Estimates Committee A Fifty-Third Parliament, Second Session (53-2) 53 2 Parliament of South Australia House of Assembly published Estimates Vote Department of the Premier and Cabinet, $75,551,000 Administered Items for the Department of the Premier and Cabinet, $1,879,000 Department of the Premier and Cabinet, $75,551,000 Administered Items for the Department of the Premier and Cabinet, $1,879,000 Minister: Minister: Hon. J.W. Weatherill, Premier. Departmental Advisers: Departmental Advisers: Mr K. Winter-Dewhirst, Chief Executive, Department of the Premier and Cabinet. Mr P. McMahon, Chief Operating Officer, Department of the Premier and Cabinet. Mr S. Woolhouse, Chief Finance Officer, Department of the Premier and Cabinet. Ms T. Lynch, Project Officer, Briefings and Parliamentary Services, Department of the Premier and Cabinet. The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: Madam Chair, can I inform you and the committee that on my left is Kym Winter-Dewhirst, Chief Executive of DPC. To his left is Phil McMahon, Chief Operating Officer, DPC; to my right is Steve Woolhouse, Chief Finance Officer, DPC; and behind me is Tricia Lynch, Project Officer, Briefings and Parliamentary Services. The Chair House of Assembly The CHAIR: What page are you starting at? Mr MARSHALL House of Assembly Mr MARSHALL: We would say 145 is where it begins. Budget Paper 4, Volume 3. It seems that there are five programs we will be examining in the remaining time. I indicate that we do not have any questions on Program 3: Agent-General. I do not know whether that helps you at all in terms of your arrangements. I am happy to just tee off with Program 1: Premier and Cabinet Policy and Support, if that would suit. I note that there was a significant payment to the Tailem Bend sport park. Can we just confirm that that $7.5 million was paid in the previous financial year, and can you outline to the committee what the basis was of that contract and what we got for the $7.5 million? Was it paid in one payment, and are any future payments envisaged? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: This of course was something we took to the election, so it was an election commitment. We essentially delivered on that $7.5 million election commitment to the Peregrine Corporation to facilitate the establishment of a motorsport park in Tailem Bend with the capability to host a second V8 Supercar race in South Australia. Since then, the federal government has also supported this project through a grant to one of the local councils to assist with infrastructure development. This will leverage over $80 million of private sector investment, we are advised, in regional South Australia and obviously provide an important boost to the region's economy by attracting tourism and further investment. An EconSearch report found the development is forecast to bring more than 300,000 extra visitors to the region each year and will provide an annual economic benefit when fully established of approximately $200 million to the South Australian economy. This is a fantastic opportunity for the local region, in particular the Coorong District Council, which has played an important role in assisting the Peregrine Corporation to purchase the land necessary, and it seems to be progressing well. Mr MARSHALL House of Assembly Mr MARSHALL: The payment has been made? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: Yes. Mr MARSHALL House of Assembly Mr MARSHALL: Are any future payments envisaged for the project? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: No. Certainly I think the developer has requested some further assistance, but no decision has been made to grant any further assistance. Mr MARSHALL House of Assembly Mr MARSHALL: What will the $7.5 million be specifically spent on, or was that not made clear in the contract? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: I do not think it is allocated against any particular element of the project, although we are familiar that the project is to develop a motorsport park at the former Mitsubishi test site. It provides for a privately built and operated motorsport park that is capable of hosting a second V8 supercar event, so it certainly has those elements to it. Mr MARSHALL House of Assembly Mr MARSHALL: When would you envisage that the motorsport park would be open? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: The funding agreement has a commitment for 30 June 2017 for the road circuit to be complete or the South Australian government can claw back all or part of the funds. Mr MARSHALL House of Assembly Mr MARSHALL: On the next page, page 148, under highlights for the 2014-15 year, the final dot point says, 'Supported the Premier's international missions'. Can the Premier outline to the committee what was the cost of the 'largest trade and investment program in the state's history to South Australia's sister state, Shandong Province, China'? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: The cost of it was largely borne by the private sector players who attended because they all paid their own way. The cost to the state government is very much more limited because the number of people who were on the delegation or the mission who came from state government or state government agencies was very much smaller than the private sector mission that also attended. The total cost to the Department of the Premier and Cabinet for this visit, for all its officers and associated costs of goods and services, was in the order of $100,000. Mr MARSHALL House of Assembly Mr MARSHALL: Just for clarity, this is the program which coordinated that visit? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: Yes, but also paid for the costs of the actual representatives who attended on the visit. There was a very substantial delegation from the Department of the Premier and Cabinet which accompanied me on the mission. Mr MARSHALL House of Assembly Mr MARSHALL: That was funded out of the $100,000 cost? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: Yes. Mr MARSHALL House of Assembly Mr MARSHALL: Does that $100,000 cost include your ministerial travel? