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					               CABINET-IN-CONFIDENCE




                  REPORT OF THE
SMALL BUSINESS REGULATION REVIEW TASKFORCE




ACCOMMODATION, FOOD AND BEVERAGE
        SERVICES SECTOR
                 (ANZSIC 44 and 45)




October 2006
CABINET-IN-CONFIDENCE




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         SMALL BUSINESS REGULATION REVIEW TASKFORCE


     REPORT ON THE ACCOMMODATION, FOOD AND BEVERAGE
       SERVICES SECTOR (ANZSIC 44 and 45) – October 2006




The Hon David Campbell MP
Minister for Water Utilities
Minister for Small Business
Minister for Regional Development
Minister for the Illawarra

Dear Minister

The review of the accommodation, food and beverage services sector
undertaken by the Small Business Regulation Review Taskforce has been
completed. I submit the report of the review for your consideration. This is
the second in a series of sector reviews being conducted by the Taskforce.
The Taskforce has undertaken extensive consultation with the industry sector
and relevant government agencies. The report addresses the key issues
raised during the course of the review by industry associations and a diverse
range of businesses in the sector, including cafes, restaurants, hotels, motels,
pubs, clubs, caravan parks, bed and breakfast operators and boarding
houses.
As with the recommendations of the report on the motor vehicle retailing and
services sector, which were endorsed by the NSW Government in August
2006, I believe that the recommendations proposed in this report offer
practical and achievable mechanisms for tackling the regulatory compliance
issues raised by the sector.




Loftus Harris
Chair
Small Business Regulation Review Taskforce


______________________________________________________________
_______




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                                            CONTENTS



    EXECUTIVE SUMMARY ............................................................................4
A. INTRODUCTION........................................................................................6

    1.0     BACKGROUND ................................................................................6
    2.0     THE TASKFORCE ............................................................................8
    3.0     REVIEW METHODOLOGY .............................................................10
    4.0     PROFILE OF THE ACCOMMODATION, FOOD AND BEVERAGE
            SERVICES SECTOR.......................................................................11
    5.0     CONSULTATIONS AND SUBMISSIONS .......................................13
B. FINDINGS AND RECOMMENDATIONS .................................................15

    6.0     ACCOMMODATION........................................................................15
    7.0     FOOD AND BEVERAGE SERVICES ..............................................33
    8.0     LIQUOR LEGISLATION..................................................................37
    8.1     NSW OFFICE OF LIQUOR, GAMING AND RACING ......................37
    9.0     GAMING LEGISLATION .................................................................50
    10.0    FOOD LEGISLATION .....................................................................57
    11.0    SMOKE-FREE LEGISLATION........................................................61
    12.0    PLACE OF PUBLIC ENTERTAINMENT .........................................64
    13.0    BROADER REGULATORY ISSUES...............................................69
C. LIST OF RECOMMENDATIONS .............................................................76

D. APPENDICES ..........................................................................................81
                      CABINET-IN-CONFIDENCE

EXECUTIVE SUMMARY
The Small Business Regulation Review Taskforce has completed its second
review, focusing on the accommodation, food and beverage services sector.
The sector includes accommodation businesses, such as bed and breakfast
establishments, boarding houses, caravan parks, hotels and motels. It also
covers registered clubs, pubs, restaurants, catering businesses and cafes.
The sector comprises nearly 25,000 businesses and provides employment for
more than 170,000 people.
The review included extensive consultations with industry associations,
individual businesses and government agencies and authorities and
considered a range of regulatory compliance issues, primarily specific to the
sector. The issues raised by the industry are detailed in the report under the
following headings: accommodation businesses, food and beverage services,
liquor legislation, gaming legislation, food legislation, smoke-free legislation,
‘place of public entertainment’ licensing and other broader regulatory issues
confronting segments of the industry.
The Taskforce recommendations broadly comprise:
Tourist Hotels, Motels, Bed and Breakfasts, and Boarding House
Accommodation: Recommendations to reduce the compliance burden for
those businesses with swimming pools and/or spas, and to improve the level
of information and guidance provided to this segment of the accommodation
industry.
Caravan Park Accommodation: Recommendations to provide caravan park
owners with a better and more efficient option for the delivery of documents to
their residents, and to address concerns about the process of terminating a
tenancy when park fees have not been paid.
Registered Clubs: Recommendations to reduce the regulatory burden on
small businesses in complying with the new accountability and governance
requirements under the Registered Clubs Act 1976.
Liquor Legislation and Licensing: Recommendations to provide businesses
with more guidance in preparing Social Impact Assessments (liquor), to
reduce the compliance burden for lower risk industry segments in relation to
liquor licence requirements, and examine possible improvements in smoking
signage based on the outcome of the review of liquor and gaming signage in
licensed premises. There is also a proposal to review the current use of
information obtained through the Alcohol Linking Project conducted by NSW
Police.
Gaming Legislation: Recommendations to avoid duplication in data
collection, address inconsistencies in legislative requirements resulting in




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staff/patron security concerns, and provide greater guidance in the
preparation of Social Impact Assessments (gaming).
Food Legislation: Recommendations aimed at improving food inspection
processes and consistency.
Smoke-free Legislation: A recommendation to assist business to comply
with smoke-free legislative requirements.
Broad Regulatory Issues:             Recommendations to streamline the
Development Application (DA) process and the process for obtaining Place of
Public Entertainment (POPE) licences, and to reduce inconsistencies within
and between local councils in relation to development assessment processes.




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A. INTRODUCTION


1.0          BACKGROUND
      On 17 January 2006, the Premier, the Hon Morris Iemma MP, announced
      a three-pronged approach to reviewing NSW Government regulation. The
      Small Business Regulation Review, being overseen by the Minister for
      Small Business, the Hon David Campbell MP, is one stream of the review
      process.
      It is a targeted sector-by-sector review of regulation from a small firm
      perspective, involving consultations with peak business groups, individual
      businesses and key government agencies.             The Small Business
      Regulation Review Taskforce established to undertake the review is
      comprised of high level government and industry representatives.
      The Taskforce has already completed a review of the motor vehicle
      retailing and services sector, which covers motor dealers, motor
      mechanics, small repairers, auto electricians and fuel retailers. The
      Taskforce presented its report to the Minister for Small Business and the
      NSW Government has endorsed all ten sets of recommendations made by
      the Taskforce.
      The industry-specific recommendations were predominantly aimed at
      addressing the administrative burden faced by businesses in complying
      with regulation, and included:
      •   Abolishing certain aspects of regulation (equipment lists);
      •   Reviewing and simplifying motor vehicle dealer licence categories and
          forms;
      •   Examining classes of motor vehicle repairer to ensure that they reflect
          current market realities and technologies in motor vehicles;
      •   Merging forms collected by different agencies that contain substantially
          the same information, in order to reduce duplication of effort;
      •   Streamlining information requirements, especially those that are
          completed by vehicle dismantlers, so that they better reflect business
          processes;
      •   Introducing measures to bring about more consistent compliance
          inspections across agencies and local government under various
          legislative instruments (Occupational Health and Safety Act, and
          Protection of the Environment Operations Act); and




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•   Requiring agencies to develop ways to share information to make
    dealing with government easier for small firms (Privacy and Personal
    Information Protection Act).
A copy of the full report on the motor vehicle retailing and services sector
is available on the Government’s Small Business website –
www.smallbiz.nsw.gov.au.
The other two streams of the Review of NSW Government Regulations
are:
•   a review by the Independent Pricing and Regulatory Tribunal (IPART)
    to identify unnecessary administrative or compliance burdens on
    business, local government and the community. It will highlight
    overlapping or inconsistent requirements between NSW, other States,
    Territories and the Commonwealth.
    IPART presented an initial report to the Premier in March 2006,
    identifying priority areas, and in July released a copy of its draft report
    for comment. A final report is expected by middle to late September
    2006.
•   a review of internal government red tape led by the Minister Assisting
    the Treasurer on Business and Economic Reform, the Hon Joe Tripodi
    MP. The role of this review is to ensure that NSW Government
    agencies minimise their paperwork and focus on the efficient delivery of
    frontline services to the community.
    An initial report has been submitted to the Government, with a two-
    stage process to follow:
    Stage 1:   a report on financial and non-financial reporting
               requirements, with recommendations by 30 September
               2006; and
    Stage 2:   a report on other red tape issues identified in the initial
               report, with recommendations by 30 April 2007.
At the national level, on 12 October 2005, the Federal Government
announced the appointment of a taskforce to identify practical options for
alleviating the compliance burden on business from Commonwealth
Government regulation. It also aimed to identify key areas in which the
regulatory burden arises from overlaps with State and Territory legislation.
The Prime Minister and the Treasurer released the taskforce report,
Rethinking Regulation, and the Government’s initial response on 7 April
2006. The Government’s final response to the report was released on 15
August 2006.




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2.0           THE TASKFORCE
      The Small Business Regulation Review is being undertaken by a
      Taskforce appointed by the Minister for Small Business. The role of the
      Taskforce is to assess regulations that have an impact on small firms and
      to recommend actions that will make compliance with regulation simpler
      for small businesses.
      The members of the Taskforce are:
      Chair
      Loftus Harris, Director General, Department of State and Regional
      Development
      Government representatives
         Roger Wilkins, Director General, The Cabinet Office (to August 2006);
         John Schmidt, Acting Director General, The Cabinet Office (from
         September 2006)
         John Pierce, Secretary, NSW Treasury
         Michael Coutts-Trotter, Director General, Department of Commerce
      Industry representatives
         Kevin MacDonald, Chief Executive Officer, ABL State Chamber
         Heather Ridout, Chief Executive Officer, Australian Industry Group
         Lynn Scott, Chair, NSW Small Business Development Corporation
      Sector representatives
      Representatives of peak bodies relevant to each sector being reviewed
      join the Taskforce for the duration of that review.
      For the review of the accommodation, food and beverage services sector,
      the sector representatives are:
         Brian Ross, Chief Executive, Australian Hotels Association (NSW)
         Barry Baillie, Chief Executive Officer, Caravan and Camping Industry
         Association NSW
         David Costello, Chief Executive Officer, ClubsNSW
         Peter Olah, National Affairs Manager, Hotel, Motel and Accommodation
         Association
         Robert Goldman, Chief Executive, Restaurant and Catering NSW/ACT
      The Taskforce is supported by a Secretariat from the Department of State
      and Regional Development.




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The sector reviews are aimed at capturing a small business perspective on
compliance issues. Therefore, in conducting its reviews, the Taskforce
focuses on:
•     regulatory controls that impose an administrative burden on small
      business and create unintended consequences particularly for small
      firms in the start-up or business expansion stage;
•     opportunities for agencies and businesses to apply technology to
      reduce the administrative burden on small firms; and
•     any overlapping, duplicative or inconsistent requirements created by
      legislation.
The Taskforce also recommends mechanisms that government should
consider adopting to manage the administrative burden of regulations
imposed on small firms.
The Taskforce does not analyse rates of taxes, fees or charges payable by
business but it may examine matters relating to the costs faced by small
firms in complying with such obligations.




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3.0          REVIEW METHODOLOGY
      As with the motor vehicle retailing and services sector, the
      accommodation, food and beverage services sector is predominantly
      comprised of small businesses and is subject to a range of sector-specific
      regulation. In addition, it contains a wide variety of businesses, a mixture
      of employing and non-employing firms, and is geographically widespread.
      To gain the perspective of the small business operator in this review,
      meetings were held with individual business operators and with their peak
      industry bodies. In addition, the peak bodies made written submissions to
      the Taskforce based on material that they had gathered from their
      members. Further details about these consultations are below.
      In the consultations, the Taskforce was seeking information about specific
      regulatory requirements that were duplicative, unnecessary, unreasonable,
      or excessively costly or time-consuming.
      A number of issues were raised with the Taskforce by business operators
      and peak bodies. These issues were predominantly specific to the
      accommodation, food and beverage services sector but some, such as
      occupational health and safety, were generic and apply to all sectors.
      Having identified the main issues, the Taskforce examined them by
      analysing relevant legislation, including regulations, and by seeking
      verification about them from government agencies responsible for the
      legislation. Some of the issues raised have not been carried forward as
      the information provided to the Taskforce was found to be inaccurate or no
      longer applicable as the issue has been resolved or regulation has
      changed. Furthermore, issues relating to industrial relations have not
      been examined by the Taskforce as the situation in NSW remains unclear
      following the introduction of new federal legislation.
      For each of the issues that have been carried forward, the Taskforce has
      considered and, where appropriate, made recommendations involving
      various levels of possible action:
      •   eliminating or reducing some compliance requirements, based on risk
          assessment;
      •   addressing inconsistencies and inequities;
      •   eliminating or amending forms and/or processes to better reflect
          business workflow and management practices;
      •   sharing information between regulatory agencies; and
      •   improving the level of information and guidance to reduce time delays
          and assist in compliance.




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     4.0              PROFILE OF THE ACCOMMODATION, FOOD AND BEVERAGE
                      SERVICES SECTOR
           The accommodation, food and beverage services sector covers ANZSIC 1
           codes 44 (accommodation) and 45 (food and beverage services), which
           include the following businesses:
           Accommodation - motels, hotels, bed and breakfast establishments,
           caravan parks and boarding houses; and
           Food and beverage services – cafes, restaurants, takeaway food services,
           catering services, pubs, taverns, bars and clubs.
           The accommodation, food and beverage services sector in NSW is
           comprised of nearly 25,000 businesses and provides employment for more
           than 170,000 people. Around 87% of the businesses are small businesses
           (42% of the businesses are sole traders and a further 45% employ fewer
           than 20 staff).
           [See Tables 1 and 2 below and Appendix 1 for an overview of the sector.]

           TABLE 1 NUMBER OF BUSINESSES BY SEGMENT AND SIZE – NSW

                      Number of Businesses by Segment and Employment Size, NSW, June 2004

Industry Classification   0-19 (employing)        20-199              200+             Total Employing*     Total non-            Total
                                                (employing)        (employing)                              employing*
Accommodation, Cafes,
                                    10 993         3 078                 165               14 236             10 230             24 466
and Restaurants (Total)
                              No.         %     No.           %    No.            %       No.        %       No.      %          No.         %
Accommodation               2 237      20.35    555        18.03    45         27.27    2 837     33.81    3 459   33.81       6 296      25.73

Pubs, Taverns and Bars        908       8.26    721        23.42    19         11.52    1 648       7.57    774        7.57    2 422       9.90

Cafes and Restaurants       7 246      65.91   1 241       40.32    56         33.94    8 543     56.04    5 733   56.04      14 276      58.35

Clubs (Hospitality)           602       5.48    561        18.23    45         27.27    1 208       2.58    264        2.58    1 472       6.02



     * Employing businesses are differentiated from non-employing businesses by the presence of an Income Tax
       Withholding (or Pay As You Go Withholding (PAYGW)) obligation.

     Source: Australian Bureau of Statistics (ABS) Counts of Business by Industry, by Main State (NSW), by Employment
     Size, June 2004




     1
      Australian and New Zealand Standard Industry Classification (ANZSIC) 2006 –
     www.abs.gov.au.
                                       CABINET-IN-CONFIDENCE

           TABLE 2 EMPLOYMENT


                      Total Employment (‘000) by Segment, NSW, February 2004- November 2005
                            February       May       August    November        February      May    August    November
                             Quarter    Quarter      Quarter     Quarter        Quarter   Quarter   Quarter     Quarter
                               2004       2004         2004        2004           2005      2005      2005        2005
Accommodation Cafes
                               174.0      175.4       171.2        184.4         168.7     179.9     171.4          176.5
& Restaurants
Accommodation                   35.5        35.2        32.5         31.2          26.6     29.6      26.6           31.4
Pubs, Taverns and
                                28.0        28.1        28.3         26.3          27.0     29.4      25.6           23.2
Bars
Cafes and restaurants           74.5        74.4        71.9         79.3          74.7     87.1      87.4           91.6
Clubs (hospitality)             32.8        35.9        33.3         40.2          36.2     33.1      28.5           28.7

      Source: ABS, Labour Force, Detailed (Cat. No. 6291.0.55.001), Dec 2005




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5.0          CONSULTATIONS AND SUBMISSIONS
      A. The Taskforce undertook consultations with:
      •   Industry associations:
          − ABL State Chamber
          − Australian Hotels Association (AHA)
          − Caravan and Camping Industry Association (CCIA)
          − ClubsNSW

          − Hotel, Motel and Accommodation Association (HMAA)
          − Property Owners Association NSW (Private Hotel & Boarding
            House Division)
          − Restaurant and Catering NSW/ACT
      •   NSW government agencies that administer legislation impacting on
          small firms:
          − Office of Fair Trading, Department of Commerce
          − Department of Health
          − Department of Local Government
          − Department of Planning
          − NSW Food Authority
          − NSW Office of Liquor, Gaming and Racing, Department of the Arts,
            Sport and Recreation
          − WorkCover NSW
      •   Local government
          − Ashfield Municipal Council

      B. Written submissions were received from the following industry
      associations:
      − Australian Hotels Association
      − Caravan and Camping Industry Association
      − ClubsNSW
      − Property Owners Association NSW (Private Hotel & Boarding House
        Division)
      − Restaurant and Catering NSW/ACT




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C. Written submissions were also received from the following businesses:
− Nags Head Hotel (Sydney)
− Smugglers on the Beach (Korora)
− The Acreage B&B (Avoca)
− The Bells’ on the Coast Retreat (Killcare)
− The Peak at Mount Kanimbla (Little Hartley)
− Winter-Rose Cottage (Bathurst)

D. Interviews were held with a total of thirty-two businesses across the
industry sector. Nineteen of these businesses were from regional NSW.
(See Appendix 2 for further details of the consultations and submissions.)




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B. FINDINGS AND RECOMMENDATIONS

6.0         ACCOMMODATION
      6.1     TOURIST HOTELS, MOTELS AND BED AND BREAKFAST
              ESTABLISHMENTS (B&Bs)
            Industry associations and businesses in the tourist hotels, motels,
            and bed and breakfasts segment of the accommodation industry
            have not raised any major regulatory issues with the Taskforce.
            6.1.1   Key Issues
            The issues that were raised are:
            a) Testing requirements for swimming pools
            It was suggested by businesses that the frequency of testing and
            record-keeping required regarding the water quality of swimming
            pools in accommodation facilities is excessive.
            Discussion:
            The NSW Health Department has reported that swimming pools
            and spa pools are often the source of outbreaks of infectious
            diseases, and it is therefore vital to ensure that they are safe for
            users in order to properly protect public health.
            Facilities such as motels can carry greater risks than large
            commercial pools because in many cases they are not
            automatically dosed and controlled and, unless they are tested
            frequently, it is difficult to ensure that the appropriate dosages are
            being used, especially if there are increasing numbers of users of
            the pools.
            Under the Public Health (Swimming Pools and Spa Pools)
            Regulation 2000, the owner of a swimming pool or spa pool must
            not allow a person to use the water in the pool unless the water is
            disinfected in such a way as to prevent the transmission of
            scheduled medical conditions to other users of the pool. The
            Regulation applies to swimming pools and spa pools to which the
            public is admitted, including pools provided at a club, hotel, motel,
            guest house or holiday units.
            The Health Department has developed Public Swimming Pool and
            Spa Pool Guidelines which outline how frequently the water quality
            of pools should be tested and the required record-keeping of the
            testing. Some testing should be carried out prior to opening the
            pool and then two hourly, some prior to opening and then once
            during the day, some daily, some weekly and some monthly.



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A register or log should be used to record the results of every test
performed at a swimming pool, spa pool or pool complex. Each
pool or pool complex should design its own test register sheet
according to local needs.
Further details about the guidelines for testing and record-keeping
associated with public pools can be found in Appendix 2.
The Health Department has reported that it is currently reviewing
the guidelines for public swimming pools and spa pools, and that it
is likely that a risk management approach will be recommended for
managing public pools.         A minimum standard would be
recommended and the pool operators/managers would need to
assess the amount of testing required, based on the risk posed by
the pool, as determined by the number of users, etc.



   Recommendation 1:
   NSW Health Department to:
   i) adopt a risk management approach to managing public
      swimming pools and spa pools, including in relation to
      the testing of water quality and the associated record-
      keeping; and
   ii) develop pool management guidelines for lower risk
       categories rather than mandatory reporting, supported
       by an information/education program.



b) Definition of “Hotel”
The Hotel, Motel and Accommodation Association (HMAA) raised
the issue of the use of the term “Hotel”. Internationally the term
“Hotel” is associated with tourist accommodation, whereas in
Australia it is often the commonly used title or description of a pub
or tavern. The association wants the definition of the term “hotel” to
be limited to tourist/accommodation hotels only, and other
descriptors, such as public houses/pubs, bars and taverns, to be
used for venues that primarily serve alcohol.




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            Discussion:
            This matter has previously been raised by the HMAA with the Office
            of Liquor, Gaming and Racing (OLGR). However, no action has
            been taken because of the broad and long-term general community
            (and business) use of the term ”hotel” to include pubs and other
            venues that primarily serve alcohol. A legislative change to the
            definition of “hotel”, to satisfy the HMAA position, would be counter
            to popular use of the term and very expensive for existing
            businesses.
            c) Provision of alcohol in small bed and breakfasts
            This issue is covered in the section below on Liquor legislation
            (item 8.0).


      6.2    BOARDING HOUSES AND OTHER ACCOMMODATION
            6.2.1    Sector Specific Legislation
            Whilst aspects of the Environmental Planning and Assessment Act
            1979 (EP&A Act) and the Building Code of Australia (BCA) are
            applicable, there is no legislation specifically for the operation of
            boarding houses.         Boarding houses that have two or more
                                   2
            handicapped people         who require some form of supervision or
            social habilitation are required to be licensed under the Youth and
            Community Services Act 1973. Currently there are 55 licensed
            boarding houses in NSW with a total capacity of around 900 beds.
            The Department of Aging, Disability and Home Care also has
            certain responsibilities under the NSW Government’s Boarding
            House Reform Program 3 .
            Since 1989, several attempts have been made by Coalition and
            Labor Governments to introduce specific legislation to protect
            boarders and lodgers.       However, it is considered that such
            legislation could be counterproductive to the continued provision of
            this form of accommodation. The Private Hotel and Boarding
            House Division of the Property Owners Association NSW has
            suggested that, in Victoria, placing boarding houses under the
2
   A handicapped person is defined under the Youth and Community Services Act 1973 as a
person who are senile, temporarily or permanently incapacitated for work, mentally ill,
intellectually handicapped, physically handicapped, sensorily handicapped, chronically ill, of
advanced age or suffering from a medical condition prescribed by the regulations, or any
combination of these disabilities and who requires some form of supervision or social
habilitation.
3
  The objectives of the Boarding House Reform Program are to improve the standards of
accommodation and support provided to residents in licensed boarding houses; to relocate
residents with high support needs to appropriate accommodation; and to maintain licensed
boarding houses where safety and affordability satisfies minimum benchmarks.



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Residential Tenancies Act 1997           has    virtually   ended   this
accommodation service in that State.
6.2.2   Other Legislation
a) Local Government Act 1993              and    Local      Government
   (General) Regulation 2005
Under the Local Government Act 1993, a "boarding house" or a
"lodging house" is defined as a building wholly or partly let as
lodging in which each letting provides the tariff-paying occupant with
a principal place of residence and in which:
(a) each tariff charged does not exceed the maximum tariff for
    boarding houses or lodging houses for the time being
    determined by the Minister by order published in the Gazette;
    and
(b) there are at least 3 tariff-paying occupants who have resided
    there for the last 3 consecutive months, or any period totalling 3
    months during the last year.
A boarding or lodging house does not include a residential flat
building, licensed premises, a private hotel, a building containing
serviced apartments, or a backpacker hostel or other tourist
establishment. A boarding or lodging house is categorised under
the Act as residential accommodation rather than as a business.
b) Residential Tenancies Act 1987
The Residential Tenancies Act 1987 specifies that it does not apply
to a residential tenancy agreement if the tenant is a boarder or
lodger (Section 6 (1) (d)). A residential tenancy agreement is any
agreement under which a person grants to another person for value
a right of occupation of residential premises (or part of premises) for
the purpose of use as a residence.
However, the Tenants Advice and Advocacy Service indicates in a
fact sheet available through the Office of Fair Trading that someone
who thinks they are a boarder or lodger may legally be a tenant who
is covered by the Residential Tenancies Act, especially if:
• they have exclusive access to their room;
• they do not receive meals, linen or cleaning services as part of
    their agreement;
• they have their own cooking facilities; and
• they do not have strict house rules enforced.




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6.2.3   Key Issues
a) Treatment of boarding houses by local government
i) It was indicated that there is inconsistency in the definition of a
   boarding house by local councils.
ii) It was suggested that some councils are micro-managing
    boarding houses to an excessive extent.
Discussion:
i) On 31 March 2006, the NSW Government released the
Standard Instrument (Local Environmental Plans) Order 2006 which
prescribes the form and content of a principal local environmental
plan (LEP) for an area. Included in the Order is a dictionary
containing definitions which must be used in all LEPs where
particular terms appear. This should remove all inconsistencies in
the definition of terms by local councils.
The Order defines a boarding house as a building:
(a) that is wholly or partly let in lodgings, and
(b) that provides lodgers with a principal place of residence for 3
    months or more, and
(c) that generally has shared facilities, such as a communal
    bathroom, kitchen or laundry, and
(d) that has rooms that accommodate one or more lodgers, but
    does not include backpackers’ accommodation, a serviced
    apartment, seniors housing or hotel accommodation.
ii) Under the orders provisions of the Local Government Act 1993,
councils have the power to take such action as is necessary to bring
places of shared accommodation into compliance with relevant
standards or requirements set or made by or under the Act.
The Local Government (General) Regulation 2005 sets standards
for boarding houses in relation to the:
• maximum number of boarders and lodgers that may be
    accommodated in each bedroom in the premises;
• notices required to be displayed, including notices to inform
    boarders and lodgers of their maximum permissible period of
    stay;
• provision of adequate light and ventilation;
• condition and cleanliness of kitchen facilities;
• general cleanliness of the premises;
• provision of appropriate furniture and fittings; and
• requirements that apply in the case of long-term residences.




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These standards, which are enforceable by orders under section
124 of the Local Government Act 1993, provide local councils with
the power to take such action as is necessary to bring places of
shared accommodation into compliance with relevant standards or
requirements set out under the Act.
In addition, the Public Health (General) Regulation 2002 specifies
the minimum floor area that must be provided for each person in
sleeping accommodation: 5.5 square metres in long-term
accommodation and 2 square metres in other accommodation.
It has been suggested by boarding house operators that local
councils are setting standards for boarding houses that impose
excessive and unnecessarily specific requirements, for example in
relation to the provision of soap and a waste paper basket in each
room. While the operators are likely to implement the requirements
anyway, and it is vital that public health is properly protected, it can
be time consuming for the operators to make sure that they are
aware of council requirements and are fulfilling them.
Sydney City Council recently released guidelines for the
management of boarding houses, which specify detailed
requirements which operators of boarding houses must comply
with, for example in relation to the quality of mattresses and
minimum kitchen facilities that must be provided.           These
requirements apply to new or refurbished premises in the area that
operate as boarding houses. While these guidelines impose
requirements on boarding houses which are additional to those
specified in the Local Government (General) Regulation 2005, there
is some concern that existing boarding houses may be prejudiced in
any development approval application, if they do not meet the
enhanced standards. The requirement to comply with these
enhanced standards, however, may make the provision of this type
of residential accommodation commercially unsustainable in the
future.
In addition to standards set by councils, boarding houses that
provide accommodation for two or more handicapped persons (that
is, persons who are senile, temporarily or permanently
incapacitated for work, mentally ill, intellectually handicapped,
physically handicapped, sensorily handicapped, chronically ill, of
advanced age or suffering from a medical condition prescribed by
the regulations, or any combination of these disabilities who require
some form of supervision or social habilitation) must be licensed
under the Youth and Community Services Act 1973, and meet



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certain conditions. These conditions are set out in guidelines
produced by the Department of Ageing, Disability and Home Care.
In addition, under the Youth and Community Services Act, the
Minister for Community Services has the power to specify certain
additional requirements on licensed boarding houses.
While it is accepted that there is a need to ensure that boarding
houses with handicapped residents provide additional care and
services to such residents, there is some concern that the existing
requirements set by the Department of Ageing, Disability and Home
Care are particularly onerous for boarding house operators.
Moreover, based on legal advice obtained by the Department of
Ageing, Disability and Home Care, the majority of the requirements
set out in these guidelines are not legally enforceable.
To address these concerns and ensure the continued provision of
this form of accommodation, there is a need for the development of
guidelines for the appropriate management of boarding houses by
local councils and the Department of Community Services, in
relation to the standards for boarding houses set by the Local
Government (General) Regulation 2005. The guidelines should
also specify the minimum requirements which are to apply to
licensed boarding houses.



   Recommendation 2
   NSW Department of Local Government, in conjunction with
   the Department of Ageing, Disability and Home Care, the
   Department of Community Services, the Local Government
   and Shires Associations of NSW, and the Property Owners
   Association NSW, to develop guidelines for the appropriate
   management of boarding houses by local councils in
   relation to the standards for boarding houses set by the
   Local Government (General) Regulation 2005.           The
   guidelines should also specify the minimum requirements
   which are to apply to licensed boarding houses.




