Department of State Development, $644,298,000

Administered Items for the Department of State Development, $7,665,000

Membership:

Mr Marshall substituted for Dr McFetridge.

Ms Redmond substituted for Mr Tarzia.

Minister:

Hon. J.J. Snelling, Minister for Health, Minister for Mental Health and Substance Abuse, Minister for the Arts, Minister for Health Industries.

Departmental Advisers:

Mr R. Garrand, Chief Executive, Department of State Development.

Ms A. Reid, Executive Director, Arts and Cultural Affairs, Arts SA, Department of the Premier and Cabinet.

Ms P. Chau, Director, Finance, Department of State Development.

Mr J. Andary, Director, Arts Industry and Finance, Arts SA, Department of the Premier and Cabinet.

The CHAIR: I declare the proposed payments open for examination. I call on the minister to make an opening statement, if he wishes.

The Hon. J.J. SNELLING: The government's strong support for arts and the cultural sector remains strong, and this budget reaffirms that. There is no doubt we are the festival state, and major arts festivals are going from strength to strength. The 2015 budget continues our commitment to support their growth through continuing funding.

The Fringe Festival has again cemented its status as Adelaide's leading arts festival and one of the largest arts festivals in the southern hemisphere, delivering a huge $66.3 million injection into our state's economy. The 2014 Fringe Festival saw record-breaking ticket sales of over 447,000, which is a 10 per cent increase on last year, and estimated attendances of 1.9 million people.

Running concurrently to the Fringe, this year's eclectic Adelaide Festival program resulted in a higher than anticipated box office of more than $2.3 million across 39 ticketed events. Critically acclaimed as 'epic and adventurous', David Sefton's second Adelaide Festival fed $24 million into South Australia. Total attendances for all 50 Adelaide Festival events were the highest in four years at more than 429,000. Notably, almost a third of ticket buyers travelled to South Australia from interstate and overseas, occupying hotel rooms, eating in our restaurants and spending money in the state.

The Cabaret Festival, under the artistic direction of Kate Ceberano, has also grown to become one of Australia's best winter festivals, and I am very much looking forward to the direction that Barry Humphries takes the festival in over the next three years. We also host other festivals, including the Adelaide Guitar Festival, which is on this weekend; OzAsia, which will be in September; and, in 2015, we will host our first ATSI Festival.

Increasingly, our focus is on creative industries and not only the cultural benefits they have on society but also the economic contributions they make. 'Creative industries' describes a range of areas across the arts and entertainment sectors, including music and live entertainment, visual arts, craft and design, screen and media in arts and cultural areas as well as libraries and museums.

In 2013, the government supported the South Australian Arts Industry Council and Service Skills SA to develop the Creative Futures Report: South Australian Arts, Creative and Cultural Industries Workforce Development Project. The Innovation and Business Skills Australia environmental scan indicated that creative industries are estimated to have delivered revenues of around $1.34 billion in 2010-11. As we transition from process driven economics to creative ones, the skills that are crucial to the creative industries also become crucial drivers of the economy.

The upcoming OzAsia Festival is a prime example of the potential for creative industries to forge arts and economic relationships. The focus on the 2014 OzAsia Festival is on South Australia's sister state of Shandong. Following the festival, which runs from 3 to 20 September, a reciprocal program is proposed to take South Australian art and artists to Shandong to support people to people international exchange and training of arts administrators. This type of cultural exchange and collaboration between South Australia and Shandong provides unique opportunities to nurture future commercial and industry opportunities. With that, Madam Chair, I will complete my remarks and happy to take questions.

Mr MARSHALL: My questions will all relate to Budget Paper 4, Volume 4, and they will all basically be centred around pages 87 to 89, just to make it easy for everybody. First of all, can I ask about the relocation of the agency into the Department of State Development? Does that require any physical move?

The Hon. J.J. SNELLING: I believe the Leader of the Opposition is referring to the physical move of Arts SA, the people, from one building to another. Correct? Is that what you were referring to?

Mr MARSHALL: Correct.

The Hon. J.J. SNELLING: There has been a move. Obviously Arts SA until recently was located in Hindley Street.

Mr MARSHALL: Yes.

The Hon. J.J. SNELLING: They have moved to Wakefield House and that has generated significant budget savings. In 2014-15 Arts SA will be contributing $200,000 of rental savings towards the arts portfolio savings target, and the savings will rise to $300,000 per annum in 2015-16.

Mr MARSHALL: So you completed the lease at the previous premises?

The Hon. J.J. SNELLING: In February 2015 the lease concludes, but it has been sublet to other organisations which are using it until the lease expires.

Mr MARSHALL: Minister, you have told us about the saving of moving to Wakefield House. Were there any costs of exiting that lease or making good on the premises?

The Hon. J.J. SNELLING: No, but they have been able to sublet that lease.

Mr MARSHALL: So the amount they are paying is commensurate with what you were paying?

The Hon. J.J. SNELLING: The sublet is not completely covering the cost of the lease, so we are having to continue, but nonetheless we are still making a considerable saving even taking that into account. From February 2015 we will make the full saving because the lease we have will expire.

