Department of State Development, $672,950,000

Administered Items for the Department of State Development, $10,448,000

Minister:

Hon. J.W. Weatherill, Premier.

Departmental Advisers:

Mr D. Russell, Chief Executive, Department of State Development.

Ms J. Parkinson, Executive Director, Economic Development Board, Department of State Development.

Mr D. Romeo, Chief of Staff, Department of the Premier and Cabinet.

The CHAIR: I declare the proposed payments open for examination and refer members to Portfolio Statements Volume 4. Premier, will you have an opening statement for this line?

The Hon. J.W. WEATHERILL: No.

The CHAIR: In that case, could I ask you to introduce the advisers you have with you.

The Hon. J.W. WEATHERILL: To my right is Don Russell, Chief Executive of DSD, to my left is Julianne Parkinson, who is the Executive Director of the Economic Development Board, and behind me is Daniel Romeo, the Chief of Staff.

The CHAIR: Can I just ask before you start, the table has just asked me about the Office for Digital Government. Is this going to be part?

The Hon. J.W. WEATHERILL: No.

Mr MARSHALL: I refer to Budget Paper 4, Volume 4, page 58. How many times did the board meet last financial year?

The Hon. J.W. WEATHERILL: There were four quarterly board meetings but numerous subcommittee meetings.

Mr MARSHALL: What are those subcommittees?

The Hon. J.W. WEATHERILL: I might have to take that on notice. They are things such as the ageing well subcommittee, the utilities subcommittee, the Tonsley subcommittee, the northern Adelaide subcommittee, but we will give you a complete list.

Mr MARSHALL: Thank you very much. How many times is the board scheduled to meet this financial year?

The Hon. J.W. WEATHERILL: It will be the same, four quarterly meetings.

Mr MARSHALL: Will you attend all those meetings?

The Hon. J.W. WEATHERILL: No, I tend to come to some of them.

Mr MARSHALL: How many did you attend last financial year?

The Hon. J.W. WEATHERILL: I cannot recall, but the real point is that the EDB is integrated into the work of the Economic Development Cabinet Committee, so the chair and deputy chair are on that cabinet committee. There are numerous other conversations I have with the chair of the Economic Development Board when they get updates of work of the board. I tend to routinely attend the meetings at the end of the year and then occasional meetings during the course of the year. That tends to be the practice.

Mr MARSHALL: Can you confirm to the committee how many meetings you did attend last financial year?

The Hon. J.W. WEATHERILL: I do not know. I will bring back an answer.

Mr MARSHALL: Thank you. What public accountability is there for the work of the EDB?

The Hon. J.W. WEATHERILL: The public accountability is with the government. They are advisers, they are not decision-makers.

Mr MARSHALL: Is there an annual report?

The Hon. J.W. WEATHERILL: No, it sits within a government agency of DSD, so DSD provides the annual report.

Mr MARSHALL: It is not subject to the Public Corporations Act?

The Hon. J.W. WEATHERILL: It is not a separate agency within the meaning of the Public Sector Act. DSD is the relevant agency.

Mr MARSHALL: Is it subject to the Auditor-General's office?

The Hon. J.W. WEATHERILL: To the extent that it comprises part of an agency which is subject to the Auditor-General's office, yes.

Mr MARSHALL: There is no annual report published and the agenda and the minutes of the meetings are not published, so the only accountability is directly to whom?

The Hon. J.W. WEATHERILL: They are not a decision-making body; they are an advisory body, so it would be in the same nature that every advisory body in government tenders their advice and then bodies advise and governments decide. The accountability goes with the decision-maker, and that is the government.

Mr MARSHALL: The current expenditure on this line for this program is just under $3 million per year, at $2.7 million per year. Are payments made to board members?

The Hon. J.W. WEATHERILL: Yes.

Mr MARSHALL: Can you outline the payments to board members?

The Hon. J.W. WEATHERILL: Total payments to board members over the relevant period were $635,000.

Mr MARSHALL: Are there any other payments to board members over and above board fees, i.e. travel or work associated with any of the subcommittees?

The Hon. J.W. WEATHERILL: To the extent that there is any travel associated with the board, the board does sometimes travel to regional areas. Those costs are met through the operating budget of the Economic Development Board, but there is no additional travel allowance to that extent.

