Department of Planning, Transport and Infrastructure, $501,908,000

Administered Items for the Department of Planning, Transport and Infrastructure, $10,022,000

Department of the Premier and Cabinet, $91,807,000

Administered Items for the Department of the Premier and Cabinet, $2,079,000

Department of Treasury and Finance, $49,379,000

Administered Items for the Department of Treasury and Finance, $1,392,192,000

Membership:

Mr Tarzia substituted for Ms Chapman.

Mr Griffiths substituted for Mr Marshall.

Mr Wingard substituted for Mr Gardner.

Minister:

Hon. J. Rau, Deputy Premier, Attorney-General, Minister for Justice Reform, Planning, Housing and Urban Development, and Industrial Relations.

Departmental Advisers:

Mr J. Hanlon, Acting Chief Executive, Department of Planning, Transport and Infrastructure.

Mr A. McKeegan, Acting Deputy Chief Executive, Department of Planning, Transport and Infrastructure.

Ms J. Tepohe, Director of Finance, Department of Planning, Transport and Infrastructure.

Mr C. Zafiropoulos, General Manager Planning, Department of Planning, Transport and Infrastructure.

Mrs G. Vasilevski, Director, Performance and Culture, Department of Planning, Transport and Infrastructure.

Mrs S. Smith, General Manager, Investment, Department of Planning, Transport and Infrastructure.

Mr R. Pitt, Chief Executive Officer, Adelaide Cemeteries Authority.

The CHAIR: I declare the proposed payments open for examination and I call on the minister to make an opening statement if he wishes and to introduce his advisers beforehand.

The Hon. J.R. RAU: On my right-hand side I have Mr John Hanlon who is the Acting Chief Executive of DPTI and on my left-hand side I have Mr Andrew McKeegan who is the acting chief executive and commissar of all things to do with planning, so they are both very important gentlemen.

I would like to put on the record that the minister assisting, minister Mullighan, was here but given that I am accountable in respect to the budget lines and with the kind indulgence of opposition members, he has now returned to sign letters to them instead of sitting here watching me. He was here, but he has been permitted to go. So I thank the opposition for letting minister Mullighan get on with his duties this afternoon. That is all I have to say.

The CHAIR: Does the member for Goyder have an opening statement?

Mr GRIFFITHS: Not an opening statement, but to go straight into questions if I may?

The CHAIR: I was supposed to read all of that but you understand that we are going to be as informal as possible. Is there any indication of questions on the government's side? So it is carte blanche for you until 4 o'clock.

Mr GRIFFITHS: I am sure the minister would recognise, given that there are only two-and-a-bit scant pages in the budget, some things will be relatively broad. I have tried to identify them back to a reference point, to assist. Minister, to start off with the Development Assessment Commission, I am rather intrigued to find out mid last week that they do not seemingly exist at this stage?

The Hon. J.R. RAU: I think as of today they do.

Mr GRIFFITHS: Gazetted today, were they?

The Hon. J.R. RAU: Yes. I am happy to explain what is going on with the DAC. There was a bit of interest, puzzlingly enough, last week about this; a couple of journalists seemed to be interested in it. As members would probably be aware, some time ago we established a committee led by Mr Brian Hayes QC to look into planning changes.

His committee is expected to provide an interim report shortly, and I am expecting, amongst other things, attention to be given the whole idea of DAC and what not in that report. I was tossing up in my own mind whether to think about making changes to the existing DAC or just let things stay in a stasis sort of situation until whatever it is that the Hayes Report recommends can be brought before the parliament.

In that context, I think what happened was that it got past the due date without our having re-appointed people, but what we have done is roll over exactly the same group for an additional nine months; I could have rolled them over for more. If they are abolished, so be it, but I just thought, so that it is clear to everybody, that the rollover of those people is intended to convey that we are leaving them there in a holding pattern pending whatever the Hayes report might recommend. It may well recommend something different; if it does, those individuals may or may not be the appropriate individuals to be considered for that.

Mr GRIFFITHS: I understand the reasoning behind that, with Mr Hayes' report to come out fairly soon, but I just seek some clarification. As I understand it, there were still the expressions of interest that closed on 12 May or thereabouts, so were no interviews undertaken for any potential candidates as replacements?

The Hon. J.R. RAU: I am advised that apparently it is a statutory requirement to put out a call, so that was why it was done. In the end, for the reasons I have just mentioned, we just decided to roll the existing personnel over for a period of time.

Mr GRIFFITHS: Just for the record, in that 16 or 17-day period, when there was no DAC membership, was anything held in abeyance? Normally, there would be a meeting in that period, or were all applications reviewed and up to date by that stage?

The Hon. J.R. RAU: I am advised that there was a change of one week, I think, between when a meeting might have occurred and when it has occurred, so I do not think there has been any material inconvenience to anybody.

Mr GRIFFITHS: Chair, I should actually reference that against Budget Paper 4, Volume 3, and page 77. I am using the description objective of land use planning. Minister, I note that several different committees report to you and, given the announcement by the Premier I think about a week ago of the intention to remove committees and boards, what is occurring with all those? I quote examples such as the Building Rules Assessment Commission, the Development Policy Advisory Committee, the Building Advisory Committee, and so on; what is occurring with them?

The Hon. J.R. RAU: First of all, the general proposition—the Premier has indicated that all boards and committees will be abolished unless it can be demonstrated they have an essential purpose that cannot be fulfilled in an alternative way. There are a number of things that come underneath that, I suppose, and I have asked all the chief executives who report to me to provide me with a list of boards and committees so that we can make our way through that in an orderly fashion. The object is to remove duplication and red tape and give a more direct line of communication between the community and the government.

In particular, in my areas there are a number of considerations. Some of the bodies in the planning area will undoubtedly be affected by whatever the Hayes committee recommends. That is a piece of work that is bubbling along in its own space, I guess, and functioning quite independently of the Premier's general announcement, but it will affect, I am sure, some governance issues within the planning area. Exactly how it will affect them, we are not sure yet because Mr Hayes' report has not been finalised.

As for others, the general way I am approaching the thing is to ask about whether there is some essential purpose that the body has and, if there is not, then there is a question about whether it can either be dispensed with altogether or whether it might be collapsed into some other suitable body that is able to discharge more than one function.

That is broadly how I am looking at it. I do not yet, I believe, have a complete list of all boards and committees in the planning area. As I said, I have asked Mr McKeegan and Mr Hanlon—well, Mr McKeegan, presently, because Mr Hanlon is not specifically busying himself with planning issues at the moment—to give me that list, and I will just work my way through it.

Mr GRIFFITHS: Can I ask a question, though, as an example. With the planning regulation changes you implemented last year and the impact upon rim council areas, and therefore, as I understand it, the establishment of the Inner Metropolitan Development Assessment Committee as a subcommittee of DAC—

The Hon. J.R. RAU: Correct.

Mr GRIFFITHS: Does that group still exist and therefore are they—

The Hon. J.R. RAU: Yes, they do.

Mr GRIFFITHS: They are on the list?

The Hon. J.R. RAU: Yes, that is my understanding. What we have is the current DAC people. I have reappointed former commissioners for nine months, as from 1 July, and they are: Mr Ted Byrt, who is the presiding member; Megan Leydon, who is the deputy presiding member; Geoff Loveday; Simone Fogarty; Andrew Ford; Carolyn Wigg; and Damien Brown. Then, the Inner Metropolitan Development Assessment Committee, which is the one to which I think you are probably referring—

Mr GRIFFITHS: Yes.

The Hon. J.R. RAU: —which is the subcommittee of that, comprises all the members of DAC I have just named and a representative from each of the six affected councils, being councillor Michael Llewellyn-Smith from Adelaide, Mr Brenton Burman from Unley, Mr Ross Bateup from Burnside, Ms Jenny Newman from Norwood Payneham and St Peters, Mr David Cooke from Prospect, and Mr Wayne Stokes from West Torrens.

Mr GRIFFITHS: I thank the minister for putting those names on the record; I know they are easily available. I ask a question about that committee, especially about a press release I think you put out earlier this week which talked about development that is occurring within the CBD, and therefore I did not know if they would be involved in that. I am sure you did not want to do anything that would actually hinder the appropriate time lines being met—

The Hon. J.R. RAU: No, absolutely not. The feedback we have had is that the development community has been very pleased with the notion of being able to deal with DAC and very pleased with the notion of being able to get design review and that sort of case management model operating. I think in future we will see outcomes that the people of the City of Adelaide will be more happy with because there has been this early attention by the planning department to working with developers very early on to make sure they have a better product by the time they put things in for assessment. I think it is working well, and we have had pretty positive feedback about it.

At the moment, I think we are really poised in this situation where, at least for the city itself—I am talking about the CBD—and the inner rim councils, we have the planning and assessment settings pretty good. Mr Hayes might ultimately say that we can make them better, but I think they are pretty good already. We are really waiting now for developers to decide, ‘Yes, I want to invest in a project.’ Some of that, in turn, devolves to questions government has no control over, for example, about demand for particular types of product, or bank lending policies, which of course affect whether they have to have a certain number of people signed up before they start and all those sorts of things.