Mr MARSHALL: Can you outline to the committee what the continuing payment on the building is that you have vacated through to the end of February? From the time you have left it through to the time that you finish the lease and any make good payments that need to be provided then, if you can tell us what the cost of breaking that lease agreement will be?

The Hon. J.J. SNELLING: I am advised that the lease on Hindley Street is about $38,000 a month. That is being partially offset by the fact that it has been able to be sublet. With regard to the accommodation that Arts SA has currently moved into in Wakefield House, that was a lease which the Department of the Premier and Cabinet had, an existing lease which was vacant, which they have been able to move into.

Mr MARSHALL: When did you leave the previous premises then?

The Hon. J.J. SNELLING: On 2 June.

Mr MARSHALL: On 2 June, so you are basically paying the $38,000 fee from 2 June through to 15 February next year.

The Hon. J.J. SNELLING: That's right, but we are still making considerable savings—

Mr MARSHALL: I understand that.

The Hon. J.J. SNELLING: —as I said, of $200,000. The $200,000 is what we will realise. The $300,000 is the full saving that will be realised from 2015.

Mr MARSHALL: Just for clarity, is the $38,000 the gross amount that is being paid, less the sublease?

The Hon. J.J. SNELLING: Yes, that is correct.

Mr MARSHALL: So what is the sublease? What are you getting paid out of the $38,000?

The Hon. J.J. SNELLING: It is not a significant amount.

Mr MARSHALL: It is not a significant amount?

The Hon. J.J. SNELLING: No, but we are still ahead, even taking into account that we have to continue to pay the rent until February 2015.

Mr MARSHALL: Can you find out what that sublease is?

The Hon. J.J. SNELLING: I can find out, but I am advised that it is a relatively small amount compared to the $38,000. Even taking that into account, taxpayers are still ahead.

Mr MARSHALL: What was the motivation for leaving?

The Hon. J.J. SNELLING: To achieve a saving.

Mr MARSHALL: My second question is about the South Australian Film Corporation. Can the minister detail any actions the government is currently taking, or funds that are allocated, to support the South Australian Film Corporation?

The Hon. J.J. SNELLING: The actions the government is currently undertaking?

Mr MARSHALL: Well, essentially, how much have you got in your budget to support the SA Film Corporation, and are there any specific programs related to that for this current financial year?

The Hon. J.J. SNELLING: The South Australian Film Corporation had its second full year of operations at the Adelaide studios at Glenside in 2013-14 since it moved there in late 2011. Despite the constrained financial environment, there has been considerable film production activity in South Australia. The government, through Arts SA, provided the SAFC with an operating budget of $5.179 million for 2013-14. For 2013-14, the SAFC is forecasting an operating deficit of $952,640, compared with an operating deficit of $4,152,559 in 2012-13.

Deficits arise due to a timing mismatch between the receipt of funding and the spending of those funds due to the fact that income is required to be recognised the year the funding is received. Film investments recognise it as an expense only after formal contract documentation has been fully executed by all parties involved. It can take up to 18 months for producers to secure the necessary finance partners, which results in some program funding not being expensed in the year that the income is received.

Due to long time lines associated with film financing, the SAFC has built a large reserve of $6.416 million cash at bank to cover any year end operating deficits. However, excluding this timing issue, the SAFC is projecting an operating surplus of $47,360 in 2013-14, compared with an operating surplus of $18,764 in 2012-13.

Mr MARSHALL: There are lots of numbers there, minister. Just to go through that, it has basically had grants from the government in the order of $5 million for the past two years?

The Hon. J.J. SNELLING: That is per year, and about $5.179 million in 2013-14.

Mr MARSHALL: And what is it this current year?

The Hon. J.J. SNELLING: So $4.757 million.

Mr MARSHALL: So the grant money has dropped down this year?

The Hon. J.J. SNELLING: Because of savings, yes. Also, last year there was a one-off grant of $400,000, so minus the $400,000 as well. A combination of savings and the fact that the one-off grant is not there is the reason for the reduction.

Mr MARSHALL: Okay; so, two lots of five grand and one lot of 4.7 is the gist of it over the past three years, or the last two years and the current year?

The Hon. J.J. SNELLING: Yes, I think so.

Mr MARSHALL: I think you are saying that in the first year of operation it lost approximately $4.1 million, and then last year did you say $952,000?

The Hon. J.J. SNELLING: Yes; so for 2013-14, SAFC is forecasting an operating deficit of $952,000.

Mr MARSHALL: That is for this current year?

The Hon. J.J. SNELLING: That is 2013-14. And in 2012-13, there was an operating deficit of $4,152,559.

Mr MARSHALL: And the loss last year, then? That was for 2012-13.

The Hon. J.J. SNELLING: The loss last year was $952,640.

Mr MARSHALL: You said that there was cash on their balance sheet sitting at $6.416 million.

The Hon. J.J. SNELLING: Just under $6½ million.

Mr MARSHALL: Is that an optimal use of state government cash to be sitting on?

