Estimates Vote

Department of Primary Industries and Regions, $104,085,000

Administered Items for the Department of Primary Industries and Regions, $4,099,000

Minister:

Hon. L.W.K. Bignell, Minister for Agriculture, Food and Fisheries, Minister for Forests, Minister for Tourism, Minister for Recreation and Sport, Minister for Racing.

Departmental Advisers:

Mr S. Ashby, Chief Executive, Department of Primary Industries and Regions.

Mr S. Johinke, Director, Finance and Prudential Management, Department of Primary Industries and Regions.

Mr D. Frater, Deputy Chief Executive, Department of Primary Industries and Regions.

Prof. M. Doroudi, Group Executive Director, Department of Primary Industries and Regions.

Mr A. Johnson, Group Executive Director, Department of Primary Industries and Regions.

Prof. P. Mooney, Executive Director, South Australian Research and Development Institute, Department of Primary Industries and Regions.

Dr R. Paskin, Chief Veterinary Officer, Department of Primary Industries and Regions.

The CHAIR: The estimates committees are a relatively informal procedure and, as such, there is no need to stand to ask or answer questions, although I do remind members that normal standing orders for conduct in the chamber remain in place. I understand that the minister and the lead speaker for the opposition have agreed an approximate time for the consideration of proposed payments, which will facilitate a change of departmental advisers. Can the minister and lead speaker for the opposition confirm that today's timetable for proceedings, previously distributed, is accurate?

Mr PEDERICK: It is 2½, is it?

The CHAIR: As we have printed here.

The Hon. L.W.K. BIGNELL: Yes, thank you, Chair.

The CHAIR: Changes to committee membership will be notified as they occur. Members should ensure the Chair is provided with a completed request to be discharged form. If the minister undertakes to supply information at a later date, it must be submitted to the committee secretary by no later than Friday 30 October 2015. This year, estimate committee responses will be published during the 17 November sitting week in corrected daily Hansard over a three-day period.

I propose to allow both the minister and the lead speaker for the opposition to make opening statements of about 10 minutes each should they wish. There will be a flexible approach to giving the call for asking questions based on about three questions per member, alternating each side. Supplementary questions will be the exception rather than the rule. A member who is not part of the committee may ask a question at the discretion of the Chair. Questions must be based on lines of expenditure in the budget papers and must be identifiable or referenced at the beginning of each question.

Members unable to complete their questions during the proceedings may submit them as questions on notice for inclusion in the House of Assembly Notice Paper. There is no formal facility for the tabling of documents before the committee; however, documents can be supplied to the Chair for distribution to the committee. The incorporation of material into Hansard is permitted on the same basis as applies in the house, that is, that it is purely statistical and limited to one page in length. All questions are to be directed to the minister and not the minister's advisers. The minister may, of course, refer questions to advisers for a response.

During the committee's examination, television cameras will be permitted to film from both the northern and southern galleries. I declare the proposed payments open for examination and refer members to the Agency Statements, Volume 4. I now call on the Minister for Agriculture, Food and Fisheries to make a statement if he wishes.

The Hon. L.W.K. BIGNELL: Good morning, Chair and committee members. It is my pleasure to provide information about the programs and work conducted by the Department of Primary Industries and Regions SA (PIRSA).

I would like to introduce the members of the department who are with me today. Firstly, on my immediate left is Chief Executive, Scott Ashby and Stephen Johinke, Director, Finance and Prudential Management. Professor Mehdi Doroudi is the Group Executive Director, and behind me is Don Frater, Deputy Chief Executive, and Andrew Johnson, Group Executive Director.

Let me start with an overview of our industries. The quality and yield of South Australian crops during last season's grain harvest generally exceeded farmers' expectations. PIRSA's final crop and pasture report for the 2014-15 grain cropping season put the crop at 7.7 million tonnes, with a farm gate value of around $2 billion. After generally adequate opening rains, seeding of a similar area of grain crop is now close to complete; however, cold conditions are slowing pasture growth, particularly in the South-East, with farmers in some areas handfeeding stock to supplement paddock feed availability.

South Australian gross food and wine revenue has continued to grow, with an $834 million, or 5 per cent, rise to reach a record $17.1 billion, with significant increases in revenue generated by the horticulture, livestock and grain industries. Finished food and wine values have also grown by $836 million, or 13 per cent, to reach record levels of $7.46 billion due to increased investment in processing facilities and strong growth in meat, horticulture, dairy and grain processing.

Total overseas exports of food and wine increased by $469 million, or 11 per cent, to reach a record $4.8 billion, or 42 per cent, of total merchandise exports. Finished food and wine exports increased by $308 million, or 13 per cent. Early information indicates continued export growth in 2014-15 for South Australian food and wine.

The state government made premium food and wine from our clean environment and exported to the world one of our 10 top economic priorities which the Premier announced in August last year. Our vision through this priority is for more premium South Australian food and wine to be consumed locally and exported around the world. It is about ensuring our agriculture, food and wine industries continue to grow through opening the door to new ideas, new opportunities, new people and new businesses.

It builds on the work that has already emerged during the past two years from our premium food and wine from our clean environment strategic priority and seeks to secure our position as a producer of premium food and wine from our clean water, clean air and clean soil, capitalising on the increase in global demand for high-quality food and wine.

Therefore, let me tell you about the major projects PIRSA has been working on for the past 12 months. The $265 million South Australian River Murray Sustainability program is funded by the Australian government and being delivered by PIRSA, with program implementation to be completed by 30 June 2018. SARMS comprises two main areas of investment: $240 million for the Irrigation Industry Improvement Program and $25 million for the regional economic development suite of programs.

Under the National Partnership Agreement for SARMS, South Australia is required to return 40 billion litres, or 40 gigalitres, of water to the River Murray. After two funding rounds, we have already delivered 34 gigalitres back to the river, so to be within six gigalitres of this target is an excellent achievement.

To further protect South Australia from the threat of fruit fly we are building a national sterile insect technology facility in Port Augusta. The design and building plans have been completed and building is expected to commence in September, with the facility to be completed by July 2016. Development of a sterile male-only line of Queensland fruit fly is well underway, with SARDI scientists and partners in a national $22 million research and development program to develop the sterile fly and then mass produce them in the new SIT facility for release in horticultural production regions across Australia.

Much of the excellent work by PIRSA in biosecurity is focused on preparedness and surveillance. The value to the state of a good biosecurity program cannot be underestimated. If some of these pests and diseases were to become established, our access to local and export markets would be severely impacted. The government will continue to invest in biosecurity as part of our national commitments.

Emergency management and response is also an integral part of PIRSA's service to the community. PIRSA staff responded to the Sampson Flat bushfire earlier this year and assisted primary producers affected by the fire. Many livestock had to be euthanased and disposed of due to serious injury and healthy animals moved to markets because of a lack of feed. Some horticultural producers were also affected by fire and smoke taint, and these producers received support where requested.

I would like to take this opportunity to thank all the staff from PIRSA who worked in horrific conditions to help their fellow South Australians deal with the aftermath of a devastating bushfire. This dedication and commitment was, as always, outstanding.

In October 2014, PIRSA took the first important step in redeveloping the Clare research centre as the national research development and extension hub for grains in South Australia. PIRSA purchased a property to establish a new improved office building, laboratory and storage facilities. Concept design and works have already commenced, and a new building will be constructed and completed by September 2016.

Efficiencies have already been achieved through the relocation of vehicles and equipment from other sites to the new Clare site. On 14 April 2015, I was pleased to announce, together with the Almond Board of Australia, the establishment of the National Almond Centre of Excellence, to be located at the redeveloped Loxton Research Centre. The National Almond Centre of Excellence will ensure future innovation and technology advances for almond growers in South Australia and around the nation. The centre will also showcase the Australian almond industry and its products and production practices to export buyers from around the world.

On 26 June 2015, I signed the deed of agreement and stage 1 funding deed with the Almond Board of Australia to formalise our agreement, with the first payment of funds being made to the board. During the past 12 months, we have continued to deepen our relationship with China, and Shandong more generally, to deliver greater export opportunities for South Australian businesses. Most recently, we were part of the Premier's mission to Shandong, leading an agribusiness delegation of nearly 60 members spread across our wine, horticulture, grains and seafood sectors.

As a side trip to this mission, I led a citrus market access delegation to participate in high-level meetings with the Chinese central government in Beijing to progress negotiations in recognition of South Australia's fruit fly free status. We have deepened our technical collaboration with a number of outbound missions focused on South Australia's biosecurity, sustainable productions, fruit fly management and integrated pest management systems.

We have also held a number of very successful high-profile events in Hong Kong, highlighting our premium food and wine and attracting positive media attention. We also welcome any delegations to South Australia and continue to highlight the state's premium food and wine products and encourage introductions to South Australian businesses.

The high-value food markets in Asia and Australia offer significant opportunities for South Australia's food industry. PIRSA is leading the Functional and Luxury Food project to help realise these opportunities, and PIRSA is using expertise from across the globe, including the VTT Technical Research Centre of Finland, the ESSEC Business School from Paris and Singapore, and Frost & Sullivan Australia, as well as the Food Innovation Centre of Mondelez Australia. This project supports the premium food and wine from our clean environment exported to the world economic priority.

I wish to conclude by reiterating that the government recognises the contribution primary industries make to this state's economy, prosperity and wellbeing. It does not matter where you live in South Australia, we all prosper thanks to the hard work of those people in our regions who do so much in growing produce that is then used here but also exported to the world. PIRSA's role in supporting this sector remains vital, and the government will continue to work side by side with agriculture, aquaculture and fishing sectors to ensure growth for them, which will lead to growth across the whole state.

The CHAIR: The member for Hammond, do you have a statement?

Mr PEDERICK: No.

The CHAIR: We will go straight to questions.

Mr PEDERICK: Thank you. Minister, I refer to Budget Paper 4, Volume 4, page 12, and I note the objectives of the agency, which largely reflect those of the previous budget. Specifically, though, the objective of attracting investment into agribusiness, which appeared in last year's paper, has been removed. Can the minister confirm that the mandate of the department has now changed, in that there is no longer a focus on attracting an investment into agribusiness and, if so, which agency is now assuming that role?

The Hon. L.W.K. BIGNELL: I thank the member for Hammond for the question and well picked up. There has been a change, because we have established the investment attraction agency under the Department of State Development. They will look at a range of different things, including agribusiness, but in no way are we diminishing what we do in trying to attract investment in our agribusiness sector. In fact, we think it is a really important sector and we want to increase that involvement. PIRSA will still play a very important role in supplying technical advice and also offering leads to the investment attraction agency to try to get more investment into South Australia.

Mr PEDERICK: Are you suggesting there is an open door and no barrier between your department and the Department of State Development, because sometimes we see silos appear between departments.

The Hon. L.W.K. BIGNELL: Yes, exactly, member for Hammond. This is all about breaking down those silos, so that when we have ministers, public servants or anyone else going in to an overseas country they have a list of many different prospective investment opportunities, whether they be in mining, the agribusiness sector, tourism or any other sector.

Mr PEDERICK: I refer to Budget Paper 4, Volume 4, page 12. In the agency's objectives I note the commitment to the department's role in the government's strategic priority of premium food and wine from our clean and green environment. Certainly the minister has constantly stated his commitment to promoting South Australian food under this banner, and often that has not been divorced from his very vocal position on keeping South Australia GM free. I further note that there is a target to grow the contribution of the South Australian food industry to $20 billion by 2020. Therefore, the objective of keeping this sector globally competitive is implicit. My first question is: given the minister's very vocal stance against GM crops, what quantifiable economic data does he have to confirm that remaining GM free delivers an economic benefit to South Australia?

The Hon. L.W.K. BIGNELL: I do not think we have all the evidence in at this stage, but what I know from my travels around the world and talking to people in—let's just focus on China for a start. When we go into the China market and we explain that we are phylloxera free, we are fruit fly free and we are the only mainland state in Australia where it is illegal to grow GM crops, the Chinese people are very interested in that, and not just the government people but the people who are importing food from around the world. It gives us a real selling point that we are different to other states of Australia and we are different to many jurisdictions right around the world, particularly if you are looking at North America. So it is a huge selling point for us.

We are trying to work with the grains industry to see whether we can change the marketing focus to ensure that they not only promote the grain as being an Australian grain, but if they could break that down and sell it is a South Australian GM free grain we think that will then result in the sort of premiums that we know are possible. In China, the importers we have spoken to there say it is much easier to get things through their customs if they are GM free; it is a much quicker process. They are keen to look at what we have to offer from South Australia.

If we look at the example of KI Pure Grain where they get a $60-a-tonne premium on their canola, it is because the Japanese want the very best they can get and they want canola that they can pitch as being GM free, and they know they have that security with what they are getting from KI Pure Grain. It is a very important part of the story that we get to tell.

The reason we are phylloxera free is because some people who came before us in this place worked with the wine industry in the 1880s. They heard tales coming back from people travelling out here from Europe about this terrible pest that had gone through and eaten the roots of vineyards right across Europe and destroyed vineyards in France, Italy, Germany—right across Europe it had wiped them out.

The wine industry here, which was only fledgling (obviously the colony formed in 1836), worked together with the legislators of the day to come up with the phylloxera act. It meant heat treating root stocks as they came in here, and it now means that we have some of the oldest lines in the world. If you go to the member for Schubert's electorate you can see vines that date back to the 1840s, and you do not find them just anywhere in the world. We must congratulate those who went before us. I hope that in many years to come people look back at this era, with successive agricultural ministers and premiers who have maintained that moratorium on growing GM crops in South Australia. Do we have the decisive edge right now? No, not necessarily, but I think it is coming.

When I was in Rotterdam in the Netherlands in April, I spoke to Viterra's parent company, Glencore, and explained to them that, if there is any way they can help us market South Australian grain in a different way, it would be very advantageous. I also met with Glencore International's CEO, Mr Ivan Glasenberg, in Zurich, and he was very interested in the possibilities to help spread the word about South Australia's GM credentials. We know that it is not just about the grain industry either. It is about companies that produce finished products here who can then put on their labels that it comes from South Australia, the only mainland state in Australia where it is illegal to grow GM crops.

