Department of State Development, $644,298,000

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

Membership:

Mr Tarzia substituted for Hon. I.F. Evans.

Mr Treloar substituted for Mr Bell.

Minister:

Hon. M.L.J. Hamilton-Smith, Minister for Investment and Trade, Minister for Defence Industries, Minister for Veterans' Affairs.

Departmental Advisers:

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

Mr S. Ward, Director, Investment, Trade and Strategic Projects, Department of State Development.

Mr R. Janssan, Executive Director, Strategic Services, Department of State Development.

Ms N. Slivak, Director, Department of State Development.

Mr M. England, Director, Department of State Development.

Mr R. Demarco, Director, Department of State Development.

Mr J. Chapman, Chief of Staff.

Ms J. Barbaro, Ministerial Adviser.

Mr B. Page, Ministerial Adviser.

The CHAIR: I declare the proposed payment for examination. Before I call on the minister to make a statement, if he wishes, rather than read the entire page of my opening remarks here, I just remind everybody that if they could preface their questions with the budget paper and line number, that would be appreciated. Is everyone happy with the agreed schedule as printed?

Mr WHETSTONE: Yes, Madam Chair.

The CHAIR: I ask the minister to make his statement.

The Hon. M.L.J. HAMILTON-SMITH: Thank you, Madam Chair. I thank the committee for their work.

The CHAIR: Is there an opening statement, minister?

The Hon. M.L.J. HAMILTON-SMITH: No, I am quite happy to go straight to questions, Madam Chair.

Mr WHETSTONE: I refer to Budget Paper 4, Volume 4, page 111, and the second dot point under financial commentary: the international trade and investment strategy for South-East Asia. Can the minister outline the breakdown of how the $230,000 will be spent in the 2014-15 year?

The Hon. M.L.J. HAMILTON-SMITH: Thank you very much for the question. It allows me to highlight the state government's commitment to assisting local companies to further engage with international markets for investment and trade outcomes with a focus on South-East Asia. The committee would be aware that the government has taken a staged process towards its international strategies that support investment and trade. We released the India and China strategies in 2012.

They provide a framework to assist trade and investment outcomes from these regions, and the state government has built its resources and focused its effort in support of their implementation. The Agent-General, of course, continues to support South Australian companies' international engagement in the UK and European regions, and now the government is looking to the ASEAN region to develop and implement its next investment and trade strategy.

We have modelled it, to a degree, on the strategy for China and India in that approach. A consultant will be appointed to assist with the development of the strategy, and an extensive industry consultation process will guide the involvement of key stakeholders in the process in due course. The implementation of the strategy will be supported with the appointment of a strategic advisory council that will work with government and the business community to grow trade.

The engagement strategy was announced some weeks ago and is available for public scrutiny. It has been put out to all stakeholders. China and India, of course, are growing economies and have established significant relationships with South-East Asia, but the ASEAN region is the next step in expanding this approach.

The Department of Treasury and Finance have appropriated $230,000 in 2014-15 and $300,000 thereafter to support the development of the ASEAN strategy including, as I have mentioned, the members of the ASEAN advisory council who will be appointed in an honorary capacity, a strategic adviser and various other initiatives that I have outlined.

We are aware that, although we have produced an ASEAN engagement strategy, there are individual nations and markets within that region, and each one of them will be approached individually. There will be an outbound and inbound mission to these locations, and the details of that will be elaborated upon in the fullness of time.

Mr WHETSTONE: Over the four years of that strategy, what will be the cost of the chief adviser? Is it a full-time position?

The Hon. M.L.J. HAMILTON-SMITH: That has not been resolved at this stage. The shadow minister will no doubt ask me at a later time about our India and China advisers. They are indicative. We have engaged people who are part-time, but when I say part-time they give up significant amounts of their time to help us, so it is a consultancy-type arrangement, and the exact details of how that will work for South-East Asia are yet to be resolved.

Mr WHETSTONE: What funds will be spent to establish the South-East Asia Council? Will that be an ongoing cost?

The Hon. M.L.J. HAMILTON-SMITH: As I mentioned, the ASEAN Advisory Council will be appointed on an honorary basis, so it is unlikely that anyone will be remunerated. That has been the practice with the other two advisory councils for India and China. Of course, the person we have appointed as the strategic adviser, who is remunerated on a consultancy basis, is usually the chair of that grouping, so that person is remunerated in their capacity as the strategic adviser but not specifically for organising the council.

We have found that these councils are a great way to engage with stakeholders. I would certainly be very keen in the case of the ASEAN Advisory Council to make sure that the regions are well represented and that we have representation there from exporters and people who understand the need to do business in South-East Asia because, as members on my right would be well aware, it is very important to our farmers, food producers, meat producers—the lot—that we get this right. It is a big market for us.

Mr WHETSTONE: Will the chief adviser's position have a travel allowance, and is that included in the budget allocation?

The Hon. M.L.J. HAMILTON-SMITH: It will be. There is work yet to be done. We have the engagement strategy out for consultation. We are going to listen to the feedback that we get from stakeholders, and I would encourage members should they know of stakeholders who have an interest in this to contribute and to respond. We will then come out with a final strategy, and that will provide more of the detail about how this will work but at the moment we are in a consultation part of the process.

It has been managed by Premier and Cabinet at this point, because the engagement strategy that is addressed in the paper has more to it than just investment and trade. There are cultural aspects here, diplomatic aspects, the arts; education is involved through Education Adelaide, through student attraction and so on. There are whole-of-government dimensions to the engagement strategy, not purely trade and investment, so we will get that right and then I expect you will see individual portfolios, including investment and trade, come out with execution and implementation plans that provide more meat on the bones of how we can do it.

Mr WHETSTONE: To do that, that adviser will have to spend time in Asia and time in Australia?

The Hon. M.L.J. HAMILTON-SMITH: I would imagine so.

Mr WHETSTONE: Is there an indicative time he will spend there or here?

The Hon. M.L.J. HAMILTON-SMITH: That has not been resolved yet. The practice has been that, in the case of China and India, our advisers have accompanied the Premier and certain ministers on missions overseas. They have also helped to host inbound missions and activities. They have been involved in other engagement activities here in Australia and overseas, so there will be a range of duties that will fall to them, and we will have to negotiate with whoever it is we finally select as to how much time they will be putting into this, but it is going to involve quite a bit of work, so they will have to be remunerated for that.

Mr WHETSTONE: As part of the $1.1 million over four years for that South-East Asia strategy, will any further trade offices be opened?

The Hon. M.L.J. HAMILTON-SMITH: That is a good question. That has not yet been resolved, but I would expect that there will be some representation required. The pathway that the government has chosen is to place people, through Austrade, in Austrade offices. That is what we have done in China and India. After the Hartley review we moved away from the idea of having, if you like, missions of our own. Some other states are doing that, notably Western Australia, I think Victoria and New South Wales and Queensland as well. We feel that that is not the best bang for buck. It is better to have people placed with Austrade, so that is probably the model that we will follow in South-East Asia.

Obviously there will be choices there: Indonesia, Malaysia, Singapore, and perhaps another location. The budget is not overly generous at this particular point, so at the first gate there will probably be one adviser, at the outset, one Austrade person. It is a decision that has not yet been made. It is a decision that we have not yet reached, but it is in prospect, and the pattern we followed in China and India is to put someone with Austrade in the right place.

Mr WHETSTONE: Obviously you are still in negotiations, but will any of that budget allocation be committed to existing Austrade offices?

