNSW as a club viability issue. ClubsNSW has previously advised that about 4.5 per cent of club directors had completed its directors' duties course and that around 1.3 per cent had completed its financial management course.

The bill inserts regulation-making powers into the Registered Clubs Act to allow for the development of a mandatory training framework for club directors and managers. This approach is consistent with the current responsible service of alcohol and responsible conduct of gambling training framework models. It will allow comprehensive discussions to occur with the clubs industry and registered training organisations to develop training frameworks that meet the individual needs of directors and managers. It will also allow the Government to examine how training can be progressively introduced to reduce the cost impact on clubs. The Independent Pricing and Regulatory Tribunal also considered that action was needed to improve board effectiveness by addressing difficulties in electing appropriately skilled directors and addressing difficulties in attracting directors. The Independent Pricing and Regulatory Tribunal noted that many clubs experience difficulty attracting suitably qualified persons to club boards and that some club constitutions limit the number of board positions that social members can hold and who is eligible to vote in club elections. It is claimed that this can narrow the pool of persons from which to elect to the board and inhibit people with appropriate skills from being elected.

There are also industry concerns about ensuring appropriate diversity of club directors, including representation of various classes of members. The Independent Pricing and Regulatory Tribunal recommended that clubs be encouraged to remove constitutional restrictions and restrictions on voting eligibility. However, the Independent Pricing and Regulatory Tribunal also noted that some club members are concerned that broadening voting eligibility may lead to boards seeking to change the objects of their clubs. These issues are contentious and need to be approached sensitively. Ideally, the Government and clubs industry representatives will be able to encourage and support clubs to voluntarily address these issues and statutory intervention will not be necessary. However, to ensure action can be taken in the event that the issues are not voluntarily addressed, the bill inserts regulation-making powers to enable matters to be prescribed relating to voting eligibility for various classes of club members, a definition of the core features of a registered club and the circumstances where a club board will be permitted to appoint up to three club directors. Given the complexity of these issues, any proposed reforms via regulation will be progressed only in close consultation with the clubs industry, should intervention be necessary in the future.

The bill also inserts further regulation-making powers into the Registered Clubs Act to facilitate mandatory three-year rolling elections, if required in the future. The Independent Pricing and Regulatory Tribunal recommended that ClubsNSW encourage clubs to voluntarily move to three-year rolling elections. However, ClubsNSW has requested that the requirement for three-year rolling elections be mandated as it will enhance board stability and may lessen the opportunity for factional control of boards. It will also help address other issues such as whether funds spent on director training are wasted because of the short time that some directors are appointed to club boards. While the Registered Clubs Act already provides for clubs to voluntarily adopt three-year rolling elections, inclusion of regulation-making powers to mandate this requirement in the future will send a message to the clubs industry about the importance of this issue, as well as provide flexibility to act, if necessary. I am advised there are approximately 80 registered clubs with 10 directors or more, with the largest board consisting of 14 members. The clubs industry reforms in this bill will contribute to real improvements in club governance and management over the next few years but there is still much work to do. The Government will continue to work with the clubs industry to develop and implement reforms to ensure clubs' long-term viability and to protect the many benefits they deliver to our society and economy. I commend the bill to the House.

Mr BRUCE NOTLEY-SMITH (Coogee) [11.33 a.m.]: I support the Clubs, Liquor and Gaming Machines Legislation Amendment Bill 2011. Our clubs are an integral part of our community. They give much-needed support to local sporting clubs and community groups and they provide thousands of jobs and community services to the State's towns and cities. The New South Wales Government is committed to supporting the vital role that clubs play in our community. The Government made the commitment before the election that we would ensure the sustainability of our clubs into the future. The previous Government proved itself to be no friend of our clubs, as evidenced by the closure of nearly 100 clubs after the imposition of excessive taxes. The Clubs, Liquor and Gaming Machines Legislation Amendment Bill 2011 will provide much-needed reforms in the governance of clubs around our State. Amalgamations and de-amalgamations will be made much easier under the conditions imposed by this bill, allowing clubs to be more easily merged or to de-merge, depending on their circumstances.

