Department of Treasury and Finance, $56,903,000

Administered Items for the Department of Treasury and Finance, $1,582,470,000

Membership:

Mr Williams substituted for Mr Speirs.

Minister:

Hon. A. Koutsantonis, Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy.

Departmental Advisers:

Mr D. Reynolds, Under Treasurer, Department of Treasury and Finance.

Mr S. Hocking, Deputy Chief Executive, Department of Treasury and Finance.

Mrs T. Pribanic, Executive Director, Budget, Department of Treasury and Finance.

Mr K. Cantley, Executive Director, Public Finance Branch, Department of Treasury and Finance.

Mr P. Williams, Director, Financial Services, Department of Treasury and Finance.

Mr G. Raymond, Director, Revenue and Intergovernmental Relations, Department of Treasury and Finance.

Mr G. Goddard, Chief Commercial Officer, Department of Treasury and Finance.

Mr B. Tuffnell, Acting Chief of Staff.

The CHAIR: I am sure you are all aware of the informal process so there is no need to stand to ask or answer questions. I understand that the Treasurer and the leader have agreed on an approximate time for the proposed payments, which will facilitate a change of departmental advisers from time to time. Can you both confirm that you are agreed on the schedule that we have before us?

The Hon. A. KOUTSANTONIS: Yes, ma'am.

Mr MARSHALL: Yes.

The CHAIR: Changes to the committee will be notified as they occur. Members should ensure that the Chair is provided with a request to discharge. If the minister undertakes to supply information at a later date, it must be submitted to the committee secretary no later than 28 October, which is a Friday. This year, estimates committee responses will be published during the 15 November sitting week in the corrected daily Hansard over a three-day period.

I propose to allow both the minister and the lead speaker to make an opening statement of about 10 minutes each should they wish to do so. There will be a flexible approach to giving the call for asking questions based on about three questions a member, alternating on each side. Supplementary questions will be the exception rather than the rule. A member who is not a part of the committee can ask a question at the discretion of the Chair. Questions must be based on lines of expenditure in the budget papers, and we do ask that these question lines be identified at the beginning of each question, for us and for Hansard.

Members unable to complete their questions during proceedings may submit them as questions on notice for inclusion in the Assembly Notice Paper. There is no formal facility for tabling of documents before the committee; however, the documents can be supplied to the Chair for distribution to the committee.

The incorporation of material in Hansard is permitted on the same basis as it applies in the house, that is, that it is purely statistical and limited to one page in length. All questions are to be directed to the minister, not the minister's adviser. The minister may then refer, if he wishes to do so, to the advisers for a response. During the committee's examination, television cameras will be permitted to film from the northern and southern galleries.

I declare the proposed payments open for examination and refer members to the agency statements in Volume 4. I call upon the Treasurer to make a statement if he wishes to do so.

The Hon. A. KOUTSANTONIS: Ma'am, I make no opening statement other than to introduce my officials. To my left, I have Mr David Reynolds, the newly-minted Under Treasurer. There is also Mr Stuart Hocking, our new Deputy Under Treasurer, and Mrs Tammie Pribanic, who is the head of budget branch.

The CHAIR: Questions, leader?

Mr MARSHALL: I will start with Budget Paper 3, Budget Statement, page 100, which talks about the economic outlook. The Treasurer has repeatedly said that this is a 'jobs budget'. How can he justify this statement given that the forecast is less than half the national figures in terms of employment growth?

The Hon. A. KOUTSANTONIS: In the budget forecast, employment growth for 2016-17 is 0.75 per cent, rising to 1 per cent per annum in the subsequent years. The downward revision to employment growth in 2016-17 occurred in the Mid-Year Budget Review, and since the MYBR, we have maintained our employment growth forecast for 2016-17 and increased our forecast for 2017-18 from 0.75 per cent to 1 per cent.

We will face job losses over the next 12 months—they are forces beyond our control. Decisions made at a commonwealth level not to invest and continue to invest in General Motors Holden has seen the deindustrialisation of our automotive industry. That is very hard for us to consume as a state, but we are doing our bit to try and fill that gap.

I want to thank and congratulate the Prime Minister and the member for Sturt on assisting South Australia with fulfilling their election commitment to build the submarines in South Australia. That will go a great way in filling a lot of that gap. Of course, a lot of those infrastructure projects we have been championing since we have been in office—whether it is the Northern Connector, the Torrens to Torrens, or the Darlington project, and I note the Leader of the Opposition promised to cancel one of those projects if he was elected.

We do have job measures in the budget that will grow our economy. I think the jobs accelerator package is a good one and offering stimulus to small to medium-size enterprises to hire new apprentices, new trainees, new employees grants of up to $10,000 per FTE—and $4,000 if you are not paying payroll tax—are very good initiatives, and I would call on the opposition to welcome those measures.

The tax cuts that have been universally welcomed by the business community, business industrial groups and advocacy groups goes to show that the government is listening to the business community and, indeed, that we are implementing a lot of the reforms that they have asked for. I point out that the opposition cooperated quite well with the government in our WorkCover reforms, and the Leader of the Opposition is to be personally applauded. But I also think our work on tax reform is also nation leading. I note the Leader of the Opposition just rolled his eyes while I was trying to be nice to him, and he just cannot take a compliment.

The CHAIR: Order!

