Legislative Council Thursday 22 November 2018

Ms  FORREST  question to LEADER of the GOVERNMENT in the LEGISLATIVE COUNCIL, Mrs HISCUTT

The TT-Line Company's 2017-18 annual report states on page 75, under Note E5, Community Service Obligation, that -

On 8 June 2016, the Tasmanian Government agreed to formally recognise up to $890,000 per contract year of the cost of the Company's 2017 to 2021 North Melbourne Football Club sponsorship as a Community Service Obligation (CSO), as defined under the Government Business Enterprise Act 1995 (Tas). This represents the difference between the commercial value of the sponsorship to the Company and the total cost of the arrangement. No funding for this CSO will be paid by the State government.

During the year ended 30 June 2018, the Company incurred a cost of $890,000 (2017: $445,000) in relation to this CSO.

(1)  Please provide a layman's interpretation of this statement.

(2)  What enables this amount to be recognised as a CSO as distinct from a commercial sponsorship arrangement?

(3)  What is the benefit of recognising this figure as a CSO as opposed to sponsorship?

(4)  What is the full commercial value of the sponsorship referred to in the annual report for both the 2017 and 2018 years?

(5)  Why has there been a twofold increase in the value of the CSO in the last two financial years?

(6)  How much was paid by TT-Line in both cash and in kind to the North Melbourne Football Club for 2017 and 2018?

(7)  If the claim is made that this information is commercially sensitive, how can this be the case when the monetary value of other sponsorship and partnership deals with other football clubs are fully disclosed?

ANSWER

Mr President, I thank the member for Murchison for her question.

(1)  The implementation of an approved community service obligation policy is integral to the enhanced performance and accountability of GBEs under the Government Business Enterprise Act 1995.  GBEs are expected to improve performance by focusing on commercial goals. 

This means non-commercial activities and functions, not all of which may qualify as community service obligations, will need to be clearly identified, justified and separately accounted for.  This comes from the Treasurer's Instruction, GBE 13-114-04.

       The CSO in relation to the North Melbourne Football Club agreement with TT-Line includes the establishment of the North Melbourne Football Club Huddle, which will assist with education and training of disadvantaged youth throughout Tasmania, a statewide youth AFL academy and a youth women's academy.

       These are all non-commercial activities and are recognised and accounted for separately as a CSO and are noted in the members' statement of expectations signed off by the shareholders.

(2)  The policy implementation guides for GBEs in respect to the treatment of CSOs are set out in the Treasurer's Instruction, GBE 13-114-04.

(3)  It recognises the company's and shareholders' agreement to participate in non-commercial activities for the benefit of the Tasmanian community, which is noted and signed off in the members' statement of expectations with the company.

(4)  This is commercial-in-confidence.

(5)  The amount accounted for in 2016-17 financial year recognises only six months of the agreement.  The 2017-18 financial statement recognises a full year of the agreement.

(6)  This information is commercial-in-confidence.  Please note that at the outset of the current agreement between the North Melbourne Football Club and the TT-Line, the chairman and chief executive officer of TT-Line provided the Legislative Council government administration committee with a briefing in an in camera session.  This was at the request of the Legislative Council on the 21 September 2016.

(7)  It should also be noted that TT-Line has an agreement in place with the North Melbourne Football Club which has a specific clause to keep any commercial information confidential.  Release of this commercial information would likely expose the North Melbourne Football Club to competitive disadvantage.  The North Melbourne Football Club competes with Hawthorn and other sporting organisations in the Tasmanian market place for corporate sponsorship and government support.  Any specific information made publicly available would impact on the North Melbourne Football Club's competitive position, not only with Hawthorn, but with other sporting codes and potential funding and sponsorship partners throughout Australia.  Furthermore, it would prove detrimental in the North Melbourne Football Club's commercial dealings with other government bodies both within and outside Tasmania.