In order to promote this, the Government is removing forfeiture requirements for poker machines and allowing liquor licences to be transferred to de-merged clubs so that the process is simplified. Section 73 of the Registered Clubs Act 1976 will be amended to mandate that those involved in the management and governance of our clubs are required to undergo training courses relating to financial management and other matters that are relevant to their function. This is a crucial reform as it ensures that those elected to administer our clubs are qualified to do so. Another crucial reform is implemented through new section 15A of the Liquor Act 2007. The new section enables hotels to continue to operate and provide services and facilities, including entertainment, conferences and lawful gambling-related activities, during trading periods, even though liquor is not being sold or supplied at that time. Indeed, hotels can even open for breakfast without selling liquor. This is important in order to move our clubs and pubs away from being just liquor barns where one swills liquor towards becoming community hubs—places where people can gather without needing to drink. Previously the Act stated that a hotelier's licence should be enforced on the grounds that the primary purpose of the business carried out on the licensed premises was the retail sale of liquor.

This is a great win for our clubs as they will be permitted more flexible opening hours, which will potentially bring in new business. Many of the clubs in our community are surviving on a shoestring as a result of lower patronage, higher staffing costs and many other reasons. This means that clubs are often vulnerable to private interests who may seek to exploit and compromise the interests of members and the community. This bill ensures that there is government scrutiny of management contracts between these honourable clubs and private interests, so that the interests of members and of the community are protected. Our clubs should always put community first and they should never be restricted from doing what is in the best interests of their community. By cutting the constraining red tape and excessive taxes levied on our clubs, the New South Wales Government's club reform package will ensure the long-term viability of our clubs so that they can continue to provide services well into the future. I commend the bill to the House.

Ms ANNA WATSON (Shellharbour) [11.37 a.m.]: In contributing to debate on the Clubs, Liquor and Gaming Machines Legislation Amendment Bill 2011, I point out that I have concerns in relation to the Government's underlying agenda. It has been seven months since Barry O'Farrell took government, and what have we seen so far? We have seen the attack on our public service workers, we have seen the removal of the independent umpire in the Industrial Relations Commission and we have seen the corporatisation of local government.

Mr Mark Coure: What has that got to do with the bill?

Ms ANNA WATSON: I am getting to it. We have seen broken promises and the debacle those opposite made of the Solar Bonus Scheme.

Mr Jai Rowell: Point of order—

The ASSISTANT-SPEAKER (Mr Andrew Fraser): Order! What is the point of order?

Mr Jai Rowell: My point of order relates to Standing Order 129, relevance. We are debating specific legislation, not legislation that we have passed over the past seven months. The member should return to the leave of the bill.

The ASSISTANT-SPEAKER (Mr Andrew Fraser): Order! I uphold the point of order. The member for Shellharbour will return to the leave of the bill.

Ms ANNA WATSON: I intend to do so, but to get to that point I need to give this preamble. We have seen the Orica cover-up and the "protection of Robyn Parker" bill, not to mention the 40, 000 protesters. I will return to the leave of the bill but I shall make one final point so that members can see where I am heading with my contribution. The myths about the big budget black hole that has never existed—as proven by the Parliamentary Budget Office, the Treasurer's own department and the Lambert report—

Mr Jai Rowell: Point of order: We are a minute and a half into the member's speech; this is the longest preamble in the history of preambles. My point of order relates to Standing Order 129, relevance.

ACTING-SPEAKER (Mr Lee Evans): Order! The member for Shellharbour will return to the leave of the bill.

Ms ANNA WATSON: I am highlighting the broken promises of this Government. My concerns lie with the club employees who will no doubt be the next victims of the industrial dinosaurs who sit opposite. Nowhere in the legislation is there mention of the impact on workers in these clubs. The people of New South Wales are starting to get the message loud and clear that this Government does not care about workers or their families. The Government is concerned only with the privatisation of New South Wales. Club employees deserve the respect and dignity associated with secure employment. They are often women and students who have worked consistently and regularly, usually casually, over a long period—five, 10, 15 and, in some cases 20, years. Will the Government move to ensure that these loyal, hardworking people have some protection in relation to this bill? The Government needs to throw a blanket over these workers in relation to their accumulated entitlements such as annual leave, long service leave and superannuation—everything that those opposite enjoy.

Clubs in my electorate of Shellharbour employ hundreds of people, mostly casual workers. What has this anti-worker Government done to enshrine conditions of employment for these workers? I cannot see anything to that effect in the legislation. I would like to see the Government transmit some sort of business statement to protect these workers. It is disappointing that this Government did not give these workers a thought when drafting this amendment bill. They clearly did not bother to consult any of the stakeholders, including United Voice. Why is the Government ramming through this legislation? Is it just a further attack on the workers of New South Wales? Sadly, I think it is.