The Hon. A. KOUTSANTONIS: I did not know that complimenting the Leader of the Opposition was out of order, ma'am.

The CHAIR: No—the rolling of the eyes.

The Hon. A. KOUTSANTONIS: I did not roll my eyes, ma'am.

The CHAIR: No—he did. I cannot see through the back of his head.

The Hon. A. KOUTSANTONIS: I think we have done a fair bit for the business community to try and incentivise that growth. As I said, there are a lot of things beyond our control, let alone the challenges we are facing in Whyalla. The Australian banks did this nation a great disservice by forcing that company into administration, and that has put that town on the brink and this state precariously closer to losing our steel industry.

I think the cooperative work between commonwealth—both the Prime Minister, the Leader of the Opposition and the state government—has been exceptional, and I want to personally thank the member for Giles for his exceptional advocacy on behalf of the people of Whyalla. I have to say, it has been a very good bipartisan response to those types of challenges.

We have seen our trade competitors dumping cheap imported steel in this state, and in this country, trying to directly attack our sovereign steel capability. There has been an immediate response by the commonwealth, and, again, I applaud minister Pyne for increasing tariffs and penalties on the import of cheap inferior steel to compete directly with Australian steel, and I applaud other governments who are now copying our procurement policies, and you have seen the national body of the Local Government Association attempt to adopt our procurement policies.

This budget delivers $50 million for Whyalla to try and save Australian steel jobs, we deliver tax cuts which go a long way to assist small to medium-size enterprises, and we are offering massive job incentives to try to help what I think we would all agree in this chamber is the engine room of our economy, which are small to medium-size enterprises. I remember the Leader of the Opposition once saying in the early days that if every South Australian small business hired one extra person, we would go close to creating full employment.

We have offered nearly $10,000, or $4,000, worth of incentives per job created in South Australia. So this has been a very good budget for jobs, and I wish there was more bipartisan support rather than the petty rancour.

Mr MARSHALL: Well, this budget has been described, and just confirmed to the committee by the Treasurer, as a jobs budget, despite the fact that it, of course, forecasts jobs growth of less than half the national jobs growth. Last year, the Treasurer similarly described his budget as a jobs budget, and, unfortunately, the jobs reality was nothing like the forecast contained in last year's budget. Is there anything that the Treasurer can point to that would give us any greater sense of confidence in the forecast contained in this budget, when we consider that last year's jobs budget was halved between the original budget and the estimate that was provided in this year's budget?

The Hon. A. KOUTSANTONIS: I would refer the Leader of the Opposition to an award-winning journalist, Mr Daniel Wills. He wrote an article about the dramatic impact the tax cuts had on South Australian business. I would also refer him to CommSec, the State of States report, which saw South Australia jump two places, overtaking Queensland and Western Australia to be the fifth ranked economy in Australia. The Leader of the Opposition had boasted that South Australia was going to overtake Tasmania and be last.

Mr MARSHALL: We are talking about jobs creations here, Treasurer.

The Hon. A. KOUTSANTONIS: I am talking about confidence. I would also point to the nearly 6,900 jobs we have created. I think that disparaging part-time jobs is unfair on those small to medium-sized enterprises that are creating part-time jobs, and it disparages the people who are employed in part-time jobs in this economy. There are a lot of people who deliberately choose to work in part-time employment. They are generally carers, people who have family responsibilities, who also want to re-enter the workforce. We should not be disparaging about that at all. These are good jobs.

I think there is negativity from the opposition. What I think would be more healthy for the economy and the state would be for there to be two alternative proposed sets of ideas, where we could look at them, hold them up to the light, compare and contrast different policy outlooks and let the South Australian public choose which they think is the alternative.

What we have now is the government cutting taxes, restructuring and transitioning our economy from an old manufacturing base to an advanced manufacturing base, offering very large incentives for small to medium-size employees to go out and employ new South Australians, taking our transactional taxes out of the economy and improving the efficiency within our economy to incentivise business to go out and make new transactions and grow the economy, and compare that with an alternative set of policies that the opposition might be advocating, and that way we can have a debate. Instead, what we have now is the government moving these policy positions forward and the opposition just saying—and I will give you some very stark examples—with payroll—

Mr MARSHALL: Chair, I ask you to ask the Treasurer to return to the question, which was about the jobs growth modelling accuracy.

The Hon. A. KOUTSANTONIS: I am answering that, ma'am. What we found was that when we announced payroll tax rebates to try to stimulate employment growth, the opposition said that that would not create a single job, and then they asked us to extend them. When we announced our tax cuts—

Mr MARSHALL: Chair, I ask you to ask the Treasurer to return to the jobs growth forecast accuracy. We have got less than two hours to deal with Treasury, and so far we have had absolute waffle from the Treasurer.

The CHAIR: I think that is harsh. I think he is trying to give you some contextual information.

Mr MARSHALL: He has not gone near it.

The CHAIR: Well, we will keep listening to him.

The Hon. A. KOUTSANTONIS: I am not trying to be combative at all, ma'am; I am actually just trying to answer the Leader of the Opposition's questions. It is not my fault that he is being frustrated with his own position.

The CHAIR: Order! Let's get back to it—as close as we can.