The Hon. J.J. SNELLING: It is, because of the nature of financing in the film industry. It requires them to hold considerable cash assets to enable them to do it effectively. Essentially, the reason for the deficit is entirely an issue of timing. When the SAFC makes a decision to contribute financially to a film, before that funding can be expended it requires the producers to go out and source their other funding for the project.

So, our contribution might be $600,000 and the total film might be $8 million or $9 million. We require the producers of the film to be able to come up to us and have contracts signed for the funding for the other $8 million or $9 million. That can take a considerable period of time, because we are talking about international finance, so it might well be 18 months later that the final contract is actually signed and, for budget purposes, for the money to be going out the door.

That is why these timing issues do indicate that they are operating deficits, but when you take out the effect of those timing issues, as I indicate in my answer, SAFC is projecting an operating surplus of $47,360 in 2013-14. If you remove the effect of these timing issues as a result of the contractual issues, it actually has an operating surplus of $47,360, and it had an operating surplus of $18,764 the previous financial year.

Mr MARSHALL: So it is operating in surplus?

The Hon. J.J. SNELLING: Yes, that is right. If you listened, the reason there are these operating deficits is because of timing issues. That is what I have been explaining: the reason why we have these timing issues. It can take up to 18 months (or longer) for the funds to actually be expended and to appear on the budget. That means that you end up having what appear to be operating deficits. If you remove the effect of those timing issues then what is actually happening is that the SAFC is having operating surpluses. However, it does have to have considerable cash on hand to enable it to meet all the obligations that it has made.

Mr MARSHALL: So, essentially, you have set up a fund that it can use to sort of match with other potential investors for productions?

The Hon. J.J. SNELLING: Yes, that is the way it works. Yes, it is an industry program designed to attract films to be made in South Australia. The South Australian Film Corporation, as it has historically done, provides grants to enable this to happen, and it has been going on for a long time.

Mr MARSHALL: Is it envisaged that, ultimately, that fund will be self-generating—that, as profits come back, they go back in there—or is it envisaged that the government will be making a $5 million contribution each and every year?

The Hon. J.J. SNELLING: Generally speaking, we do not actually expect to make a return on these investments; they are effectively a grant. What happens is that the South Australian Film Corporation will be the first on board—the first person to provide funding towards the project. Once that has happened, that enables the producer of the film to go out and attract additional funding to the project. I think it would be correct to characterise it as a grant rather than an investment upon which we would get a return.

Mr MARSHALL: Okay, but it sits on their balance sheet. From their annual report, we can see that it generated $344,000 worth of interest last year. That interest stays with the South Australian Film Corporation?

The Hon. J.J. SNELLING: Yes, that is right.

Mr MARSHALL: So the plan is to return to surplus this year, but that is a surplus—

The Hon. J.J. SNELLING: No, it will always depend on these timing issues. These timing issues will always throw up rogue results and make it appear as though there may be an operating deficit. However, when you take out the timing effects then in fact SAFC has operated, as I say, a $47,000 surplus for last financial year and an $18,000 surplus the financial year before.

Mr MARSHALL: I am not trying to be in any way difficult but am just trying to understand this: it is fine for them to say that they made an operating profit, but they are receiving in the vicinity of a $5 million grant from the state government each year. So, given the total cost to the taxpayer, you cannot say that it is breaking even. They might make an operating surplus of $47,000 but, from the taxpayers' perspective, that is $47,000 less $5 million from the taxpayer. That is the gist of it; I am not trying to be funny.

The Hon. J.J. SNELLING: The $5 million annual grant (or $4.7 million next year) is basically the investment that the state government makes in order to have a film industry in this state. I am advised that for every dollar that is invested in the film industry there is an $8 return to the state economy from the activity of the film industry.

Ms REDMOND: Just following on from that, minister, I have had discussions with some filmmakers, for instance, Mario Andreacchio who made a children's film effectively called The Dragon Pearl a number of years ago. That was a coproduction with the Chinese and involved no money from the Film Corporation but had significant employment benefits and so on with the making of the film here—and it premiered here. From discussions with him it appears that there is a huge market in China. I am not sure, but I would like to find out: did Scott Hicks, for instance, making The Boys Are Back, have money from the Film Corporation?

The Hon. J.J. SNELLING: Of course, there will always be films made here that have not received an investment. I am advised that Mario Andreacchio has been the recipient of grant funding, not necessarily for the particular film you referred to but other films he has been involved with. He has attracted funding from the South Australian Film Corporation. Of course, there would be films made in South Australia where SAFC has not provided funding. The decision on whether or not to provide funding to a film is made by the board of the South Australian Film Corporation.

Ms REDMOND: But it would be fair to say, therefore, that it is not absolutely correct to say that there would not be a film industry if we did not give these grants. Scott Hicks, for instance, with his loyalty to this state, would go on making films here regardless and, because of our particular outback landscape and the accessibility of certain things, it would be perfectly possible for films to be made here with all sorts of other encouragements rather than grants.