Mr GRIFFITHS: My last question on the committee section is: given that there are eight, nine, 10 or thereabouts that report to you, do you have some sort of time line in your own mind when you would like to have it decided which ones continue or which ones change structure?

The Hon. J.R. RAU: The Premier has indicated that he has this sort of drop-dead date; I cannot remember exactly when it was, but it was October or something this year. That is why I have been asking all the people to please tell me what we have on our list because we do not have long.

Mr GRIFFITHS: The next question is on the Vibrant City initiatives. I note on page 77, under Financial Commentary, there was additional expenditure of $2.8 million.

The Hon. J.R. RAU: Yes.

Mr GRIFFITHS: My understanding is that comes from the Planning and Development Fund. Is that correct?

The Hon. J.R. RAU: Yes, it is.

Mr GRIFFITHS: Okay. Minister, are you able to give me an outline for the 2013-14 year where that $2.8 million was expended, and has it, indeed, been fully expended?

The Hon. J.R. RAU: Here is the summary of it. First of all, in Leigh Street, $290,000 was spent. There were permanent public realm upgrades, trees, infrastructure, uplighting, irrigation and so forth. One of the problems in Leigh Street was, amongst other things, planting those trees. You might recall that Leigh Street previously had planter boxes. Obviously, the desired outcome was to have a permanent tree arrangement like some of the ones already there, and I certainly have been asking the department to deal with that for some time.

Mr GRIFFITHS: They are very expensive trees though, minister.

The Hon. J.R. RAU: What was expensive was the fact that we were, firstly, upgrading the public realm, but also, as soon as you go underground anywhere, I have discovered, in the city, you hit services, and you have got to start moving services around, so that starts to change the economics of it. Nonetheless, I do not regret the trees having been done. I think, in time, they will be seen as a great asset to the street.

Incidentally, not only is that street taking off but Peel Street next door has taken off, and now they have punched that hole through there. I have not been there yet, but I read in the paper that that little area there is also now opened up, so you have got new venues in there. It has been a very successful project.

The information we have is that this area is now getting national recognition. There are 9,000 people visiting Leigh Street on a major AFL game day now. There are increases in outdoor dining. Six traders now have outdoor dining and an additional 46 tables and 174 chairs are in the open space. There has been an increase in lunchtime dining traffic, and an increase in the numbers spending time there, whether it be to stop and have lunch or coffee or whatever it might be.

There has been a 50 per cent increase in the number of cyclists, and an improvement to pedestrian movements. Of users surveyed, 90 per cent indicate that they prefer the permanent closure and 85 per cent want to see similar projects rolled out in other small streets or lanes across Adelaide.

The public reaction to what has gone on in Leigh Street has been excellent. The trader participation has been excellent. The major property owner in the area has really put his back into it and started to invest in his own properties in order to, I guess, generate a greater effect. It is all coming together very well and, as I said, Peel Street is an example of how that is rippling out.

The next one is Bank Street. An amount of $214,450 involves public lighting, pedestrian counts, traffic evaluation, design review, parklet maintenance and CCTV as well. We are now getting 21,000 people moving through Bank Street on a major AFL game day, which is extraordinary for that tiny little street. The parklets are having a positive effect on business and encouraging more people to stay in the street. There is an improved perception of safety in Bank Street.

On business growth, CIBO—which, as you would appreciate, is there—has indicated a 55 per cent increase in business, which is pretty good. Zambrero—I hope I have pronounced that correctly for the owners of Zambrero—has hosted events in the parklets and has reported a 50 per cent increase in evening sales for an event last year, so it appears that stuff is happening there.

In Peel Street, $55,000 has been spent on traffic calming, place making, consultancy and activation. We have seen the establishment of seven new small licensed venues in Peel Street, which is extraordinary. This time a year or so ago, there were tumbleweeds rolling down Peel Street; now, it is just chock-a-block full of activity. There is almost $2 million worth of investment going into that street and the CBD as a result of what is happening in Peel Street, and about 50 new jobs have been created by the activity in Peel Street.

For Riverbank events and coordination, $1,049,200 has been spent. This involves the Blue Hive concept and design and construction of that, events and activation, marketing and communications, volunteer support and management.

To date, the Blue Hive has hosted 25 events; 115 stallholders consisting of South Australian small businesses, wineries, entertainers and community groups; and approximately 18,000 visitors to events held within the space. The Blue Hive activates an area which was basically a dead area at the back of the InterContinental Hotel, an area which was an obvious blank spot in that area. Other Vibrant City funding: $512,000 Adelaide City Council District Plan; Good Evening Adelaide forum; reDISCOVER Hindley Street; Renew Adelaide grant funding; Hub Adelaide fellowship program.

With the Hub Adelaide fellowship program, nine new start-up businesses have been created out of that and, if you have not had the chance, I say to members please go down again into Peel Street, walk upstairs and have a look at the hub. It is a great little area. I can arrange for any members who want to go and be taken around where young people are paying to become members of the hub. It is a collaborative working environment and it is linked to similar collaborative working environments in other cities around Australia and around the world.

Mr GRIFFITHS: So, minister, in summarising that, I note there are a lot of projects but you have talked about Adelaide City Council and how there was $500,000 for a plan, but the rest of it is basically for infrastructure. There is no money that has been expended out of that for any of the openings or parties associated with the industries?

The Hon. J.R. RAU: I think some of it would have been. Some of the events on the Riverbank area would have been to do with that. I think reDISCOVER Hindley Street, for example, had the shape and feel of a street event. I have some more detail here. For example, the Blue Hive thing, the concept, design and construction was $424,000. Now, the events: Sunday Sessions with food and activation, $69,000. That is over what period?

Mr GRIFFITHS: Yes, how many Sundays is that?

The Hon. J.R. RAU: That is what I am asking. That is over a six-week time frame, I am told, so that sounds like six Sundays. Would that be correct? Yes. Then Noodle Nights activation—I did not realise there was so much going on there, it is fantastic! Noodle Nights, $40,000; that is every Friday night. Unveiling of light and water features, $2,000; that was the opening of the bridge—the much opened bridge. Then Footy Day activation, $3,000; that was 29 June. What was so special about that? Was Port Adelaide playing that day?

Mr GRIFFITHS: You will get the detail on that one back to me, I am sure.

The Hon. J.R. RAU: Yes. I can certainly get you more of this sort of detail, if that—

Mr GRIFFITHS: No, well, I must admit the reason I have asked the question is that in planning and development the funding comes from development costs associated predominantly with greenfield sites.

The Hon. J.R. RAU: Yes.

Mr GRIFFITHS: And I hope that the minister is conscious of the fact that it adds to cost of development, building costs, impacts upon young homeowners and all that sort of stuff. How much does the $2.8 million represent as a total fund then from the 2013-14 year?

The Hon. J.R. RAU: It is normally about 14 through there of any given year. Let's see. The way the fund works is that it is constantly being topped up and constantly being drawn down. It is usually about 14.

Mr GRIFFITHS: In taking dollars from the fund for the Vibrant City initiative, did that diminish the amount of dollars that was available for other normal projects that are funded from the Planning and Development Fund?

The Hon. J.R. RAU: I have just been shown some figures. The actual expenditure for 13-14 is $22.976, so it is more that I said—nearly $23 million.

Mr GRIFFITHS: Okay, so that is the expenditure. What was the inflow for 13-14?

The Hon. J.R. RAU: The inflow—$18,141,000.

Mr GRIFFITHS: Were there any substantial cuts that had to be taken to previously existing funding programs to create the $2.8 million for the vibrant city's agenda?

The Hon. J.R. RAU: No; the way I have worked it basically is this: I have approached it on the basis that I do not offer recurrent funding out of that fund, because otherwise all you do is wind up with these permanent claimants, and they are very hard to get rid of once you get them. The view I have taken is that you do not create a permanent, or any, expectation of continuing drawdowns on that fund.

We try to find things which we think are going to produce real impact. If there is anything that I have done in my time as minister, there used to be to some extent a policy of spending that money in penny packets, which I thought was layering it too thin. I would rather layer it a bit thicker in fewer places and get big impact out of it than spread it wafer thin across a whole bunch of places and it be lost in the mix. I think you would probably find, if you looked at the number of projects that have been picked up in recent times, that there are less of them but there is probably more being spent on them, and they are all about open space and public realm.

The division goes something like this: 50 per cent of the fund is allocated presently by local government making competitive applications, and the other 50 per cent is strategic investment, which is largely driven by recommendations to me and me considering why I think it would work. The fact is that I have made a point of saying the vibrant city agenda is something that I personally think is really important, and I have tried to focus a lot of recent investment into promoting that agenda.

Mr GRIFFITHS: Vibrant communities per se are really important no matter where they are from, and I know that local government has benefited from it in the past. In your earlier answers you referred to Brian Hayes and his team's review. You have been somewhat reluctant to do things, seemingly, before the recommendation has come out and then you consider what you wish to pursue from it. However, late last year in the development of the metropolitan area regulations that you brought into force, why did you decide to do it then, given that it is presumably all part of the review being undertaken by the Hayes team?

