NSW Trustee and Guardian Bill 2009
I speak in debate on the NSW Trustee and Guardian Bill 2009, the objects of which are to constitute the NSW Trustee and Guardian as a statutory corporation and confer on it the functions currently exercised by the Public Trustee and the Protective Commissioner, and to repeal, re-enact and update, with some modifications, the provisions of the Public Trustee Act 1913 and the Protected Estates Act 1983.
According to the Minister’s agreement in principle speech, the NSW Trustee and Guardian Bill facilitates a merger between the Office of Protective Commissioner and the Public Trustee, enabling service improvements and operational efficiencies that will benefit the people of New South Wales.
The proposed legislation will commence on 1 July 2009. A merger implementation team, comprising the Director General of the Attorney General’s Department, the Protective Commissioner and the Public Trustee, has been working this year on the merger. It has held a number of meetings with stakeholder groups in the disability sector. It has been argued that the bill does not involve substantive amendments to the roles and responsibilities currently exercised by the Protective Commissioner or the Public Trustee; rather, it integrates the two, repeals the existing legislation and replaces it with one Act that focuses on the role of the merged entities, that is, personal trustee and financial management services.
The bill amends provisions relating to the management of estates of people incapable of managing their affairs. In particular, the bill sets out for the first time the duties of persons exercising functions with respect to protected persons and patients and requires them to observe a number of functions and principles. I will not take the time of the House by referring to them, as they are mentioned in the bill.
The bill also reverses some of the presumptions of incapacity currently contained in sections 16 to 19 of the Protected Estates Act 1983. Whereas currently a magistrate or the Mental Health Review Tribunal must make a person’s estate subject to management unless satisfied that the patient is capable of managing their affairs, this will be reversed so that such an order will be given only if the decision maker is satisfied that the person is incapable of managing the whole or part of their financial affairs. This is a significant improvement.
It is acknowledged that the amendments proposed in the bill have focused almost exclusively on amalgamating the two offices and that further reform may be required. The Legislative Council Standing Committee on Social Issues will inquire into additional matters as part of a general reference and report on whether the New South Wales legislation requires amendment to make better provision for the management of estates of people incapable of managing their affairs and the guardianship of people who have disabilities. The standing committee will report back by 1 February 2010. This also will provide a means by which any further concerns regarding the proposed merger can be adequately addressed.
Before I examine the bill in further detail I will give a brief overview of the existing organisations. This is a very complex merger. I commend the Minister and those who have worked diligently with him on it. Very few people would fully understand the overall role of the existing organisations. The Protective Commissioner is an independent public official appointed under the Protected Estates Act 1983 to protect and administer the financial affairs of people who are unable to make their own financial decisions, called protected persons, and missing persons who are identified as protected missing persons. The Office of the Protective Commissioner has approximately 12,000 clients in New South Wales.
The Office of the Protective Commissioner provides support to over 9,000 people under direct management. Over 3,000 of this group are clients who live in aged care facilities or accommodation operated or funded by the Department of Ageing, Disability, and Home Care. The Protective Commissioner does not choose clients but is appointed by a court or tribunal financial management order. The Office of the Protective Commissioner has a staff of approximately 250. Clients of the Office of the Protective Commissioner require a high level of service in respect of financial decision making due to their disability or mental illness. People with a mental illness make up approximately 44 percent of the client group of the Office of the Protective Commissioner.
The Public Trustee is appointed by the Governor for a period of up to five years under the Public Trustee Act 1913. The Public Trustee’s role is to act as an independent and impartial trustee, executor, attorney and agent for the people of New South Wales. Its five core businesses include: will making, estate administration, executor services, trust management, and power of attorney management. The Public Trustee also attends to the management of seized or confiscated assets under the Criminal Assets Recovery Act 1990 and the Confiscation of Proceeds of Crime Act 1989. It manages approximately 7,100 ongoing trusts, 5,800 deceased estates and 660 powers of attorney and holds 400,000 wills for current clients who have appointed the Public Trustee as their executor.