[Interruption]

I am talking about the workers in these clubs. Nowhere in this amendment bill is there one word about the workers. I am stating this for the public record. The workers in clubs in my electorate and throughout New South Wales surely need to know, and have a right to know, what is going to happen to them.

Mr ANDREW FRASER (Coffs Harbour—The Assistant-Speaker) [11.42 a.m.]: I support the Clubs, Liquor and Gaming Machines Legislation Amendment Bill 2011. The bill makes several reforms to the Gaming Machines Act. Clubs are important community assets that make major contributions to the communities they serve and are a vital part of the social fabric of those communities. This is why the Government has committed in its memorandum of understanding with clubs to take action to help secure the financial viability of the clubs industry. One area in particular involves taking action to help facilitate amalgamations and de-amalgamations. A significant barrier and cost for clubs considering amalgamation, or de-­amalgamation for that matter, are the forfeiture requirements associated with gaming machine entitlement transfers. Currently, no forfeiture is required for entitlement transfers between amalgamated clubs in the same local government area. A lesser forfeiture rate applies for transfers between amalgamated club premises situated in different local government areas.

A key reform in this area is the removal of the forfeiture requirements for entitlement transfers between amalgamated club premises regardless of their location. This is an important reform for clubs that may seek an amalgamation partner or consider merging with another club as entitlements are an important club asset and it is not always possible to find an amalgamation partner situated in the same local government area. This reform will reduce costs and allow the movement of entitlements between amalgamated club premises while providing greater flexibility to clubs when establishing the most appropriate site for their gaming across the different premises of an amalgamated club. It is important to note that, while the Government is delivering on its promise to remove the forfeiture requirements for amalgamated clubs, the local impact assessment requirements remain unchanged ensuring any proposed increase in gaming is properly assessed.

The amendments in the bill also help clubs that previously merged or amalgamated to de-amalgamate. Clubs may choose to de-amalgamate for a range of reasons, particularly if financial circumstances have improved or the prospect of a formerly dissolved club operating once again in its own right may be achievable and more beneficial than remaining tied to another club. The reforms will provide appropriate controls around the process while reducing costs and enable the seamless transfer of club licences, property transfers and gaming machine entitlements. It is likely that when the de-amalgamated club initially amalgamated, some of its entitlements may have been relocated from its premises to another venue of the amalgamated club. In these cases it is likely that an agreement may be reached regarding entitlements. This may include restoring the number of gaming machine entitlements that a de-amalgamated club held prior to the amalgamation. The amendments in the bill will simply allow gaming to operate as it did prior to the amalgamation.

To enable this to occur, c1ubs situated in lower gaming machine density local government areas will be exempt from the local impact assessment requirements when transferring entitlements back to the club premises where they were located before the amalgamation occurred. A class 1 local impact assessment will be required where the entitlements are being transferred back to club premises in a higher gaming machine density area, and applicants must demonstrate that the proposed increase will have a positive impact on the local community. This is not an ongoing exemption and is only available to clubs during the de-amalgamation process. All other proposed increases in gaming will be subject to the usual local impact assessment requirements. It is important to note also that the reforms will not result in additional gaming machines in New South Wales. The Liberal-Nationals Government stands by its commitment in the memorandum of understanding with clubs to maintain existing caps on gaming across the State as well as venue caps. This commitment is further demonstrated by other reforms in the bill that ensure the integrity of the gaming machine threshold scheme.

The bill makes a range of miscellaneous amendments to the Gaming Machines Act 2001 regarding the cap and trade scheme that controls the distribution of gaming machines in clubs and hotels. Changes to the Gaming Machines Act proposed in the bill will permanently close a loophole that was previously exploited by a number of hoteliers when trading poker machine permits between each other in order to increase their gaming machine threshold. Since 2009 the Act has required a venue's gaming machine threshold to decrease when transferring entitlements. The same requirement was not applied to permit transfers due to an oversight in the development of the legislation. Approximately eight hotels, some with common ownership, collaborated during 2009 to transfer a small number of permits between each other in order to increase their gaming machine thresholds. As the threshold does not reduce when transferring permits, these hotels were able to retain the increased threshold before transferring those permits back.