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6.3       CARAVAN PARKS
      6.3.1   Sector Specific Legislation
      a) Residential Parks Act 1998
      The Residential Parks Act 1998 commenced on 1 March 1999.
      Prior to this legislation coming into being, residential park tenancies
      were regulated by the Residential Tenancies Act 1987 and the
      Caravan and Relocatable Home Park Industry Code of Practice
      Regulation 1992, a mandatory code of practice under the Fair
      Trading Act 1987. The Residential Parks Act 1998 arose following
      recognition that specialised legislation was necessary to address
      the unique circumstances that arise in park occupation where the
      majority of residents live in their own homes on rented sites in a
      self-contained community.
      The Act provides for:
      • the rights and obligations of park owners and residents who are
         subject to residential tenancy agreements;
      •   dispute resolution between parties; and
      •   appropriate legislative protection for residents.
      In accordance with the requirements of the Act and statutory review
      regulation, and in response to community concern regarding
      closures of parks for re-development purposes, a review of the Act
      was undertaken in 2004. Following that review, Parliament passed
      a package of significant reforms to the Act in December 2005. Most
      of the amendments came into force on 10 April 2006, along with
      some new regulations. In July 2006 the Office of Fair Trading
      released a Regulatory Impact Statement and a draft Residential
      Parks Regulation 2006, with submissions closing on 1 August 2006.
      The new Regulation came into effect on 1 September 2006.
      The reforms to the Residential Parks Act arose after a lengthy
      period of public consultation in association with the statutory 5-year
      review. The subsequent legislative amendments received bi-
      partisan support during their passage through Parliament.
      The Act endeavours to find the appropriate balance between the
      rights of residents who have made their permanent homes in
      residential parks and the expectations of park owners who hope to
      derive a satisfactory income from their investment.
      Park living, where most residents live in their own homes on rented
      sites, is a unique form of housing and many issues arise which are
      not relevant to conventional residential tenancies. Whereas a



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tenant of a house or apartment is able to relocate relatively easily at
the end of a tenancy, a park resident is faced with the cost,
inconvenience and disturbance of not only moving themselves and
their possessions, but also the dwelling they live in.
New South Wales is the only jurisdiction, apart from Queensland, to
have legislation which covers mobile, or manufactured, homes. The
NSW Residential Parks Act applies to both owner-occupiers of
manufactured homes and persons renting manufactured homes on
a site in a residential park.

b) Holiday Parks (Long Term Casual Occupation) Act 2002

On 28 February 2003, the Holiday Parks (Long Term Casual
Occupation) Act 2002 became law. The Act applies to "occupation
agreements" between a holiday park owner and a van owner in
which the van owner installs their van on a site, is permitted to
occupy the site for no more than 180 days a year and, with the
agreement of the park owner, agrees to be an occupant for at least
12 months. The Act only applies where the van owner has a
principal place of residence other than the site in the holiday park.

c) Consumer, Trader and Tenancy Tribunal Act 2001
The Consumer, Trader and Tenancy Tribunal Act 2001 established
the Consumer, Trader and Tenancy Tribunal (CTTT) of NSW.

The Fair Trading Tribunal and the Residential Tribunal merged on
25 February 2002 to form the CTTT which is designed to provide a
specialist dispute resolution forum for consumer, trader and tenancy
matters throughout NSW.          A number of Acts, including the
Residential Parks Act 1998 and the Holiday Parks (Long Term
Occupation) Act 2002, confer jurisdiction on the Tribunal.

In accordance with the statutory requirement under section 91 of
the Consumer, Trader and Tenancy Tribunal Act 2001, a review of
the Tribunal has been conducted by the Office of Fair Trading. The
review only concerned itself with the legislative framework
supporting the Tribunal and did not examine its practices and
operations in detail, as this was not the review’s purpose. The
Statutory Report of the Review of the Consumer, Trader and
Tenancy Tribunal Act 2001 was tabled in Parliament on 28 March
2006. In summary, the review concluded that the legislation that
provides the framework for the Tribunal is fundamentally sound and
that the policy objectives of the Act remain valid. The review found


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that the legislation could be improved with some refinements in
several areas to help meet the Act’s objectives.
The Minister for Fair Trading has initiated an operational review of
the Consumer, Trader and Tenancy Tribunal. The review is being
undertaken by an independent reviewer, Ms Jan McClelland, who
was appointed by the Commissioner for Fair Trading.
6.3.2   Key Issues
During the course of 2004 to 2006, legislation impacting residential
park accommodation has been under review. This has involved
considerable consultation by the Government with the industry,
residents and welfare groups, which is still continuing. Some
changes flowing from the review of the Residential Parks Act only
came into force in April 2006 and the outcomes of the review of the
Consumer, Trader and Tenancy Tribunal Act 2001 are yet to be
finalised.

a) Inefficient information dissemination requirements
The Caravan and Camping Industry Association (CCIA) raised the
issue of the methods that park owners can use, under the current
Residential Parks Act 1998 and Residential Parks Regulation 2006,,
to serve documents on their residents. The Association suggested
that there should be alternatives to the current hand or postal
delivery.
Discussion:
Under Section 153 of the Residential Parks Act 1998:
(1) A notice or other document (other than a notice of termination or
    penalty notice) required to be given to a resident under this Act
    may be given:
   a) by delivering it personally to a resident or a person
      apparently of or above the age or 16 years by whom the rent
      payable by the resident is ordinarily paid, or
   b) by delivering it to the residential premises occupied by the
      resident and by leaving it there with some person apparently
      of or above the age of 16 years for the resident, or
   c) by sending it by post to the residential premises occupied by
      the resident, or
   d) as in such other manner as may be prescribed by the
      regulations for the purposes of this section or approved
      by the Tribunal.



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            CABINET-IN-CONFIDENCE

   Clause 35 of the Residential Parks Regulation 2006 – Service of
   documents other than notices of termination: section 153 (1) and
   (2) states:
(1) This clause:
   a) applies to all notices or other documents (other than notices
      of termination) required to be given under the Act or this
      Regulation, and
   b) prescribes, for the purposes of section 153 of the Act, the
      additional ways in which such notices and other documents
      may be given.
(2) A notice or other document required to be given under the Act to
    a resident:
   a) may be given by sending it by post to the resident’s usual
      place of business or employment, and
   b) in the case of the notice required by clause 24 (relating to
      goods in storage), may also be given:
     (i) by sending it by post to the resident’s last forwarding
         address known to the park owner or park manager, or
     (ii) by giving it to a representative nominated by the resident
          before the resident vacated the residential premises.
The Residential Parks Act 1998 has a provision whereby residents
may request the installation of individual mail boxes (section 75). It
has been proposed by the CCIA that, while the Act and the
Regulation provide the options of direct hand or postal delivery of
documents to residents, a better and more effective method would
be to use the mail receptacles at the park, where they are provided.
In this way, any notices could be placed in the mail receptacle
without the loss of time in using the postal system and the additional
costs of stamping. This would not put at risk any rights the residents
might have.
According to the CCIA, this issue applies equally to the Holiday
Parks (Long-term Casual Occupation) Act 2002 that deals with
holiday accommodation on sites in a caravan park.




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            CABINET-IN-CONFIDENCE



   Recommendation 3:
   Residential Parks Regulation 2006 to be amended to include
   the use of on-site mail boxes (where provided in
   accordance with section 75 of the Residential Parks Act
   1998) as an additional option for delivery of documents to
   residents of residential parks.


b) Excessive information provision requirements
The CCIA has indicated that, under the current Residential Parks
Act and Regulation, park owners and operators are required to
comply with the provision of what it regards as an “excessive”
amount of information to current and prospective residents.
According to the CCIA, before signing a tenancy agreement,
prospective residents must be given a copy of:
   the agreement, which includes a premises or site condition
   report and any additional terms shown on a separate page
   [sections 8 and 10 of the Act and section 5 (4) and Schedules 1
   and 2 of the Regulation];
   the booklet issued by the Office of Fair Trading entitled
   Residential Park Living [section 6 of the Regulation];
   16 questions and answers by the park owner about the resident
   living in the park – distilled from the tenancy agreement;
   a list of park rules;
   a list of the fees and charges payable on entering into the
   agreement;
   a notice about their rights to access the Energy and Water
   Ombudsman (required under Customer Service Standards for
   the Supply of Electricity to Permanent Residents of Residential
   Parks);
   a notice about where to get information about rebates for
   electricity (required under Customer Service Standards for the
   Supply of Electricity to Permanent Residents of Residential
   Parks); and
   a statement that the occupation is on a tenancy basis which may
   be terminated and that no ownership of land is involved.




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            CABINET-IN-CONFIDENCE

   In accordance with section 143A of the Residential Parks Act,
   “…. a park owner must not advertise the availability of residential
   premises under a residential tenancy agreement in any way
   unless the advertisement clearly states that a resident’s right to
   occupy the premises under a residential tenancy agreement is:
   a) a leasehold right only, and not a freehold right or other right of
   an unlimited perpetual nature, and b) may, in certain
   circumstances, be terminated”.
Discussion:
The objectives of the Residential Parks Act 1998 are to:
(a) set out the respective rights and obligations of park owners and
    residents, including their rights and obligations under residential
    tenancy agreements;
(b) establish legislative protection for residents; and
(c) establish procedures for resolving disputes between park
    owners and residents.
A significant portion of residential park tenants are in the lower
socio-economic segment of the community, including a significant
number of recipients of the aged pension or other government
financial assistance who therefore have less access to financial and
advisory resources. Their accommodation options are limited and
they are considered vulnerable to exploitation.
The legislation has a consumer protection focus and the volume of
information required to be provided to prospective residents
appears to take into account the disadvantage of this consumer
group in tenancy dealings.        The legislation however, also
acknowledges the property rights of the residential park owners.
In relation to the issue about the requirement (under section 143A
of the Act) for park owners to include in advertisements a statement
of the nature of a resident’s rights to occupy, the CCIA considers
this to be excessive and costly. Considering that this requirement is
not imposed on others such as real estate agents or park residents
and that, according to the CCIA, 90% of sales in residential parks
are conducted by residents, there is a strong case for reviewing the
cost/benefit of this requirement.
The Office of Fair Trading has advised that the provision, in relation
to advertising, was one of the key amendments to the Act to
improve the relevance and accuracy of information given to
residents before they take up park occupation. The aim of the
provision is to minimise the likelihood that park residents will be



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            CABINET-IN-CONFIDENCE

misled as to the nature of their occupation and ownership
arrangements. Some park owners have in the past deliberately
created the impression that residents had the right to remain in the
park for as long as they wished and openly promoted it as a
“retirement” lifestyle. The fact that residents had no title to any land
nor any guarantee of continuing occupation rights was usually
overlooked in advertising material.
The provision requiring certain statements to be made in
advertisements about park accommodation only applies to park
owners primarily because park owners were the only persons
identified during the consultation as causing the problem. They are
the ones who advertise in glossy seniors magazines and in aged
persons publications. Some advertisements by park owners in
these publications were found to be clearly misleading. A number
of residents advised during the consultation that they would have
made a different decision about moving into their park if the
promotional material had been more accurate.
While it is recognised that the new legislative requirements may
involve additional expense to park owners in their advertising
activities, costs to both park owners and residents will ultimately be
saved through the avoidance of future disputes. Proceedings in the
Consumer, Trader and Tenancy Tribunal will be less likely and the
need for dissatisfied residents to move out of the park concerned
and relocate their homes elsewhere will be minimised.
The Office of Fair Trading indicated that consideration would be
given to widening the coverage of section 143A if others engaged in
selling park dwellings, such as real estate agents, were found to be
providing misleading information in their advertising.

c) Park owners are treated more onerously than electricity
   supply authorities
The CCIA has advised that, under the current Residential Parks
Regulation, park owners have to comply with additional terms
regarding power supply that supply authorities, such as Integral,
Country Energy and EnergyAustralia, do not have to, and may
receive a lower access fee than do suppliers.




                                                                     28
                         CABINET-IN-CONFIDENCE

           Discussion:
           The Office of Fair Trading has advised that park owners do not
           have to “comply with additional terms” to electricity suppliers, and
           that mandatory customer service standards imposed on licensed
           suppliers under the Electricity Supply General Regulation 2001 are
           much more extensive.
           On 10 April 2006, a code - Customer Service Standards for the
           Supply of Electricity to Permanent Residents of Residential Parks -
           commenced. Under the code, the amount that residents have to
           pay for electricity will depend on the number of amps received. The
           Office of Fair Trading has noted that, “while some park owners
           argue that the restricted availability charges have, or will, result in
           rent increases to recover the loss of revenue, it is too early to
           assess this purported impact. This will be examined when a full
           review of the code is conducted during 2007” 4 .

           d) Eviction or termination process is slow and complex
           In order to terminate the tenancy of a park resident, the Residential
           Parks Act (section 98) requires rent to be in arrears for 14 days and
           then the park owner has to give 14 days notice. At the expiry of that
           period, the park owner has to apply to the Consumer, Trader and
           Tenancy Tribunal for an order for termination and an order for
           possession. According to the CCIA, this can take up to a further 6
           to 8 weeks.
           Discussion:
           While it is understandable that consumers need protection from less
           scrupulous park operators, it appears that under the current
           legislation it can take park owners up to three months to remove a
           tenant that has not been paying rent. This results in a loss of
           revenue, and an expenditure of time and effort in seeking redress
           through the Tribunal, and creates stress for park owners.
           As indicated in the discussion of the Consumer, Trader and
           Tenancy Tribunal Act [see item 6.3.1c)], the operations of the
           Tribunal are being reviewed. The Taskforce suggests that the
           terms of reference for that review should include matters relating to
           listing and hearing procedures, adjournments and delays.




4
 NSW Office of Fair Trading, Regulation Impact Statement, Subordinate Legislation Act
1989, Residential Parks Regulation 2006, July 2006, Clause 17, page 23.



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           CABINET-IN-CONFIDENCE



   Recommendation 4:
   The operational review of the Consumer, Trader and
   Tenancy Tribunal to consider whether the current length of
   time it can take to terminate a tenancy, where park fees
   have not been paid, is reasonable, given the potential cost
   and time impacts on the residential park business.


e) Control of rent applications
According to the CCIA, the Consumer, Trader and Tenancy
Tribunal has excessive control over rent applications, especially
increases. It is considered that there are too many issues that can
be taken into account by the Tribunal requiring a lot of paperwork by
park owners.
Since 10 April 2006, it is not possible for a tenant to challenge a
rent increase that is below the rise in the Consumer Price Index
(CPI). However any resident who receives a notice of rent increase
that is above the CPI can challenge it in the Consumer, Trader and
Tenancy Tribunal. The CCIA suggests that this is facilitated by the
low cost of applying to make a challenge ($5 for residents) and the
government-funded advocacy services that increase the likelihood
of the settlement of such cases.


Discussion:
The CCIA claims that the Residential Parks Act has an excessive
rent jurisdiction that operates as a rent control mechanism.
In considering whether a proposed rental increase is excessive, the
Consumer, Trader and Tenancy Tribunal (in accordance with
section 57 of the Residential Parks Act) will take into account the
following:
(a) the general market level of rents for comparable premises in the
    same residential park and in other residential parks in the
    locality or similar locality,
(b) the value of the residential premises,
(c) the frequency and the amount of past rent increases under the
    residential tenancy agreements between the same park owner
    and resident,
(d) the general price index (such as the CPI),
(e) the conduct of the parties,




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           CABINET-IN-CONFIDENCE

(f) the amount of any outgoings in respect of the residential
    premises required to be borne by the park owner under the
    residential tenancy agreement or proposed agreement,
(g) the estimated cost of any services provided by the park owner or
    resident under the residential tenancy agreement or proposed
    agreement,
(h) the value and nature of any fittings, appliances or other goods,
    services or facilities provided with the residential premises,
(i) the accommodation and amenities provided in the residential
    premises and the state of repair and general condition of the
    premises,
(j) any work done on the premises by or on behalf of the resident,
    to which the park owner has consented,
(k) any other relevant matter.
Rent provisions also apply to tenants of residential premises other
than caravan parks. However, in those cases, the overriding
consideration in rent determinations is the market level of rents for
similar premises whereas, as indicated above, market levels are
just one of the factors that are taken into account in determining
rents in residential parks. Other factors that have equal weight
include the CPI, and the frequency and amount of past rent
increases. This introduces uncertainty in achieving commercial
returns for residential park owners and results in the Tribunal
effectively controlling rents.
This approach to determining what are acceptable rents for
residents of residential parks appears to be more in line with public
housing rather than commercial accommodation provision. It is
understood that similar criteria do not apply in relation to rental
increases for tenants of boarding houses, which also provide low
cost accommodation.
Amendments made to the Residential Parks Act in 2005 included a
provision that rent increases that did not exceed the CPI for the
period involved could not be challenged by residents through the
Tribunal unless services or facilities had been reduced or
withdrawn. The Office of Fair Trading has advised that these
amendments have already streamlined the process for park owners
and should reduce costs and time associated with disputes over
relatively minor rent increases.




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            CABINET-IN-CONFIDENCE


f) Illegal camping
Concern was raised by a residential park operator that councils and
schools are offering free or subsidised camping in competition with
local caravan parks.

Discussion:
The CCIA has advised that this matter relates to the illegal provision
of camping facilities, and is being dealt with by the CCIA with the
support of Tourism NSW and the Departments of Lands and Local
Government.




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7.0         FOOD AND BEVERAGE SERVICES
      7.1     PUBS, TAVERNS AND BARS
            7.1.1   Sector Specific Legislation
            The three principal issues raised in consultations with this segment
            of the accommodation, food and beverage services sector were
            liquor, gaming and smoking. These issues are discussed below in
            the sections on Liquor legislation (item 8.0), Gaming legislation
            (item 9.0) and Smoke-free legislation (item 11.0). The issue of
            food is covered in the section on Food legislation (item 10.0).


      7.2     RESTAURANTS, CAFES AND TAKE-AWAY FOOD
            7.2.1   Sector Specific Legislation
            The issues of liquor, food and smoking are covered in the sections
            on Liquor legislation (item 8.0), Food legislation (item 10.0) and
            Smoke-free legislation (item 11.0).


      7.3     REGISTERED CLUBS
            7.3.1   Sector Specific Legislation
            The issues of liquor, gaming, food and smoking are discussed in the
            sections on Liquor legislation (item 8.0), Gaming legislation
            (item 9.0), Food legislation (item 10.0) and Smoke-free
            legislation (item 11.0).

            The Registered Clubs Act 1976 and the Registered Clubs
            Regulation 1996 contain an extensive range of controls applying to
            the management of registered clubs, and the sale and supply of
            liquor on club premises. The Registered Clubs Act specifies in
            detail actions that must be taken by a club’s management in the
            area of harm minimisation regarding its liquor and gaming
            operations, and in relation to the protection of club members’
            interests under club governance requirements.
            Under the proposed changes to the draft Liquor Bill 2005 and the
            Registered Clubs Act, all liquor-related issues will be managed
            under the Liquor Act, while the Registered Clubs Act will focus on
            club management/governance issues.




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            CABINET-IN-CONFIDENCE

7.3.2   Key Issues
a) Registered Clubs Act
The clubs industry has acknowledged the need for the
establishment of good governance practices. However, it has raised
concerns about the excessive level of compliance imposed on the
industry and the impact this has, particularly on the operations of
smaller clubs.
Discussion:
The Registered Clubs Act incorporates requirements both for the
governance of clubs and the control of the sale and supply of liquor.
Following amendments to the legislation under the Registered
Clubs Amendment Act 2003, clubs are now required to meet
enhanced accountability and governance requirements.
These additional requirements include new accountability measures
requiring directors, top executives and employees of clubs to
disclose any material interest in the matters relating to the affairs of
the club, including any interests in contracts, any financial interest in
a hotel, and any gifts from affiliated bodies and contractors. The
club secretary is required to keep a register of all such disclosures
and declarations made to the club by its directors, top executives
and employees.
In addition, clubs are required to comply with enhanced annual
reporting requirements, including the provision of an annual written
report to members containing:
 • details of gifts received by Directors, top executives and
    employees;
 • declarations (and board approval) of contracts between club
    top executives and the club, and of the pecuniary interests of
    top executives in contractor companies to clubs;
 • disclosure of remuneration paid to top executives in excess of
    $100,000, in $10,000 bands;
 • details of any club-related overseas travel by a director or an
    employee;
 • details of any loan made to an employee if the loan amount
    exceeds $1,000;
 • disclosure of the employment of close relatives of a Director or
    top executive, and the salary paid to such employees;
 • details of any amount of $30,000 or more paid to a consultant
    to the club, including the name of the consultant and the
    services provided;


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•   details of any legal settlement made with a director or an
    employee of the club as a result of a legal dispute, including the
    amount of any associated legal fees incurred by the director or
    employee that were paid by the club; and
•   the total profit from the operation of the club’s gaming
    machines during the 9-month gaming machine tax period
    ending 31 August 2004 and during each 12-month tax period
    beginning 1 September thereafter.
This annual report is to be sent to members within 4 months after
the end of the club’s financial year.
The financial cost of recording, storing and disseminating the
information contained in annual reports to members can be
substantial for smaller clubs. This cost could possibly be reduced
by giving clubs the opportunity to offer members a choice of
receiving either a full report or a summary report.
As all clubs are either registered under the federal Corporations Act
2001 or the NSW Cooperatives Act 1992, they also carry reporting
obligations under these Acts, in particular in relation to club
constitutions. These obligations can impose an administrative
burden because a number of the requirements under these Acts are
similar to, and duplicative with, those under the Registered Clubs
Act. Specific areas of overlap between these various pieces of
legislation should be minimised.
The Corporations Act mandates the information to be disclosed to
shareholders under its governance standards. Over the years
these have been reviewed to help address the cost of disclosing
information to shareholders, for example through the provision of
summary reports instead of full reports at the choice of
shareholders. These practices in the corporate world can inform
standards under the Registered Clubs Act while at the same time
taking into account the special needs and circumstances of club
members.
Another issue raised by clubs was the requirement under the
Registered Clubs Act that all members and temporary members
sign in prior to using club facilities. Managing sign-in requirements
is especially expensive for smaller clubs who cannot afford a
dedicated reception person to ensure that all members and guests
are properly signed in.
The Small Business Regulation Review Taskforce believes that the
principles and practices applied by the Australian Securities and
Investment Commission (ASIC) in relation to information disclosure


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           CABINET-IN-CONFIDENCE

standards for companies could be used to inform the development
of less burdensome disclosure standards for registered clubs. The
Taskforce has noted the view of OLGR that the nature of clubs, as
non-profit organisations, and the services and products they supply
require specific accountability and governance.
It is noted that since August 2003 there has been in place a
program to address issues with the club industry 5 . In addition,
further consideration of proposed measures has been undertaken
with the Club Industry Working Group (IWG), established by the
Minister for Gaming and Racing in May 2006. The IWG includes
representatives of ClubsNSW and the Club Managers Association,
club CEOs with experience in the long-term management of clubs,
as well as ministerial and OLGR staff members. The discussions
have centred on current management practices and how they might
be enhanced to strengthen the future sustainability of the club
industry in this State.



    Recommendation 5:
    Office of Liquor, Gaming and Racing, in consultation with
    stakeholders such as industry peak bodies, to develop
    standards of disclosure and governance that meet the
    needs of club members and community expectations,
    reflect a club’s capacity to comply, and result in less
    burdensome disclosure standards for clubs.
    Recommendation 6:
    Eliminate areas of duplication between reporting
    requirements under the Registered Clubs Act 1976 and
    other legislation governing club constitutions.




5
 Refer to extracts from the 2003-04 and 2004-05 Annual Reports of the
NSW Department of Gaming and Racing, included at Appendix 5.




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8.0         LIQUOR LEGISLATION
8.1         NSW OFFICE OF LIQUOR, GAMING AND RACING
      The NSW Office of Liquor, Gaming and Racing (OLGR) is part of the
      Department of the Arts, Sport and Recreation. The office regulates four
      industry sectors – liquor, gaming, racing and charities.
      OLGR undertakes education programs, ongoing monitoring, and
      compliance action where appropriate, to ensure these industries operate
      in the public interest and with the highest level of integrity.
      OLGR also works in partnership with industry and other stakeholders to
      develop policies and strategies to minimise the potential social harm
      associated with liquor and gaming activities.
      OLGR has participated in the establishment, support and development
      of more than 127 liquor accords throughout the state. Liquor accords are
      voluntary industry-based partnerships operating in local communities to
      introduce practical solutions to liquor-related problems.
      OLGR also provides secretariat and administrative support to the
      Responsible Gambling Fund, the Liquor Administration Board and the
      Licensing Court of NSW.
      8.2     SECTOR SPECIFIC LEGISLATION
      Each State and Territory has in place legislation governing the sale and
      supply of alcohol. The Victorian model 6 has been described as the most
      flexible, in terms of where and when liquor can be supplied by licensees.
      The Western Australian Government is expected to adopt a similar
      approach to that of Victoria through amendments to its existing
      legislation 7 due to be introduced to Parliament in the 2006 Spring sitting.
      The Queensland liquor legislation 8 incorporates a Public Impact
      Assessment (PIA), which is similar to the Social Impact Assessment
      (SIA) contained in the NSW draft Liquor Bill, although the Queensland
      legislation is currently being reviewed. A summary of liquor legislation
      in other jurisdictions is provided at Appendix 4.0.
      In November 2005, the NSW Government released a draft Liquor Bill
      2005 and a draft Liquor and Gaming Court Bill 2005 which represent a
      complete rewriting of the State’s liquor licensing laws. 9




6
  Liquor Control Reform Act 1998
7
  Liquor Licensing Act 1988
8
  Liquor Act 1992
9
  NSW Department of Gaming and Racing; Liquor Bill 2005, Liquor and Gaming Court Bill
2005 – Consultation Drafts, Summary Provisions, November 2005



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8.2.1   Liquor Bill 2005
The draft Liquor Bill 2005 includes comprehensive changes to the
liquor regulatory framework which reduce complexity and cost. The
proposed changes are intended to simplify and modernise the law
to aid understanding, compliance and enforcement.
The Bill implements reforms recommended by the 2003 National
Competition Policy (NCP) review of the liquor and club
management laws. The first stage of those reforms – replacing the
“needs” test with a social impact assessment, and amending
grant/annual fees for new hotels and liquor stores – commenced on
1 August 2004.
The NCP reforms contained in the Liquor Bill will reduce cost and
complexity that can act as a barrier to market entry, while ensuring
that the law meets the changing demands of industry, the public
and tourists.
A simplified, informal administrative-based licensing system will
facilitate flexibility. It will significantly reduce the need for legal
representation and formal court hearings.
The Liquor Bill removes the remaining “needs” and “public benefit”
objections that can offend competition principles.
A new fee system will also be introduced as part of these reforms
(as recommended by the NCP review). Application, grant and
annual fees will be developed in consultation with stakeholders, and
will be included in a new Liquor Regulation.
The Bill also implements important Government initiatives flowing
from the NSW Summit on Alcohol Abuse, held in August 2003.
Those initiatives were originally proposed in an exposure Bill
released in March 2005. They have been modified to take account
of issues raised in response to that Bill.
Reforms in the Liquor Bill support the Government’s program to
reduce the harm associated with alcohol abuse, and promote a
culture of responsible service and consumption of alcohol. They are
also intended to help to promote industry sustainability and integrity,
and enhance access to the liquor licensing system for industry and
the community.




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The new regulatory framework proposed in the Bill includes:
•   simplification of the wording of the legislation;
•   a single new Liquor Act for the regulation of liquor sales –
    including sales in licensed (registered) clubs;
    The Registered Clubs Act is amended to focus on club
    management/governance issues;
•   liquor licence categories are reduced from 21 to 8. There are
    separate forms of on-premises licence (restaurant, motel, public
    hall, theatre, university, vessel, airport and caterer) to recognise
    the different nature of these types of business;
•   a simplified and flexible administrative-based liquor licensing
    system.    The Director of Liquor and Gaming deals with
    applications and disciplinary matters;
•   licensees and interested persons (including residents) can make
    submissions to the Director regarding applications and
    disciplinary matters. The administrative nature of the process
    will allow differences to be resolved between parties without the
    need for court hearings;
•   extension of the social impact assessment process to other
    licence applications;
•   standardisation of liquor trading hours;
•   small bed and breakfast and farm-stay accommodation venues
    can supply alcohol in certain circumstances without the need for
    a liquor licence (subject to controls). Larger bed and breakfast
    venues will be able to apply for an on-premises licence;
•   neighbourhood harm issues are considered through the social
    impact assessment process, and through a noise/disturbance
    complaint mechanism.        Disturbance complaint provisions
    recognise order of occupancy between a venue and residents as
    an issue that can be considered.
    Applicants, licensees, police and complainants are able to
    appeal to a new Liquor and Gaming Court against decisions of
    the Director of Liquor and Gaming.
    The Director and the Commissioner of Police may also refer
    disciplinary matters directly to the Court if appropriate;
•   conditions and trading entitlements for existing licensees and
    clubs are preserved;



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      •   key underage drinking, responsible service of alcohol and liquor
          harm minimisation provisions are strengthened; and
      •   wine producers will be able to operate a restaurant and provide
          accommodation, charge for wine tastings, and sell their wine at
          approved wine shows away from their premises.
      8.2.2   Liquor and Gaming Court Bill 2005
      The draft Liquor and Gaming Court Bill 2005 establishes a new
      Liquor and Gaming Court, which will replace the Licensing Court of
      NSW. The new Court will deal with appeals from decisions of the
      Director of Liquor and Gaming, certain disciplinary matters in the
      first instance, and liquor licensing offences. Offences can also be
      dealt with by local courts.