The Hon. A. KOUTSANTONIS: I will. We brought in the payroll tax rebates to try to stimulate growth. The Leader of the Opposition said that that would not work and then asked us to extend them. We cut taxes in the transactional area, which has been applauded by every major employee group in the country. The Leader of the Opposition said that would not work, and then he asked us to bring them forward. I think creating 6,900 jobs over the last 12 months has been very, very good outcome from the last budget, and I think this budget will do a lot to try to stimulate more jobs growth. I also say that stronger growth in part-time work, which the Leader of the Opposition disparages, is growing nationally.

Mr MARSHALL: It is not even anything like the question.

The CHAIR: Order!

The Hon. A. KOUTSANTONIS: I think your frustration is not so much about this.

The CHAIR: Order! No, get back to the question.

The Hon. A. KOUTSANTONIS: It is about other aspects of what is going on internally, so I will not bother with that. But I will just say this: over the last six months, for example, full-time employment Australia-wide has fallen by 0.2 per cent. So, it is not uniquely a South Australian problem; it is an Australian problem.

Mr MARSHALL: So it is a South Australian problem, the fall in full-time employment?

The Hon. A. KOUTSANTONIS: I said it is an Australian problem.

Mr MARSHALL: You just said it is not uniquely a South Australian problem, so it is a problem in South Australia, the fall from full-time employment?

The Hon. A. KOUTSANTONIS: I just said, again, over the last six months, full time employment has fallen across the country, so it is not unique to South Australia.

Mr MARSHALL: So it is a problem in South Australia. How many full-time jobs did we lose last financial year?

The Hon. A. KOUTSANTONIS: We lost 3,700.

Mr MARSHALL: Why did you tell the radio that you had actually created 6,000 full-time jobs?

The Hon. A. KOUTSANTONIS: No. What I said was, I thought they were full-time equivalents, but we did create over 6,000 jobs—

Mr MARSHALL: Did you create over 6,000 full-time equivalent jobs?

The CHAIR: Order! Can I just ask that the Treasurer be given a chance to finish his question before we get to the next one. We will give you as much time as we can.

Mr MARSHALL: When you say you are giving me as much time as possible, are you planning to extend the time?

The CHAIR: He had not finished the answer to that question.

Mr MARSHALL: When you said that you were happy to give me all the time I need, we can extend the time?

The CHAIR: I will try to give you as much time as I can.

Mr MARSHALL: Beyond the two hours currently allocated?

The CHAIR: I think it is not an issue. He could have been going on to give you the bit you wanted. If you cut him off halfway, then you might not get—

Mr MARSHALL: So you are not going to give me any further time?

The CHAIR: I will give you as much time as I possibly can if we do not have these interruptions. Please continue.

The Hon. A. KOUTSANTONIS: I just point out, Madam Chairperson, that you asked both of us at the beginning of this estimates whether we were happy with the time allocated and we both said yes.

The CHAIR: Okay, let us just get on with the answer.

The Hon. A. KOUTSANTONIS: Unless the leader is misleading the committee.

Mr MARSHALL: All this waffle, 20 minutes of rubbish.

The CHAIR: Order!

The Hon. A. KOUTSANTONIS: It's—

The CHAIR: Order! Just get back to the answer to the question.

The Hon. A. KOUTSANTONIS: Well, I do not think you can put words into my mouth, ma'am.

The CHAIR: If you have finished the answer, that is quite okay. Leader, do you have another question?

The Hon. A. KOUTSANTONIS: No, I have not finished the answer.

The CHAIR: Alright, then let's go.

The Hon. A. KOUTSANTONIS: I think the Leader of the Opposition, in his questioning about whether this is unique to South Australia, is ignoring the stats that are occurring nationwide. There is a fall in full-time employment across the country, and what you are seeing is growth in part-time work. That part-time work is new jobs. Those new jobs are being created in our economy and they are benefiting our economy. I do not think it is fair to say that we are not creating new jobs when we are.

Mr MARSHALL: What about the number of hours worked? Can the Treasurer shed some light on whether more hours or fewer hours were worked last financial year?

The Hon. A. KOUTSANTONIS: I do not have the ABS stats here, but I will get them for you.

Mr MARSHALL: Was it an increase? You were saying before that you thought that there was the equivalent of 6,000 full-time equivalent jobs, not full-time jobs but full-time equivalent jobs. From that I would envisage that you mean that the overall size of employment and the number of hours worked—

The Hon. A. KOUTSANTONIS: I just told you that it is part-time work, so unless you are deliberately misleading the parliament again. I said to you that there were over 6,000 part-time jobs created in the economy. Full-time employment is down across the nation. I do not have the ABS stats here, but I will get them for you.

Mr MARSHALL: So why did you tell the radio interview that you thought there were 6,000 full-time jobs, because if we check Hansard, only a few moments ago in this committee you said that you thought that those were full-time equivalent jobs. Now you are saying you did not think they were full-time equivalent jobs, they were just part-time jobs. I have asked a very reasonable question about whether there were more or fewer hours worked last financial year and you cannot give me an answer.

The Hon. A. KOUTSANTONIS: I have just said again—

Mr MARSHALL: Have you got any idea what is going on in terms of employment in South Australia?

The CHAIR: Order!

The Hon. A. KOUTSANTONIS: I have just said to you earlier that there was an error on that radio program. I have said it now three times, but obviously you are not listening. What you are attempting to do is make a point, because you have nothing else to say about this budget.

The CHAIR: Order!

