Department of State Development, $674,320,000

Administered Items for the Department of State Development, $7,629,000

Membership:

Ms Redmond substituted for Dr McFetridge.

Mr Knoll substituted for Mr Tarzia.

Mr Duluk substituted for Mr Bell.

Minister:

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

Departmental Advisers:

Ms A. Reid, Deputy Chief Executive, Department of State Development.

Mr J. Andary, Acting Executive Director, Arts SA.

Ms H. Schultz, Director, Cultural Heritage and Assets, Arts SA.

Mr R. Janssan, Executive Director, Strategy and Business Services, Department of State Development.

Mr P. Louca, Chief of Staff.

The CHAIR: We now have the proposed payments for Arts SA, and I declare the proposed payments open for examination. I refer members to the Agency Statements, Volume 4. I call on the minister to introduce his advisers and to make an opening statement if he so wishes.

The Hon. J.J. SNELLING: To my left is Alex Reid, Deputy Chief Executive of the Department of State Development; to her left is Hannah Schultz, Director, Cultural Heritage and Assets, Arts SA; and to my right is Jeff Andary, who is the Acting Executive Director, Arts SA.

We have come off a very successful 12 months in the arts, with a very successful Festival, but I think probably the highlight of the year would have to be the Cabaret Festival, which really did blow all box office records. It was a tremendous success under the artistic direction of Mr Barry Humphries, with many, many interstate and overseas visitor nights generated by that festival.

We have a number of events still to come for the calendar year which we are looking forward to. Our cultural institutions go from strength to strength as well, with the Art Gallery, the Museum, the State Library, just to name a few, doing very important work, and of course very important work is done within Arts SA administering all these things.

I should say at the outset that I have been very disappointed by the decision of the federal government to take $100-odd million out of the Arts Council and redirect that funding towards a ministerial fund, funding arts organisations. That is going to have an enormous effect on our small and medium arts sector in South Australia. It is something we are currently having a look at, as there is no doubt that it is going to have an impact on the way we deliver funding to various arts groups because, of course, a lot of the funding we do is matched funding with funding that comes from the Australia Council, so we will have to have a look and deal with the consequences of that.

We will do everything we can from a state perspective to try to preserve those small to medium arts organisations that have been enormously affected by, I think, what is a very regrettable decision on the part of the federal government. With that, I am happy to take questions, Madam Chair.

The CHAIR: Are you the lead member, member for Davenport?

Mr DULUK: No.

The CHAIR: Does anybody have an opening statement, or are we straight into questions?

Mr DULUK: No, straight to questions. Minister, in relation to the State Library, Budget Paper 4, Volume 4, pages 77 and 78, given that there has been a drop of almost 100,000 visitors to the State Library website since 2013-14, what justification is there for developing a new website?

The Hon. J.J. SNELLING: My advice is that it had something to do with the way that hits to the website are counted, and there have been issues associated with that. I am happy to get a full briefing from the committee and ask the Library for some information.

Ms REDMOND: Still on the same page, minister, could you provide some explanation of just how much impact the relocation of the City of Adelaide Lending Library from the Spence Building has had? The explanation given for the dramatic reduction—you had a projection at the beginning of last year for 900,000 visitors to the State Library and the actual estimated result was 600,000, so a one-third reduction in what you were expecting—was that it is all put down 'to the first full-year impact of the relocation of the City of Adelaide Lending Library'.

Now, that of itself, that explanation, implies that there must have been a part-year impact prior to that and, therefore, one would have thought that there would be an inclination to put a lower projection for 2014-15, yet your projection for 2014-15 at 900,000 was well out of kilter with the actual results. I am curious because I would not have thought that the number of people borrowing or attending at the Spence Building was actually 300,000 or anything like it.

The Hon. J.J. SNELLING: I will ask the deputy chief executive. She can answer the question.

Ms REID: Again, we can get a more detailed answer from the Director of the State Library, but my understanding is that, in the changeover and the transition, they certainly anticipated a reduction as a result of the city lending library moving as it did to the Mall. They completely altered their programming associated with that part of the library—that space.

If you have been in there recently, you will know that it is now filled with students and all sorts of people using their facilities, using their wi-fi, doing a whole range of things and a whole range of programming. They obviously anticipated a level of programming to replace that and build up to that again that was not achieved in that year. It is a target they set for themselves.

Mr DULUK: That is not obviously reflected in, say, users of the website.

Ms REID: No, this is physical access.

The Hon. J.J. SNELLING: I thought Isobel was talking about physical—

Ms REID: This is physical.

Mr DULUK: Minister, in terms of FTEs for sub-program 4.1, there has obviously been a reduction in FTEs. Can we just have a bit of explanation behind that, please?

The Hon. J.J. SNELLING: The FTEs in Arts SA?

Mr DULUK: For the library and statewide information services.

The Hon. J.J. SNELLING: In short, it reflects the fact we are making savings in the portfolio. Those savings have been allocated to the various cultural institutions of which the library is one.

Ms REDMOND: I refer you, minister, to Volume 4, page 76, Program 4: Arts, the summary on that page and the table of the program summary. The number of full-time employees overall is reducing from 99.6 in the year just finished down to 76.9, so there is a significant reduction in the number of employees and, consequently, a significant reduction in, at the very first line of that, the employee benefit expenses. With that significant reduction, how is it that it is still going to cost more for the net cost of providing services? Why is there such a blowout in the net cost of providing services when the number of people providing them is being reduced by about 25 per cent?