The Hon. J.R. RAU: Are you talking about the rim council stuff?

Mr GRIFFITHS: Yes.

The Hon. J.R. RAU: A couple of things: I have to say the Hayes committee review has been something that I think was necessary and long overdue, but it has actually presented me with this dilemma that I do not want to do things that are too radical or start tinkering around with the existing system too much, because I have asked Brian and his team to have a look at that. By the same token, I have to manage the system in an ongoing way and cannot put it into deep-freeze while Brian and his team work on it for 18 months; so there is a tension between those two points.

What I can say about those regulations that went through last year is a couple of things. First of all, with the Adelaide City Council, when we introduced that $10 million threshold and design review and case management we saw a big improvement in the quality of product and in the uptake by the development industry. We basically have taken a fair bit of stick from particular parts of the community over it going through that rezone of the rim. I was determined that we would not be frustrated, having gone through all that pain, by leaving the development assessment proposals in potentially, in some cases, hostile hands.

Mr GRIFFITHS: But even so, minister, we acknowledge the councils' CDAPs have to use the development plans which are in place and the zoning that it creates and the allowable heights as the guide for what they are meant to consider there.

The Hon. J.R. RAU: With the exception of one, all the councils were involved in the setting of those policies, so they had input at the beginning. One council was not really interested in that and they sort of hid in a cupboard and pretended 'we are not here'. Eventually, we had to drag them out and get them involved, but the rest of them were completely cooperative and they were involved in setting those policies.

The nub of the problem is this: in my personal opinion, a DAP is okay if you are dealing with a carport or a new fence—probably fine—maybe even a tennis court, unless you happen to be in the principality of Burnside, because I know of people who have taken two years to get permission to put a light on their tennis court in that part of the universe, believe it or not. You would believe that, wouldn't you?

Mr HANLON: You are the minister.

The Hon. J.R. RAU: The idea was: let us get a uniformity of application of these new zoning changes; let us have one body making all of the decisions about those things; let us not take it away from councils at very low levels, but if it is five storeys or above (I think that is what we said) then we are starting to talk about a complex building, a building in respect of which probably they do not have a lot of experience anyway, in any of those areas. They would not have a lot of buildings over five storeys in any of those councils, so why not actually make sure the building goes through design review, there is consistency in the application of the planning rules, and every person who makes an application is going to have the same body hearing it and there are not going to be these local differences?

One of the big things we have been hearing from business is that you go to two different councils and, even though the zoning is exactly the same, you will get two completely different interpretations about what that zoning means. I would encourage you to have a chat to some of the people around town who are building things all over the place. They are building a supermarket or some other establishment, which is basically the same thing rolled out here, rolled out there and rolled out somewhere else. You speak to them about some of the horror stories they have of going from one part of the city to another and having a completely different set of rules, or interpretation of the rules, apply to them. Even though the wording is exactly the same, some individual in one particular council has decided, 'Nuh-uh, it doesn't mean that; I think it means this,' and away you go.

Mr GRIFFITHS: The individual interpretation opportunity is there when it includes words such as 'should' and 'may' instead of 'must' and 'shall'. I know you need flexibility when considering development applications and to consider them on the merit and all those sorts of things—I appreciate that. I just wanted to get it on the record from you, given that you focused on recommendations that will come from Hayes and that has delayed some actions, but in this case you saw an opportunity and a need and just decided to take action for the regulations.

The Hon. J.R. RAU: Yes. To be fair, as I said, with the exception of one council, we had been working with these people for 18 months on this policy, so there was nothing out of the blue about this policy. I have said this publicly several times, and I say it again: I have serious reservations about DAPs being capable of dealing with complex matters, particularly matters which have a very high local sensitivity, in any consistent manner.

Mr GRIFFITHS: Given that, do you see regional DAPs as being part of a solution?

The Hon. J.R. RAU: They are an option, yes, as a general concept. I think that is a concept worth looking at. How exactly it would look, a bit of work would need to be done on that, and I am hoping that the Hayes report will at least turn its mind to that.

Ideally, you would want to be in a situation where, if you want to build a supermarket in a commercial zone and it is a commercial zone in Payneham or a commercial zone in O'Sullivan's Beach or a commercial zone in Gawler—or Mitcham or Burnside, that is where a real challenge comes in—then you should expect to get exactly the same treatment from the system wherever you go. Assuming the zoning is the same, the treatment should be the same—and I can tell you that is not the case.

Mr GRIFFITHS: From a planning viewpoint there is a consistency, it is just the interpretation you believe of individual officers.

The Hon. J.R. RAU: A lot of it is, yes.

Mr GRIFFITHS: And councils, yes. I had always thought that in reality very few applications should even be considered by the DAPs because most should be considered under delegated authority within the confines of the development plan.

The Hon. J.R. RAU: Yes, I think that is fair comment; a large number are. However, it is always the hot ones that wind up in the DAPs, and that is the place where it gets—

Mr GRIFFITHS: If we can move on, minister, I am interested in the 30-Year Plan for Greater Adelaide.

The Hon. J.R. RAU: Sorry, just one more point John made, and it is a very good point. If somebody like Aldi, for example, wants to come to Adelaide and build umpteen stores—I do not know how many stores, but say it is five, 10, 15, 20 or whatever it might be—for the state that represents an investment in South Australia of tens if not hundreds of millions of dollars in construction and then full-time employment for a whole bunch of people who are going to work in those shops.

As a government, we would like to be able to say, 'You are a $300 million investor in our state. We want to provide you with case management to help you negotiate your way through the system and be able to invest that money and employ people.' But then they have to go to each individual council and ask them for permission to do that on the land and, for the councils, they are just one application; they do not see the big picture, nor do they see the fact that in the adjoining council a similar proposal is being made and it is getting a completely different treatment even though the zoning is the same. There are real issues here.

Mr GRIFFITHS: Minister, I can see your point, but can I lead into Mr Jim Hallion's appointment as the Coordinator-General, which I think was the term given.

The Hon. J.R. RAU: Yes.

Mr GRIFFITHS: In the example you just gave about Aldi, is he involved in that because it is above the $3 million threshold?

The Hon. J.R. RAU: Yes, on my expectations it will be because it would certainly be above the $3 million. Quite frankly, we know that there are a number of investors with money in their pockets who want to build and invest in South Australia. I have met with them recently, as have other ministers, and one of them told me that but for the experiences they are having with local government they would have had two more substantial building projects either completed or underway right now. As it is, they are five, six, 12,15 months behind their own schedule.

They are also people who deal with these types of applications across the country, and their experience of trying to deal with it in Adelaide is not good. Part of the reason it is not good is that they have this sort of almost lucky dip situation happening about who is going to be assessing their matter. There is no consistency at all. There is nothing quite as destructive of business confidence as a lack of consistency and transparency, and that is exactly what we have at the moment in the development assessment process when it comes to complex projects and local government.

Mr GRIFFITHS: I appreciate the complexity of it all and the need for a level of consistency but, given your comment that Mr Hallion appears to be or might be involved in that in the example you quote and that it is beyond the rim councils where the regulations exist for a different body to make decisions, are you considering another impact from a planning viewpoint upon councils beyond that line?

The Hon. J.R. RAU: I think that the effect of the Coordinator-General's role is that he is able, in effect, to call in a matter; I think that is what they call it. If one of these investors comes to Mr Hallion and says, 'I want to invest this money, and I'm getting the run-around,' he is going to be able to say, 'Rightio, I'm going to hand you to a case manager,' who would most likely be Mr McKeegan or one of the people in his team. That case manager would then try to clear all the government obstacles out of the way. We will just have to see how many obstacles remain there and what is required to move them.

I do not see the announcement the Premier made about Mr Hallion being the end of this process; that is a way of jump-starting a number of projects that basically have got stuck in the works at the moment. We are looking at a more complete and fundamental change to the system, but I am not really ready for that until I have seen what Mr Hayes comes up with.

Perhaps I should put on the record here too that I am not running away from the fact that it is not just local government. There are some government agencies which could be much more responsive than they are, and that is something which Mr Hallion can do something directly about. There are some agencies which have probably delegated decision-making far too far down the pyramid, to the point where the individual who has the decision-making discretion lacks the seniority to do anything other than an absolutely risk-averse outcome, which more often than not is to do nothing.

Mr GRIFFITHS: Minister, it is interesting that further down my list I have a question about major projects and, indeed, one I am aware has been declared a major project which is in my own electorate but which has been sitting there for years. I think that you might have had discussions about that; it is at Port Wakefield.

The Hon. J.R. RAU: Wakefield Waters.

Mr GRIFFITHS: Yes. I am rather interested to hear that because, as I understand it, it was someone fairly high up the tree within a government department who was saying no.

The Hon. J.R. RAU: With Wakefield Waters?

Mr GRIFFITHS: Yes.