Consequently, some of these hotels achieved a threshold increase when they would otherwise have needed to undertake a local impact assessment, which would have subjected the transfers to analysis and review. The increases occurred predominantly in higher gaming machine density local government areas such as band 3 areas. While the actions of these hoteliers were strictly not illegal, they were not in the spirit of the law. An amending regulation was introduced in 2010 after the loophole was identified to prevent more hoteliers taking advantage. However, this is not a satisfactory long-term solution as it has created unnecessary red tape for venues transferring permits in lower-risk band 1 areas. Other amendments to the Gaming Machines Act in this bill will modernise the permit trading arrangements, tighten controls and bring permit trading into line with gaming machine entitlement trading in order to create a level playing field for all participants.

The reforms do not impact on the well-established harm minimisation controls in the Gaming Machines Act such as the provision of a self-exclusion scheme, restrictions on the location of gaming machines and automatic teller machines [ATMs], prohibiting inducements to gamble such as offering free credits, and the display of gambling warning notices and information about the chances of winning, including contact details for problem gambling counselling services. The gaming-related reforms in the bill are largely technical and clarifying in nature and aim primarily to improve the operation of the gaming machine threshold scheme while also providing some assistance to clubs that choose to merge or separate. This package of legislation, which is the second stage of reforms, demonstrates the Government's clear commitment to helping the clubs industry and that the Government has wasted no time in implementing a comprehensive range of measures to secure the financial viability of the clubs industry. I commend the bill to the House.

Mr JAMIE PARKER (Balmain) [11.48 a.m.]: I am conscious of the time so I will be brief, but it is important to address a few questions. I am glad the Minister is in the Chamber because I would like more detail on some issues that have arisen in the short time that we have had to consider the Clubs, Liquor and Gaming Machines Legislation Amendment Bill 2011. There are some measures in the bill that The Greens do not have any problems with and that seem to be worthwhile. They include the development of the mandatory training framework for club directors and managers, the insertion of other regulation-making powers to enable matters to be prescribed relating to voting eligibility for various classes of club members, and the circumstances where a club board will be permitted to appoint club directors. The bill provides for a maximum of nine directors for registered clubs. Many of these provisions are worthwhile and it is important that they be brought before the House.

The Greens seek clarification of several key issues and I ask that the Minister respond to those issues when he replies to the debate. The issue of entitlements for de-amalgamated clubs has been discussed. Workers' entitlements need to be protected in that de-amalgamation process. Members have also raised the issue of the abolition of inquiry powers. But what other powers will there be to promote transparency and accountability in the sector? The bill follows the signing of a memorandum of understanding in support of the Stronger Clubs, Stronger Communities pre-election commitment given by the then Coalition, which has resulted in a $300 million "gift" to the clubs in tax breaks on gaming machine profits.

The Greens are particularly concerned by the proposal to remove all forfeiture requirements for gaming machine entitlement transfers between amalgamated club premises. The bill does not address the significant problems associated with clubs' addictions to gambling losses in order to sustain their businesses. We have all seen the report of the Productivity Commission. It is well known that problem gamblers contribute a significant portion of the losses that sustain clubs. The Greens believe we need to cure clubs of this addiction to gambling machine losses and encourage them to diversify. We need to see what we can do to support clubs so that they do not have to rely on such losses. Is the Minister concerned that with no forfeiture requirements in the de-amalgamation provisions clubs in higher income areas will attempt to move to areas with lower incomes? It is well known that if a gaming machine is moved from the North Shore or Rozelle to Auburn or Bankstown—

Mr George Souris: You are confusing two items.

Mr JAMIE PARKER: I am seeking clarification of this point from the Minister, who I appreciate is being very attentive. A key reform in the bill is removing all forfeiture requirements for gaming machine entitlement transfers between amalgamated club premises. It is my understanding that the amalgamated clubs retain all their poker machine entitlements when relocating from their old premises. The concern is that the forfeiture provisions in de-amalgamation laws will not be present. Is the Minister concerned that clubs will attempt through this process to transfer their machines to areas where they can generate more revenue? The Greens are also concerned that if clubs that have merged wish to de-amalgamate under the legislation they are allowed to transfer their poker machine entitlements to the other club rather than retaining them. This may lead to the conglomeration of poker machines in areas of the State where they will generate the largest profits and cause the greatest damage.

Mr George Souris: Where are you getting this from? It is not in the bill.

Mr JAMIE PARKER: What is not in the bill? Do you mean the forfeitures?

Mr George Souris: No, what you are now alleging.

Mr JAMIE PARKER: That is why I am asking the question. Under the current arrangement machines need to be forfeited.

Mr Mark Coure: That's what question time is for.