The Hon. M.L.J. HAMILTON-SMITH: I would not expect so, because the people we have placed with Austrade at the moment in Jinan Shandong province, China, and in Mumbai, India—and there are some others as well, one in Shanghai—are funded separately, so I would not see a need to use the South-East Asia budget line to fund the placement of anyone outside of the ASEAN South-East Asia region; that is what the money is there for. We will review whether or not we need to provide some additional funding into this once we have had feedback from stakeholders about where we need to go and what we need to do, and that is something that we might be here discussing any year's time after the next budget review.

Mr WHETSTONE: You have said that you will have to lobby for more funding at the next state budget. Did you raise concerns with cabinet as soon as you were appointed minister?

The Hon. M.L.J. HAMILTON-SMITH: About what? About the adequacy of the funding for the South-East Asia strategy?

The Hon. J.W. WEATHERILL: Having to go back and seek funding for your strategy on an annual basis rather than a four-year cycle.

The Hon. M.L.J. HAMILTON-SMITH: Money has been provided, if you look at the budget line, I think for each of the years of the estimates period, over four years. It is a modest amount. The total amount is about $1.3 million, I think: $230,000 in 2014-15 and $300,000 thereafter to support the development and implementation of the ASEAN strategy. That is what has been provided for at the moment. That is adequate to get us started. We will review the situation once we get feedback from the draft that has been put out for consultation, but that is what is budgeted at the moment in a fairly tight fiscal climate, so that is what we will work with and the means we will live within.

The Hon. J.W. WEATHERILL: Obviously the focus, you said, is the South-East Asia strategy—Indonesia, Malaysia, Singapore and Vietnam. How much money from the strategy will be allocated to improving exports and trade relations in those countries?

The Hon. M.L.J. HAMILTON-SMITH: I would imagine all of it will be focused on growing our export outcomes with those countries. It is for our engagement strategy, but my view is that it is principally about investment and trade. It is also about education and attracting students, arts outcomes, cultural outcomes and mutual understanding, and there is a whole lot of other outcomes as well that are very important. However, it is principally about selling our products overseas and attracting investment into the country.

ASEAN is an important trading partner. If the shadow minister would like to ask me, I can provide some more information on the extent to which we are trading with ASEAN. I would like to see as much of that money as possible applied to the road and helping our exporters to get over there and to sell their products, because to me that is what it is all about. We recently had a record outcome for exports, the highest figure ever. It was encouraging to see, but we can do better, much better.

Mr WHETSTONE: Can you outline how much investment to South Australia has occurred in South-East Asia through these ASEAN-based Austrade offices over the last two financial years, 2012-13 and 2013-14, and what will be the administrative cost to set up in South-East Asia the trade strategy?

The Hon. M.L.J. HAMILTON-SMITH: First of all, the two aspects that we need to focus on when trying to measure value for money in our trade engagements are exports and investment coming in—how are we performing? In regard to exports, which is the first half of that equation, we have had pretty good results in China. In the 12 months to May 2014, the value of South Australia's exports totalled $12.4 billion and accounted for 4.5 per cent of the national export value for the period. Our export value was up 18 per cent, or $1.87 billion, on the previous 12-month period, which is a pretty good result. This was the largest growth rate for any state or territory, compared to Australian average growth of 11 per cent over the previous 12 months.

Why is this important? When you talk about GSP, if there are 10 people sitting in a line and somebody gives them a dollar and you move that dollar along the line, at the end of the day your GSP is $10, but where did that first dollar start from? It started from a farmer or a small business exporting something and producing that dollar, which then passed through to education, restaurants, retail and so on. So, at the heart of our GSP really significantly is what we are exporting—what we are selling overseas. That is what starts that dollar moving. To get a record result like that is fantastic.

You asked me about China: up $1.16 billion or 53 per cent. The US was up significantly, $373 million. ASEAN was up $151 million or 8.4 per cent. New Zealand was up $93 million. So we are starting to get the sort of movement that we have needed to see on exports. Metal ores, $2.7 billion; other commodities, $2.4 billion; wheat, $1.4 billion—a lot of happy wheat farmers, broadacre farmers. Wine, which I know is important to the member, $1.1 billion; copper, $1.1 billion. So, we are getting some good results. It is also reaching out across meat, road vehicles, vegetables and fruit, which I know is very important in the Riverland, gold, silver and platinum, coal and gas, even petroleum products are up $31.3 million or 20 per cent, so the export results are there.

Investment coming in is a little bit harder to measure. Our most dominant sources of investment remain North America and Europe, interestingly. However, increasingly, we are getting significant investment from Japan, China and from other countries, including South-East Asia. That is much harder to measure at a national and at a state level, so we have got further work to do to try to pin down those figures, because a lot of it is not immediately visible. You can count what is going out but it is much harder to count what is coming in, and to measure it and tabulate the information.

ASEAN is a potentially very significant source of investment, and the sort of investment we want is the sort of investment that opens markets. For example, earlier this year my colleague, the member for Port Adelaide (Hon. Susan Close) and I went to China. We took with us about 15 South Australian companies, mostly food producers. There were dairy farmers, wheat producers, wine producers, even movie and film manufacturers. They all got up and presented their offering. At the end it was like speed dating down the back of the room where they all got together with the Chinese investors who had attended. Having seen their presentation, they then sifted over the details of what they had on offer.

What those food producers and other manufacturers were looking for was investment where, for example, a Chinese investor might buy 49 per cent and in so doing open access to outlets for the sale of those products in China. So they would have a stake in the food producer, but they would have a connection to offer in regard to distribution. That is a model I think would apply well in South-East Asia, where you get someone who takes a stake in your business so you get some investment coming in and that delivers improved exports going out. It is a much better model than someone coming in and buying your business because, for example, as members would know, you might have an investor from ASEAN, China or India and they might have money to invest but they might not know how to farm.

In the member for Flinders' electorate not too many people know how to produce wheat and barley better than the farmers of Eyre Peninsula, and it is the same thing up in the Riverland. You do not want someone to come in and buy the business and then not be able to produce food to the same standard, but you do want the capital for growth. So, this is a good model to follow, and I imagine that is how it will work.

Mr WHETSTONE: Is there any financial assistance available to assist SMEs to improve their exports to the ASEAN countries?

The CHAIR: We will defer over here after this answer, thank you.

Mr WHETSTONE: More Dorothys.

The CHAIR: No. Listen—

Ms DIGANCE: I am actually building on what you are asking on various things.

The Hon. M.L.J. HAMILTON-SMITH: I will answer that question and then we will—

The CHAIR: And then we will come over here.

The Hon. M.L.J. HAMILTON-SMITH: There is quite a bit of support available, and I am glad the member has asked this question because we need to get the information out at every opportunity about what is on offer. I want to start by talking about TradeStart. This is an export facilitation program we are running in concert with Austrade. It is a key mechanism for the Australian government and the South Australian government to deliver export facilitation services to small, medium-size and regional businesses.

Under the current contract with Austrade, the Department of State Development employs five export advisers to cover the state. Advisers are based in Adelaide CBD (there are two there), the Riverland (there is a 0.4 FTE), and the Limestone Coast and Upper Spencer Gulf (one FTE). I do not know why there is not one over on Eyre Peninsula, I must say to the member for Flinders. That might be something he wants to take up with me. We might have to look at that.