A company like Bickford's has 150 different lines of produce. I caught up with Angelo Kotses in Shanghai last year at a big SIAL conference. I had just finished making a speech about our credentials of being fruit fly free, phylloxera free, and GM free, when he came up and said, 'Now it makes sense.' He said, 'We should be using that in what we sell, whether it's our lime cordial or it's our water products or anything else that Bickford's is selling into the Chinese market, and we should be using that.' We are seeing more and more food manufacturers looking at the advantages that they can get out of it. We need to take a wider view of the advantages that come from it. It might not necessarily be grain at the moment, but I hope that over the next few years we can work with the grain manufacturers and make sure that they can do the same sort of marketing that we are seeing with food producers.

If we look at the small seed market and lucerne, 50 per cent of the world market will not accept GM products, hence, we can access 100 per cent of the market and not have limited access; so we have some real advantages here. To change the way we do things is to let the genie out of the bottle, and we know that once that genie is out you cannot put it back in. We should probably have a good conversation about where we can go with this and how we can all prosper. Even in the grain community the thoughts are split. I hear from farmers who are totally pro GM and who want us to lift the moratorium, and I get correspondence from farmers who congratulate us on maintaining the moratorium, telling us how beneficial it will be for them.

I do not like to see division in any sector or community, but I think all the discussions so far have been very civil and I would like to keep it that way, but I really would like to hear some contributions from people. If we look at it and say, 'This is what we've got. Rather than keep fighting for something different, why don't we work with what we've got and see whether we can convince the marketers, the exporters, to try to go out and get that premium for the farmers?' I think our grain is some of the best grain in the world, but often it is seen as a commodity instead of the premium food that it is. In some instances the farmer feels that they have lost control of it once it leaves their property, and they do not feel as involved in the marketing process as perhaps a winemaker may, who may grow their grapes, turn it into wine and then put what they would like on the labels and take a point of view in marketing their produce.

To get back to your question, our stance on South Australia remaining GM free and maintaining that moratorium through to 2019 (and I hope beyond 2019) continues to be a major selling point for us. It is not just about getting a premium for our food across, as I said, not just the grains but all of our other foods and wine that are produced in South Australia, but it speaks to who we are. It tells a story to people from overseas that, when we can get up and say, 'We are phylloxera free, we are fruit fly free, we are GM free', we are not any of those three things by accident. We are those three things because we have a government that gets involved and works side by side with the agricultural community and works on things like biosecurity for the good of the whole agriculture and food manufacturing sector here in South Australia.

Mr PEDERICK: So, for the whole time that you have been minister and the time you have been very strongly advocating GM free, you cannot identify a single premium for South Australian farmers in remaining GM free?

The Hon. L.W.K. BIGNELL: It is a work in progress. I can come back to you with some more facts, but off the top of my head I have given you the example of the KI Pure Grain canola where they are getting a $60-a-tonne premium. I have given you the example of food manufacturers who are getting a premium because they can point to the credentials of this state. I met with the Viterra people in Rotterdam. They say that what they see in the US is the market is looking more and more to have more GM-free produce in their market. We think that the future is very bright and the fact that we remain GM free will help us, not just in the short term but I think in the long term the real benefits will flow as well.

Mr PEDERICK: But, minister, this flies in the face of the fact that the chair of Grain Producers South Australia, Garry Hansen (who happens to be my neighbour, just to declare my full interest), is advocating for farmers' choice and also the fact that large importers like both China and Japan do import GM produce.

The Hon. L.W.K. BIGNELL: I hear that, and while he may be advocating for farmers' choice, once you lift that moratorium on GM, you take away the choice of every other food producer, food manufacturer, wine producer and wine manufacturer to be able to go out and use the claim, quite correctly, that South Australia is the only mainland state in Australia that is GM free. We are GM free because this government has taken a view that that is a good place for us to be and that is a good place for our food producers, wine producers and food manufacturers to be.

As I said before, I think what would be really helpful is if we could all just work together and get Grain Producers SA involved in that as well to see how we can come up with a concept and a project where we can have the value add for the agricultural produce that we have here, not just for food manufacturers but for our grain growers as well. As I said before, there is a split in the farming community—people who grow grain. There are people who come to me and applaud the fact that we have a moratorium on the production of GM crops in South Australia and there are others who have a different point of view.

The CHAIR: Before we go on, can I just ask if we have any questions on the right-hand side? Member for Torrens.

Ms WORTLEY: I refer to Budget Paper 4, Volume 4, pages 26-27, Rural Services. Minister, how are the New Horizons demonstrations helping Australian grain growers increase production levels?

The Hon. L.W.K. BIGNELL: Thank you very much, Madam Chair, and I thank the member for Torrens for her question. New Horizons is a PIRSA initiative and is being delivered in collaboration with Farming Systems Groups, the University of South Australia, the University of Adelaide and the Department of Environment, Water and Natural Resources. Existing trial sites are located at Karoonda in the Mallee, Brimpton Lake on Eyre Peninsula, and Cadgee in the South-East.

I must say that last year I went to see the Karoonda site, and in December I was over on Eyre Peninsula and saw the Brimpton Lake trial sites. The difference is extraordinary, Madam Chair. To see crops that are grown in the usual way against these New Horizons crops is like you are looking at something that has come from vastly different parts of the state. For people who can get the chance to get out and have a look at these trial sites, it is a terrific thing to do. I know we have also had field days over at Cleve last year and then again down at Lucindale earlier this year. It was terrific to see PIRSA's New Horizons team down there showing farmers what the potential is for this amazing technology.

Our new site is at the PIRSA research centre at Struan, also in the South-East, just near Naracoorte. That site will look at managing the more cost-effective treatments and specifically determine the benefits of sourcing locally available organic matter. By looking local, we will support suppliers of organic material, such as chicken litter, grape marc and biosolids. New Horizons has shown soils can be dramatically improved and crop production increased through managing the top 50 centimetres of soil, rather than the traditional top 10 centimetres.

A program such as New Horizons is more than a revolution in dryland agriculture: it means jobs in our regions for farmhands, business advisers, accountants, bankers, farm consultants and machinery suppliers, and will significantly increase demand on our transport services. All this creates spin-off benefits for local communities, with increased patronage at sporting clubs, hotels and retail outlets.

There is a tremendous opportunity to develop the agriculture equipment required for a statewide uptake of New Horizons practices for engineers, manufacturers and maintenance workers. To progress this, we are collaborating with the University of South Australia's Agricultural Machinery Research and Design Centre. Their experts will look at current machinery available to our farmers and then design, build and test engineering machinery necessary to delivery the New Horizons practices.

In the first trials we have seen, I think the average was around a 70 per cent improvement in yields. If you could get that work right across all these same soil types across the state, we would be looking at a massive increase in our harvest each year and an economic benefit to the state of around $800 million. We know that we have to move from this small-scale production to larger scale, and then keep proving it up year after year to make sure that we can convince farmers that it is going to be worth the investment, not only in money but also in their time and their hard labour, so that we can actually convince people that this is a good thing to do.

People have been adding organic matter, going deeper and putting clay into soils around the state for quite a few years, but I guess this is the first time we have brought different groups of people together to do the science. It was interesting being down in the Mallee last year because I think there were two or three different people there, and one was saying, 'It's all about the organic matter,' someone else was saying, 'It was because we go so deep,' and someone else was saying it was the clay.

It was great to see three different groups who had been working on their own scientific experiments and trials having that sort of debate with each other. As a layperson, having a look at the trial sites, the one that looked the best to me was the one that had a bit of everything in it. It is something that is good in that it does not require a lot of addition chemicals or anything like that. It is quite a natural system and way of increasing productivity.

To that end, the government has provided a $200,000 grant to UniSA for machinery development. The purposes of this project is to benchmark the current subsoil, improving technologies, and identify the performance limitations that need to be addressed in order to increase the effectiveness and reduce the cost of subsoil modifications. It is also to develop the concept solutions that can be engineered to form the basis of improved prototype technologies and to design, build and test a specific engineering solution addressing at least one priority problem area.

Ms WORTLEY: I refer to Budget Paper 4, Volume 4, page 30, entitled South Australian River Murray Sustainability. Minister, can you provide a progress update on achievements to date regarding the South Australian River Murray Sustainability Program Irrigation Industry Improvement Program?

The Hon. L.W.K. BIGNELL: The $265 million South Australian River Murray Sustainability Program (known as SARMS) is funded by the federal government and being delivered by Primary Industries and Regions SA, with program implementation to be completed by 30 June 2018. SARMS comprises two main areas of investment: $240 million for the Irrigation Industry Improvement Program and $25 million for the regional economic development suite of programs. The $240 million 3IP is a competitive grants program which supports the restoration of a healthy Murray-Darling Basin environment by aiming to recover 40 gigalitres of water across entitlements from participating irrigators and, in turn, provides them with access to industry assistance funding.

Successful projects for 3IP round 1 and round 2 were announced on 21 July 2014 and 20 May 2015 respectively. The total investment on offer through 3IP round 1 and round 2 equates to $170 million, with a total of 34 gigalitres of water to be returned to the river. South Australia is well on track to return the 40-gigalitre return target required under the National Partnership Agreement. Achievement of the National Partnership Agreement (NPA) milestones are on track, with 20 gigalitres of water returned to the river by the end of 2014-15 and more than 100 projects well underway. 3IP round 1 projects are driving the following changes in the region:

approximately 1,300 hectares of crop plantings, including both new plantings and crop conversions;

a significant increase in almond plantings;

a shift towards more commercial varieties of wine grape and citrus varieties;

more than 20 new processing, packing and cold storage facilities, adding to the efficiency and end product value for farms; and

an increase in employment as a result of implementing 3IP round 1 projects is already being seen, with 250 jobs to be created in 2015-16 and an estimated 500 long-term jobs as a result of 3IP implementation.

The economic flow-on effects as a result of the implementation of the 3IP will travel throughout the South Australian River Murray region and broader South Australia. Through the program's exemplary implementation and by staying true to the original design request by industry, it continues to garner the support of community and industry.

SARMS is also a private sector award winner, having recently received the 2015 Water Industry Alliance SA Water Leadership Award for the implementation of 3IP round 1 in which PIRSA demonstrated leadership at both the state and national level to deliver the program which is meeting industry needs. The $25 million Regional Economic Development program forms the other part of the $265 million SARMS Program. Funding for the SARMS program was formalised under the SARMS National Partnership Agreement in which I, as the Minister for Agriculture, have overall responsibility in terms of intergovernmental governance, management and dispute resolution.

In forming the new government, it was agreed the Minister for Regional Development would have oversight of the $25 million RED program of SARMS, given its focus on regional development. The RED program features a suite of regional development research and innovation sub-programs, including:

$12.5 million for the Regional Development and Innovation Fund, a competitive grants program for non-irrigators;

$7.5 million for the redevelopment of the Loxton Research Centre; and

$5 million for the industry-led research sub-program, a competitive grants program for registered research service providers.

The $12.5 million Regional Development and Innovation Fund is providing funding to non-irrigators within the South Australian River Murray region through a competitive grant application process. Funds are being made available to a diverse range of projects which support regional development, employment opportunities and/or economic diversification in the region. Round 1 of the fund closed on 19 September 2014, with a total of $4.8 million of successful projects co-announced on 24 March 2015 by the Minister for Regional Development and the federal Minister for Infrastructure and Regional Development. A review of projects from round 1 demonstrated there would be benefit for calling for smaller innovative projects as well as the larger projects requested through round 1.

As such, a dual focus on smaller and larger-sized projects to capture the best ideas for the River Murray region has now been offered through rounds 2 and 3 of the RDIF. Round 2 focuses on larger value projects over $500,000, which will have an immediate impact on economic development in the region and the creation of new employment opportunities. Round 2 of the RDIF opened on 7 April 2015 and closed on 18 May 2015; 20 applications were received in round 2.

Round 3 focuses on projects between $200,000 and $500,000 to deliver economic diversification and innovation which will foster future economic development in the region. Round 3 of the RDIF opened on 13 April and closed on 25 May 2015; nine applications were received in round 3. Announcements of successful applicants for rounds 2 and 3 of RDIF are anticipated in late September this year.

During Murray-Darling Basin Plan discussions Riverland businesses and community leaders prepared a proposal for a Riverland and Mallee primary producers business centre. The $7.5 million redevelopment of the Loxton Research Centre (LRC), along with the associated research and regional development funding, is delivering on this locally-led proposal.

The Loxton Research Centre redevelopment is providing new opportunities for collaboration between industry and researchers at a national and international level and supporting South Australia's reputation and market edge as a leader in premium food and wine production from our clean environment. In August 2014 the final redevelopment plan for the Loxton Research Centre was approved by the federal government. The redevelopment is currently in the design and documentation phase, with development approvals and tendering for contractors expected to be completed in 2015 and construction commencing in 2016. Completion of construction of the Loxton Research Centre is expected by the end of 2016.

The $5 million Industry-led Research Sub-Program (IRSP) is an industry-led applied research grants program designed to improve South Australian River Murray regional productivity and innovation. This is funding research projects which address identified industry research priorities, with a particular focus on gaps in research not presently funded by federal, state or private investment.

Projects will be aligned with the objectives of the redeveloped LRC. Round 1 of the IRSP closed on 27 July 2014 with a total of five proposals totalling $1.8 million announced on 29 October 2014. Round 2 is being offered at two funding levels, with stream 1 projects seeking funding of up to $100,000 and stream 2 projects seeking funding between $100,000 and $500,000. Round 2 of the IRSP opened on 20 April 2015 and closed on 29 May 2015 with six applications received. Announcements of successful applicants for round 2 of IRSP are anticipated in late September 2015.

Finally, on 14 April 2015 I was pleased to announce, together with the Almond Board of Australia, the establishment of a centre of excellence for the Australian Almond industry to be located at the redeveloped Loxton Research Centre. In recognition of South Australia's unique capacity to foster growth of and innovation in the almond industry, the Almond Board has agreed to partner with the South Australian government to deliver a suite of initiatives which will see the establishment of the inaugural centre of excellence for the Australian almond industry in the Riverland.

The centre will ensure future innovation and technology advances for almond growers in South Australia and around the nation. The centre will also showcase the Australian almond industry and its products and production practices to export buyers from around the world. The agreement includes a state government commitment of $1 million in funding per year for four years for research, with further contributions from industry and the federal government. The agreement comprises:

expanding the South Australian Research and Development Institute's scientific capacity supporting the industry's research program;

PIRSA to establish a new research site to enable semi-commercial scale assessment of new varieties from the Adelaide University's plant breeding program;

a new experimental orchard for research into new production systems and enhanced land and water management; and

Almond Board staff to be based at the redeveloped Loxton Research Centre, together with officers and laboratory facilities.