The Hon. J.J. SNELLING: Are you talking across the portfolio or just to the library?

Ms REDMOND: Across.

The Hon. J.J. SNELLING: Spending money on things other than employees, for example, a lot of our money goes out in grants to both individual artists and to others. So supplies and services—that is an increase of $2.7 million per annum, primarily due to the budget measure to maintain arts activities. You will be aware that, as part of the budget, $4 million per annum is provided for arts events, including events, exhibitions and public programs provided through the state's arts organisations, cultural institutions and festivals as well as regional initiatives. There would be some operating money associated with the extra money that we are putting into theatres so that would be included in it as well.

Intragovernment transfers—an increase of $6.3 million for the upgrade of infrastructure at regional arts theatres by Country Arts SA, but that is investing. Because it is a transfer from government to outside of government, the expenditure, the extra money that we have put into the regional theatres to upgrade the regional theatres, is reflected as an operating expenditure rather than an investing expenditure because it is a transfer to an outside government organisation. It is within government but it is a statutory authority. The transfer from Arts to Country Arts appears as operating expenditure.

So, yes, we are spending less on employee expenses, but we are spending more in other areas of the arts portfolio. Principally it would be the increased money that we had as part of the budget for arts events and the increased expenditure on our regional arts theatres.

Ms REDMOND: Still on that same page, and in particular on the first line, the employee benefit expenses, I asked you last year about a particular employee by the name of Nicole Burns, and you undertook—both in estimates and in a question a week later in the house—to provide a response to the question as to how that particular young woman managed to be appointed to a relatively highly paid job within Arts, having been moved from the office of the member for Mawson, with no apparent advertisement for the position, no due process for the position and, indeed, with a number of emails going back and forth indicating that there was some need to have a very quiet appointment of this person who was taking on a job at a relatively high level, as I say, but a job that was previously done by a trainee.

If I can quote what you said last year in response to that question, you indicated that you were not privy to the emails but that you would get back to me—'I am happy to find that out for the member for Heysen'—but a year later I still have not had a response as to how Ms Nicole Burns, formerly of the member for Mawson's office, got such a high level appointment previously done by a trainee within your department.

The Hon. J.J. SNELLING: I need to find out what information I have but I have to say that I am not in the practice of speaking in a public forum about appointments of individuals within the public sector.

Ms REDMOND: But, minister, you have had a year to respond to the question.

The Hon. J.J. SNELLING: Probably the reason why I have not is that it is inappropriate for me to comment on the appointment of an individual within the public sector.

Ms REDMOND: If you do not do it in the public arena—

The Hon. J.J. SNELLING: I am satisfied that all the processes that needed to be undertaken were undertaken.

Ms REDMOND: So nothing worries you about an appointment of someone to what was formerly a—

The Hon. J.J. SNELLING: I am very confident with the circumstances of all the appointments that happen with Arts SA.

Ms REDMOND: Really?

The Hon. J.J. SNELLING: Yes.

Ms REDMOND: And that no further explanation is required or warranted.

The Hon. J.J. SNELLING: I am not in the business of sharing in a public forum like the estimates committees, circumstances around the appointment of—

Ms REDMOND: Well, minister, you could have written to me any time over the last 12 months.

The Hon. J.J. SNELLING: I am not going to be sharing circumstances regarding the appointment of particular individuals. If there is concern that there is some sort of probity or something that has been infringed in this appointment, my answer is no, I am not concerned about any of the probity around this appointment.

Ms REDMOND: So you are not concerned about it.

The Hon. J.J. SNELLING: I have confidence in the appointment.

Ms REDMOND: That is not to say that there was a lack of probity, but just that you are not concerned about.

The Hon. J.J. SNELLING: There was not a lack of probity. The appointment was done with regard to and taking into account all the rules regarding public sector appointments, and transferring individual public sector employees from one agency to another.

The CHAIR: The member for Schubert. The answer was not finished; that is why we were waiting.

Mr KNOLL: So, the minister is confirming that there was a job description developed for this position, that there was a process by which applicants were sought for this position and then, as is the normal process, applicants were interviewed and then a person chosen as the best person for this job, that the normal process by which each of the other 80,000 or 90,000-odd public servants go through was followed in this case.

The Hon. J.J. SNELLING: Any public sector employment is done by the relevant public sector employees whether that be the chief executive of the department and obviously it filters down from there depending on the nature of the employment. I presume Arts SA would have been within the Department of the Premier and Cabinet at the time this particular appointment was made and I have confidence in the processes that were taken.

Mr KNOLL: So you are confirming and ruling out the fact that there was no abnormality in the appropriateness of this process compared to the processes normally undertaken.

The Hon. J.J. SNELLING: What I am confirming is that they were done within the rules and guidelines that are there when the appointment was made. I point out that this was long before I took over the portfolio but I have confidence in the officers who were making the appointment at the time.

Mr DULUK: Back to public libraries, in what capacity were South Australian councils and the Local Government Association involved in the development and implementation of the One Card system and were they involved in a financial capacity?