The services provided by the Office of the Protective Commissioner and the Public Trustee in New South Wales are provided by a single entity in other Australian jurisdictions. This merger is feasible because both the Office of the Protective Commissioner and the Public Trustee provide similar services, particularly in the areas of legal and financial management. The legislation creates the opportunity to forge a strong new organisation that builds on the existing strengths of both offices while harmonising common functions. The primary objective of the merger is to provide a better deal for people with impaired decision-making capacity, particularly in front-line service delivery.
At present the Office of the Protective Commissioner has a highly centralised and Sydney-based operation. On the other hand, the Public Trustee has an extensive branch network. This network will become available to protected clients with service centres at places such as Gosford, Newcastle, Armidale, Broken Hill, Lismore, Port Macquarie, Wollongong and Bathurst. Improved access to services will become increasingly important for retiring sea changers and tree changers as the number of people affected by disabilities such as dementia grows.
The Government will implement the key recommendations of the Independent Pricing and Regulatory Tribunal report on the review of the fees of the Office of the Protective Commissioner. I will not go through all the recommendations in detail. I am sure that other members will cover them. Recommendation 7 states:
That a total subsidy of $8.4 million be provided for the OPC in 2008/09, based on a full year subsidy level of $10.6 million.
The Government proposes that the additional funds required to meet the changes to the fee structure pending the merger of the Office of the Protective Commissioner and the Public Trustee will be met from the retained earnings of the Office of the Protective Commissioner. I have referred to this recommendation as I believe a previous speaker inaccurately commented on it. Recommendation 9 states:
That a rolling four-year funding agreement between Treasury, the Attorney General’s Department and the OPC be implemented in which $10.6 million be the annual base for the period 2008/09 to 2011/12, from 1 January 2009. The $10.6 million should be adjusted each year for:
changes in the CPI for Sydney
changes in client numbers and
an efficiency factor of 1 per cent.
The Government proposes that until 30 June 2011 the additional funds identified by the Independent Pricing and Regulatory Tribunal will be met from the merger. The Government supports recommendations 10, 11, 12 and 13 in relation to fees to be charged. The merged body will be able to provide fee relief for disadvantaged clients because it will retain the dividend and tax equivalent payments the Public Trustee would have made otherwise.
It will have access to the surplus funds in the interest suspense account of the Public Trustee and it will continue to receive funding from the Government. The fee regime of the New South Wales Trustee and Guardian will be reviewed as early as 2010 by the Independent Pricing and Regulatory Tribunal to ensure that it is both fair and equitable.
According to the New South Wales Government the merger is needed to improve the delivery of services, reduce bureaucracy, eliminate red tape, increase operational efficiency, create savings and bring New South Wales into line with other jurisdictions. I want to refer to a few aspects of the bill, firstly, the name of the new organisation. It is important that a new name that is being chosen to mark the beginning of a new statutory corporation harmonises the Public Trustee and the Office of the Protective Commissioner. The Government’s main concern is not to send a message that the merger is, in effect, a takeover of the Office of the Protective Commissioner by the Public Trustee.
The new name was agreed upon following discussions between the Director General of the Attorney General’s Department, the Public Trustee and the Protective Commissioner. The Public Guardian advises that this will not create any confusion with the Office of the Public Guardian, which will become independent under the legislation. That is something the disability sector has long desired. I have contacted them concerning their particular desires on this point. The period of transition will allow clients of both organisations time to adjust, and rebranding will be a gradual process.
It is important to understand the Public Trustee Interest Suspense Account. One of the most important things to remember about the merger is that it facilitates the implementation of the fee recommendations of the Independent Pricing and Regulatory Tribunal’s report entitled “Review of the Fees of the Office of the Protective Commissioner”. These recommendations followed from a reference to examine the fees charged by the Office of the Protective Commissioner and to recommend a clear, fair and transparent fee structure. The Government is implementing those recommendations relating to fees.