This work will result in more than $1 billion of economic activity being generated in the region. I look forward to seeing the implementation of the significant suite of projects being delivered to the South Australian River Murray region.

Ms WORTLEY: I refer to budget Paper 4, Volume 4, Program 1, pages 24 to 26. How are the South Australian Research and Development Institute scientists helping Australian grain growers to better manage the snails damaging their crops?

The Hon. L.W.K. BIGNELL: Once again, I thank the member for Torrens for this question. Snails are the cause of significant losses to South Australian grain growers. These losses are due to feeding damage on the grain, the cost of controlling the snails in the paddock, additional costs during harvest and devalued and rejected grain at the silos. They also threaten access to important export markets. South Australian Research and Development Institute (SARDI) entomologists are working with the grains industry to develop better management options for snails.

The Grains Research and Development Corporation is providing funding of $1.2 million over three years to SARDI to lead the national snail control program. These snails are exotic pests, they are invasive and are expanding their footprint across southern Australia's grain growing regions. Bait control is often unreliable. As a consequence, farmers have had to resort to burning for snail control in autumn, which in turn has negative impacts on soil conservation.

To date, SARDI has identified the two snail species, the common white snail and the small pointed snail, which pose the greatest risk of further spread across southern Australia and has revised recommendations for baiting rates to maximise kill rates and the persistence of different bait types in the field. Research is continuing to find the optimal timing and densities for the different types of bait. The new findings will be conveyed to growers and consultants during the next 12 months through workshops in affected districts and through the media.

Mr PEDERICK: I refer to Budget Paper 4, Volume 4, page 14, Ministerial office resources. The ministerial office budget for 2015-16 is $1.468 million and last year it was $1.536 million. Last night, we saw on Today Tonight that in the last year you have spent $170,000 on travel. Did the full $170,000 come out of your ministerial office budget or was any portion taken from the direct PIRSA budget?

An honourable member interjecting:

The CHAIR: Order!

The Hon. L.W.K. BIGNELL: I thank the member for his question. I am advised that the entire cost of any travel done by our ministerial office was all taken from the budget allocated to our ministerial office and not from the PIRSA budget.

Mr PEDERICK: Same budget reference. The PIRSA executive director of strategy and engagement, Jo Collins, attended the Chinese food and beverage show SIAL in May of this year. What was her purpose in being there? How long was she present at the show? What was the cost of her trip and did this come from the PIRSA or ministerial budget?

The Hon. L.W.K. BIGNELL: I thank the member for the question. Ms Collins' travel was paid for out of the PIRSA budget. SIAL is a very important event. It has about 40,000 to 50,000 buyers go through it over a two or three-day period. It is held in Shanghai each May. I was there last year for it and, as I mentioned in one of the earlier questions about GM, there are South Australian food producers like Bickford's, who were there, tuna producers, canola oil producers and many other South Australian businesses who are trying to increase their market share or get their foot in the door in China.

I know that this year David Ridgway, the shadow agriculture minister, also went to SIAL and I think it is a really good thing to see bipartisan involvement. I had spoken to Mr Ridgway about SIAL, and certainly since he has been back I have asked him how it went and congratulated him on going over there, because we are not going to sell too much if we stay home here in South Australia.

What we need to be doing is getting out there and letting the world know what South Australia has to offer. We have premium food and wine from our clean environment and we have things that the rest of the world really desires once they know about us, but it is a little bit hard to sell a secret. We actually have to go to places like SIAL in China and really put ourselves out there and stand shoulder-to-shoulder with those food companies looking to export, whether it be into China or any other market.

I have stood up in here before and made the offer to people on both sides of the chamber that anyone who is travelling overseas should contact us and we will give you some tips on things you might be able to follow up on behalf of the government or on behalf of certain industries because we are all in this together. We all want to grow the economy. We all want to grow jobs, and one of the fastest ways we will do that is by increasing the amount of food and wine that we can export to the rest of the world.

Food SA coordinated the Australian stand. That was something that I offered up at the federal ministerial council to the agriculture minister, Barnaby Joyce, because last year when I went there, I walked in and South Australia was over in one corner and then tucked away somewhere else was Victoria, and New South Wales had a small presence somewhere else. Getting in there and actually seeing it firsthand, it looked really disjointed and I thought, 'This needs some national leadership.'

Mexico had all come in under the one banner, as had Canada and the USA. So many other countries were in there fighting under a national banner and we were split and divided. I understand from talking to David Ridgway that things worked a lot better this year and it was because of that leadership we had shown, from something that I had picked up and seen and then came back and brought up with Barnaby Joyce and other ministers from other states and territories. Ms Collins went to represent South Australia and to report on the success. The travel value of her trip was under $7,000 and she was there from 6 to 8 May.

The CHAIR: Does the member for Wright have a question on this?

The Hon. J.M. RANKINE: Yes, I have. I refer to Budget Paper 4, Program 1, page 19, dot point 5. Will the minister inform the committee about the benefits of the trading relationship between China and South Australia and the outcomes of the Premier's trade mission to China in May this year?

The Hon. L.W.K. BIGNELL: I thank the member for her question. In May 2015, the Premier led South Australia's largest international trade and investment mission to Shandong Province. Shandong is our sister state and an important agricultural producer and food processing hub in China. This mission was aimed at building on the strong relationship we have developed over many years with Shandong Province. The mission included eight sectors, with the agribusiness delegation of approximately 55 representatives being the largest.

Key elements of the mission included agriculture, food and wine round tables, wine buyer tasting events, the South Australian Investment Roundtable, citrus market access mission meetings, off-site horticultural visits and participation in the Wine Australia roadshow. It built on the crucial government-to-government relationships we have developed with the Shandong provincial government to deliver greater export opportunities for South Australian business. China, including Hong Kong and Macau, is South Australia's number one agriculture, food and wine export destination. It is in our top three export destinations for field crops, meat, livestock, wine, seafood and dairy. It is one of our leading destinations for food commodity and finished food exports with canola, wheat, sheep, lamb meat, beef and abalone.

During the mission, the Shandong government expressed strong interest in research and development technology transfer, horticulture, meat, seafood and wine. A number of significant memorandums of understanding were signed during the mission by South Australian agribusiness companies. PIRSA and the Shandong Provincial Department of Agriculture reviewed the MOU signed in June 2014 on a framework for communication and cooperation and signed a new MOU to continue high-level agricultural dialogue.

PIRSA also signed a MOU with the Shandong Provincial Oceanic and Fishery Department to pursue a framework of collaboration for mutual growth in the following areas: trade and investment opportunities in seafood, fisheries and aquaculture; strengthen exchanges and collaboration between research institutes, universities and industry in areas of common interest to enhance outcomes and commercialisation; and promote the sharing of fisheries, aquaculture and marine sciences information and policy through exchanges of technical and other personnel. Other significant transactions involved Seppeltsfield signing a deal to supply 1.5 million litres of wine to their Chinese partner, and the Stehr Group signed its first deal to export 40 tonnes of tuna to China.

It was very encouraging to see the Chinese participants in the agriculture, food and wine round tables eager to commence detailed discussions as well as their particular interest in our meat, livestock, seafood and wine industries. PIRSA also led a citrus market access mission to Beijing for meetings with high-level officials on the technical issues related to recognising South Australia's fruit fly free status. Discussions went well and it is hoped continuing negotiations will see the signing of a proposed MOU in the near future and recognition of our fruit fly free status.

In recent years the growth of South Australian food exports to China has been dominated by grains and meat. From 2012-13 to 2013-14 livestock volume increased by 8.5 million kilograms, an increase in value of more than $70.5 million. Total livestock value for 2013-14 was in excess of $168 million. In the same period, the volume of field crops increased by 227.8 million kilograms, an increase in value of more than $127.4 million. Total value of field crops for 2013-14 was $174.8 million.

Wine exports in 2013-14 were $179 million, dairy $2.4 million, horticulture $11.5 million, seafood $35.7 million, and other exports $30.3 million. South Australian 2013-14 food exports represented around 9 per cent of Australian food exports to China and Hong Kong, and South Australia's total food and wine exports to China and Hong Kong were $602 million, an increase of $155.9 million from 2012-13 to 2013-14.

PIRSA will continue to work closely with all stakeholders and our counterparts in Shandong to develop and promote mutual investment opportunities for the benefit of South Australia. Further to this, the China-Australia Free Trade Agreement allows us to explore new markets and export opportunities for all South Australian producers. Through the state government's premium food and wine produced in our clean environment and exported to the world economic priority, we are looking to increase our international exports which will benefit our state.

The Hon. J.M. RANKINE: Thank you, minister. That was really interesting and encouraging to hear how—

Mr Knoll interjecting:

The Hon. J.M. RANKINE: You will have your turn. It was interesting to hear how our exports have increased so massively. Can you also tell us how you are helping to expand the nation's oat growing industry?

Members interjecting:

The CHAIR: Order! The minister has a response? I just remind all members that standing order 142 still applies. Member for Schubert and member for Wright, we are listening to the minister's answer. Thank you.

The Hon. L.W.K. BIGNELL: Thank you, Madam Chair, and I thank the member for her question. The South Australian Research and Development Institute (SARDI) leads Australia's national oat breeding program, which has, and continues to deliver, new and improved varieties of oats for both grain growers and hay producers. The national oat breeding program is jointly funded by the Grains Research and Development Corporation, the Rural Industries Research and Development Corporation and the South Australian government. Oats are known as nature's functional food. The health benefits of the grain, such as beta-glucan, which is effective in lowering blood cholesterol levels, is an important point of differentiation for Australian companies producing food products from our oat varieties.

Consumer demand for milling oat is increasing on average by 5 per cent each year, both nationally and in our Asian markets. This increase in demand is directly linked to benefits to human health and wellness. To keep up with demand, SARDI is developing new oat varieties with improved productivity, improved disease resistance and milling and eating quality. A new early maturing oat variety suitable for growing in low rainfall regions is being developed at SARDI to assist the industry expand its production base and thereby meet the increasing demand for oat products. This new variety will be named and launched in 2016.

The CHAIR: Member for Wright, one more?

The Hon. J.M. RANKINE: I do have one more, thank you, Chair. Same budget paper, page 24: can you also tell us what is being done to promote the ethical production of both wool and sheep meat?

The Hon. L.W.K. BIGNELL: Again, I thank the member for her question. The South Australian wool and sheep meat industries are important to the state, with a joint farm gate value of around $679 million per year. The health and welfare of the animals in these industries is a major concern to the producers and consumers alike. South Australian Research and Development Institute scientists, in collaboration with researchers at the University of Adelaide, have recently developed the novel wool cortisol assay, which may revolutionise the way sheep welfare is assessed.

The wool cortisol assay indicates the health status of the sheep by measuring key chemicals in the wool which provide a reliable indicator of the stress the animal has experienced over the past couple of months and can be used as a measure of the health of the animal. This will enable producers to provide early intervention to improve the health of the animals or to identify poorly performing animals which can be removed from the flock, ensuring the overall performance of progeny improves over time.

Another potential use for the assay is to identify sheep susceptible to fly strike. Fly strike costs the South Australian wool industry approximately $15 million per annum. The ability to develop flocks which are not susceptible to fly strike should be a major cost saving to the industry. Overall, better management of sheep health and welfare during production has the potential to add $6 million to the net farm gate value by improving meat quality. Testing of the assay will continue into 2016 and if successful it is expected to be available for adoption by 2017.

SARDI scientists are also working with the Sheep Cooperative Research Centre on developing a wellbeing index for sheep which can be used by farmers to assess the welfare of their sheep. The index will be multifaceted and will include measures of behaviour, physiology and health.

Mr KNOLL: Just to clarify the answer in the previous set. Obviously, your travel would relate to different portfolios within your ministry.

The CHAIR: What page are you on?

Mr KNOLL: We are dealing at the moment still with Budget Paper 4, Volume 4, page 14, when we look at the $1.468 million provision for ministerial office. Some of your travel would come out of each portfolio: there is sport and there is tourism. Are you saying that that is not segregated at all, that it all comes out of the ministerial office; there is no other departmental line where that budget comes from? To further that, how much of this last year's budget in 2014-15 was spent then on travel by you or your staff?

The Hon. L.W.K. BIGNELL: All the money that is spent on travel comes from the ministerial budget. I do not have the figures here of how much of our budget was spent on travel but, as I have said, it is an important thing for us to do, to be out selling South Australia and its produce, whether it is for tourism, our wine industry or our food industry. A lot of the travel, too, is throughout the regions. I spend a lot of time travelling throughout South Australia and, as members here would attest, they have seen plenty of me over the past 2½ years since I have been a minister.

I am constantly out on the road in South Australia, and I am on the road interstate and overseas. I think it is a really important part of our job to be out there because we are up against other states in Australia and we are up against other countries, and everyone is vying to get into the market and increase their share. What I find is that the better your relationships with potential customers, particularly when you are dealing with the China market, the better you will do in terms of selling our wonderful produce.

Mr PEDERICK: I refer to Budget Paper 4, Volume 4, page 14 again. The 2015-16 budget for ministerial office resources shows that there will be eight FTEs in the Minister for Agriculture's office, and the associated cost is budgeted at $1.468 million. Last year, the provision was for nine full-time equivalents, with a $1.536 million budget. It is apparent that an FTE on $68,000 per annum has been removed from the office. Can the minister confirm who that staff member was, what their title was and what the circumstances were around the reduction of the FTE—for example, resignation, sacking, transferral. Also, how is that role now being absorbed by the office?

The Hon. J.M. RANKINE: Point of order, Chair. It has been a convention, as I understand it, that it is inappropriate to name people in ministerial offices.

Mr PEDERICK: I have not named anyone.

The Hon. J.M. RANKINE: You asked for who it was.

Mr GOLDSWORTHY: What the position was.

Mr PEDERICK: I have not named anyone.

The CHAIR: Order!

Mr PEDERICK: I have asked who it was, but I have not named them.

The CHAIR: Order!

The Hon. J.M. RANKINE: That's right; you have asked the minister.

The CHAIR: Order!

Mr PEDERICK: He can answer how he likes; I am sure he is big enough.

The CHAIR: He will then in that case.

Mr PEDERICK: Yes, I think he can handle it.

The CHAIR: Order!

Mr PEDERICK: You are shielding him enough. I think he can handle it.