The Hon. J.J. SNELLING: That's a Dorothy Dixer, Sam.

Mr DULUK: I want to see if you get this one right.

The Hon. J.J. SNELLING: The One Card Project started in May 2012 and, over a period of less than 2½ years, 80 separate library databases have been merged into the single One Card system. During 2014-15 the final five councils joined the system, with Yankalilla being the final library to join in September 2014. The speed at which this project progressed was initially considered ambitious. To the credit of everyone involved, every library commenced operations on its agreed go live date.

Using One Card, people can access an item from any library in the state. Library customers can also walk into any library and borrow or return items, as well as use the internet and other services regardless of which library their membership is with. The One Card Project has been an overwhelming success. Public feedback has been significant, almost entirely positive. Making the collections of the state's 138 libraries totally accessible to all library users is very efficient use of an existing resource. With regard to council, the funding came from within the existing annual funding allocation provided to public libraries through the MOU that we have with the Local Government Association.

Mr DULUK: Thank you for that wonderful answer to that Dorothy Dixer, minister. How will the rollout of the One Card system in Shandong Province, China, be funded?

The Hon. J.J. SNELLING: The One Card system, which allows all South Australian citizens a library card to borrow from over four million items held in any public or school community library in the state, is one of the significant features of the agreement between the State Library and the Shandong Library.

The agreement will see the State Library and public library services use their expertise and experience to support the Shandong Library to achieve its goal of rolling out the One Card management service system to its over 98 million citizens by 2020. In the coming weeks, public library services staff will meet with officials in Shandong to develop the implementation plan. It is also intended that the State Library will host two Shandong staff for a period of up to three months. There are further plans for the State Library and public library services staff to meet counterparts in Shandong.

Mr DULUK: How will it be funded?

The Hon. J.J. SNELLING: It will just be from within their existing budget, but it is in the very early stages, so it would just be utilising staff we already have.

Mr DULUK: Given that it is in its early stages—

The Hon. J.J. SNELLING: Hang on a moment, I am just getting some more advice. The deputy chief executive has just said that in her discussions with the Shandong Library they indicated that their budget for digital services was $70 million alone and they would be looking to invest their own money in this project.

Mr DULUK: Sorry, that was Shandong Province will be investing $70 million?

The Hon. J.J. SNELLING: Yes—no, no, just say the total budget was $70 million. They have a considerable budget for these sorts of things and they would be looking to invest a component of that $70 million in this project.

Mr DULUK: So, there are no specific costs at the moment?

The Hon. J.J. SNELLING: No, not at the moment, but it is very early days. Other than small amounts of travel that would be involved and use of our existing staff, we would not anticipate there being state government money going into the program. It would essentially be funded by Shandong.

Mr DULUK: What do you see as the benefits of this venture for South Australian public library users?

The Hon. J.J. SNELLING: I think any cultural exchange is going to have enormous economic and social benefits and close cooperation between the two states, between Shandong and South Australia. Obviously, it has been a priority of the government to engage more deeply with Shandong in particular to utilise the fact that we have had, since 1986 I think, an agreement with Shandong Province. It is something which the state government put particular focus on when, as part of the Premier's overseas mission to Shandong earlier in the year, the arts sector was very much involved. We had a number of representatives from our arts organisations involved in that particular trip because we believe that there is not just the immediate impact in terms of greater exposure of South Australia within Shandong, but further long-term economic benefits from an engagement of this type.

Ms REDMOND: Just on that, minister, without wishing in any way to disagree with what you have just said about the value of cultural exchanges, I am struggling to understand the relevance of the One Card library system in any such exchange. Can you explain what it is that is going to be rolled out in Shandong or here, what the connection is and why we—

The Hon. J.J. SNELLING: I do not know what problem the opposition has with this. I would have thought, if anything, it was beneficial and certainly relatively harmless, but with regard to—

Ms REDMOND: But in what way? There are 94 million people in Shandong who might have a One Card library system.

The Hon. J.J. SNELLING: What harm is going to be had from us sharing a program with the people of China? I do not understand, for the life of me, what problem you could possibly have with it.

Ms REDMOND: I want to know what cost it is to the state—

The Hon. J.J. SNELLING: It is a very, very negligible cost, a few airfares. The view would be that this is IP that would be sold to Shandong, so the library would benefit—

Ms REDMOND: Okay, that is all I wanted to know, that that is what we are doing with the One Card system.

The Hon. J.J. SNELLING: But even if it was not, even if it was for free, would it not be a good thing?

Ms REDMOND: I just wanted to understand what the nature of the exchange is.

The Hon. J.J. SNELLING: It is an MOU at this stage. There is no contract at this stage, but my advice is that in the medium to long term they would aim to have some sort of contractual arrangement to sell their IP on this particular project to China. Its consultants—

Ms REDMOND: Right. So, we have a One Card system that is throughout South Australia—

The Hon. J.J. SNELLING: Yes.

Ms REDMOND: —and we are like a test case almost.

The Hon. J.J. SNELLING: And they want it. The Chinese like it.

Ms REDMOND: So, 94 million people in Shandong Province, potentially, they could adopt that for—

The Hon. J.J. SNELLING: Yes.

Ms REDMOND: There are not enough books in South Australia, of course, for 94 million people.