Mr MARSHALL: You referred earlier to a utilities subcommittee. Can you outline to the house who is on the utilities subcommittee?

The Hon. J.W. WEATHERILL: It is chaired by Terry Burgess, but I will bring back the composition of the committee.

Mr MARSHALL: What is the work of the utilities subcommittee?

The Hon. J.W. WEATHERILL: The work of the committee is to determine the structure and driver of utility pricing in South Australia, particularly in relation to commercial and industrial users, and it is to assist the government in making policy decisions in the areas of electricity, gas, water and wastewater.

Mr MARSHALL: Has this committee made recommendations to the government regarding utilities and electricity pricing here in South Australia?

The Hon. J.W. WEATHERILL: Yes.

Mr MARSHALL: Can you detail what advice they have provided?

The Hon. J.W. WEATHERILL: In broad terms, it was that we need to pursue reform of the National Electricity Market, and there was some detail that sits below that, but that in essence was the recommendation that was made to us.

Mr MARSHALL: In what format did they provide that advice? Was there any written advice or minutes of meetings that provided that advice that their recommendation—

The Hon. J.W. WEATHERILL: It was presented to a cabinet committee meeting verbally.

Mr MARSHALL: Who verbally presented that?

The Hon. J.W. WEATHERILL: Mr Burgess made that presentation.

Mr MARSHALL: Has that utilities subcommittee made any presentations, verbal or in writing, regarding the closure of Alinta or base load power in South Australia?

The Hon. J.W. WEATHERILL: I would have to take that on notice. I do not know what other pronouncements they have made, either verbally or in writing. The one I am familiar with is the one that was presented to me and others in the context of that committee, and certainly there was no reference to Alinta except as a fact.

Mr MARSHALL: In a speech made by the Chairman of the Economic Development Board, Raymond Spencer, in November last year, he talked about the subcommittee preparing workshops for this energy area for South Australia. Can you tell us about these workshops, when they were held and what the outcomes were?

The Hon. J.W. WEATHERILL: I understand that they have extended from January through to as late as yesterday and that we can bring back a report about the nature of those workshops.

Mr MARSHALL: Who attends those workshops? Is it generators or users or consumers?

The Hon. J.W. WEATHERILL: It is a broad cross-section of people: business, government, regulators, consumers of electricity, business consumers of electricity. They are the sorts of people associated with those workshops.

Mr MARSHALL: How many workshops have been held?

The Hon. J.W. WEATHERILL: I will take that on notice. I do not know the precise number, but they span from January through to now.

Mr MARSHALL: What is the purpose of those, and will there be a final report, and will that report be made public?

The Hon. J.W. WEATHERILL: The purpose is as I just indicated. This is an advisory body. It gathers information to make representations to the government to assist government to make policy, and it has already done that and it has been of great assistance to us.

Mr MARSHALL: Yes, but will there be a report with recommendations?

The Hon. J.W. WEATHERILL: I do not understand that there will be a report with recommendations. That has not been drawn to my attention, but there may well be. There has not been one delivered to this point that I am aware of, and I don't understand that there are plans to produce a report beyond the reporting that has already occurred to the Economic Development Cabinet Committee.

Mr MARSHALL: Can you give an update on another of the EDB's projects, the food park precinct? Are there any tenants for this new precinct at the moment?

The Hon. J.W. WEATHERILL: I can. I will just get that. This is really supervised by PIRSA, but I will give you as much assistance as I can. The EDB's involvement in this is about the initiation of the project. It was involved in the development of the food park through the representation of Rob Kerin, Göran Roos and Terry Burgess on the food park advisory committee. Rob Kerin was co-chair of the advisory committee with Mehdi Doroudi from PIRSA. PIRSA established a government steering group for the project, which is chaired by Mehdi Doroudi, and includes representatives from across government.

In a sense, it has passed from the EDB and now is in the hands of PIRSA. We have established the process that led to the selection of a location. The EDB continues to be involved in the development of the food park through the representation of Rob Kerin, Göran Roos and Terry Burgess on the project advisory committee, but it is essentially now an advisory committee that responds to PIRSA.

Mr MARSHALL: So, we have a site?