8.3       KEY ISSUES
      8.3.1 Proposed Social Impact Assessment Process
      a) Concerns were raised by the Australian Hotels Association
         (AHA) and restaurant owners that the current process to obtain
         a liquor licence is complex and slow and, further, that under the
         proposed new Liquor Bill, any business wanting to do anything
         different, eg varying liquor licence conditions, may need to
         undertake a Social Impact Assessment (SIA) which can be very
         expensive.
          The view was expressed that the SIA requirement should reflect
          the potential level of risk to the local and broader community,
          and take into account the size of the business and its capacity to
          undertake and fund a complex SIA process. The Hotel, Motel
          and Accommodation Association in its submission “Rewrite of
          the NSW Liquor Laws”, has proposed a ‘lower level’ SIA process
          for certain categories of licence holder.

      Discussion:
      SIAs were introduced for hotels and liquor stores in August 2004.
      The new Liquor Bill extends them to other licence types.
      A Social Impact Assessment examines the social impact of the
      proposed licensed venue, or a proposed change to an existing
      venue. It is prepared by the applicant, and (in many cases) must be
      advertised and made available for public comment. Under the Bill,
      for an assessment to be approved, the Director of Liquor and
      Gaming will need to be satisfied that the overall social impact of the



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application being granted will not be detrimental to the local
community or the broader community.
Under the Liquor Bill, different social impact assessments will apply
to different types of licensed venue. Venues associated with less
alcohol-related harm will not be required to prepare as
comprehensive an assessment. Costs will be commensurate with
the extent of information and work required to assess different
social impacts.
OLGR has advised that SIA requirements will be developed in
consultation with stakeholders, and included in the new Liquor
Regulation.
SIA guidelines
The draft Liquor Bill proposes the introduction of Social Impact
Assessment ‘guidelines’ [Clause 46 (4) of the Liquor Bill 2005].
This is considered a positive step. The provision of sample
completed SIAs for each category of licence would assist applicants
to complete the SIA, provide benchmarks (information standards)
and reduce processing times. The guidelines should incorporate
sources of information, suggested consultation with stakeholders,
and any criteria that are employed by the Director of Liquor and
Gaming in assessing applications.
SIA approval process
The Restaurant and Catering Association and the Hotel, Motel and
Accommodation Association have both raised concerns about the
cost, complexity and time in preparing and submitting an SIA where
a person wants to establish or expand a business that requires, or
has an existing, liquor licence.
The OLGR has indicated that consideration is being given to
imposing less stringent SIA requirements on ‘lower risk’ businesses,
such as B&Bs, motels and restaurants, although no details of this
proposal have as yet been provided for analysis. There is certainly
a case for requirements regarding the provision of information to
reflect the level of risk to the community associated with the
business being granted a liquor licence.
While the Taskforce notes that the AHA expressed the view that
local councils should not be involved with the hotel industry, it
considers that economies could be achieved for the business, local
council and OLGR in the case of an application for a ‘lower risk’
category of liquor licence, if the SIA and Development Application
(DA) requirements and processes were better integrated. The
potential outcomes of adopting this approach would include


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minimising duplication and inconsistencies in the provision of
information and documentation by businesses, improved approval
processing times and reduced costs for businesses and both levels
of government (State and local).
Specified timeframes
Concerns have been raised about the amount of time taken to
process licence applications. The delays may be caused by the
lack of information or poor quality information provided in initial
applications, the time taken for applicants to respond to requests for
further information, the level of risk/complexity relating to the licence
and the quantity of applications being considered at any one time.
Specific, reasonable timeframes should be set, within which any
requested further information should be provided.               If these
timeframes in relation to the provision of information by the
applicant are not met, the licence application would be deemed to
have lapsed. This action, combined with the proposals relating to
the provision of guidelines/samples and combined local DA/SIA
approval processes, should result in more timely and efficient, and
less costly, processing of liquor licences.



   Recommendation 7:
   When the new liquor legislation is introduced, Social Impact
   Assessment ‘guidelines’ [proposed under Clause 46 (4) of
   the Liquor Bill 2005], should include completed sample
   SIAs for each of the categories of liquor licence. These
   guidelines should also incorporate sources of information,
   suggested consultation with stakeholders, and any criteria
   that will be employed by the Director of Liquor and Gaming
   in assessing applications.




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   Recommendation 8:
   In relation to applications for lower risk categories of liquor
   licence, covering such businesses as cafes, and catering
   and bed and breakfast operations, the Office of Liquor,
   Gaming and Racing to consult with the Department of Local
   Government and the Local Government and Shires
   Associations about development of a Social Impact
   Assessment approval process and content that:
        meets the needs of both the Office of Liquor, Gaming
        and Racing and local councils;
        addresses areas of inconsistency and duplication; and
        reduces the compliance burden for businesses.

   Recommendation 9:
   The Office of Liquor, Gaming and Racing to consider
   implementing mechanisms to reduce the extent of delays
   currently experienced in the liquor licence approval
   process, such as specifying information submission
   timeframes for applicants and response timeframes for the
   agency.
   (Also see Recommendations 16-17)



8.3.2   Responsible Service of Alcohol (RSA)
a) One restaurant owner raised concern about the quality and
   value of the RSA training, indicating that a number of the
   participants in the course she undertook had difficulty with the
   English language and others did not pay attention during the
   training, but all course participants received their certificate of
   attainment. Comment was also made about the Responsible
   Service of Alcohol (RSA) course content. The view was
   expressed that the RSA training course should include a focus
   on developing employees’ skills in managing difficult situations
   and people.
b) The question was raised about the recognition of training, similar
   to RSA, conducted in other jurisdictions such as Victoria,
   because the industry employs a large number of tourist and
   other transient workers.




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c) Owners of licensed restaurants highlighted an inconsistency in
   RSA training requirements. Staff in licensed restaurants are
   required to undertake RSA training, whereas staff in Bring Your
   Own (BYO) restaurants, that also have to deal with customers
   consuming alcohol in the restaurant, are not.
Discussion:
a) Clause 87 of the draft Liquor Bill 2005 deals with regulating the
   responsible service of alcohol.         Under the mandatory
   Responsible Service of Alcohol (RSA) training scheme that
   applies to the NSW liquor industry, all liquor licensees, club
   secretaries and retail serving staff in licensed venues must
   complete a RSA course approved by the Liquor Administration
   Board.
   This scheme, introduced under the Liquor Regulation 1996 and
   the Registered Clubs Regulation 1996, also imposes
   requirements on registered training organisations seeking Board
   approval, in terms of statutory fees, conditions of course
   approval and statutory requirements that must be met by
   proposed trainers.
   Registered Training Organisations (RTOs) are required by the
   Vocational Education and Training Board (VETAB) to provide
   assistance to students who have learning difficulties or are from
   a non-English speaking background. Satisfactory assessment
   of students is also the domain of the NSW Vocational Education
   and Training Accreditation Board (VETAB) and if RTOs certify a
   person competent they must have documentation which
   supports this decision. Action can be taken by VETAB if the
   RTO falsely certifies a person competent.
   In response to a Government commitment to the 2003 Summit
   on Alcohol Abuse, the Office of Liquor, Gaming and Racing has
   established an independent review of the RSA training course.

   The terms of reference of the review are:
   • How to best provide training for liquor industry operators and
      staff;
   • Promote the use of appropriate technology in RSA training
      and administration;
   • Review curriculum content and its assessment/evaluation
      criteria;
   • Establish periodic evaluation mechanisms to maintain
      course/training responsiveness; and



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   • Report on actions required by government and industry
     stakeholders to ensure relevance of RSA training.
   It was anticipated that the independent consultant would report
   to the Minister for Gaming and Racing in the first quarter of
   2007.
b) While the training that has been approved by interstate liquor
   licensing authorities is recognised in NSW, it is on the basis that
   it must be coupled with completion of an approved (4 hour)
   bridging course on the NSW liquor laws. The bridging course
   has also been approved to be conducted by distance learning
   through TAFE's Open Training Education Network (OTEN).
c) The Taskforce has been advised by the OLGR that the
   Government has determined that there is a higher level of risk to
   the public associated with the sale, service and consumption of
   alcohol at licensed restaurants than there is with the
   consumption of BYO alcohol at unlicensed BYO restaurants.



   Recommendation 10:
   Concerns raised about the relevance of the Responsible
   Service of Alcohol (RSA) course content and evaluation of
   training outcomes to be referred to the current review of the
   RSA training course.


8.3.3   Impractical Licence Restrictions

a) Motels and bed and breakfast establishments
i) Small bed and breakfast establishments (B&Bs) are exempt
   under the draft Bill [Clause 8 (2)], but still need to comply with
   RSA requirements and notify the Director of Liquor and Gaming
   that the B&B sells or supplies liquor to guests. B&B operators
   have indicated that they are not able to get a motel
   (accommodation) licence, which would allow mini bars to be
   provided in guests’ rooms.
ii) Where mini-bars are allowed (in accommodation units), there
    are unduly complex requirements around the management of
    mini-bars, eg in relation to the daily litreage limit and the taking
    of mini-bar alcohol from premises.




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b) Restaurant owners
i) Excessive restrictions in restaurant         (on-premises)    liquor
   licences, in particular in relation to:
   • the hosting of functions, such as weddings, cocktail
     receptions, etc, on an occasional basis, requiring a relatively
     expensive additional licence. There appears to be an
     increasing demand for these occasions to be held in a more
     intimate local restaurant environment;
   • the requirement for the submission of returns on the amount
     of alcohol sold under a ‘dine-or-drink’ authority; and
   • the relative cost of a ‘dine-or-drink’ authority.
c) Hotels
i) More onerous licensing restrictions placed on hotels than clubs.
   For example, licence applications by hotels to extend trading
   hours for special events, such as the Soccer World Cup, are
   complex and cumbersome, especially for hotels located in
   regional areas – clubs do not have to apply.
ii) Concerns were raised that Alcohol Linking Project reports by
    police may be unfair as they may link irresponsible behaviour
    with specific hotels (or clubs) even though there is no causal link
    with the venue established. It was suggested that these reports
    can be taken into consideration and influence the determination
    of approvals in relation to other business activities, eg
    applications for a DA or POPE (place of public entertainment
    licence – see item 12.1). It is understood that NSW Police has
    convened an Alcohol Linking Project Monitoring Group that may
    be able to provide further advice on this issue.




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   Recommendation 11:
   Office of Liquor, Gaming and Racing, in reviewing the draft
   Liquor Bill, to:
   i)    reduce the level of proposed limitations and liquor
         compliance requirements imposed on bed and
         breakfast operations, given the relatively low level of
         risk in relation to the provision of alcohol in such
         establishments;
   ii)   provide greater flexibility to restaurant owners and
         reduce related compliance requirements and costs
         associated with the occasional hosting of functions,
         such as weddings and receptions, at their premises;
   iii) review the reporting requirements and costs associated
        with the granting of a dine-or-drink authority, given the
        relatively low level of risk associated with the provision
        of alcohol at such venues; and
   iv) examine the complexity of the processes in place for
       hotels applying for extended trading hours for special
       events, especially in relation to hotels located in
       regional areas.
   Recommendation 12
   NSW Police, in consultation with the Office of Liquor,
   Gaming and Racing, to develop policies that specify how
   information obtained through the Alcohol Linking Project
   can be used. This is aimed at limiting inappropriate and
   unrelated use of such information.


8.3.4    Signage
There is currently a plethora of information and warning signs
required to be displayed by certain businesses under the liquor,
smoking and gambling legislation. It is questionable whether the
signage is effective in delivering the appropriate messages to
patrons.




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a) Signage review
In May 2005, the Government announced its response to the review
by the Independent Pricing and Regulatory Tribunal (IPART) of
responsible gambling measures. The Government supported
IPART's recommendation that a review be conducted of the
messages contained in the entire range of responsible gambling
signs,    brochures     and     other    communications     (IPART
Recommendation 12). The Government also stated that the review
should examine ways to improve the mandatory signage in venues
concerning the responsible service of alcohol and restrictions
relating to minors. This will give partial effect to an undertaking
contained in the Government’s response to the Summit on Alcohol
Abuse held in 2003. The review will involve measuring current
message effectiveness, developing options to increase message
effectiveness, testing those options and developing best practice
guidelines for gambling and liquor signage.
In April 2006, OLGR contracted ACNielsen Research Pty Ltd to
conduct the review. The aim of the review is to ensure that the
entire range of liquor and gambling signage (including brochures,
notices and stickers) operate effectively and consistently as a
package for the community. It will take into account the number and
placement of signs to ensure that the different requirements for
these notices are complementary.
The review will also include:
•   consideration of making the ‘sale of liquor to minors’ sign
    compulsory for clubs;
•   incorporating information about self-exclusion schemes and
    problem gambling counselling services in the PlaySmart
    brochures;
•   consideration for the PlaySmart brochures to include information
    about the availability of limits that players may place on their
    gambling expenditure through the use of player accounts;
•   consideration of the message required for the ‘responsible
    gambling’ contact cards that will provide details of the venue’s
    nominated problem gambling counselling services or G-line;
•   consideration of the optimal form of words for the proposed pop-
    up message on gaming machines that will advise players when
    they have been playing continuously for 60 minutes;




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•   consideration of whether individual gaming machine payout
    ratios are capable of being instructively communicated without
    misleading players; and
•   consideration of other means by which the availability of player
    activity statements might be publicised to encourage more
    people to request them.
It is understood that the review has concluded and that a draft
report has been produced.
b) Signage in clubs, pubs and taverns
Clubs are required to put up signs at their premises and at specific
locations on account of the requirements under the Registered
Clubs Act, Gaming Machines Act, Smoke-free Environment Act or
on account of licence conditions imposed by the Liquor
Administration Board or Liquor Licensing Court. Concern has been
raised that the proliferation of signs at venues has led to a situation
where the signs are not meeting their intended objective, that of
advising patrons At the same time it is argued that the requirement
to have signs in place imposes a substantial administrative burden
on venues.


    Recommendation 13:
    The NSW Department of Health to consult with the Office of
    Liquor, Gaming and Racing to identify learning and
    information that may have arisen through the review of
    liquor and gaming signage undertaken by ACNielsen, that
    may be applied to improve regulatory requirements relating
    to smoking signage in licensed premises.




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9.0         GAMING LEGISLATION
            The issues relating to gaming affect the pubs, taverns and bars and
            the registered clubs segments of the accommodation, food and
            beverage services sector.
      9.1     SECTOR SPECIFIC LEGISLATION
            9.1.1   Gaming Machines Act 2001
            The Gaming Machines Act 2001 provides for the regulation, control
            and management of gaming machines in hotels and registered
            clubs.
            The primary objectives of the Act are:
               gambling harm minimisation; and
               the fostering of responsible conduct in relation to gambling.
            Among other things, the Act:
              specifies the conduct of gaming operations;
              establishes the maximum number of gaming machines that may
              be authorised to be kept in a hotel or registered club;
              establishes the total maximum number of approved gaming
              machines that the Liquor Administration Board may authorise for
              NSW. The overall State cap as at 22 February 2005 was
              104,000, comprising 25,980 for hotels and 78,020 for registered
              clubs;
              allows trading of gaming machine entitlements;
              sets out the requirements for a Social Impact Assessment in
              relation to gaming machines; and
              requires approved gaming machines to be connected to an
              authorised Centralised Monitoring System (CMS). The CMS is
              operated by Data Monitoring Services which is a business
              division of Maxgaming NSW Pty Ltd.
            The draft Liquor Bill 2005 contains the following consequential
            amendments to the Gaming Machines Act 2001:
               The Director of Liquor and Gaming will take over the functions of
               the Liquor Administration Board in relation to gaming machine
               matters, e.g., the allocation of poker machine entitlements, the
               approval of social impact assessments and the granting of
               authorisations for hotels and clubs to keep gaming machines;
               and
               The Director of Liquor and Gaming will take over the functions of
               the Licensing Court, e.g., the granting of gaming-related licences
               and the taking of disciplinary action against hoteliers, licensed
               clubs and gaming-related licensees.



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         Disciplinary action may also be taken by the proposed Liquor
         and Gaming Court. However, only the Court can cancel or
         suspend a hotel licence, club licence or gaming related licence,
         impose a monetary penalty, or disqualify a gaming-related
         licensee from holding a licence.
      9.1.2   Gaming Machines Tax Act 2001
      The Gaming Machines Tax Act 2001 consolidates the former
      provisions of the Liquor Act 1982 and the Registered Clubs Act
      1976 with respect to the imposition of tax on poker machines and
      other gaming devices.
9.2     KEY ISSUES
      9.2.1   Excessive Reporting Requirements
      ClubsNSW has submitted that while the Gaming Machines Act 2001
      requires clubs to be connected to the CMS, they also need to
      undertake independent meter recording and to send this information
      to the Office of Liquor, Gaming and Racing. ClubsNSW believes
      that this is an unnecessary duplication of effort.
      Discussion:
      The Centralised Monitoring System captures gaming information via
      meter readings at 15-minute intervals, as well as data on unusual
      (or integrity) events. The information obtained by the CMS forms the
      basis of taxes payable and is also made available to clubs monthly
      for the management of their gaming operations.
      According to ClubsNSW, the data collected by the CMS can be
      unreliable, and in a significant number of cases has led to tax re-
      assessments. OLGR disagrees with this view and has advised that
      the CMS is reliable and only a very small number of reassessments
      are required. In addition, reassessments are generally only required
      where venues have not maintained their CMS connectivity.
      The Office of Liquor Gaming and Racing reviewed the accounting
      and reporting requirements under the Gaming Machine Act and
      Gaming Machines Regulation in 2004-05. This included
      consultation with the gaming industry, with 11 submissions being
      received.
      The proposals contained in the discussion paper related to the
      provisions carried forward from the Liquor and Registered Clubs
      Acts and Regulations. These provisions were carried forward mostly
      unchanged, and the discussion paper sought to update and clarify




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those provisions to ensure that they remain effective and
appropriate.
Accounting and reporting requirements have now been transferred
as an issue into the 5-year review of the Act which will conclude
before December 2007. This will involve further consultation with
the industry.


   Recommendation 14:
   Office of Liquor, Gaming and Racing to work with
   Maxgaming NSW Pty Ltd, the Australian Hotels Association
   NSW and ClubsNSW to review the collection of data by the
   Centralised Monitoring System (CMS) and registered clubs,
   in particular to avoid/minimise duplication in the collection
   of data, and to develop best practices in record-keeping
   which incorporates the use of CMS data.



9.2.2   Excessive Signage Requirements
Businesses that were consulted suggested that there is excessive
signage in relation to gaming, and that patrons don’t notice it. In
particular, it was argued that the requirement to check the signs on
gaming machines every day is excessive, and that it should not be
necessary to have a wall clock if every gaming machine has a
clock. This matter is addressed under the heading ‘Signage’ (item
8.3.4).
9.2.3   Inconsistency between OH&S and Gaming Laws
The Gaming Machines Regulation 2002 [Clause 9 (2)(e)] requires
hotel gaming rooms, except those in registered clubs, to “be
situated so that (they) cannot be seen from any place outside the
hotel that is used by the public or to which the public has access”.
This creates a situation that is inconsistent with occupational health
and safety, and police requirements in relation to the security of
employees and patrons.

Discussion:
OLGR has advised that hotels are required to have gaming rooms
in response to community concerns about the visual impact of
gaming machines in places that were not traditionally gaming
venues. The requirement also relates to the concept of hotels



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having their primary purpose as the sale of liquor, not gaming
operations.
Further, the limitation on the visibility of gaming machines in hotels
may also assist some gamblers in controlling their gambling by
removing the inducement or temptation to gamble by the presence
of the gaming machine, in the same way that advertising restrictions
do. This applies to visibility both inside and outside the venue.
There are other ways that venues can ensure the safety and
security of staff, such as surveillance cameras, security guards, and
ensuring a secure location of cashier booths. Further investigation
is required into whether these options provide a similar or better
level of safety and security for staff and customers than removing
the requirements for limited visibility of gaming machines from
outside the hotel.
The Taskforce believes that while harm minimisation is a key focus
of gaming legislation, there is a need for management practices and
regulatory requirements to ensure the safety and security of
employees, as well as the public.
OLGR has advised that the Minister for Gaming and Racing has
written to the Police Minister on this issue and is awaiting advice on
whether there is any evidence that the gaming room provisions
affect the ability of hotels to protect the safety and security of their
staff and patrons. The Minister has also sought advice on other
effective tools that hotels may use to protect their business and the
safety and security of staff and customers. In addition, the Minister
has sought the views of the Minister for Industrial Relations on the
issue as it relates to OH&S.


   Recommendation 15:
   Office of Liquor, Gaming and Racing, in consultation with
   WorkCover NSW and NSW Police, to review the provision
   for gaming rooms to be situated so that they cannot be
   seen from any place outside the hotel that is used by the
   public or to which the public has access, including
   consideration of appropriate security measures to protect
   employees and the public.




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           9.2.4     Social Impact Assessments (Gambling)

           The Gaming Machines Act 2001 and the Gaming Machines
           Regulation 2002 specify that hotels and registered clubs need to
           furnish a Social Impact Assessment (SIA) as part of their application
           for an increase in their poker machine threshold. The regulations
           indicate what matters need to be considered in the SIA depending
           upon the purpose and circumstances of seeking an increase in the
           threshold. There is a need for further guidance in the development
           of social impact assessment documentation and better
           management of processing timeframes to reduce delays and
           uncertainty for applicants.
           Discussion:

           There are two different types of SIA. A class 1 SIA application
           applies to an increase of 10 or fewer gaming machines over a ten-
           year period, or the transfer of poker machine entitlements between
           metropolitan premises within a 1 kilometre radius, or the transfer of
           entitlements between country premises within a 50 kilometre radius.
           A class 1 SIA is considered by the industry to be relatively
           straightforward.

           All other circumstances require applicants to submit a class 2 SIA,
           which is considered to be expensive, subjective and difficult to
           comply with 10 . This is borne out by the fact that, since March 2002,
           of the 92 class 2 SIA applications that have been lodged by clubs
           and hotels, only 59 (64%) have been finalised, resulting in 23
           approvals (39% of finalised applications), and 24 (26% of those
           lodged) which required further information from applicants in
           response to requests from the Office of Liquor, Gaming and Racing.
           This indicates that the quality of the original class 2 SIA applications
           submitted did not satisfy the standards expected by the Office
           resulting in requests for further information and clarification. The
           club industry asserts that the information required to meet class 2
           SIA quality standards is either too difficult or too expensive to
           obtain. For instance, clause 35 (3) of the Gaming Machines
           Regulation 2002, requires all class 2 SIA applications to include a
           statement, supported by data, indicating the likely overall net social
           and economic benefit to the local community if the application is


10
  The information to be provided in a class 2 Social Impact Assessment is outlined in clause
35 of the Gaming Machines Regulation 2002.



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           granted. However, no guidance is provided as to the type of
           information that this may involve.
           The Independent Pricing and Regulatory Tribunal report on
           gambling (Promoting a Culture of Responsibility, April 2004)
           concluded that the “statutory test for approving SIAs is extremely
           difficult for the Liquor Administration Board (LAB) to establish …
           The test requires the LAB to weigh unclear costs and benefits of a
           range of potentialities for each SIA submitted.”
           The LAB has reported in their Information Sheet 1/2006 that it is not
           unusual for applicants to take up to twelve months to provide further
           information requested by the Board, and that some applicants have
           taken significantly longer. In some cases, applicants do not
           respond at all, despite regular follow-ups by the Board. Such
           applications stay on the list of unresolved applications. This must
           cause a level of uncertainty for the businesses and the local
           community, as well as resulting in an unsatisfactory level of
           unresolved applications.
           Guidelines for applicants and numerous Liquor Administration
           Board practice directions (referred to in the guidelines) have been
           published on this issue 11 .
           As each application must take into consideration a range of unique
           factors relating to that particular location, OLGR is of the view that
           sample SIAs may not necessarily assist in ensuring all applications
           include adequate material. In fact, it argues that sample SIAs may
           have the opposite effect, in that people religiously stick to the
           sample provided and do not provide adequate information that is
           specific to their own case.
           However, the Taskforce considers that there is sufficient
           consistency in a significant number of issues which applicants are
           required to address in Class 2 SIAs, to merit sample SIAs being
           developed. The provision of sample SIAs will improve the quality
           and uniformity of information provided by applicants and reduce the
           incidence of unnecessary delays associated with the need for
           businesses to provide additional information.
           OLGR has noted that it intends to review the SIA process as part of
           the 5-year statutory review of the Gaming Machines Act 2001, due
           to be undertaken in 2007. It argues that the review process should
           be allowed to proceed prior to the introduction of any stop-gap

11
  For example, Board Information Sheet 1/2006 – Gaming Class 2 Social Impact Assessment
(SIA) – Application Process and Timeframes.



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measures. The review process will look at ways of adequately
assessing the impact of gaming without undue burden on venues.
However, the Taskforce considers that the difficulty businesses are
facing in understanding the level of detailed information they are
required to provide to support their applications, particularly in
relation to Class 2 SIAs, and the time and cost to businesses of
obtaining such information, warrants clearer guidance being
provided on the SIA process, at this stage.


   Recommendation 16:
   Office of Liquor, Gaming and Racing to develop
   sample/benchmark social impact assessments for each
   category of assessment that applicants can use as
   guidance in the preparation of a gaming licence application.
   These should incorporate sources of information,
   suggested consultation with stakeholders, and any data
   that is/will be employed by the Liquor Administration
   Board/Director Gaming and Racing in assessing
   applications.

   Recommendation 17:
   Gaming Class 2 Social Impact Assessment applications to
   be determined within a specified timeframe, allowing a
   reasonable but limited time to be stipulated for clarification
   or the provision of additional information by applicants. If
   the information is not provided within the specified
   timeframe, the gaming licence application will be deemed to
   have lapsed.
   (Also see Recommendations 7-9)




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10.0          FOOD LEGISLATION
       10.1     SECTOR SPECIFIC LEGISLATION
              10.1.1 Food Act 2003 and Food Regulation 2004
              Any business that has a food-related activity needs to comply with
              the Food Act 2003.          This Act imposes obligations on food
              businesses in relation to food safety practices, food premises and
              equipment.      These include food handling (skills, knowledge,
              notification, receipt, storage, processing, display etc), health and
              hygiene requirements, cleaning, sanitising and maintenance, and
              the design and construction of food premises, equipment and food
              transport vehicles.
              Notification: Businesses need to notify the NSW Food Authority of
              their food activity details prior to starting operation. The notification
              process under the legislation supports the control of potential
              threats to food safety. Notification is simple and does not require
              significant effort as operational information is not required. The
              information needs to be kept up-to-date with changes to an existing
              business or changes in ownership required to be notified to the
              NSW Food Authority.
              Businesses can notify by either lodging a form with the NSW Food
              Authority at a cost of $55, with the local council (council-specified
              fees apply) or on-line over the Internet free of charge.
              Consultations have indicated that the notification process and works
              well as it does not impose a significant administrative burden. It
              balances the need for information to meet legislative objectives and
              the management of the risks involved. As such, it is a good
              example of regulatory administration.
              Restaurant and Catering NSW/ACT has however indicated that the
              relatively high fee for a notification lodged manually with the
              Authority in comparison to a notification lodged on-line is
              anomalous and should be reviewed.              In comparison the
              Government Licensing Project (GLP), the proposed NSW
              Government portal for all licence transactions, is offering discounts
              of about $5 for licence applications lodged on-line. Fees and
              charges do not constitute ‘administrative burden’ and this issue has
              therefore not been considered by the Taskforce.
              Food Safety Programs are voluntary (Standard 3.2.1 of Australia
              New Zealand Food Standards Code) although it was indicated in
              consultations that there is a proposal to make these mandatory for
              some food businesses. Businesses stated that monitoring and



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       record-keeping under these programs require significant resources
       while providing little or no benefit for food businesses in the running
       of their operations. It was argued that mandated food handler
       training would achieve the objectives of having a food safety
       program in place for every business.
10.2     KEY ISSUES
       10.2.1 Inconsistency of Food Inspections
       The Food Act controls the entire value-adding chain in the
       production and manufacture of food. The NSW Food Authority and
       local councils can conduct inspections of food at any stage of the
       chain, including manufacture, storage, distribution and retailing, for
       compliance with food handling legislative requirements. Concern
       was raised regarding the consistency of the inspection practices
       between councils, and a heavier inspection focus on restaurants in
       comparison to food distribution firms.
       Discussion
       Discussions with the NSW Food Authority indicate that concerns
       raised with regard to inspection are a reflection of business focus,
       availability of skills and resources within individual councils.
       It is also noted that the NSW Government is developing a
       consultation process for identifying and addressing food safety
       regulatory issues raised by operators of food businesses.
       In December 2005 the Hon David Campbell MP, Minister for Small
       Business, and the Hon Ian McDonald, Minister for Primary Industry,
       called for industry feedback on a discussion paper detailing options
       for improving food safety in NSW. The discussion paper, “Improving
       Food Safety Framework in NSW – an SME Perspective”, outlines a
       number of options for enhancing the regulatory regime for food
       safety, which were developed by a an industry/government
       roundtable convened by the Ministers for Small Business and
       Primary Industry (Appendix 6).
       These options included:
          The establishment of a small business consultative committee or
          similar mechanism for ongoing consultation and communication
          between the NSW Food Authority and small-to-medium size
          enterprises (SMEs);
          Better integration of the NSW Food Authority’s inspection/audit
          activities with local government and independent auditors, to
          minimise problems identified with duplication and inconsistency
          in inspection/audit activities;


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              Consideration of mandatory, standardised food handling training
              as a prerequisite for employment in the food processing and
              food services sectors;
              Provision of practical guidance for SMEs, such as self-
              assessment tools and information kits to help businesses
              introduce their own HACCP-based 12 food safety plans;
              Undertaking of research to provide a baseline from which to
              measure the effectiveness of the NSW food safety framework in
              reducing the incidence and severity of food-borne disease
              outbreaks;
              Exploration with the Insurance Council of Australia of the idea of
              discounted insurance premiums for food businesses, based on
              their food safety management and performance;
              Development of measures to promote best practice, including
              case studies, establishing networks and use of mentors to
              address food safety issues; and
              Institution of stronger regulatory measures to ensure truth-in-
              labelling for imported products.
          The options contained in the discussion paper are currently being
          considered by the NSW Government.