The Hon. J.J. SNELLING: If I can just clarify: it has just been pointed out to me that with regard to the answer that I undertook to provide the member for Heysen in last year's estimates, there was an answer provided to exactly the same question to the Leader of the Opposition, Mr Marshall, and that is dated 26 September 2014.

Ms REDMOND: Because I was not the Leader of the Opposition in 2014. I asked the question and it should have been sent to me.

The Hon. J.J. SNELLING: Mr Marshall asked the same question.

The CHAIR: That is an external matter that we should not really waste our time on. Next question, member for Heysen.

The Hon. J.M. Rankine interjecting:

The CHAIR: Order! Member for Heysen.

The Hon. J.M. Rankine interjecting:

The CHAIR: Order! Member for Heysen, just ask the—

Ms REDMOND: Well, no, I am not—

The CHAIR: It is unparliamentary.

Ms REDMOND: —not while I have interruptions from the other side making criticisms of me—

The CHAIR: No, do not argue with me. Do not argue with me.

Ms REDMOND: —over something that is not anything to do with her.

The CHAIR: I am on my feet.

Ms REDMOND: Are you?

The CHAIR: Yes, sadly, Darth Vader and all. You know the rules of this house much better than anyone else in this room and to waste our time is unforgivable. Ignore her. It is unparliamentary to react to her.

Ms REDMOND: It is unparliamentary for her to—

The CHAIR: Do not keep answering me back. I have asked her to desist and I will speak to her in a minute. You should just ask the next question and ignore it. Question, member for Heysen. And you can help by not being—

Ms REDMOND: Minister, can I ask about the dot point under highlights on page 77? The last dot point under highlights relates to increased user access to the State Library's digitised collections. Does that digitised capability extend to the provision of newspaper access on a daily basis? The reason for my question is this: I have had complaints in my local area from people who previously used to access their local newspapers by going to the library.

Everyone accepts that that is not an official way to do it and that having digitised access to the local papers and whatever papers is easier and better. That is fine, but it appears from the experience that is occurring since the One Card system and the whole digitisation that there may be insufficient subscriptions to newspapers to allow the people who would normally have read newspapers digitally in their local library to get access to their local library newspapers.

The Hon. J.J. SNELLING: With regard to digitisation, the only newspapers they are able to digitise are historic, because under the copyright rules they can only do that if they are of a certain age. I think the substance of the question was with regard to access—

Ms REDMOND: Access to daily papers.

The Hon. J.J. SNELLING: —and whether there are enough subscriptions.

Ms REDMOND: Yes, whether there are enough subscriptions to allow the people around the state to access it, or is that something that is done by individual libraries?

The Hon. J.J. SNELLING: I will need to take that on notice. I am happy to get an answer back to you.

The CHAIR: Member for Davenport.

Mr DULUK: Minister, in light of the cuts to vocational music courses at Noarlunga TAFE and the University of Adelaide—

Ms Redmond interjecting:

The Hon. J.J. SNELLING: Sorry, say that again.

Ms REDMOND: Are you going to speak to her, by the way?

The CHAIR: I will speak to her later. You do not have to tell me what to do. It is not really helpful. Two wrongs do not make a right.

Ms REDMOND: You said you were going to.

The CHAIR: If you let her get under your skin that makes her happy. Ignore her completely is my best advice to you. Member for Davenport, do you have a page?

Mr DULUK: At pages 76 to 84.

Ms Redmond interjecting:

The Hon. J.J. SNELLING: Taylor Swift says, 'Shake it off'.

The CHAIR: Pages 76 to 84. Okay, what is your question.

Mr DULUK: In light of the cuts to vocational music courses at the Noarlunga TAFE and the University of Adelaide, can you as the minister outline the steps that the state government is taking to support aspiring musicians in the South Australian local music scene?

The Hon. J.J. SNELLING: You will have to ask minister Gago about what is happening in the VET sector, but there are only a number of things that we are doing, particularly in the live music space, to support aspiring musicians.

Mr DULUK: So there is nothing within arts industry development for aspiring musicians?

The Hon. J.J. SNELLING: Hang on. The James Morrison Academy of Music, for example, is the newest, most innovative place to undertake jazz studies in Australia. The James Morrison Academy of Music at the University of South Australia is a new music school based on the partnership model between the private sector and the university. Bearing James Morrison's name, this new world-class music academy draws on his global connections and expertise. The JM Academy, as it is known, delivers accredited teaching programs that lead to students receiving university awarded diplomas, advanced diplomas and bachelor degrees with a focus on jazz music.

Courses are promoted to local, national and international students, and enrolments to date have been strong. While the academy refines its business model and explores viable opportunities for diverse engagement to meet interest and demand, other education services are on offer, including short courses in improvisation and composition, music camps during semester breaks, and individual music tuition.

In October 2014, cabinet approved funding of half a million dollars to support the academy, with $300,000 to be provided in 2014-15 and the remaining 200,000 to be provided this financial year. Students are enrolled as registered students of UniSA and attend classes at the academy in Mount Gambier. The faculty are all employed directly by the JM Academy and the curriculum is created by the JM Academy. The arrangement provides the best of both worlds, with all the benefits of a large university combined with the focus of a small academy where teachers and the curriculum can be flexible in delivering what is most beneficial to the students.