The Hon. J.W. WEATHERILL: Yes, it is at Parafield Airport in the precinct around that.

Mr MARSHALL: When was that site announced, do you know?

The Hon. J.W. WEATHERILL: I can't remember. We announced it some time ago now. I can bring back an answer, but that was announced some time ago.

Mr MARSHALL: We don't have a tenant, though, at the moment. Do you envisage—

The Hon. J.W. WEATHERILL: We don't have a?

Mr MARSHALL: Tenant.

The Hon. J.W. WEATHERILL: I think there are a range of prospective tenants, and we are obviously at an early stage in the recruiting of tenants, but there are a number of prospective tenants that I understand are in the final stages of discussion about establishing themselves in the food park.

Mr MARSHALL: When would you envisage that that food park would be operational?

The Hon. J.W. WEATHERILL: That is something I can take on notice. It would largely depend on when the first tenants begin to move in. That is something I do not presently know but I am happy to take that on notice.

Mr MARSHALL: For clarity, this is a project which is no longer within the EDB. It has moved elsewhere. Is that correct?

The Hon. J.W. WEATHERILL: It still has involvement from representation on the EDB. People who are on the EDB are now on the project's advisory committee. Rob Kerin is the co-chair of the advisory committee with Mehdi Doroudi from PIRSA. The advisory committee also has representatives from Parafield Airport Limited, the City of Salisbury and Food SA. Catherine Jamieson from the office of economic development and also representatives from the investment attraction body attend these meetings as observers, so there is a watching brief if you like, and also some cross representation.

Mr MARSHALL: Last year, we saw that the advanced manufacturing project was rolled into the EDB's responsibility, but I do not see any reference to it whatsoever in this year's program. Can you update us as to whether or not that is still an active program for the Economic Development Board? You might recall last year that one of the reasons for the increase in funding to the Economic Development Board was that the functions of the previous Advanced Manufacturing Council were rolled into this body.

The Hon. J.W. WEATHERILL: Göran Roos, who certainly headed that body, is now part of the Economic Development Board, so in a policy sense those matters fall within the province of the Economic Development Board. Other elements, if you like, of the work of the Advanced Manufacturing Council are now also within the province of the Investment Attraction Agency and the disposition of funds has followed those functions.

Mr MARSHALL: For clarity, does the Advanced Manufacturing Council exist any more or has that gone?

The Hon. J.W. WEATHERILL: Yes.

Mr MARSHALL: The Advanced Manufacturing Council has gone and the work of the Advanced Manufacturing Council is now done by the Economic Development Board, but there is no—

The Hon. J.W. WEATHERILL: And the Investment Attraction agency.

Mr MARSHALL: And the Investment Attraction agency. Is the Premier aware that in another part of the budget the funds for advanced manufacturing programs in South Australia were substantially cut for this—

The Hon. J.W. WEATHERILL: No, that is not true. The investments in advanced manufacturing have been dramatically increased and it is all a question of definition. In our ten economic priorities, one of the areas is innovation. Innovation is at the heart of advanced manufacturing and there is a substantial innovation package that exists within the South Australian budget, including that the most significant contribution that can be made to advanced manufacturing are the defence contracts and the substantial investments that are made in realising the possibilities and potentials there.

Mr MARSHALL: I have previously asked in this committee for you to come back with an answer as to whether the advanced manufacturing ministerial task force still exists. I did not get an answer to that last year, but do you have any knowledge of that task force set up by your government?

The Hon. J.W. WEATHERILL: No, I do not think that continues in its current form. The work of the Economic Development Cabinet Committee comprehends all the work of that body.

Mr MARSHALL: Did that body ever meet?

The Hon. J.W. WEATHERILL: I do not know the answer.

Mr MARSHALL: We asked that question last year and we have not had an answer. Would it be possible to find out whether that committee ever met?

The Hon. J.W. WEATHERILL: In a sense it is somewhat irrelevant because for all intents and purposes the relevant ministers with the responsibility do meet and they discuss advanced manufacturing, but in the context of the Economic Development Cabinet Committee.

Mr MARSHALL: Can you provide details to the committee of the work the EDB is doing to identify potential future industries for South Australia?