The Hon. J.J. SNELLING: Certainly it is the case that some films would continue to be made even if you did not have the South Australian Film Corporation and if you did not have the government's support. The question is: would you have it on the same scale? What we have seen is an increase. In 2012-13 South Australia's share of Australian feature film and TV production investment represented the highest share of total national production expenditure since 2005-06, at 7 per cent, compared with 2 per cent the previous year.

While a substantial proportion of postproduction digital and visual effect services work was undertaken in New South Wales, which accounted for 67 per cent of the national spend in the five years from 2008-09 to 2012-13, the balance of PDV work over this period was spread between Victoria at 20 per cent and South Australia at 9 per cent. PDV projects undertaken in South Australia include the features The Seventh Son, Gravity, The Incredible Burt Wonderstone, Prometheus and The Wolverine. Yes, it may be that there will continue to be films being made, but certainly not at the current level. I do not think that there is any doubt that the investment the government makes does mean that films are being made and brought to South Australia that otherwise would not.

Mr MARSHALL: I have a couple of quick questions here, first of all on the State Theatre Company, Budget Paper 4, Volume 4, page 88. It is listed there as a state public sector organisation in the Budget Statement. Can the minister update the committee on any progress in the company moving to a private company structure rather than a statutory authority model?

The Hon. J.J. SNELLING: The State Theatre has certainly made an approach to government saying that it wants to become a company limited by guarantee. The government is in the process of engaging consultants to examine in detail that issue and advise government on how it needs to be structured, and to advise the government on the State Theatre Company's ability to exist separate from government and, of course, what financial impacts there might for government from such a move.

Mr MARSHALL: Do you have a time frame for that?

The Hon. J.J. SNELLING: We do not expect that it is going to take a very long time once they are engaged to do that work—probably a few months. Then, of course, there will obviously have to be legislation brought to the parliament as well. Cabinet would have to make a decision based upon the advice. If we do proceed, it may well be that towards the end of the year we will be looking at having legislation in the parliament.

Mr MARSHALL: What is the cost of that review?

The Hon. J.J. SNELLING: Less than $20,000.

Mr MARSHALL: I refer to Budget Paper 4, Volume 4, page 85, Old Police Barracks. The government has just done an upgrade to the Old Police Barracks armoury facility. Who will be the tenant going forward, and are there any plans to rent this out to commercial operators?

The Hon. J.J. SNELLING: I will get a report back, but my understanding is that the South Australian Museum have responsibility for it. They have undertaken restoration and building code upgrades of the timber frame balcony joining the Old Police Barracks and the armoury buildings have recently been completed. Heritage conservation works to the armoury building and the Old Police Barracks included restoration of the roof, stone walls and timber work and repainting of the buildings.

The project was completed with a contribution of $274,000 from the Department of Planning, Transport and Infrastructure's heritage unit and a supplement of $51,249 from Art SA's capital investment program. An amount of $725,320 was spent on the project. It will continue to be put to use, which the Museum currently does. I think that they lease it out for functions and, if you want to have a party in there, you can hire it out—

Mr MARSHALL: I will look forward to that.

The Hon. J.J. SNELLING: —and now do so without a bit of stone falling on your head.

Mr MARSHALL: Sorry?

The Hon. J.J. SNELLING: And hopefully do it now without falling through the balcony or with a bit of stone falling on your head.

Mr MARSHALL: Indeed. The government has cut its funding to Co-Opera. Can the minister explain why that funding is not continuing? It is a very successful internationally touring South Australian opera company. I am wondering whether the minister can outline the reasons why—

The Hon. J.J. SNELLING: I am advised that that cut happened about three or four years ago.

Ms Redmond interjecting:

Mr MARSHALL: Sure, nevertheless—

The Hon. J.J. SNELLING: It was part of the Sustainable Budget Commission savings.

Ms REDMOND: Minister, with respect, there were a lot of things that were part of the Sustainable Budget Commission report that did not become—

The Hon. J.J. SNELLING: I can dig through the archives and find out the reasoning at the time. There was an overall funding cut to the Industry Development Program at the time, and the overall cut was $1 million. Then the panel of peers, which makes recommendations or decisions and allocation of funding, given that they had less money to deal with, made the recommendation to discontinue the funding to Co-Opera.

Mr MARSHALL: Given that a target of this year's budget is to enhance access to Arts SA funding and grants programs, is it possible that this would be something that might be reviewed, since one of your targets is to increase access?

The Hon. J.J. SNELLING: Given that we have a considerable savings task in front of us, I do not think there is going to be much opportunity to expand funding.

Mr MARSHALL: Not much hope on that one.

The Hon. J.J. SNELLING: I am sorry.

Mr MARSHALL: On the Art Gallery, can the minister detail the exact amount budgeted for phase 1 of the Art Gallery of South Australia's digital strategy and elaborate on the expected time line for all phases of this project to be completed?

The Hon. J.J. SNELLING: Can you refer us to the page?

Mr MARSHALL: It is page 85. I am happy for you to take that on notice.