The Hon. J.R. RAU: We have gone from the general to the particular, but I am happy to explore that. Wakefield Waters was granted major project status some years ago, well before my time. When I became minister, I was concerned that there had been a number of major project declarations made, more than I felt was comfortable. To me, using major project applications for most things (and I will leave aside things such as ports and mines and stuff) is an indication that the planning system is not sufficiently responsive to be able to deal with it in its ordinary terms, which should be like a canary in the coalmine.

I called all these things in to have a look of them, and some of them we got rid of and said, 'This is not going to happen.' We gave the people an opportunity, 'Do you want to go on with this or do you not?' They were given a chance to say whatever they wanted to say, and some we revoked their status and some have gone on. Then we have ones like that, which are sitting there in this sort of twilight zone, where the original proposal required certain land to be made available to the developers, land which was owned by DEWNR. DEWNR did not wish to part with the land for what they say are environmental reasons. Without that land, that project as conceived was not, as I understand it, a viable project.

Mr GRIFFITHS: It is challenged when it comes to broader access issues.

The Hon. J.R. RAU: Yes. Their challenge is to get hold of the land. They already have an existing approval, which is sitting there by reason of that major project declaration process.

Mr GRIFFITHS: On the portion of the land that is freehold, I think that is already appropriately zoned for a commercial site to be established there. I do not want necessarily this forum to discuss the details of this application either, but I am interested about Mr Hallion's appointment and the potential impact of those major projects that have been stuck for some time.

The Hon. J.R. RAU: He may well be able to help them. If you are speaking to them, perhaps they might get on the phone.

Mr GRIFFITHS: Interestingly, I did provide them with Mr Hallion's details earlier this week.

The Hon. J.R. RAU: Well, there you are. Can I say this too: not everybody who has sought or obtained a major project declaration is exactly the same. Some of them are completely serious about doing something and they have money in the bank and are ready to go. Some of them are using the major project declaration they hoped to achieve as a way of pulling themselves up by their bootstraps because they are going to say, 'Well, now I have this I am going to hawk it around to financiers. Based on the fact I now have this approval, you finance me.'

Then you have others who are basically taking a lucky dip: 'I have an idea and I'm going to try and get a major project approval on this idea. Once I've got the approval, I'm then going to go around and onsell my idea, coupled with the approval to a third party.'

From the government's point of view there are varying degrees of enthusiasm for those different groups of people. The one you really want to help is the one who has the money in their pocket, they are ready to go, and they want to invest in the state and do something sensible. I have this note which says that under the major development heading there are 22 major developments currently being considered under the Development Act. We are talking of a potential value of about $10 billion, which is a lot of money in this state. That is not taking account of the potential at Olympic Dam.

Two projects were approved in 2013-14: Nyrstar and the Plympton Mixed Use Development. Four projects were declared in 2013-14: the Braemar Bulk Export Project, which in my opinion is exactly the sort of thing that this should be used for—

Mr GRIFFITHS: I believe it was the Toll family?

The Hon. J.R. RAU: Yes. There is the Kangaroo Island golf course which is a potentially significant issue in terms of tourism and what not—economy for KI. There is also the Nora Creina golf course and then there is Iron Road. And then there are four projects that are under construction at the moment: the Nyrstar prep works, the Cape Jaffa marina, the Mannum marina and the preliminary infrastructure works at Buckland Park. I have avoided any temptation to use that particular power that I have to get around bad policy. We changed the policy.

Mr GRIFFITHS: Fair enough. I move to another question regarding the 30-year plan for Greater Adelaide, which has been around for all of five years now. When are you intending to review that?

The Hon. J.R. RAU: I have to review it by the end of 2015. I have formed certain views about the need for the plan to be reviewed.

Mr GRIFFITHS: Particularly so with the change of emphasis of green field versus infill?

The Hon. J.R. RAU: Yes, there are a few things which I think should be said about this. There is a lot of bunkum talked by some people out there, usually fairly self-interested people, about the lack of fringe land for development. It is just not correct. At the moment we have a 20-year supply of green field land—20 years—which means that 18,000 lots are available for development. I defy anybody to say that means that, given the size of this city and its projected population growth, we have a shortage of green field land. That is just not right.

Mr Hanlon reminds me that when I started in this role only eight years of land was available. All this stuff about my not having rezoned enough is just rubbish. We put in the urban renewal legislation which went through here a while ago and that will enable us to declare precincts for the purposes of specific developments, which I think has enormous work to do in the years ahead.

The fundamental problem I see presently with the 30-Year Plan is not the idea that we have a 30-Year Plan—that is clearly correct—but some of the underpinning assumptions in the plan have been shown to be inaccurate or they have changed. For instance, we are now building fewer buildings than we were at the time the plan came in. Average lot sizes are smaller than they were anticipated to be at the time of the plan; therefore, our consumption of land on the fringe has been reducing by reason of less construction numerically and less size physically.

We already have exceeded the 60/40 greenfield infill ratio. The expectation in the 30-Year Plan was we would go from 30 per cent infill 70 per cent greenfield, to flip that around in 30 years. Well, here we are four and a bit years down the track and we are already at 60/40 the other way. So, that suggests to me that our ambition to go 70/30 in another 20 years is a very, very inadequate ambition.

Mr GRIFFITHS: Because indeed, minister, there is only a certain amount of capacity that exists without wiping out complete areas for infill to occur, and, with heritage protection requirements and those particular areas that want to retain their character, I am not sure how you can do that.

The Hon. J.R. RAU: I think there are a few important things there, too. Infill growth is accelerating well beyond the predictions in the plan already. That is without the rezones we have done in the inner rim or in the CBD, although the rim rezones and the CBD rezones will actually help that even further. Growth in Adelaide's middle and inner suburbs now accounts for about 60 per cent of population growth with 25 to 30 per cent of new housing stock being delivered in established suburbs through minor subdivisions, like two-for-ones.

We are going to have to have a look again, obviously, at what the expert panel has to say, but to get higher density does not mean you have to have Soviet-style 10-storey buildings up and down every street. You can achieve quite significant improvements in density by having a mixed character of dwellings: duplexes, single-storey detached dwellings, attached dwellings and so on.

In fact, if you had a look at North Adelaide, nobody would call that, I do not think, driving through there a highly dense suburb. It is certainly not in the Sydney, Brisbane, Melbourne or Kowloon category, but that is the densest part of the city of Adelaide by a long way. If we had the same density as is in North Adelaide through the existing footprint of the city, we could probably absorb another million people or something. So, it is a big deal.

What we are trying to do is we are trying to say, 'Look, there is nothing inconsistent with decent infill in the inner suburbs and protecting character areas.' Some of the trade-offs we did in those inner metro DAPs were to say—take Unley for example, in those character areas of Unley where they have got those beautiful old homes—'You can have all your historic preservation stuff in there, and not only that, we will make the minimum plot size 700 square metres,' which means nobody has got a block big enough to subdivide even if they had permission to demolish the house. What is the point? You cannot subdivide.

We are able to protect areas like that or areas like Alexandra Avenue and Toorak Gardens or most of Dulwich and all these places. You can easily protect them, finding other areas where you free up the planning regime so that there is a bit more flexibility in the density and the plot sizes and that sort of thing, and none of it has to involve skyscrapers or huge buildings or anything of that nature. One of the big challenges I think we have got is to actually persuade the people of our city that a small increase in density is actually going to deliver greater efficiencies in public transport, better access to jobs, better access to schools, hospitals—

Mr GRIFFITHS: Utilisation of the infrastructure all round that is already provided.

The Hon. J.R. RAU: —better utilisation of existing infrastructure, and also deliver a vibrant city. People need to recall that 100 years ago twice as many people were living in the City of Adelaide as live here now. We had over 44,000 people living in the City of Adelaide; we are now just creeping back up to 22,000 or 23,000, having been down as low as 11,000. If we cannot get 50,000-odd people into the space that used to have 44,000 in 1914, well, I think we are not setting ourselves much in the way of targets.

Mr GRIFFITHS: If we can go back to the original point about the 30-Year Plan—

The Hon. J.R. RAU: One more point I would add, too, because you have got me on a roll here—

Mr GRIFFITHS: I know; that’s dangerous!

The Hon. J.R. RAU: —is infrastructure costs. I just want this on the public record. Research conducted for the department indicates that infrastructure costs associated with broadacre greenfields development are substantially higher than those associated with infill—substantially higher; that is, $60,000 to $90,000 per allotment for greenfields, compared to $15,000 to $45,000 per allotment for infill. The question is: guess who pays the bill for the difference for that?

Mr GRIFFITHS: The poor old taxpayer has to put their hand in their pocket for everything, don’t they, I suppose?

The Hon. J.R. RAU: Yes.

Mr GRIFFITHS: I can see it is a mixture of onsite infrastructure associated with the development and also the infrastructure that government provides to support it—transport, schools—I understand what you are after, but still, coming back to the original question about the 30-Year Plan and how it has to be reviewed by next year, when do you intend to commence that?

The Hon. J.R. RAU: There is internal working in the department going on now, and I would like to see it rolling on well and truly by the end of this year.