As at 30 June 2014 ,TradeStart advisers had an active client list of 638 clients and assisted with 66 export outcomes, with a total value of $29,974,000. Of these outcomes, 62 were export sales and four were international agreements. The Department of State Development has been advised that its delivery model for the TradeStart program is considered to be the benchmark for other states and has been awarded two bonus payments for the Adelaide South region, having exceeded targets in two years.

In 2013, the TradeStart export advisers led the South Australian Wine Trail initiative in partnership with the South Australian Wine Industry Council. The Wine Trail attracted five influential Chinese buyers to visit 31 wineries which were recruited in partnership with SAWIC. The wineries used the opportunity to showcase their products with SAWIC, and the TradeStart advisers supported the program by providing assistance, coordination and introductions during the buyers' visit.

For the financial year 2013-14, the Department of State Development allocated a budget of around $489,000 per annum in addition to Austrade's contribution of $345,000; that is about $834,000. That is one program that is available. Another one I would like to mention in response to the member's question is the Gateway program that provides funding for exporters through the Department of State Development, offering packages of up to $25,000 over two years for eligible South Australian exporters, mostly small to medium-size enterprises, to support export market development activities.

Given the challenging export environment, the exporters focus on the domestic Australian market. Over the past three years, the Gateway budget has been revised and refocused to other areas. The original budget was $1 million in 2012-13; it was $873,000, with the revised 2013-14 budget being $525,000. The Gateway Business Program involves the competitive grant application process with a strong focus on preparing companies for export. The grant was originally announced in November 2010. Funding is provided for this one on a dollar-for-dollar basis.

Companies are expected to match the 50 per cent funding offered under Gateway. Should they be successful in obtaining a grant, individual activity caps range from $2,000 and $10,000, and eligible activities for reimbursement include: researching feasible overseas markets, up to $10,000; marketing materials for distribution overseas, up to $5,000; export training, mentoring and development, up to $5,000; trade show participation and overseas business programs, up to $10,000; website improvements for overseas markets, up to $5,000; and supporting incoming buyers, up to $2,000.

I encourage members to get the word out in their newsletters and to make sure their exporters, food producers and manufacturers—I know the member for Hartley would have a lot in his electorate—know that this money is out there, that it is there to be had. I would be very happy to facilitate meetings, as required, for anyone who might want to take that up.

Mr WHETSTONE: What advice have you received about the recent Malaysia Airlines crash and how it may affect trade relations nationally and, more importantly, between South Australia, Russia and the Ukraine?

The Hon. M.L.J. HAMILTON-SMITH: I have not received any advice on that tragic accident specifically related to the areas of concern the member raises. I think we are all still in a bit of shock over that terrible event. I think the federal government is doing a good job in reflecting the sort of sadness and anger that is evident in the community about that. I just hope we get those people home. I think we will just have to wait and see what the impacts are for Malaysia Airlines, but I would be very surprised if there is any impact on our engagement strategy with South-East Asia as a result of that.

Our hearts go out to Malaysia Airlines, the Malaysian people and everyone involved and caught up in that terrible event. I hope it does not put people off travelling. I think travelling is still a relatively safe business compared to road traffic accidents. I hope that everyone who travels for tourism purposes or those who might seek to travel for trade purposes continue to do so. I am sure they will.

Ms DIGANCE: My question builds on the member for Chaffey’s line of questioning. I refer to Budget Paper 4, Volume 3, pages 112 and 113. Minister, can you please inform the committee about how the government is supporting increased business migration into this state?

The Hon. M.L.J. HAMILTON-SMITH: I thank the member for her question. I know that she would have a lot of migrants in her electorate, and they are fantastic South Australians. Our business migration outcomes have more than tripled this financial year compared to the previous year—37 compared with 130. Three initiatives have contributed to this outcome. First, the government introduced a 90-day change project, improving skilled and business migration outcomes for South Australia.

Secondly, the state government put in additional funding of $600,000 over two years (announced in last year’s budget) to target skilled and high net-worth migrants for state nomination under the general skilled migration and Business Innovation and Investment Program. Thirdly, the China Engagement Strategy, which outlined a facilitation process by the state government in deepening the pool of quality Chinese business migrants by continuing to promote South Australia as a desired destination for migration.

The business migration program is an interesting government initiative. I am pleased to advise that the state government is an active participant in the business migration and Business Innovation and Investment Program provided by the federal Department of Immigration and Border Protection. Of course, this is a partnership. Participating in the Business Innovation and Investment Program attracts business migrants to support population targets and build business investment, resulting in job creation, enhanced industry capability and export dollars. State nomination is mandatory for a business migrant looking to apply for a visa from the federal government.

Through the business innovation and investment migration program, the state attracts new investment into the economy, increases export activity and creates new jobs—and it is all about jobs now. By attracting people with demonstrated business or investment activity who are committed to using their business or investment skills in South Australia, everybody wins.

As I mentioned, the increased state government funding of $600,000 over two years from 1 July 2013 has been allocated to boost business migrant numbers. So where the state government has made an investment, here is a good example of us getting a result. The extra funding has allowed Immigration SA to engage two new positions, funded until 30 June 2015, specifically responsible for undertaking promotional activities to increase business and skilled migration.

The roles are focused on managing the delivery of international market promotional activities, supporting expanded key stakeholder engagement activities and hosting exploratory visits to South Australia by potential business migrants and agents. I am advised that there are a number of external factors that affect demand:

global and national competition for business migrants is fierce;

restrictions and changes to visa eligibility, as well as processing times by the federal Department of Immigration and Border Protection, together with the state nomination criteria required by the South Australian government;

interest in immigration by potential migrants, which is influenced by global economic conditions and the general awareness of migration options;

business and investment opportunities in South Australia; and

comparative economic conditions with source markets.

The federal government has made significant changes to the national business innovation and investment migration program that have directly impacted the uptake of this program at a state level. The decline in eligible applications is not unique to South Australia; other states and territories participating in the scheme have also experienced declines.

Existing business migration support has consisted of support for exploratory visits. Immigration SA hosts potential applicants and migration agents as an introductory visit to South Australia. Where a potential applicant's investment interests can be determined before the visit, Immigration SA is able to facilitate meetings with relevant government agencies.

Secondly, we have on-arrival meetings. Once the federal government has issued a visa and a significant investor has arrived in South Australia, Immigration SA provides a one-on-one meeting to support settlement activities. Thirdly, we have open days. Immigration SA offers free one-on-one meetings with the business migration team every Tuesday for people who have been nominated to answer questions about the nomination process or requirements.

New business migration support provided comprises: reintroduction of an exploratory visit program; facilitation of a significant investor local organisation register to assist applicants; adopting an account management approach; and reintroduction of in-market visits to promote the program.

The focus for the 2014-15 financial year is to build on migration agent engagement through in-market visits and migration seminars; to implement a broader engagement strategy with migration agents; to undertake a social media campaign to raise the awareness of South Australia as a destination for skilled migration; to host onshore business migration engagement events; and, finally, to expand the account management approach to build closer relationships. The program for 2014-15 includes three trips to China and two trips to Malaysia. So, we are starting to go down the ASEAN route.

In relation to key outcomes in 2013-14, the number of new business migrants has more than tripled, as I mentioned, to 130, including 24 significant investor visa nominations and seven SIVs, approved compared with the previous year's outcome of business nominations (37 in total) and only six SIV nominations. The target number for new business migrants to be nominated by South Australia in the 2014-15 program has been set at 150. So, we are stretching ourselves even further.