The CHAIR: Member for Hammond.

Mr Pederick interjecting:

The CHAIR: I will have to suspend the committee for five minutes if you cannot obey the standing order. I want everyone to acknowledge that standing order 142 is in force.

Mr PEDERICK: I am quite happy to have a cup of coffee with the member for Wright.

The CHAIR: I think your behaviour is outrageous.

The Hon. J.M. Rankine interjecting:

The CHAIR: Order!

Mr PEDERICK: Chuck her out.

The CHAIR: No, I will chuck you out first. Honestly, members, the minister is getting his advice and we do not need a running commentary while he is getting his advice; it is quite silly.

The Hon. L.W.K. BIGNELL: Thank you, Madam Chair. We are just trying to get an answer. We think it might be the fact that last year we had a parliamentary secretary, Kyam Maher, who was attached to our office, and a staff member was assigned to him as an adviser. Of course, Mr Maher is now minister Maher, and I would say that is the reason for that position not being there now.

Mr KNOLL: Can I again clarify, and I am trying to get a specific answer here, minister, whether the travel expenditure you have talked about within your ministerial budget covers the travel for your tourism adviser or does that come from the separate departmental budget? Does that travel come out of the ministerial office or does it come under the tourism budget?

The Hon. L.W.K. BIGNELL: Yes, sorry, I thought I explained it before. All the travel from our office, whether it is for me or advisers, comes out of the ministerial office budget and not directly from PIRSA.

Mr GEE: I refer the committee to Budget Paper 4, Volume 4, pages 27 to 29,Biosecurity. Will the minister please provide an update on the progress of the Sterile Insect Technology facility in Port Augusta and how this new initiative will contribute to maintaining South Australia's fruit fly free status?

The Hon. L.W.K. BIGNELL: I thank the member for his question. The Sterile Insect Technology (SIT) facility build will commence in September this year. I am hoping that we will have a couple of people from the other side coming up to the announcement, which I think will be on 3 September, and it would be terrific to have some people from the opposition with us.

Mr PEDERICK: We will be there.

The Hon. L.W.K. BIGNELL: That's terrific. I am pretty sure that Senator Anne Ruston is going to come along as well. It is something that is very important for the state. Final architect drawings for the facility have been completed, and the building tender closed on 17 June. Tender evaluation is still underway, and the tender will be awarded shortly. The design and specifications are state of the art and have included input from international organisations, including the Food and Agriculture Organisation (FAO), which has assisted other countries develop SIT facilities for the management of Mediterranean fruit fly.

Our new facility in Port Augusta will be the first purpose-built factory for the production of sterile male-only Queensland fruit fly (known as Q-fly) in the world. This week, this development is a step closer, with the state government signing an agreement with Horticulture Innovation Australia to build and manage the facility. Horticulture Innovation Australia is contributing $800,000 to this venture on top of the $3 million state government commitment. This is a great development and means this is now a truly national facility. HIA is in the process of appointing a program director who will be responsible for ensuring the delivery of high-quality research and appropriate outputs and outcomes. It is anticipated that this national facility, once fully operational, will employ up to 10 full-time equivalent positions.

The SIT facility is supported by a national research development effort, SITplus, which now has a combined program budget of nearly $50 million. This research is focused on producing a fit, male only line of Q-fly for production in the new facility. Other projects being undertaken by this national consortium include the development of new Q-fly traps, lures and surveillance and monitoring techniques. Research and development partners in the SIT facility and the national program are: Horticulture Innovation Australia Limited, the CSIRO Biosecurity Flagship, Plant and Food Research Australia, the New South Wales Department of Primary Industries, and Macquarie University.

At full production, the Port Augusta facility design will provide for 50 million sterile Q-fly per week. Once the new facility is completed, it will require a period to commission the factory. It will ultimately provide Q-fly pest solution packages to all affected horticultural regions across Australia. For South Australia, the factory will supply sterile male-only Q-fly to assist with eradication efforts whenever isolated incursions are detected in the Riverland, metropolitan Adelaide or other growing areas.

The SIT facility will also assist in protecting the Riverland from the increased threat of Q-fly from areas in Victoria where the pest is now unfortunately endemic. Improved area-wide management of Q-fly proposed by the Victorian government in the Sunraysia region, along with access to a significant number of sterile male Q-fly from the Port Augusta factory, will reduce the pest pressure on the South Australia-Victoria border. It is hoped over time that the pest pressures can be relived and Q-fly pushed out of the major production areas in Victoria.

Members may be aware that a number of effective fruit fly horticultural chemicals have recently been removed from various uses by the Australian Pesticide and Veterinary Medicines Authority (APVMA) due to human health and environmental concerns.

Mr KNOLL: Point of order, Chair.

The CHAIR: Yes, member for Schubert.

Mr KNOLL: Am I given to suggest that the standing orders apply in their entirety—well, only suspended to the extent that we can have this committee—

The CHAIR: I will have to check exactly what you are getting at.

Mr KNOLL: Because the minister's statement relates to the press release he put out on 22 December 2014.

The CHAIR: I am sure it will be significantly different, but I will check on that for you, member for Schubert. The minister can continue.

Mr KNOLL: If it is publicly available information—

The CHAIR: Order! The minister can continue.

The Hon. L.W.K. BIGNELL: Growers need to move from the old solution in a can to a more sustainable integrated pest management regime. Sterile insect technology is an important component of this pest management strategy and establishes South Australia as a leader in sterile insect technology in this country.

Mr GEE: I refer the committee to Budget Paper 4, Volume 4, Program 1, statement page 28. Will the minister provide an update on the programs within Primary Industries and Regions South Australia which protect human health?

The Hon. L.W.K. BIGNELL: Thank you, Madam Chair, and I thank the member for his question. Biosecurity SA has a range of programs which assist our industries to comply with Australia's food safety standards. They help our industries maintain market access and minimise the negative impacts from food-borne pathogens. The programs are a key component in the state government's strategic priorities, in particular 'premium food and wine from our clean environment'. The food safety program is an example of one of the programs used to achieve this important strategic priority.

The food safety program is a regulatory program which applies to citrus packers, shellfish growers and harvesters (for example, oyster growers), egg producers, poultry growers, seed sprout producers, meat processing—

Mr Knoll interjecting:

The Hon. L.W.K. BIGNELL: —production of smallgoods—sorry, it is hard to concentrate with the member talking to himself.

The CHAIR: Yes, I am sure it is.

Mr KNOLL: If I could raise the point of order again: this information is all very clearly—he is actually reading a list from his own website. If in question time on a normal basis we are allowed to question whether information is publicly available, surely that applies to estimates in the same way, given that the standing orders still apply.

The CHAIR: I am sure it is much more lengthy than a press release, whatever it is.

Mr KNOLL: There is certainly no new information in the first couple of minutes.

The CHAIR: Order! Let's just finish it off and then you can have some questions.

The Hon. L.W.K. BIGNELL: —production of smallgoods, storage and transportation. Dairy production and processing is regulated in the same way, but by the Dairy Authority of South Australia. The regulations require relevant businesses to hold accreditation or have an approved food safety arrangement and comply with national food safety standards. There are approximately 1,600 accredited businesses under the regulatory program, which includes those businesses regulated by the Dairy Authority.

To ensure businesses comply with food safety standards, they are audited. Businesses are either audited quarterly, every six months or annually, depending on the type of business. The audit frequency is based on the food safety risk, where higher-risk businesses are audited more frequently. The audits are mostly conducted by highly qualified Biosecurity SA staff, Dairy Authority staff or other approved external auditors. To ensure efficiency and reduction of red tape, businesses audited by approved external auditors are not audited by Biosecurity SA auditors, therefore avoiding duplication of audits and unnecessary costs.

More than 1,600 food regulatory audits were performed by Biosecurity SA in the 2014-15 financial year. Biosecurity SA's Food Safety Program also includes the South Australian Shellfish Quality Assurance Program, which manages the food safety risks associated with growing and harvesting shellfish. The program monitors water and shellfish for harmful substances such as biotoxins and pathogens. South Australia's shellfish growing areas are located in pristine waters, which greatly reduces the food safety risk; however, vigilance is required to ensure shellfish have not been contaminated by food-borne pathogens.

Technical support is provided to higher-risk businesses such as those which make ready-to-eat smallgoods. The support includes validation of processing protocols to ensure processes consistently produce safe products. Also, targeted environmental and product testing is used to verify regulatory controls are effective.

Biosecurity SA works in partnership with SA Health, the agency responsible for administering the Food Act in South Australia, and the lead with respect to food safety. An example of the partnership is the collaborative arrangements associated with the investigation of food poisoning outbreaks, where Biosecurity SA assists SA Health to determine the cause. If illness is associated with primary food production, Biosecurity SA will assist in investigations and/or actions to ensure the outbreak is contained.

Mr KNOLL: Budget Paper 4, Volume 4, page 14. On 5 and 6 October 2014, you travelled to and from Sydney, where you spent $739.09 on a limousine service, which included, but was not limited to, a $426 charge for the vehicle to take you to the NRL grand final, wait in the car park while you watched the game, and then returned to your accommodation. Do you think that this is a reasonable use of taxpayer funds and, if so, what value did the South Australian taxpayer derive from this expense?

The Hon. L.W.K. BIGNELL: I thank the member for the question. There were four separate car journeys there, and, while you might you want to refer to it as a limousine, it was a Ford or a Holden sedan, and—

The Hon. J.M. RANKINE: It wasn't a helicopter?

The Hon. L.W.K. BIGNELL: It wasn't a helicopter, no; it was a Ford sedan or a Holden sedan. I was invited to an official function where the Prime Minister and other ministers from around Australia were in attendance. The reason I was there does not really relate to the agriculture sector, but I am happy to explain. We saw, on Monday night, Liverpool playing at the Adelaide Oval with 53,000 people there. The day before that, there were 54,000. So, we had 107,000 people at the Adelaide Oval over the space of 24 or 25 hours. That is what we want to see as much of as possible. You do not get people to come and play their events—

Mr KNOLL: That's why you had the car to wait in the car park.

The CHAIR: Order!

The Hon. L.W.K. BIGNELL: —in your state, in the best stadium in Australia, if you do not have relationships and you do not go out there and you do not go after these events. For much of the NRL grand final I was talking to the people from the National Rugby League about our desire here in South Australia to host an NRL match, and those discussions are ongoing. I do think it was worth the visit. We have established some key contacts now within the NRL, and we will continue to work with them so that we can get more events to South Australia. When we have more events, we know we get more tourists.

For the Liverpool example from Monday night, we had 10,000 people come here from interstate and overseas. It injected $10 million into our economy. I think the return on investment will be great. I think, as I have mentioned before, part of our job, on whichever side of the house you sit, is to be out there promoting South Australia, looking for opportunities where we can increase visitation to our state, increase the exports that come from our state and really sell what we have here in South Australia, and to go out and try and get new events here. We are not going to do that by sitting at home. We have to be out and about, in the marketplace, having conversations with the decision-makers at the national and international level.

Mr KNOLL: My second question relates to the same budget line and, given the minister's answer about promoting South Australia and coming from a wine region myself, I think this question is quite pertinent. On 24 July 2014, you travelled to Glasgow for the Commonwealth Games. While stopping over in Edinburgh, you dined at the Rutland Hotel and purchased a £55 (which is about $130) bottle of Catena Alta Malbec Argentinian wine. What value did the taxpayer get from this $248.77 meal and, as a South Australian minister who has spruiked representing the South Australian food and wine sector quite strongly, did you not see it as more appropriate to purchase maybe an expensive South Australian bottle of wine, as opposed to an Argentinian bottle?

Members interjecting:

The CHAIR: Members, order!

The Hon. L.W.K. BIGNELL: I dined in restaurants where we had the £1 roll and tattie, I think it is called. That is a bit of a Scottish delicacy. On some occasions, rare occasions, there are some restaurant bills that are higher than others. Anyone who has travelled will know this: a lot of times you grab a sandwich along the way somewhere. I think on this particular night we had arrived and went looking for somewhere open and this is the place we found. We went in and found they had an extensive South Australian wine list, which was terrific, and I spoke to the manager of the establishment and encouraged them to get even more South Australian wine and told him about our 18 wonderful wine regions. As you know, I am always out there spruiking South Australian wine.

The thing we do not get a lot of in South Australia is Argentinian wine. The thing that other markets have is competition. The Australian wine industry is up against Argentina, Chile, France, Italy, US and South Africa. I do not know of too many places in South Australia where you get Argentinian wine. What I know is that, if you are in business, in politics or in sport, you always want to know the measure of your opponent. If our opponent is Argentina, I want to try their wine, because it is pretty easy to discount what your opponent is all about.

I tried that wine and it was actually a good wine. Argentina is producing good wine. We cannot go out there and say that Argentina has crap wine and it is really bad if they actually have good wine because it points to our own credibility by our talking it down. That is the reason I went for an Argentinian over a South Australian wine, but I can tell you that when I was talking to the manager of the establishment I was definitely spruiking South Australian wine and congratulating him for the list that they had, which was very extensive.

Mr KNOLL: My third question relates to the same budget line. Did you have any ministerial or departmental staff present whilst you visited Edinburgh from 27 to 29 July 2014? You stayed at the Radisson Blu Hotel in Edinburgh, where it appears that you were charged £412 for the two nights in a single room. Were there any other charges in Edinburgh for accommodation of your accompanying staff?

The Hon. L.W.K. BIGNELL: I was travelling with a staff member. There were two rooms booked, there were two rooms used and I do not know why there was only one room on the account. Sometimes that happens. We pay with one credit card as we book out and sometimes hotels just pile it all onto the one and we pay for that bill. Either that, or the documents you are referring to you are not in possession of.

The CHAIR: Are there any other questions on my right?

Mr GEE: I refer to Budget Paper 4, Volume 4, pages 18 to 20. How is the government assisting with market access support and opportunities for the food and beverage industry?

Membership:

Mr Treloar substituted for Mr Knoll.

The Hon. L.W.K. BIGNELL: I thank the member for the question. The 2014-15 state budget delivered on the election commitment 'Premium Free Range Food'. In December 2014 cabinet approved an approach which delivers across four key program areas, and since this time has seen Primary Industries and Regions South Australia:

establish a Seafood Credentials Grant Program to co-invest and assist business and industry raise standards, and attain third party certification for particular credentials required to access new markets or contribute to premium prices;

undertaking projects which will promote South Australian government credentials, such as the state's non-genetically modified status and rigorous biosecurity measures by working with specific industries and sectors to identify key barriers to entering or expanding in export markets, as well as enable businesses to verify particular credentials to customers;

increasing the use and consumer recognition of the state brand through greater uptake and utilisation by the food and beverage industry;

investigating opportunities with the wine industry and tourism groups for Adelaide to join the Great Wine Capitals of the World network and the potential of marketing this as a key feature of the state's wine and tourism offering.