The Hon. A. KOUTSANTONIS: You complained about the time allocated after we agreed to it.

The CHAIR: Order! Is there another question?

The Hon. A. KOUTSANTONIS: I am answering his questions, ma'am, and his personal attacks. I think that, if you wanted to show that you have any form of policy initiative, you would actually to go to the policy initiatives in the budget. You would ask questions about those. Instead what you are trying to do is, after agreeing to the time allocated, you complain. It is an old tactic and it is tired.

The CHAIR: In the spirit of whatever the word is, let us start again with the next question.

Mr MARSHALL: Were more hours or fewer hours worked in South Australia last financial year?

The Hon. A. KOUTSANTONIS: I will get that.

Mr MARSHALL: Why do you not know that?

The CHAIR: Order! He said he would get—

The Hon. A. KOUTSANTONIS: If it is such an important—

The CHAIR: Order! I am speaking now. He said he would get to that information. Next question.

The Hon. A. KOUTSANTONIS: Well, I will just put—

The CHAIR: Next question.

Mr MARSHALL: What makes the forecast provided in this budget any more accurate than the completely and utterly inaccurate Treasury forecast provided in last year's state budget? Why should we have any faith whatsoever that we will achieve jobs that are projected in this budget?

The CHAIR: That is a comment. Next answer.

The Hon. A. KOUTSANTONIS: I think that is an appalling attack on the independent Public Service, and I think they do their very best to give us the very best modelling they can.

Mr MARSHALL: Why was it wrong last year?

The CHAIR: Hang on. He had not finished.

The Hon. A. KOUTSANTONIS: I think that given the nature of the modelling, you can look to the commonwealth budget, you could look to other state budgets around the nation, often those numbers are difficult to get right. They are very hard to model. No-one saw, for example, deflation a few quarters ago, and the Reserve Bank acted immediately, so I do not think attacking the modelling serves the opposition or anyone. I think we would be much better off talking about policy initiatives.

Mr MARSHALL: Can you explain how the estimate of 14,000 full-time equivalents has been derived?

The CHAIR: Are we still on Budget Paper 3, or have we moved on, leader?

Mr MARSHALL: Yes, Budget Paper 3.

The Hon. A. KOUTSANTONIS: I am advised that we have looked at modelling through payroll tax receipts and made assumptions on that basis, but I will get the leader a more detailed answer.

Mr MARSHALL: I do not understand the last answer, sorry. I asked how you arrived at the 14,000 figure and you said you are going to look at payroll tax receipts.

The Hon. A. KOUTSANTONIS: I said that payroll tax receipts were used to do the modelling.

Mr MARSHALL: So, who did the modelling?

The Hon. A. KOUTSANTONIS: Department of Treasury and Finance.

Mr MARSHALL: And you have no more detail that they—

The Hon. A. KOUTSANTONIS: I said I would get it for you. I do not have it here.

Mr MARSHALL: What was the split then between those companies which are liable for payroll tax and those which are smaller start-ups which will receive the lesser amount?

The Hon. A. KOUTSANTONIS: I will get that for you.

Mr MARSHALL: So, no work has been done on that?

The Hon. A. KOUTSANTONIS: Yes, and I will get it for you.

Mr MARSHALL: How are the grants being restricted to positions created in South Australia, given the measure relates to total taxable Australian payrolls?

The Hon. A. KOUTSANTONIS: People are required to abide by the rules that we set down. If they are caught not abiding by them, there will be penalties.

Mr MARSHALL: Have those rules been set down?

The Hon. A. KOUTSANTONIS: Yes, they have. I think if you go to the RevenueSA website, you will see a very detailed posting of what the rules and conditions are to apply for those grants. They were made public I think the day of the budget, and I would refer you to RevenueSA's website. In fact, I will give you the website now.

Mr MARSHALL: How would you envisage that we would be able to check whether someone is residing and employed in South Australia?

The Hon. A. KOUTSANTONIS: I will ask the tax commissioner and get an answer for you.

Mr MARSHALL: Thank you very much. What definition of full-time equivalent position is being used in calculating these grants? Is it the 35 hours per week used by the ABS?

The Hon. A. KOUTSANTONIS: If you are in the threshold of paying payroll tax from a payroll of between $5 million and $600,000, it is 35 hours per week as set by the ABS. If you are below the payroll tax threshold of not paying payroll tax, it is anything above 22 hours.

Mr MARSHALL: But the question was really with regard to this scheme that you have put in place, when you say it is for a full-time equivalent person, you are saying that that full-time equivalent person is 35 hours per week.

The Hon. A. KOUTSANTONIS: Yes.

Mr MARSHALL: Okay, thank you. Is there anything stopping an individual starting a business as a sole trader from accessing this scheme?

The Hon. A. KOUTSANTONIS: No.

Mr MARSHALL: In other words, I could just start a business tomorrow, employ myself and get $4,000 from the state government.

The Hon. A. KOUTSANTONIS: Given your history with business, I would not suggest it.

The CHAIR: Not necessary.

The Hon. A. KOUTSANTONIS: But true, ma'am.

The CHAIR: Stop it.

The Hon. A. KOUTSANTONIS: For example, if a young fresh-faced so-called entrepreneur couldn't run dad's business, so he bought a couple of Wokinabox franchises—

The CHAIR: Stop.