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: That would have been funded from our ministerial office account. Mr MARSHALL House of Assembly Mr MARSHALL: Just for clarity, do you have a figure for the total cost to government of the trip to Shandong? I presume there would be some money in ministerial travel, some with this agency, some with other. I understand there might have been upwards of 80 public servants on this trip, presumably paid for by government. I appreciate that there would have been very substantial investment by the private sector as well. The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: To clarify, there were 49 state government delegates, plus five BioSA and four TAFE representatives that attended the visit. That is inclusive of the Department of the Premier and Cabinet, so it was not 80, but we will aggregate those numbers and bring back a response. Mr MARSHALL House of Assembly Mr MARSHALL: Thank you. Under targets, it says that this agency will: Lead and coordinate the Premier’s international engagement agenda, including…outbound international missions. What is the plan in terms of outbound international missions for the current financial year? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: I will bring back an answer to you on that. We are trying to focus our visits on a settled calendar. So, we are beginning to settle that May will be a month when we have an outbound mission to China, that we have an outbound mission to India in August, and this year we also will be having, for the first time, a substantial outbound mission to South-East Asia. Later this year there will be a mission to the climate change conference in France in December. There are also the inbound missions which come into South Australia which need to be supported. There will be substantial international missions inbound to South Australia, and they need to be supported by this agency to make sure that they are a success. One of the things that is absolutely critical is that we replicate the style, manner and status of the visit that we have been afforded when we attend another country when there is a return visit here to South Australia, and this agency is going to play an important role in ensuring those missions are a success. Mr MARSHALL House of Assembly Mr MARSHALL: Is this the agency or the program in which the federal government response task force sits? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: If the question is about the part of government that responds to the federal government cuts— Mr MARSHALL House of Assembly Mr MARSHALL: I am just referring to your evidence to this committee last year, where you reported that on 2 July 2014 you had 'convened the first meeting of the federal government response task force', and you went on to outline the members of that committee. I am just interested to know whether this is the program in which that task force sits. The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: It is part of the ordinary work of my role as Premier to convene task forces that respond to contemporary issues. In this case, it was the federal government budget cuts, and we did convene a task force for that purpose. It is supported by my office and my agency, so I suppose, in a generic sense, the Department of the Premier and Cabinet does support me in that task force. Mr MARSHALL House of Assembly Mr MARSHALL: Can you outline to the committee who was on that task force, how often it has met, and when was the last time that it met? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: It is open to anybody who wants to be there who does not like the federal government's budget cuts, so it is standing room only, really. It is a range of interest groups across education, health and social welfare sectors. It has met on a number of occasions to give updates to those community groups. I will bring back details of when it has met. It is also supported by academics who come in and provide reports. Mr MARSHALL House of Assembly Mr MARSHALL: When was the last time it met? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: I cannot recall the last time we brought it together. Mr MARSHALL House of Assembly Mr MARSHALL: This year? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: We would have given a report back in the context of the budget, I am sure, but I will bring back an answer to you. Mr MARSHALL House of Assembly Mr MARSHALL: Has the task force been made aware that, in fact, we ended up with more money from the federal government last financial year than was either budgeted for by the former Labor federal government or, in fact, by this state government when it brought down its budget last year? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: You see, obviously you have not caught up with the news that occurred out of Canberra: nobody now is continuing to advance the argument that there was no federal government cuts under the previous budget. Mr MARSHALL House of Assembly Mr MARSHALL: There was no cut last year? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: Everybody now accepts that there were cuts that were imposed by the federal government to the health budgets around the nation. Indeed, Premier Baird and I made that point, which is now reflected in a communiqué and which accepts that there is a massive funding gap for our health services. It is not just the federal government cut; that is part of the equation. The problem is even much bigger than the federal government cut which was a substantial and unhelpful contribution to that problem. It is nonsense that there was no cut when everybody now accepts that healthcare funding is growing north of 6 per cent per annum, and the federal government seeks to simply just provide you with funding which goes forward at CPI—there is nobody who is seriously contending that that is not a cut. To the extent that we have been able to win that argument, this campaign has been successful; and it is a very important argument to win because we now have a national conversation about a very critical issue which is about filling the gap between the amount of revenue that we raise and the amount of revenue that is needed to actually finance healthcare services in this nation. I am proud of the fact that on this little picket line we were about the only person there at the start, and now we have a lot of very powerful friends with us and we are beginning to have a national conversation about properly funding our healthcare systems; otherwise, the burden just falls on state governments. The truth is that those cuts, in the first few years, are substantial at $655 million over the first four years, but they dramatically increase after the first four-year period. It is no answer to the question to say that the amount of money coming to South Australia is also increasing each year, of course, but it does not increase at the rate it needs to increase to cover off the increasing costs. Mr MARSHALL House of Assembly Mr MARSHALL: When you informed the committee that the health cost increases are in the order of 6 per cent per year, were you relying on your own figures that you have developed in your COAG secretariat within this agency or were you relying on another state premier's figures? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: Yes, we have been relying on Premier Baird's figures and our own experience; it is a pretty uncontroverted contention that the growth in healthcare funding around the nation for both the commonwealth and the state government is growing much more strongly than CPI. Mr MARSHALL House of Assembly Mr MARSHALL: Are you aware that, in fact, the net cost of health to this state has diminished over the last four years, both as a proportion of the budget and as a proportion of the gross state product? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: Healthcare costs are growing at an inflator which exceeds CPI and has consistently been growing at an inflator that exceeds CPI. The fact that we have had to also make some very substantial savings measures just to keep up with the rate of growth of healthcare services is to our credit. The fact that we have had to make some very tough decisions just to try to manage our budgets when substantially the cost of healthcare services is increasing at this very substantial rate just demonstrates how seriously we are taking the task and grappling with it. Mr MARSHALL House of Assembly Mr MARSHALL: I refer to Volume 3, page 148, under highlights. Can the Premier explain what work was conducted by the department in relation to the review of GST relativities and related analysis of the current GST framework? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: Yes, we commissioned a report in relation to horizontal fiscal equalisation and we published that last week. It was a report that was prepared by Independent Economics. That report actually found that our system of horizontal fiscal equalisation in this country is really an international exemplar on how federations should distribute resources from the federal government to various state governments, having regard to questions of equity and efficiency. We have traditionally run the equity argument, which is that services—healthcare services, education services—in this country should not depend on where you live. In particular, it should not depend on whether you live next to a big mine but it should really be determined on much more equitable principles. The equity argument for HFE is powerful and, frankly, has really been accepted since the 1930s in some form or another. However, in its current sophisticated form it is really a case study in international business schools on how you do an HFE. The point here is that it is not just an equity issue. This report finds that there are important efficiency reasons why the nation should be constructed in this way. If you did it otherwise, what you would have is an allocation of resources which would skew the economic efficiency of the nation. This is important work and we have run the argument hard. I think Western Australia, frankly, are isolated on this point. I think the big states, which are donor states outside of Western Australia, are supportive. In particular, New South Wales and Victoria accept that the larger, more prosperous states have a role to play in supporting states that are less prosperous. Of course, the ambition is that we will one day be a donor state; that becomes the ambition, but that is how it should be. If we were to become financially very prosperous, it would be proper for us to redistribute some of our resources. Mr MARSHALL House of Assembly Mr MARSHALL: How much did that report cost? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: That particular report cost $52,458. Mr MARSHALL House of Assembly Mr MARSHALL: Who was that done by? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: Independent Economics. Mr MARSHALL House of Assembly Mr MARSHALL: Did that report look at any sensitivity analysis around an increase in the GST rate? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: No, we did a separate piece of work in relation to GST, which was carried out by NATSEM. Through the Canberra University we looked at essentially the equity impacts of broadening the base of the GST or expanding its rate. What we found was that, if you increase the rate, apply it to fresh food or apply it to health, it is a regressive increase. Education ended up being neutral and financial services ended up being progressive, which is why I promoted the expansion of GST to cover financial services. That report, as I said, was prepared by NATSEM. Mr MARSHALL House of Assembly Mr MARSHALL: What cost was that report? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: I will need to get back to you about that. I do not know whether I have that number. Mr MARSHALL House of Assembly Mr MARSHALL: When you promoted the concept of moving GST on to financial services, which particular financial services were you envisaging that it would cover: deposits, withdrawals, loans, financial advice, superannuation advice, all of the above? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: All the financial services. The modelling was done, essentially, based on the fact that GST presently does not cover financial services. The reason it does not cover financial services is that it is a little more complicated than taxing other services. At least theoretically, the gap, the interest margin between what banks can borrow on and what they end up lending on, is a service that can be taxed. There is a lot of scaremongering about the fact this will just add GST to the cost of every house, but it is not; it is just to the financial service. It would raise I think in the order of $3.6 billion, which is a very substantial contribution to the hole that we face in health care funding, and I thought it was worthy of discussion. I also wanted to open up for public debate about revenue, because we had been focusing so much on cost. Premier Baird's work indicates that our health care system in this nation is one of the most efficient in the world, just looking at the proportion of GDP which is allocated to health services. While we can do some more things on the efficiency side of the equation, the scope for that is limited. The truth is we are going to have to contemplate some form of additional revenue. Mr MARSHALL House of Assembly Mr MARSHALL: That $3.6 billion, that is an annual increased revenue per year? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: Yes. Mr MARSHALL House of Assembly Mr MARSHALL: Do we know what the hit to the South Australian taxpayers would be for that increase? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: Much lower than a number of the other propositions that have been advanced, because we have a higher proportion of low-income earners here in South Australia and this is the only progressive reform of GST that would not require some form of compensation. The principal is this: if you have got a revenue problem, in that what we all think we need to spend on health is more than what we are collecting, then you have got to collect revenue. Consulting my values, I think we should make people on higher incomes contribute proportionately more than people on lower incomes, hence we advance the GST on financial services. Mr MARSHALL House of Assembly Mr MARSHALL: How committed are you to exploring the possibility of a 50 per cent increase in the GST as it currently exists on the current regimen of goods and services? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: I am open to it, provided we can solve the problem of the regressive nature of that increase. It will place an additional burden on people on low incomes, and that is something that I find unacceptable. One, you would have to design some form of compensation; two, it would have to be durable, because we have seen compensation be washed away in the past; and, three, you would have to be certain that there was not going to be some further push to increase GST again for some other purpose. There are lots of competing contentions about GST. We obviously are interested in a new revenue source to solve this health gap, but obviously there are others who have ambitions to use the GST to simply reduce the general level of taxation on businesses or the personal income tax system. There are a lot of calls on this revenue that are being made by different sections of the community. Mr MARSHALL House of Assembly Mr MARSHALL: Premier, have you done away with the State Strategic Plan? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: No. Mr MARSHALL House of Assembly Mr MARSHALL: In last year's estimates, you went to some extent to talk about an audit committee that was going to bring down a report. That report was due last year. It has not been received, and has not been received so far this year. When is it going to be complete and when is it going to be updated? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: Our focus has been on the targets that we have set in relation to our 10 economic priorities. That has been the principal focus that we have had. Naturally enough, the economy has consumed a lot of our attention, given the challenges we have in relation to employment. I am committed to ensuring that we make progress on this front. To do that, we have to have a sharper focus. Focusing on 100 things is not a sharp enough focus, in my view, and that is why I have sought to sharpen the focus to the 10 economic priorities which represent our economic plan for South Australia. That is the choice that I have made. That is not to say that the Strategic Plan does not provide us with guidance across a whole range of areas of endeavour which are important for government. The 10 economic priorities are not the only things we are doing, but they are the things that I am placing my attention on to ensure that we drive progress in each of those areas. Mr MARSHALL House of Assembly Mr MARSHALL: Will there be an update to the State Strategic Plan? A year ago you said that the South Australian Strategic Plan Audit Committee was undertaking an audit, and that was due last year. It is running quite late now. Is that going to proceed or is it going to be superseded by the seven and then 10 strategic priorities for the government? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: No, it will conclude that work but, as I said, we have had an election and, since that election, we learnt the lessons. We listened and have changed our approach, so we have set ourselves a new set of priorities which are much sharper and much more specific and we are focusing our attention on those things. Sure, the work of auditing against the broader objectives of the Strategic Plan will be concluded but, certainly, the priority for me is to pursue the necessary changes to the South Australian economy which involve its transformation, and that is a big task and it is consuming a lot of our attention. Mr SPEIRS House of Assembly Mr SPEIRS: Premier, there is South Australia's Strategic Plan, then came along the state government seven strategic priorities and then there are the 10 economic priorities. Do you think this confuses the Public Service when it comes to working out where to put an emphasis for their work? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: No. Mr SPEIRS House of Assembly Mr SPEIRS: On South Australia's Strategic Plan, under that program there is an organisation or program called the Strategic Plan's Our Alliance Program. It is essentially a business and NGO engagement forum, with membership including the Weeks group, Bendigo Bank, Walker Corporation, Anglicare SA, the Conservation Council, KPMG, Flinders University and another 60 or so organisations. Has that been engaged with in the last financial year? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: I would have to bring back an answer to you. Not directly by me, but it may well be that officers and other agencies have engaged with it. Mr MARSHALL House of Assembly Mr MARSHALL: Back to the South Australian Strategic Plan Audit Committee, who are the members of that committee, what was the expenditure on that program last year and is there a budget line or a budget allocated to the audit work for that committee for this current financial year? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: I will have to bring back an answer to you. Mr MARSHALL House of Assembly Mr MARSHALL: One of the things that you spoke about with regard to your priorities for the state was the establishment of the future fund. Do you remain committed to that? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: Yes. Mr MARSHALL House of Assembly Mr MARSHALL: That is really lagging now. You spoke about this more than two years ago and we still have not seen any legislation brought to the parliament. When do you envisage that legislation will be brought to the parliament? What is the hold-up? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: Obviously, circumstances have changed since we first announced that fund, but the policy will commit a proportion of our royalty revenues to the fund for investment in infrastructure and other initiatives. The bill to establish the fund has been drafted and will be introduced into the parliament later this year. Payments are made to the fund when the budget is in surplus. There has not been a need to do that because we have not been in surplus until now. As at the 2015-16 budget, the budget surplus will be $43 million and $654 million in 2016-17. Mr MARSHALL House of Assembly Mr MARSHALL: Earlier in the year, a substantial number of executives were cut from DPC—in fact, 11 in total. Can you outline to the committee who those people were and the reason for their employment termination? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: We do not supply individual names in forums like this, but suffice to say that we had a new chief executive who wanted to restructure his agency and he chose to do that. The positions that were abolished also yielded substantial savings for the government. Mr MARSHALL House of Assembly Mr MARSHALL: For those 11 positions that were terminated, were they positions that were essentially eliminated or were they personnel who were removed and then subsequently replaced or a combination of the two? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: There was a net reduction of seven staff that occurred as a consequence of this. Mr MARSHALL House of Assembly Mr MARSHALL: What was the total cost of the termination of those 11 positions? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: The TVSP component was $3.71 million. Mr MARSHALL House of Assembly Mr MARSHALL: Plus their statutory entitlements. The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: Sorry? Mr MARSHALL House of Assembly Mr MARSHALL: Plus their statutory entitlements. The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: Yes, plus their statutory entitlements. Mr MARSHALL House of Assembly Mr MARSHALL: There was quite some controversy about the way— The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: That is for TVSPs in the agency. In relation to the actual positions that occurred as a consequence of the restructure, there were 18 executive positions that were abolished across the department over that period. Not all of them left and ended up triggering financial payments because some left at the end of contracts, so the $2.74 million is attributed to early termination provisions because they are in a different position from general public servants who leave associated with TVSPs. Mr MARSHALL House of Assembly Mr MARSHALL: Back to the 11, though, was the reason for the four people who were subsequently replaced because of poor performance? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: No, they were not performance related, they were restructuring arrangements. Mr MARSHALL House of Assembly Mr MARSHALL: But you have mentioned that regarding four of the 11 people who have been replaced, the positions have not been abolished. Seven positions were abolished and— The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: No, I did not say they had been replaced. I said that there had been a net effect in terms of the workforce. It is just that it is a different structure. The chief executive decided that he wanted a particular structure for the agency and then different skills and capabilities were necessary to meet the positions that were left in the new structure. Mr MARSHALL House of Assembly Mr MARSHALL: Just for clarity, though, those 11 positions have resulted in a saving of seven and it pretty much indicates to me that there are four that are ongoing positions. So regarding the people who were removed from those positions that now remain ongoing, were they removed because of poor work performance, were they given warning of their poor work performance and were they given procedural fairness? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: No, there were no performance issues associated with the restructuring so, therefore, the other questions do not pertain. Mr MARSHALL House of Assembly Mr MARSHALL: Okay, well, certainly at the time that this decision was made it received some publicity about the fact that these 11 were essentially informed of their employment termination, some of them who had worked in the South Australian Public Service for many decades, without warning and in fact required to leave their office without even returning to their desk and certainly not given an opportunity to farewell their colleagues. Can you perhaps indicate to the committee whether you were aware of this practice? Is this a new practice? Perhaps could you make reference to comments that you made earlier in the year when you suggested this was commonplace in business in South Australia? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: Well, the first thing is that it is not accurate to say that people were not given an opportunity to return to their desks or carry out the usual courtesies. What is appropriate and is common practice is that people who work in secure organisations are required to provide access to relevant material and cease having access to relevant material because of the sensitivities of those matters. So, it is appropriate that some degree of security is maintained in relation to sensitive matters and that is commonplace in private sector organisations and should be commonplace in public sector organisations and was appropriately implemented by the chief executive. Mr MARSHALL House of Assembly Mr MARSHALL: So, you are suggesting to this committee that there was a fear that these 11 public servants, long-standing public servants, could become disgruntled with the decision and there could be some loss to the state, they could sabotage a computer or they could take information with them. Was that the fear that led to the dismissal methodology? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: This is just standard practice for any organisation that deals with secure and confidential information. It is appropriate that any risks—without suggesting that these were likely or otherwise—would occur in an organisation of this sort. Mr MARSHALL House of Assembly Mr MARSHALL: Is the Premier aware that some of the contracts for ongoing employment had a very short number of months to run and in fact it would have been cheaper for the state to actually allow them to serve out their time than to terminate them and pay a termination payment? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: We bring in a chief executive where I am demanding immediate results for the state government in circumstances where we have pretty urgent challenges. I expect him to get on with the job and that is what he did. Mr MARSHALL House of Assembly Mr MARSHALL: Even though that ended up costing the taxpayers more than letting them complete their existing contracts? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: I think I have answered the question. Mr MARSHALL House of Assembly Mr MARSHALL: Do you think the methodology for the termination of these employees has had a detrimental effect on the morale within the Public Service in South Australia? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: No, I think it has actually lifted morale in the South Australian Public Service. I think the new chief executive is an excellent leader and I think the Department of the Premier and Cabinet has a sense of urgency and professionalism about it which is delivering to me and delivering to the state. Mr MARSHALL House of Assembly Mr MARSHALL: Maybe we could look at Program 2: Strategic Engagement and Communications. Who heads up this unit? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: Mr Paul Flanagan, I think, is the executive director of that unit. Mr MARSHALL House of Assembly Mr MARSHALL: Is this the program area which is responsible for our government media staff and also for the media contracts? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: No, it is not the area of government responsible for the government media staff, they are contracted to my office, but it does supervise the whole-of-government media contract. Mr MARSHALL House of Assembly Mr MARSHALL: Perhaps if we could start with the media staff then. They come under your control, so I presume if we wanted a reference we would have to go back to pages 144 and 145; is that correct? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: Yes, the ministerial office— Mr MARSHALL House of Assembly Mr MARSHALL: Just for clarity: you employ the media staff who are then subsequently deployed into ministerial offices? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: Yes, I think that is accurate. Mr MARSHALL House of Assembly Mr MARSHALL: How many media staff are there currently in DPC—well, in your DPC budget? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: The material here suggests there are 35 FTEs, which is my office. That would not include the ministerial office. We will have to bring back the breakdown for you on that. Mr MARSHALL House of Assembly Mr MARSHALL: Just for clarity: is that 35 media staff or staff in total? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: That is staff in total, including public servants. Mr MARSHALL House of Assembly Mr MARSHALL: But that is not the question. The question was really about how many media staff are employed by your department in total and then also deployed. The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: Yes, I will take that on notice. Mr MARSHALL House of Assembly Mr MARSHALL: But it is your agency which employs those people? The contracts all sit with you, and then you allocate them to individual ministers? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: Yes. Mr MARSHALL House of Assembly Mr MARSHALL: Generally speaking, is it one or two per minister plus a central group? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: I think it is, generally speaking, one per minister. Mr MARSHALL House of Assembly Mr MARSHALL: When you tell us the numbers, can you also identify what the total budget is for that media complement? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: Yes. Mr MARSHALL House of Assembly Mr MARSHALL: Back to the other point you raised, that is, the media contract, the media contract we have had concluded on 30 June. Can the Premier outline to the committee what the ongoing basis is for our media contract going forward? What is the term of that contract, who is it with, is it with multiple people and what is the total value? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: With the media contract, the Master Media Agency negotiates advertising rates on behalf of the government to ensure that we get the best deal that we can. Procurement of the new Master Media Agency agreement was finalised in June this year, with a new three-year plus two-year agreement commencing from 1 July. Mediaedge:cia Pty Ltd— Mr MARSHALL House of Assembly Mr MARSHALL: Is this a new firm? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: —yes, it is slightly alarming—was the successful tenderer. Apparently, they get access to some fantastic stuff, as well. We have been able to maintain— Mr MARSHALL House of Assembly Mr MARSHALL: All my personal details! The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: —important communications with the community by using more cost-effective and targeted media, so they are the new organisation that is handling this. Mr MARSHALL House of Assembly Mr MARSHALL: Are they are a South Australian firm? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: I cannot tell you, but I will bring back an answer. Mr MARSHALL House of Assembly Mr MARSHALL: Was there any advantage or consideration for South Australian firms in the awarding of this contract, and what is the total value of the contract? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: I will bring back an answer to you on that. Mr MARSHALL House of Assembly Mr MARSHALL: The previous media contract was split between two firms, so this new firm has the total contract; is that correct? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: The person who manages the placement of the advertisements is obviously placing them with a range of organisations, so their job is to try to get you the best deal by negotiating presumably across a whole range of media platforms, but I will bring back an answer to you on that as well. Mr MARSHALL House of Assembly Mr MARSHALL: While we are on advertising, can the Premier outline when you run let's loosely call them 'public awareness campaigns' what the authorisation process is. I understand there is an authorisation process; could the Premier outline that to the committee? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: Yes, there is a process of authorisation, which is through a committee. The acronym is PCAG (Premier's Communications Advisory Group), and that is the organisation that considers them according to a set of criteria that have been established. Mr MARSHALL House of Assembly Mr MARSHALL: Can you outline to the committee what the criteria for authorisation are? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: I can bring you those details. Mr MARSHALL House of Assembly Mr MARSHALL: And can you outline who is on that authorisation committee? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: I will have to bring back an answer to you on that. Mr MARSHALL House of Assembly Mr MARSHALL: As part of that answer, can you also tell us how many times you have approached that authorising committee in the past 12 months? I do not think you will need to come back with an answer on this one, but what is the process? Is it that your agency says, 'We would like to run an advertising campaign', it is above a certain threshold, and then it automatically goes to that, or is there some discretion below a certain threshold or on certain— The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: There is a terms of reference for what gets referred to PCAG (Premier's Communication Advisory Group) and it is essentially about ensuring there is some probity over government advertising. Mr MARSHALL House of Assembly Mr MARSHALL: I think I will hand over to the member for Bright. The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: Perhaps just before you do, I think I gave an answer before which was not strictly accurate. The $100,000 estimate of the cost of travel on the China trip I think does include my officers' costs. I think I said before it did not, but I am advised that apparently it does. We will bring back the broader answer, because I think your other question was what were all the other agencies' spends. Mr MARSHALL House of Assembly Mr MARSHALL: Just on that issue of travel, have you got a total spend for the last financial year for your travel and associated people who accompanied you? Some other ministers have very hurriedly put up on their website their disclosures and their total spend, including that of their advisers, in the last couple of days. Is your return 100 per cent accurate and complete and what was it for the last financial year? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: As you know, it is all published on the website to the extent that some of the trips are relatively recent and still being collated. I do not know whether the last European mission is contained there. Certainly as soon as the information is capable of being put on the website, it is up there; it would just be a matter of months between the mission and it being published. Certainly last year's information is readily available. Mr MARSHALL House of Assembly Mr MARSHALL: Members who use their allowance for parliamentary travel are required to submit a report to the parliament. There is no requirement for a minister to produce a report. Does the Premier think that it would be useful to have a report which is tabled on ministerial travel, the objectives of the trip— The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: Ministers are available to answer questions every question time about any element of their portfolio, including ministerial travel, and we do better than what is required in the members of parliament report. Members of parliament are not obliged to publish on a website all details of their expenditure, whereas ministers are. We think we are more accountable and more transparent than the general run of play for members of parliament. Mr MARSHALL House of Assembly Mr MARSHALL: So, no need for a ministerial report on travel? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: Most ministers come back and report to this parliament about what they have achieved and they are available to answer questions on what they have been doing overseas. Mr SPEIRS House of Assembly Mr SPEIRS: Premier, I just want to go through a couple of questions which the Minister for the Public Sector kindly referred to you from last week. Also, program 1, I believe, general questions for the department— The Chair House of Assembly The CHAIR: Page 147, is that right? Mr SPEIRS House of Assembly Mr SPEIRS: Yes, I believe so. Just going through your CEO's contract, clause 4.1 of the standard CEO contract for South Australian government CEOs states that the salary allowances, monetary benefits and non-monetary benefits should be specified in schedule 2. Schedule 2 of Mr Winter-Dewhirst's contract makes no reference of a $35,000 per annum payment for a private motor vehicle lease and an extra two weeks of annual paid leave for professional development reasons. Can the Premier explain why these additional payments were not revealed in schedule 2 of Mr Winter-Dewhirst's contract? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: The first thing to say is that, in relation to the vehicle, it was contained in a letter of offer which was accepted by the chief executive officer and it was contained in the materials which were disclosed to you or to others in your party that were supervising these matters. The reason you are able to ask about these things is that they were disclosed, which in substance meets the obligation of disclosure about what the chief executive receives. In relation to the issue of professional development, in some sense it is not actually a benefit. If the chief executive were to carry out professional development in the ordinary course, just as for any public servant, they would be paid their salary. This just, I suppose, makes explicit something which is implicit: that if you are actually doing professional development in the course of your employment and you are taking leave—well, it is not leave in the relevant sense, but if you are taking time to do that, then you would be receiving your ordinary remuneration. It does not create an additional benefit over and above that which exists, so I think it falls into a different category. It does not actually add anything to the salary and so does not represent remuneration. Mr SPEIRS House of Assembly Mr SPEIRS: Premier, the professional development may not, but the $35,000 per annum private motor vehicle lease does add an additional benefit. Its appearance in a letter, as opposed to being in schedule 2, as per the standard contract, gives rise that it might be seen as a bit of a last-minute sweetener. Can you explain why the normal process, as outlined by the Commissioner for Public Sector Employment's guidelines, was not followed? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: It was no question of a sweetener, it was the terms on which Mr Kym Winter-Dewhirst agreed to accept the role. It was essentially the negotiated bargain. How it is represented in the paperwork is a separate matter, but the disclosure is complete. It is contained in the letter of offer which was accepted by Mr Kym Winter-Dewhirst, and the associated contract is attached to that letter. All of the relevant material has been disclosed. Mr SPEIRS House of Assembly Mr SPEIRS: Premier, I would like to go back to what the leader was discussing before, the dismissal of those 11 executives from the Department of the Premier and Cabinet. The Commissioner for Public Sector Employment, Ms Erma Ranieri, appeared before the Budget and Finance Committee on 9 June and gave evidence that one of those executives was sacked as an executive within your department within the first year of their contract, only to be re-employed soon after as an executive within SAFECOM. Was the cost of the termination from DPC between $200,000 and $300,000? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: My understanding is that a substantial proportion of the termination payment was comprised of statutory entitlements, so I will take that on notice and get back to you. Also, my understanding is that the person was not re-employed as an executive but, in fact, as a manager in another agency. Although, it does raise the question, I think, that Ms Ranieri is giving her consideration to about whether there does need to be a similar provision to the one that exists in relation to TVSPs for executives who are terminated and then are seeking re-employment in the Public Service. That is being given consideration to now. Mr SPEIRS House of Assembly Mr SPEIRS: Thank you, Premier, you pre-empted my next question on that, but I will just ask one question related to that. Would you support the implementation of a new policy which required chief executives who are looking to terminate existing executives within their department looking at other executive vacancies across government and trying to locate the terminated executive, or the executive they want to remove, prior to a termination payment being made? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: I would not necessarily want to constrain the way chief executives carry out and manage their own organisations, but I think it is appropriate to give some consideration, in the provisions that exist within existing contracts, for there to be some offset, if you like, of what would otherwise be the termination payment if somebody is capable of being re-employed within a certain period. Obviously, there would have to be some accounting for the fact that somebody might be re-employed at a much lower level than they were previously engaged in, but I am sure there is some capacity for us to come up with a sensible provision that covers those circumstances. Mr MARSHALL House of Assembly Mr MARSHALL: Going back to Budget Paper 4, Volume 3, where the budget identifies a red-tape reduction program and deregulation. Can the Premier outline how much is dedicated to that program in terms of expenditure this year; and we do not need to know what it saved last year and how much was spent last year, but what is actually in the budget for this current financial year and has there been a target set for deregulation? The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: We deliberately called it simpler regulation rather than deregulation because we actually think that sometimes high-quality regulation can be an important driver of innovation and economic opportunity. Obviously, the work that is occurring through the Office of the Coordinator-General is yielding some real benefits in terms of speeding up the system; he is learning quite a bit about things that could well be simplified. The simpler regulation unit is an adjunct to that work. The purpose of this is to make sure that we do not unnecessarily detain people with burdensome regulation. If we can achieve the public interest objectives of the regulation in a cheaper and more effective way then we will certainly be prepared to pursue it. The Chair House of Assembly The CHAIR: Are you going to read the omnibus questions in, member for Bright? Mr SPEIRS House of Assembly Mr SPEIRS: Yes, the omnibus questions are: 1.	Will the Premier provide a detailed breakdown of expenditure on consultants and contractors above $10,000 in 2014-15 for all departments and agencies reporting to the Premier 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 Premier 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 Premier, 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 Premier 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 Premier, 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 Premier and, for 2014-15, provide a breakdown of expenditure on all grants administered by all departments and agencies reporting to the Premier listing the name of the grant recipient, the amount of the grant, 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, please provide the name and budget for each individual program administered by or on behalf of departments and agencies reporting to the Premier. 8.	For each year of the forward estimates, please provide the name and budget for each individual investing expenditure project administered by or on behalf of all departments and agencies reporting to the Premier. 9.	For each department or agency reporting to the Premier, 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 Premier's office as at 30 June 2015, including all departmental employees seconded to ministerial offices and ministerial liaison officers? The Chair House of Assembly The CHAIR: There being no further questions, I declare the examination of proposed payments completed and thank the Premier and his advisers for their attendance. I advise everybody that, according to the agreed timetable, the committee stands suspended until 11.30am. Sitting suspended from 11:15 to 11:30.