Liquor bill would 'make trusts unaccountable’

Press, 8 October 1988, Page 4

Liquor bill would 'make trusts unaccountable’

PA Wellington The Sale of Liquor bill would make licensing trusts unaccountable to their electors, the Audi-tor-General. Mr Brian Tyler, said yesterday. The bill would open up licensing trusts to competition from private enterprise but would also allow them to operate outside their present trust areas.

Trusts, which are pub-licly-owned liquor monopolies in some areas, are required to distribute profits to the communities in which they operate. Under the bill they would be able to amalgamate with each other.

Mr Tyler told the select committee studying the bill that trusts, with present controls, had a poor record of distributing profits to the community and many were financially shaky. The bill would make trusts much less accountable. An Audit Office submission to the select committee studying the bill said under the bill licensing trusts would be “masters of other people's money

for which they are virtually unaccountable and effectively beyond recall.” Mr Tyler told the committee yesterday that there would be no requirement for trusts to face their electors in annual meetings. “The total absence of opportunity for electors, who feel they have not had a fair shake, to hold the trust accountable is a serious omission, ” Mr

Tyler said. There would be less accountability for public trusts than for public companies. Shareholders who did not like what a public company was doing could sell their shares while the electors of a public trust did not have that choice.

Some of the specific Audit Office concerns included: © Trusts could become involved in whatever business they wanted without any provision for public objection. © The initial members of the trusts would be elected for six years whereas company directors had to submit themselves for re-election more frequently and could be removed by shareholders. © Trust members would be able to vote themselves unlimited remuneration. allowances and expenses.

© Trusts could appoint their own auditors, replacing the present requirement for audit by the Audit Office. This was potentially dangerous.