12
   HACCP stands for Hazard Analysis Critical Control Point. Basically, a HACCP
program means finding out where the really serious problems occur, monitoring these
steps so you know if there are problems, and fixing any problems that arise.



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Recommendation 18:
Government agencies imposing regulatory requirements on
business to recognise “Food Business Notification” as an
example of good practice that reflects a balance between
policy objectives, risk management and administrative
burden.

Recommendation 19:
NSW Food Authority to consider developing a protocol of
sharing responsibility for food handling inspections with
local councils, including joint training, that spans the value-
adding    chain     (including    warehousing/storage      and
transport); and develop guidelines for inspection practices
that provide consistency of experience for business
operators.




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11.0          SMOKE-FREE LEGISLATION
       11.1       SECTOR SPECIFIC LEGISLATION
              11.1.1 Smoke–free Environment Act 2000, Smoke-free
                     Environment Amendment Act 2004 and Smoke-free
                     Environment Regulation 2000
              The object of the Smoke-free Environment Act 2000 is to promote
              public health by reducing exposure to tobacco and other smoke in
              enclosed public places.
              The Act requires most enclosed public places in NSW to be smoke-
              free. Key obligations under the Act include:
              •   a person cannot smoke in a smoke-free area;
              •   a proprietor must not allow smoking in a smoke-free area;
              •   proprietors must prominently display NO SMOKING signs in all
                  smoke-free areas; and
              •   all ashtrays, matches, lighters and other items used in smoking
                  should be removed from smoke-free areas.
              The ban covers all types of cigarettes, cigars and pipes.
              A ‘public place’ means a place or vehicle that the public, or a
              section of the public, is entitled to use or that is open to, or is being
              used by, the public or a section of the public (whether on payment
              of money, by virtue of membership of a club or other body, or
              otherwise). An ‘enclosed’ public place means a public place which
              has a ceiling or roof and, except for doors and passageways, is
              completely or substantially enclosed, whether permanently or
              temporarily.
              The Smoke-free Environment Act 2000 contains a list of examples
              of places that are smoke-free if they are enclosed public places,
              including:
              • Restaurants, cafes, cafeterias, dining areas and other eating
                  places;
              • Hostels (other than residential accommodation); and
              • Motels (other than residential accommodation).
              The Smoke-free Environment Amendment Act 2004 adds the
              following places to this list:
              • Casinos (other than a casino private gaming area or residential
                  accommodation);
              • Hotels (other than residential accommodation);
              • Clubs (other than residential accommodation); and
              • Nightclubs.



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       However, the Smoke-free Environment Act 2000 contains a series
       of transitional arrangements for clubs, hotels, nightclubs and
       casinos. From 3 January 2005 until 3 July 2005, all but one of each
       of the bar rooms, gaming machine rooms and recreation rooms in a
       club, hotel, nightclub or casino could be set aside as an area that is
       exempt from the legislation.
       From 4 July 2005 until 1 July 2007, one room or part of one room
       (being a bar room, a gaming machine room or a recreation room) in
       a club, hotel, nightclub or casino may be set aside as the exempt
       area. Between 4 July 2005 and 2 July 2006, the exempt area could
       not exceed 50% of the total area of all the rooms in the venue.
       From 3 July 2006 until 1 July 2007, the exempt area cannot exceed
       25% of the total area, or 50% in venues where the total area does
       not exceed 100 square metres. From 2 July 2007, all enclosed
       public places in clubs, hotels, nightclubs and casinos must be
       smoke-free.
11.2     KEY ISSUES
       There has been some concern amongst clubs and hotels in the
       lead-up to smoke-free enclosed areas as they organise their
       business venues to be compliant with transitional requirements
       under the Smoke-free Environment Act, especially since being
       compliant under these arrangements may mean that they are non-
       compliant under the Occupational Health and Safety Act as
       employees are exposed to passive smoking.
       In addition, the issue of how enclosed spaces are defined, and
       therefore what counts as a non-enclosed space, was raised,
       especially in the context of consistency in development application
       processes.
       Discussion:
       From 2 July 2007, when all enclosed areas become smoke-free,
       most of the concerns relating to the conflict between the smoke-free
       legislation and occupational health and safety legislation will
       disappear. However, some concerns will remain on this account as
       clubs and hotels re-design and re-develop venues to provide their
       patrons with an outdoor smoking area. The industry would benefit
       from guidance to both businesses and local councils on allowable
       practices and design specifications that meet both business needs
       (that of offering patrons a smoking alternative) and OH&S
       requirements. The Taskforce believes there is a role for the
       Department of Health, the agency responsible for administering the
       Smoke-free Environment legislation, in consultation with WorkCover


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NSW and the Department of Planning, to develop guidelines for
clubs and hotels aimed at addressing the issue of potential conflict
between different legislation in this area.
WorkCover has indicated it would be willing to assist, where
appropriate, in the development of such guidelines, as it is in the
interest of all stakeholders to have a single set of consistent
guidelines available to industry.



   Recommendation 20:
   Department of Health, in co-operation with WorkCover NSW
   and the Department of Planning, and in consultation with
   relevant industry bodies, to develop guidelines for the
   development of smoking areas that meet the policy intent
   and objectives of applicable legislation.




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12.0          PLACE OF PUBLIC ENTERTAINMENT
       12.1     SECTOR SPECIFIC LEGISLATION
              The Local Government Act 1993 defines a place of public
              entertainment (POPE) as:
              • A drive-in theatre; or
              • An open-air theatre; or
              • A theatre or public hall (means any building or part of a building
                 that is used or intended to be used for the purpose of providing
                 public entertainment or conducting public meetings); or
              • Licensed premises (means premises subject of a licence, under
                 the Liquor Act 1982 or a certificate of registration under the
                 Registered Clubs Act 1976, that are used or intended to be used
                 for the purpose of providing entertainment).
              Further, under the Standard Instrument (Local Environment Plans)
              Order 2006, public entertainment has the same meaning as in the
              Local Government Act 1993. The term ‘public entertainment’ is
              defined as follows:
              (a) entertainment to which admission may ordinarily be gained by
                  members of the public on payment of money, or other
                  consideration, as the price or condition of admission, and an
                  entertainment does not cease to be a public entertainment
                  merely because:
                 (i) some (but not all) persons may be admitted to the
                      entertainment otherwise than on payment of money, or other
                      consideration, as the price or condition of admission, or
                 (ii) such payment, or other consideration, is demanded as the
                      charge for a meal or other refreshment, or for any other
                      service or thing, before admission to the entertainment is
                      granted or as the charge for the entertainment after
                      admission to the entertainment has been granted, and
              (b) includes a public meeting.
              Currently, a person planning to operate a business that provides
              live entertainment, for example a musician playing an acoustic
              guitar or piano, needs to apply for approval of a place of public
              entertainment (variously referred to as an entertainment area permit
              application, an application for a place of public entertainment, etc)
              to the local council.
              Under current legislation, local councils permit/approve a place of
              public entertainment under section 68 of the Local Government Act
              which specifies activities that generally require the approval of the



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council. Part A of the table in section 68 that specifies these
activities includes structures or places of public entertainment that
generally require council approval. Division 2 of Part 2 of the Local
Government (General) Regulation 2005 specifies:
•   matters that councils have to take into account in determining
    use of a building as a place of public entertainment (section 7);
•   standards to be met for approval (section 8);
•   conditions of approval (section 9); and
•    provisions of part 1 of schedule 1 (section 10) relating to the
    management and use of place of public entertainment.,
    including:
    −   Fire safety officers;
    −   Stage hands;
    −   Projection suites;
    −   Smoking and drinking;
    −   Naked flames;
    −   Dangerous performances;
    −   Marking of aisles and cross-overs;
    −   Aisle lights to be energised;
    −   Locks;
    −   Rope barriers;
    −   Proscenium curtains;
    −   Display of approval for place of public entertainment; and
    − Council may require a certificate from a registered testing
      authority verifying the flammability properties of the finish of a
      wall, ceiling, floor, curtain blind or cinematograph screen.
A business owner, as a proponent of the application for a place of
public entertainment, has to seek development consent under the
Environmental Planning and Assessment Act from the council
(generally dealing with building use and zoning, and building code
issues) and a permit (valid for up to five years) to operate a public
entertainment business as defined under the Act at the proposed
building. In case liquor is to be made available at the venue, the
business needs to obtain a liquor licence as well.
The Local Government and Environmental Planning and
Assessment Amendment (Transfer of Functions) Act 2001 (the
Amending Act) transferred building related functions from the Local
Government Act to the Environmental Planning and Assessment
Act. The Amending Act transferred the approvals required under



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       section 68 of the Local Government Act to the Environmental
       Planning and Assessment Act. The Amending Act was assented to
       on 6 December 2001 but had not commenced. However, the
       powers under section 68 of the Local Government Act were
       delegated by the Minister for Local Government to the Director
       General of the Department of Planning in 2002. All policy and
       guidelines relating to section 68 of the Local Government Act are
       currently provided by the Department of Planning.
12.2     KEY ISSUES
       a) The Australian Hotels Association submitted that obtaining a
          permit for a place of public entertainment is extremely difficult on
          account of the cost of obtaining one from local councils.
       b) There is inconsistency of rules between councils and little, if any,
          guidance is provided by them.
       c) Also many councils do not specify application forms and a
          number of them require that the permit application be part of a
          development application.
       d) In addition, while a business needs a development approval
          once at the time of developing a property for a specified
          purpose, the permit for a place of public entertainment is time
          limited and has to be renewed periodically. While local councils
          can approve a permit valid generally for a period of five years
          under section 103 of the Local Government Act, the Act allows
          them to vary the validity period. Generally permits are issued for
          a shorter period of time. As a result, while a building may have
          a valid development approval, a business owner may need to
          comply with standards that are different at the time of re-
          applying for a place of public entertainment permit. This leads to
          business uncertainty and additional business expense.
       Discussion:
       From the perspective of a hotel proposing to offer public
       entertainment and serving alcohol, the process of obtaining
       necessary licences and permits is expensive and uncertain. This is
       on account of the need for three approvals (and licenses): a
       development approval, a place of public entertainment permit and a
       liquor licence (hotel). The evaluation processes for the three
       overlap and together require extensive information to be collected
       and put together by the applicant. For example, building related
       information is needed for the development application and place of
       public entertainment permit. Impact on local amenity has to be



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assessed for the development application and the liquor licence
(Social Impact Assessment B). At the expiry of the place of public
entertainment permit, a business will have to go through the
application process again and may need to upgrade their building to
comply with contemporary building, mainly fire safety-related,
standards. This adds to the uncertainty of operating a public
entertainment business.
For consistency, it would be useful for the businessperson to be
able to plan their business operations under a unified system of
development assessments that incorporates approvals for places of
public entertainment. That is, a property/development should need
to satisfy land use zoning requirements, applicable building
standards and local amenity requirements before a development
application is approved. Considering the nature and status of
legislation governing places of public entertainment, the Department
of Planning should provide guidance and advice to local councils to
make their practices and processes for permits consistent with other
development applications.
On proclamation (commencement), the transfer of building related
functions under the Amending Act would mean that business
owners will no longer need to obtain both a development consent
under the Environmental Planning and Assessment Act and an
approval under the Local Government Act to conduct a business
that requires using a building (or temporary structure) as a place of
public entertainment, as they will be controlled solely as a
development under the Environmental Planning and Assessment
Act.
This amendment should mean that business owners will no longer
need to obtain both a development consent under the
Environmental Planning and Assessment Act and an approval
under the Local Government Act to conduct a business that
requires using a building (or temporary structure) as a place of
public entertainment, as they will be controlled solely as a
development under the Environmental Planning and Assessment
Act.


NOTE:
On 24 October 2006, the NSW Government introduced the
Environmental Planning and Legislation Amendment Bill 2006. The
Bill amends the Local Government and Planning Assessment
Amendment (Transfer of Functions) Act 2001 with respect to



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            miscellaneous matters, including the provision of regulation-making
            powers under the Environmental Planning and Assessment Act
            1979 in respect of places of public entertainment. This will pave the
            way for the planned transfer of live music venue regulations from
            the Local Government Act to the Environmental Planning and
            Assessment Act.
            According to the Minister for Planning, the Hon Frank Sartor MP,
            the “Department of Planning can then finalise a draft State
            Environmental Planning policy promoting safe public entertainment
            and amend some regulations to complete the reforms” 13 .




                Recommendation 21:
                Department of Planning to:
                i)    streamline the approvals process hotels need to
                      undergo to operate as a place of public entertainment.
                      The current process requires both a Development
                      Application (DA) and an application for a Place of
                      Public Entertainment (POPE) permit, which leads to
                      inconsistencies, duplication and unnecessary delays;
                      and
                ii)   develop guidelines to assist hotels to understand and
                      meet the requirements of applying to operate as a place
                      of public entertainment.
                Recommendation 22:
                Department of Planning to provide guidance to councils to
                assist them to apply requirements consistently and
                uniformly by promoting good practice examples with the
                aim of meeting legislative objectives and providing
                certainty of application outcomes to business.




13
   Media release – Minister for Planning, the Hon Frank Sartor MP - ‘Live music legislation
introduced into Parliament’ – 24 October 2006



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13.0        BROADER REGULATORY ISSUES
       13.1 DEVELOPMENT ASSESSMENT PROCESS
            13.1.1 Principal Legislation
            All development proposals in NSW must be assessed to ensure
            they comply with relevant planning controls and, according to nature
            and scale, that they are environmentally and socially sustainable.
            State, regional and local plans and policies indicate what level of
            assessment is required, and who is responsible for assessment of
            the proposal: a local council, an accredited private professional 14 or
            the Department of Planning on behalf of the Minister for Planning.
            These plans and policies include Local Environmental Plans (LEPs)
            which each local council has, and a series of NSW-wide State
            Environmental Planning Policies (SEPPs).
            The development assessment system is set out in the
            Environmental Planning and Assessment Act 1979. Under this
            system, there are four different development assessment
            categories:
            i) Development that does not require development consent -
                •    Exempt development: a development which will only have a
                     minimal impact on the local environment and is classified as
                     ‘exempt development’ in a local, regional or state planning
                     instrument. Development consent is not required as long as
                     the proposal satisfies the requirements of the local council.
                •    General development not requiring consent: a development
                     which is classified as ‘development without consent’ in a
                     local, regional or state planning instrument.         The
                     environmental impact of the development may still need to
                     be assessed (see next point).
                •    Development     that   requires   environmental   impact
                     assessment: a development which does not need council
                     consent but does require a licence or permit from a state
                     government authority that may need to receive an
                     environmental impact statement (EIS) before it considers
                     granting approval.




14
  Note that the use of accredited private professionals is limited to certain aspects of the
development assessment process.



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ii) Development that requires development consent -
   •   Complying development: a development which is common
       or routine, with a predictable and minor impact on the
       environment, and classified as ‘complying development’ in a
       local, regional or state planning instrument. A complying
       development certificate must be obtained from the local
       council or an accredited private certifier but a development
       application (DA) is not required. The certificate may be
       subject to conditions.
   •   Other local development: development which could have a
       significant environmental impact, or is not common or
       routine, and requires a DA to be lodged with the local
       council. The council will assess the impact of the proposed
       development on the local area and, if the application is
       successful, will give development consent, usually subject to
       conditions.
   •   Development that requires the Minister for Planning’s
       consent: a major piece of infrastructure or another major
       project of state or regional environmental planning
       significance which requires the approval of the Minister for
       Planning.
iii) Development that requires additional issues to be covered as
     part of the consent process -
   •   Integrated development: a development that requires not
       only consent from a local council or the Minister but also a
       permit or licence from a state government agency. The
       council or the Department of Planning (for the Minister) will
       refer the DA to the relevant agency so that there is an
       integrated assessment of the proposal. If the development is
       approved, the terms of any additional licences or approvals
       will be included in the development consent. The necessary
       permit or licence must still be applied for and obtained.
   •   Concurrence required for development: a development that
       requires consent from a local council and the agreement of a
       state agency but not a licence or permit. The council or the
       Department will refer the DA to the relevant state agency for
       its agreement.
   •   Designated development: a type of development that is
       listed in Schedule 3 of the Environmental Planning and
       Assessment Regulation 2000. This includes industries that



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             CABINET-IN-CONFIDENCE

        have a high potential to pollute, large scale developments
        and developments that are located near sensitive
        environmental areas. An EIS will need to be submitted with
        the DA.
iv) Other types of development
    •   Prohibited development: a type of development that is
        prohibited because it is in a land zone area where the activity
        is not permitted under the local council’s LEP.
13.1.2 Key Issues
A number of criticisms were made of the development assessment
process. These included:
a) The process is slow, cumbersome and expensive, with particular
   problems in bushfire-prone areas;
b) Too many reports are           required   to   be   submitted   with
   development applications;
c) There are often too many conditions imposed on approved
   developments;
d) There are inconsistencies between local councils, and even
   between different officers in the same council, in development
   assessment procedures, conditions imposed on developments,
   etc;
e) Councils sometimes impose conditions or refuse applications in
   contravention of their own planning policies; and
f) Councils sometimes take excessive notice of unreasonable
   complaints by a small number of possibly vexatious residents
   and reject otherwise valid DAs.
The following suggestions to improve the development assessment
process were made during consultations with businesses and
associations:
•   A development application should not be necessary if the
    proposed change to a building is minor, for example a change of
    usage of the same premises involving no physical modifications;
•   Where a development has to be approved by both a local
    council and another authority, it should be possible to make a
    single application rather than two separate ones;
•   Alternatives to the Land and Environment Court should be
    available in relation to local council DA requirements and



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    decisions, for example a tribunal or an advisory and conciliation
    service, in particular because of the high cost involved in taking
    matters to the Court; and
•   There should be guidelines, or a code of practice, for local
    councils to follow in relation to the development assessment
    process.
Discussion:
a) On 30 September 2004, the Minister for Planning announced a
   major overhaul of the NSW planning system. Two of the major
   aims of the reforms were to simplify planning controls and
   improve development assessment processes.
    On 31 March 2006, the NSW Government released the
    Standard Instrument (Local Environmental Plans) Order 2006
    which prescribes the form and content of the principal LEPs of
    local councils throughout NSW. This means that local plans
    across NSW will now use the same planning language, making it
    easier for communities to understand the plan for their area. At
    the same time, councils will be able to add local provisions to
    address local issues, as well as having the flexibility to control
    the scale of development within the different zones of their area.
    Within the next five years, all councils will use the standard
    instrument to prepare a new principal LEP for their local
    government area.
    The Government has introduced the Environmental Planning
    and Assessment Amendment Act 2006 which the Governor
    assented to on 3 April 2006. The aim of the Act is to:
    • reduce delays and costs in the assessment of development
       applications;
    • help provide for regional infrastructure and amenities in new
       land release areas and other sites identified for growth; and
    • help coordinate local and State planning controls.

    This legislation is in part a response by the Government to the
    failure of some local councils to assess development
    applications in a timely manner. Average DA processing times
    have increased from a State-wide average of 44 days in 1999-
    2000 to 53 days in 2003-04. Generally, councils have a
    statutory timeline of 40 days to process most DAs after
    lodgement. After this period has passed, applicants can lodge
    an appeal in the Land and Environment Court.




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           CABINET-IN-CONFIDENCE

   The Act gives the Minister for Planning new powers to improve
   the planning and development assessment performance of a
   council. The Minister will be able to appoint a ‘planning
   assessment panel’ or a planning administrator or both to take on
   the council’s planning and development responsibilities, for a set
   period or in relation to specified tasks.
   An administrator panel can be appointed if:
   • the council has failed to comply with its obligations under
      planning law;
   • the performance of the council in dealing with planning and
      development matters is unsatisfactory because of the
      manner in which the council has dealt with these matters, the
      time taken or in any other respect;
   • the council agrees to the appointment; or
   • an Independent Commission Against Corruption report
      recommends that consideration be given to the appointment.
   The Minister will only use the powers contained in this Act as a
   ‘last resort’, after clear evidence has emerged that a council is
   not doing its job properly. Some councils already have advisory
   Independent Hearing and Assessment Panels but the new law
   extends the function of panels to include a development consent
   role.
   The Department of Local Government and the Department of
   Planning monitor the performance of local councils in processing
   DAs with regard to issues such as the length of time taken, legal
   costs, etc. The data collected is kept under review to identify
   trends with council approval processes and to identify councils
   which may be facing difficulties in relation to these issues. If
   necessary, a ‘planning assessment panel’ or a planning
   administrator or both could be appointed to assist a council or to
   take over its development assessment role.
b) Where a proposed change to a building is minor and the
   development is classified as ‘exempt development’ or ‘complying
   development’ under the Environmental Planning and
   Assessment Act 1979 (see above), a development application is
   not necessary.




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           CABINET-IN-CONFIDENCE

   For example, one council in metropolitan Sydney includes the
   following as exempt development:
   Minor alterations – commercial premises
   Internal:
   • Non-structural work, such as shelving, displays, benches and
       partitions that do not provide structural support to any part of
       the building;
   • Floor area not to exceed 20m²;
   • Work must not include changes to the configuration of rooms
       whether by removal of walls or other means of structural
       support.
   External:
   • Being changes that involve the repair or renovation, or the
       painting, plastering or other decoration, of the building or
       work, but does not include enlargement or extension of the
       building or work.
   The Department of Planning has advised that all councils in
   NSW are required to prepare new local environmental plans in
   accordance with the standard instrument by March 2011. This
   will involve all councils re-making local controls for exempt and
   complying development, covering issues such as a change of
   use of commercial premises, internal and external alterations,
   bed and breakfast establishments, home businesses and the
   like. There is an opportunity to seek greater consistency in
   exempt and complying development requirements across
   councils as part of this process.
c) Where a development has to be approved by both a local
   council and another authority, it is possible to make a single
   application rather than two separate ones. If a development is
   classified as ‘integrated development’ or ‘concurrence [is]
   required for development’ under the Environmental Planning and
   Assessment Act 1979 (see above), a development application is
   made to a local council or the Minister for Planning, and the
   council or the Department of Planning (for the Minister) refers
   the application to the state government agency that is required
   to grant a licence or permit, or to provide its agreement. This
   enables an integrated assessment of the proposal and therefore
   a quicker decision.

d) Establishing a tribunal or an advisory and conciliation service as
   an alternative to the Land and Environment Court in relation to
   local council DA requirements and decisions could simply mean


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           CABINET-IN-CONFIDENCE

   an additional layer of regulation and bureaucracy, and an
   associated cost, with which applicants have to deal. In addition,
   local councils normally provide applicants with the reasons for
   not approving a DA and an opportunity to consult and determine
   what amendments need to be made to the DA in order to meet
   any concerns that the council has.

e) The Department of Planning has developed a series of
   guidelines regarding the development assessment process. The
   Department is considering updating and re-issuing practice
   notes to guide councils and applicants through the DA process
   and provide guidance as to what are appropriate conditions of
   consent. This should result in a more efficient and consistent
   application of DA processes and requirements across NSW.



   Recommendation 23:
   NSW Department of Planning, in conjunction with the Local
   Government and Shires Associations of NSW, to develop a
   set of best practices to reduce inconsistencies within and
   between local councils in relation to development
   assessment processes, requirements and decisions.
   Recommendation 24:
   NSW Department of Planning to develop guidelines to
   ensure greater consistency in exempt and complying
   development requirements in new local environmental
   plans.




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                      CABINET-IN-CONFIDENCE

C. LIST OF RECOMMENDATIONS

Recommendation 1:
NSW Health Department to:
i) adopt a risk management approach to managing public swimming pools
   and spa pools, including in relation to the testing of water quality and the
   associated record-keeping; and
ii) develop pool management guidelines for lower risk categories rather than
    mandatory reporting, supported by an information/education program.
Recommendation 2
NSW Department of Local Government, in conjunction with the Department of
Ageing, Disability and Home Care, the Department of Community Services,
the Local Government and Shires Associations of NSW, and the Property
Owners Association NSW, to develop guidelines for the appropriate
management of boarding houses by local councils in relation to the standards
for boarding houses set by the Local Government (General) Regulation 2005.
The guidelines should also specify the minimum requirements which are to
apply to licensed boarding houses.
Recommendation 3:
Residential Parks Regulation 2006 to be amended to include the use of on-
site mail boxes (where provided in accordance with section 75 of the
Residential Parks Act 1998) as an additional option for delivery of documents
to residents of residential parks.
Recommendation 4:
The operational review of the Consumer, Trader and Tenancy Tribunal to
consider whether the current length of time it can take to terminate a tenancy,
where park fees have not been paid, is reasonable, given the potential cost
and time impacts on the residential park business.
Recommendation 5:
Office of Liquor, Gaming and Racing, in consultation with stakeholders such
as industry peak bodies, to develop standards of disclosure and governance
that meet the needs of club members and community expectations, reflect a
club’s capacity to comply, and results in less burdensome disclosure
standards for clubs.
Recommendation 6:
Eliminate areas of duplication between reporting requirements under the
Registered Clubs Act 1976 and other legislation governing club constitutions.




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                       CABINET-IN-CONFIDENCE

Recommendation 7:
When the new liquor legislation is introduced, Social Impact Assessment
‘guidelines’ [proposed under Clause 46 (4) of the Liquor Bill 2005], should
include completed sample SIAs for each of the categories of liquor licence.
These guidelines should also incorporate sources of information, suggested
consultation with stakeholders, and any criteria that will be employed by the
Director of Liquor and Gaming in assessing applications.

Recommendation 8:
In relation to applications for lower risk categories of liquor licence, covering
such businesses as cafes, and catering and bed and breakfast operations, the
Office of Liquor, Gaming and Racing to consult with the Department of Local
Government and the Local Government and Shires Associations about
development of a Social Impact Assessment approval process and content
that:
      meets the needs of both the Office of Liquor, Gaming and Racing and
      local councils;
      addresses areas of inconsistency and duplication; and
      reduces the compliance burden for businesses.

Recommendation 9:
Office of Liquor, Gaming and Racing to consider implementing mechanisms to
reduce the extent of delays currently experienced in the liquor licence
approval process, such as specifying information submission timeframes for
applicants and response timeframes for the agency.
(Also see Recommendations 16-17)
Recommendation 10:
Concerns raised about the relevance of the Responsible Service of Alcohol
(RSA) course content and evaluation of training outcomes to be referred to
the current review of the RSA training course.

Recommendation 11:
Office of Liquor, Gaming and Racing, in reviewing the draft Liquor Bill, to:
i)    reduce the level of proposed limitations and liquor compliance
      requirements imposed on bed and breakfast operations, given the
      relatively low level of risk in relation to the provision of alcohol in such
      establishments;
ii)   provide greater flexibility to restaurant owners and reduce related
      compliance requirements and costs associated with the occasional
      hosting of functions, such as weddings and receptions, at their premises;



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                         CABINET-IN-CONFIDENCE

iii)   review the reporting requirements and costs associated with the granting
       of a dine-or-drink authority, given the relatively low level of risk associated
       with the provision of alcohol at such venues; and
iv) examine the complexity of the processes in place for hotels applying for
    extended trading hours for special events, especially in relation to hotels
    located in regional areas.
Recommendation 12
NSW Police, in consultation with the Office of Liquor, Gaming and Racing, to
develop policies that specify how information obtained through the Alcohol
Linking Project can be used. This is aimed at limiting inappropriate and
unrelated use of such information.
Recommendation 13:
The NSW Department of Health to consult with the Office of Liquor, Gaming
and Racing to identify learning and information that may have arisen through
the review of liquor and gaming signage undertaken by ACNielsen, that may
be applied to improve regulatory requirements relating to smoking signage in
licensed premises.
Recommendation 14:
Office of Liquor, Gaming and Racing to work with Maxgaming NSW Pty Ltd,
the Australian Hotels Association NSW and ClubsNSW to review the
collection of data by the Centralised Monitoring System (CMS) and registered
clubs, in particular to avoid/minimise duplication in the collection of data, and
to develop best practices in record-keeping which incorporates the use of
CMS data.
Recommendation 15:
Office of Liquor, Gaming and Racing, in consultation with WorkCover NSW
and NSW Police, to review the provision for gaming rooms to be situated so
that they cannot be seen from any place outside the hotel that is used by the
public or to which the public has access, including consideration of
appropriate security measures to protect employees and the public.
Recommendation 16:
Office of Liquor, Gaming and Racing to develop sample/benchmark social
impact assessments for each category of assessment that applicants can use
as guidance in the preparation of a gaming licence application. These should
incorporate sources of information, suggested consultation with stakeholders,
and any data that is/will be employed by the Liquor Administration
Board/Director Gaming and Racing in assessing applications.