The Hon. A. KOUTSANTONIS: —and then decided to hire people, yes, you would be able to claim the rebate if you purchased the franchise and you employ people. Employing yourself, though—

Mr MARSHALL: That wasn't my question, though. It was about a sole trader.

The Hon. A. KOUTSANTONIS: —I am not sure that would qualify, but I will check and get an answer for you.

Mr MARSHALL: Are you saying that whilst announcing the scheme you did not envisage that people could be sole traders and immediately access this?

The Hon. A. KOUTSANTONIS: You would have to create full-time employment.

Mr MARSHALL: Somebody could employ themselves.

The Hon. A. KOUTSANTONIS: Well, we would have to have a look at the history of that business. Obviously, it is paid in arrears.

Mr MARSHALL: How would you do that?

The Hon. A. KOUTSANTONIS: You would have to submit the turnover the business. You would have to submit BAS statements. You would have to submit how the business was running. It could not just be, for example, someone creating a $2 business and just not doing anything.

Mr MARSHALL: Plenty of $2 businesses employ thousands of people. So this is not open to people who open $2 businesses?

The Hon. A. KOUTSANTONIS: If $2 businesses employ thousands of people—

Mr MARSHALL: Are you suggesting this is not open to people who have $2 paid-up capital?

The CHAIR: Leader, he is responding to your $2 question.

The Hon. A. KOUTSANTONIS: I just said to you that people will have to show there has been an enterprise. It is not a matter of just starting a business.

Mr MARSHALL: How would they demonstrate that?

The Hon. A. KOUTSANTONIS: They would have to show their pay as you go statements. They would have to show all sorts of information to the Treasury to qualify.

Mr MARSHALL: Can you clarify your position made in the parliament a few minutes ago—

The Hon. A. KOUTSANTONIS: I just did.

Mr MARSHALL: —regarding the paid-up capital for the company? Is that a consideration?

The Hon. A. KOUTSANTONIS: Paid-up capital?

Mr MARSHALL: You just said a $2 company. I presume you are talking—

The Hon. A. KOUTSANTONIS: I just said to you—

The CHAIR: Order! Leader—

Mr MARSHALL: You do know how to start a company, I presume.

The CHAIR: Order! We need to have a question and then a stop for the answer because I cannot hear—

Mr MARSHALL: I am just trying to help him.

The CHAIR: —and I am sure Hansard cannot hear either.

Mr MARSHALL: I am trying to help him.

The CHAIR: So we are on the answer to your last question. The Treasurer.

The Hon. A. KOUTSANTONIS: It would have to be an ongoing enterprise. It cannot be someone just establishing a company—

Mr MARSHALL: But what is the determination of an ongoing enterprise?

The CHAIR: No, leader, please, so we can hear the answer.

The Hon. A. KOUTSANTONIS: There would need to be a turnover, wouldn't there?

Mr MARSHALL: Not necessarily. In a start-up business? Are you saying that every start-up business has to have revenue? Have you ever run a business?

The CHAIR: Order!

The Hon. A. KOUTSANTONIS: Well, I have never run a franchise, no.

Mr MARSHALL: But have you run a business?

The Hon. A. KOUTSANTONIS: And I have never, I suppose—

Mr MARSHALL: Are you saying that—

The CHAIR: Order!

Mr MARSHALL: —only businesses that have revenue can access this money?

The CHAIR: Leader, I must call you to order.

The Hon. A. KOUTSANTONIS: You would have to show activity.

Mr MARSHALL: Is this a new ruling?

The Hon. A. KOUTSANTONIS: You would have to show activity.

Mr MARSHALL: That is not on the RevenueSA site.

The Hon. A. KOUTSANTONIS: Oh, you have seen the RevenueSA criteria, so you are asking questions about things you already know about.

The CHAIR: Order!

The Hon. A. KOUTSANTONIS: What deceit.

The CHAIR: I am standing up in case you cannot tell. I am asking both the leader and the Treasurer to ask the question and listen to the answer.

Mr MARSHALL: He does not know the answer.

The CHAIR: That is beside the point.

Mr MARSHALL: But true.

The CHAIR: No, beside the point.

Mr MARSHALL: Absolutely spot on.

The CHAIR: Leader, I will have to suspend the committee if we cannot organise some sort of question and answer turnaround so that we can all hear the question and all hear the answer, and that would be regrettable.

Mr MARSHALL: You did it last year.

The CHAIR: Well, the same bad behaviour will get the same response. Do you have a question, leader?

Mr MARSHALL: I have not had an answer to the last question. I need clarification from the Treasurer—

The Hon. A. KOUTSANTONIS: I just told you—

Mr MARSHALL: —because the Treasurer—

The Hon. A. KOUTSANTONIS: You would have to see activity—

Mr MARSHALL: Am I allowed to ask the question or not?

The CHAIR: You just said you haven't had the answer so he is moving to the answer, I presume.

Mr MARSHALL: No, well, the question—

The CHAIR: Let's hear what he has to say and we will decide if it is an answer to your question.

Mr MARSHALL: The question is that we need clarification from the Treasurer, who has now said that there will be restrictions for people accessing this program based upon their paid-up capital and also whether or not they are revenue positive.

The CHAIR: I do not know that that is exactly what he said.