South Australia produces a diverse range of high quality food and beverage products. Building South Australia's Premium Food and Wine Credentials Grant Program will continue to support this growth now and through to 2017-18 to further assist these South Australian products with premium positioning in key identified local, national and international markets. Highlights include:

Seafood Industry Grants Program. In the first year of the grant program the government supported six seafood organisations by providing assistance with attaining third party certification, such as the Marine Stewardship Council (MSC), Friend of the Sea (FoS) and the Aquaculture Stewardship Council (ASC) to contribute to South Australian premium seafood market access expansion. The backing of an achieved certification provides customers with assurance about the products they are buying; this in many instances can improve access to new higher value markets and support price premiums being received. Following the good response from the seafood sector in 2014-15, it is planned to expand the grants program to be available to a broader range of food and wine businesses in 2015-16.

PIRSA has established a collaborative working relationship with Brand South Australia and together have implemented targeted food and beverage sector strategies and initiatives to increase use and viability of the state brand across these sectors. This has led to an accelerated number of business registrations to use the brand—an increase of 8 per cent overall in the last month to reach 287 businesses. In coming months we will be expanding our targeted program with each of the food and wine sectors to further accelerate uptake of the state brand for use in marketing materials and on wine and food packaging.

I want to congratulate all those great South Australian companies that have been using the state brand. It is terrific to walk down the aisles of the supermarket and even into the wine shops to see the South Australian brand there. The brand has been an enormous success, and I must congratulate our Premier, too, for seeking out a new look for South Australia. It is something that we could really identify ourselves with and that all South Australians could get behind.

It was a long process and I know there was a lot of consultation right across the state, with lots of forums where all sorts of people had all sorts of views and they put them forward. I think the design they came up with has been excellent and I think the implementation has been terrific by those in Brand SA and the many government departments who have picked up and run with the state brand. I think the food and wine sector has been one of the leading sectors in private enterprise to use the state brand as something in their marketing. There is nothing as simple as a well designed brand mark that can point to where something comes from.

Darren Thomas, who is on our Economic Development Board, and of course has Thomas Foods, one of the leading agricultural businesses in South Australia, played a leading role in the development of the brand. As I said, every time I walk into a supermarket or open up my fridge and see all these little state brands peering out at me it is with a terrific sense of pride that I hope all South Australians have in knowing that when they take the lid off or open the packet that they are having great South Australian produce. It is something that we should all be very, very proud of.

In terms of promotion of government credentials to benefit the industry, two key projects have commenced which are looking at opportunities to enhance South Australia's market position. The first is a market research project to further enhance and differentiate South Australia's products based on our non-genetically modified status. The second is the One Biosecurity pilot program, which will enhance South Australia's biosecurity position for livestock, an essential factor in maintaining and growing market access for South Australia's meat products.

Mr GEE: I have one follow-up question. Can the minister explain or expand on the One Biosecurity on-farm animal biosecurity trial?

The Hon. L.W.K. BIGNELL: Again, I thank the member for his question and his interest in this very important subject. To meet future consumer expectations, livestock product must meet food safety, animal welfare and auditable traceability requirements along the whole product chain. Market access is vulnerable to incursions of exotic diseases unless mitigation measures are in place. One Biosecurity offers a new integrated approach to disease risk management, focusing on on-farm biosecurity, and will give South Australian producers a competitive advantage over other states.

The value of the livestock industry in South Australia is estimated at $6 billion; however, market access of livestock and livestock products is dependent on maintaining a favourable animal health status. The continued recognition of South Australia as a source of premium animal products faces pressures from consumer expectations and an increasing threat of introduction of devastating exotic diseases, such as foot and mouth disease, due to increased international movement of people and goods.

One Biosecurity is a new risk management approach which shifts attention from dealing with individual diseases to a more integrated approach, focusing on disease pathways which address multiple threats. By raising awareness of on-farm biosecurity, One Biosecurity aims to build a culture of good practice which will result in the prevention of disease incursion, as well as improved early detection of potential exotic diseases. The expected result is reduced risk of endemic and exotic disease, reduced potential impact, increased resilience and better carcasses throughout the production chain.

The project is designed to pilot the governance and implementation of the One Biosecurity approach, develop appropriate documentation and stakeholder consultation. A rigorous audit process will assist compliance with herd and flock disease status, reporting on cattle health statements and sheep health statements. The program will empower producers to adopt safe practices whilst reducing the regulatory burden and red tape of endemic disease control.

Mr PEDERICK: Another question in relation to European travel. I refer to Budget Paper 4, Volume 4, page 14. While you were in Frankfurt, on 28 July 2014 you spent almost $500 on a single limousine service. Was it necessary to use such a service, and where did you go and who did you visit?

The Hon. L.W.K. BIGNELL: We flew direct into Frankfurt. Again, you refer to them as a limousine service: it was a sedan. I cannot remember the make of the sedan, but it was a normal car that you get around in with a driver. We had flown directly into Frankfurt, and the car picked us up and took us into the city of Frankfurt. We had meetings with Austrade and the South Australian Tourism Commission representatives there, and we had meetings with Tourism Australia and Singapore Airlines' German operation. As you can see, it was a fair bit of running around.

I think the plane got in early afternoon, and we got straight off the plane and went straight into meetings. There was not a minute wasted in getting to work, in trying to talk to people from the other side of the world about what we have to offer here and about how we can work with them on marketing South Australia. Every time we go on a trip, it is about building our exports or building visitation to South Australia. I have to say that, when we got off the plane and into that car and went to those meetings, that was exactly what we were focused on. The meetings were terrific.

We found out the latest about what was happening in terms of flights in and out of Frankfurt. We had had Qantas pull out of Frankfurt, and I think one of the other airlines, Malaysia, might have come a little bit after that. Just to give a little bit of intel, Frankfurt is the biggest European port for us in terms of bringing people from Europe down to South Australia, other than, of course, out of London; it is Frankfurt if we are talking mainland Europe. We had very good discussions with them. We had great discussions with Singapore Airlines, and that was around the time when a day or two later we announced that Singapore Airlines would fund 300 travel agents throughout Europe coming down here to South Australia, which they did in April this year.

It was terrific to sit down around the table with those people and have the discussions and to talk to Tourism Australia. Obviously, they are trying to sell all of Australia to the people of Germany, and we wanted to make sure that South Australia gets more than its fair share. We were able to brief them on what we have to offer and on some new tourism experiences we have here, including some touring routes. We know that European tourists love to partake in self-drive travel and that the self-drive market is worth 24 per cent of South Australian tourism revenue, which we are trying to grow from $5.2 billion a year to $8 billion a year by 2020.

You do not do that unless you go out and get more people coming here. If we have the same number of people coming here as we had last year and the year before, it is going to stick on $5.2 billion. As much as you want to sit around and talk to people in South Australia about how you want to improve tourism, you are not going to improve it unless you go out there and sell what we have to offer to people interstate and to people overseas, and that is exactly what that was all about.

The other part of that journey was, I think, about 50 or 60 kilometres from Frankfurt to the town where we were staying. Frankfurt Airport sits in between Frankfurt and towns like Mainz and Wiesbaden. We were staying in Mainz, which is the head of the world Great Wine Capitals for Germany. Mainz is the city, like Adelaide wants to be the city, so we stayed in Mainz and, as I said, I think it was about a 40 or 50-kilometre trip. All up, we probably had the car for five hours. We did a fair few kilometres from the airport into the city, around the city and then back out to Mainz. That is where that cost was incurred.

Mr PEDERICK: I now refer to Budget Paper 4, Volume 4, page 23. I note the 2015-16 target to finalise and implement a new management plan for the commercial Lakes and Coorong Fishery. The minister would be aware that I first called on the government three years ago to implement an overabundant native species management plan to tackle the New Zealand fur seal problem, which has now become a crisis. Does the new management plan noted in the targets include such management of fur seals? Has the minister received any advice from his department on precisely what measures will be used to tackle the fur seal problem and has he offered any assistance to the Lakes and Coorong fishers?

The Hon. L.W.K. BIGNELL: I share the concerns of the member for Hammond and I share the concerns of the industry about the problem we have with this native animal. I think they call it the short-nosed—

Mr PEDERICK: Long-nosed.

The Hon. L.W.K. BIGNELL: It is the long-nosed fur seal now, as opposed to its former name of the New Zealand fur seal, and I guess that is to indicate that it is actually a native species. I think there are about 100,000 of them, and they are growing at about 5 per cent a year, so it is obviously a very big problem for the fishers and for other people upstream, but there is probably no easy solution.

One thing that we have ruled out is a cull. We will not be involved in a cull, but pretty much every other option is out there and we want to hear from anyone who has any good ideas. I know there are some acoustic deterrents out there at the moment that hope to scare them away, but it is a real problem and something we are working on with the Department of Environment as well. For a deeper understanding and explanation of the issue, and what we are doing about it, I might ask Professor Mehdi Doroudi, the group executive director, to give more detail.

Prof. DOROUDI: We have recently had meetings with the industry association, and Mr Gary Hera-Singh and Mr Neil McDonald attended. We asked for a proposal from the association in terms of what measures could be taken and put in place to help resolve the pressure on fishermen in the Lakes and Coorong. We came up with a number of measures, some short to mid-term and some longer term.

To start with, in collaboration with the environment department we came up with about a $100,000 cash investment to investigate modified gear and technologies that could address the issue by separating seals from attacking the fish tangled in their mesh nets. That is a process we have already talked to the relevant experts and consultants about. If I am correct, my understanding is that next week the fieldwork is going to be done in the Lakes and Coorong, but obviously that is going to be a long-term solution.

How we can help to assist fishermen with the pressure they are under is that we have come up with some regulatory measures that are in place and looked at how we could lift some of those measures temporarily under some exceptional circumstances that this group are under. For instance, we have a policy of owner-operator in marine scale fishery where you need to own the licence to be able to operate on the boats. Very recently, last year, we came up with about 28 days of relief for masters. We are in discussion with industry to increase that to about three months for the Lakes and Coorong because one of the ways that they can better address their fishing activity is if they could have relief masters and get inspections of their nets quicker than the normal way they do; therefore, they can collect the fish and harvest the fish before they are damaged by seals.

The other measure we are looking at is using drum nets. At the moment, the problem is with mesh nets, and not every licence holder in the Lakes and Coorong has drum nets on their licence. Again, in a temporary way, we believe we can do something so that all of them have access to this until the longer term when the issue is addressed to be able again to revoke that additional year from their licences, because it is a matter of equity, really, when it comes to the fishery.

They discussed with us relief of fees. That is a matter that is under consideration, and we are looking into that. They have suggested that if people are prepared to shelve their mesh net and not work on that at all, is there any possibility of withdrawing their fees and stop them from paying that. That is a matter that needs further discussion with the Treasury and we need to look into regulatory aspects to see how we can help them.

Mr PEDERICK: Thank you. I just have a back up for that. There are a couple of things around that. Of that $100,000, what is PIRSA paying? Also, when this fishery is decimated, and I believe it will be, because this is just ridiculous how slowly any action needed is taken, will the minister buy out licences and fully compensate fishers—I am not saying if—when this fishery is decimated?

The Hon. J.M. Rankine interjecting:

Mr PEDERICK: Well, you have a look; you go down there and have a look.

The CHAIR: Minister.

The Hon. L.W.K. BIGNELL: Thank you very much, Madam Chair.

Mr PEDERICK: They are already getting their licences paid out.

The CHAIR: Order! Minister.

The Hon. L.W.K. BIGNELL: Thank you very much, Madam Chair, and I thank the member for the question and acknowledge his long-term interest and passion for this particular subject and this problem for the fishery down there. The cost is being shared on a fifty-fifty basis and in relation to the buyout we are not ruling anything in or out. As I said earlier, the only thing we are ruling out at the moment is a cull.

Mr PEDERICK: So have you supplied time payment licence relief? I also frame in the question huge support for my motion in regard to an overabundant native species management plan including a sustainable harvest of New Zealand/long-nosed fur seals, and note that Coorong council has unanimous support for my motion and certainly the Ngarrindjeri, through the Ngarrindjeri Regional Authority, have full support for getting rid of this feral pest out of the waters of the Coorong, Lakes Albert and Alexandrina, and the River Murray.

The Hon. L.W.K. BIGNELL: To talk about the cull, we all remember the images out of Canada a few years ago of fur seals.

Mr PEDERICK: It did not stop tourists going to Canada, minister.

The CHAIR: Order, the member for Hammond! Minister.

The Hon. L.W.K. BIGNELL: We do have premium food and wine from our premium environment exported to the world. What we know with koalas on Kangaroo Island and other—

Mr Pederick interjecting:

The CHAIR: Order! Member for Hammond, please.

The Hon. L.W.K. BIGNELL: —native species that breed up into abundance is that the answer is not to cull, because you might reduce the numbers, but you will create more problems in other areas. I think it would be very hard to sell us as premium food and wine from our clean environment if we are out there—

Mr Pederick interjecting:

The CHAIR: Order!

The Hon. L.W.K. BIGNELL: —killing fur seals. I might hand over to Professor Doroudi for a little more information.

Prof. DOROUDI: In relation to fee relief, the example of that was with St Vincent prawn. When we closed the fishery, we exempted them from paying the fee altogether. No doubt there were costing pressures on the operation of the fisheries division of the department, but we managed that. At the moment, we are convinced that there has been a loss of production, and fishermen are not making the revenue that they used to. In their proposal, they ask for this relief fee and we are looking into that. I am positive that we could address that to their expectation and satisfaction.

In terms of the buyback, they put that request in their correspondence with the department as well. That is like any other fishery and the matter that if a public good policy is involved with the matter if there is any legitimacy of taxpayers' funds to go and buy back. It would be very early for me to make any suggestions on that, whether that needs to happen or not, because we are hopeful that by changing the gear and technology that they have we may be able to address the issue.

Mr PEDERICK: We will see how we go next year.