The Hon. J.J. SNELLING: The Art Gallery of South Australia is commencing phase 1 of its digital strategy in 2014-15. The gallery's digital strategy aims to transform the gallery by creating new and inspirational online experiences. The strategy seeks to ignite critical change and have the gallery deliver services to audiences. It has a goal to work smarter, increase efficiency, and build capacity.

The digital strategy is a three-year project that will first invest in transforming the gallery's website and other online communication channels, such as social media, and then expand into the creation of new and cutting-edge gallery experiences. By investing in a transformative service approach, the gallery can redefine how and where visitors can experience the collection and expand its capacity to reach a wide and diverse audience. In the first phase, the project will develop a new mobile-accessible website that will host e-commerce capability and update critical software systems to enable communication across all platforms.

In February 2014, the gallery applied for funding for its digital strategy, through the Ian Potter Foundation 50^th Anniversary Commemorative Grants funding round, but was unsuccessful. The foundation has since advised that the application is to be considered separately through the arts committee fund. The art gallery is currently waiting for further advice from the foundation.

Mr MARSHALL: Can you provide the total budget for phase 1, which is completed, and what is the time frame—

The Hon. J.J. SNELLING: We will have to get that from the Art Gallery.

Mr MARSHALL: Thank you very much. On the Adelaide Festival Centre, page 87, can the minister detail the transfer of assets to the Adelaide Festival Centre Trust as part of the administration fit-out project?

The Hon. J.J. SNELLING: What are you referring to?

Mr MARSHALL: Page 87.

The Hon. J.J. SNELLING: I invite Ms Alex Reid to respond.

Ms REID: You are referring to a reference which is about a variation between the 2013-14 estimated result and the 2013-14 budget. It is a component of the $3.2 million increase in expenses over those two years. The fit-out was a project in total of $2.543 million. That $500,000 was initially profiled to the AFC, so therefore it is not showing in our 2013-14 budget. We actually did the works.

The $500,000 was effectively reprofiled to us, so you see it appear there. We did the works on their behalf, and we have then donated back those assets to that extent. It is an accounting treatment, having done the work ourselves, as you would expect us to do. It was just reprofiled to them in the first instance and then reprofiled to us in the course of the project.

Mr MARSHALL: Lots of reprofiling. But where is this new space?

Ms REID: It is underneath the bridge.

Mr MARSHALL: Basically, the total cost of creating that administration space under the bridge was $2.534 million or $3.2 million? I did not quite catch that.

The Hon. J.J. SNELLING: The investment was $2.543 million, and this is under the Playhouse where the bridge comes in, under the bridge next to the Playhouse, that area, and basically it is being used as administrative space for the Adelaide Festival Centre Trust.

Mr MARSHALL: So that is $2.543 million total, or plus the $500,000 that is mentioned in the variation?

The Hon. J.J. SNELLING: That is total; $2.543 million is the total figure.

Mr MARSHALL: The original budget was for $2 million, and it has now become $2.5 million.

The Hon. J.J. SNELLING: No, the original budget was always $2.543 million. The difference is the treatment of $500,000 of that; $500,000 of that $2.543 million originally had been counted within the AFC and therefore was not appearing in the budget, and now that has been brought back. The reality is that Arts SA undertook the full scope of the works and, that having been done, the assets transferred back to the AFC and back onto the AFC balance sheet.

Mr MARSHALL: Also on page 88, I have just a couple of quick questions about the Festival Centre. Can the minister explain what remediation works to address water infiltration are being undertaken at the Festival Centre and the total budgeted spend for this project.

The Hon. J.J. SNELLING: Concrete degradation at the Adelaide Festival Centre has been apparent for some time. Ongoing consultation with industry experts has been undertaken over the past decade to understand and mitigate the degradation process at the Adelaide Festival Centre. Recent investigations found that additional life can be given to the building if program remediation works are undertaken over the next one to three years.

The 2013-14 state budget included a $3½ million funding commitment to undertake the highest priority works to address water infiltration at the Adelaide Festival Centre. Specialist consultants were engaged to investigate and scope the installation of a new waterproofing solution to the Space Theatre Plaza and both the Festival Theatre and Dunstan Playhouse roof shells. The funding available will enable the Space Theatre Plaza waterproofing and Dunstan Playhouse roof membrane waterproofing to be undertaken at a total cost of $3.386 million.

There are insufficient funds to address the Festival Theatre shell, at an estimated cost of $3.5 million. Design and documentation have been completed and tenders have been called and evaluated. Construction works are due to commence on site in August this year.

Mr MARSHALL: Just to clarify that, money has already been spent, and that was in the order of $3.5 million previous—

The Hon. J.J. SNELLING: No, that is due to start in August.

Mr MARSHALL: What has been spent up until now on this treatment?

The Hon. J.J. SNELLING: There has been money spent as part of just the ongoing maintenance budget of Arts SA. The $3½ million—

Mr MARSHALL: Is what is going to be spent.

The Hon. J.J. SNELLING: —is new money on top of our existing maintenance budget, which is being spent on the waterproofing solution on this specific issue, and that project begins in August this year. None of that $3½ million will have been expended yet.