Mr GRIFFITHS: Okay, but is it a broad-ranging review inviting comments from the community and development industry? Are there a series of community meetings? Is there a bit of what Brian Hayes has done by going around and actually meeting with different groups?

The Hon. J.R. RAU: We will listen to people, absolutely; but, just so it is clear, the review is not intended to say, ‘Look, should we tear the 30-Year Plan up and start again, and go back to nothing?’ What the review is intending to say is, ‘Okay, now that five years have passed, how are we tracking according to some of the underpinning assumptions in this plan? Are some of these assumptions wrong? If they are wrong, let’s change them and acknowledge they are wrong, and see what that now does to the outcome.’ It is a realignment of the plan to known trends and behaviours in the marketplace, and yes, we will be talking to be people about it.

Mr GRIFFITHS: In the couple of minutes we have left, I will indulge myself in an issue about the residential code. I am aware, in my own electorate, that the District Council of the Copper Coast wrote to Mr McKeegan, and I believe a copy of the letter was forwarded on to you also, with concerns about the conflict between ResCode provisions and what they allow to occur and planning provisions that local government has in place, particularly when you consider the impact in that area of water issues, coastal erosion and things like that. Have you had other areas contact you with a concern about the conflict?

The Hon. J.R. RAU: You enter into a level of technicality that I think escapes me, so I will ask Mr McKeegan if he can help you with that, if you do not mind.

Mr McKEEGAN: Are you referring specifically to the difference between the flood mapping issue with those council areas and the residential code?

Mr GRIFFITHS: Yes. But also, for example, the Copper Coast area has undertaken a report that highlights, I think, around $8 million worth of foreshore protection area works that were required, but then they are concerned about planning provisions that are in place which they would like to have, but the ResCode seems to override that. Is that the case, minister, where the provisions of the residential code override local planning?

The Hon. J.R. RAU: I would not have thought so, but I think we will take that one on notice and we will get back to you on that, because it is quite a particular question and I am quite—

Mr GRIFFITHS: It is, but I suppose, by association, I am wondering if there are other areas that have highlighted that.

The Hon. J.R. RAU: We will take that on notice too. I am told they have not been getting those complaints, but we will check it out for you.

The CHAIR: Are there any further questions, member for Goyder?

Mr GRIFFITHS: Well, there are lots, but our time has expired.

The CHAIR: In that case, there being no further questions I thank the Minister for Planning and his advisers, and call the Minister for Housing and Urban Development and the Minister Assisting the Minister for Housing and Urban Development to the table.

Membership:

Ms Chapman substituted for Mr Tarzia.

Ms Sanderson substituted for Mr Wingard.

Departmental Advisers:

Mr J. Oliver, Chief Executive Officer, HomeStart Finance.

Ms T. Meakins, Acting Chief Executive, Renewal SA.

Mr M. Buchan, Chief Operating Officer, Renewal SA.

Ms J. Durand, Executive Director, Marketing and Corporate Relations, Renewal SA.

Ms L. South, General Manager, Corporate Services, Renewal SA.

Mr I. Hodgen, General Manager, Industrial Project Delivery, Renewal SA.

Ms D. Just, General Manager, Urban and Portfolio Planning, Renewal SA.

Mr D. DeConno, General Manager, Asset Management, Renewal SA.

The CHAIR: Is there an opening statement or are we just going straight into questions?

The Hon. J.R. RAU: No, I am good.

The CHAIR: Deputy leader.

Ms CHAPMAN: Excellent. We will start, minister, with Budget Paper 6, page 14—the Seniors Housing Grant. This is a new initiative I think, in essence, to try to help people to move from larger homes to smaller homes. My question is: is this available to people who are purchasing into a retirement village?

The Hon. J.R. RAU: I think this might be a Treasury question, if I am not mistaken. It is to do with some sort of incentive—

Ms CHAPMAN: It is a housing grant.

The Hon. J.R. RAU: Yes, but it is not one, I believe, that is administered by me. It is a Treasury thing. I think it sits in the same bucket as stamp duties concessions and various other bits and pieces.

Ms CHAPMAN: I see; alright. So, you do not know the answer to that then.

The Hon. J.R. RAU: No.

Ms CHAPMAN: This is supposed to be helping people get into lower cost housing.

The Hon. J.R. RAU: Can you repeat the question again? I might take a swing at it, but I am not sure I—

Ms CHAPMAN: The Seniors Housing Grant that is being introduced at a cost of some $7 million in this forthcoming year is basically to get people from their larger family home, for example, to smaller homes.

The Hon. J.R. RAU: It is not one of mine. I am not sure whether it is dealt with under Ageing or under Treasury, but I can tell you what the theory is. It is an attempt to make it easier for people who want to downsize from a larger sort of family home. That is the philosophy, as I understand it, but I am not the person who runs it.

Ms CHAPMAN: Yes, I understand all that. I think I had actually said all that. My question really was: do you know whether it applies to people who are going to buy into a residential retirement village?

The Hon. J.R. RAU: No, I do not.

Ms CHAPMAN: You do not know the answer?

The Hon. J.R. RAU: No, I do not know the answer.

Ms CHAPMAN: Will you get it?

The Hon. J.R. RAU: No, because I am not the minister who does it.

Ms CHAPMAN: Right; ever helpful, I see, thank you. I will start with Renewal SA at Budget Paper 3, page 63—the Renewal SA dividend. Was the 2013-14 Renewal SA dividend affected by the Premier's decision to terminate Mr Fred Hansen’s contract? What termination payment was made to Mr Hansen as a result of the Premier's decision to terminate his contract?

The Hon. J.R. RAU: I do not believe Renewal SA was intending or proposing to pay a dividend, and I believe in that respect they were as good as their word. As for particulars about Mr Hansen, I gather there was a total gross payment to him, which included annual leave, special leave and remuneration in lieu of notice, of $384,920.

Ms CHAPMAN: How much of that was entitlements and how much was in lieu of notice?

The Hon. J.R. RAU: Annual leave, $23,159; special leave, $17,015; in lieu of notice, $344,745; and there were two uncompleted years and nine months of service, and the notice was on the basis of four months for each unexpired year of the term, a pro rata adjustment for part of a year, which having regard to the uncompleted years translated to 11.23 months.

Ms CHAPMAN: Still at page 63, the Renewal SA dividend, Premier—although you indicated that you thought they were not intending to have a dividend—if you see there at about point 3 in the schedule, the dividend for Renewal SA was budgeted for 2013-16 for $9.5 million and it had received an estimate at 2.1, so it clearly had budgeted for a dividend. The commentary on this indicates that the forecast down to the reality is attributed further down to 'the deferral of the sale of commercial property'. My question is: what property sale was deferred and is an agreement in place with a buyer, or is that property yet to go to market?

The Hon. J.R. RAU: The situation, I am advised, is this: there are a number of properties around the place which it was anticipated would be able to be sold, and it turns out that there were either no takers or there were takers at a price that was completely unacceptably low, in which case the properties were not turned over. I think it is worth mentioning that Renewal SA has a number of assets that, in the event of the economy becoming reasonably buoyant, would rebound pretty significantly and fairly quickly in terms of their value, so there is some sense in some of those properties being held.

I think you would have to say that the predictions made in those budget estimates previously were obviously based on assumptions about the market which turned out to be incorrect. I am advised that we will be able to provide you with a more detailed answer, which I can provide on notice.

Ms CHAPMAN: In respect of that, whilst the general market flat return on sale activity was the explanation last year—and I appreciate that in a general term that may be the case this year—these explanatory notes do not just talk about general flatness of the market. They talk about this distribution from the last financial year mainly due to the 'deferral of the sale of a commercial property', one particular property.

The Hon. J.R. RAU: I will get back to you on the details.

Ms CHAPMAN: What we are asking is that it be identified as to what it is and whether in fact in that instance a buyer has been determined, or is the property still yet to go to market? That is what I am seeking.

The Hon. J.R. RAU: We will get back to you.

Ms CHAPMAN: Is the sale of the land to Incitec Pivot included in the dividend projections and, if so, what land at Gillman does Renewal SA propose to sell or lease to Incitec Pivot?

The Hon. J.R. RAU: In relation to Incitec Pivot, there have been discussions with them and Renewal SA about a property at Gillman. I am not sure exactly what else I am in a position to say about that, having regard to certain commercial matters that are on foot, so I will take the question on notice and ask that whatever can be said about the matter, without offending any commercial matters, can be said.

Ms CHAPMAN: Attorney, if you are suggesting that there is some transfer to a third party and then to Incitec Pivot and there is a possibility that might overlap some other matters that are pending at the moment, it is well known and publicly known that the government's intention is to relocate Incitec Pivot so that it might advance their Port Adelaide development. It is a question of whether the purchase by Incitec Pivot of other land is in those forward estimates. At this point—

The Hon. J.R. RAU: I will check.

Ms CHAPMAN: —it does not really matter to that extent about identifying where it is as such.

The Hon. J.R. RAU: No, I understand your question.