Ms DIGANCE: I have one more question. It leads on from that, and I think it relates to Budget Paper 4, Volume 4. Minister, did you invite the head of Indonesia's Chamber of Commerce, Suryo Sulisto, to meet with you whilst he was in Australia earlier this month?

The Hon. M.L.J. HAMILTON-SMITH: Thank you for that question because I did undertake to a member that I would get back to the house about a question that he asked me in parliament, and this is a good opportunity to do that, although I will reply through the normal process. The question I was asked was: did the minister invite the head of Indonesia's Chamber of Commerce, Suryo Sulisto, to meet with him whilst he was in Australia earlier this month?

I am advised by my agency that Mr Sulisto, Chairman Kadin, arrived in Australia on Wednesday 4 June 2014 and departed on Thursday 12 June 2014. I am told that his program in Australia was prepared over a three-month period in the lead-up to his visit and that the itinerary involved business and private activity in Canberra, Melbourne, Brisbane and Sydney. Mr Sulisto did not travel to Adelaide during that time, and the agency is not aware of any request to meet with the South Australian government Minister for Trade or anyone else.

Nobody can be found to support the imputation that a meeting was sought. Generally, if visitors do not advise the South Australian government of their travel plans, do not travel to South Australia and do not seek a meeting with ministers, it is unlikely that ministers will meet with them. So, I just thought I should get back to the member on that.

Mr WHETSTONE: Budget Paper 4, Volume 4, page 112, under Targets, fifth dot point. How much funding is being spent on each of the China and India strategies on an annual basis? What cost is it to have South Australia-focused investment officers, or officer, in Mumbai and Shanghai Austrade offices?

The Hon. M.L.J. HAMILTON-SMITH: Thank you for the question. I will start with the China strategy, because DSD is working collaboratively across government, business and communities to effectively implement the China engagement strategy which was launched in December 2012. It is significantly focused on Shandong province and our South Australia-Shandong relationship.

The member would probably be aware that the City of Adelaide has also entered into a special relationship with Qingdao within Shandong province, which helps underpin our state government plan. The former DMITRE supported the Premier's delegation to Shandong and Beijing in April 2013, which included representation from 29 key SA iconic businesses and industry associations.

The inaugural South Australian Shandong Corporation and Development Forum was co-chaired by Premier Weatherill and Shandong Governor Guo Shuqing, and a memorandum of understanding, or MOU, was signed between the parties as result of the forum. A high-level working group was established to service the MOU, and in August 2013 former minister Kenyon visited Shandong to progress the high-level working group.

In December 2013 an MOU on cooperation between the former DMITRE and the Shandong Chamber Of Commerce was signed. DMITRE also signed an MOU with the Qingdao Bureau of Commerce in September 2013 to support the Adelaide-Qingdao sister city relationship. The Qingdao Bureau of Commerce has suggested that it will lead a trade investment focus delegation to South Australia before the end of the year.

As I mentioned, in May 2014 former trade minister the Hon. Susan Close led a delegation of 27 South Australian companies seeking investment and trade outcomes to Shandong, where they met 170 local Chinese companies. All companies made valuable contacts through the events, held in Jinan and Qingdao, and nine of the companies who presented investment opportunities have reported that they are continuing investment discussions with Chinese counterparts.

The eighth OzAsia Festival will be held in September with a focus on Shandong, and a delegation of Shandong officials will visit SA. In November 3 an Invest in SA conference will be held, attracting an audience of Chinese business migrants and potential migrants keen to explore investment opportunities. In December 2013 an MOU was signed between the government of South Australia and the China Development Bank to facilitate large project funding in South Australia. The China Development Bank has since accompanied South Australia to Shandong to leverage the relationship and investment outcomes.

Over 200 South Australian businesses have attended events organised as part of the China business education program, and over 250 businesses have registered with the Department of State Development to learn more about China. The Department of State Development has met with representatives from 13 China-focused member-based organisations, which represent Chinese business communities in South Australia, to encourage collaboration.

Exports to China reached $3.3 billion for the 12 months to May, which was an increase of 54 per cent on the previous 12 months. China remains the most significant trade partner for South Australia, making up 27 per cent of the state's total exports, and there are currently 11,160 Chinese students enrolled in South Australia. China also continues to be a rich source of skilled migrants and, during 2012-13, 1,725 Chinese migrants settled in South Australia, up from 1,341 the previous year.

The member asked me specifically about financial issues. The resources for implementing the China strategy are sourced from the South Australian government's existing international engagement budget. The members of the China Advisory Council, as I have mentioned earlier, are in an honorary capacity. Mr Sean Keenihan is appointed until 31 January 2016, and his twelve-month remuneration package is $A100,000. Travel, accommodation and reasonable entertainment expenses are covered with prior approval. As at 30 may 2014, for 2013-14 Mr Keenihan's travel, accommodation and other expenses were $A19,000.

Mr Alfred Wong's 12 month remuneration package is $500 per day for a maximum of 20 days per 12 months. Dr Wong's contract is until 31 December 2014 and contains the same travel, accommodation and entertainment conditions as Mr Keenihan’s. For 2013-14, Dr Wong's travel, accommodation and other expenses were $A2,500.

On the Austrade presence in China, the Jinan representative office in China remains open as the state builds its sister-state relationship with Shandong. This is an exception in Jinan where we have a dedicated person, and she is not part of the Austrade office.

The member asked me a further question about China. The Shanghai office was closed in June 2013 with office closure costs estimated at $274,000 which comprised staff termination payments and legal advisory services. In-country legal advice was necessary to ensure the closure was undertaken in accordance with local Chinese law as it related to labour taxation matters. The legal firm engaged in the Shanghai office undertaking final closure activities post this exercise, and the end of financial year audit is required.

The member also asked me about India. The Chennai representative office in India was closed for business in January 2013. The staff worked until the end of their contracts and they were paid accrued entitlements, such as annual and long service leave payments. One staff member remained under contract and then on a fee-for-service basis until August 2013 to assist with the office closure. As mentioned, the closure of these offices followed the Hartley review, which I think enjoyed the support of the opposition, and the state government re-prioritised its India and China activities.

The member asked me about our offices in China. It costs us in the vicinity of $240,000 for our Austrade embedded person in Shanghai. We also have an embedded person in Hong Kong, at $210,000, and we have put someone into Mumbai in India at a cost of $200,000. These are much more affordable arrangements than what we had previously, and I think we are getting better value for money from them. Could members be mindful that that is a total cost for that position including not only salaries, but operational costs and accommodation—there is a package of things—so the actual remuneration amounts are much smaller than that.

Mr WHETSTONE: Minister, are you sure you do not have got a copy of my questions in front of you?

The Hon. M.L.J. HAMILTON-SMITH: No, I wish I had.

Mr WHETSTONE: I turn to Budget Paper 4, Volume 4, page 112 under the heading of Targets 2014-15 and I refer to the fifth and sixth dot points in regard to the progressing trade priorities and also assisting businesses to achieve long-term success in international trade. What was the total cost of South Australia's trade missions in 2013-14?

The Hon. M.L.J. HAMILTON-SMITH: If I could take that question on notice because not all of the trade missions were within my portfolio. The Premier has led some missions and the Minister for Primary Industries has also been active because, of course, Food SA is a stakeholder and primary industries has an important role to play in promoting our trade. So, there is an 'across portfolios' answer—not all of the information is accessible to me right now.