Mr MARSHALL: But for years now they have had areas which have been cordoned off and they send somebody up there, believe it or not, tapping things to see if things are going to fall down.

The Hon. J.J. SNELLING: That is a separate issue: that is concrete degradation. The $3½ million is to basically address the water leakage into the Playhouse and the Space Theatre.

Mr MARSHALL: This is a water issue problem of which part is being addressed, but not the Festival Theatre—

The Hon. J.J. SNELLING: No, that is right. We are not—

Mr MARSHALL: That is something for the future?

The Hon. J.J. SNELLING: Yes.

Mr MARSHALL: You think that will be an additional $3 million, unbudgeted at this point in time?

The Hon. J.J. SNELLING: The cost is expected to be approximately $3½ million.

Mr MARSHALL: You are doing the most urgent part, $3½ million in the budget—

The Hon. J.J. SNELLING: Yes, exactly.

Mr MARSHALL: —and then at some point in the future, not in the budget at the moment, there will be another $3 million required for the Festival Theatre?

The Hon. J.J. SNELLING: At some stage, it will have to be addressed and the expected cost of that is $3½ million.

Mr MARSHALL: And what about the rest of the environment—so, the concrete cancer that exists? That is the water filtration, but what about the costs associated with that concrete cancer that exists on the Festival Centre and its environ?

The Hon. J.J. SNELLING: Where the concrete degradation is worse is basically the car park, and that will be addressed as part of the government’s plans for the Festival Centre Plaza and car park.

Mr MARSHALL: There is $16.5 million budgeted, not for this financial year but for the next financial year, for the plaza, which is the top of the car park, essentially, so that will be addressed via that $16.5 million?

The Hon. J.J. SNELLING: The $16.5 million is held in contingency; so, it is held by Treasury, and it is what the anticipated expenditure is on state government works necessary for the interface between the plaza, the Festival Theatre and the car park.

Mr MARSHALL: I understand that the car park is going to be addressed separately with the Walker Corp project. The $16.5 million is for the interface between the Hyatt plaza, or whatever that is going to be called, and the Festival Centre—

The Hon. J.J. SNELLING: Yes.

Mr MARSHALL: —and we have got the water filtration project going, and another one pending, but what about the concrete cancer that exits, not in the car park, but in the environ of the Festival Centre? That is actually scaffolded off at the moment and has been for years.

The Hon. J.J. SNELLING: At the moment there is no funding allocated to address those particular issues, but obviously there is a strong connection between whatever happens to the car park, the redevelopment of the plaza, and the broader Riverbank Precinct. So, I would expect it will all be caught up as part of that. But at the moment, you are right; there is no specific funding allocated to address those concrete issues around the plaza beyond those issues that we have talked about.

Mr MARSHALL: Are you satisfied that it is safe, given that for an extended period of time you have essentially had contractors going around—I am not joking—tapping the concrete to try and break off pieces on an ongoing basis? They do this on a periodic basis. How do we know there has not been a—

The Hon. J.J. SNELLING: Well, that is the reason why we do that—to ensure that it is safe.

Mr MARSHALL: And that practice will continue indefinitely?

The Hon. J.J. SNELLING: Yes; the expert advice that has been provided to Arts SA is that it is safe, and the Festival Centre has said it is safe.

Mr MARSHALL: And who has provided that—

The Hon. J.J. SNELLING: But, of course, we have to keep doing the remediation process.

Mr MARSHALL: Who has provided that advice to Arts SA?

The Hon. J.J. SNELLING: An engineering company called Aurecon.

Mr MARSHALL: Aurecon have provided advice that it is perfectly safe for the very—

The Hon. J.J. SNELLING: Given that we continue to undertake the remediation that we are currently doing, and do the work in the time frames we anticipate.

Mr MARSHALL: Okay, thank you. Also, are there any further plans to undertake a more far-reaching upgrade of the Adelaide Festival Centre?

The Hon. J.J. SNELLING: My understanding is that the Festival Centre is actively considering further development in time.

Mr MARSHALL: I know they are, but I am wondering whether you are. I think it is well documented that they are.

The Hon. J.J. SNELLING: I am not at the moment, but I am always happy to consider proposals that are put to me, and any proposals that are developed by the Festival Centre would have to go through the normal budget process.

Mr MARSHALL: Are you involved in the negotiation with Walker Corp?

The Hon. J.J. SNELLING: No.

Mr MARSHALL: So, Arts SA and the Adelaide Festival Centre and the trust have got no interface with Walker Corp?

The Hon. J.J. SNELLING: The Festival Centre are obviously being consulted, but the negotiations with Walker Corporation are being undertaken by minister Rau within Planning.

Mr MARSHALL: Do you have any idea of the update on when those negotiations will be concluded?

The Hon. J.J. SNELLING: No, you will have to direct that to minister Rau.

Mr MARSHALL: Okay.