Ms CHAPMAN: It is 2014-15 and, notwithstanding these very generous estimates that are given every year for Renewal SA, they are proposing here that there will be a $20 million dividend in this financial year—

The Hon. J.R. RAU: We will find out exactly what, if any, money is slated in the budget in respect of the sale of that land to Incitec Pivot.

Ms CHAPMAN: Thank you. Again, I note that it will be subject to your suggesting there may be some confidentiality, but I will further ask: what land has Incitec Pivot been offered at Gillman and is it the land that forms part of the East Grand Trunkway project? I refer to the announcements that you made late last year.

The Hon. J.R. RAU: I will take that on notice.

Ms CHAPMAN: Thank you. Did Renewal SA purchase the current Incitec Pivot site at Port Adelaide and, if so, what was the cost and leaseback arrangement?

The Hon. J.R. RAU: As I understand it, I am advised as follows: in October 2013, cabinet approved the acquisition and leaseback of their premises in Port Adelaide. In January this year, settlement occurred with a three plus one, plus one, plus one year lease being granted to Incitec Pivot in order to give them sufficient time to procure alternative facilities.

Ms CHAPMAN: So it has a three, plus one, plus one, plus one lease arrangement at present?

The Hon. J.R. RAU: Yes.

Ms CHAPMAN: What does Renewal SA plan to do with the Incitec Pivot site in Port Adelaide, obviously subject to the lease? I accept that they are waiting to be moved on.

The Hon. J.R. RAU: There has been a master planning process going on for some time around Port Adelaide. As the member for Bragg would be aware, one of the problems which any development down at the port has been potentially facing is the blast exclusion zone, which I think was a 500 metre zone which appeared around the perimeter of Incitec Pivot's facility in that place. Again, if there is anything more detailed than that, I will take that on notice, but the gist of it is that site being there indefinitely has the effect of basically dampening any form of development within 500 metres at least, if not more, of the Incitec Pivot factory or premises.

Ms CHAPMAN: Are there any proposals by Renewal SA to attempt to—I will put it as high as that—move Adelaide Brighton Cement?

The Hon. J.R. RAU: I do not know of any intention to do that.

Ms CHAPMAN: I will move to the HomeStart Finance dividend, which is also detailed there in table 317 on page 63. A dividend is expected from HomeStart Finance in each year across the forward estimates. Will the minister confirm whether the government is still investigating the privatisation of HomeStart and what effect privatisation would have on dividend income?

The Hon. J.R. RAU: I am intrigued at the word 'still'. I was not aware that we were investigating that. I certainly have not been investigating it.

Ms CHAPMAN: Your department has not contracted anybody?

The Hon. J.R. RAU: As far as HomeStart is concerned and as far as I am concerned, it is business as usual for HomeStart.

Ms CHAPMAN: When your government contracted someone to undertake scoping work last year regarding the future of HomeStart, did their recommendations include what was to happen with dividends to the government? In addition, did the scoping work detail any recommendations in respect of the dividends to government? If so, what were they?

The Hon. J.R. RAU: It is before my time, so I do not have any personal direct knowledge of that at all.

Ms CHAPMAN: This was done last year.

The Hon. J.R. RAU: Sure. I am advised that HomeStart themselves do not even know what was in that. It was a Treasury piece of work, so Treasury might know something about it.

Ms CHAPMAN: So you did not commission the report or see it?

The Hon. J.R. RAU: No. I was not even the minister at the relevant time.

Ms CHAPMAN: When did you assume responsibility for HomeStart?

The Hon. J.R. RAU: It was one fine day in March, I think.

Ms CHAPMAN: This year?

The Hon. J.R. RAU: Yes.

Ms CHAPMAN: What is the annual payment that HomeStart Finance pays to Treasury? More specifically, I should say what was it in the last financial year and what is budgeted to be paid this financial year?

The Hon. J.R. RAU: Perhaps you are able to answer that.

Mr OLIVER: Yes, I can. The last financial year was recorded in our annual report in terms of payments to Treasury. That would cover income tax equivalents, dividends and payments to Treasury for the guarantee fee.

Ms CHAPMAN: Yes, the guarantee fee is what I am asking for.

Mr OLIVER: I will just find it in our annual report. It is in the order of $27 million but I will get the exact number for you.

Ms CHAPMAN: If it was in last year's annual report that was 2012-13.

Mr OLIVER: Yes, 2012-13. The guarantee fee last year was $27.1 million. This year it will be similar. I do not have the number off the top of my head but it will be in the vicinity of that; it could even be a little bit more, but I can get that for you.

Ms CHAPMAN: In addition to that, the 2013-14 estimate result is that there will be another $11.3 million paid to Treasury as a dividend, according to page 63.

Mr OLIVER: The dividend that we will be paying for 2013-14, based on that year, will be in the order of $7.3 million and another $5.2 million comes in the form of tax equivalents. The dividend on page 99 of the budget papers shows that the HomeStart proposed dividend for 2013-14 in the budget was $6.9 million and that will now be $7.3 million. The income tax equivalents were shown as $4.9 million and that will now be $5.2 million.

Ms CHAPMAN: Could you just go to page 63 of Budget Paper 3.

Mr OLIVER: Yes, that is the combined total. The combined total—

Ms CHAPMAN: So the $11.3 million, if I can just be clear then, is the $6.9 million and 4 point whatever it was?

Mr OLIVER: Yes, that is right. That is actually $11.5 million. The $11.3 million was the estimated result at the time the papers were put together. We provide numbers to Treasury at least three or four times a year because we review our operating outlook. The latest figures that we provided to Treasury were post the production of these papers and the total combined income tax equivalent and dividend will be in the vicinity of $12.5 million.

Ms CHAPMAN: So $12.5 million plus $27-odd million will be paid to the government.

Mr OLIVER: Yes.

Ms CHAPMAN: Anything else from this entity?

Mr OLIVER: No. When I say no, we do pay money to SAFA. We pay an admin fee because we use SAFA and we pay there on the margins. Last year we paid $1.1 million. It will be in the order of that number again this year but that is a payment that is made to SAFA.

Ms CHAPMAN: Right. Renewal SA and Gillman, in particular I will look at Budget Paper 5, page 49. Here under the capital program, Renewal SA capital program listed here 'excludes land and other property, including development costs, held for sale in the ordinary course of business'. Previously we have had some listings of this so my question is: what is the estimated total cost of the Dry Creek Lot 201 stormwater drain diversion project which is due to start this financial year?

The Hon. J.R. RAU: I am advised that it is in the order of half a million.

Ms CHAPMAN: Will this project assist the development of land included in the option agreement with Adelaide Capital Partners?

The Hon. J.R. RAU: I am advised not; it is apparently to do with another allotment.

Ms CHAPMAN: Will the Lot 201 stormwater diversion project allow for the future extension of Hanson Road through the land that is subject to the ACP deal?

The Hon. J.R. RAU: I am advised that it would enable that, but it is not for that purpose. It is for the purpose stated, being allotment 201.

Ms CHAPMAN: I am sorry, I did not hear that.

The Hon. J.R. RAU: It is for the purpose of allotment 201, not for another purpose, although, as I said, I am advised that the outcome that you suggest is a consequence of it.

Ms CHAPMAN: When is the East Grand Trunkway project expected to be completed?

The Hon. J.R. RAU: I am advised at the end of 2016.

Ms CHAPMAN: Are there any other capital works in the Gillman area planned for the forward estimates?

The Hon. J.R. RAU: I am advised no.

Ms CHAPMAN: Before we leave that list there, where you have the investment program, which it states 'excludes land and other property, including development costs, held for sale in the ordinary course of business', do you have a list of those properties?

The Hon. J.R. RAU: I am advised that this relates to land or buildings where they are part of the commercial activity of Renewal; so they have ongoing maintenance things, such as lifts, painting, etc. attached to them. They are not properties that are being held as part of potential land sale type of investment, if that makes sense. Apparently, the distinction is this way: these are buildings that would be sold as entire units rather than things that would be chopped up as broadacre land.

Ms CHAPMAN: So, essentially, if there is a piece of property which is being cleaned up or painted up or whatever for the purposes of then being sold on, you are not including any of the costs in relation to that under these capital costs. Is that what I am understanding it to be?

The Hon. J.R. RAU: I am advised that the quantum of what is anticipated from those projects would be included.

Ms CHAPMAN: What does that mean?

The Hon. J.R. RAU: I will let Mr Buchan, who knows a lot more about these matters than I do, answer your detailed question.

Mr BUCHAN: This table relates directly to the investment properties that are held by Renewal SA across a number of different sites, predominantly at Technology Park, where there are a number of key assets that were constructed on behalf of the government, through principally the Industrial Commercial Premises Scheme for different activities at the time. These buildings, essentially, have works that are undertaken to them during their life, and the figure that is included within the estimated cost is the quantum of the likely works that we have budgeted for the next financial year associated with those buildings.

Ms CHAPMAN: We are yet to identify which sale of a particular commercial property was deferred and that has been taken on notice to obtain it. Is there any other property that you can recall during the last 12 months that was offered for sale and did not sell in the last 12 months?