While James Morrison himself is not one of the core weekly teaching staff, it is his academy and he will be teaching all students during each semester. In addition to this, James has co-designed the curriculum to reflect his philosophy of learning music, which promises an exciting, vibrant environment with the emphasis on playing jazz.

St Paul's Creative Centre is the other area. This centre has been fully operational as a collaborative space for the creative industry since early 2015. It offers flexible working options for small businesses and artists, including coworking spaces, tenancies, training rooms, and events that add value to its community.

St Paul's is becoming recognised as a flourishing centre for the creative industries. It offers many flexible options to support industry growth, clustering and collaboration. Its growing community includes business tenants, coworkers and students. Upstairs the centre houses the Music Development Office and music-clustering organisation Musitec, while downstairs tenants include training organisations, MusicSA, and various other creative businesses. Coworking members are situated throughout the building.

Arts SA has been successful in securing an ongoing allocation of funding for 2015-16 that will provide resources to assist with the day-to-day operations of St Paul's and further facilitate the building of the community that engages with the centre. This builds on funding that was provided in the 2014-15 budget for the development of a music industry cluster of organisations and entrepreneurs at St Paul's being driven by the MDO. The ongoing funding provided will resource a new position which will sit within the MDO and support the strategic growth and operation of the centre.

There is considerable current interest in the notion of coworking, and it is a growing mode of business practice. St Paul's is well placed to take advantage of this. It is differentiated from other coworking spaces through its focus on the creative industries. This point of difference will be further enhanced when makerspace, Fab Lab Adelaide, moves into the modified downstairs kitchen space. Lab will bring a broader community of designers and creative technologists into the space to collaborate with and build the skills of current tenants and coworkers.

St Paul's is a stunning and distinctive looking space that is in much demand for functions, and several events that benefit the creative community have recently been held there. These included a 'meet the locals event' organised by the Australasian Performing Rights Association, the Media Arts Production Skills film school, launch of five new South Australian audio clips, and community radio station Fresh FM's regular open house events that connect Adelaide's producers and musicians with media professionals.

Those are just a few organisations and things that we are doing in that space. Of course, there is also our grants program. We spend $896,000 every year as part of our 2015-16 grant funding as well.

Ms COOK: I refer to sub-program 4.3, pages 79 and 80. Having some curiosity around entomology, I am particularly keen to hear more about the efforts to restore and preserve collections at the Museum in light of the devastating infestation of bugs.

The Hon. J.J. SNELLING: A very interesting question, and I think we can safely say 'mission accomplished'; the bugs are safe, due to some tremendous work, of course. We do have an issue with looking after our museum's cultural collections and this is, of course, of extreme concern. The Museum does wonderful work, but these are small insects that get into our collections and are not easily defeated by conventional methods. It is not like a bathroom, where the reassuring smell of Dettol, for example, can prevent infection. It requires particular measures to be taken to prevent these sorts of infestations.

I have to say that they have done a wonderful job at the Museum in taking appropriate measures. In 2014-15 we spent $464,000 of a $2.674 million measure to address the infestation of carpet beetles in the museum's entomology collection. The 2014-15 estimated result is that $542,000 of that money was expended to advance this. They have done very well. Having saved the bugs we have now moved on to mammals and birds.

Mr DULUK: Minister, just going back to Generations in Jazz and the James Morrison Academy, which was a wonderful investment, my original question was relation to vocational funding cuts, including at Noarlunga where, now, if you do want to study jazz vocationally, and you live in the southern suburbs, you have to travel some 58 kilometres to the Salisbury campus.

The Hon. J.J. SNELLING: If you have questions about VET—

Mr DULUK: No; in response to my question about vocational funding, you talked about the James Morrison Academy which, of course, relates to high school students and does not relate to vocational—

The Hon. J.J. SNELLING: No; these are graduate diplomas, degrees; they are post-secondary qualifications.

Mr DULUK: Thank you. Can you please outline what controls, if any, are in place to ensure that grants provided by or to Arts SA are used for their intended purpose, and the acquittal process that goes with that?

The Hon. J.J. SNELLING: Sorry, can you ask that question again, and can you give us a budget reference to so that we know what you are talking about?

Ms REDMOND: Well, the $896,000 that you referred to—

The CHAIR: The member for Davenport is asking the question.

Mr DULUK: Page 82; it is in relation to the acquittal of grants provided, and what controls are there, if any, around the acquittal of grants?

The Hon. J.J. SNELLING: I will ask the Acting Executive Director of Arts SA to answer the question.

Mr ANDARY: According to Treasurer's Instructions, all grants have to be acquitted and have a funding agreement. So, there would be, within the funding agreement for every grant, reporting requirements that would need to be met. They would differ between the different grant programs and the different grants, but those particular funding agreements outline the acquittal process.

Within three months from the end of every project, those funds would have to be acquitted. They would have to give us, probably, a budget breakdown and whether they have achieved the outcomes of the project that they indicated in their application. It is quite a good process, and it is a process that is very much integrated within our grants management system, otherwise they are not able to apply for grants again if they do not acquit grants.