Ms WORTLEY: I refer to Budget Paper 4, Volume 4, pages 18 to 20, titled agriculture food and wine. How is the government using the concept of co-innovation clusters to support regional organisations through the 'premium food and wine from our clean environment' strategic priority?

The Hon. L.W.K. BIGNELL: I thank the member for Torrens for the question. The Premium Food and Wine Co-Innovation Cluster Program is a state government initiative supporting local regional agriculture food and wine businesses to become more collaborative, productive and globally competitive. The initiative is based around the government's strategic priority of 'premium food and wine from our clean environment' and is overseen by the Minister for Agriculture, Food and Fisheries.

Innovation clusters are a widely recognised concept used worldwide as an effective means to stimulate urban and regional economic growth. It is now widely accepted that the productivity and competitiveness of industries which participate in such an initiative improves significantly. Clusters initiatives are usually projects organised as collaborations between a diverse number of business groups and associated organisations. These groups may include private businesses, government agencies and academic institutions.

There is an important role for government in assisting with the establishment of industry-led innovation clusters, particularly during the development stage. We have budgeted $2.67 million for the cluster program over the first five years. The cluster program is being piloted by PIRSA in the Murraylands, Riverland and Limestone Coast regions, with a total of around $500,000 allocated to various cluster groups annually.

Although this program is being piloted in the Murraylands, Riverland and Limestone Coast regions, it is anticipated the knowledge and experience from the pilot program will be shared with other regional areas. Grant funding for seven projects at a total of $487,000 has been approved. The four successful applicants from the Limestone Coast are, firstly, Coonawarra Grape and Wine Incorporated. Funding will aim to accelerate the activities of the already existing Coonawarra Grape and Wine Incorporated industry cluster, incorporating the Coonawarra Vignerons Association and the Coonawarra Grape Growers Association. This aims to promote the wine, region and brand, and to encourage collaboration, improve profitability of wine and wine grape production, and engender a sustainable Coonawarra wine industry through environmentally friendly initiatives and sustainable business practices.

The project aims to ultimately build capacity for wine companies to more effectively compete in the Chinese market, leveraging the benefits of being part of a larger group. It was terrific to be in Qingdao just a few weeks ago with the Coonawarra wine cluster. It was their first real foray into China where they grouped up, instead of going over there as individual wineries, which is always pretty hard to do. To bulk up and go into the Chinese market selling some of the best wine produced anywhere in Australia—and I have to say that the very high-end people that they engaged with in Qingdao were very impressed with the wines.

If you look at the Halliday rankings and the five-star rankings that he gives to wineries, there is no other wine region in Australia with as many five-star rated wineries per the amount of wineries in a wine region than Coonawarra. It is only 27 kilometres long and it is two or three kilometres wide, so it is not as vast as McLaren Vale, the Barossa or the Riverland but, gee, it punches well above its weight.

However, when you have a smaller region sometimes you do not have the capacity to be able to get out there and get into an important market like China. So I think we will see the stocks of Coonawarra wine really improve in China. It was great to have Mr Halliday there as well to host a masterclass of Coonawarra wine and to be present at a lunch that I was fortunate enough to be at as well. Once again, it is about getting out of South Australia and selling our fantastic produce to the world.

One of the other recipients of the project is the Naracoorte Lucindale Council. Funding aims to develop collaboration across the red meat value chain to create a deeper understanding of the industry, its barriers and inefficiencies. It will also help to understand the economic impact of potential collaborations and establish a collaborative culture to drive innovation and build capacity for increased sustainable profitability across the red meat value chain.

Regional Development Australia Limestone Coast was another recipient. Their funding aims to progress the formation of an industry cluster to determine opportunities and establish a model for the retention of the cold storage facilities on the Limestone Coast to secure the economic viability of the region's potato industry, following the closure of the McCain group's South Australian fries factory in December 2013. It is great to see new life being pumped into that facility. It is an amazing facility and one that I toured back in January this year on one of my many trips to the South-East and, of course, I was there again yesterday in my role as forestry minister. It is very important to get out into the regions and travel a lot. This project will also enable the development of strategies to meet a number of requirements of a cold storage and transport logistics initiative.

Dairy SA is another funding recipient. The money that goes to them is aimed at enhancing collaboration between the processing and pre-farm gate sectors by developing a results-driven plan which will enhance profitability, drive production and increase confidence in the SA dairy sector. This project reflects the 'grass to glass' value chain of the state's dairy industry and will collaborate across the two pilot regions of the Limestone Coast, the Murraylands and Riverland.

The three successful applicants from the Murraylands and Riverland region and their projects include Regional Development Australia Murraylands and Riverland. Funding aims to advance the Murraylands food group, which includes major food production and processing companies from across the region to work together and, with relevant government organisations, to achieve goals which cannot be achieved as individuals. The group's focus is on mapping capability and forming identity, and will explore brand and market development, capability development and production sustainability.

Regional Development Australia Murraylands and Riverland is another applicant. Their funding aims to support the overarching initiative of building and exploring a portfolio of activities to link and leverage many of the underlying activities and opportunities currently available in the Riverland. The project aims to coordinate local businesses in the sharing of ideas, the co-definition of solutions and in testing delivery. The third applicant is the Southern Mallee District Council. Funding aims to support the Southern Mallee cluster in its efforts to drive better value at the farm gate through more efficient and effective farm practices. The cluster group aims to build long-term sustainable agricultural and horticultural structures and will work with experts around issues such as land management, soil management, farming technologies, farm practices, crop management and crop and seed technologies.

I would like to take this opportunity to publicly congratulate the Southern Mallee District Council on the outstanding work that they are doing in looking after the farmers in their community. Last year in May, I was in Shanghai, and the farmer group led by the Southern Mallee council was over there having very good discussions with people who want to buy the premium quality produce that is produced in the Southern Mallee. I know that the local member for Hammond is very proud of the produce that comes from his area. It was terrific to see these people, councillors and farmers, heading to Shanghai. They had some great meetings and they got out and met with a lot of different people to further their knowledge and understanding of the Chinese market. They then came back and got to work on making sure that they could do more in the China market.

I was back in China again in about March this year again with representatives from the local council, the Southern Mallee council. We sat around the table at Tsingtao Brewery, where 16 to 17 per cent of the barley that goes into every glass or every bottle of Tsingtao beer comes from South Australia. It was terrific to sit there alongside these representatives to really push our credentials, our GM free credentials. It was something that the Tsingtao Brewing Company was very interested to hear when it comes to the barley that they need to go into their produce. Right from President Xi down there is a very keen interest in food safety and food security in China. As the biggest beer exporter out of China, Tsingtao takes that stuff very seriously and is keen to get as much produce as they can out of South Australia and, in particular, the Southern Mallee District Council. Again, I congratulate the council on their fine work.

Mr TRELOAR: Minister, I just want to take you to Budget Paper 4, Volume 4, page 21. I note in the 2014-15 highlights for the aquaculture sub-program that the four-year cost recovery agreements were established with various sectors. I have been advised that the western zone abalone did not agree to four-year cost recovery agreements. The zone refused to lock the existing recovery in for any more than one year due to ongoing issues they had with transparency and accountability. Can the minister confirm in fact that the western, southern and central zones did not agree to the four-year term?

The Hon. L.W.K. BIGNELL: The short answer is that abalone is fisheries, not aquaculture, but I can get—

Mr TRELOAR: I take your point. It is the case that only land-based abalone, which of course would be aquaculture, have locked into that four-year agreement—that is correct?

The Hon. L.W.K. BIGNELL: Correct.

Mr TRELOAR: Again, on the topic of cost recovery, I am informed that Deloitte has recently conducted an independent review of cost recovery. Was the industry consulted throughout the preparation of the report, because I am informed that it was not consulted throughout the preparation of that report, and have you or your department considered that report and its recommendations?

The Hon. L.W.K. BIGNELL: Once again, I thank the member for Flinders for his question and also acknowledge his great interest in fisheries, aquaculture and of course all the great crops that come from over on Eyre Peninsula as well. I might ask Professor Doroudi to provide a little bit more information.

Prof. DOROUDI: Thank you, minister, and thank you, Madam Chair. Yes, we had Deloitte involved with an internal review of cost recovery procedures. I need to say at the outset that it was not a review of cost recovery policy; it was a review of the administrative processes that we have internally within the department, including the costing model, the time sheet, and the integrity of that program and level of transparency that we have.

The first actual review of cost recovery policy was conducted by Deloitte, but in 2009, and that was work of the Fisheries Council. The Fisheries Council commissioned Deloitte to independently review the cost recovery policy. This recent exercise was an internal exercise for us. In terms of identifying the robustness of our system, like many other audits or reviews that we may have along the different functions of the department, yes, there have been sets of recommendations. I will read that out if you are okay with that.

Mr TRELOAR: Perhaps, Professor, those recommendations and which ones have been adopted.

Prof. DOROUDI: Sure. I will go through them. The first one was to include a principle relating to transparency and accountability to the actual policy. We have already done that. It means we have included the wording of 'transparency and accountability' there. It was about that we include every document that we have from every sector of Fisheries on our website. In the past, we just dealt sector by sector about their work plan, their program, costing associated with that, and we never shared that information with any other sectors. One recommendation was that it may be better in terms of transparency to put the detail of those documents, sector by sector, on the website.

The third one is to adopt those measures for the aquaculture industry as well, which we are going to do. I have to say, the documents have not gone up yet on our website, but we are currently in the process of adding them to our website.

The reason for the delay from the time that Deloitte finished its work, which was a report perhaps submitted to us around a few weeks ago, was the fact that we get all the documents associated to each sector's work plans and costing models up to the present time to be able to add them to our website.

Mr TRELOAR: Minister, just further to that and on the same budget line, Volume 4, page 21, have there been any studies conducted in the past few years, or even decade, to assist the efficiency and cost effectiveness of actual service delivery of either SARDI or PIRSA?

The Hon. L.W.K. BIGNELL: Once again, thank you to the member for Flinders for the question, and I will ask Professor Doroudi to explain that.

Prof. DOROUDI: May I just clarify something I said previously? The Deloitte report which goes on our website said that the process we are running is already transparent, but the word 'transparency' was not in the policy, and that needed to be included.

In terms of the previous reviews, the last review goes back to the 1990s and happened to be on SARDI's costing model. We internally review that every year, based on discussions that we have with the industry. In 2009, as I said, Deloitte—there is a comprehensive report about it and it is on our website as well—looked into every aspect of the departmental costs associated with Fisheries' cost recovery. They are the only previous reports that we can say were in the system.

You need to know that, in discussions with western zone abalone—because that sector obviously still had concerns and issues with cost recovery, and they clearly raised those concerns with us this year—an offer was made by the department, that we are prepared to review costs associated with compliance and SARDI if they wish or are willing for that review to take place. We have not heard back from them since the last meeting we had with them.

The other thing I can add is that the rock lobster industry sector has been in touch with the department in terms of being willing to run an independent or third-party review of their costs associated with research for SARDI's programs. We accepted that and will be working closely with them in relation to that review.

Mr TRELOAR: Minister, the professor mentioned the western zone abalone sector. You would be aware, through the professor, that they have records and are suggesting a discrepancy. I would ask you for an explanation for charging the western zone abalone sector for 80 days of education, when in fact only 2.4 hours were involved in 2014. The discrepancy is around those hours because they have been charged for 79½ full-time equivalents and there have been no new education requirements anticipated there.

The Hon. L.W.K. BIGNELL: Thank you again for the question. We have sat down with the western zone abalone people around the table. We do not agree on everything they put forward as being 100 per cent true, and I guess they do not agree with everything we say either. What we are trying to do is actually come up with something that we can all live with.

I think if you look at the cost to western zone abalone, those costs have come down markedly in recent years. We are happy to keep working with them, but what we will not do is reduce anything that will put that fishery at jeopardy, and that includes surveillance. Surveillance is a really important part of the integrity of the industry and so we want to have people out there doing the policing of the industry.

I might again hand over to Professor Doroudi to expand a little bit on what it is that we do with the western zone abalone people. As I said, it is an important industry. About 95 per cent of abalone ends up in China and Hong Kong. It is a tremendous part of our export industry. I remember the SIAL dinner in China last year, and the Chinese were glowing in their praise of our abalone. It is not really my favourite food, but it is a good thing if we can export 95 per cent of it to people who do appreciate it.

Prof. DOROUDI: I definitely say that there are disagreements between the sector and the department in terms of cost recovery. There are views in the sector that there is no need for that level of compliance because it is about just 22 divers and we would not need, to the best to my calculations, around a 26 per cent reduction that we implemented in their costs over the last few years. It was not really practical to go anything beyond that by not dropping, again, the integrity of the service that you provide.

The compliance program is divided into three elements: education, deterrence and enforcement. The time sheet that we have, that every single officer is following in terms of the time that they put in, came to be translated to that number of days of that program. I am still not convinced and do not understand where Mr Coates from the western zone abalone sector is coming from by saying that was just a 2½ hour education program. I believe he may be referring to 2½ hours of perhaps officers having interaction on certain matters with divers, but these programs go way beyond that.

The thing that I always discussed with western zone abalone is that, if there is any idea or initiative so that we can reduce our costs without adversely impacting on the management of this resource, by all means, bring it to the table. We are prepared to do that. On the record, we have shown with a number of sectors that we have been negotiating, discussing and reducing costs wherever it is possible. The act provides for the end user and beneficiary of this resource to be charged the fees associated with the management of the sector. Ninety-nine per cent of abalone is dedicated in the management plan to the commercial sector. We do not have much of a recreational activity side or public side associated with that.

On the illegal part of it, the state Treasury contribution that we have in fisheries section is a spending of significant amounts on an annual basis in addressing poaching and illegal activities in abalone, and none of that cost has been shifted or referred to the commercial sector. Again, we are waiting to hear from them. As far as I am concerned, we told them if they want a formal review to happen, we are prepared to open that formal review for the cost of compliance and SARDI research.

Mr TRELOAR: I refer to Budget Paper 4, Volume 4, page 22 and the financial commentary for the fisheries sub-program and, specifically, the 2014-15 estimated result versus the same period's budget. In that period, $3.3 million over and above that budgeted is estimated to have been spent on the purchase of commercial fishing licences and entitlements under the SA Marine Parks: Commercial Fisheries Voluntary Catch/Effort Reduction Program. Can the minister provide a general update on the marine parks buyback, specifically, how much effort has been taken and across which sectors, and how far that buyback has progressed? If it is not completed, then when is completion scheduled for?