Ms REDMOND: I am referring, minister, to Budget Paper 4, Volume 4, page 87, and the employee benefit expenses. In fact, you mentioned, minister, a few times the implementation of saving measures which are also mentioned on that page. Can you explain why a position within Arts SA was created for a lady by the name of Nicole Burns? I say 'created' because, in fact, that position was previously performed by a graduate trainee.

The Hon. J.J. SNELLING: This pre-dates my involvement with the portfolio, but my advice is that, basically, the position was a marketing position. There was an opportunity there to fill a position permanently that had previously been done, I think, by a range of different people, including trainees, in the past. That is probably all the information I have got at the moment. I can come back to the member with additional information, if it is available.

Ms REDMOND: I have quite a few questions about this particular appointment because I have a series of emails regarding it, saying things like, 'Nicole is on two weeks' leave, as you know.' I am curious as to just what exchange of information was going on, what Nicole's previous job was and what made her ideal for the appointment.

One of the curious things in one these subsequent emails was, 'The good thing about this strategy is that, however long the transfer takes, it poses no risks.' That seems an odd basis for the appointment of someone to a job which, as I said, was previously undertaken by a graduate trainee.

The Hon. J.J. SNELLING: I am not sure I can comment much. Under the Public Sector Management Act, I am not able to comment on individual appointments. I am not privy to the emails that the member for Heysen is referring to. It is a bit hard for me to provide any additional information to what I have said.

Ms REDMOND: Could you also find out, when you are getting further information, minister, whether this position was advertised and, if not, why there was not a proper process?

The Hon. J.J. SNELLING: I am happy to find that out for the member for Heysen.

Ms REDMOND: Okay, thank you. On a couple of other matters, minister, you mentioned in your opening statement the Fringe Festival now being the leading festival, and that is fantastic. I have read the booklet, as you may be aware. In fact, it was very handy to me that I had read the booklet about the economic benefits of the Fringe Festival.

I am also aware that the Cabaret Festival is now the biggest cabaret festival in the world. I do not know whether the minister is aware, but we have had a very successful and growing cabaret fringe coming up alongside it, which has been growing at about a multiple of three times a year. So each year it has been three times larger than the previous year, but it seems bereft of funding. I wonder if the minister could provide any information, since I have had to dig into my own pocket to fund that particular organisation.

The Hon. J.J. SNELLING: My advice is that to our knowledge they have not contacted the government and made an approach for funding, but I would be more than happy to talk to them about it and give it consideration. I have just been advised they have not applied for any grants in the last two years.

Ms REDMOND: Was that because they got none when they first applied?

The Hon. J.J. SNELLING: No, I do not think so. I do not think they have ever applied for funding.

Ms REDMOND: So I should perhaps give an indication to them that an application for funding might be favourably considered?

The Hon. J.J. SNELLING: We would have to consider it on its merits, and of course it would depend on what other applications for funding we had before us. Of course I would encourage them to make an application for funding.

Ms REDMOND: My reason for inquiring, minister, is simply this: because the Cabaret Festival has got so large, it now attracts a huge number of international and interstate participants. The Cabaret Fringe by its nature, just as the Fringe itself to the Festival originally did, gives a lot more opportunity to local home-grown people who can grow their capacity here, if we give them a bit of funding.

The Hon. J.J. SNELLING: And of course, we would certainly welcome an application for funding and go through the normal process. We would encourage them to make an application. My advice is that to date they have not made an application.

Ms REDMOND: Minister, and especially for the benefit of the Chair, I want to ask a question about the first dot point in the highlights on page 85.

The Hon. J.J. SNELLING: Where are you going?

Ms REDMOND: I have asked questions about this issue before because I was a bit puzzled by why we are spending a lot of money on moths, not in the collection but—

The Hon. J.J. SNELLING: This is the bug question.

Mr GARDNER: What was the one that you were thinking of?

The Hon. J.J. SNELLING: I was thinking of a certain social history museum on North Terrace.

Mr MARSHALL: Well, we are keen to talk about Muriel Matters as well.

The Hon. J.J. SNELLING: I have been waiting for that.

Ms REDMOND: I do want to ask about the entomology collection preservation project. I think that has been in the budget for a number of years because I remember asking questions about it as the shadow for the arts some years ago. Can the minister advise whether the money being expended—

The Hon. J.J. SNELLING: Are the bugs safe?

Ms REDMOND: Well, are the bugs safe from the bugs?

The Hon. J.J. SNELLING: Yes.

Ms REDMOND: And has it been resolved for all time? Has all the money been expended and are we satisfied that it is all okay?

The Hon. J.J. SNELLING: Alright, here we go. The 2011-12 Mid-Year Budget Review allocated $2.67 million to address the infestation of carpet beetles in the Museum's entomology collection, including the purchase of specialised storage equipment with adequate environmental protection. Since 2002 the Museum has reported that the entomology collection has been affected by a recurring infestation of carpet beetles. The Museum's insect collection is one of the most comprehensive in the world, valued in 2010-11 at $91 million.