The Hon. J.W. WEATHERILL: That is basically all they do. In fact, their whole work is devoted and dedicated to that, supervised by the ten economic priorities. This is the work of the Economic Development Board, whether it is the ageing well, which speaks directly to the economic priority in terms of health and ageing, the work on food park, which speaks directly to the premium food and wine grown in a clean environment, or the Tonsley subcommittee, which speaks directly to the innovation agenda, each of those areas is the subject of work by the Economic Development Board.

Mr MARSHALL: Previously the chairman outlined that last year a number of workshops would be held. In fact, he stated eight industry-specific workshops would be held to identify potential future industries for South Australia and then the EDB would rank those opportunities and build a case for developing the priorities. Has that work been completed?

The Hon. J.W. WEATHERILL: I certainly know that work is being done in that area and I will give you a report on where that work is up to, but I am familiar that work has certainly occurred.

Mr MARSHALL: Were those workshops held?

The Hon. J.W. WEATHERILL: I will take on notice whether they have been held in every single one of the areas, but there have been workshops held in a substantial number of areas that are the subject of the work of the subcommittees, and the subcommittees identify those particular new business opportunities.

Mr MARSHALL: For clarity, you as the Premier have not received any advice from the EDB on the work that they did last year in identifying and then prioritising the future industries for South Australia?

The Hon. J.W. WEATHERILL: I routinely get advice and input.

Mr MARSHALL: So what were they?

The Hon. J.W. WEATHERILL: It is all supplied to the Economic Development Cabinet Committee through the joint membership of the chair and the deputy chair of the committee. The work of the EDB is integrated into the Economic Development Cabinet Committee work. We have already heard the discussions that have been had around ageing well, and there have been substantial contributions made by the Economic Development Cabinet Committee in a range of areas.

There are some which have begun and there are some which are emerging. Some of the emerging areas are micrology, cell therapy, advanced censures and the internet of things. As their work progresses and they are in a position to report progress, they then supply us with reports and advice through the medium of the Economic Development Cabinet Committee.

Mr MARSHALL: Last year, there was an EDB meeting—in fact, the September board meeting was held in Port Lincoln. Following on from that meeting, a subcommittee of the EDB was formed to explore opportunities for Eyre Peninsula. Has that subcommittee met?

The Hon. J.W. WEATHERILL: Yes.

Mr MARSHALL: And who is on that subcommittee?

The Hon. J.W. WEATHERILL: I will bring back the precise composition, but we think it includes Rob Kerin, Göran Roos and there may be other subcommittee members. We will supply the answers to those questions.

Mr MARSHALL: Is Göran Roos paid as a board member for this work, or is he paid separately as a consultant for the work that he is doing in this space?

The Hon. J.W. WEATHERILL: He is paid as a board member for his work in relation to the board and as a consultant for his work as a consultant.

Mr MARSHALL: What was the total of his payment last financial year in that consulting capacity?

The Hon. J.W. WEATHERILL: I do not have that number, but we will bring back an answer.

Mr MARSHALL: Is there any final report or indeed an interim report or recommendations from that Eyre Peninsula subcommittee that have been actioned?

The Hon. J.W. WEATHERILL: I understand that the work that occurred in relation to that is has been federal back to the regional development authority in relation to Eyre Peninsula.

Mr MARSHALL: In fact, the chairman said that the work was instigated from the regional development board. They were the ones that sought the meeting with the Economic Development Board, so feeding it back to them would not make a lot of sense, really. He was very specific in his speech which was made at a CEDA function last year, that the subcommittee was formed to explore the role the EDB could play in assisting Eyre Peninsula, not identifying issues for Regional Development Australia to go on with. Has there been any output from this subcommittee?

The Hon. J.W. WEATHERILL: I do not understand that chain of reasoning. If they are approached by the regional development authority for assistance, and then they undertook their work and they reported back to the regional development authority, I would have thought that is entirely what one would expect.

Mr MARSHALL: But has the government received any recommendations and acted upon them?

The Hon. J.W. WEATHERILL: I will have to take that on notice. Certainly, the future of Eyre Peninsula has been the subject of regular discussions and informs our work, especially in terms of the work that the Minister for Regional Development pursues in terms of the creation of opportunities and jobs in that area. I know that there are some exciting opportunities around the creation of processing facilities in Eyre Peninsula for the processing of seafood which might otherwise have to be processed overseas.