Mr BUCHAN: The most significant building that was offered for sale but did not sell was the Optus building at Technology Park.

Ms CHAPMAN: Could that be the building that is referred to as the building that is responsible for the significant downturn in the dividend for 2013-14?

Mr BUCHAN: I would anticipate that would be the building. The proceeds from that sale were anticipated to be in the order of $10 million plus.

Ms CHAPMAN: If that is the building—and I appreciate that is going to be checked—have you found a buyer for it now?

Mr BUCHAN: No.

Ms CHAPMAN: Does it remain on the market?

Mr BUCHAN: No, we have withdrawn it from the market at this time.

Ms CHAPMAN: Do you intend to put it back on the market in this current financial year?

Mr BUCHAN: No, not in this next financial year.

Ms CHAPMAN: Does it have a tenant?

Mr BUCHAN: Yes, it does.

Ms CHAPMAN: And what is the length of the lease of the tenancy?

Mr BUCHAN: Five years.

Ms CHAPMAN: Has Renewal SA formed any intention at this stage as to when it would re-market for the sale of that property?

Mr BUCHAN: No, we have not. We will continue to assess the depth of the commercial premises market in terms of investors and the nature of returns and yields that have been generated. As part of that, we will continue to talk to commercial advisers to determine the best time to bring the building to the market for sale.

Ms CHAPMAN: Is it fair to say that the advice coming out of the commercial market at the moment is that it is very flat and that large companies, including the large German superannuation companies who own commercial properties here in this state, are selling commercial properties, so it is not a good time to sell, generally? Is that the same advice you are getting?

Mr BUCHAN: I would not characterise it that way. I would suggest that it is a difficult market at this point in time.

Ms CHAPMAN: In the last 12 months has Renewal SA purchased any property?

The Hon. J.R. RAU: I think we will take that on notice—probably nothing of significance, but we will take it on notice.

Ms CHAPMAN: Does Renewal SA still have the property called the Caroma site in the north-eastern suburbs?

The Hon. J.R. RAU: I believe so, yes.

Ms CHAPMAN: Does Renewal SA have any portfolios of land that are outside South Australia?

The Hon. J.R. RAU: I am advised no.

Ms CHAPMAN: Budget Paper 3 at page 95—back to the budget statement—under 'Grants, subsidies and CSOs' in Table 5.4 there is the 2013-14 budget, $20.7 million; estimated result for that year is $24.7 million; and the budget for this year is $21.1 million. The increase in grants, subsidies and CSOs paid to Renewal SA in the 2013-14 year compared to the budgeted amount is attributed—and I am taking this from the commentary—to receiving $2.8 million from the Department of State Development under an indemnity deed following the sale of a property at Felixstow. Can you confirm that the Felixstow property was the former J.P. Morgan site on OG Road and explain what the indemnity related to?

The Hon. J.R. RAU: I am advised that, yes, that is the property, and the indemnity deed is in respect of the amount by which the ultimate sale of the property comes in below a nominated or a struck figure in the first place. In other words, the opening value of the property is X; if the property sells for X minus Y, then Y is the notional loss on the sale of the property, which this indemnity enables Renewal SA to call upon the relevant agency to indemnify it for.

Ms CHAPMAN: Why did the Department of State Development, whose minister is the Premier, provide this indemnity deed for this property?

The Hon. J.R. RAU: I gather this was part of the scheme that has been referred to before, which is the industrial commercial premises scheme. Where there was perceived to be some degree of risk as to the financial performance of these particular investments, these deeds were secured in order to cover off any potential risk to Renewal's funding.

Ms CHAPMAN: What did you have to do to be able to get one of these? It seems like a pretty good deal. How do you get an indemnity deed to write off your loss or potential loss? How do I get one of those?

The Hon. J.R. RAU: I would not mind one myself, actually, but I gather you had to enter into a discussion with the Department of State Development. It might be useful to discover exactly what sort of age some of these things have because I do not know exactly when these deeds were entered into or the precise circumstances of the entry into the deed. Perhaps if we can obtain some further information for you about that, that might be useful.

Ms CHAPMAN: I will assume you will take that on notice as to what are the qualifying features to be able to get access to these indemnity deeds, particularly this one, and, if that is obtained, the circumstances upon which that was advanced according to the note in any event by the Department of State Development. Are there any other current properties owned by Renewal SA in which they have an interest which is subject to one of these indemnity deeds?

The Hon. J.R. RAU: We will take it on notice, although I am advised that nobody here is aware of one, but we will check it anyway.

Ms CHAPMAN: Of properties that were disposed of in the last two years, are any of them subject to these indemnity deeds, that have sold?

The Hon. J.R. RAU: Again, I will check.

Ms CHAPMAN: Budget Paper 3, page 95 again, the net contributions from Renewal SA, how many hectares of land has Renewal SA sold in each of the three previous years and how many hectares is it forecast to sell each year in the forward estimates?

The Hon. J.R. RAU: We will take it on notice.

Ms CHAPMAN: Is the reason that the Budget Paper 3, page 91, identifies that the oversupply of residential and commercial property the reason Renewal SA is forecasting loss in every year except 2014-15?

The Hon. J.R. RAU: I think with Renewal now it is very hard to actually say that there is any simple answer to how their performance is going from a year-to-year basis, and it would be misleading to generalise that that particular matter is the sole cause of performance either up or down. I think I mentioned before that Renewal is increasingly sensitive, as an organisation, to changes in the property market, including the commercial property market, and is increasingly quite different, historically, from its predecessors.

It is not a large holder of undeveloped greenfields fringe land, so the nature and character of the landholdings and activity have changed substantially from the old days; therefore, any performance by the organisation is a complex mix of many things, including (and probably most importantly) the general performance of the property market and, in particular, the commercial interest in land. I do not think it is fair to say that that one particular indicator is the reason for a good or a bad performance.

Ms CHAPMAN: It may be retrospectively, but that it is what it is saying here, at point 3 on page 91; that is, very specifically:

However, given the oversupply of residential and commercial land in South Australia, Renewal SA is forecasting delays in sales resulting in losses in all years other than 2014-15.

That is what Renewal SA is claiming.

The Hon. J.R. RAU: I think all that can be added to that is that it comes down to many things, but you would appreciate there is a diverse portfolio of land being held by Renewal; some of it has come in at relatively low value and may be sold for a considerable profit—hopefully, lots of it. Much of it has come in at perhaps a book value which exceeds its current market value, and so the performance from year to year may be dependent upon not only the general conditions of the market but also which particular parcel of land is being rolled over. Some of them, when rolled over, will deliver a profit by reason of the relatively low entry point; others will most certainly generate a loss if only because of a book value at which they are entered into the books of account of Renewal.

Ms CHAPMAN: But even a commercial building like Optus, with a five-year tenancy secured in it, does not appear to have been able to shift.

The Hon. J.R. RAU: No.

Ms CHAPMAN: In any event, we will see what happens. Is Renewal SA working on the disposal of any land along the O-Bahn corridor over the forward estimates?

The Hon. J.R. RAU: I am advised no.

Ms CHAPMAN: There has been a reduction in estimated sales of government employee housing assets of $26.5 million in 2013-14. How many houses did the government decide not to sell and why?

The Hon. J.R. RAU: This is Housing SA, I believe, which is—

Ms CHAPMAN: I am reading again from page 91, at the end of paragraph 4:

This is partially offset by lower estimated sales of non-financial assets due to a re-profile of Renewal SA’s commercial property sales ($21.7 million) and a reduction in estimated sales of government employee housing assets ($26.5 million).

The Hon. J.R. RAU: I will have to get back to you on that to make sure we are all clear on what it is. It is potentially a matter in DPTI; it is potentially a matter in minister Bettison's area. We will try to get to the bottom of it, and we will provide an answer.

Ms CHAPMAN: I will make a note to ask the DPTIs anyway—

The Hon. J.R. RAU: Yes.

Ms CHAPMAN: —but it is not in your area, you say?

The Hon. J.R. RAU: No—so I am told.

Ms CHAPMAN: DPTI or possibly Social Housing.

The Hon. J.R. RAU: Yes.

Ms CHAPMAN: I refer to Budget Paper 3, page 90, which is on the net operating balance. Again, we are talking table 5.1. The final line of the first paragraph under the table identifies that Renewal SA's net operating balance for 2013-14 was $9.9 million, which is a deterioration from what was forecast. What was Renewal SA's originally forecast net operating balance?

The Hon. J.R. RAU: I presume it would be whatever it wound up being plus $9.9 million. It was budgeted for $236.9 million, I think, and came in at $224.5 million.

Ms CHAPMAN: I cannot find the $9.9 million amount. I may have been referring to $9.6 million, but I will just have to identify that. I will not hold up the questions. The deterioration is attributed to delays in sales. What was the total cost to Renewal SA of land sales, and what was the total revenue for land sales in 2013-14?

The Hon. J.R. RAU: We do not have any final figures on that, so can I get back to you with that one?