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                      CABINET-IN-CONFIDENCE

Recommendation 17:
Gaming Class 2 Social Impact Assessment applications to be determined
within a specified timeframe, allowing a reasonable but limited time to be
stipulated for clarification or the provision of additional information by
applicants. If the information is not provided within the specified timeframe,
the gaming licence application will be deemed to have lapsed.
(Also see Recommendations 7-9)
Recommendation 18:
Government agencies imposing regulatory requirements on business to
recognise “Food Business Notification” as an example of good practice that
reflects a balance between policy objectives, risk management and
administrative burden.

Recommendation 19:
NSW Food Authority to consider developing a protocol of sharing
responsibility for food handling inspections with local councils, including joint
training, that spans the value-adding chain (including warehousing/storage
and transport); and develop guidelines for inspection practices that provide
consistency of experience for business operators.
Recommendation 20:
Department of Health, in co-operation with WorkCover NSW and the
Department of Planning, and in consultation with relevant industry bodies, to
develop guidelines for the development of smoking areas that meet the policy
intent and objectives of applicable legislation.
Recommendation 21:
Department of Planning to:
i)    streamline the approvals process hotels need to undergo to operate as a
      place of public entertainment. The current process requires both a
      Development Application (DA) and an application for a Place of Public
      Entertainment (POPE) permit, which leads to inconsistencies, duplication
      and unnecessary delays; and
ii)   develop guidelines to assist hotels to understand and meet the
      requirements of applying to operate as a place of public entertainment.
Recommendation 22:
Department of Planning to provide guidance to councils to assist them to
apply requirements consistently and uniformly by promoting good practice
examples with the aim of meeting legislative objectives and providing certainty
of application outcomes to business.



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                     CABINET-IN-CONFIDENCE

Recommendation 23:
NSW Department of Planning, in conjunction with the Local Government and
Shires Associations of NSW, to develop a set of best practices to reduce
inconsistencies within and between local councils in relation to development
assessment processes, requirements and decisions.
Recommendation 24:
NSW Department of Planning to develop guidelines to ensure greater
consistency in exempt and complying development requirements in new local
environmental plans.




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                      CABINET-IN-CONFIDENCE

D. APPENDICES

Appendix 1 Accommodation, food and beverage services sector – an
           overview

Appendix 2 Public swimming pool and spa pool guidelines

Appendix 3 Submissions

             Australian Hotel Association (New South Wales)

             Caravan and Camping Industry Association NSW

             ClubsNSW

             Property Owners Association NSW (Private Hotel and Boarding
             House Division)

             Restaurant and Catering NSW/ACT

Appendix 4 Summary of liquor legislation in other Australian jurisdictions

Appendix 5 Department of Gaming and Racing – extracts from annual
           reports

Appendix 6 Discussion paper: Improving the Food Safety Framework in
           NSW – an SME perspective




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                                       CABINET-IN-CONFIDENCE

                                                                                                                  Appendix 1


      Accommodation, Food and Beverage Services Sector – An Overview
           1. NUMBER OF BUSINESSES BY SEGMENT AND SIZE – NSW


Number of Businesses by Segment and Employment Size, NSW, June 2004

Industry Classification    0-19 (employing)          20-199                200+                Total Employing*    Total      non-   Total
                                                     (employing)           (employing)                             employing*
Accommodation, Cafes,
                                  10 993             3 078                 165                 14 236              10 230            24 466
and Restaurants (Total)
                           No.        %              No.          %        No.       %         No.        %        No.      %        No.      %
Accommodation              2 237      20.35          555          18.03    45        27.27     2 837      33.81    3 459    33.81    6 296    25.73

Pubs, Taverns and Bars     908        8.26           721          23.42    19        11.52     1 648      7.57     774      7.57     2 422    9.90

Cafes and Restaurants      7 246      65.91          1 241        40.32    56        33.94     8 543      56.04    5 733    56.04    14 276   58.35

Clubs (Hospitality)        602        5.48           561          18.23    45        27.27     1 208      2.58     264      2.58     1 472    6.02



      * Employing businesses are differentiated from non-employing businesses by the presence of an Income Tax
      Withholding (or Pay As You Go Withholding (PAYGW)) obligation.
      Source: Australian Bureau of Statistics (ABS) Counts of Business by Industry, by Main State (NSW), by Employment
      Size, June 2004



           2. EMPLOYMENT


Total Employment (‘000) by Segment, NSW, February 2004- November 2005
                          February         May             August         November     February        May        August     November
                          Quarter          Quarter         Quarter        Quarter      Quarter         Quarter    Quarter    Quarter
                          2004             2004            2004           2004         2005            2005       2005       2005
Accommodation Cafes
                          174.0            175.4           171.2          184.4        168.7           179.9      171.4      176.5
& Restaurants
Accommodation             35.5             35.2            32.5           31.2         26.6            29.6       26.6       31.4
Pubs, Taverns and
                          28.0             28.1            28.3           26.3         27.0            29.4       25.6       23.2
Bars
Cafes and restaurants     74.5             74.4            71.9           79.3         74.7            87.1       87.4       91.6
Clubs (hospitality)       32.8             35.9            33.3           40.2         36.2            33.1       28.5       28.7


                          Source: ABS, Labour Force, Detailed (Cat. No. 6291.0.55.001), Dec 2005
                                 CABINET-IN-CONFIDENCE

                         Total Em ploym ent ('000) By Segm ent, NSW, February 2004 - Novem ber 2005

                                                                                                    Accommodation Cafes
                 200                                                                                and Restaurants
                 180                                                                                Accommodation
                 160
                 140                                                                                Pubs, Taverns and Bars
                 120
                 100                                                                                Cafes and restaurants
                  80
                  60
                                                                                                    Clubs (hospitality)
                  40
                  20
       3.          0




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                                                                          classification 57
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             Accommodation, Cafes and Restaurants, location is vital to competitiveness
       •     Locations that have high-level activity from both tourists and business travellers are
             likely to have enhanced demand for accommodation, café and restaurant services 15
       •     There tends to be greater international tourist demand for four and five star hotels in
             central business districts and other major tourist areas 16
       •     The choice of motels as an accommodation service is more prevalent in small
             regional areas where there is more likely to be a lack of choice in other
             accommodation services 17
       •     For the accommodation sector, location is vital to success with greater prospects in
             locations en-route to a tourist/business travel area 18
       •     The general consumer preference has moved away from larger suburban pubs,
             taverns and bars, and more toward small local facilities, which are more in tune with
             local consumer needs 19
       •     Of the total cafes and restaurants in Australia at the end of June 2004 (13,761), 74
             per cent of these businesses were located in capital cities. 20
       •     In 2002-03, tourism employed a greater share of the workforce in regional areas than
             in the cities (see graph 1), however, over the last five years tourism employment in
             city areas has been growing more rapidly than in regional areas 21 .




Graph 1: Intensity of tourism employment 2002-03




15
   IBIS World (2006a), IBIS World Industry Report: Accommodation, Cafes and Restaurants in Australia, 23
December 2006.
16
   IBIS World (2006b), IBIS World Industry Report: H5711 Hotel Accommodation in Australia, 13 February 2006.
17
   IBIS World (2006c), IBIS World Industry Report: H5712 Motel Accommodation in Australia, 13 February 2006
18
   As above
19
   IBIS World (2006d), IBIS World Industry Report: H5720 Pubs, Taverns and Bars in Australia, 31 January 2006.
20
   ABS, Cafes and Restaurants 2003-04, (Cat. No. 8655.0), July 2005
21
   Tourism and Transport Forum Australia (2004) TTF Australia National Tourism Employment Atlas 2004 Poster,
November 2004.
                               CABINET-IN-CONFIDENCE


4. OUTLOOKS/TRENDS WITHIN THE SECTORS

According to IBIS World Industry Reports, the following factors may have some effect on the
outlook and trends of the Accommodation, Cafes and Restaurant Sector

Smoking Bans 22
Total smoking bans in pubs and clubs by 2007 may initially affect takings from gaming
machines and other areas of operations.

Regulations on Gaming Machines 23
Affecting the clubs, pubs, taverns and bars industry are recent government regulations that
include:

     •   the placing of ceilings on the total number of gaming machines in pubs and clubs
     •   increased taxes on gaming machines

Increased taxes and limits on poker machine numbers may have negative impacts on
revenue, profits, future growth, and employment levels.


Fuel Prices and Disposable Household Income 24
With the effect of continuing high fuel prices on travel costs, and its direct relationship on
household disposable incomes and associated consumer expenditure, all of the industries
may experience some of the following changes:

     •    continued slow growth in revenues
     •    slow growth in international and domestic travel, resulting in less uptake of
          accommodation services
     •    slowing of consumer expenditure on gaming, entertainment, and food, alcohol and
          other beverage purchases at clubs and pubs


Competition from Substitutes
All of these industries under classification 57 Accommodation, Cafes and Restaurants, tend to
have high levels of competition given the large number of small business operators within
each sub sector, often resulting in price-based competition.

Cafes and restaurants 25 : competition arises from both within the industry as well as from the
pubs, taverns and bars industry where there has been a growing trend to convert pubs into
licensed restaurants with cocktail bars and bistro activities, which provide quality food at value
for money prices.

There has also been an increase in competition from the continued franchising of coffee
shops, both from Australian and overseas operators such as McCafe, Starbucks and Gloria
Jeans Coffees.

Clubs 26 : are feeling competition from substitutes such as casinos, pubs, taverns and bars.

Pubs, taverns and bars 27 : competition also occurs with alcohol consumption from licensed
restaurants and cafes, casinos, clubs and liquor retail stores, as well as competition from
clubs through their availability of foods, beverages and gaming machines.


22
   IBIS World (2006d); IBIS World (2006e), IBIS World Industry Report: H5740 Clubs (Hospitality) in Australia, 18
January 2006.
23
   As above
24
   IBIS World (2006a)
25
   IBIS World (2005), IBIS World Industry Report: H5731 Cafes and Restaurants in Australia, 23 December 2005.
26
   IBIS World (2006e)
27
   IBIS World (2006d)
                                CABINET-IN-CONFIDENCE

There is increasing consolidation of the industry, with large companies such as Woolworths
and Coles Myer acquiring existing businesses in the industry. Further deregulation of the
liquor industry in NSW, under National Competition Policy, is likely to see continued
consolidation of operators in liquor related activities.

Accommodation 28 : increasing competition for hotels by high quality motels and self-serviced
apartments.

Tourism 29
The accommodation industry is dependent on the following groups to maintain occupancy
rates and growth:
    • tourists (domestic and international) and
    • business/commercial, government and convention/conference markets

The industry is sensitive to factors that affect international and domestic travel.

Domestic travel has been assisted with lower domestic airfares from Virgin Blue and Jet Star.


Franchising 30
There has been a growing trend in the accommodation and cafes sector for franchising. One
of the success factors in being part of a franchised/chain operation relates to being part of a
group buying, promotion and marketing scheme.


Deregulation of the Liquor Industry 31
The deregulation of the liquor industry in NSW is likely to lead to consolidation of operators
across liquor related activities, an increased availability of liquor across existing and new
establishments and a redistribution of sales across all components of the liquor industry (i.e.
pubs, clubs, cafes, restaurants and retail liquor stores).

Organisations applying for liquor licences will also be subject to completing a Social Impact
Assessment, which replaces the ‘needs’ test for obtaining a liquor licence. This may have the
affect of limiting some growth in licence numbers.

5. SECTOR CONTRIBUTION TO THE ECONOMY

Sales And Income By Size of Business, Australia, 2002-03
     Accommodation, Cafes and
     Restaurants                   Number of Operating Businesses        Sales of Goods   Total Income
     Size
                                                                         ($m)             ($m)
     Small                         32 692                                7 746.2          14 416.5
     Medium                        3 870                                 10 284.3         18 361.7
     Large                         108                                   3 777.2          7 275.9
 Total                           36 670                                 21 807.7          40 054.1
Source: ABS, Industry Performance 2002-03 (Cat. No. 8155.0.55.002) Australian Industry




28
   IBIS World (2006c)
29
   IBIS World (2006b)
30
   IBIS World (2006c); (2006b); (2006c)
31
   IBIS World (2006d); (2006e); (2005)
                     CABINET-IN-CONFIDENCE


Wages And Salaries, Income And Value Added By Segment, 2002-03
(Experimental Estimates)

                                                                            Industry
                                                 Wages and     Total
                                                                            Value
                                                 Salaries      Income
                                                                            Added
                                                 $m            $m           $m
57 Accommodation, Cafes and Restaurants
                                                 2 637.6       11 635.3     4 787.8
   571 Accommodation
   572 Pubs, taverns and bars                    1 942.6       11 699.0     3 774.6
   573 Cafes and Restaurants                     3 257.1       12 870.5     4 721.5
   574 Clubs (hospitality)                       1 638.8       6 692.0      2 568.0

Total 57 Accommodation, Cafes and Restaurants    9 471.1       42 896.7     15 851.9

Source: ABS, Experimental Estimates, Industry Performance 2002-03, (Cat. No. 8155.0), Australian
Industry
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                                                                 Appendix 2

Public Swimming Pool and Spa Pool Guidelines
   The following extracts from the Public Swimming Pool and Spa Pool
   Guidelines developed by the NSW Department of Health outline how
   frequently the water quality of pools must be tested and the required
   record keeping of the testing:




 A register or log should be used to record the results of every test
 performed at a swimming pool, spa pool or pool complex. Each pool or
 pool complex should design its own test register sheet according to local
 needs.

 A daily register sheet must be filled in indicating the testing times of each
 pool each day along with:
 •   disinfectant concentrations (and ORP);
 •   pH;
 •   total alkalinity;
 •   temperature; and
 •   bathing loads.

 Other entries may be made including:
 •   backwashing;
 •   total dissolved solids;
 •   chlorine bottle usage;
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•   cyanuric acid concentration;
•   water meter reading;
•   electricity meter readings;
•   admission data;
•   dose settings;
•   mechanical maintenance items;
•   chemical stocks on hand;
•   weather;
•   water balancing; and
•   general remarks.
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                                                                     Appendix 3

Submissions

Submissions were received from the following organisations and have been
included below:
   1. Australian Hotels Association (AHA) NSW
   2. Caravan and Camping Industry Association
   3. ClubsNSW
   4. Property Owners Association NSW
   5. Restaurant and Catering NSW/ACT


Additionally, input to the review was received, by letter, email or face-to-face
interview, from the Hotel, Motel and Accommodation Association, 32
businesses (19 of which were from regional NSW), 6 NSW government
agencies and one local council.
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1.    Australian Hotels Association (New South Wales)

The NSW Branch of the Australian Hotels Association can trace its origins
back to 1873. At that time it was known as the Licensed Victuallers’
Association of New South Wales. Later in the nineteenth century the name
was changed to the United Licensed Victuallers Association (ULVA).

The AHA (NSW) is also affiliated with the International Hotel & Restaurant
Association (IHA).

Throughout its history the AHA (NSW), in its various forms, has represented
the interests of Hoteliers in a wide variety of areas. The success of the AHA
(NSW) is reflected in the high level of membership it has always enjoyed and
the increasing number of new hotels who are electing to join the AHA (NSW).

Currently the membership structure has two divisions - the General Division
representing the traditional pub-style Hotel and the Accommodation Division
representing International style Hotels and Resorts catering exclusively for the
Accommodation market.

The AHA (NSW) represents approximately 1600 pub-style hotels and 200
accommodation properties across the State. This equates to a membership
density of over 90%.

The AHA (NSW) is a registered organisation of employers, incorporated under
the Industrial Relations Act (NSW) 1996. It is recognised at law as a union
of employers. Our members constitute those “employers of labour” holding a
liquor licence within New South Wales.

New South Wales hoteliers employ over 70,000 staff. Staff are employed as
either full-time, part-time or casual. AHA (NSW) members vary on the number
of staff they have from several hundred staff in the case of our large
international hotel members, to family-run businesses.

Introduction

Hotels are complex businesses to run and are subject to multiple layers of
government regulation. Hotels are subject to considerable regulation in
respect of the service of alcohol and the conduct of gaming, and compliance
standards that are over and above compliance and regulatory standards that
relate to other businesses.

The Liquor Act 1982 and the Gaming Machines Act 2001 impose regulation
and certain arbitrary restrictions on the operation of hotel businesses that
create additional burden on hotel businesses.
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As employers, hoteliers are subject to the provisions of the various (and often
overlapping) requirements of the employment relation legislation, including but
not limited to:

   •   The Workplace Relations Act (Cth)1996;
   •   The Industrial Relations Act (NSW) 1996;
   •   The Occupational Health and Safety Act (NSW) 2000
   •   The Workplace Injury Management Act (NSW) 1998 and the
       Workers Compensation Act (NSW) 1987
   •   The Annual Leave Act (NSW) 1944;
   •   The Long Service Leave Act (NSW) 1955,
   •   The Anti-Discrimination Act (NSW) 1977
   •   The Sex Discrimination Act (Cth)1984
   •   The Racial Discrimination Act (Cth) 1975
   •   The Disability Discrimination Act (Cth) 1992
   •   The Human Rights and Equal Opportunity Commission Act (Cth)
       1986

Furthermore, hoteliers are subjected to local council planning laws and also
noise abatement orders that are onerous and inconsistent from one
municipality to another.

In addition to the burdensome nature of the legislative regulation of hotels,
there are also inconsistencies in the enforcement of the various legislative
provisions that apply to hotels. In some circumstances multiple agencies
have responsibility for similar or overlapping enforcement functions. Different
agencies take a different approach to enforcement, and inconsistencies also
arise between local areas.

The legislative requirements that hoteliers, as small business people, have to
conform to are significant. This, coupled with inconsistent enforcement,
creates a significant burden for hoteliers to keep up with legislative
requirements and how they are to be applied at the workplace.

Over the past decade, an increasing number of members of the AHA (NSW)
have raised concerns with the general burden of government regulation in
New South Wales on the operation of their businesses. These concerns
could be best categorised into three areas: general legislative burden;
overlapping requirements and inconsistencies in enforcement and regulation.

General Legislative Burden

The level of legislative burden licensed premises, and in particular hotels,
need to comply with is itself onerous and a significant cost to business. Whilst
industry recognises the need for some continued controls on certain business
operations, the level of regulation hotels are currently subjected to has
created anomalies and inefficiencies in how they operate.
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Example 1:
Multiple Jurisdictions of Employment Regulation

Taking the employment relationship as a specific example, there is
considerable burden on hoteliers (specifically international accommodation
properties) in regard to the inconsistent approaches and overlap of multiple
State and federal systems.

This creates a significant burden on businesses that operate across borders,
and imposes additional administrative costs that would otherwise be
considered unnecessary. It also creates additional difficulties for hoteliers that
are located in border towns.

The most obvious example is the inability of such businesses to be able to
consolidate their payroll into a single system. Each State (other than Victoria)
has its own operational requirements imposed under the various industrial
instruments, in addition to that are the statutory requirements imposed in each
State, and federally, so that:

   •   Each State provides for a different accrual of long service leave and
       different circumstances under which an employee may access long
       service leave. For example, in New South Wales, under certain
       circumstances an employee may access leave after just 5 years
       service, whereas in Queensland an employee will not receive any pro-
       rata leave until after 7 years service. Furthermore, in New South
       Wales an employee continues to accrue long service leave on the
       transmission of business, whereas they do not in Queensland.

   •   Each State and the Federal jurisdictions have different requirements
       relating to the basic information that is to be kept in time and wages
       records. For example, there is no single consistent national approach
       to what information needs to be included on a payslip.

   •   Each State has different systems of Occupational Health and Safety
       and what requirements apply under each. This relates to how many
       staff are in a premises before they need to have a formal OHS
       Committee, what training is required, what basic safety aspects relate
       in each workplace or even what level first aid kit they need.

   •   Training requirements are different from State to State. For example,
       New South Wales does not recognise Responsible Service of Alcohol
       Training undertaken in any other State.

There are too many examples of interstate inconsistencies to relate here. The
simple fact is that employers often have to have a payroll system and
administrator for each State. Human Resources cannot be centrally
controlled, and this duality creates generally inefficiencies in business.

For Australian businesses to be competitive this unnecessary and
burdensome red tape needs to be removed.
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Example 2:
Occupational Health and Safety Legislation and Gaming Operations

One of the most anomalous areas of legislative inconsistency relates to the
requirement for hotel gaming venues to have blacked out windows. There are
several requirements for hotel gaming rooms established under the Gaming
Machine Regulation 2002. Hotel gaming rooms must conform with the
following requirements:

   •   It must be located in a restricted area of the hotel;
   •   It must by physically separated from the general bar area by a
       permanent floor to ceiling wall with at least the bottom half of such wall
       being constructed of opaque material;
   •   It must be situated in such area as to ensure patrons are not compelled
       to pass through the gaming room in order to enter or leave the hotel;
   •   The gaming machines in the gaming room must be situation so
       that it cannot be seen from any place outside the hotel that is
       used by the public or to which the public has access.

The same level of compliance is not expected for Registered Clubs with
gaming machines.

It is this last requirement that causes a significant anomaly between the
Gaming Machines Act 2001 requirements and the Occupational Health
and Safety Act 2000 provisions.

Hotels, and to a lesser extent Registered Clubs, have increasingly become
the targets of violent crime and robberies due to the large amounts of cash
kept on the premises for gaming.

WorkCover has already successfully prosecuted one venue (Souths Juniors
Rugby League Football Club) for breaches of the Occupational Health and
Safety Act 2001 as an employee was injured during an armed robbery.

The AHA (NSW) is conscious of this increase in crime and also the likelihood
of a prosecution stemming from employee or patron injury. WorkCover
inspectors have previously requested that members remove the dark tinting
from their gaming room windows to increase visualisation of the premises and
reduce the risk of robbery. Police have also requested the removal of the
dark window tinting to increase security and to allow them better visual access
should they be called to the premises whilst an armed robbery is happening.
However, hoteliers risk prosecution under the Gaming Act should they remove
the window tinting and allow their gaming machines to be seen from the
street.

The requirement to prevent gaming rooms to be visible from outside the hotel
is arbitrary and unnecessary. It creates a potentially dangerous environment
for staff working in the gaming area of a hotel. It also creates a situation
where a hotelier can be prosecuted under the Occupational Health and
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Safety Act 2000 for compliance with the Gaming Machine Act 2001
requirements, should an employee be injured during an armed robbery.

The AHA (NSW) requests that such arbitrary requirements that increase
burden on hoteliers be removed from legislation.

Overlapping Requirements

There is significant overlap of regulatory controls and requirements of differing
layers of government. In all cases this increases the regulatory burden on
the operation of hotel businesses; in many areas it also provides a level of
subjectivity in the application of legal requirements.

Example 3:
Extension to Premises

If a hotelier wanted to extend the size of their business to provide for an
outdoor smoking area they would, in the first instance, have to apply for a
development application within their local government area. Development
Applications, by and large, are expensive and onerous processes involving
the need to engage architectural and town planning experts. One of the
difficulties related to this is that different local administrations have different
requirements for development applications. There is a lack of consistency
between and across municipalities. King Street, Newtown, for example, has a
high level of liquor outlet density. However the hotels that are on the north
side of the street are regulated by Marrickville Council and those on the south
side of the street by the City of Sydney Council. So even on this densely
populated city “eat street” there is no consistency in how hotels may apply for
a Development Application.

Some local government areas are faster and more efficient in the processing
of these applications than others. In other words, there is no single consistent
approach for planning across the State. The AHA (NSW) has many members
who are caught in a local government holding pattern with their development
applications at the moment. A further concern to the inconsistent approach
taken by Local Councils, is that local government in general does not have
concern for the need for business to comply with other State legislation (for
example the cut off date for indoor smoking bans). There is nothing to compel
Local Councils to consider these applications on a priority basis as they affect
compliance in other areas relating to health.

The second stage for an hotelier to extend the size of their business to
provide for an outdoor smoking area is to apply for a redefinition of their
licensed area. This requires an application to the Liquor Administration Board
or the Licensing Court. A redefinition is require for all extensions or changes
to the size of the licensed area. Proposed new legislation in New South
Wales will also make this process subject to a Social Impact Assessment.

Currently the New South Wales Government is reviewing the Liquor Act 1983
with a view of introducing a new licensing regime. This licensing regime will
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reduce the number of license categories, but increase the burden on hoteliers
and other licensees by ensuring that license applications and variations are
subject to a Social Impact Assessment. Social Impact Assessments are
currently used in the determination of gaming machine applications. They
require town planning information and local area demographics to be
presented in order to assess levels of potential harm created by the increase
in the number of licensed premises or gaming machines in an area. Social
Impact Assessments in Gaming Machine applications cost upwards from
$60,000 each to complete. Furthermore, the Liquor Administration Board has,
in numerous circumstances, taken over 12 months to determine Social Impact
Assessment based applications. The Liquor Administration Board often
makes several requests for further information in relation to Social Impact
Assessments. Each time a request is made, it places further costs on the
hotelier to comply with the request and produce the information. Often the
information required, including considerable local demographic information, is
not readily available and requires extrapolation from census data. Both the
raw census data and the analysis work are costly to produce.

An SIA requires the engagement of consultants or legal expertise, along with
town planning expertise. This is a clear overlap with the Development
Application requirements.

Only once approvals are made at both the local government and the licensing
level, can the hotelier commence work on building their outdoor smoking area.
It is also very difficult for hotelier to assess whether they should undertake
both applications concurrently or one after the other. If the hotelier’s
Development Application fails or is held up, but their licensed area redefinition
is approved, it can create a conflict in terms of their project management.

It would be preferable that these two distinct processes, that require similar
information and expertise to develop, become a single process in order to
reduce the regulatory burden on hoteliers. Furthermore, there should be a
single, central approval process to remove inconsistencies that stem from
localised application of legislation across municipalities. This would create a
single process of application (combined Development Application/Licensed
Area Redefinition Process) with a single centre of assessment (Planning
Department) to decrease this overlap in regulatory requirements and increase
efficiencies in planning.

There are no procedures incorporated in the Development Application or the
Licensed Area Redefinition Process to ensure that the outcome will be
compliant with the smoking legislation. That is, an hotelier could spend a
significant amount of time and money complying with local government and
licensing regulations with the purpose in mind for compliance with health
regulated smoking requirements, and still find themselves non-compliant. Or
alternatively, the hotelier may start at a point of compliance with the smoking
requirements, but through arbitrary requirements imposed by local
government, end up with an approved plan that no longer meets the
compliance level of that legislation.
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Inconsistencies in Compliance Enforcement and Regulation

In many circumstances multiple government agencies are provided with
enforcement powers under the same legislation. Different government
agencies take different approaches to enforcement and this creates
inconsistencies. Furthermore, there is evidence of inconsistent approaches to
enforcement within the same agency.

Example 4:
Shared Enforcement Powers Under the Liquor & Gaming Legislation

The Liquor Act 1983 and the Gaming Machines Act 2002 provides powers
to both Police and also an inspectorate under the auspices of the Department
of Gaming and Racing to investigate and fine operators of licensed premises
for breaches of the Act. Some of the most common breaches of the Acts
relate to the display of statutorily required signage.

It is evident that a different approach is taken by Police generally as opposed
to Departmental Inspectors. Further, that a different approach is taken by
Police operating in certain Local Area Commands to Police operating in other
Local Area Commands.

By and large it is evident that DGR Inspectors take an educative role when
investigating a breach. Rather than enforcing a fine in the first instance they
will generally undertake an audit of the premises then work with the licensee
to improve certain practices.

Police are more likely to apply a punitive approach to enforcement, and fine
licensees in the first instance.

The inconsistencies are compounded when one takes into account the
differences between and across Police Local Area Commands. Police in
some local area commands will take a different approach to Police in other
local area commands when it comes to compliance in licensed premises, such
as hotels.

There is no consistent approach to enforcement of current legislative
requirements. This makes it difficult for AHA (NSW) members to operate their
businesses when the regulatory environment is so fluid. Potentially the
member could be audited by a DGR inspector, and then be fined by the Police
in the same day for the same alleged breach.

In particular this inconsistent approach provides further regulatory burden on
those members of the AHA (NSW) that own more than one hotel in more than
one Local Area Command Practices deemed acceptable in one area may
attract a fine in another.

This inconsistent approach is highlighted further where the law is open to
interpretation. The Liquor Act, for example, makes it an offence for an
intoxicated person to be on licensed premises.        What is considered
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“intoxication” by the Police may not be considered “intoxicated” by a DGR
Inspector. Similarly an interpretation of intoxication may differ from Police
person to Police person, or inspector to inspector. The subjectivity of the
legislation makes it difficult for hoteliers to ensure compliance.