The Hon. A. KOUTSANTONIS: No, that is not what I said, but the Leader of the Opposition—

Mr MARSHALL: Well, can you clarify—

The CHAIR: Order! He will be heard. Let's hear the answer.

Mr MARSHALL: He does not know the answer. He's got no idea.

The CHAIR: Audible mumbling will count as a question if you are not careful.

The Hon. A. KOUTSANTONIS: It suffices for policy apparently, too. Businesses would have to show their BAS statements over a 12-month period and that they have actually had activity and employed people. The Leader of the Opposition then says that that can be rorted. I have no doubt that there will be some people who think like the Leader of the Opposition and attempt to rort this—

The CHAIR: That was not necessary.

The Hon. A. KOUTSANTONIS: —but we have very well-trained—

Mr MARSHALL: Well, you are chairing it.

The CHAIR: You keep egging him on.

The Hon. A. KOUTSANTONIS: —people within Treasury who are attempting to make sure that this goes to enterprises and businesses in South Australia that are attempting to grow and create viable businesses.

Mr MARSHALL: Can companies with a paid-up capital of $2 access this scheme?

The Hon. A. KOUTSANTONIS: If they have activity over 12 months, supply BAS statements and are employing new people, yes.

Mr MARSHALL: Can businesses with no revenue access this scheme?

The Hon. A. KOUTSANTONIS: If they provide BAS statements, if they are trading and they are an active business over a 12-month period and they have sustained employment over that 12 months, yes.

Mr MARSHALL: You have already, in the space of 10 minutes—

The Hon. A. KOUTSANTONIS: Fake laughter—

The CHAIR: Order!

The Hon. A. KOUTSANTONIS: No, I have not. Fake laughter is not a substitute

Mr MARSHALL: —said two completely different points and you are the Treasurer of this state.

The CHAIR: In fairness to the Treasurer, I think he has tried to rectify what may have been—

Mr MARSHALL: His earlier errors.

The CHAIR: —a misapprehension.

The Hon. A. KOUTSANTONIS: I certainly have not, Madam Chair, and I take offence to you saying that.

Mr MARSHALL: Check the Hansard.

The Hon. A. KOUTSANTONIS: No problem.

The CHAIR: In that case I apologise if I have offended you.

The Hon. A. KOUTSANTONIS: Thank you.

Mr MARSHALL: What is the cost of administering this scheme?

The Hon. A. KOUTSANTONIS: I am advised that the capital in building the operating system is going to cost in 2016-17 about $522,000 and an ongoing operating cost of about $360,000 per year.

Mr MARSHALL: Are you expecting the committee to believe that there will be just $360,000 used to assess and process each of these applications?

The Hon. A. KOUTSANTONIS: That is my advice, yes.

Mr MARSHALL: Does that seem right to you?

The Hon. A. KOUTSANTONIS: Yes.

Mr MARSHALL: Why?

The Hon. A. KOUTSANTONIS: Treasury is one of the most efficient agencies in the government and I have complete faith in them.

Mr MARSHALL: How many companies do you envisage that they will be administering as part of this scheme?

The Hon. A. KOUTSANTONIS: How many companies? It depends on how many applications there are.

Mr MARSHALL: Correct; how many do you envisage as part of that modelling? How did you arrive at $360,000?

The Hon. A. KOUTSANTONIS: That is again on the basis of the Treasury modelling that I sought to undertake to bring to you.

Mr MARSHALL: So you are going to bring me the modelling that arrived at the $360,000?

The Hon. A. KOUTSANTONIS: No, I am not going to bring you the modelling; I am going to tell you how we came to expect that it would cost us the $109 million that it was, and—

Mr MARSHALL: So—

The Hon. A. KOUTSANTONIS: Hang on a second.

The CHAIR: He is trying to seek some extra information for you, leader.

The Hon. A. KOUTSANTONIS: We will give you the basis of the operating cost going forward.

Mr MARSHALL: Is it reasonable to expect that just 2.4 extra FTEs can administer this scheme which could be processing thousands and thousands of applications and now, by your own determination in the committee today, accessing BAS statements, checking paid-up capital and seeing whether people are revenue positive or not. Is it in any way plausible that 2.4 FTEs can do this work?

The Hon. A. KOUTSANTONIS: I would also point out that it is not just the role of those extra FTEs. There are also existing compliance officers within RevenueSA. It is an innovative agency which can divert resources when needed to do multitasking functions. I would imagine someone who is in compliance in land tax or payroll tax can quite easily be diverted to do this work as well.

Mr MARSHALL: I refer to Budget Paper 4, Volume 4, page 168. Given that this innovative Revenue Collection and Management Unit that you describe is going to be able to do this with just 2.4 people, can you explain why on earth they had a massive, multimillion-dollar blowout in their budget for last year?

The Hon. A. KOUTSANTONIS: I would not categorise it as a blowout. I understand it is a carryover, but I will get you a more detailed answer.

Mr MARSHALL: When you say, 'It's not a blowout, it's a carryover,' the budget for the Revenue Collection and Management Sub-Program of your department was $32 million for the last financial year, with 202 employees. It went up to 229 employees and had a budget performance of $35 million. It was a multimillion-dollar blowout. This is the same agency that you think, with just 2.4 extra FTEs, can administer this brand-new scheme. It is completely implausible.