Ms CHAPMAN: Take it on notice, thank you. Just for clarity on the previous one, I have found it now. In the commentary under the table 5.1, the end of that paragraph is where it specifically says:

This is partially offset by a deterioration in Renewal SA's net operating balance ($9.9 million) due to delays in sales.

The Hon. J.R. RAU: Yes.

Ms CHAPMAN: Just so that is clear, thank you. For each of the forward years, could you please identify Renewal SA's projected net operating balance before dividends and income tax equivalents, the net operating balance and the net acquisition of non-financial assets?

The Hon. J.R. RAU: We will take that on notice.

Ms CHAPMAN: Thank you. On page 100 of the same Budget Paper 3—full-time equivalents, Renewal SA's full-time equivalent employees are forecast to increase from 197.7 this year to 202.7 next year, and then come back down to 197.7 for the remainder of the forward estimates. Is this a one-off increase in 2014 15 as a result of the sale of the first 150 hectares at Gillman to Adelaide Capital Partners?

The Hon. J.R. RAU: No, I am advised not. It is to do with Port Adelaide works.

Ms CHAPMAN: Sorry, it is to do with Port Adelaide?

The Hon. J.R. RAU: The development of Port Adelaide.

Ms CHAPMAN: Port Adelaide development.

The Hon. J.R. RAU: Yes.

Ms CHAPMAN: Page 98—the public non-financial corporations sector net debt. It was a bit frightening last year, but let's have a look at it this year. The public non-financial sector net debt is forecast to increase over the forward estimates and this is 'primarily related to Renewal SA and the financing of the Riverbank Precinct Development'. What additional debt does Renewal SA expect to accrue over the forward estimates, and what projects does this relate to?

The Hon. J.R. RAU: I would have to take that on notice.

Ms CHAPMAN: Referring to the 2013-14 year, did Renewal SA complete any land acquisition during that year?

The Hon. J.R. RAU: I am advised nothing material that we are aware of, but I will take all of these on notice, member for Bragg, because I want to make sure we give a considered answer to these questions.

Ms CHAPMAN: In relation to any asset acquisition, were any land or building assets acquired by Renewal SA during the 13-14 year, not including government assets transferred to Renewal SA for sale, and does Renewal SA expect to acquire non-government assets in 2014-15?

The Hon. J.R. RAU: Again, we will take it on notice.

Ms CHAPMAN: Thank you. As to the Adelaide Railway Station, it seems that just when you are getting clear of assets you get another one. Budget Paper 4, Volume 3, page 103, relating to the Adelaide Railway Station transfer: at the top of this page, it is confirmed that the Adelaide Railway Station was transferred to Renewal SA in 2012-13 from the Department of Planning, Transport and Infrastructure. Can you confirm what land this transfer involved and whether it includes the Festival Plaza, Adelaide Festival Centre car park or the land the Casino plans to build on?

The Hon. J.R. RAU: I will take that on notice.

Ms CHAPMAN: Because this was something that was transferred from the Department of Planning, Transport and Infrastructure of which Mr Hook was seized of, I ask about the tenancies in the Adelaide Railway Station. Has Renewal SA negotiated and completed the tenancies of the current tenants in the Railway Station?

The Hon. J.R. RAU: I understand that is something that is being managed by DPTI.

Ms CHAPMAN: I see, so you own it now but DPTI are managing it. Is that what happens?

The Hon. J.R. RAU: That is what I am advised. The management of those tenants is something that is being dealt with by DPTI as an agent on behalf of Renewal SA.

Ms CHAPMAN: Okay, so they have kept responsibility for managing that. Anything else?

The Hon. J.R. RAU: It has just been suggested to me that, given the fact that they as the previous owner already had an existing relationship with the tenants, it was probably thought wise that they continue to manage those tenants as they had existing relationships with them. I understand that is the reason for them continuing to perform that work as agent of Renewal SA.

Ms CHAPMAN: Why was it transferred to you? Why did Renewal SA even take it or buy it or accept it or put up with it or whatever the deal was?

The Hon. J.R. RAU: Yes, look, again that's a good question. The more you delve into this you find that the government has all sorts of land all over the place with different names on it. We heard this earlier today about the land down there at Victoria Square. Some of it is the old courts department, some of it is DPTI. There are various benefits, real or book entry benefits, to consolidation of some of these in single landholdings. In the case of this one, the advice I have is that there is a net benefit to the state of approximately $5.1 million by the end of the forward estimates as a result of recovery of land tax. Now, of course, Renewal SA does pay land tax.

Ms CHAPMAN: Yes. So taking it from a government department to Renewal SA which is for all intents and purposes an independent corporate entity, although it is subject to direction obviously, perhaps you could give some explanation then as to why it would be transferred, apart from the fact that somebody is telling you that there is some land tax benefit in it.

The Hon. J.R. RAU: I gather it works something like this. If Renewal SA as the landlord has to pay land tax, then Renewal SA is entitled to pass on that land tax burden to tenants.

Ms CHAPMAN: Really?

The Hon. J.R. RAU: I believe so.

Ms CHAPMAN: I do not think anyone else is allowed to do that.

The Hon. J.R. RAU: I think in commercial tenancy that is alright.

Ms CHAPMAN: Yes, right. So why don't you take up all property owned by the asset? Why does Renewal SA not take all assets owned by the government?

The Hon. J.R. RAU: No doubt that has been tried at some point.

Ms CHAPMAN: The government may not own a lot anymore; it leases a lot, I know that, and DPTI takes responsibility within their division to manage all of the leases of government tenancies. I appreciate that is over in that area of management, but on the face of it there does not seem to be any logical reason why an asset of the government would be transferred to Renewal SA unless it is for the purpose of sale, which is one of its charters. To the best of your knowledge, the only thing you are informed of is that there is some land tax benefit to the value of $5 million plus over the forward estimates?

The Hon. J.R. RAU: That is my advice, yes.

Ms CHAPMAN: Did Renewal SA ask to have this property or was it asked to take it?

The Hon. J.R. RAU: If it is anything like most of their properties, I imagine they were asked to take it.

Ms CHAPMAN: Did they pay anything for it?

The Hon. J.R. RAU: No; I am advised, no.

Ms CHAPMAN: Given that Renewal SA, for better or worse, is now the owner of the Adelaide Railway Station, is it involved in the negotiations with the Casino regarding their expansion?

The Hon. J.R. RAU: I am not sure. I will check it out.

Ms CHAPMAN: Given that Renewal SA is the owner of the Adelaide Railway Station, is it continuing to be involved with the Walker Corporation proposal for the surrounding land?

The Hon. J.R. RAU: I do not know that it was ever involved in that specifically, but, again, I will find out.

Ms CHAPMAN: Just so that I am clear about this, as I understand it—and it is only from briefings that I have had—as to the development behind Parliament House for the Plaza and the car park proposal that was announced by the government, I think, in January and February this year, irrespective of all the ownerships that is under the management of Mr Hanlon, who is your acting chief executive in another role in the Department of Transport and Planning. Is that the situation?

The Hon. J.R. RAU: Yes, I believe that is the situation.

Ms CHAPMAN: And Renewal SA is not active in the involvement of any management of that project or the development?

The Hon. J.R. RAU: I understand that that is presently being managed by DPTI planning division and in particular the Office for Design and Architecture SA.

Ms CHAPMAN: Is Renewal SA still responsible for the development of the Royal Adelaide Hospital site?

The Hon. J.R. RAU: The old RAH?

Ms CHAPMAN: Yes.

The Hon. J.R. RAU: Well, yes; at this stage I think as a result of the competition that went on towards the end of last year, the matter was handed over to Renewal, and Renewal is presently undertaking some works in relation to that. Yes, they are looking at economic impact assessments, planning about who may or may not go there, some heritage studies, environmental investigations, and so on.

Ms CHAPMAN: Are they commissioning the environmental investigations?

The Hon. J.R. RAU: Yes.

Ms CHAPMAN: And that includes the soil testing?

The Hon. J.R. RAU: Yes. I understand that some work has been commissioned by Renewal in relation to soil testing. That said, I think everyone needs to be aware that, given the fact that it is still functioning site and given that some of the soil is obviously under buildings that are presently being used, there is a limit to which that testing can be undertaken and there is a limit to how comprehensive any feedback from that testing might be; but, yes, it is being undertaken.

Ms CHAPMAN: Does Renewal SA have a budget for this current financial year for continued works?

The Hon. J.R. RAU: I can tell you what has been spent. Whether the formal payment for this is in the current financial year or last year, I am not quite sure, but the presently undertaken investigations are forecast to cost approximately $34,000. I gather that that includes sampling, testing of samples and provision of a report.

The CHAIR: Are there any further questions, deputy leader?

Ms CHAPMAN: No, that concludes my questions. Thank you, Attorney, and members of your staff.

The CHAIR: There being no further questions, I declare the consideration of the proposed payments for the Department of Planning, Transport and Infrastructure adjourned until 21 July, and thank the minister and his advisers. In accordance with the agreed timetable, I advise that the committee stands suspended until 5.15.

Sitting suspended from 17:01 to 17:15.