Conclusions

This submissions provides just a few examples of how government regulation
has created a burden of compliance for hoteliers in New South Wales. In
concluding, the AHA (NSW) requests the New South Wales Small Business
Regulation Review Task Force to consider these examples and the following
recommendations:

   1. Removal of cross-jurisdictional inconsistencies between and across
      State borders, and federally.

   2. Ensure that State legislation mirrors federal legislation where there is a
      need for overlap.

   3. Ensure consistency in intra-State legislative requirements on small
      businesses in order to remove anomalies in the application of different
      legislation within hotels.

   4. Consolidate applications for development application; liquor licensing
      and licensed area extensions and like applications to reduce expense
      for business.

   5. Create a single processing/assessing body for those applications to
      remove inconsistencies between layers of government and across
      municipalities.

   6. Rationalise enforcement powers on various inspectorates to remove
      subjectivity and inconsistency in application of enforcement powers.

Contact Details

                           Carolyn Kitchner-Moore
                           Strategic Policy Manager
                           Australian Hotels Association (NSW)
                           Level 5, 8 Quay Street NSW 2000

                           Phone: (02) 8218 1833
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   2. Caravan and Camping Industry Association

                      CARAVAN & CAMPING
                The Fastest Growing Tourism Sector


Barry Baillie
Chief Executive Officer
Caravan & Camping Industry Association NSW


Introduction

Camping, caravanning, and getting out there and enjoying the great outdoors
is an Australian tradition which has seen a real resurgence over the past 10
years. So much so that it is now the fastest growing tourism sector.

Independent research associated with a review of our Caravan, Camping,
4WD & Holiday Supershow held over 9 days each year at Rosehill
Racecourse indicated that 60% of the general community who have never
attended the show, have participated in our industry, in one form or another,
over the past five years. Of those attending the show, the number is 95%.

In line with the industry’s growth has been a significant transformation of the
products available – to be much more trendy, attractive, usable and luxurious.
This transformation applies to up-market camping equipment at one end – to
5 Star luxurious, self contained cabins in a holiday park, on the beach front, at
the other. Have you seen the appointments now installed in middle of the road
caravans valued at between $25,000 and $35,000? All the comforts of home.
Let alone what you get in a $600,000 Winnebago (motorhome).

Also successful holiday, tourist and caravan parks are responding to
consumer demands for better standards of just about everything, and provide
facilities such as swimming pools, kids clubs, camp kitchens, restaurants,
jumping pillows, mini golf, group entertainment, internet access, shops etc.
They also offer a range of accommodation options.

I’m a country boy who now lives in Mosman, Sydney. How often do I hear
people say “Oh, I would never stay in a caravan park – it’s 5 Star luxury for
me”.
Probably some of you in this room have the same attitude. Our challenge is to
show off the standards of accommodation that we are now able to offer, in
absolutely prime locations on the beach (for coastal parks).

Unfortunately there are still a lot of the ‘old style’ caravan parks around which
are visual eyesores, and are not attractive to discerning tourists. These parks
will have to improve their standards significantly or they will not survive.

Today, I want to talk about the positive development in our industry (some of
which I’ve already touched on) and some negative influences which threaten
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the viability of a number of caravan parks in Australia, (which is necessary
tourism infrastructure) some of which involve the policies of Councils.

Industry Profile & Statistics

Let me give you some statistics to profile the industry:

   The industry has been growing at an annual rate of around 15% over the
   past six years (this includes park occupancies and RV registrations).

   According to ABS statistics, 51% of available paid tourism beds in NSW
   are in the caravan & camping industry (via some 900 caravan parks)

   According to Tourism Research Australia, camping and caravan visitor
   nights increased from 8.4 million in 2000 to 11 million in 2005 - an
   increase of 31%. Compare this to 12.1 million visitor nights for hotels,
   motels and serviced apartments, you can see the contribution being made
   by caravan parks to the tourism industry.

   Last year (2005) new RV products purchased represented: 18,000
   caravans; 2,000 campervans / motorhomes; 1,650 camper & tent trailers.

   As an example, caravan registrations over the past 10 years increased
   from 4,982 in 1995 to 18,000 in 2005 – an increase of 261%. We expect a
   further 10% growth this year,

   There are currently around 330,000 RV’s registered in Australia,

   It is estimated that there are around 70,000 and 80,000 caravanners
   travelling on an extended tour around Australia at any one time.

   More than 87% of Australians have stayed at a park, according to industry
   research.


It is interesting to look at the demographics of those who participate in our
industry. In fact it covers just about everyone. Statistics show that the mean
age groups who holiday in caravan parks are between 15 and 44 years – in
other words, families. Those touring with caravans or motorhomes are likely to
be retirees of the 55 plus age group.

With the introduction of 4 and 5 Star, self contained, one or two bedroom
cabins, in prime locations, parks are now appealing to the ‘yuppie’ short break
market as well as families. Parks with good cabins are now competing
effectively with motels and hotels for obvious reasons.

Whether couples or families are holidaying in a tent or cabin, or whether
retirees are touring Australia in their caravan, a caravan park environment
offers a unique sense of camaraderie and community which you will not find in
any other type of tourism accommodation. Indeed generations of families
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have effectively grown up together, measured at their annual holidays in the
same park (and often the same site). Marriages, children and grandchildren
have resulted.

The ‘baby boomer’ generation is the next golden opportunity for our industry.
These guys are just reaching early retirement age, many with reasonable net
wealth and superannuation funds. Many will pack up and take off with a
caravan or motorhome to discover the ‘freedom’ of touring this great country
of ours. “Spending the kid’s inheritance”.

There is no such thing as a ‘typical’ caravan or holiday park. They range from
resort standards at one end to ‘old and ugly’ at the other. As I said earlier, the
bottom end of the market will not survive. Parks can comprise a combination
of sites and accommodation options.

Short-term holiday makers will occupy either:

o Powered or un-powered sites for camping or caravans. Some parks also
  offer
  en-suits (toilet / shower units) for these sites;

o One to three bedroom cabins, most of which are self contained with
  kitchens and bathrooms;

o Privately owned caravans with annex (referred to as either holiday /
  weekender / static / storage vans) located at caravan parks, which require
  a formal agreement with the park owner, usually negotiated on an annual
  basis, for casual occupancy not to exceed 180 days per year (not a
  permanent residence).

Long-term sites are occupied by permanent residents who own their own
manufactured home or caravan / annex and who pay rent for their sites. Many
parks have a proportion of permanents, but generally speaking, the numbers
are decreasing. I will not be dealing with that aspect of the industry in this
presentation.

The number of cabins being provided in parks will continue to increase, in
response to consumer demand, and because cabins offer a much higher yield
than powered sites for example. Some people are concerned that the
subsequent reduction in powered sites will have a negative impact on those
touring with caravans or motorhomes. However, the average occupancy rates
for caravan parks is between 40 and 50 percent . It is only during peak holiday
periods when site availability may be a problem and most ‘tourers’ tend to
avoid those times anyway.

There are 2,700 caravan parks in Australia and 900 in NSW. There has been
a 10% reduction in the number of parks over the past 10 years (I will deal with
that issue later). The majority of parks are family owned (small business)
however at the top end, coastal parks, with a return on capital of over 10%,
are being snapped up by corporate interests, of which there are about six
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major players in the market. They are paying prices in a range of $10m to
$25m.

In NSW 30% of caravan parks are located on Crown Lands and are either
operated by Councils or by long term private leaseholders. Somewhere
between15 % and 20% (150 +) of parks in NSW are either owned or run by
Councils under a range of different management arrangements (eg contract
managers / incentive arrangements).

Having told you about many of the positive attributes about our industry, I also
need to make you aware of some of the issues which threaten the future of
the tourism infrastructure we provide.

About the CCIA

Before I do that, I will briefly outline the role of the Caravan & Camping
Industry Association of NSW (CCIA) as the voice of the industry:

       CCIA comprises 530 members of which 410 are caravan / holiday /
       tourist park operators and 120 ‘trade’ members being manufacturers
       and dealers of caravans, motorhomes, camping equipment, services
       and accessories;

       We lobby to NSW Government Ministers and agencies regarding five
       pieces of legislation which specifically apply to our industry. Agencies
       we primarily deal with are: Planning; Fair Trading; Lands; Local
       Government; and Tourism;

       We run the annual Caravan, Camping, 4WD & Holiday Supershow at
       Rosehill Racecourse, which attracts around 80,000 visitors over 9
       days in April. Showcasing 400 exhibitors of our industry’s products, it
       is also a major forum for the promotion of regional tourism (as many of
       you would know). The Supershow won an Award of Distinction at the
       2004 NSW Tourism Awards in the Major Festivals & Events category.
       We also run three-day expos at Penrith and Batemans Bay.

       We publish the annual ‘NSW Caravan & Camping, Holiday & Touring
       Guide’ of which 155,000 copies are distributed free of charge
       throughout Australia. The 2005 Guide won the Media category in both
       the NSW and (recent) Australian Tourism Awards– the only Award to
       go to a NSW product over the 28 categories.

       In addition to the Supershow and Guide, we also invest heavily into
       industry promotion through television programs such as ‘Sydney
       Weekender’ (8 segments annually) and ‘Discover Downunder’
       (5 programs this year).

       We run the Gumnut Awards program for member parks which is a
       certification scheme that recognises a commitment to environmental
       sustainability and social responsibility. This program is run with the
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       technical support of the University of Western Sydney (UWS). The
       Gumnut Awards has achieved a 45% adoption rate which makes it
       highly successful compared to similar programs internationally.

       We also offer a whole range of member services including: legal and
       legislative advice (a full time Legal Counsel on staff); training in
       compliance areas and professional development; Review newsletter;
       conference; study tours (US / Canada / Alaska this year); golf day;
       trade Run-Out Sale etc.

       This year we are running the Australian Caravan Safari Trails project
       nationally – offering three pilot Safaris, and supported by a $250,000
       grant from Tourism Australia. Safaris will be held for outback NSW &
       Qld in April / May; WA in August / Sept; and VIC & SA in Nov / Dec.
       Each Safari will comprise around 40 caravans and motorhomes.

Issues & Threats

I’d be surprised if you did’nt agree with me – that the loss of a significant
number of caravan / holiday parks would be a severe blow to the tourism
infrastructure in NSW, which offers traditional holidays to middle Australia.
There are threats that we need to be faced.

Over the past five years there have been about 50 park closures in NSW
(out of 900 or so) for various reasons. Increasing land values (particularly in
coastal regions) and associated costs of Land Tax and Council rates is
placing great pressure on the ability of parks to achieve a return on their
capital investment. There is also demand on prime coastal lands (where most
parks are located) for further commercial developments (a higher a better
use). Fortunately, it is unlikely that caravan parks located on Crown Lands
(leasehold or Council run) will be available for re-development.

Generally speaking, current park site fees have not increased to the degree
necessary to allow them (parks) to remain viable, and survive, in the longer
term, particularly with the cost pressures on coastal parks. However, the
potential yields available from cabin occupancy offers an opportunity to
balance this.

There have been very few new parks established over the past 10 years. The
cost of doing so, plus the hurdles created by both State and local government
for development approval, does not offer a potential operator any real
incentive to try.

Free & Subsidised Camping & Caravanning

Another area which potentially threatens the viability of caravan parks is the
practice where some Councils (and schools) are offering, and promoting, free
or subsidised (cheap) camping and caravan sites in locations which are not
licensed as caravan parks, such as showgrounds or other public lands - in
                       CABINET-IN-CONFIDENCE

direct competition with legitimate (with an Approval to Operate) caravan parks
in the same town or region.

In these situations, legitimate caravan parks are left wondering why they must
comply with, and meet the cost of, the raft of specific legislation which applies
to their businesses, including Council rates and regulations – when their own
Council can unfairly compete and undermine their operations and, at the
same time, not comply with the law.

Some Councils believe that by offering free or subsidised camping / caravan
sites that it will attract more travelling tourists to their towns to do business.
Indeed, some motorhome and caravan clubs have even attempted to
‘blackmail’ some Councils / towns by threatening to by-pass their towns if free
or cheap facilities are not provided.

The position of our Association is that any provision of caravan and camping
facilities must comply with the law (would anyone here disagree with that?).
And secondly, that the pricing of sites need to comply with Competitive
Neutrality guidelines (which applies to Councils).

There are a number of other potential problems which can be associated with
non-compliant camp / caravan sites and which may impact negatively on local
communities, on Councils, or on the travellers themselves. They are: sewage
and grey water disposal (environmental pollution); rubbish disposal; adequacy
of toilet facilities; OHS and risk management; safety and security; lighting; fire
control facilities etc. Who will be liable when a problem occurs?

Legitimate caravan parks, be they run by Councils or private operators, must
be seen as important small businesses which contribute to the local economy.
They employ local people, encourage tourists to the town, promote other local
attractions to visitors, and invest capital and cash into the town.

We have no objections to bona fide bush camping or National Parks camps
for example, which have always been a part of the Australian way of life.

Recently, we wrote to every Council in NSW outlining our concerns about this
practice, along with a summary of the legislation which applies to a legitimate
(with a formal Approval to Operate) caravan park.

Significantly we sought, and received, formal support for our position from the
Department of Local Government (the DG), Department of Lands (who control
the use conditions of Crown Lands be they caravan park leases or
showgrounds), and Tourism NSW. Collectively they issued a statement that
they are:

“ ……. concerned to ensure regulations are performed uniformly and
consistently, and the principles of competitive neutrality are observed.”
                      CABINET-IN-CONFIDENCE

We have received replies from a number of Councils already. Whereas, the
large majority are doing the right thing, we know of others which are not, and
(judging by their letters) they will need a little more encouragement.

So today I seek your understanding of the implications of Councils offering
free or subsidised camping or caravan sites which do not comply with the law.

I believe it is in everyone’s interest to maintain and enhance the caravan and
camping infrastructure in NSW – so that we can continue to accommodate the
growing number of patrons who are discovering the freedom and camaraderie
which this lifestyle has to offer.
     SUBMISSION TO


SMALL BUSINESS REGULATION
    REVIEW TASKFORCE




      23 JUNE 2006
CONTENTS

                                                            Page

Overview                                                    3

1. Background                                               4

2. Volume of Legislation                                    5

3. Signage                                                  6

4. Governance                                               7
      4.1 Annual Returns                                    7
      4.2 Requirement to keep Register                      7
      4.3 Disclosure of Related Employee                    7
      4.4 Gifts                                             7
      4.5 Amalgamations                                     8
      4.6 Federal Issues                                    8

5. Sign-in Registers                                        9

6. Central Monitoring System                                9

7. Compliance Auditing Process                              11

8. Social Impact Assessments                                12
       8.1 Class 1 SIA                                      13
       8.2 Class 2 SIA                                      13

9. Record Keeping                                           15

10. Workers Compensation and Occupational Health & Safety   15

11. Local Government                                        16


LIST OF ATTACHMENTS

Attachment   1   –   Directors Guide
Attachment   2   –   Club Compliance Checklist
Attachment   3   –   Signage Examples
Attachment   4   –   Audit Pro-Forma
Attachment   5   –   SIA Kit for Clubs
Attachment   6   –   List of Class 2 SIAs lodged with LAB




                                                                   2
OVERVIEW


ClubsNSW appreciates the opportunity to provide comment on compliance issues and ‘red
tape’ experienced by the club industry.

This submission provides comment on a range of diverse areas of compliance which
impact significantly on the operation of clubs, primarily through the duplication of
requirements across government departments and the seeming unnecessary processes
required to facilitate daily operational requirements. The submission provides suggestions
for overcoming these issues.

ClubsNSW’s request is that Government considers the high level of compliance required of
the club industry whilst considering that clubs are non-profit community organisations with
Boards of Directors giving their time on a voluntary basis.

The main areas covered by this submission relate to:

     the volume of legislation affecting the club industry;
     overwhelming signage requirements;
     a range of governance issues;
     sign-in registers;
     the introduction and application of the Central Monitoring System;
     the compliance auditing process;
     social impact assessments;
     record keeping requirements;
     workers compensation and OHS legislation; and
     issues across Local Government.

Given the very short timeframe provided to respond, ClubsNSW is unable to submit
an exhaustive analysis of red tape and compliance burden faced by the industry.
However, the issues raised in the submission are those that raise the most concern
among clubs and are most in need of review.




                                                                                  3
1. BACKGROUND – NSW CLUBS

ClubsNSW represents over 90% of the approximately 1,500 registered clubs in
NSW, which include RSL/services, lawn bowling, golf, sporting and recreation,
football, ethnic and religious clubs, as well as community/workers, business, social
and country clubs. ClubsNSW is also the registered union of employers in this state
for the club industry.

Clubs are a major social outlet for the people of NSW: over half the adult population
of NSW holds membership to at least one registered club, and over 80 per cent of
people in NSW have visited a club in the past 12 months.1 Clubs are particularly
important sources of social infrastructure for resource-starved rural and regional
areas – 43 per cent of the State’s clubs are located outside of metropolitan areas.
Generally, where a town has a population of more than 400, it boasts a registered
club.

Clubs are major providers of community support. In 2004, clubs of all sizes
provided over $100 million annually in direct cash and in-kind support to charities
and community organisations. Beneficiaries have included junior sports, local
schools and playgroups, returned soldiers’ and war widows support groups, local
hospitals, surf lifesaving clubs, seniors’ groups and family support services.
Registered clubs also provide free or subsidised meeting places for Lions, Rotary,
schools and other community and charity groups.

The Club Movement is a strong supporter of sport and healthy activities through the
provision of sporting facilities including over 1,600 bowling greens, over 300 golf
courses, over 300 sporting fields, 102 gymnasiums and 57 swimming pools. 2

The NSW Club Movement is a significant tax contributor to the NSW Treasury.
NSW clubs paid a total of $969 million in taxation in 2003 including payroll tax,
fringe benefits tax, goods and services tax and land tax.

The industry employs 52,000 people at a cost of around $1.2 billion annually. Clubs
also rely heavily on voluntary labour, with volunteers contributing over 5.6 million
hours every year.

Despite this significant socio-economic role in NSW, the financial position of many
clubs, especially small and non-metropolitan clubs remains perilous. Based on
research undertaken in 2003, less than half of all clubs (43 per cent) are reasonably
profitable – that is, with a profit to revenue ratio of more than 5 per cent – and 28
per cent of all clubs are making a loss. Around 47 per cent of NSW’s 500 smallest
clubs are making a loss, and a further 25 per cent are only marginally profitable.


1
  Q2 Strategic Market Research, 2004, “Perceptions of ClubsNSW in 2004”, unpublished survey by
Q2 Strategic Market Research Pty Ltd, p.64.
2
  The Allen Consulting Group 2004, “Socio-Economic Impact Study of Clubs in NSW”, Report to
ClubsNSW April 2004, p.50.


                                                                                            4
There are many factors undermining the financial performance of clubs including
increased competition, demographic shifts and an ageing population, changing
patterns of leisure, taxation increases, general cost increases, and costs associated
with a growing legislative compliance burden.


2. VOLUME OF LEGISLATION

The club industry, involved as it is in the provision of alcohol and gaming, is a
highly regulated business sector subject to high levels of compliance and
administration cost. The following is an outline of some of the many different Acts
which clubs are currently required to comply with – each providing a different set of
administrative requirements for clubs. This is not an exhaustive list and the Acts
are not presented in any particular order. It is also important to note that this list
does not contain the numerous accompanying Regulations which apply to the club
industry.

1. Registered Clubs Act 1976
2. Gaming Machines Act 2001
3. Gaming Machines Tax Act 2001
4. Charitable Fundraising Act 1991
5. Fair Trading Act 1987
6. Corporations Act 2001
7. Industrial Relations Act 1996
8. Club Managers’ (State) Award 1999
9. Club Employees (State) Award 1999
10. Annual Holidays Act 1994
11. Long Service Leave Act 1955
12. Lotteries and Art Unions Act 1901
13. Privacy Act 2001
14. Public Lotteries Act 1996
15. Racing Administration Act 1998
16. Trade Practices Act 1974
17. Occupational Health and Safety Act 2000;
18. Apprenticeship and Traineeship Act 2001
19. The Unlawful Gambling (Two-up) Act 1998
20. Smoke Free Environment Act 2000
21. Income Tax Assessment Act 1997
22. A New Tax System Act 2000
23. Food Act 2003
24. Workplace Relations Act 1996

As you can see from the above list, there is multiplicity of legislative requirements
which clubs must comply with at both State and Federal level and this is not only
time consuming but expensive for clubs.

In providing advice to our members, ClubsNSW invests significantly in not only
providing face to face and online training for club directors and senior staff but also


                                                                                     5
in the production of resources to assist our members to comply with the required
legislation. To highlight the complexity and high number of requirements impacting
on directors and staff, a copy of the ClubsNSW Directors Guide is attached for your
information (Attachment 1). The Directors Guide provides directors and managers
with information on legislation covering the major operational and governance areas
affecting clubs as well as helps clubs in achieving best practice goals.

Also attached (Attachment 2) for your information is a copy of the Club Compliance
Checklist which was provided to members of our Club Directors’ Institute during
2005. This checklist again highlights the significant compliance issues faced by
clubs, with the length of the document reflective of the cost and time involved in
ensuring clubs compliance.


3. SIGNAGE

Clubs currently have a significant signage compliance burden which is
predominantly dictated by the Office of Liquor, Gaming and Racing (OLGR –
formerly the Department of Gaming and Racing (DGR)) through the Registered Clubs
Act 1976, Gaming Machines Act 2001 and Smoke-free Environment Act 2000 and
associated Regulations. The result of the requirements contained in these Acts is
that currently there are far too many signs required to be put up, hence the sign
effectiveness is reduced as the message is lost through sign saturation. Also
exacerbating this issue is that the same signs need to be put up in several locations
in the same club (i.e. at the entrance to the club, at the entrance to a restricted area
of the club and at each bar etc). Further, signage is also required to be placed on
every gaming machine within the club.

The number of signs required for compliance with each and every relevant Act
makes it difficult for clubs to comply as there needs to be constant checking to
ensure that all required signs are put up and are the latest edition – this is
particularly difficult for the smaller, regional clubs with limited staff or rely upon
volunteers. Clubs face monetary penalties and possible prosecution should they not
display the correct signage. Clubs incur the cost for the initial purchase of the
required signs plus their ongoing replacement costs, in additional to the cost for
staff to ensure signage compliance. Attached is an outline of some examples of the
current signage requirements for clubs, although this is not an exhaustive list
(Attachment 3).

The OLGR has recognised the issues associated with displaying signs (including the
number of signs) and is currently reviewing the effectiveness of signage required by
legislation.




                                                                                      6
4. GOVERNANCE

4.1 Annual Returns
Over the past few years there has been an increase in the Governance and
Accountability measures imposed upon clubs. Specifically section 41 of the
Registered Clubs Act 1976 outlines a range of requirements which creates a certain
amount of duplication across different segments of the OLGR. For example, the
disclosures, declarations and returns attached to the club annual report must be
sent to the Liquor Administration Board and also to the OLGR under the same
provisions.

Section 41H requires clubs to send a full set of accounts to members annually
which incurs a significant cost to clubs to comply when considering the postage
costs involved in such an exercise. Whilst the need to prepare a full set of
accounts is not in dispute, it has been suggested that this requirement could be
changed so that this information is only provided upon specific request by a
member, hence significantly reducing the cost to clubs.

4.2 Requirement to Keep Register
Section 41G of the Registered Clubs Act 1976 requires the secretary of a club to
keep a register of disclosures, declarations and returns made to the club under
Division 2 and provide a copy of the register to the Director each year and at any
other times as requested by the Director. This same information is included in the
club’s annual report which is supplied to both the Liquor Administration Board and
the OLGR.

4.3 Disclosure of Related Employee
Section 41H(1)(f) requires the name of an employee who is a close relative of a
director or top executive, together with that employee’s remuneration, to be
publicly disclosed to every member of the club. This appears to be quite an
unnecessary requirement and has proven to not only be an embarrassment to the
employee but also a ‘turn-off’ for someone who may be making a significant
contribution to the club industry but is discouraged for no other reason than they
are related to a director or another senior employee within the club. It is suggested
that this section of the Act could be removed and replaced with a requirement that
the employment of a close relative must first be approved by the club’s Board of
Directors.

4.4 Gifts
Section 41F requires that all gifts from a contractor be declared and publicly
exposed to every member of the club. This means that all gifts irrespective of cost
(i.e. a ball-point pen or bottle of wine) need to be declared. This requirement
appears ‘out of step’ with other commercial enterprises as gifts are commonplace in
today’s business environment. It is suggested that this section of the Act could be
reviewed by establishing a minimum value (for example $500) for gifts which must
be declared.




                                                                                   7
4.5 Amalgamations
In an industry that is evolving, particularly in relation to the changing business
environment, a number of clubs have or are investigating the opportunities for
amalgamation with another club. The amalgamation requirements contained in the
various Acts, including Division 41 of the Registered Clubs Act, are significant and
in many cases the amalgamation process may take several years to complete. In
addition to the lengthy timeframe, the amalgamation process invariably requires the
engagement of specialist legal advisors for all clubs involved in the proposed
amalgamation. In considering an amalgamation, it is likely that a club may already
be in financial difficulty, therefore the costs of complying with the legislation plus
the significant time taken to complete the process can be a major detracting factor
in effecting a successful amalgamation and the ongoing viability of more than one
club.

The NSW Government has recognised the difficulties associated with the
amalgamation process (including cost and complexity) and has undertaken to review
the process.

4.6 Federal Issues
Although not specifically within the scope of this review, there are a range of
Federal Government requirements which impact on the club industry and have been
identified by our members as negatively impacting on club operations.

There is a high level of duplication between State and Federal requirements
specifically in relation to Corporations law. Clubs are companies and as such must
meet strict reporting and lodgement requirements. For example, when a club makes
constitutional changes, the club is required to lodge these changes with both
Australian Securities and Investment Commission (ASIC) which is Federal and the
Liquor Administration Board which is State.

The Registered Clubs Act requirements also duplicate Corporations Law under
which clubs (being companies) must produce and lodge annual returns containing
much the same information, particularly the financial information.

Another issue at the Federal level which has compliance and cost implications for
clubs relates to the time consuming review and preparation of GST Business
Activity Statements. This is a particularly relevant issue for our small regional clubs
that may be managed by limited staff or volunteers. These returns are legal
documents and require a certain level of specialist knowledge – something that our
volunteers have difficulty complying with. This is an issue for all small businesses
not only clubs, therefore consideration of the implications the GST reporting
requirements place on small business is recommended.




                                                                                     8
5. SIGN-IN REGISTERS

Clubs are established for the benefit of members and guests and as a consequence
have a requirement that all guests and temporary members sign-in to the club prior
to using the club’s facilities (section 30 of the Registered Clubs Act). Monitoring
and managing the sign-in requirements is particularly difficult for small clubs with
limited staff or those managed by volunteers as generally there is no fulltime door
person ensuring that temporary members and guests sign-in correctly when entering
the club. Clubs can be breached by the OLGR if the strict sign-in requirements are
not adhered to at all times. This is a difficult area for small clubs to comply with
effectively, given that there may be limited paid staff members in the club at a
particular time or volunteers may be operating the club. The costs of ensuring that
all members and guests are correctly signed-in are significant.


6. CENTRAL MONITORING SYSTEM

The Central Monitoring System (CMS) commenced operation in clubs on 1
December 2001. Legislation requires clubs to pay a progressively increasing
monthly fee to a private operator for the 15 year exclusive licence period.

The CMS electronically connects to gaming machines and receives information
about individual machines at regular intervals of less than one minute. The
information is gathered by the CMS locally and passed on to a central computer on
a daily basis. The information is primarily used to assess the state tax payable on
gaming machine revenue.

While determination of tax revenue is a fundamental aspect of gaming machine
operations another is “cash flow” analysis. Cash flow analysis underpins the
integrity of club gaming machine operations and at its most basic level involves
comparison of the actual cash cleared from gaming machines against the
independent “theoretical” or meter derived revenue.

Prior to the introduction of the CMS the legislation required clubs to acquire gaming
machine data manually or electronically and submit this data along with a self
assessment of tax to Government by means of an assessment form on a quarterly
basis. The process was relatively simple, accurate and in our view resulted in the
correct tax revenue calculation. At the same time the process facilitated cash flow
analysis. That is, two fundamental requirements were achieved by a single
effective process which could be easily checked for compliance.

The introduction of the CMS has resulted in a duplication of work and significantly
increased compliance costs because:

•    legislation requires clubs to undertake independent meter recording in a
     manner similar to that prior to CMS even though the CMS now acquires data
     electronically at a significant cost to clubs;


                                                                                   9
•    for clubs the CMS has proved to be unreliable or impractical for undertaking
     accurate cash flow analysis and in a significant number of cases, tax
     assessments. These activities are undertaken more appropriately through in-
     house non CMS monitoring systems or manual reading processes. That is,
     whereas pre CMS requirements could be used to successfully integrate two
     functions, the introduction of the CMS has not achieved the efficiency of the
     already proven methods; and
•    the CMS requires a significant and ongoing amount of support from clubs in
     order to maintain “connectivity”. It should be noted that responsibility for
     “connectivity” is assigned to clubs by way of legislation even though this is a
     simplistic approach to what is a very complex system where responsibility is
     often difficult to assign between the various stakeholders directly involved in
     its operation.