The Hon. L.W.K. BIGNELL: Thanks again, Madam Chair, and to the member for Flinders. Again, Professor Doroudi has some more in-depth information that he can supply the committee.

Prof. DOROUDI: The figure in the budget is associated with the last sector, which was central zone abalone, $3.3 million. That was the last sector to complete the buyback program. Due to the difference between this sector and other sectors, in other sectors we did have provision of buying a complete licence or complete licences. In this sector the fairest way to go was to go pro rata and reduce the amount of quota that was calculated as reduction effort to be taken from each of the six licence holders.

On its own that took some time to get to that point. There was additional matter to it, and that was the fact that we had discrepancies between what they wanted to be reduced and what SARDI's calculation was saying to be reduced. We got to a landing on that and increased the level of purchase, but at the end we completed that sector. All the six sectors were affected by implementation of sanctuary zones and marine parks, their relevance calculated, and estimated licences were purchased in all those sectors. I would be happy to provide further detail on those sectors and number of licences, if you require.

Mr TRELOAR: I refer to the same budget line and the same page (page 22, Volume 4). What conversations have taken place, if any, in the previous financial period between your department and the Gulf St Vincent prawn fishery with regard to the future viability of that fishery?

The Hon. L.W.K. BIGNELL: Again, thank you to the member for Flinders for the question. There has been a lot of discussion going on with the Gulf St Vincent prawn fishery. It has been good to see the prawn fishery come closer together and having the one voice rather than several separate ideas. It was also good to see that the fishery was reopened this season with some very good results there. Hopefully, that all bodes well for a bright future for that fishery, which was, of course, dramatically overfished.

In terms of the various discussions that the department has had, I will ask, again, Professor Doroudi to go over some of those meetings they have had and where they are at at the moment.

Prof. DOROUDI: The fishery was closed for a period of time—near to two years—for biological and economical reasons. We know that. There are issues associated with that fishery. On request of fishermen—10 licence holders—the fishery was closed. During that time we worked on implementing a new method, which is trading nights of fishery. This is an input control fishery. This is not based on quota. Therefore when you do not have quota what we could do is to introduce a system that is going to be tradeable between the 10 licence holders. It took some time obviously to develop that, and it took time for the industry to re-create its association.

At the moment my latest understanding is that seven out of 10 of them have joined to become members of the association. We worked very closely with the association. There are other members of the industry who have obviously different views. What we did through all those programs and surveys that we ran is we got to a point where that fishery could be opened. The fishery was opened in the last season. We have been advised that the average catch has been more than a tonne per night. It is a good amount, a significant amount.

We recently had a meeting with the industry association executive officer Neil MacDonald, who provided some feedback on the season for us. It looked like six licence holders picked up the method that we introduced and rather than utilising six boats they utilised three boats during the activities they had. There were other operators who decided to go out with their own boat. More than 300 tonnes was caught. There are two schools of thought within the industry, I need to say, the majority who are a member of the association. They believe fisheries bounce back and would be good and continuing transferrable knowledge may get us to a point where over a couple of years, according to Cartwright and Morgan's review, we may be able to introduce a quota for this fishery. In that way an internal adjustment could happen if that process could get to that point and implement it.

There are others in the industry who strongly believe that the fishery will go back down again after a couple of years of catch and until at least half of these boats are not purchased out and licences surrounded there would not be a future for this fishery. We have to work with what is available to us, the best science that comes to us. In terms of the science of that also, I need to say that has been recently reviewed by CSIRO and further comments and input were provided for us to improve our stock assessment program and the science that we can deliver for this fishery.

Mr PEDERICK: I will just read in the omnibus questions and if I have any more time I will have another question, thank you, Madam Chair.

1. Will the minister provide a detailed breakdown of expenditure on consultants and contractors above $10,000 in 2014-15 for all departments and agencies reporting to the minister listing the name of the consultant, contractor or service supplier, cost, work undertaken and method of appointment?

2. For each department or agency reporting to the minister in 2014-15, please provide the number of public servants broken down into heads and FTEs that are (1) tenured and (2) on contract and, for each category, provide a breakdown of the number of (1) executives and (2) non-executives.

3. In the financial year 2014-15, for all departments and agencies reporting to the minister, what underspending on projects and programs (1) was and (2) was not approved by cabinet for carryover expenditure in 2015-16?

4. Between 30 June 2014 and 30 June 2015, will the minister list the job title and total employment cost of each position with a total estimated cost of $100,000 or more—(1) which has been abolished and (2) which has been created?

5. For each department or agency reporting to the minister, please provide a breakdown of attraction, retention and performance allowances as well as non-salary benefits paid to public servants and contractors in the years 2013-14 and 2014-15.

6. For each year of the forward estimates, provide the name and budget of all grant programs administered by all departments and agencies reporting to the minister and, for 2014-15, provide a breakdown of expenditure on all grants administered by all departments and agencies reporting to the minister listing the name of the grant recipient, the amount of the grant and the purpose of the grant and whether the grant was subject to a grant agreement as required by Treasurer's Instruction 15.

7. For each year of the forward estimates, provide the name and budget for each individual program administered by or on behalf of departments and agencies reporting to the minister.

8. For each year of the forward estimates, provide the name and budget for each individual investing expenditure project administered by or on behalf of all departments and agencies reporting to the minister.

9. For each department or agency reporting to the minister, what is the budget for targeted voluntary separation packages for the financial years included in the forward estimates by year and how are these packages to be funded?

10. What is the title and total employment cost of each individual staff member in the minister's office as at 30 June 2015, including all departmental employees seconded to ministerial offices and ministerial liaison officers?

The CHAIR: Really quickly.

Mr PEDERICK: Really quickly. Minister, I refer to Budget Paper 4, Volume 4, page 21, with regard to cost recovery and agreements around cost recovery. I have had a little bit of a history with this. Fishing is one of the most, if not the most, highly regulated industry in South Australia and it is a world regarded fishery in how it is managed. I think there are some issues around what some in the fishery see as the reporting back and the transparency of PIRSA documentation around cost recovery. In that light my question is: is there genuine cost recovery around each sector or is there a targeted budget amount that PIRSA has to recoup from each individual fishing sector?

The Hon. L.W.K. BIGNELL: Thanks again for the question, member for Hammond. Cost recovery is something that we discuss a lot with all the individual fisheries. In most cases there is agreement. We always listen to the suggestions as to how things can be done better. In some cases fisheries ask for us to put up their costs because they want to implement a different program or go down a different line or something like that. So, it is a matter of us, on a case by case, fishery by fishery basis, working with those various groups to make sure that we come up with the best possible system.

We do not want to have any huge financial burden on them, but it is an activity-based costing and if the work is being done then it is appropriate that the industry pays for it. There are so many different aspects to it as well. One of the things that we have a great reputation for, around Australia and around the world, is the food safety around our fisheries. So, I guess that is one aspect of it.

In the time that I have been in this role I must applaud everyone in PIRSA and in particular Professor Doroudi and Sean Sloan and the other people involved because they very much have an open door policy and they listen to what people in the sector have to say. I think they are very well respected by the fisheries as well, by all the different fisheries around the state. You are always going to get some level of disagreement here and there but I think that 99 per cent of the time we can come to an agreement where we are both happy with what is being delivered and what is being paid for.

Sitting suspended from 12:02 to 12:15.

Membership:

Mr Bell substituted for Mr Goldsworthy.

Departmental Advisers:

Mr S. Ashby, Chief Executive, Department of Primary Industries and Regions.

Mr J. Coleman, Acting Chief Executive, ForestrySA.

Mr S. West, Executive Director, Forestry, Department of Primary Industries and Regions.

Mr D. Frater, Deputy Chief Executive, Department of Primary Industries and Regions.

Mr J. Zwijnenburg, Acting Chief Financial Officer, ForestrySA.

Mr S. Johinke, Director, Finance and Prudential Management, Department of Primary Industries and Regions.

Ms R. Skewes, Manager, Cabinet and Ministerial Coordination.

The CHAIR: I call on the minister in his role as Minister for Forests to introduce his new advisers and make an opening statement.

The Hon. L.W.K. BIGNELL: The government's interests in forestry are managed by both PIRSA and ForestrySA. I would like to introduce the members of the department and ForestrySA who are here today. To my right is Jerome Coleman, Acting Chief Executive of ForestrySA. On my left is Scott Ashby, Chief Executive of PIRSA, and Stuart West, Executive Director, Forestry, PIRSA. Behind me are Jeroen Zwijnenburg, Acting Chief Financial Officer, ForestrySA, Don Frater, Deputy Chief Executive, PIRSA and Stephen Johinke, Director, Finance and Prudential Management, PIRSA.

PIRSA is responsible for providing policy advice to the government in relation to the forest and wood products industry, including associated environmental matters, and for developing the industry in this state. ForestrySA has responsibility for the day-to-day, on-the-ground management of the state's forests. Yesterday I was in Mount Gambier to announce the agreement between the South Australian government and OneFortyOne Plantations Proprietary Limited to assume full responsibility for managing OneFortyOne Plantations in the South-East. The transfer of responsibilities is expected to occur by October this year, pending no unforeseen delays.

This agreement between the government and OneFortyOne simplifies the forest management of the estate and will create certainty for existing ForestrySA employees currently employed to assist with the management of OneFortyOne Plantations. It will also create certainty for the South-East forest industry as a whole. During the transition period, both ForestrySA and OneFortyOne will be conducting a business-as-usual approach. Due to the close working relationship both organisations have developed over the past 2½ years, disruption to business and services is expected to be minimal.

After the transition period, ForestrySA will continue to manage ForestrySA's existing softwood plantation operations in the Mount Lofty Ranges and the Mid North forests; community service functions, including the fire management of non-OneFortyOne forest estates; management of 23,000 hectares of native forests in the South-East, Mount Lofty Ranges and the Mid North; public access of forest reserves in the South-East, Mount Lofty Ranges, Mid North and the OneFortyOne leased plantation area; and forest industry development activities.

There are no changes to forest management arrangements in the Mount Lofty Ranges or the Mid North. ForestrySA will retain staff in the Green Triangle who were not predominantly involved in providing services to OneFortyOne under the original management agreement. I would also like to reassure everyone that there will be no changes to the present fire management levels as a result of this latest agreement. ForestrySA will retain responsibility for fire protection and management outside the OneFortyOne forest estate, and OneFortyOne will provide protection and management of its forestry estate.

The fire equipment required to manage the OneFortyOne estate will transfer to OneFortyOne, while ForestrySA will retain the necessary equipment and resources to maintain fire protection beyond the OneFortyOne estate in the South-East, along with the forests in the Mount Lofty Ranges and Mid North regions. Plant and equipment, IT systems and services required for the management of the non-OneFortyOne forest assets will be retained by ForestrySA.

The state government will continue to own the ForestrySA headquarters in Mount Gambier, and part of it will be leased to OneFortyOne. The government will also continue to retain ownership of the forest land, water and carbon rights. With this new agreement, the government has ensured that there will be no changes to the conditions relating to rotation length, domestic supply arrangements, annual reporting requirement or replanting obligations, which will continue to help ensure the long-term future of the industry.

In September last year, I released the Blueprint for the Future South Australian Forest and Wood Products Industry (2014-2040) and the Forest and Wood Products Industry Policy Statement. These involved significant consultation with industry and have identified a range of opportunities which could achieve significant economic, social and environmental outcomes for the sector. The government is continuing to work with industry to drive the activities identified in the blueprint, including initiating discussions to establish a unified voice for the industry and realising the opportunities for innovation and collaborative research.

The recommendations from the VTT stage II report of the cellulosic fibre value chain study, which were identified in the blueprint, include exploring the use of new wood products and value-adding opportunities for underutilised wood fibre and residues. The VTT recommendations were also incorporated into the application criteria for the government's South East Forestry Partnerships Program.

This program reflects the government's continued commitment to ensure investment continues to support improvements in productivity through modernisation and innovation. The government established the South East Forestry Partnerships Program in November 2012. To date, grants totalling $27 million have been approved for 15 significant projects which will generate total investments in the region's forestry industry exceeding $79 million.

PIRSA also continues to work with other government agencies, such as the Department for Environment, Water and Natural Resources, and industry across a range of issues impacting on forestry. PIRSA is also leading the government's Mid North Forests—Future Strategy during 2015 to set out a way forward for the industry, government and the community to determine the future direction the Mid North forests could take for the benefit of the region and the state.

PIRSA has a memorandum of administrative arrangement with ForestrySA to manage and fund non-commercial forestry activities of benefit to all South Australians. Annual programs and performance targets have been developed by ForestrySA in consultation with PIRSA. These programs recognise the importance of forestry and forest reserve uses to the people of South Australia. The ForestrySA budget is based on an ongoing transformation to be a more effective and efficient forest owner in the Mount Lofty Ranges, forest manager in the Green Triangle for OneFortyOne Plantations, and a renewed focus on implementing the community service obligations in the Mid North.

ForestrySA has achieved progress in the restructuring of its operations. In July 2014, the government approved a targeted voluntary separation package program which saw 66 staff accept voluntary separation packages. This investment of $9.6 million should realise a saving of $16 million over three years. A commercial system upgrade program has been delivered, providing considerable operational efficiencies. This allowed the restructure of the administration functions while providing a platform to improve the delivery of forest management services.

The Mount Lofty Ranges forests have been impacted by two significant fire events. The Sampson Flat fire in January 2015 saw approximately 176,000 cubic metres of standing pine plantation timber lost and some 2,500 hectares of native vegetation burnt. This will require the Port Adelaide export log business to continue to complete the fire salvage.

The second fire event was at the SA Pine Pty Ltd sawmill, which has further impacted log sales and the resultant cash flows. ForestrySA is still managing the impact of the Mid North's Bundaleer and Bangor fires in 2013 and 2014 respectively. ForestrySA has completed the fire salvage and has stopped the exporting of burnt timber. Its new focus is the Mid North community service obligations, in particular fire protection and the re-establishment of recreation and tourism in the forests. Since the first trial plantings in Bundaleer in 1876, the Mid North forests have become an important tourism and recreational asset for the local and wider community.

ForestrySA has also been negotiating new commercial arrangements for log supply in the Mid North and has been actively involved in the Mid North Forests—Future Strategy process. The market for softwood logs has stabilised over the past year, with strong domestic and solid export markets. This has resulted in a forecast improvement of $500,000 during the 2014-15 budget estimate. The government acknowledges the important contribution forestry makes to the state of South Australia and more importantly to its regional economies.