There are obviously exciting opportunities in Eyre Peninsula in relation to the development of Iron Road, a potential iron ore mine which had been the subject of numerous international representations that have been made by me on behalf of the company, and indeed back here in Australia together with the company.

Mr MARSHALL: Why did the government make the decision to move the investment attraction work of the government out of the Economic Development Board into another department?

The Hon. J.W. WEATHERILL: We did this on the advice of the Economic Development Board after we took international soundings on what is world's best practice in relation to investment attraction. We looked carefully at the Irish attraction board, the Welsh attraction board and the Singaporean Economic Development Board, which were all investment attraction bodies, and we tried to construct an investment attraction body—and we reviewed, of course, our existing arrangements—and we believed that this was the appropriate mechanism for pursuing investment attraction. I think the early results of the Investment Attraction authority vindicate that work.

Mr MARSHALL: When did that transfer take place?

The Hon. J.W. WEATHERILL: I will bring back an answer about when.

Mr MARSHALL: One of the programs that was envisaged when Investment Attraction was the responsibility of the Economic Development Board was the Unlocking Capital for Jobs Program, which you have previously reported on. In fact, last year you said that there was one recipient, Australian Fashion Labels, under that program. In the past 12 months, have there been any other recipients of grant funding?

The Hon. J.W. WEATHERILL: No, there have not. We are reviewing that program. Remembering, of course, that this was directly responsive to what industry told us—that is, that they were having trouble getting access to capital—we wanted to set up a body which to some degree tested that proposition. There has only been one agency that has taken advantage of that at this moment. There was, I suppose, even at the time we set it up, this lively debate about the bank saying, 'There isn't any problem here,' and many businesses saying, 'Yes, there is a problem here.' We are presently reviewing the operation of that body to see whether there is a future need for it or whether it needs to be structured in a different way to permit people to take advantage of it.

Mr MARSHALL: When will you make a decision on whether that program continues?

The Hon. J.W. WEATHERILL: As soon as the review is completed.

Mr MARSHALL: What was the total cost of administering that program on the life of the program to date?

The Hon. J.W. WEATHERILL: I will bring back an answer.

Mr MARSHALL: We might need to read in some omnibus questions now.

Mr KNOLL: The omnibus questions are:

1. Will the minister provide a detailed breakdown of expenditure on consultants and contractors above $10,000 in 2015-16 for all departments and agencies reporting to the minister, listing the name of the consultant, contractor or service supplier, cost, work undertaken and method of appointment?

2. In financial year 2015-16 for all departments and agencies reporting to the minister, what underspending on projects and programs (1) was and (2) was not approved by cabinet for carryover expenditure in 2016-17?

3. For each department and agency reporting to the minister, please provide a breakdown of attraction, retention and performance allowances, as well as non-salary benefits, paid to public servants and contractors in the years 2014-15 and 2015-16.

4. For each year of the forward estimates, please provide the name and budget of all grant programs administered by all departments and agencies reporting to the minister, and for 2015-16 provide a breakdown of expenditure on all grants administered by all departments and agencies reporting to the minister, listing the name of the grant recipient, the amount of the grant, the purpose of the grant and whether the grant was subject to a grant agreement as required by Treasurer's Instruction 15.

5. For each year of the forward estimates, please provide the corporate overhead costs allocated to each individual program and subprogram administered by or on behalf of all departments and agencies reporting to the minister.

6. For each department and agency reporting to the minister, could you detail:

(a) How much was spent on targeted voluntary separation packages in 2015-16?

(b) Which department funded these TVSPs?

(c) What number of TVSPs was funded?

(d) What is the budget for targeted voluntary separation packages for financial years included in the forward estimates (by year), and how these packages are to be funded?

7. What is the title and total employment cost of each individual staff member in the minister's office as at 30 June 2016, including all departmental employees seconded to ministerial offices and ministerial liaison officers?

The CHAIR: I thank the Premier and his advisers for their attendance. There being no further questions, I declare the examination of this proposed payments adjourned until later today.

Sitting suspended from 11:15 to 11:30.