The Hon. A. KOUTSANTONIS: I am advised it is the money that we carried over to complete the finalisation of the RISTEC program, but I will get you a more detailed answer. You can criticise Treasury if you like, but I think they are an exemplary agency within government.

Mr MARSHALL: Not very good at forecasts.

The CHAIR: Leader, another question?

Mr MARSHALL: Yes, absolutely. I would like to turn the Treasurer's attention to Budget Paper 3, page 38, where we deal with payroll tax. I just say that in December 2009, the government announced a payroll tax rebate scheme for wind and solar projects, whereby up to $1 million in payroll tax would be rebated on major wind projects and up to $5 million on solar projects. As of this morning, RevenueSA still had the information circular on this rebate available on its website that the Treasurer very kindly pointed me towards only a few minutes ago. How much has the state government paid in payroll tax rebates on wind projects since 2010 and, in particular, how much was paid in the 2015-16 and how much is budgeted for the 2016-17 year?

The Hon. A. KOUTSANTONIS: On wind projects?

Mr MARSHALL: Yes.

The Hon. A. KOUTSANTONIS: I do not know if we have broken it down by wind projects, but I will find out what the breakdown for wind projects are.

Mr MARSHALL: Well, how would you refer to them?

The Hon. A. KOUTSANTONIS: Renewable energy.

Mr MARSHALL: There are wind renewable energy projects, there are solar renewable—

The Hon. A. KOUTSANTONIS: I am glad that the Leader of the Opposition admits that renewable energy creates jobs.

Mr MARSHALL: Do you know the answers to the questions that I have asked?

The CHAIR: He just said it is not broken down and he will get you that information.

Mr MARSHALL: How much was paid in total then for renewable projects for the payroll tax?

The Hon. A. KOUTSANTONIS: In all rebates for payroll tax? Last financial year?

Mr MARSHALL: For renewable projects.

The Hon. A. KOUTSANTONIS: I do not have it broken down by industry.

Mr MARSHALL: How much in total then?

The Hon. A. KOUTSANTONIS: It would be like asking me how much rebate was paid to Wokinabox franchises. I do not know.

The CHAIR: Order!

Mr MARSHALL: Do you know how much has been budgeted for this current year?

The Hon. A. KOUTSANTONIS: For renewables?

Mr MARSHALL: Yes.

The Hon. A. KOUTSANTONIS: No, it is a universal payroll tax rebate for all employers who meet that threshold requirement. We do not discriminate against industries. Why would we?

Mr MARSHALL: Have you just had another whoopsie moment?

The Hon. A. KOUTSANTONIS: Did I?

Mr MARSHALL: Well, I am asking the question.

The Hon. A. KOUTSANTONIS: Are you asking about the payroll tax rebates we have budgeted this year?

Mr MARSHALL: For payroll tax on renewable energy projects.

The Hon. A. KOUTSANTONIS: For this year?

Mr MARSHALL: Yes. Why did you state in the media—

The CHAIR: Are we getting you some information or not?

Mr MARSHALL: Here we go. Someone knows what is going on.

The CHAIR: Did you have a question, member for Fisher?

Ms COOK: Yes.

Mr MARSHALL: Do not tell me they are doing Dorothy Dixers. We have less than two hours and we have had no answers so far. If this is about the Cockle Bay pony club or something—

The CHAIR: The first I have heard of it, the member for Fisher has a question, so in a minute we will get to you.

Members interjecting:

The CHAIR: Order!

The Hon. A. KOUTSANTONIS: We have not budgeted anything for it this year because there have been almost no applications.

The CHAIR: The member for Fisher has a question.

Mr MARSHALL: I am still on this line. Surely we can—

Ms COOK: Treasurer, can I take you to Budget Paper 3.

Mr MARSHALL: Surely we can complete a line.

The CHAIR: Hang on, I have about 30 questions you have asked already. We are just having one from the member for Fisher.

The Hon. A. KOUTSANTONIS: You will love this one, Steven.

The CHAIR: Order!

Ms COOK: Can I take you to Budget Paper 3, page 35. There have been revenue measures announced since the Mid-Year Budget Review. Can you outline for us the increase to the solid waste levy.

The Hon. A. KOUTSANTONIS: Yes, I can. This has been something I have been very keen to talk about because it is something that has been criticised by a number of people as just another tax. What we are attempting to do by increasing the solid waste levy from $62 a tonne to $103 a tonne by 2019, by raising an additional $64 million over the period, is we want to see an incentivised program that will go towards local governments for waste recovery.

We estimate that this increased levy, a lot like the container deposit legislation, will create up to 350 jobs in an industry that is actually growing this state and employs, I understand, nearly 5,000 people, I am advised. The funding will go to local government and waste and resource recovery infrastructure, and there have been some very strong advocates of this issue. We know that in 2006, when the Leader of the Opposition was chairman of Compost SA, he wrote a proposal to increase the subsidy, say, to $10 a tonne, to $8 per tonne for two years and then get rid of it.

Mr Marshall interjecting:

The CHAIR: Order!

Mr MARSHALL: What is it going to go to now—$100?

The CHAIR: He is going to get to that, I hope.

The Hon. A. KOUTSANTONIS: I am, because this is a very good measure in the budget, and the question—

Mr MARSHALL: This is a complete waste of time.

The Hon. A. KOUTSANTONIS: It is alright. It will be over soon.

