Wednesday, 2 July 2014

Kings Cross Licensed Premises 1996

From Parliament House NSW 

Mr ROGAN: Mr Speaker - 

Mr SPEAKER: Order! The House will come to order. The Premier and the Deputy Leader of the Opposition will cease interjecting across the Chamber. The member for East Hills has the call.

Mr ROGAN: My question is directed to the Minister for Gaming and Racing, and Minister Assisting the Premier on Hunter Development. What action has the Government taken to clean up Kings Cross strip clubs following evidence at the police royal commission?

Mr FACE: The longstanding interest of the honourable member for East Hills in the problems caused by licensing breaches is well known. He was also chairman of the prostitution select committee, which identified many of the problems relating to licensed premises at Kings Cross. If those problems had been addressed, I might not be answering this question in the House today. I intend to inform the House of actions taken by the Government to address the crime and corrupt activity at licensed premises in Kings Cross. I also intend to disclose the results of several months of covert operations in Kings Cross by special inspectors of a task force established last year in the Department of Gaming and Racing. Frankly, the results of the operations are shocking to say the least. The other day somebody asked how bad the situation is and I said, "Think the worst and double it." The results back up the Wood royal commission revelations about crime and corruption in Kings Cross and they are serious enough to warrant immediate action. I intend reporting to the House on the new tough measures proposed by the Government to clean up premises in Kings Cross.

In September last year the Government established a covert liquor and gaming task force to examine illegal activities being conducted in licensed premises in the Kings Cross area and adjacent areas. This occurred following revelations at the Wood royal commission of criminal activities concerning such premises. The findings of the task force reinforce disclosures made at the Wood royal commission, namely, that unfit operators and criminals, in breach of licensing laws, are in control of licensed premises. Such persons have effectively taken over the businesses conducted under many liquor licenses to the exclusion of licensees, and run the businesses in a manner to encourage drug sales and prostitution. In effect, the licensee is a front man or a "clean skin".

The task force uncovered more than 300 breaches of the licensing laws. Action is being taken now to bring these matters before the Licensing Court. Charges and objections to the licensees have been laid against a number of persons including Bill Bayeh, Chook Fowler, Charles Staunton, Steve Hardas and Abe Saffron. At present a number of night clubs, as distinct from registered clubs, are facing possible formal action in 
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the Licensing Court for breaches of the Liquor Act. They include: Playbirds on-licence theatre, Porky's on-licence theatre, Love Machine on-licence theatre, Stripperama on-licence theatre, Test Tube Factory restaurant, Dancers Cabaret restaurant, Pink Pussy Cat on-licence theatre, Pink Panther on-licence theatre and Illusions at Night on-licence theatre. Let me go through some of the task force's findings. Activities detected include widespread drug dealing and prostitution as well as live sex shows and audience participation in sexual acts. All of these activities are in breach of the Liquor Act. The task force found that strip clubs licensed under the Liquor Act had bedrooms for sex with customers and drug shooting galleries on the premises and adjacent thereto. Again, these are breaches of the Act. Inspectors also collected information indicating that some restaurants are operated solely as bars.

Mr SPEAKER: Order! I call the honourable member for Murrumbidgee to order.

Mr FACE: In several restaurants there was not a single morsel of food on the site but the premises were classified as restaurants. I am advised that more than 90 per cent of the revenue of one so-called restaurant came from liquor sales. However, on the opposite end of the scale many premises received about 5 per cent of their income from liquor and 95 per cent from prostitution, gambling and drugs. You name it, and whatever it is some of the premises at Kings Cross are doing it. They have continued to operate outside the law - in the past with immunity - and outside the conditions of their licences, despite the commission and despite targeted enforcement action. Despite my officers gathering information, the clubs believe that they are immune. I am told that the most recalcitrant and recidivist of the operators have told the authorities that they have no intention whatsoever of changing the way they do business. The only effective solutions to problems such as these is to close the premises down once and for all - and in my view that will not overcome the problem because there will be a possible infiltration of such premises into the suburbs and country centres - or to ensure that the present operators are shown there is no future for them in the industry with the new measures the Government will take.

The Government's priorities for action lie in tough new legislative measures. As a result of my department's investigations and the work of the task force I can today announce a tough new enforcement package containing extensive amendments to the Liquor Act and the Registered Clubs Act. The enforcement package will ensure more responsible and lawful management of licensed premises by overcoming a number of serious deficiencies in the current legislation and enabling more effective enforcement of licensing laws. A key change will enable objections and complaints to be taken directly against a newly defined category of close associate, and allow the court to exclude a particular person from being involved as a close associate in any licensed premises. The new definition of close associate will include landlords and the other people who are entitled to receive payments from the business holding the licence. Licensed premises in identified high-risk areas such as Kings Cross will be required to have designated managers who must be approved by the court. This will allow the Director of Liquor and Gaming to investigate the backgrounds of all managers in those high-risk areas, and to object to their approval if it is considered that they are not of good repute.

A serious anomaly exists where a person with a serious criminal history can obtain, normally within 48 hours, a provisional transfer of a licence for up to three months. That has happened regularly. The law will therefore be amended to require that such applications cannot be granted unless a report from the director has been received by the court. The powers of liquor and gaming inspectors of the Department of Gaming and Racing are presently limited in comparison with members of the Police Service. That is what led to the task force and the audit undertaken by my department. The legislation will address this problem, and the Minister for Police is to be thanked for his cooperation. Accordingly, it is proposed to amend the liquor laws to allow special inspectors to issue infringement notices, to enter licensed premises at any time, and to seize records, documents and liquor in certain circumstances.

The enforcement package will also allow for the closure of premises on a short-term basis upon an order by a magistrate where there are reasonable grounds to believe that serious breaches of the law will occur, or are occurring, and that the public interest would be placed at significant risk if the premises were to remain open. Without reflecting on what is likely to happen in the inquest into the death of Anna Wood, or the problems that occur at certain premises that I have tried to remedy, the present problems demonstrate the inadequacy of the present law. The package will provide for automatic cancellation of liquor licences when a number of serious offences have been committed in a 12-month period. This cancellation will be subject to review by the Licensing Court.

The legislation will also require the Licensing Court to take into account the findings of inquiries such as the Wood royal commission. The package will also make significant changes to the focus and objectives of the Licensing Court's jurisdiction. The court will be able to impose deterrent penalties and will no longer be constrained by case law when exercising its disciplinary or protective powers. This will enable the court to send a clear message to the industry that where serious grounds of complaint are established, or where breaches of the legislation occur, they will not be tolerated and will be met with real and substantial penalties. Other amendments in the package relate to controls over conduct on licensed premises. These controls will be strengthened in relation to the use of licensed premises for the sale of illicit drugs and stolen goods.

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The investigations and the Government's tough new approach will help remove to a great degree the criminal elements from licensed premises in Kings Cross. The legislation will ensure that the criminal element does not filter off into other parts of New South Wales. The officers associated with the task force and the personnel from the Department of Gaming and Racing are to be congratulated. They have not been able to conduct their investigations without a degree of risk to their own personal safety. The investigation has vindicated me, the Premier and the Director-General of the Department of Gaming and Racing. We went ahead with this task force without a great deal of support. In fact, the task force received little support from the Police Service because it did not regard it as necessary. Despite that, we pursued the investigation and we have shown what needs to be done. The legislative package will go a long way towards ensuring that the activities of licensed premises are conducted in accordance with the relevant laws and, most importantly, in accordance with community expectations.

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