Ms REDMOND: Supplementary to that, if I may ask the acting director: I have come across a situation where a group of young performers, only three in number, obtained a grant, and when they went to Europe two of the three decided they were basically there for a holiday at the taxpayers' expense. In spite of the objections of the third person, who tried to object to the department upon return, nothing was ever done about the failure of that particular grant to be used and expended for its intended purposes.

Mr ANDARY: If they did not acquit properly, they would be 'destatused', which means they could not apply. I am not privy to the circumstances specifically about the case as to whether they in fact did achieve some if not all of the particular objectives that they were aiming to achieve.

Mr DULUK: Moving on to arts, museum and heritage services, pages 79 to 81, can the minister please explain why the international Fashion Icons exhibition resulted in a $1.7 million cost overspend?

The Hon. J.J. SNELLING: The Fashion Icons?

Mr DULUK: Yes.

The Hon. J.J. SNELLING: Can you tell us what you are referring to, and we might be able to explain it to you.

Mr DULUK: Page 80—$1.2 million increase in expenses.

The Hon. J.J. SNELLING: It is just the government funding, the $1.2 million increase in expenses. Generally speaking (not always), when the Art Gallery puts on an exhibition—and there are several that come to mind, such as the Turner from the Tate: the Making of a Master exhibition and the Fashion Icons exhibition—we will provide grant funding to the Art Gallery to enable them to put on exhibitions because the scale is such that they would not be able to do it within their existing budget. It is not that there has been an overspend, it is that the government has made a decision to give the Art Gallery extra money to enable it to put on that exhibition. It was split over two financial years, so $150,000 was expended in the 2013-14 financial year and $1.85 million was expended in the 2014-15 financial year.

Ms REDMOND: If I can refer you to page 82. At the bottom of the page there are a few dot points on the estimated 2014-15 result, and the second dot point refers to an increase in agency operating expenditure following the sale of Netley Commercial Park. I take it that that is the area that is currently housing Opera SA and it also houses some of the Museum collection and so on?

The Hon. J.J. SNELLING: Yes.

Ms REDMOND: Can you explain firstly what is meant by that dot point and then what is to happen in terms of the collection of the Museum, for instance, that is held at the back of that precinct? Where is that going to be held in the future given that we have not seen any plans for the expansion of the Museum?

The Hon. J.J. SNELLING: It is just a sale and leaseback project. We have sold it and we are leasing it back from the purchaser, so I presume we are given a budget allocation to enable us to rent the building. In the short term, we would expect that we would continue to use those premises for what they are currently being used for, such as the Museum collection.

Ms REDMOND: Does that explain the $3.4 million operating expenditure increase?

The Hon. J.J. SNELLING: Yes. It is approximately a 10-year lease and yes, we are given extra expenditure authority so we can rent the premises.

Ms REDMOND: In layman's terms, what has happened is the state government owned a precinct—

The Hon. J.J. SNELLING: We have sold it and we are renting it back, yes.

Ms REDMOND: —and they have sold that, pocketed the funds—

The Hon. J.J. SNELLING: Yes.

Ms REDMOND: —and then said, 'Now we have to rent that site—

The Hon. J.J. SNELLING: That is right.

Ms REDMOND: —and that is costing us $3.4 million just for this year.'

The Hon. J.J. SNELLING: On 5 May 2014, cabinet approved the sale and leaseback of Netley Commercial Park. Under the terms of the sale, the Minister for the Arts became the head lessee. The Department of Planning, Transport and Infrastructure acts as the property manager on behalf of the Minister for the Arts and on-charges rental costs to the relevant government tenants, which include the State Opera of South Australia, the State Library, the South Australian Museum and History SA. This is something which the government has been doing across government properties.

Ms REDMOND: I am aware of that.

The Hon. J.J. SNELLING: I have to say that $3.4 million is the rent for the entire site. It is not just for a part of it.

Ms REDMOND: It is for the Netley Commercial site, yes. It is still the case that you sold the property, pocketed the money and now you have to rent the property and you are paying $3.4 million this year.

The Hon. J.J. SNELLING: It has not gone into anyone's pocket. I think the Treasurer would say that it has been used to pay down debt.

Mr KNOLL: Can I ask how much the property was sold for?

The Hon. J.J. SNELLING: You would have to ask the Treasurer, but I think it might be commercial-in-confidence, but you would have to ask the Treasurer.

Mr KNOLL: The 10-year lease is presumably $34 million plus some annual increase.

The Hon. J.J. SNELLING: $3.4 million.

Mr KNOLL: But over the 10-year lease period obviously the total would be $34 million plus whatever—

The Hon. J.J. SNELLING: I can get some more information, but essentially it would be CPI increase.

Mr KNOLL: Would you expect that the sale of the building would have been larger than the 10-year lease cost?

The Hon. J.J. SNELLING: You will need to ask these questions of the Treasurer. The Treasurer and Treasury officials will be able to explain to you why this makes good financial sense. I am simply the head lessee.

Mr KNOLL: So DTF gets the money and you guys get the expenses?

The Hon. J.J. SNELLING: No, because we are provided a budget allocation to pay the lease, so there are no moneys coming out of the arts portfolio. There are no changes at all. We simply get an extra budget allocation.

Mr KNOLL: So there was an extra budget allocation as opposed to having to find savings elsewhere within the department?