Artlab advised that the entire collection could be lost in a matter of a few years if no treatment program was implemented. The treatment program involved decanting the collection into freezer storage for several months and then rehousing it in cabinets specifically made with doors and drawers that have effective insect seals. The existing storage room has been modified to gain the best possible environmental control, including sealing the ceiling, cleaning the roof space and providing separate—

Ms REDMOND: Keeping the bugs from the bugs and the sealing the ceiling!

The Hon. J.J. SNELLING: —filtered air conditioning—these are some bugs! These bugs are getting the royal treatment. The entomology component of the project was completed on schedule in December 2013. In June 2013 the Treasurer approved the project scope being expanded to address the infestation of mammals and bird collections as well, so it is not just the bugs at risk.

Members interjecting:

The Hon. J.J. SNELLING: No, of mammals and birds by bugs. This additional scope could be achieved from savings resulting from the downturn of building activity in the competitive tender process applied to the compactus and storage cabinet solution for the entomology store. Projects currently apply in the treatment program for the mammals and bird collection. The treatment for the mammals and birds collection will be completed in December 2014. In the words of George W. Bush, mission accomplished.

Ms REDMOND: Oh, I thought you were going to say there are no knowns and unknown knowns.

The Hon. J.J. SNELLING: That was Donald Rumsfeld.

Ms REDMOND: I know; I was about to correct you. Minister, just a couple more questions on the targets and so on. The targets—

The Hon. J.J. SNELLING: I thought you were going to ask me more about the bugs.

Ms REDMOND: Well, no, I think I have got enough of an answer on the bugs. I have just been following their progress for a number of years. In the targets on page 85 for 2014-15, the first dot point is to:

Present the Fashion Icons: From the Collection of the Musee Des Arts Deoratifs, Paris exhibition…

Where is that being held, at what cost, and what is the anticipated benefit to the state in terms of anticipated visitor numbers, and so on?

The Hon. J.J. SNELLING: It is being held at the Art Gallery, and it will be from 25 October until 1 February next year.

Ms REDMOND: Yes, got that bit. And the Chair wants to know what year the fashions are and whether you have anything in an appropriate size.

The Hon. J.J. SNELLING: Well, I think there will be a strict policy of no borrowing from the collection. The state government contribution to it is $2 million. The estimated total budget, which includes all the other contributions, is $4.883 million. What were your other questions?

Ms REDMOND: The other question was: what is the anticipated benefit in terms of visitor numbers? I know that, for instance, some of the exhibitions that are held in Queensland, and so on, have had large visitor numbers. I am just curious as to what our anticipation is.

The Hon. J.J. SNELLING: We expect it to be significant.

Ms REDMOND: It did not work out for the pandas, for instance.

The Hon. J.J. SNELLING: Well, that is true. For the Turner from the Tate exhibition, which was incredibly successful, total economic value to the state was estimated at over $14 million, generating over 200,000 room nights in Adelaide. Audience surveys showed that 47 per cent of attendees had planned to visit especially for the exhibition. They are the sorts of things. The difference between this and the Turner is that we shared the Turner with the National Gallery in Canberra. This exhibition will be Adelaide only, so we expect that there will be a significant increase in nights and benefit.

Ms REDMOND: Do we have any anticipation as to what that increase will be, or what those numbers will be? I presume some sort of proposal went up for the government to put in the $2 million.

The Hon. J.J. SNELLING: They are basing the projected outcomes on the experiences of the Turner from the Tate, which was by anyone's measure very, very successful in attracting—

Ms REDMOND: Deservedly so. J.M.W. Turner captures light perfectly.

The Hon. J.J. SNELLING: Indeed he does.

Ms REDMOND: Almost as well as Sir Hans Heysen.

The Hon. J.J. SNELLING: Perhaps not as good as Caravaggio, maybe. The other thing that I will just say about the fashion exhibition is that I think it has real potential to attract people to the Art Gallery who might not otherwise go there. I think there will be an enormous amount of interest in this particular exhibition and bring the audiences into the Art Gallery. So, full credit to Nick Mitzevich. He is the brains behind this.

Ms REDMOND: Yes, and a good appointment. Last question, minister, and it is on the second to last dot point of the highlights:

Launched <www.adelaideia.sa.gov.au>, the new website and mobile app…

Does the minister yet have any information on usage of that website and/or app? I do not know whether it is possible to track those things.

The Hon. J.J. SNELLING: It is up and running, and it was launched in February 2014. I have not got that information in front of me, but I should be able to get that from History SA.

Ms REDMOND: So we can tell? I am completely ignorant about these technology things, but we can tell—

The Hon. J.J. SNELLING: I think we're probably operating at about the same level of understanding of these issues but, yes, go on.

Ms REDMOND: We can tell how many at least have downloaded that app, and so on?

The Hon. J.J. SNELLING: Where is my IT adviser? You can track these things, apparently. I will ask History SA and provide the information.

The CHAIR: That being the last question, I declare the examination of the proposed payments adjourned and transferred to Committee B. I thank the minister and his advisers and thank everyone for their goodwill today.

At 16:30 the committee adjourned to Monday 21 July 2014 at 10:30.