An estimate of duplication costs associated with CMS can be gained by comparing
the total operating costs of the OLGR before and after the introduction of the CMS
with the additional cost imposed on clubs as a result of the CMS.

Prior to the introduction of the CMS, the former Department of Gaming and Racing
(DGR) annual reports 1998 through to 2001 show operating expenses (excluding
grants and subsidies) remain relatively steady at around $29 million.     As noted
above, during this period of time the procedure for assessing tax and cash flow
relied on a self assessment process and processing by the DGR. This arrangement
successfully facilitated the two basic requirements of tax assessment and cash flow
analysis.

Following the introduction of the CMS in December 2001 annual reports for the
period 2002 to 2005 show DGR expenses gradually increasing from around $24
million to $27 million. That is, since the introduction of the CMS the overall saving
to the DGR has been less than $5 million while during this period of time clubs have
paid an annual CMS fee which has increased from approximately $24 million to $28
million (excluding GST). While it is possible that the DGR has undertaken other
programs to replace the savings generated by the CMS it is not possible that any
savings could approach the additional cost burden imposed on clubs.

From a club perspective the CMS has not proved to be practical for delivering the
basic functions required of such a system. The CMS has generated substantial
costs on clubs to support its operation because of the monitoring fee and the
resources required to support the system.

ClubsNSW submits that the cost imposed on clubs (which will rise to over $37
million [excluding GST] by 2015) as a result of the CMS is unnecessary and
unjustifiable when compared to a perceived benefit of greater security which in
reality is illusory.




                                                                                  10
7. COMPLIANCE AUDITING PROCESS

The Gaming Machines Act 2001, under section 35A allows for audits of clubs to be
conducted. The legislation states that:

“The Director may, by notice in writing, require a person who is the subject of an
investigation under this section, or is a member of the governing body of or an
employee of a registered club that is the subject of such an investigation, to do one
or more of the following things:

a)   provide, in accordance with directions in the notice, such information verified
     by statutory declaration as is relevant to the investigation and is specified in
     the notice,

b)   produce, in accordance with directions in the notice, such records as are
     relevant to the investigation and permit examination of the records, the taking
     of extracts from them and the making of copies of them,

c)   authorise a person described in the notice to comply with a requirement of the
     kind referred to in paragraph (a) or (b),

d)   furnish to the Director such authorities and consents as the Director requires
     for the purpose of enabling the Director to obtain information (including
     financial and other confidential information) from other persons concerning the
     person under investigation and his or her associates.”


While the most obvious way to carry out an investigation is by means of an on site
inspection where the relevant information is produced, the current practice is to
employ a “desk audit” process which may be followed by a further “on site”
investigation.

The desk audit process requires clubs to complete a self-audit prior to the conduct
of a more detailed section 35A audit. The self-audit requirement for clubs is
extensive and takes many hours to complete which is reflected in a high cost for
clubs to complete. In a significant number of cases, particularly in smaller, regional
clubs, the club needs to employ a consultant to complete the audit on their behalf
as they do not have the staff available to complete such a detailed and lengthy
process. Whilst ClubsNSW understands the need for audits at certain times, it is
suggested that this process be streamlined to minimise the cost to clubs through
lost staff time and the preparation of the required documentation.

The extent of the compliance burden on clubs is reflected in a document developed
and currently in use by the OLGR. The document titled “Audit Pro-forma” is
attached (Attachment 4) and consists of over 40 pages of questions which are
required to be completed as part of a desk audit/affidavit procedure. It is to be
noted that this is not an exhaustive list of all compliance requirements imposed on
clubs.



                                                                                   11
An examination of the document readily reveals the extent and level of detail that
clubs are required to provide. While clubs are required to keep much of this
information because of various legislative requirements or good commercial practice
it is generally not kept in a form that is readily compatible with that of the audit pro-
forma.

With reference to the audit pro-forma, some examples of duplication include:

•    Question 1 – there is a need to re-state the clubs “financial position” when
     this is available through the annual reports of the club which are also supplied
     to the regulator and the ASIC.
•    Part 2 – this section deals with matters at an operational level that not only
     duplicates work but requires a significant effort to collate and present in the
     required format. By way of example, 2.7 “Gaming Reports” requires the club
     to extract information from records that are already required under the Gaming
     Machine Regulation 2002.
•    Part 3 and Part 4 – similar comments apply to these sections.

Accurate completion of a document of this magnitude requires considerable
resources and as shown in the examples in many cases, duplicates information that
is already available in various other forms or records.

The impact on club resources is substantial with clubs reporting a need to engage
additional resources, over and above those normally required to meet compliance
obligations solely for the purpose of assisting with audit pro-forma completion.

ClubsNSW submits that this type of compliance activity creates an unnecessary
burden on clubs and is an example of compliance “red tape” that could be
drastically streamlined to reduce the burden on clubs.


8. SOCIAL IMPACT ASSESSMENTS

Since May 2000, various types of applications for the authorisation of gaming
machines in clubs have required an assessment to be made of the likely impact on
the local community, by addressing the gaming history of the venue and the gaming
environment of the local community.

While the policy intent of this measure is clear, the application of the legislation has
imposed an unreasonable compliance burden upon clubs. The ClubsNSW SIA Kit is
provided as an attachment (Attachment 5).

The Gaming Machines Act establishes a two-tiered SIA process and the Regulation
describes the different requirements for each class.




                                                                                      12
8.1 Class 1 SIA
This class of SIA is required if the application relates to:

•    an increase of 10 or less gaming machines in a 10 year period; or
•    a transfer of poker machine entitlements from a venue within 1 kilometre; or
•    a new club or new hotel being removed to premises within 1 kilometre and
     there is no proposed increase in gaming machines.

SIA 1 requirements are relatively simple to comply with. The same cannot be said
for SIA 2 requirements which are set out below (and drawn from the DGR
Information sheet 6/02).

8.2 Class 2 SIA
A class 2 SIA is required in all other cases and must include the information
required for a class 1 SIA, as well as the following:

•    the total number of gaming machines and the gaming machine expenditure in
     both hotels and clubs in the local government area in which the venue is
     situated;
•    the total number of gaming machines in both hotels and clubs approved by the
     Board through the SIA process in that area which are not yet authorised to be
     kept;
•    an estimate of median individual wage and salary income for that area. The
     applicant may relate the median for the area with the NSW median. As this
     data is based on income tax data alone, the Board will also consider
     information on median weekly personal income for the area as provided in
     Tables 1 and 2 of ABS bulletin 2015.1 titled Census of Population and
     Housing Characteristics for statistical Local Areas, NSW and Jervis Bay;
•    the unemployment level for that area. This information is to be provided from
     the latest available edition of Small Area Labour Markets Australia, published
     by the Department of Employment and Workplace Relations and available from
     www.workplace.gov.au. The applicant may relate the unemployment level for
     that area with the NSW unemployment level; and
•    an estimate of the resident population aged 18 years or over in that area. This
     information is to be provided from the 1996 Census data (the 2001 Census
     data when available) from the ABS.

Clubs are invited to provide the Board with comments on any inconsistencies or
limitations that may exist in the use of the statistical information to determine
whether or not the overall economic and social impact of granting the application
will be detrimental to the community in the local government area.

A class 2 SIA must also include the following:

•    a map indicating where the venue is situated;
•    an identification of the negative social and economic impact on the local
     community (i.e. the people living in the LGA in which the venue is situated)


                                                                                 13
     that would or might result from the granting of the application to which the
     SIA relates;
•    an identification of the social and economic benefit to the local community
     that would or might result from the granting of the application;
•    a statement, supported by data provided in the SIA, addressing the likelihood
     of an overall net social and economic benefit to the local community if the
     application is granted;
•    a statement outlining and identifying the source and date of all data and
     information provided in the SIA;
•    a statement, supported by data provided in the SIA, estimating the number of,
     and the average expenditure on, gaming machines per person aged 18 years or
     over in the LGA, where the venue is situated, if the application is granted.

The applicant must provide a copy of the SIA to the local council, the Council of
Social Service of NSW, the Department of Community Services, the local area
health service, the Director of Liquor and Gaming and any body that is funded by
the Casino Community Benefit Fund for the purpose of providing gambling related
counselling in the area where the venue is situated.

Significant costs are attached to the SIA application process (clubs generally pay
about $60,000 to prepare and lodge an SIA 2, with additional costs incurred to
respond to Liquor Administration Board requirements which can increase the cost
closer to $80,000), in addition to the often lengthy delays experienced by clubs in
processing applications. The difficulties associated with the SIA Class 2 process
are reflected in the fact that, of 91 SIA 2 applications lodged by clubs and hotels
since March 2002, only 22 have been approved (or partially approved) and that a
number of applications lodged in 2002 are yet to be finalised (Attachment 6).

The difficult application process is compounded by the subjectivity and inconsistent
approach by the reviewers and the resultant delays. This creates uncertainty which
unreasonably impedes business activity.

The Independent Pricing and Regulatory Tribunal (IPART) in its June 2004 report,
Gambling: Promoting a Culture of Responsibility, recognised these difficulties finding
that the statutory test for approving SIAs is extremely difficult to establish and that
“guidelines should be developed and made publicly available indicating timeframes
in which the Liquor Administration Board could be expected to process the major
components of the SIA applications.”

The NSW Government has indicated a willingness to review the SIA process with
the aim of reducing cost and complexity.




                                                                                    14
    9. RECORD KEEPING

    Due to the large variety of Acts which the club industry must comply with, there is
    a vast range of record keeping requirements for clubs – often different depending
    on the Act in question. For example, sign-in registers must be kept for three years
    from the last entry, gaming machine reports must be kept for three years, liquor
    purchase register must be kept for five years, accounting records must be kept for
    seven years, wage records (under the State Act) must be kept for six years and
    seven years under WorkChoices (Federal Act).

    The range of record keeping requirements under the different Acts ensures that it is
    a difficult and time-consuming task ensuring that these record keeping requirements
    are met appropriately.


    10. WORKERS COMPENSATION AND OCCUPATIONAL HEALTH & SAFETY

    Clubs increasing have a very high compliance burden required under Workers
    Compensation, Workcover and Occupational Health and Safety (OHS) legislation.
    Currently it is a requirement under Workcover that all contractors are OHS
    compliant which means that they must be aware of the clubs OHS policies and
    procedures.

    Therefore, to comply with this requirement, there is no other way for a club to
    comply than by the club ensuring that all contractors complete a club induction
    program and risk assessment. This results in a significant cost to clubs in
    conducting the induction program, through lost staff time spent completing this
    activity with contractors and the cost to clubs for contractors to actually complete
    the induction.

    Clubs are also required to ensure that all contractors are paying correct wages,
    superannuation and taxation and abiding by OHS requirements. It is therefore in a
    clubs best interest to request from contractors copies of their certificates of
    currently for workers compensation and public liability insurance, otherwise the club
    could be held liable in the event that the contractor goes out of business. This is
    area which requires constant monitoring by the club to ensure that firstly the
    information is supplied and secondly that the information is correct and up to date.
    This is a costly and time consuming activity.

    Currently under NSW law, employers are obligated to report injuries of any kind and
    any ‘near misses’ to Workcover. In effect, most organisations will notify their own
    insurer who will then fulfil the notification requirements to Workcover, however this
    process is time consuming, unnecessary and costly to clubs. This is due to:

•        most injuries incurring no time lost and the employee will resume work
         immediately and yet clubs are required to notify insurers of fairly extensive
         details regarding the injury particulars;


                                                                                      15
•        in a lot of minor cases, the employee if visiting a doctor for the first instance
         will then automatically have to visit the doctor a second time so that a final
         certificate can be issues, even if the treating doctor has already certified them
         fit for suitable duties;
•        furthermore, employees are required to maintain continuity in their
         certification, even if the employees circumstances have not changed at all
         since the last assessment;
•        the same level of compliance standards apply to low risk industries as they do
         for high risk industries – clubs are not a high risk industry; and
•        injured employees visit a nominated treating doctor (NTD) – this should be an
         independent doctor from the start of the treatment process. NTD’s are
         commonly the employee’s family doctor who already knows the inured worker
         well and can tend to be less objective than an independent assessment.
         NTD’s often fail at detecting “yellow flag claims” – psychological barriers to
         returning to work.

    It is suggested that injury reporting be necessary only with claims which require
    medical attention and/or time off work, the NTD system be reviewed for possible
    termination so that all claims are independently assessed, remove the need for
    unnecessary doubling up of medical certification and investigate the return to work
    process becoming a little more ‘informal’, provided it is reasonable.


    11. LOCAL GOVERNMENT

    Clubs are exposed to many requirements which are regulated by local councils. For
    example, applications for Place of Public Entertainment (POPE) licences and the
    ensuing fire safety and other requirements; leasing and rental of land and approval
    of Development Applications for refurbishment/construction works being undertaken
    by clubs.

    The requirements of local councils represent a significant compliance issue for our
    industry, primarily due to the inconsistencies applied between different local
    government municipalities.    The requirements imposed on clubs within close
    proximity which are in different municipalities can be quite stark and particularly
    burdensome depending on which municipality the club is in.

    The differences between requirements for POPE licences across municipalities have
    often disadvantaged some clubs. This inconsistency is also highlighted by the
    differences between approval processes for Development Applications and has
    become more significant in recent times with clubs in the process of adapting their
    premises for the new smoking legislation.

    Issues of consistency between local government areas and the level of red tape at
    that level are becoming more apparent as clubs seek approval to construct outdoor
    areas in advance of the smoking ban in licensed premises from 2 July 2007.




                                                                                       16
It is ClubsNSW’s recommendation that there needs to be a certain level of
consistency between the decisions made by different local councils; this is
particularly relevant for clubs with amalgamated premises in different municipalities
that need to apply different compliance requirements based on the clubs’ location.




                       ♣       ♣      ♣      ♣      ♣      ♣




                                                                                  17
                      CABINET-IN-CONFIDENCE

4.    Property Owners Association NSW

             Private Hotel & Boarding House Division

                PROPERTY OWNERS ASSOCIATION NSW

                                      P.O.Box 329 Bondi Junction NSW 1355
                                         Ph: 02 9388 1045; fax 02 9337 4748
                                              Email: gervays@bigpond.com
                                                  Website: poa-nsw.com.au

21/6/06
Martin Mansfield
Small Business Regulation Review Taskforce Secretariat
NSW Department of State and Regional Development
+61 2 9338 6684
martin.mansfield@business.nsw.gov.au

SUBMISSION: Small Business Regulation Review Taskforce

Local councils are a serious and major obstacle to the establishment of new
business and/or the continuation of businesses and/or growth.

A. LOCAL COUNCIL


Development Applications:

      •   There is an escalating number of reports and conditions required
          by Councils from professional experts such as transport,
          environmental impact, heritage studies, fire, irrespective of the
          nature and/or size of the development; in addition to multiple copies
          of plans and lengthy administrative processes required for
          applicants

      •   Councils rarely comply with 40 day response requirement. Delays in
          excess of 6 months are common.

      •   Personal agendas of individual Council officers can be part of the
          DA process with officers making conditions or refusing applications
          in contravention of their own planning policies. There appears to be
          a lack of accountability and/or concern at the business and/or
          personal difficulties, by council officers.

      •   DA approvals with conflicting conditions are not uncommon

      •   A high priority by Council is ensuring that Council has limited liability
          and protection of Council, by Council, creating a system with
          numerous conditions and delays for applicants.
                      CABINET-IN-CONFIDENCE


      •   DA applications are used by Councils to initiate and activate
          numerous agendas which are outside the DA, such as parking
          requirements, landscaping and management processes.

      •   DA’s for change of business usage in an approved business area,
          often incur delays, new conditions, payments, obstacles and
          refusals, despite compliance with the original conditions.

      •   Council officers are aware that many people are reluctant to engage
          in litigation due to high costs, personal stress, time taken away from
          business.

      •   The methodology of dealing with Council can involve lengthy visits
          to Council Offices with delays and inadequate responses.

      •   The politicisation of some decisions is damaging to businesses and
          the community and impacts on DA approvals and conditions.

RESULT:

  •   The costs for compliance to any change which requires Council
      approval is generally high and often difficult, with a business unable to
      calculate the true financial and business cost.

  •   There are substantial delays by Council at assessing a DA with
      expectations of between 6 to 12 months to obtain approvals, creating
      financial and business difficulties.

  •   In the main, only high value businesses challenge Council decisions
      through Land & Environment Court. In this way Council are empowered
      to act at will.

  •   Council can cause and have caused businesses to close due to their
      action or inaction.

  •   There is a general fear of approaching or activating Council in any DA
      application as businesses are uncertain of Council attitude and the
      possible negative effects.

  •   Council is used by opponents and residents as tools to penalise
      business.

  •   Council attitude and policies are a factor in establishment of a business
      in an area.

  •   Council can be politically hijacked creating a negative attitude to
      business and community attitudes.
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EXAMPLES OF CASES IN SYDNEY:

  1. Change of Usage to Bed & Breakfast

  The residential house is located in a street which has both business and
  residential use. It is classified to allow bed and breakfast businesses. It
  complies with local planning policies. There were no resident complaints.

  There would be no significant increase in occupancy and traffic.

  Result: Council required an environmental impact statement and a traffic
  report by a traffic engineer costing many thousands of dollars in addition to
  months of delay.

  The building is 1870s in Paddington, with one existing parking of one car
  space.

  Result:-

  Council indicated that it would refuse the application, as it did not meet
  current parking requirements even if there is no increase in parking usage
  requirements. Although the Council decision would have been in all
  likelihood, lost in Land & Environment Court, the decision was made to
  abandon the business and the change of usage.

  2. Change of Usage

  A property which had been rented as a commercial premises located in the
  centre of a shopping precinct for over twenty years, was changing usage
  from an accountant’s office to a Chinese herbalist’s office. A DA was
  lodged. The matter required a town planner to submit the DA to Council
  which was expensive. It took several months with the town planner
  continually making contact in an attempt for Council to comply with the 40
  days. Meanwhile the premises was empty, the lessor not receiving rent,
  the business unable to occupy the premises.

  Frequently in these situations, the business choses not to wait and the
  property remains unoccupied and the business is unestablished.

  The Council did not advise the stakeholders when notice was eventually
  put on its website. The DA had been refused as the property did not
  comply with current parking requirements. In addition, it claimed that it was
  being used illegally as a commercial premises.

  The Council officer had a hostile history with the lessor, so was not
  supportive of the lessor or the applicant. When the building was built 25
  years ago it was classified as a residential property. However twenty years
  ago, Council had issued as 317a certificate changing usage to
  commercial, and the premises had been operating commercially for all that
                     CABINET-IN-CONFIDENCE

   time. The Council officer apparently was unable to find any data in Council
   records on this property


   Result:

   The lessor engaged a town planner. The prospective lessee engaged a
   town planner and the matter continued for months with the DA
   disapproved. Fortunately, the lessor was able to uncover in archives,
   copies of Council documentation giving commercial usage approval.
   Otherwise the matter was heading for the Land & Environment Court and
   substantial costs in addition to the loss of a business start up.

   The DA was finally approved with a delay of 6 months.

   3. Alterations & Additions to Existing Boarding House

   The NSW State Government has a policy which supports the retention and
   expansion of low to moderate cost accommodation .

   An existing boarding house in Surry Hills applied for an extension,
   providing additional accommodation.

   Boarding houses are an accommodation service which have marginal
   profits. However with good management, it is a business which can
   provide a housing service, utilise other business services and provide an
   income.

   While the DA was approved after numerous consultations, the conditions
   were controlling and prescriptive. Samples of the conditions in the DA
   include:-

   ‘All bathrooms shall be provide with a soap holder or liquid soap dispenser,
   a supply of toilet paper and an adequate number of hooks or shelves to
   allow occupants to place belongings to prevent contact with the floor.’

  The Council recommended that the applicant go to the Land &
Environment Court.

  Result:-

   The business owner had an intention of developing around 15 boarding
   house/private hotels in inner city Sydney. He already has 4 properties.
   However while he was happy to establish well managed accommodation
   businesses, meeting high standard health and fire requirements, he
   became increasingly disillusioned by the punitive and intrusive
   requirements of the Council.
                     CABINET-IN-CONFIDENCE

   The owner has decided to retain his existing boarding house portfolio for
   the moment. He may sell, but he is firm in his decision not expand any
   further. He is developing businesses now in New Zealand.

   4. DA with Parking

   A new business submitted a DA for a usage in an existing long term
   commercially zoned property. The matter should have been a corridor
   process. However Council rejected the application on the grounds that
   there was insufficient parking under the current Council code.

   However the property and parking allocation were Council approved at the
   time it was built. The Council changed the conditions making the property
   totally unleasable. Council instructions were to take the matter to Land &
   Environment Court.

   Result:

  The business did not move in. The lessor had no income. The space was
empty.

RECOMMENDATIONS:-

   1. DA approval for change of business usage in an existing business
      zoning should be a corridor process, where the new business notifies
      Council of the change.

      There should be no further administration required, except where there
      is a health & safety issue, or when Council deems the change to be
      contraindicated in the area.

   2. An advisory and conciliation service should be available for
      businesses.

   3. There should be made available an option for a Tribunal hearing at the
      Office of Fair Trading or an appeal to State Government of an Advisory
      Service, where businesses for a nominal fee, can seek a decision. In
      this way Council is made accountable and cannot use its greater
      financial power to dictate terms and threaten businesses with Land &
      Environment Court.

   4. There should be a code of practice regarding Council compliance
      requirements for each level of development. For example, a minor
      alteration to an existing and approved property, should require lesser
      compliance. A major project such as a shopping centre, would have
      substantially higher compliance requirements.

   5. For minor building works on a property, which comply with existing
      Council approval and zoning, and which do not go beyond the site
      ratio, there should be a corridor process. There should be a notification
                         CABINET-IN-CONFIDENCE

         system only, without the need for advertising, neighbourhood letters
         and the many compliance requirements.

   6. Education of Council officers is essential, in that they must accept that
      they are there to be of service to the community, not to be
      obstructionist and use their power for personal or administrative or
      other agendas.

   7. Council must comply with the 40 day period for a decision.




   Council Policies

   1. Parking Regulations

   Parking is a major issue for business. Council regulation regarding the
   management of parking can determine the success or failure of business.

   Council’s attitude to parking varies across Councils which are often
   contradictory:-

         •    a hostility towards the provision of any car parking
         •    maximization of Council income by engaging an army of parking
              officers like Waverly Council
         •    escalation in numbers of parking meters
         •    time restrictions
         •    pro-car parks
         •    pro-shopping centres with carparking
         •    resident parking stickers
         •    7 day per week, 24 hour parking restrictions

For businesses, change in a premises or usage, requires Council approval,
which is subject to individual Council parking policy and regulation.

         •    DA’s are subject to parking
         •    Councils use parking as a means to collect a parking contribution
              without providing any parking spaces
         •    Council officers and Councillors have varied and controversial
              attitudes towards parking
         •    Parking has become a major revenue source for Councils

RESULT:-

     •       Council parking policies impact on the development and success of
             businesses
                       CABINET-IN-CONFIDENCE

    •     Community and businesses are hostile about restrictive Councils
          parking policies
    •     Businesses are often unable to meet parking regulations.

EXAMPLES OF CASES IN SYDNEY:

  1. Business Reaction to Waverly Council PARKING policies

        Widespread businesses demonstrations and anger resulted from
        Waverley Council’s employment of a force of 65 parking officers driving
        customers away from many businesses and into free parking shopping
        centres.

        Bondi Beach traders experienced and continue to experience a loss of
        customers. The impact of the 7 day a week meters along Bondi Beach
        is translated to large amounts of meter parking unused after 6 p.m. with
        a reduction in customers.

        An angry demonstration on 21st March 2006 in Waverley Council led to
        a reconsideration of Council parking policy. However, with Council
        rejecting additional onsite parking with DA applications and an anti-car
        attitude and the pressures on this densely populated area of Sydney,
        the car parking issue is expected to impact negatively on businesses.

  2. Hornsby Council With a Dual Attitude to Parking

        Parking is a serious problem in the shopping precinct impacting on
        customer access to the businesses. Hornsby Council has a parking
        committee trying to handle the problem.

        The owners of a tenanted house adjacent to the shops with a
        substantial backyard, decided to provide free parking for 4 cars for local
        businesses in the owner’s other property. The house still met the green
        space requirements and still provided parking for the tenants. There
        were no resident objections. The businesses wrote to Council
        explaining the benefit of the free car spaces.

        The Council deemed the provision of free off-street parking, to be a
        commercial carpark and commenced legal proceedings against the
        owner. As a result the owners made a DA application for a home and
        office usage for the house.

        The Council approved the DA subject to the backyard being dug up in
        order to reduce the car spaces available. This requirement was in
        contravention of their own LEP.

        The owner commenced proceedings to go to the Land & Environment
        Court with costs for solicitors and town planners. When the matter was
        listed Council withdrew the application, leaving the owner with costs of
        around $20,000.
                      CABINET-IN-CONFIDENCE


       RECOMMENDATIONS:-

             1. Code of practice developed for Councils regarding DA’s and
                parking
             2. Code of practice developed for Councils regarding parking
                and business
             3. Parking fines NOT used as a revenue source with a cap
                placed on income received from fines.
             4. After 6 p.m. free parking policies to support customers

Administration and Council
There is increasing growth in paperwork with onerous administrative
compliance in most areas depending on individual Councils. A sample is:-

   •   Environmental effects
   •   Landscaping
   •   Tree preservation
   •   Heritage
   •   Traffic
   •   Scale models of projects
   •   Geotechnical reports
   •   Fire
   •   Shadow
   •   SEPPs compliance

Delays in developments, escalating costs, increasing requirements to obtain
professional reports from traffic engineers to arborists is deterring business
development and small business.

EXAMPLE OF A CASE IN SYDNEY:

DA was approved by Council for a strata development subject to conditions.
One of the conditions was that the garbage area had to be rebuilt to meet
modern height criteria. The other criterion was that the garbage area could not
increase in height if it was to be seen from neighbouring units.

The problem: It was impossible to build the garbage bays to the height
required under the DA without being seen by neighbouring unit.

Council was unable to resolve the conflict within its own DA conditions. It was
resolved after many months of careful negotiation by the owner with Council,
causing delay in project completion and incurring additional costs.

RECOMMENDATION:-

   1. Councils have a policy of not increasing administrative requirements
      where reasonable.
                      CABINET-IN-CONFIDENCE

   2. Stop administration becoming a source of revenue for Council.
   3. There is an assessable Advisory Service and reconciliation service
      available and Tribunal or other available to assist with Council
      conditions.

      B. COUNCIL RESPONSES TO SOCIAL ISSUES

Council response to real social and community issues can lead to increased
regulations and restrictions on businesses threatening their viability.

Backpacker & Tourism Creating Disturbances

A serious problem in tourist areas is the noise and major disturbances caused
by overcrowding in accommodation with no management controls in
unregistered premises.

Accommodations which are registered businesses are required to meet
regulatory conditions regarding health & safety, fire, conditions of the premise
and similar. There are regular Council inspections, the cost of which is met by
the operator. Charges to the business are commercial in terms of water rates,
council rates, insurance and other business costs.

Council have or are proposing planning regulations/restrictions on registered
and existing accommodation providers, increasing costs and compliance. The
impact has been onerous on businesses and has had no impact on the actual
problem.

The problems are:-

- unregistered operators will rent a unit/house and sublet to any number of
people operating without controls, under the Residential Tenancies Act

- there is no legislation for share accommodation

- under the Residential Tenancies Act, the owner and/or Councils have no real
avenues to resolve the problem.

Some Councils who have introduced more administrative requirements on
existing businesses who are not causing the problem, in an attempt to resolve
this social issue include – Randwick, Byron Bay, Waverley and other councils
with tourist areas.

Some Councils such as Byron Bay, are planning to introduce planning policies
which ban holiday lettings in tourist areas with a serious impact on businesses
in the region.

These actions have proven to be unsuccessful in stopping the problem, but
have closed or changed existing businesses and impacted negatively on the
growth of their areas.
                       CABINET-IN-CONFIDENCE

The social problem is real and needs to be addressed. However the
implementation of Council regulations on registered/approved premises who
comply, is not an answer.

NOT IN MY BACKYARD SYNDROME

Depending on the Council, individuals in a community can have serious sway
with the Council. Common practices include a new resident buying a property
and then commencing action to change or close a business despite that
business being registered and operating under Council zoning. Or a resident
or group with a specific agenda, lobbying against Council approved and
registered businesses. Or Councillors with an agenda, who act to stop
business, often in contravention of their planning policies and approvals.


EXAMPLES OF CASES IN SYDNEY:

1. A person with a high profile within the Woollahra area purchased a terrace
adjacent to a pub/hotel. The lobbying against the hotel was so successful, that
its hours of operation were restricted to 10 pm. The result is that the hotel is a
failing business.

2. A long standing business is a factory in Leichhardt in a street that now has
a residential zoning. The factory needs substantial refurbishment to meet fire
and safety requirements alone. The owner wants to sell and relocate the
factory to a commercial/industrial area. The property under Council zoning is
zoned for residential strata development.