The Hon. J.J. SNELLING: There is an extra budget appropriation to pay for the lease, so there are no moneys coming out of the existing arts programs to pay for the lease.

Mr DULUK: In reference to page 80, in relation to the contemporary Aboriginal and Torres Strait Islander Art Festival, given that BHP has provided over $1 million to this festival, how much is it likely to cost the state government?

The Hon. J.J. SNELLING: No separate grant has been provided to the Art Gallery to fund it, but I would imagine the Art Gallery, from within its existing appropriation, would be providing funding to the program for staffing, and so on.

Ms REDMOND: On page 83, minister, about a third of the way down the page is a reference to a $1.5 million decrease in income, which is primarily due to a donated asset for the Adelaide Festival Centre Riverside Bistro in 2013-14 of $1.8 million. I was puzzled as to what that explanation meant. What was the donated asset for the Adelaide Festival Centre Riverside Bistro, and why does it appear as a decrease in income?

The Hon. J.J. SNELLING: Incorporated within the Riverbank bridge development was the fit-out works associated with the Riverside bistro, in which the Department of Planning, Transport and Infrastructure incurred $1.75 million of costs, based on construction cost value during 2013-14. As the asset forms part of the Adelaide Festival Centre within the Arts SA portfolio, it was appropriate for DPTI to donate this asset to Arts SA for recognition in its asset register as a donated asset.

As part of the Riverbank bridge development, cabinet approved the improvements and modifications to the existing precinct adjacent to the Adelaide Festival Centre, including the revitalisation of the Adelaide Festival Centre Bistro. Works to the bistro included the refurbishment of the kitchen facilities and expanded internal dining area and new external terrace space featuring riverfront views. The cost of these works was to be met through the Riverbank bridge project allocation.

The design for the revitalised bistro was undertaken in consultation with DPTI, Arts SA and the Adelaide Festival Centre Trust, and in conjunction with the operators of the bistro. This later discussion was particularly necessary as the construction required closure of the bistro for approximately nine months. Works were completed during the bridge construction works and delivered under the same contract.

Mr DULUK: Minister, what is the expected cost of restoration works for the east wing of the Museum as part of the North Terrace cultural precinct heritage restoration program, page 81?

The Hon. J.J. SNELLING: In 2015-16, the east wing of the South Australian Museum will undergo heritage restorations and external painting and have new safe work access provided at an estimated cost of $747,000.

Mr DULUK: Could the minister provide an update on the rental savings achieved through the relocation of Arts SA from Hindley Street to Wakefield Street?

The Hon. J.J. SNELLING: Over the three financial years from 2013-14 to 2015-16, $70,000, $140,000 and $100,000, so over those three years a total of $310,000, which is the net figure.

Mr KNOLL: To clarify, the net figure per annum?

The Hon. J.J. SNELLING: Yes.

Ms REDMOND: I refer to sub-program 4.1 on page 77. The table at the top of that page refers to the expenses and income of the program and shows in the financial commentary that the significant $1.6 million decrease in expenses is basically because the building they were painting is now finished, which is all understood. But, if you look at the line on income, it has gone from $171,000 in 2013-14 to $45,000 last year and $12,000 this year is projected. What is that income and why has it deteriorated so significantly over the last couple of years?

The Hon. J.J. SNELLING: We need to find out, but my advice is that it is a relatively small figure in the context of a $14 million budget.

Ms REDMOND: I accept that it is a relatively small figure, but it is a big figure of the salaries of the people who are here to advise you, who have no doubt been preparing for months for estimates. I just am puzzled as to why no explanation could be available. I do not understand the point of having all these people present if we cannot get an answer to a fairly straightforward question on a table.

The Hon. J.J. SNELLING: It just could be part of the normal operating stuff within the library so people are not paying for things any more that previously they had to pay for. We would have to find out from the library to get that figure. It is not their external income: it is just an internal income thing.

Mr DULUK: In regard to building remediation works at the Adelaide Festival Centre, can the minister update the committee on the progress of the concrete degradation investigations?

The Hon. J.J. SNELLING: The 2013-14 state budget included a $3.5 million funding commitment to undertake the highest priority works to address water infiltration at the Adelaide Festival Centre. The government's recent announcement of further upgrades to the Adelaide Festival Centre will complete the final phase of remediation works to address the effects of water infiltration over the last 40 years. Concrete degradation in the Adelaide Festival Centre has been apparent for some time.

Ongoing consultation with industry experts has been undertaken over the past decade to understand and mitigate concrete degradation at the Adelaide Festival Centre. The engineering investigation undertaken in 2013 found that, unless remediation works were undertaken to the theatre roof membranes and surrounding plant areas within the next three years, irrevocable damage to the substructures will occur.

The 2013-14 budget included a $3.5 million funding commitment to commence these remediation works. Funding will enable the Space Theatre plaza waterproofing and Dunstan Playhouse roof membrane waterproofing to be undertaken at a cost of $2.983 million. The Department of Planning, Transport and Infrastructure has engaged contractors Coombs & Barei to undertake these works. As the total project cost is less than the budget due to a favourable tender being received, the uncommitted balance of just over half a million dollars will be held as a contingency to allow for any additional project costs to be addressed, including latent conditions and unforeseen risks.