The Independent Pricing and Regulatory Tribunal recommended that the Government provide additional funding for the Office of the Protective Commissioner. The additional funds identified by the Independent Pricing and Regulatory Tribunal are being met from the merger.
The merged body will have sufficient funds for three reasons. First, the current Community Service Obligation payments for the Office of the Protective Commissioner and the Public Trustee will continue to be provided to the New South Wales Trustee and Guardian. Second, the New South Wales Trustee and Guardian will retain the dividend and tax equivalent payments the Public Trustee would have otherwise made to the Government under the Public Finance and Audit Act. Third, the New South Wales Trustee and Guardian will have access to surplus funds held in the Interest Suspense Account of the Public Trustee. Other members have commented, wrongly I believe, about this account. I would appreciate the Minister responding to my following comment that all the money currently in the Interest Suspense Account will stay with the New South Wales Trustee and Guardian—
The Hon. John Hatzistergos: Yes.
Reverend the Hon. Dr Gordon Moyes: —either as reserves, as part of the common funds, or for paying current and future costs incurred by the New South Wales Trustee and Guardian in the exercise of functions under the new Act. This is spelt out clearly in clause 15 of schedule 1 to the bill. I make the further point that no money is to be appropriated by the Government.
The Hon. John Hatzistergos: That is correct.
Reverend the Hon. Dr Gordon Moyes: The Independent Pricing and Regulatory Tribunal will be requested to conduct a mid-term review of the new fee and funding arrangements for the New South Wales Trustee and Guardian in 2010. The Government believes that such surplus funds, as well as the profit and tax equivalents that the Public Trustee would otherwise be paying to the Government, would be well spent on supporting the fee recommendations of the Independent Pricing and Regulatory Tribunal, and on supporting the overall functions of what is currently the Office of the Protective Commissioner.
I should like now to briefly refer to occupational health and safety issues. I have been approached by a number of staff members concerned about the change in some of the client base. The creation of a decentralised Office of the Protective Commissioner client services will be gradually taking advantage of opportunities arising from the new location in Bathurst and the expiration of existing leases for Public Trustee premises. All clients will continue existing service arrangements until they are advised of new arrangements.
Issues of security and occupational health and safety are being managed by senior staff from both organisations in conjunction with the Merger Implementation Committee. Analysis is being provided on the nature and frequency of incidents where staff safety has been threatened; all work areas will be professionally assessed.
Having worked for many years with people who are mentally sick or mentally disabled, or with prisoners and the like, I understand how sometimes staff can be attacked and placed in danger. The new proposal will provide a real basis for designing appropriate client service areas. Discussions will need to be held with interstate public trustees, particularly in Queensland where it has been found that decentralised services provide opportunities for better client service with clients and staff having face-to-face meetings with greater access to carers, advocates and community workers. This will need to be dealt with gradually over a period of time. I am aware that many staff are concerned about the possible physical danger with taking on new forms of clients.
Past experience has shown that clients of both organisations have occasionally presented in a threatening manner, but the staff are well trained in dealing with these clients and follow standard procedures. Public Trustee staff will be given additional disability awareness training to complement their existing knowledge and experience in assisting people with disabilities in estate planning, disability trust and power of attorney management. I should like to highlight some significant concerns raised both by People with Disability, as mentioned earlier by another member, and the Mental Health Coordinating Council. First, People with Disability has indicated the need for fundamental legislative reform. I shall not speak at length about this because this matter can be taken up after the bill has been passed and during the period of merger. However, in general the amendments aim to bring the Protected Estates Act 1983 in line with the Guardianship Act 1987. People with Disability and the Mental Health Coordinating Council remained concerned that the Government is not using the merger as an opportunity to fundamentally reform the Act so that it conforms to the Convention on the Rights of Persons with Disabilities Article 12, Equal Recognition Before the Law. However, I believe the opportunity exists for further legislation or regulation to cover these issues.