Mr JAMIE PARKER: If we had more than 48 hours to examine the bill we would be able to go through it in detail.

Mr Richard Amery: You got 24 hours more than we got.

Mr JAMIE PARKER: We like that.

The ASSISTANT-SPEAKER (Mr Andrew Fraser): Order! The member for Balmain will make his contribution to the debate without the assistance of Opposition members.

Mr JAMIE PARKER: I encourage the Minister to address the issue of forfeiture requirements when he speaks in reply. Currently, when clubs amalgamate there is a forfeiture requirement but there is no such forfeiture requirement in the bill. Is the Government not concerned that that will result in an increased number of gambling machines in lower income areas, where they will generate the largest profits and cause the greatest damage? The Greens are also concerned about the changes to the Liquor Act affecting trading hours and gaming machine operations. With the coupling of the provision of alcohol and trading hours does an opportunity exist to increase the amount of time available for people to use gaming machines? I appreciate that the Minister is under time pressure but will the amendment to the Liquor Act as to trading hours and gaming machine operations provide an increased opportunity for gaming machine use?

Mr George Souris: No.

Mr JAMIE PARKER: I appreciate the Minister's positive response. The Greens have had only a short time to consider the bill. I ask the Minister to respond to the issues that I have raised. No doubt they will be discussed further in the other place.

Mr TIM OWEN (Newcastle) [11.55 a.m.]: I speak to one specific aspect of the Clubs, Liquor and Gaming Machines Legislation Amendment Bill 2011. Recently the Government identified several circumstances where licensed and unlicensed operators have sought to exploit various aspects of the liquor laws. As well as undermining the spirit and intent of the liquor laws, the action of those operators has the potential to lead to significant public disturbances and/or serious alcohol-related harm. On one occasion significant concerns were expressed about the use of a caterer's licence to host hundreds of patrons at a function held on a Saturday night in a nightclub setting at Newcastle. On two previous occasions that particular nightclub operator had been refused an application to remove a hotel licence to the premises where the function was being held. As a result, the operator sought out a licensed caterer to supply liquor during the event.

The Government acted swiftly to prevent further events being held by making a regulation prohibiting the use of a caterers licence on premises previously refused a liquor licence. The Government then requested a review of the caterers licence provisions in the Liquor Act to ensure that this category of licence could not be used to undermine the integrity of the liquor laws in any other manner. The review identified that there may be additional circumstances when it would be appropriate to prevent the use of a caterers licence for an event not captured by the regulation that prevented its use on premises that had previously been refused a licence. Such events may be proposed to be held in public places such as parks, beaches or other locations, which has the potential to lead to disturbances. This approach will ensure that the director general can respond promptly to events where the use of a caterers licence raises significant public concerns or is not considered to be in the public interest. I commend the bill to the House.

Mr RICHARD TORBAY (Northern Tablelands) [11.56 a.m.]: I support the Clubs, Liquor and Gaming Machines Legislation Amendment Bill 2011. The bill implements the changes agreed to in the memorandum of understanding that ClubsNSW signed last year with the then Opposition. I commend the Minister on honouring those commitments, which were made in good faith with ClubsNSW. The key idea behind the memorandum is to improve corporate governance in clubs by addressing the size of club boards and by allowing for a club's amalgamation or merger process that not only easier makes it for clubs to decide on structured options but also makes it a more attractive option for those clubs interested in thinking strategically about their future. This will allow clubs to determine their future using a flexible and individual approach.

Due to time constraints I will not go into significant detail about the great work done by clubs, particularly those in regional areas—and the clubs in Northern Tablelands are no exception. I commend all clubs for the crucial role they play in supporting communities and sponsoring many great initiatives. They also maintain bowling greens, golf courses and playing fields and organise social activities that otherwise would not be available to those who live in smaller communities, in particular. As the Minister intends, I hope the bill makes it easier for those clubs that, with the support of their communities, want to merge. For example, in Guyra, in my electorate, the golf and bowling clubs wanted to merge because of financial difficulties but it was a very difficult and time-consuming process. If the bill makes that process easier while protecting the integrity of those services in country communities then I support it. I commend the bill to the House.