In March 2015, cabinet approved funding of $5.138 million for the remainder of the remediation works, including $3.625 million for the replacement of the Festival Theatre roof membrane as part of the Adelaide Festival Centre precinct project.

Mr DULUK: Has funding been allocated for this work? I could not see it.

The Hon. J.J. SNELLING: $3.5 million was allocated back in 2013-14, plus there is the most recent announcement which we made in March, with the rest of the project basically being funded as part of the redevelopment of the precinct.

Mr DULUK: There is no direct line item for this and the original allocation has not been fully expended, is that correct?

The Hon. J.J. SNELLING: Of the $3.5 million, the tender came in under, so there is half a million dollars which is being held basically as a contingency. So, if any unforeseen things happen as part of the project, there will be half a million dollars funding there to cover those costs—otherwise, it would go back to Treasury, as it inevitably does.

Mr KNOLL: I am looking at page 119 in non-current assets for the Department of State Development, which I assume would indicate that the Department of State Development holds the $602 million worth of art that the Art Gallery has. My first question is: does the government have a figure on how much art, in a cumulative total of money, it is appropriate to hold and how much the cost of insuring the $600 million worth of artwork is?

The Hon. J.J. SNELLING: The collection sits with the Art Gallery; it does not sit with Department of State Development. There are various views. I think what you are getting at is how much of the collection do you display at any one time. Is that what you are saying?

Mr KNOLL: Yes, and also we have obviously got a reasonable collection. I do not know how much $600 million worth of art looks like, but is there a cost of looking after this artwork while it is not necessarily on display?

The Hon. J.J. SNELLING: There is, because obviously we have to store it, and so there are storage facilities where we store the art that is not on display at the Art Gallery. It has to be conserved and looked after—that all has a cost—but in most art galleries around the world, and in fact probably all the major art galleries, the overwhelming majority of their collections at any one time would be in storage, not on display. The international standard for the percentage of your collection which is on display at any one time is 5 to 7 per cent, and ours is 3 per cent, so it is less than what the international standard is.

Mr KNOLL: Does your department pick up the cost of insurance for the total sum of that work?

The Hon. J.J. SNELLING: It is done by SAICORP, who are the insurer, and the Art Gallery pay a premium out of their grant every year for the cost of insurance.

Mr KNOLL: In the Auditor-General's Report last year, and this obviously feeds into the 2013-14 financial result, there was a Pissarro work that was bought for $4.593 million—

The Hon. J.J. SNELLING: A very nice work it is, too. I recommend you go and have a look at it.

Mr KNOLL: I think I might, at $4½ million.

The Hon. J.J. SNELLING: It would be good for your education. Get Sam to take you.

Mr KNOLL: The difficulty at the time was that Treasurer's Instruction 8 says that any approval of a purchase of a work over $1.1 million needs to go to the Treasurer. I understand that I could ask the Treasurer those questions, except have there been any other purchases which have flaunted Treasurer's Instruction No. 8 within your portfolio?

The Hon. J.J. SNELLING: It does not flaunt Treasurer's Instructions because it was a purchase by the foundation and a gift to the gallery. My advice is, and I am very nervous about saying this, in that report the Auditor-General was in fact wrong. I am very nervous about making that comment, but there it is.

Mr KNOLL: Especially—

The CHAIR: Order! He is still talking.

The Hon. J.J. SNELLING: Let's be quite clear about this: the funds to purchase that particular work were raised by the Art Gallery Foundation. The Art Gallery Foundation sits quite separately to the Art Gallery itself and there was a discussion with Treasury at the time arising from the Auditor-General's finding. The result of those discussions was that the approval of the purchase was within the authority of the board of the Art Gallery.

Mr KNOLL: Have there been any further instances where the Art Gallery or the foundation—

The Hon. J.J. SNELLING: As much as I would like to say that buying $4½ million works of art is a regular occurrence of the Art Gallery of South Australia, I have to say no.

The CHAIR: We are sure it is genuine, so it is not a problem. The member for Heysen.

Ms REDMOND: This might be the last question. I refer to Budget Paper 5, page 54. At the very bottom of Budget Paper 5, there is a new one called 'Maintaining arts activity', and it shows that there was no budget expense for that in the year just finished, but for the next several years in the forward estimates there will be $4 million per annum to 'maintain arts activities to ensure that the state continues to benefit from the social, cultural and economic contribution of the arts'. Can the minister give me some idea of what, in addition to what was already being done across the arts portfolio (and I love the Cabaret Festival and all our festivals), is to be done under this particular $4 million a year?

The Hon. J.J. SNELLING: We do not expect it to go towards anything new; it is essentially there to maintain the arts events that we have. Because of all sorts of pressures, we have needed extra funding to make sure we can continue those arts events, including the Cabaret Festival, of which I know the member for Heysen is very fond.

Ms REDMOND: I have just about revived the state's economy singlehandedly with the Cabaret Festival.

The Hon. J.J. SNELLING: Indeed.

The CHAIR: Having reached the witching hour, and there being no further questions for the Minister for the Arts—

Ms Redmond interjecting:

The CHAIR: No further questions—that is a broad statement—I declare the examination of the proposed payments adjourned until Monday 27 July 2015.

At 16:31 the committee adjourned to Monday 27 July 2015 at 10:00.