The government is giving some consideration at the moment to try and introduce some improved regularity into our missions, both outbound and inbound. We are just giving some thought to that at the moment so as to better systemise what we are doing both for the recipient country and ourselves, but also for budgeting purposes. We have that whole question under review at the moment so I will come back to the house, and to the member, with a more considered answer. As a guide, however, I would indicate to the committee that in the annual report for this portfolio, tabled in the parliament, we did list the overseas missions for the financial year 2013-14 trip by trip and the total sum was $268,113 through this agency. As I said, I will check that figure and I will update it and come back to the committee.

Mr WHETSTONE: How many trade missions are planned for the 2014-15 year, and is there a budget allocated to a trade schedule?

The Hon. M.L.J. HAMILTON-SMITH: Yes, the existing budget lines for the China, India and South-East Asia strategy will support those missions. There are missions planned. As I mentioned, the government, as we speak, is giving some consideration to the frequency and timing of those overseas missions, so your question is very timely. You are interested in the year going forward, for this financial year forthcoming?

Mr WHETSTONE: Yes.

The Hon. M.L.J. HAMILTON-SMITH: I will come back to the house with some detail of what is planned for this financial year because our current considerations on this subject may impact the answer. I want to make sure the member has very accurate information.

Mr WHETSTONE: Minister, when businesses travel with you, SMEs and the like, on trade missions, does the state government pick up any of their expenses?

The Hon. M.L.J. HAMILTON-SMITH: Yes. As I mentioned, the two programs that I addressed a moment ago, TradeStart and Gateway, do have some provision for assistance with travel, both outbound and inbound. This is something that we would like to promote more extensively to food producers and businesses out there. I would like see to every single dollar of that money deployed. So, there is money available to assist with outbound travel and also with inbound visits.

That money can also be used to assist companies to prepare their materials, both electronic and written, for such missions. So, there is money there, it is available and can be bid for. Some of it is on a matching dollar for dollar basis, some of it is there as a grant. Apart from those grant programs, we do not have a magic pool of money that is available for overseas missions.

Can I just say that I would agree with the point the member is making, there is scope to take more businesses overseas to explore export opportunities. Some other states are doing this extensively. I understand that states like Victoria have been known to fill entire aircraft with people and they have contributed significantly to the travel expenses.

I am not sure what the budget of the Victorian government is but I think it is a little bit more than ours—Mr Garrand might be able to help me—we do not have that sort of money available. I would simply say that this is an area, if we are going to grow the economy and create jobs, where we need to put in some effort.

Mr WHETSTONE: In saying that, in the 2012-13 year Business SA was given $1 million over two years to help with businesses that were looking at export and trade missions. Is there anything like that forecast, or are you lobbying for anything like that for other organisations?

The Hon. M.L.J. HAMILTON-SMITH: I appreciate the member's question and I thank him for it. The government does have a policy of working in conjunction with industry. We have provided support for key events and activities that show measurable and tangible outcomes in value for SA exporters and the business community generally. Cutting straight to the chase, examples of key events and activities recently supported by this department include $30,000 of sponsorship for Business SA's export awards programs.

The CEO of Business SA was one of the first people I met with when I took over this portfolio. I was pleased to advise him that we would be giving him that money. It is part of a national program conducted by the Australian Chamber of Commerce and Industry and Austrade, and I will make sure that the shadow minister gets an invitation to attend, because I think it is very important that we give our bipartisan support to our exporters.

We have provided an $11,000 sponsorship for Food SA's Food Industry Awards, which provide an opportunity to recognise and reward our best food producers, manufacturers and exporters. I have met with Catherine Barnett from Food SA. They are doing an outstanding job. They have someone up in Shanghai, by the way, and I think also in Hong Kong. They are receiving significant government funding. I have also met with Rob Kerin through Producers SA, and the food story is a very important part of what we are doing in this portfolio.

Business SA did have a three-year funding program for $420,000 for coaching and mentoring services to SMEs; it ended on 1 July 2014. The Department of State Development plans to contribute ongoing support to Business SA as part of DSD's overall coaching and mentoring program, and I am looking at ways to reintroduce some assistance to Business SA. I am not quite sure what form that will take yet but I have opened the discussion, because I think ultimately what we do in China, India, ASEAN and our other trading partners needs to be industry led.

We do not want governments going over there trying to lead the way. I think we are important to open doors, particularly in countries like China, but you really want industry to be doing deals round the table with each other and writing each other cheques. When that is happening, we know the system is working, and I think the chambers can provide important assistance here.

Of course, we have engaged with the Australia China Business Council (ACBC). They have received $50,000 to assist, develop and engage the business community to provide input into SA's China strategy. I have also met with Francis Wong of CITCSA. The SA government agencies such as the Department of the Premier and Cabinet and Primary Industries and Regions SA have sponsored events such as the 2014 ASEAN conference, with my department supporting the initiative through sponsoring a table and promoting the event to relevant industry clients.

Future support to CITCSA and other organisations will continue to be considered in line with strategic priorities and potential return on investment. That is something I will probably be looking at in this next budget cycle, because I think CITCSA and Business SA are organisations that the government values highly and I think they make very good partners in this space, so I am giving that considerable attention.

Mr WHETSTONE: The State Strategic Plan aimed for a total value of export income to South Australia to be $25 billion by 2013 and obviously that has been extended to 2014 and now it has been revised to 2020. What is your strategy to meet that target?

The Hon. M.L.J. HAMILTON-SMITH: I think everybody understands that some fairly ambitious targets were set in the State Strategic Plan many years ago. We have reached $12.4 billion, the highest result ever, in the 12 months to May 2014—as I mentioned earlier, up 18 per cent. It is a pretty good result and we are outperforming every other state at the moment. We have done that in the climate of the GFC and the aftermath and in the context of the Olympic Dam expansion not proceeding and the automotive industry really collapsing around us. So, it is actually a credit to all who have contributed to that export outcome.

Mr TARZIA: Low base, though.

The Hon. M.L.J. HAMILTON-SMITH: Yes, that is true. It is coming off a low base, although $12.4 billion worth of export revenue flowing around the economy, as I mentioned before, that passes through GSP. That is farmers who can go and put the kids in private school and buy a new tractor. That is a food manufacturer who can go and put in a new plant line or hire some new people or spend money on an expansion. It flows through in retail. That is the core money that gets the GSP of the state going, so we need to grow it. What we will not be doing is setting targets that are unrealistic. What we will be doing is working pragmatically at getting results.

The approach I have taken to this portfolio is I want to know the facts of what is going on out there, down to intricate detail. I want to know exactly how many people we have exporting to which countries, I want to know what they are selling, I want to know how much we are selling, I want to know where the opportunities to expand that are, I want to know who is out there that could be exporting that is not and how can we help them to do so.

I want to take a fairly statistical approach to this, because if we can measure where we are now and develop some KPIs as to where we want to be and then, as we have seen with business migration, introduce some selective funding programs that get those results, I hope to be able to come back to this committee every year and show that we have built, in a very pragmatic way, a program of work that has actually got small businesses in particular out there doing things in regard to selling their products.

It is that SME sector on which I am really focused, because commodities, to a degree, tend to look after themselves. Copper, wheat, big business, tends to manage its export operations in the large bulk commodity sector. The sector in our community that we need to stimulate to create growth and opportunity is the SME sector. That is places like Impi Fruits, when I was up in the Riverland, it is dairy farmers down in the South-East, meat producers in country SA. The people who are producing advanced products, processed foods, dried fruits, almonds—these SMEs. This is the group on which I really want to focus, because $1 million there, $1 million here, $2 million over there, if individual companies are making money, it all goes together into the same bucket, and we will get that figure up from $12.4 billion.