Mr GEORGE SOURIS (Upper Hunter—Minister for Tourism, Major Events, Hospitality and Racing, and Minister for the Arts) [11.59 a.m.], in reply: I thank the members representing the electorates of Monaro, Coogee, Shellharbour, Coffs Harbour, Balmain, Newcastle and Northern Tablelands for their contributions to the debate. I thank also the acting shadow Minister, the member for Liverpool, for his contribution. I acknowledge that a number of speakers were unable to gain the call because of time constraints, especially the member for Wollondilly, the member for East Hills, the member for Oatley and the member for The Entrance. A number of questions have been raised, and it is important to respond to some of them. The acting shadow Minister asked three questions relating to section 41X, the decoupling of liquor and gaming, and industrial relations.

Section 41X, which has only been used once and that related to the Temby inquiry, was hurriedly moved as an addition mid-way through the Temby inquiry to enable Mr Temby to make a finding of corruption. Such a finding never eventuated. Clearly, this section was designed capriciously by the then Government to continue its attack on the clubs movement and particularly to enhance the opportunity for political gain by creating the availability of a finding of corruption in that particular case. It is an obnoxious clause. There are sufficient opportunities for Office of Liquor, Gaming and Racing inspectors who are empowered to conduct any inquiries they deem appropriate. These powers allow investigations into clubs to determine if a disciplinary complaint should be made. These powers, which are longstanding, can result in disciplinary action when clubs act against the requirements of the law and the interests of their members. These powers are more than adequately provided for, and have always been provided. This section of the Act had its genesis entirely in political motivations.

The second question raised related to decoupling powers. The overriding point to be made is that only existing hours are able to be decoupled and again only on application. Consequently if—this example was given—a hotel wishes to open for breakfast it can certainly do so. However, as to whether it operates either a liquor service or gaming machines, if those hours are an extension of the hours provided in the licence the hotel would have to make an application to the Casino Liquor and Gaming Control Authority, which will be renamed after the passage of this legislation. If that is the case, and depending on other circumstances, a local impact assessment will have to be completed. That is the case whether or not a licence application for decoupling is made.

Any application for extended trading hours must be made under the existing provisions. This bill does not provide for the automatic passage of an application to extend trading hours for any purpose. So that remains the case. The purpose of these decoupling provisions is to enable liquor service to cease during the existing trading hours of a licensed venue. That will be an aid to those who are playing gaming machines and/or those who have in the past demonstrated a problem by emerging from licensed premises in an intoxicated state. This will assist with general behaviour in the immediate vicinity of a hotel by enabling that hotel to cease the service of alcohol within existing trading hours. That is the intention and that is the reality of that particular provision.

The third question raised by the acting shadow Minister related to industrial relations. I point out that nothing in this bill alters existing entitlements or arrangements. Employees involved in a de-amalgamation will carry their entitlements back to the original club. The essence of the de-amalgamation provisions is to reinstate the circumstances, with not only employees but also gaming machines, that existed at the point of amalgamation. These provisions are purely to reinstate what was there at the time of amalgamation, not to create any additional entitlement or loss of entitlements for employees or to create a new entitlement to move poker machines. An application to increase the number of poker machines in any location subsequent to a de-amalgamation will be dealt with under the same provisions as would be applicable if no de-amalgamation was involved.

Extended trading hours, gaming machines and so on, particularly if they are in a high incidence area of poker machines will nonetheless require an application to the Casino Liquor and Gaming Control Authority. Depending on the circumstances, a local impact assessment will need to be completed and lodged, and in high incident areas a local impact assessment 2, as it is called, would have to be assessed. That is required now and it will be required after a de-amalgamation. The passage of this legislation will not alter those requirements; it will merely facilitate a return to the circumstances that existed prior to an amalgamation and refers particularly to the forfeiture provisions. De-amalgamation is not the same as the commercial trading of poker machines, for which the forfeiture entitlements were originally designed.

With those remarks, I thank members who contributed to the debate. I thank also Mr Peter Cox of the Office of Liquor, Gaming and Racing, and Mr Frank Marzic and Mr Jinesh Patel of my office, for the considerable effort involved in this complicated bill. I note that the shadow Minister made that exact observation. The bill contains more than a dozen provisions in the complex area of liquor and gaming, licensed clubs and licensed premises generally. It is never an easy or quick path to either an understanding or an amendment to legislation. I appreciate that members have had only a limited opportunity to study the bill in detail since its introduction. I place on record my thanks to those members who have nonetheless studied the bill and been able to make a contribution. I commend the bill to the House.

Question—That this bill be now agreed to in principle—put and resolved in the affirmative.

Motion agreed to.

Bill agreed to in principle.


Passing of the Bill

Bill declared passed and transmitted to the Legislative Council with a message seeking its concurrence in the bill.