In addition, there is no recognition that the Guardianship Act 1987 also requires urgent and comprehensive review in light of the Government’s obligations under Article 12 of the convention. While the Guardianship Act 1987 may provide marginally better protections and safeguards for people with disability, it has not been reviewed against the Convention on the Rights of Persons with Disabilities, a more recent internationally agreed standard on the human rights of people with disability. The bill provides for only piecemeal reform while those two organisations call for major reform. This fact was acknowledged in Mr Barry Collier’s speech when he acknowledged ” that these amendments have focussed almost exclusively on amalgamating the two offices and that further reform may be required”.
The second concern relates to the proposed funding for service delivery to Office of the Protective Commissioner clients. People with Disability and the Mental Health Coordinating Council remain concerned that the Government has failed to respond to the Independent Pricing and Regulation Tribunal recommending a major injection of funds of $10.6 million from Treasury. This level of funding is required to pay for the current shortfall in the Office of the Protective Commissioner operating funds, and the future decrease in those funds that will result from the fee reductions. The Independent Pricing and Regulatory Tribunal report states that demand for the Office of the Protective Commissioner’s services is expected to grow into the foreseeable future. Currently, Office of the Protective Commissioner clients on low incomes receive inadequate financial management services. Few, if any, have individual financial plans and budgets specifically tailored to their lifestyle needs and aspirations. Few clients have regular direct personal contact with Office of the Protective Commissioner staff. In these circumstances it is impossible for the Office of the Protective Commissioner to really know if the person’s assets are being used for their benefit.
In addition to these concerns, the funding of the Office of the Protective Commissioner through existing commercial income streams of the Public Trustee is a measure to correct the progressive withdrawal of funds from Treasury. In 2003 Treasury provided $9 million to fund the service delivery. This funding was supposed to provide the basis for significant improvements to client services, and it was envisaged at the time that such public funding would continue. However, this funding has been withdrawn progressively since 2004-05. In the current financial year it has been reduced to $2.825 million. I have one final matter to raise. Currently the Public Guardian reports directly to the director general. Not only does this add a new layer of bureaucracy for the Public Guardian, but also it creates the possibility for the Public Guardian to be under some influence and direction by the chief executive officer, which would compromise their independence. Professor Prue Vines from the Private Law Research and Policy Group at the University of New South Wales raised her concerns regarding the independence and fiduciary obligations of the proposed new entity. She highlighted in my contact with her the character of the entity as a trustee and the potential damage to the increasingly important role of the Public Trustee in providing free wills for those who cannot afford a solicitor. Professor Vines stated:
In relation to the making of wills, I would point out that the Public Trustee has two very important roles, one of which is often overlooked. The first is the role of making wills for free for those who cannot afford a solicitor to do this. This role is extremely important, because intestacy is often not appropriate in outcome for a family and this is increasingly so in our multicultural environment and for Indigenous people.
Professor Vines also highlighted that because there is no law school in Australia that requires students to study succession law, the role of the Public Trustee has become vitally important. She stated:
Contrary to some people’s assumptions, people with less money do not necessarily require less complex wills, as their family arrangements may create huge complexity. The orderly passing of property across generations prevents many disputes and is important for the steady functioning of society and the economy. This is the reason that the legal counsel and the other lawyers in the Public Trustee office are extraordinarily important.
In conclusion, comprehensive reforms are necessary to ensure efficiency in this area. I have been given a strong assurance personally from the Attorney General and from some of his staff regarding some of the concerns that I raised with them, which have been highlighted by other key stakeholders in our meetings with them.
I understand several other stakeholders, such as the Council of Social Service New South Wales and the Law Society of New South Wales, who raised objections earlier on, do not object to this bill now, although I stand to be corrected on that because I do not have it in writing. I ask the Attorney General to widen the terms of reference for the Standing Committee on Social Issues in order to have a proper investigation of the important and critical concerns that will affect relevant stakeholders. In substance and in principle I support the NSW Trustee and Guardian Bill 2009 and I commend it to the House.