Mr WHETSTONE: Moving on, what is the flight protocol for ministers and departmental ministerial advisers travelling overseas on portfolio matters?

The Hon. M.L.J. HAMILTON-SMITH: Do you mean what class of travel?

Mr WHETSTONE: I guess. Do you travel with your SMEs, flight classes?

The Hon. M.L.J. HAMILTON-SMITH: It is interesting that you ask this question, because I am not sure if there is a hard and fast protocol for outbound and inbound missions. As I mentioned, this is something to which, as we speak, the government is giving some consideration, and I am actively involved with reviewing that with other ministers and other departments. We are looking at trying to develop some improved protocols so that, for example, if the minister for primary industries, who I think has just come back from a mission to India, has had a very successful visit and has met a group of people, if I was to go six months from now I would know who he met, what happened, what the outcomes were. I can get off the plane, well briefed and well prepared, and can walk straight up to those people and say, 'Well, you met with the minister for primary industries on this day, these were the things you did, I'm here to follow on from that'. We can get better connectivity.

This is an area in which we have identified we can do better. Similarly, we are trying to ensure that our outbound missions line up with the appropriate events. For example, the food producers will want to be at the right expo or event in a country, where the buyers or show is on for food producers. That might be occurring at a different time to when the miners want to go. The miners might want to go to a completely different event at a different time. We need to synchronise those things a little better. I would like to see a regular or principal outbound event each year and a principal inbound event each year to each country.

I think the pattern established by the former premier, the Hon. John Olsen, in setting up the G'day USA program in the US, where he branded and set up an event that really showcased Australia, whilst you would not want to copy that, the idea of having a regular event at the same time each year as your outbound, if you are going from Australia there to show your wares, has some merit. We are giving some thought to that; no decisions have been made. It is a work in progress, but I am happy to share it with the committee. Some protocols that provide for better connectivity would be good. There are other activities going on. I think the Confucius Institute is about to take a group of MPs off to China.

I would encourage every new member in particular to take that opportunity to go, take their spouses with them if they can—I think they have been invited—understand the culture, engage with the country and get a feel for the place, because that helps our relationship with those countries, having bipartisan missions of that kind. Those members can go over there and come back better understanding the opportunities of China.

I think we could organise something similar in India, perhaps through the Commonwealth Parliamentary Association, where a bipartisan group of MPs tours India and brings into that some trade outcomes and trade visits. I know certainly I and other ministers would be interesting in helping to facilitate. I think as a parliament and a government we could improve the protocols, so I think we could do more in this space.

Mr WHETSTONE: Minister, you have mentioned your trip to China with then trade minister Close. The trade minister and her advisers flew first class within China during that trip. Did you also travel first class?

The Hon. M.L.J. HAMILTON-SMITH: I am not sure if that information is correct. I will check and I will get back to you, but—

Mr WHETSTONE: It is correct; it was based on an FOI that has been received regarding the overseas trip, May 2014.

The Hon. M.L.J. HAMILTON-SMITH: Was it? Okay. Well, I am not aware of that FOI or that minister’s situation in that regard, but all I can say is that I think we flew from here to China business class; I think that is the standard protocol. I think we flew up and back business class. I think there might have been an internal flight—we had to come out through Qingdao through Shanghai; I am not sure whether that was a domestic flight, but I think that was business class as well. As far as I was aware, the whole trip was business class. I was with her the whole time, and I am not aware of her having travelled first class at any time during that trip. All I can answer is what was my experience.

I am advised that for the domestic flights within China they may only have two classes of travel, and they call business class ‘first class’ and then there is just economy, so I am advised that may be the solution. But certainly the international component of that travel, from Adelaide to China and back, was business class, because I was in it and minister Close was in there with me.

If there was a first class component, I can only assume it was that very short domestic leg, which would have been probably the distance from Adelaide to Melbourne. It might be a terminology issue: it might be that there is no such thing as first class, even though it might be named as such, on the local China airline, whoever that was. One might want to refer that question to minister Close.

Mr WHETSTONE: Certainly. In regard to progressing trade priorities, have you met with your federal counterpart to discuss how South Australian exporters can maximise the free trade agreement with Japan and Korea?

The Hon. M.L.J. HAMILTON-SMITH: As a matter or fact, yes. I was, just this weekend, up in Sydney at the B20, which is the business component which forms part of the G20. It received quite a bit of media coverage. I spoke with the Hon. Andrew Robb up there at the B20, and also Ian Macfarlane. All state trade and investment ministers were invited to participate in a number of events, including a session on Saturday morning addressed by Treasurer Joe Hockey and attended by other ministers, including Jamie Briggs and Andrew Robb.

The event was also attended by the foreign affairs, investment and trade ministers from a good number of the G20 nations, together with a group of industry leaders from across Australia. It was a very interesting group, and I will also be attending a trade ministers meeting in Cairns in September, to which I assume all investment and trade ministers have been invited from around the country. I have had extensive discussions with Austrade, both on the weekend and separately.

My feeling is that the federal government and Austrade understand completely that what our food producers, exporters and small businesses want to see is complete cooperation between the commonwealth and the states in their best interests, and they want the commonwealth and the states to be working together on their behalf. They would be very disappointed if we were not, and so I am very happy to advise that, as I would expect from those two very professional ministers, Mr Robb and Mr Macfarlane, the South Australian government and the federal government are getting on with the business of advancing the best interests of our exporters.

Mr WHETSTONE: Have you met with any of the export businesses? Have you met with them directly or to discuss the benefits of the free trade agreement? I did note with interest your press release that was released sometime late last week with regard to bulk barley and bottled wine. I am just curious as to whether it was actually bulk wine and feed barley, because they were the beneficiaries of that free trade agreement.

The Hon. M.L.J. HAMILTON-SMITH: I am glad you have raised free trade agreements because, as I said, there have been discussions with the commonwealth and certainly locally about these agreements. Australia has entered into FTAs with Chile, Singapore, Thailand, the USA and certain ASEAN countries, and closer economic relations are planned between Australia and New Zealand. FTAs are under negotiation with Australia-China, the Australia-Gulf Cooperation Council, the CCC FTA negotiations and Indonesia-Australia's comprehensive economic partnership. Negotiations are also underway with Japan, Korea and Malaysia. The Pacific Agreement on Closer Economic Relations (PACER) is also underway, as is a Trans-Pacific Partnership Agreement.

FTAs are the responsibility of the commonwealth, and it is up to the states to really work out how they are going to best advantage their businesses and food producers from them. They have recently been pursued by the current federal government and those of significant interest to South Australia include the Japan-Australia Economic Partnership and the Korea-Australia Free Trade Agreement.

At the B20, I had a great discussion with the Korean trade minister, who is very keen to do business with South Australia. In fact, I had a bit of a laugh with him that he is going to be building one of the supply ships for the Royal Australian Navy. It would have been nice if it was built here, but that is probably a subject for later in estimates.

South Australian goods exported to Japan in 2013 were valued at $623 million, accounting for 5.8 per cent of total exports. Key exports from South Australia to Japan in 2012-13 included bluefin tuna, hay and chaff, beef and oranges. Key imports from Japan include motor vehicles and tyres. The Japan-Australia Economic Partnership is set to deliver a significant boost to Australian farmers and other agricultural producers, resource exporters, service providers and consumers.