Mr BELL: My questions relate to Budget Paper 4, Volume 4, page 32 and concern compliance with ForestrySA's forward sale and contractual requirements. It is obviously not a big section, as there are only two pages, but it might reflect some of the forests goings-on. Did OneFortyOne indicate that they were not intending to renew the management contract in 2017? Is that what has led to this change in agreement?

The Hon. L.W.K. BIGNELL: In discussions with OneFortyOne over the period of time that I have been the Minister for Forests, I think it has not looked like it was more than a 50 per cent chance, and we had to prepare ourselves for that eventuation if that is what actually happened. We had to look at all possibilities, and the thing I wanted to have as the main priority was job security for the 74 ForestrySA workers, particularly those 60 workers who were involved in the management of the OneFortyOne plantations, which is one of those roles you have as minister: you have to look at what the potential is and if there is something that might not go as we would have liked.

In an ideal world, we would like to have had a five-year term, where ForestrySA and its staff managed those forests on behalf of OneFortyOne, followed by a further five-year contract. I know that there were some frustrations, not with the workers—the workers are considered some of the best workers anywhere in the country when it comes to the management of forests—but for people who had to deal with two organisations instead of one organisation. I am sure as the local member you will have heard similar sorts of things as I have heard from industry, where sometimes they did not know whether they had to go to OneFortyOne or to ForestrySA to get the answers they required.

OneFortyOne did come to us with a suggestion. We had a good look through it. As I said at the outset, the welfare of those 74 workers and their families was uppermost in our mind. If anything was to happen, if we were to reach agreement, there had to be a very good deal for those workers. I went down yesterday and broke the news to those workers in person because it is big news for them and it is going to require some adjustment.

If you have 74 people, you have 74 individual reactions. Some people will say, 'This is fine; I am happy to transfer over. My rights and all my entitlements will transfer over with me. If I'm on an enterprise bargaining agreement, the only thing that will change in there is that instead of it being with ForestrySA it will be with OneFortyOne plantations.' The other change, I guess, is the fact that those entitlements will reach out to June 2018 now, instead of October 2017.

We think that we have come up with the best deal possible for the workers, but it will be up to all those individuals. No-one is going to be forced to move from ForestrySA over to OneFortyOne, and that is the important thing that people need to remember. We want to give them every assistance we can. We have an open-door policy in terms of, if they want to speak to anyone within OneFortyOne or ForestrySA; those doors are open for questions, and people will be given considered answers about what the future may hold for them.

The other really important thing was fire security, to make sure that there would be no deterioration in the level of fire coverage we have in the South-East. I am pleased to say that that was signed off on by OneFortyOne and the government. I guess the two really important things for us were the welfare and job security of the staff and for the firefighting capacity and capability to be maintained. They have been put out there as two non-negotiables as far as we were concerned and they are two things that have been signed off in this agreement.

Mr BELL: In terms of intellectual property, can you explain to the committee what is going to occur with that if you sit back and look at it and say, 'Right, ForestrySA no longer has the management contracts.' If that was a private organisation, they would shut down the systems that they have in place. There would be no transfer over of intellectual property, modelling, data, software or a whole range of IP that gives credit. In that explanation, would it be true to say that the government may have underplayed its hand if it transfers that IP across at no cost?

The Hon. L.W.K. BIGNELL: We retain the IP. We will give them a licence to use that IP. The whole IP factor was considered in the deal that was done. We are not giving anything away.

Mr BELL: Will that have a return to the state taxpayer in terms of a licensing fee, or is it just a licence for a period of time?

The Hon. L.W.K. BIGNELL: It is a perpetual licence.

Mr BELL: But there is no cost associated with it?

The Hon. L.W.K. BIGNELL: No cost to us. The consideration has been taken up-front in the overall consideration of the deal.

Mr BELL: In terms of staff, I really want to focus on that, where I genuinely believe your concern is as well. You are assuming 60 staff will transfer across to OneFortyOne. Let's play devil's advocate and say that no staff transfer across, so you have OneFortyOne looking for 60 staff and you have ForestrySA with 74 staff sitting on its books. What are your mechanisms in terms of dealing with that type of scenario?

The Hon. L.W.K. BIGNELL: We have three weeks to work out who is going to move over to OneFortyOne and who will not move over to OneFortyOne. I guess we will deal with the reality once we know what the reality is.

Mr BELL: Am I correct in my assumption that you are asking public servants, who are permanent, to at best take up a three-year contract with a private provider?

The Hon. L.W.K. BIGNELL: That offer is there, but they do not have to accept that offer.

Mr BELL: But that is the case: if they go over to OneFortyOne, they will have a three-year contract, because at best it ends in 2018?

The Hon. L.W.K. BIGNELL: Yes, that is right. At the moment, the deal with OneFortyOne goes through until October 2017.

Mr BELL: Yes, with the right of renewal that could have been in there. What is the total cost to the South Australian taxpayer in breaking the previous agreement? I will give some clarity around that. I imagine that there are long service leave and sick leave entitlements that quite rightly will transfer across for any staff who take those positions up, but that is actually a liability that would be sitting on someone's books somewhere. What is the total cost if all 60 go across? How much extra money is the state government going to be putting in to cover those existing workplace arrangements?

The Hon. L.W.K. BIGNELL: Without breaking down line by line what this deal is worth, I think the safe thing to say is that this deal is not going to cost the government anything. In fact, over the next seven years the government will be more than $30 million better off.

Mr BELL: So OneFortyOne will pick up the tab for existing sick leave and long service leave that has accrued over a period of time?

The Hon. L.W.K. BIGNELL: That has been part of the negotiations. As I said, it is commercial in confidence, but the taxpayers of South Australia are not going to be out of pocket on this deal.

Mr BELL: Again, more to do with the compliance issues, have there been any compliance issues raised by ForestrySA, OneFortyOne or timber processors to do with the current contract conditions that are in place? Have there been any concerns raised in the last 12 months on the forward sale conditions?

The Hon. L.W.K. BIGNELL: Thanks again for the question, member for Mount Gambier. I might ask Stuart West, the Executive Director of Forestry, to answer that question.

Mr WEST: OneFortyOne is required to submit an annual compliance report to the government and they have done that as per the requirements. Many of the details of the compliance reporting are confidential as per the original negotiations, but OneFortyOne have submitted their compliance reports and have complied since their involvement in the business.

Mr BELL: So there have been no complaints about OneFortyOne's dealings up to this date?

Mr WEST: No, there have not.

Mr BELL: Who specifically monitors the compliance of OneFortyOne's requirements tied up with the forward sale?

The Hon. L.W.K. BIGNELL: PIRSA does that monitoring.

Mr BELL: Is there a certain person within PIRSA or is it a team of people? Who specifically monitors the conditions of the forward sale and the compliance of those?

The Hon. L.W.K. BIGNELL: The forest policy unit, led by Mr Stuart West.

Mr BELL: Are you able to detail for the committee their qualifications? That can be taken on notice, but can we have a detailed breakdown?

The Hon. L.W.K. BIGNELL: I will ask Mr West to answer that one.

Mr WEST: I lead that group. I have a Bachelor of Science in forestry. My staff have either forestry degrees or up to 25 years of forestry-related experience. Most of my staff have worked for ForestrySA or its previous structure, the woods and forests department, at some point in their career. We have appropriately qualified people to look at the required elements, but it is led by me.

Mr BELL: Minister, just to clarify: how many people are in that team? Stuart obviously heads it up, but how many people are in that team?

The Hon. L.W.K. BIGNELL: Six people.

Mr BELL: Can you inform the committee when the report is published, the bits that can be published?

The Hon. L.W.K. BIGNELL: It is tabled annually.

Mr BELL: A date—1 July, December?

The Hon. L.W.K. BIGNELL: I think it is May, from memory.

Mr BELL: One thing that has puzzled me is the mechanics of Carter Holt Harvey. Can the minister explain the mechanics of the supply agreement with Carter Holt Harvey, considering they have not novated their contract from ForestrySA over to OneFortyOne? What I am trying to get at is: does ForestrySA purchase the wood from OneFortyOne to then sell it to Carter Holt Harvey? The agreement is between Carter Holt Harvey and ForestrySA, not Carter Holt Harvey and OneFortyOne. I just want to understand those mechanics.

The Hon. L.W.K. BIGNELL: I will ask Mr Jerome Coleman to provide some in-depth information about that.

Mr COLEMAN: There is a back-to-back arrangement in place between ourselves and OneFortyOne. It is a fairly common occurrence, when you have a major business sale, that you novate your agreements, but a novation requires the agreement of all parties. In this particular case, Carter Holt Harvey did not agree to the transaction, so there is an agreement between OneFortyOne and ForestrySA to effect the same agreement as if a novation was in place. In short, there is a contractual relationship that exists, but for all intents and purposes, it is as if it is novated.

Mr BELL: Does the state government, through ForestrySA, take any percentage or any difference in what they purchase and what they sell back to Carter Holt Harvey, which they commonly call 'clip the ticket' on the way through? Is there any of that or is it just a straight transfer?

Mr COLEMAN: No.

Mr GEE: I refer the committee to Program 2: Forestry Policy, Budget Paper 4, Volume 4, pages 38 and 39. Will the minister advise how the $7.12 million available in the third phase of the South East Forestry Partnerships Program will be used to maintain jobs and allow the forestry industry to grow?

The Hon. L.W.K. BIGNELL: On 16 June this year, I announced funding for $7.12 million from the South East Forestry Partnership Program phase 3, which will contribute to six projects with a combined total of almost $25 million. The projects represent a significant investment in this key industry for the state and in particular for the Limestone Coast. The successful applicants were South East Pine Sales Proprietary Limited, with $1.873 million to implement a new softwoods sawmill process. This will involve scanning and sawing, optimisation capability as well as the installation of a light organic solvent preservative timber treatment process. This investment will secure 30 current jobs as well as create an initial four to five full-time equivalents and one part-time role.

Another one was Roundwood Solutions Proprietary Limited, with $1.58 million for a new combined gasifier and biochar plant. The plant will utilise wood residues from current operations, such as sawdust, shavings and woodchips, to produce biochar and hot air. Hot air will be used to generate steam to dry posts—we could do with one of those in here maybe. Biochar will be sold as a fertiliser extender in local forests and agricultural markets, and this investment will provide work for up to five engineering trades workers during construction and initial commissioning. Once operational, it will provide employment to an additional 2½ full-time equivalents. Biochar will be a new product and a new skill will be required to produce it.

H&L Scheidl Pty Ltd. receives $1 million for a new kiln, drying facility and treatment plant. This will value add to existing products, expand Scheidl's market and increase utilisation of forest products. The kiln will be heated by both solar energy and a bioplant run on mill residues. The post peeling line will enable more posts to be produced. It is anticipated the project will create an additional five full-time equivalents. The new equipment will require the skill base of existing employees to expand.

3RT Holding Pty Ltd. receives $993,668 for a new customised 3RT Strand technology production unit in Mount Gambier. Low-value wood, which is the first thinnings and the damaged logs and mill offcuts, will be transformed into high-value timber products, being compressed wood, with similar properties to mature hardwood. The production unit will initially require five skilled workers, leading to 20 new employees when in full capacity mode. Development and expansion of the production unit will require uniquely skilled operators and technicians.

Timberlink Australia receives $1.115 million for a new high-speed board sorter, scanner, stacker and cleat grading system to enable processing of more small log. The investment will allow the current Tarpeena greenmill assets to run at maximum capacity. This investment will continue to support the current employment level at the Tarpeena site and will require an additional four employees. A substantial specialty contract labour resource will also be required.

The Association of Green Triangle Growers Incorporated receive $550,000 for a feasibility study into opportunities to increase processing capacity in the Green Triangle region. The development of a state-of-the-art processing facility will provide a significant opportunity for highly skilled employment during the construction phase of the project, should the outcomes of the proposed full feasibility studies support such an investment. These projects will help transform the industry in the South-East so it is globally competitive.

The South East Forestry Partnership Program is a $27 million merit-based grant program. Its aim is to assist the forestry industry and forest products industry recovery by encouraging further investment in new and existing businesses. It supports the development of innovative products and technologies to increase sales volume and log throughput, making the entire forestry supply chain in the South-East more sustainable. Phase 3 builds on the investment in 2013 in phase 1, which resulted in the government funding $15.38 million for five projects. The projects are expected to contribute approximately $34 million of joint investment in the forest processing sector in the South-East.

On 13 January 2015, I announced $4½ million of funding from the South East Forestry Partnership Program. Phase 2 for four projects are expected to contribute a combined total of almost $22.2 million to the local economy. The total value of the SEFPP projects and government funding is estimated at more than $79 million and includes applicant contributions of around $52 million. It is envisaged that further leverage from applicants will occur once all the projects are underway.

Mr BELL: Minister, could you explain why Roundwood Solutions cannot get a log supply agreement with OneFortyOne, even though they are recipients of one of those grants that you just mentioned?

The Hon. L.W.K. BIGNELL: That is probably a question you should direct to OneFortyOne, and if you do not get an appropriate answer, come back and I will talk to you about it and see what we can find out.

Mr BELL: I am just interested in the assets such as the Fire Kings, which will cause some concern down in my area. Are they to be sold or transferred at commercial rates to OneFortyOne, or are they just going to be given away?

The Hon. L.W.K. BIGNELL: They definitely will not be given away. They got transferred to OneFortyOne at their commercial value.

Mr BELL: The only other question I have, minister, concerns the South East Forestry Partnership Program. If there are any unspent funds from the South East Forestry Partnership Program (i.e., a project has received funding but does not progress for whatever reason) will that money come back into the fund, or will it go to general revenue?

The Hon. L.W.K. BIGNELL: The fund is currently fully acquitted, so I guess it is a hypothetical question, but my personal view is that the money should stay in the South-East. It was promised to the people of the South-East. It is an important industry, of course, as you well know. We have discussed this many times. I think we are both very passionate about supporting the timber industry in the South-East. Any way that we can help out that timber industry, we will do that. While it is a hypothetical question, it would be my intention to make sure that money goes where we said it would go.

Mr BELL: I appreciate that. Thank you, minister.

The CHAIR: There being no further questions, I declare the examination of the proposed payments adjourned and referred to committee B.

Sitting suspended from 12:46 to 13:45.