There is a sole residential objector. The sole objector does not want the
property to be developed to a residential usage, nor does the objector want
the factory to exist.

Council response has been refusal of the development, implementation of
rigorous compliance as the factory is old and needs urgent repairs.

The result has been that the factory cannot relocate. The owner is subject to
substantial land tax and council rates while operating at a subsistence level.
The matter is being taken to Land & Environment Court. The process to date
has been 2 years.

RECOMMENDATIONS:

1. Council is accountable for obstructionist regulations which impact on
approved businesses.
2. An Advisory and ConciliationService or similar is available for businesses to
negotiate with Councils.
                      CABINET-IN-CONFIDENCE

C. PRIVATE HOTELS & BOARDING HOUSES

Private hotels and boarding houses are individual style managements meeting
the accommodation needs of unique sectors ranging from student
accommodation, guest houses, holiday lettings, low to moderate cost
accommodation, short term to long term accommodation, tourist lodges and
other alternate forms of accommodation.




Residential tenancies are an exclusive occupation of a space where the
tenant is in control of that space with all the obligations of that tenancy.
Boarding houses are non exclusive, providing a valuable and unique
accommodation service adding to the vitality of housing and business in NSW.

There is continual political pressure by NCOSS and residential tenancies
groups to place boarding houses under the Residential Tenancies Act which
would end this accommodation service, as it has done in Victoria.

Lack of understanding of the nature of Boarding Houses/Private Hotels has
increased administrative regulations. There have been the creation of Council
housing officers and policies with unique regulations, creating restrictions in
growth and development of this style of accommodation

Local Councils have a varied and variable approach to boarding houses.
Regulations can be arbitary and invasive. For example there can be
requirements that rooms provide soap, waste paper baskets, that there are
signs stating 'long to short term' accommodation on the building, the provision
and laundry of linen, and many micro management requirements.

The requirements for extension, improvement and building of new boarding
houses, are heavily restricted by a failure to understand the nature of boarding
houses and the inclusion of micro management requirements in approvals
and variable conditions. Upgrade determinations can disallow ensuited
bathrooms or that Management Plans with 24 hour on-call requirements are
provided. The variations differ and act as a deterrent to the maintenance and
growth of this style of managed accommodation.

Boarding houses are a managed accommodation service and not based
on actual physical constructs, other than compliance with the Building Code of
Australia in the interests of public health & safety.

Areas that vary in terms of compliance include:-

Registration
Inspections
Licensing
OLSH
Fire compliance
                      CABINET-IN-CONFIDENCE

Management
Housing policies

RECOMMENDATIONS:-

1. Boarding houses/private hotels are recognised as an accommodation
service that is different to residential tenancies

2. These accommodations meet the fire, health and safety requirements and
are not required to comply with detailed management regulations by Councils.

3. Local Councils do not take a political position with regard to these
accommodations

D. RESPONSBILE SERVICE OF ALCOHOL (RSA)

RSA is a requirement under liquor licencing laws. People who have completed
this cours staisfactoriy prior to the compuerisation of RSA, are required to re-
do the course in order to obtain a number for administration services.

The impact is that businesses must pay again for the course and sacrifice a
work day or face penalities.

RECOMMENDATION:

Where a RSA has been completed prior to computerisation by a government
accredited provided at the time, then a Statutory Declaration should be
acceptable proof of completion.

WHERE REGULATIONS WORK

OSR

Low to moderate cost boarding houses obtain a land tax exemption subject to
conditions outlined by OSR. The administration of this exemption is simple,
easy to complete and works effectively.

ONLINE

Online services has been a significant development in reducing time involved
in compliance.
                     CABINET-IN-CONFIDENCE

OVERALL RECOMMENDATION

Advisory and Conciliation Service provided to businesses and other
people to deal with Council regulations and administrative
requirements.


Susanne Gervay
Private Hotel & Boarding House Division
of Property Owners Association.
                     CABINET-IN-CONFIDENCE

Appendix 4


Summary of liquor legislation in other Australian jurisdictions
   Victoria
   − Liquor Control Reform Act 1998
      The Victoria's liquor laws are considered as highly flexible in terms of
      how, where and when liquor is supplied by licensees. The substantive
      Victorian liquor legislation is the Liquor Control Act 1998. Similar to the
      proposed NSW Bill, under the Victorian legislation, the position of
      Director Liquor Licensing determines all uncontested licence and
      licence-related applications, and subject to the recommendation of a
      liquor licensing panel, contested applications. Parties aggrieved at
      any decision of the Director may appeal the decision to the Victorian
      Civil and Administrative Tribunal.
      Under the Act, premises other than those otherwise prohibited (such
      as: drive-in cinemas, petrol stations, milk bars, convenience stores or
      mixed business, and premises used primarily as a place by persons
      under the age of 18) will be eligible to seek to be licensed provided an
      appropriate planning permission is held.

      The aim of the Liquor Control Reform Act 1998 is to:
      •   contribute to minimising the harm arising from the misuse and
          abuse of alcohol by:
          o providing adequate controls over the supply and consumption of
              liquor’ and
          o ensuring as far as practicable that the supply of liquor
              contributes to, rather than detracting from the amenity of
              community life;
      •   facilitate the development of a diversity of licensed facilities
          reflecting community expectations; and
      •   contribute to the responsible development of the liquor and licensed
          hospitality industries.
      The Victorian Act provides for eight (8) types of licence and permit.
      •   General Licence authorises the supply of liquor for consumption on
          and off the licensed premises, provides information on trading hours
          and links to application forms.
      •   Packaged Liquor Licence authorises the supply of packaged liquor
          in sealed containers for consumption off the licensed premises.
      •   On-premises Licence authorises the sale of liquor for consumption
          on the licensed premises. Any business with appropriate planning
          permission is eligible to seek an On-premises Licence.
      •   Club Licence (Full and Restricted) authorises the supply of liquor to
          club members, guests of members and authorised gaming visitors.
                  CABINET-IN-CONFIDENCE

  •   Club Licence (Amalgamated) authorises the amalgamation of two or
      more clubs.
  •   Club Licence (Renewable Limited) authorises the licensee to supply
      liquor to a member of the club.
  •   Pre-retail Licence authorises the 'wholesale' supply of liquor to other
      Victorian licensees and to licensees in other states and territories. It
      can also be supplied to a person for the purpose of exporting liquor.
      A Pre-retail Licence permits the 'wholesale' supply of liquor at any
      time and on any premises, eg wholesalers, producers, brewers and
      liquor importers.
  •   Vigneron's Licence authorises the supply of liquor by a winemaker
      for consumption on and off the licensed premises and may include
      cellar door, mail order, internet and wholesale sales.
  •   Limited Licence authorises the supply of liquor where the scale and
      scope of the supply is limited, such as for sporting events, festivals,
      bed and breakfasts, caravan parks, fund raisers, social functions,
      and confectionary or florist businesses.
  •   BYO Permit authorises the consumption, possession and control of
      liquor in restaurants and clubs that do not hold a liquor licence.
Queensland
− Liquor Act 1992
  The Queensland Liquor Licensing Division is responsible for the
  administration of the Liquor Act 1992, and the Wine Industry Act 1994.

  The Liquor Licensing Division has a broad mandate which includes a
  key role in developing a contemporary liquor and hospitality industry.
  The main responsibility of the Liquor Licensing Division is to regulate
  the sale and supply of liquor in Queensland.

  Amendments to the Liquor Act 1992 which commenced on 1 July 2001,
  have refocused Section 116 of the Act from an examination of
  applications in terms of ‘public need’ to ‘public interest’. This means
  that the applicant, the Chief Executive of the Liquor Licensing Division
  and, where relevant, the Liquor Appeals Tribunal must now give
  greater weight to public or social interest. The following guidelines
  provide applicants with the information needed to complete a Public
  Interest Assessment (PIA) for a thorough examination of these issues.
  Types of Public Interest Assessments
  There are two types of PIA – ‘Standard’ and ‘Full’ assessments. Every
  applicant for a licence (other than a club), a detached bottle shop or an
  extended hours permit on a regular basis will be required to submit at
  least a Standard PIA. A Full PIA will be mandatory for certain licence
  categories or styles of venue.
  A Full PIA will be mandatory for the following applications:
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   general licences;
   on-premises (cabaret) licences;
   any other category where entertainment is to be provided after 8
   p.m. where the noise level generated will exceed 90dBA;
   extended hours permit for trading on a regular basis after 2 a.m.
Additionally, some applicants required to complete a Standard PIA may
later be requested by the Chief Executive to submit a Full PIA after
advertising has been carried out and the application has been initially
examined.
All applicants must submit a Standard Public Interest Assessment
which provides details on the health and social impact of their proposal.
The submission must address a number of areas and issues and
provide any mitigating factors or proposals by the applicant to reduce
any negative impacts. Impacts may be positive or negative, and
applicants should attempt to define the magnitude, duration and
probability of the occurrence of particular impacts.
A Full PIA must contain:
   Delineation of the Local Community Area;
   Social profile of the Local Community Area;
   Assessment of community risk;
   The likely health and social impacts (positive and negative impacts).
   Consultation with residents and businesses within 200 metres of the
   site;
   Consultation via a survey with residents in the Local Community
   Area;
   Consultation with key advisers.
The PIA is somewhat similar to the Social Impact Assessment (SIA)
required under the proposed NSW liquor laws.
Under the Queensland liquor legislation there are currently 17
categories of licences:
   General – for Victuallers, Taverns, Hotels, Spirit Merchant Retail
   Club - Registered Clubs, Workers Clubs, Ex –Serviceman’s Clubs
   On Premises (Meals) - Restaurants
   On Premises (Tourist) - Tourist Parks, Amusement Parks
   On Premises (Cabaret) - Nightclubs
   On Premises (Presentations) – Theatres, Cultural Centres,
   Cinemas
   On Premises (Function) - Function Rooms, Halls, Reception
   Lounges
   On Premises (Transport) – Vessels, Trains
   On Premises (Training or Educational) – TAFEs, Hospitality
   Training Colleges
   On Premises (Railway Refreshment Rooms) - Category soon to be
   deleted
   On Premises (Other Activity) - Indoor Sporting Centres, Airports
   Residential - Guest Houses, Resorts, Motels
   Special Facility - Public Golf Courses, Casinos, Cultural Centres
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       Limited – Caterers, Canteens, Florist Shops
       Wine Producer – Wineries, Vineyards
       Wine Merchant – Blenders, Wine Contractors
       Producer / Wholesaler – Breweries, Spirit Merchants, Wholesalers

   The Queensland Government is conducting a comprehensive review of
   the Liquor Act 1992 (the Liquor Act) to:
   •   ensure the Liquor Act reflects recent community attitudes including
       concerns of alcohol abuse and binge drinking; and
   •   consider how the nature of venues that serve alcohol has changed,
       recent changes in serving practices and the rapid growth of the
       tourism and hospitality industry.
   A Discussion Paper was released on 10 April 2006 seeking public
   comment on a range of issues to consider whether the current liquor
   laws need enhancing. Feedback on this Discussion Paper closed on
   Friday 2 June 2006.
• Western Australia
− Liquor Licensing Act 1988
   In 2003 the Western Australian Government commissioned a review of
   the Liquor Licensing Act 1988. After extensive consultation process,
   the Review report, incorporating 100 recommendations, was presented
   to Government in May 2005. The Review Report was released for
   public comment in July 2005 and attracted in excess of 2000
   submissions.     The Government has been engaged in on-going
   consultations with industry and community groups since August 2005.
   The key features of the proposed changes are:
       Replace the current anti-competitive “needs” based test for new
       licenses with a fairer public interest test;
       More flexibility for restaurants to serve drinks without a meal.
       A new “Small Bar” licence to encourage a more vibrant café-style
       drinking culture;
       Sunday trading for metropolitan liquor stores, in line with hotel bottle
       shops;
       Stronger harm minimisation and policing measures to promote
       responsible drinking and reduce anti-social behaviour; and
       A new Liquor Commission to replace the Liquor Licensing Court,
       providing a less legalistic and less costly licensing process.
   The proposals reflect a similar approach to liquor licensing as adopted
   by the Victorian Government. The WA Government intends introducing
   the package of amendments into the Parliament during the Spring
   session with the intention of the reforms taking effect in 2007.
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• South Australia
− Liquor Licensing Act 1997
    The object of this Act is to regulate and control the sale, supply and
   consumption of liquor for the benefit of the community as a whole and,
   in particular—
   (a) to encourage responsible attitudes towards the promotion, sale,
       supply, consumption and use of liquor, to develop and implement
       principles directed towards that end (the responsible service and
       consumption principles) and minimise the harm associated with
       the consumption of liquor; and
   (b) to further the interests of the liquor industry and industries with
       which it is closely associated—such as the live music industry,
       tourism and the hospitality industry—within the context of
       appropriate regulation and controls; and
   (c) to ensure that the liquor industry develops in a way that is
       consistent with the needs and aspirations of the community; and
   (d) to ensure as far as practicable that the sale and supply of liquor
       contributes to, and does not detract from, the amenity of
       community life; and
   (e) to encourage a competitive market for the supply of liquor.

   Licences are of the following classes:
       hotel licence;
       residential licence;
       restaurant licence;
       entertainment venue licence;
       club licence;
       retail liquor merchant's licence;
       wholesale liquor merchant's licence;
       producer's licence;
       direct sales licence;
       special circumstances licence;
       limited licence.

   The licensing authority comprises the Licensing Court of South
   Australia, presided over by the Licensing Court Judge and the Liquor
   and Gambling Commissioner. Responsibilities of the Liquor and
   Gambling Commissioner include:
       all non-contested matters except those that are under some other
       provision of the Act, to be determined by the Court;
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       all contested applications for a limited licence;
       administration of the Liquor Licensing Act;
       conciliation of complaints and review of barring orders;
       inspections of licensed premises.
• Tasmania
− Liquor Licensing Act 1990

   The Licensing Board is a separate body of 3 people appointed by the
   Governor of Tasmania on advice of the Minister responsible for liquor
   and gaming. The Board is separate and independent from the
   Commissioner for Licensing who administers the Liquor Licensing Act
   1990.

   The Board is responsible for considering applications for liquor
   licences, hearing appeals against decisions made by the
   Commissioner, issuing liquor restriction orders and hearing applications
   by the Commissioner for cancellation or suspension of licence.

   The Board makes statements of interpretation of policy and law in
   written decisions made regarding licence applications, appeals etc.

   In hearing applications the Board must make a decision which in the
   opinion of the Board is in the best interests of the community and may
   take into account submissions from the industry, and general public.

   The Liquor and Gaming Branch of the Department of Treasury and
   Finance provides administrative support to the Commissioner for
   Licensing and the Licensing Board of Tasmania, which are separate
   entities established under the Liquor Licensing Act 1990. Acting
   together as the State’s licensing authority, the Commissioner and the
   Board have responsibilities that include:

       authorisation of the sale and supply of liquor in licensed premises
       and in non-licensed premises under the authority of liquor permits;
       monitoring and investigation of the operation of licensed and
       permitted premises;
       conduct of the Responsible Serving of Alcohol program and
       minimisation of harm associated with the sale and consumption of
       liquor.

   There are several types of Liquor Licences. These are broken down
   into the following categories:-

       General licence;
       Club licence;
       On licence;
       On (restaurant) licence;
       Off licence; and
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       Special licence.

• Northern Territory
− Liquor Act
  The Licensing Commission is an independent statutory authority with
  extensive powers to regulate and enforce the Territory’s racing, gaming
  and licensing legislation. The Commission operates as an independent
  tribunal with responsibility for licensing and related matters covering
  liquor control, kava management, private security, escort agencies and
  gaming                                                        machines.

  Treasury’s Racing, Gaming and Licensing Division works closely with
  the Commission, bringing forward matters associated with licence
  applications, variations and breaches.
  The Northern Territory Licensing Commission was established on 14
  February 2000 and has taken over from the former Liquor Commission,
  Private Security Licensing Authority, Escort Agency Licensing Board,
  Gaming Machine Commission and Gaming Control Commission. All
  the functions previously administered by these boards are now within
  the scope of the single Licensing Commission.
  The Licensing Commission is an independent statutory authority
  created by the Northern Territory Licensing Commission Act 2000.
  The Licensing Commission is a quasi-judicial tribunal with responsibility
  for licensing and related matters pursuant to the legislation listed
  below:
  − Northern Territory Licensing Commission Act
  − Racing and Betting Act (as the Racing Commission)
  − Totalisator Licensing and Regulation Act
  − Gaming Control Act
  − Gaming Machine Act
  − Liquor Act
  − Kava Management Act
  − Private Security Licensing Act
  −     Prostitution Regulation Act
• Australian Capital Territory
− Liquor Act 1975
  The object of the Liquor Act is to promote and encourage responsibility
  in the sale and consumption of liquor through the establishment of a
  scheme of liquor licences and permits.

  The Liquor Licensing Board is established under the Liquor Act 1975.
  The Board's main functions include:

       determining contentious applications for liquor licences;
       conducting hearings into allegations of breaches of the Liquor Act;
       and
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    ensuring licensed premises, licensees and the sale of liquor in the
    ACT are of the highest standard which reflect the desires of the
    community and ACT Government.

The Licensing Standards Manual came into operation on 29 October
1999 and was prepared in accordance with the provisions of Part III of
the Liquor Act 1975. In respect of the standards contained in the
Manual, the “Primary Purpose” of a premises, or the term “primarily
used” is that determined by the Registrar and expressed on the liquor
licence or licence renewal. The “Primary Purpose” will be determined
by reference to issues including, for example, the layout of the
premises; the various sizes of the areas of the premises being used for
particular activities (i.e. meals, bar, dancing); the trading hours of the
premises; how liquor is sold (beer on tap or bottled); the range of liquor
sold; and the variety and types of food provided. Premises will be
categorised as one of the following:
     Club
     Off
     Wholesale
     General
     Restaurant
     Restaurant/Tavern
     Tavern/Bar
     Nightclub
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                                                                  Appendix 5

                 DEPARTMENT OF GAMING AND RACING
                 – EXTRACTS FROM ANNUAL REPORTS
Annual Report 2003-04
Corporate Governance
In August 2003, the Minister announced the establishment of the Club
Industry Task Force to develop a package of recommendations to expand and
clarify the accountability, compliance and management responsibilities of
registered club staff and directors.
The Task Force is a working partnership between Government, the club
industry and employee groups with the key aim to clearly identify and
articulate what the Government and the community expect of the club
industry. A particular focus is the key areas of governance, probity, financial
and community accountability, and transparency.
Following    extensive    deliberations,     the    Task Force developed
recommendations to amend the registered club laws. The new measures
were introduced in stages during the first half of 2004.
An intensive information and education campaign was carried out by the
Department that included industry workshops and a detailed legislation
bulletin covering all of the changes. Further details of the enhanced measures
are included in Appendix 13 of the 2003-04 Annual Report.
Annual report 2004-05
Registered clubs - Assistance schemes to support viability
Through the Club Industry Task Force (CITF), the Department of gaming and
Racing began developing detailed proposals for an assistance scheme and a
strategic management plan for registered clubs. The Minister formed the task
force in August 2003 and it consists of representatives of clubs, employee
groups and our department. Its arm is to establish a long-term policy
framework that will support a strong and viable club industry. The Minister
also refined and expanded the consultation framework with clubs, through the
appointment of the Special Ministerial Advisory Group ISMAG) to further
support reforms. SMAG comprises 10 highly experienced and skilled CEOs
from metropolitan, regional and rural clubs, and operated as a subcommittee
of the CITF during the year.
During the year the Department acted as the primary catalyst, along with
senior club industry executives, to develop a potential framework for industry
assistance schemes, particularly targeted at smaller clubs in rural and
regional areas. The industry would assess and operate these schemes.
To further expand and test these ideas the Department held a workshop at
Maroubra Seals Club in November 2004. At that consultation delegates
unanimously agreed to further study and develop the policy principles
regarding club industry assistance schemes.
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                                                                      Appendix 6

Improving the Food Safety Framework in NSW – an SME Perspective

Discussion Paper resulting from a NSW Food Safety Roundtable on 13 April
2005

INTRODUCTION
The NSW Government is very much aware of the importance of food safety, not
only for the well-being of consumers, but also for the well-being of our food
industry.

The food industry is, of course, a major player in the Australian and NSW
economies, and our producers and processors have long enjoyed an enviable
reputation as a source of high quality, safe food products. However our continued
commercial success is dependent on maintaining this reputation.

Globalisation is driving many changes that have the potential to impact, positively
or negatively, on our performance in the area of food safety, including:
- technological innovations in production, processing, packaging and logistics;
- competing consumer demands for convenience, indulgence, functionality and
    safety;
- the increasing speed and reach of communication through the internet; and
- the convergence of regulatory systems, both nationally and internationally.

Our food industry, including our food safety regulatory framework, needs to be
responsive to these changes.

CONTEXT FOR ROUNDTABLE
The State Government considers that the responsibility for ensuring safe food is
shared by all parts of the value chain, including business, government and
consumers.

While the Government has moved to significantly streamline the regulation of
food safety in NSW, with the establishment last year of the NSW Food Authority,
it is aware that there are ongoing issues regarding the efficiency and
effectiveness of the current arrangements, particularly among small-to-medium
enterprises (SMEs).

Accordingly, the Hon Ian Macdonald, Minister for Primary Industries and the Hon
David Campbell, Minister for Small Business, decided that it would be desirable
to hold a consultative “roundtable”, to bring together a range of industry and
government representatives to identify and address these issues.

The roundtable was organised by the NSW Food Authority and the NSW
Department of State and Regional Development, and chaired by Ms Lynn Scott,
Chairperson of the Small Business Development Corporation of NSW. It included
representation from a wide cross-section of industry sectors and value chain
segments, including:
- growers/producers;
- processing;
- packaging;
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-   equipment/machinery manufacturing;
-   transport and logistics;
-   research and development;
-   diagnostic/consultancy services;
-   education and training; and
-   Commonwealth, State and local government regulation.

The Roundtable included a number of regional as well as metropolitan
participants, and a mix of representatives from industry bodies as well as small
businesspeople, who could comment from first-hand experience.

The Roundtable took the form of a half-day workshop, facilitated by Samara
Kitchener, Director of Consumer and Corporate Services with the NSW Food
Authority. It was designed to draw out the key issues, canvass preferred
scenarios, and identify specific actions that could be taken by industry and
government to move towards an “ideal world” situation.

EXPERIENCES AND ISSUES
1) Duplication of inspections

Probably the major issue raised by industry representatives was the multiplicity of
inspections and audits that they are currently required to undergo – by the NSW
Food Authority, by Environmental Health Officers from their local councils, by
third-party auditors acting on behalf of supermarket chains, etc. Such multiple
inspections are time-consuming, costly and frustrating for the businesses
concerned.

2) Inconsistency in inspections
Almost as significant as the multiplicity of audits and inspections, from an industry
perspective, is the lack of consistency among the various auditors/inspectors.
Again, this can generate substantial costs, delays and frustration.

3) Effectiveness of inspections
There is a view among industry practitioners that, currently, inspections are more
a matter of process (“tick and flick”) than a careful scrutiny based on set, standard
criteria. Some queried whether inspectors could be expected to be proficient
across a diverse range of industry sectors, and highlighted the need for
independent accreditation of inspectors.

4) Need for simplicity and common-sense in approach to regulation
A perception among SME operators is that current regulatory arrangements are
cumbersome and demanding, in terms of the amount of information required, and
that they bear little relation to the actual level of risk. There was some comfort in
the presentation which identified the risk based approach to food regulation, with
most regulatory resources aimed at the higher risk business, and less to lower
risk operations.
5) Need for an appeals process
Industry representatives noted that there needs to be a transparent appeals
process for enterprises that are unhappy with the outcome of a food safety
inspection. This was regarded as particularly important in view of other concerns
mentioned above regarding inconsistencies in interpretation among
inspectors/auditors.
                       CABINET-IN-CONFIDENCE

6) Language and cultural barriers
Some industry representatives noted that inspectors/auditors need the
communication skills and cultural sensitivity to work effectively with small
businesspeople from a non-English speaking background (NESB). There could
be a tendency among inspectors to view NESB operators as likely to be unaware
of food safety requirements, and to overlook/undervalue their industry experience
and training, which are often substantial.

7) Outcome based standards v. need for guidance for managers/owners
While appreciating the flexibility provided by an outcomes-based approach to
food safety, SME operators highlighted that they need simple, practical guidance
in how to achieve such outcomes. While there is an enormous amount of data
available, very few operators have the time or skills to identify sources and digest
the key information. This is a particular issue for businesses which do not have
ready access to the internet.

8) Need for operator training
There is currently no mandatory, standardised training in safe food handling
practices that employees in the food processing and food service industries must
complete as a prerequisite to employment in these industries. This was regarded
as a fundamental gap that should be addressed as a priority.

9) Incentives for improved performance
It was considered that there should be scope for companies that are achieving
good food safety outcomes to receive some tangible benefits, such as reductions
in insurance premiums or easier access to finance.
10) Level playing field vis-à-vis imports
Some industry participants expressed concern that the current NSW regulatory
arrangements impose costs on local processors which may not apply to imports.
A particular problem was identified with “counterfeit” food products, whereby
branded products are copied in a low-cost overseas country and imported.
SUGGESTED ACTIONS
Much of the discussion at the Roundtable related to the current regulatory
framework, focussing on ways of easing the regulatory burden on SMEs. The
main conclusion in this respect was that the regulatory impact could be reduced
through increased simplicity, consistency and transparency in food safety
regulations, and in the way they are implemented and enforced. Besides this
focus on the regulatory burden, the group also showed considerable interest in
exploring other ideas for achieving better food safety outcomes.

Among the specific ideas suggested at the Roundtable were the following:

1) Ongoing consultation and communication between the NSW Food
   Authority and SMEs
It was generally agreed that the process of consultation between the NSW Food
Authority and SMEs should continue, by establishing a specific mechanism such
as a Small Business Consultative Committee/Working Group.
The Food Authority should also develop a communication plan for improving its
ongoing communication with SMEs. Such a plan could draw on the tools
available from other stakeholders (industry newsletters, conferences, exhibitions,
                       CABINET-IN-CONFIDENCE

etc). It should also include a regional workshop program, recognising that many
regional companies prefer to receive their information face-to-face or in hard
copy, rather than electronically.

2) Better integration of the NSW Food Authority's inspection/audit
   activities with local government and independent auditors
This is seen as the key to minimising the problems identified with duplication and
inconsistency in inspection/audit activities. The NSW Food Authority is already
moving to develop a Food Regulation Partnership to explore a mandated and
resourced role for local government in this area. It is also developing a protocol
which will allow greater use of certified, third party auditors to undertake
inspections according to Food Authority requirements, thereby further avoiding
duplication.
3) Training in Responsible Food Handling
It was agreed that the concept of mandatory, standardised food handling training
as a prerequisite for employment in the food processing and food and beverage
services sectors, should be seriously considered. The Responsible Service of
Alcohol certificate required under NSW liquor laws was cited as an example of
what is required, and an online training course already developed by the
Queensland Government was cited as a possible model.

4) Practical guidance for SMEs
It was agreed that, while regulatory arrangements should continue to be based on
outcome-based standards, SMEs need additional, practical guidance, such as
self-assessment tools and information kits (perhaps customised for different
industry sectors) to help companies introduce their own HACCP-based food
safety plans. It was noted that the Victorian Government has already developed
templates along these lines.
As an initial project, it was suggested that guidelines could be developed for the
farmers’ markets sector, in conjunction with the Australian Farmers Markets
Association.

5) Baseline research
It was suggested that research be undertaken to provide a baseline from which to
measure the effectiveness of the NSW food safety framework in reducing the
incidence and severity of food-borne disease outbreaks, and that this research be
regularly updated and communicated to industry.

6) Relating food safety to the bottom line
It was suggested that a meeting be sought with representatives of the Insurance
Council to explore the idea of discounted insurance premiums for companies
based on their food safety performance and the availability of certified, auditable
food safety plans. It was also suggested that a series of case studies be
developed and communicated to industry, to show how effective food safety
systems can lower costs and improve profitability (or conversely, how
breakdowns in such systems can impact a business).
                      CABINET-IN-CONFIDENCE

7) Promotion of best practice
Ideas for encouraging SMEs to pursue best practice in food safety included group
visits to the premises of "champion" companies to inspect HACCP in action;
development of an ongoing cluster/network of interested SMEs to share
information about effective approaches, emerging issues, available technologies,
etc (DSRD is looking to develop such a cluster in Western Sydney); and use of
mentors to address common food safety issues, such as how to handle product
recalls and how to deal with product tampering/contamination.

It may be useful to establish an awards program to recognise industries,
companies and individuals who are making a significant difference in terms of
enhanced food safety outcomes.

8) Truth in labelling for imported products
It was suggested that stronger regulatory action is required to ensure truth in
labelling for imported products.


THE WAY FORWARD
Participants in the Roundtable agreed that, as a next step, their deliberations
would be captured in this Discussion Paper for consideration and for subsequent
feedback by the participants. The discussion paper and the industry response
will be presented through the Small Business Development Corporation of NSW
to Ministers Macdonald and Campbell, and will subsequently serve as the
background for a proposal to form a Small Business Consultative
Committee/Working Group, which will be responsible for oversighting the next
stages.

				
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