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Page 18 Senate Monday, 27 February 2017 Senator ABETZ: How did this even come about then that there was this concern that the department was trying to order the stopping of the use of the name Aussies? Mr Stefanic: It is an interesting question, Senator, because Mr Calabria has at no point come back to DPS asking for an answer to that question. A draft agreement was provided to him before Christmas. He did not engage with my department in any way other than to send an offensive email to one of my staff. We had sent him a revised draft agreement on 20 February. A draft licence was provided to him along with a copy of the valuer's report, which we actually are not obliged to provide, but we have for the sake of transparency. We had advised that we would like to start negotiations on 6 March. The operative word is 'negotiations'. It was the provision of a draft agreement. It has been alleged in the media that it was 'take it or leave it'. That is not the case at all. We have not even got to the stage of representations by Aussies to us. Rather, it has played out in the media. Senator ABETZ: With the draft agreement, was there a suggested rental? Mr Stefanic: Yes. Senator ABETZ: Was the figure, as reported in the media, a 70 per cent increase? Mr Stefanic: The figures reported in the media are also not correct. Senator ABETZ: What was the increase? Mr Stefanic: The current lease arrangement is something just short of $87,000 a year, not including GST. The amount—and I stand to be corrected—advised by the independent valuer was something of the order of $150,000 a year. The reason the amount is so significant is that the proprietor of Aussies has refused to share his turnover information. In doing so, it became very hard for the valuer to make an assessment of the true, fair market value of the rent. The independent valuer had to make an estimate based on a complex formula to establish a licence fee value. He had to make an estimate of the turnover that Aussies achieves in a year. Senator ABETZ: So the worse he runs the show, the less the parliament—or the taxpayer—would get. The better he runs the show, the more you want to fleece him. Is that the idea? If his figures were very bad and he were running at a loss, would you be paying him to be there? Mr Stefanic: No. If the estimate of the valuer is incorrect—and it is open to Mr Calabria to challenge the assumptions and the valuation, based on whatever his turnover value is—that proposed licence fee would be adjusted accordingly. Senator ABETZ: Since when has the proprietor of Aussies been required to disclose the turnover? Mr Stefanic: Under the current licence he is not required to disclose it. Under the previous licence, held by his father, there was a turnover requirement. The turnover was factored into the calculation. I will also put on record that the licence fee charged now is of the order of $10,000 less than the licence fee charged under the previous arrangement. Under that previous arrangement, turnover was used to help assess the licence fee. The point is: if Mr Calabria is prepared to be transparent with the department, we can establish a fair market value that is sustainable for his operation and also— Senator ABETZ: Why should he have to disclose things which he is not required to? Senator XENOPHON: I have a number of questions to ask Mr Stefanic on this in due course, after the break, but, further to Senator Abetz's questioning: my understanding of the licensing agreement is that you want to know how many takeaway coffees Aussies sells. Is that right? Mr Stefanic: No. Senator XENOPHON: You do not want to know that? Mr Stefanic: No. Senator XENOPHON: Are you sure about that? Ms Croke: Our requirement is to look at turnover, overall turnover. Senator XENOPHON: But you want to know how many coffees they sell—and what about a veto over their menu? Mr Stefanic: No, that is incorrect as well. Senator XENOPHON: I will ask the rest of my questions after the break. Senator ABETZ: What about key performance indicators for part-time staff? Mr Stefanic: There are key performance indicators that apply to the business itself. There are no key performance indicators that relate to any employees. That would be ridiculous. FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE
Monday, 27 February 2017 Senate Page 19 Senator ABETZ: What are the key performance indicators then? You are telling us what it does not include. Let us hear what it does include. Ms Croke: Again, they are subject to negotiation through the process. What we have given Mr Calabria at this stage is a proposal for discussion. CHAIR: I note that we are breaking at 10:30 for 15 minutes. We will return to this matter, but, when we do return, Senator McKenzie has questions, on a different matter, that she needs to ask before she leaves for another commitment. We will take this answer from Ms Croke then we will go to the break. Ms Croke: The licence that is proposed talks about performance reviews. It talks about an annual performance review and failure to meet KPIs. The President: Perhaps we can come back to you with the exact information after the break? CHAIR: Thank you. That is a good suggestion. Senator ABETZ: Since it is commercial-in-confidence, you cannot table the proposed document? Mr Stefanic: Given the circumstances— Ms Croke: I have just found the document. It talks about the key performance indicators. It is in schedule 2 of the proposed licence and it refers to 'provision of services at all times during the operating hours.' That is it. Senator ABETZ: That might include staff levels—because that is part and parcel, I would have thought. For a takeaway shop, the provision of service can only occur with staff. Ms Croke: It does not go to the level of staffing. Again, these are the sorts of— Senator ABETZ: How can you provide service in a coffee shop without staff? Clearly that has to be part of it, I would have thought. Mr Stefanic: It is not our concern how many staff the proprietor of Aussies engages. Our concern is at the level of the business itself. If Mr Calabria wants to employ one staff or 20, that is a matter for him. Senator ABETZ: The DPS is now in direct competition with Aussies in the provision of services, the provision of coffee, the provision of meals and the provision of other food and beverages in this building. That is correct, is it not? Mr Stefanic: Yes. Proceedings suspended from 10:31 to 10:45 CHAIR: We will resume. Senator Bernardi. Senator BERNARDI: Thank you, Chair. I want to go back to my questions of Mr Cooper. Ms Croke, have you been asked to review this incident and the actions of Mr Cooper? Ms Croke: I have, Senator. Senator BERNARDI: Is that investigation currently ongoing? Ms Croke: I was appointed just over a week ago. I got the paperwork last Wednesday or Thursday. I have not actually commenced yet because I was preparing for Senate estimates in a number of things, but I will be commencing at the beginning— Senator BERNARDI: Who asked you to conduct that review? Ms Croke: The secretary appointed me as the reviewer of that matter. Senator BERNARDI: Just to confirm: you have been asked to conduct a review in the handling of a matter from June last year which resided with Mr Cooper for some months? Ms Croke: I have been asked to review the previous decision made in the matter. As I said, I have not— Senator BERNARDI: Not the process attached to it? Ms Croke: No, just the previous decision and whether that was the right decision. I have been asked to review the decision. Senator BERNARDI: I want to go to process, just quickly, Mr Stefanic. Surely there has been a breach of the regular process if it takes eight months, in which one of your senior officers has it in his remit for a number of those months and nothing happens to it after others had previously had it before that? I have got the time lines and everything else. It should not be a review about the decision only. It should be a review of the process that has happened here, shouldn't it? FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE
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