The commonwealth government advises that more than 97 per cent of Australia's exports to Japan will receive preferential access to enter duty free when the agreement is fully implemented. Better access for key agriculture products, including beef, cheese, horticulture and wine, are expected. Tariffs will be bound at zero for wool, cotton, lamb and beer, most importantly at the end. For Australian consumers, tariffs will be eliminated on imported cars from Japan, as well as on household appliances and electronics. Australian service providers will also gain significant new access to the Japanese market across areas such as finance, education, telecommunications and legal services.

Under the Korea-Australia FTA, 99.8 per cent of Australian goods will enter Korea duty free on full implementation of the agreement. Compared with other trading partners, South Australia has a modest economic relationship with Korea and, unlike the rest of Australia, the state imports much more than it exports. The agreement eliminates high tariffs on a wide range of Australian goods exports, including beef, wheat, sugar, dairy, wine, horticulture and seafood, creates new market openings for services and improves investment protections. I would be very happy to provide briefings for any members of the opposition who would like to know more from the agency.

For agriculture, Korea will eliminate tariffs immediately on entry into force for raw sugar, wheat, wine and some horticulture. Tariffs on most other agricultural products will be eliminated within short time frames thereafter. Korea will eliminate its 40 per cent tariff on beef products progressively over 15 years, which will help to level the playing field for Australian beef exporters, relative to the USA. Korea will also eliminate all tariffs on manufacturing, energy and resources products within 10 years, which will benefit Australia's resource, pharmaceutical, energy and automotive parts exporters.

Australia will remove its remaining tariffs on Korean goods on entry into force or over several years, which will benefit Australian consumers and industries which rely on imported Korean products. Tariffs relevant to local sectors which compete against Korean products, including some vehicles, automotive parts, steel, textiles, footwear and clothing, will be phased out in staging periods to allow industry to adjust.

The KAFTA will provide benefits to the Australian services export industry, with new market access for suppliers of legal, accounting and telecommunications services and guaranteed open access across a broad range of other services, including financial and education services. In addition, the agreement improves opportunities and protections for Australian investors and investments in Korea, which will help attract more direct investment from Korea into Australia and promote investor confidence and certainty in both countries. For the Australian automotive industry, in place are staging periods for the reduction of tariffs for some vehicles of three years or, for parts, up to five years.

Negotiations on the Australia China Free Trade Agreement commenced in 2005. The negotiations are complex, covering an array of issues, including agricultural tariffs and quotas, manufactured goods, services, temporary entry of people and foreign investment. With China being a significant trader to South Australia, agreeing an effective FTA is essential to improving the competitiveness of our exporters in this significant market.

China has FTAs with New Zealand and Chile, giving them preferential access to the Chinese market; therefore, it is important for our agricultural producers to be able to compete on a level playing field. I am told that the 20^th round of negotiations in May 2014 has progressed the agreement; however, substantial work is still required to conclude negotiations, and an intensive program of work is being pursued.

Mr WHETSTONE: Thank you, minister. I refer to Budget Paper 4, Volume 4, page 111—program summary. As the government has cut the budget to the Globally Integrating the SA Economy program from $30 million in 2011-12 to $19 million this year, have you, the minister, lobbied cabinet about reinstating funding for this program back to that $30 million?

The Hon. M.L.J. HAMILTON-SMITH: Could you just clarify that question for me? Could you just point out where that $30 million is on that page? Is it page 111?

Mr WHETSTONE: Budget Paper 4, Volume 4.

The Hon. M.L.J. HAMILTON-SMITH: Page 111?

Mr WHETSTONE: Yes.

The Hon. M.L.J. HAMILTON-SMITH: I am just looking for the $30 million, because the page I am looking at in the budget paper has it going up from $13 million in 2012-13 to $19 million in 2014-15; that is, the net cost of providing services. If you look at page 111—

Mr WHETSTONE: Yes, I am looking.

The Hon. M.L.J. HAMILTON-SMITH: —we have got $13.3 million net cost of services in 2012-13 going to a budget of $13.8 million, then an estimated result of $14.3 million, and then lifting to $19.1 million in 2014-15. I just cannot see a figure of $30 million there.

Mr WHETSTONE: No, you are right.

The Hon. M.L.J. HAMILTON-SMITH: It might have been $13 million.

Mr WHETSTONE: My mistake; I apologise. Alright, we will move on.

The CHAIR: Perhaps we will have another question on this side, if that is alright.

Mr WHETSTONE: Another 15 minutes.

The CHAIR: Not necessarily. This could be just a yes/no. If you want to go with yours first, then we will come back.

Mr WHETSTONE: Okay, this one might stir them up a bit. Minister, I refer to Budget Paper 4, Volume 4, page 60—your ministerial office resources. Since moving into your new office at the Department of State Development, has your ministerial office had or will have any office fit-outs or modifications?

The Hon. M.L.J. HAMILTON-SMITH: Now look, the member for Elder will be shattered because this was her question, I understand, because I know she has had a keen interest in this. She has raised it with me on a number of occasions, so your question gives me an opportunity to provide an answer.

Yes that is correct. Information has been provided in the budget paper about the cost of establishing my office and I have made a concerted effort to try and minimise those costs. For that reason, although my office is in temporary lodgings in the city at the moment in Waymouth Street, I will be moving I think next week (so we love moving) to the State Admin Centre which is owned by the state government.

The annual cost of renting that office space will be $156,100 and that is a bargain basement price because the cost of Waymouth Street is in the order of $236,000 should they be retained. There are other government offices on North Terrace, for example, where it is $340,000 and other city locations for $223,000—so $156,000, well, we have been sent to Siberia. It is very affordable accommodation by comparison with those other office spaces.

Can I also say the cost of setting up the office is very reasonable with the current estimate being $1,051 per metre squared against the DPTI benchmark for a ministerial office of $1,595 per square metre. So I am two-thirds of what the benchmark is for a normal ministerial office, and it is $1,785 per square metre for this type of work generally. I do not know how but I managed to do it extremely economically. Although I did look into this, and I thought I would not bring it in, but I did look back to the time when the Liberal government was in office and we might not want to pursue this too much further.

There will be some fit-out costs of around—and this is just the normal stuff that goes on whenever there is rearrangement within the building—building works, moving the odd wall, putting up a reception desk and so on $143,000, joinery $16,000, furniture $22,000, removalists $4,000 and that comes to $185,000, which is quickly ameliorated by the reduced rent being in the State Admin Centre, so it has been a great achievement. I want to congratulate my Chief of Staff and the CE of DSD for the job they have done.

Mr WHETSTONE: Does that fit-out include a new kitchen?

The Hon. M.L.J. HAMILTON-SMITH: I do not think so.

The CHAIR: Is that a no; that is a suggestion?

The Hon. M.L.J. HAMILTON-SMITH: The answer is no. In fact, when I was a minister in a Liberal government I had the luxury of an ensuite adjoining my office in plush circumstances. It is now quite a long walk to the other side of the building just to sort of powder your nose. So it is a much more humble, lean show in the current government than I remember from 2001.

Mr WHETSTONE: That is what happens when you do what you have done. Minister, how many staff will operate within your office?

The Hon. M.L.J. HAMILTON-SMITH: Can I just have a minute? Just to be accurate, I am advised that there is a movement of a wall that is required and that apparently is adjacent to the kitchen. So I am not sure whether it makes the kitchen smaller or wider, but there is a wall that is being moved. It is a bit like being back in the army I am afraid.

The CHAIR: Member for Elder, you have some news for the member for Chaffey.

Ms DIGANCE: Yes, Chair, I would just like to say, member for Chaffey, I am really pleased I let you go first with that question because I think you and I are in a bit of synergy today. That was the question I was planning to ask, so thank you for that; I appreciate it.

The CHAIR: You have the call.

Ms DIGANCE: So back to you.

Mr WHETSTONE: Minister, how many staff operate within your office, including the MLOs, other public servants and any other political staff reporting to you and at what cost? Can the minister advise when the information about his office staff will be gazetted, as it was due at the beginning of this month?

The Hon. M.L.J. HAMILTON-SMITH: Drawing the member's attention to Budget Paper 4, Volume 4, page 60, the budget paper gives a figure of eight FTE beside my name, minister Gago with 11 and minister Close with seven. That does not include ministerial liaison officers (MLOs). Funding provided for my departmental or my ministerial office for 2014-15 is $1.7 million, comprising salaries of $1.2 million, including $0.3 million for three additional public sector FTEs, supplies and services of $0.5 million.

The FTE budget for this office for 2014-15 will be 11 FTEs, comprising the following positions: a chief of staff, three ministerial advisers, an office manager, a PA to the minister, a PA to the chief of staff, a parliamentary officer, and three additional Public Service positions. The way ministerial offices work is you have people from departments attached called MLOs who are actually the connectivity point between your ministerial office and the department and who ostensibly are in your office but really are not, so to speak.

I am also going to have the Veterans' Affairs agency in my office; that was the practice of some previous ministers. This is an agency comprised and funded elsewhere in DPC; it comes under Treasury, I think, administered by Treasury. I am going to make efficient use of their co-location to ensure that I have direct access to that agency and, therefore, do not need an additional staff member. So I think in the overall scheme of things, my office is fairly lean compared to some; however, the benefits have been many.

Mr WHETSTONE: Referring back to the question I asked regarding Budget Paper 4, Volume 4, page 111, I did refer to globally integrating the SA Economy from $30 million in 2011-12 to $19 million this year.

The Hon. M.L.J. HAMILTON-SMITH: You said 30, sorry?

Mr WHETSTONE: Yes. In the 2011-12 budget.

The Hon. M.L.J. HAMILTON-SMITH: The 2011-12 budget. I do not have the 2011-12 budget in this budget paper and I am—

Mr WHETSTONE: Minister, back in 2011-12 the budget was $30 million and it has been reduced to $19 million. Obviously, with the importance of trade, your new portfolio, will you lobby cabinet to reinstate that funding to $30 million?

The Hon. M.L.J. HAMILTON-SMITH: I will go back and check 2011-12 and I will see how that was constructed, because there has been significant reorganisation of government over that period. Now what it may show, when I obtain that information, is that that figure of $30 million may have included small business, industry and trade or certain other functions that are not now included in the department. I am advised that there are portions of this function, such as Invest SA, that in 2011-12 were within the department but were hived off and went to DPC.

It may be that the reason for that discrepancy, if it is there, is reorganisation within government. Sometimes you are not comparing apples with apples: it is an orange and an apple. However, I will ask the department to go back and look at that. It is outside the purview of this budget paper, but I am more than happy to ask the department to go back and have a look at that, and I will get an explanation and certainly provide it to the member.

It may be that that money, or even more, is actually still being deployed but it might be deployed by either the Premier or by another minister, such as the Minister for Automotive Transformation or the Minister for Investment and Trade, or even PIRSA, because functions have been moved within government. I will come back to the house on that one.

Mr TARZIA: I refer to Budget Paper 4, Volume 4, page 112, the fifth dot point under Targets, progressing all investment priorities. What part of attracting investment to South Australia does the minister believe tax reform should play?

The Hon. M.L.J. HAMILTON-SMITH: Tax reform is clearly a matter for the Treasurer, and I am sure that he got a lot of questions on that subject. I would simply say that the message I get from businesses everywhere is that they would clearly like to be paying as little tax as possible. Somebody once said to me that the art of politics is deciding how the money will be raised and how the money will be spent, and I think they were not far off the mark. It is always important, but I think any questions of a specific nature on tax probably need to be referred to the Treasurer.

I would point out that the budget comprises a $180 million reform of WorkCover. Can I say that I am really looking forward to seeing the details of those reforms. I think the opposition will be impressed and, I hope, fully supportive of those reforms, because it would be very nice to see a levy rate with a 1 in front of it, given that other states have a low levy rate. Everyone would like to see taxes come down, but they are questions for the Treasurer.

Mr TARZIA: I refer to Budget Paper 4, Volume 4, Page 31, under Targets 2014-15, the second dot point. How much extra funding has the government allocated to the state's fruit fly program to ensure our fruit fly free status is retained and horticulture export market access is maintained in the Riverland?

The Hon. M.L.J. HAMILTON-SMITH: I just observe that primary industries is the portfolio of another minister.

Mr TARZIA: I will rephrase it. What role is the SA government playing to ensure China recognises the state's freedom status?

The Hon. M.L.J. HAMILTON-SMITH: We press our clean and green credentials very forcefully in all of our trade missions, and we do our very best. I was delighted to be up in the Riverland the other day at the cabinet meeting where locals got up and absolutely commended the government for its efforts on fruit fly. Someone, not known to me but perhaps known to the shadow minister, got up and said they were amazed and impressed that minister Bignell and, prior to him, minister Gago had spent hours and days, I think it was, standing with them in the orchards working through the issues during the recent crisis up there.

Mr Whetstone interjecting:

The Hon. M.L.J. HAMILTON-SMITH: I think they were congratulating the government quite strongly. In fact, I must say the whole Riverland shadow cabinet was just incredibly well received. The feeling I got from the community up there was that they were really pleased with the effort the government had put into measures in respect of fruit fly management, but they are questions you will need to refer to the minister for primary industry because it is his area. I acknowledge, in response, that it is important for us to push our clean and green message in China. Our produce is absolutely fantastic, and we do need to keep reminding people that we are a good clean destination. Of course, we are always going to have problems.

Mr WHETSTONE: During question time in the house a question was asked about you adopting the strategy to have China recognise South Australia as an area of freedom status, which is China giving recognition for, particularly, Riverland fruit growers to be recognised for being fruit fly free, which currently does not happen, and it is at considerable cost to the grower.

The Hon. M.L.J. HAMILTON-SMITH: I am not quite sure exactly what information the member is seeking.

Mr WHETSTONE: I am looking for your support to lobby the federal government, but also in your trade missions to support area freedom in the Riverland of South Australia. Exports that currently land in China are not recognised as fruit fly free, so all fruit exports have to go through cold sterilisation treatment. They are already recognised as fruit fly free, but China does not recognise that agreement.

The Hon. M.L.J. HAMILTON-SMITH: That sounds to me like a very interesting issue for us to explore together. I invite the shadow minister to perhaps catch up about that. You would be far more knowledgeable about these things than me; you have lived and breathed it all your life. I would be very happy to sit down to talk with you and others about that. If there is anything we can do to enhance our credentials as a clean, fruit fly free destination, I would be able to work together if you want to. The overriding message I am getting, as I go around talking to people in this portfolio, is that they really want us all to work together—the federal government, the state government and the opposition. There is work to be done, and if there is anything we can do together to improve our fruit exports, based on better promoting ourselves in China, I would be happy to work with you on it.

The CHAIR: There being no further questions, I declare consideration of proposed payments adjourned and referred to committee B. I thank the minister and his advisers for their time here today.