Mr MARSHALL: You do not want to answer any questions, so you are now—

The CHAIR: Order!

Mr MARSHALL: —resorting to getting Dorothy Dixers asked so you can just waffle on because you do not want to answer questions from the opposition. You do not answer any questions in question time–

The CHAIR: No, order!

Mr MARSHALL: —and now you do not want to answer any questions in estimates.

The CHAIR: Leader! This is one question. Please move on with the answer.

The Hon. A. KOUTSANTONIS: There is a letter dated in—

Mr MARSHALL: The Treasurer's colleague could ask this question in the corridor or in caucus or in any other of their party forums—

The CHAIR: In fairness, I do not know what the question is until it is asked, leader.

Mr MARSHALL: —not chew up the time provided to the opposition—

The CHAIR: Let's move on and get the answer out and you can have another question.

Mr MARSHALL: —to ask questions in estimates. It is a disgraceful waste of time.

The Hon. A. KOUTSANTONIS: You are trying to stop me from reading out—

The CHAIR: Order!

Mr MARSHALL: I am surprised that the member for Fisher would participate. Ask him in the corridor.

The Hon. A. KOUTSANTONIS: It is interesting that he does not want me to read this out.

The CHAIR: No.

Mr MARSHALL: Is this your only avenue to ask him?

The CHAIR: I am on my feet. Stop, please. The Treasurer needs to move on with the answer to the question so we can move to the next question.

The Hon. A. KOUTSANTONIS: Sure. The head of Compost SA wrote a subsequent letter the following year and, on the levy rate, this is what the chairman had to say—

Mr MARSHALL: This has nothing to do with the question.

The CHAIR: Well, I do not know yet until I hear what he says.

Mr MARSHALL: He is reading out a submission that I made to the Productivity Commission.

The CHAIR: But I do not know that, do I? In fairness, leader, I do not know that you wrote it.

Mr MARSHALL: Well, he just said it right then.

The Hon. A. KOUTSANTONIS: No, this is a subsequent submission, and this submission is different from the one that has been raised publicly. This is one that has not been raised publicly, one that you have not talked publicly and have been trying to stop me to read it to the chamber now:

Compost SA believes that the levy should be higher than the proposed $55 as disposal to landfill costs and not in line with other states or overseas. The low landfill rate in SA makes it difficult to encourage (non local government) customers to recover resource from the landfill stream. A substantial differential is required to ensure that source separating of clean organic material is attractive and economically viable for customers.

Conclusion: Compost SA thanks ZWSA for the opportunity to provide input into this important revision of the Waste Deposit Landfill levy for SA. We would be pleased to provide a presentation on this submission if required. If you require any further information regarding any of the comments, please do not hesitate in contacting me.

Yours sincerely,

Steven Marshall, Chairman—Compost SA

The CHAIR: Next question then I think.

The Hon. A. KOUTSANTONIS: In the media—

The CHAIR: No.

The Hon. A. KOUTSANTONIS: —the Leader of the Opposition has criticised this move as being just another tax.

Mr MARSHALL: Which it is.

The Hon. A. KOUTSANTONIS: There you go. When he was in the private sector and advocated for a dramatic increase in the waste levy to create jobs, employment and growth, that was okay. Now that he is in the parliament and he is working for the Liberal Party, quite a similar organisation, he says, 'It's just another tax that will increase the cost-of-living pressures and make unemployment in South Australia even worse.' The truth is that, if this statement is what he believes, what was he saying in his submission to Zero Waste SA, or is this what you believe and then you say something different in the media?

The CHAIR: Okay, that is enough. Leader, do you have a question?

The Hon. A. KOUTSANTONIS: No consistency in policy at all, not one bit.

The CHAIR: The leader has a question.

The Hon. A. KOUTSANTONIS: That is a whoops moment.

The CHAIR: Order! Leader, you have a question.

Mr MARSHALL: Following on from that very briefly, will the increase in the solid waste levy be used to fund the Frome Street bikeway?

The Hon. A. KOUTSANTONIS: I do not know, I will have to check. Certainly, we would be very interested in using any increase in resources we have to encourage alternative forms of transport because we believe that getting people to use public transport, or bikeways or walking, are great ways of minimising carbon emissions and go a long way to meeting our target of being a carbon neutral city. It also creates a stimulus in employment, but I will check if that program in particular is being funded out of this line.

Mr MARSHALL: Back to what we were actually talking about before we had that little hiatus on the solid waste levy—that is, the renewable energy projects—you have said that despite the payroll tax rebate program still being on the website there is nothing in the budget for it this year. Can you tell us what has been paid in previous years under this scheme?

The Hon. A. KOUTSANTONIS: I will get you a detailed answer on notice of what we have paid historically.

Mr MARSHALL: Thank you. Does the Treasurer accept that the statement that he made in the media on Monday, 'The state government has not invested a dollar in wind generation' is untrue?

The Hon. A. KOUTSANTONIS: We have not invested in wind generation—

Mr MARSHALL: Well, what is a payroll tax rebate?

The CHAIR: Order! We need the answer to the question.

The Hon. A. KOUTSANTONIS: A payroll tax rebate is like saying we are investing in small businesses across the state, that I am some sort of shareholder in any business that receives a payroll tax rebate—

Mr MARSHALL: So you are now telling us—

The CHAIR: Hang on.

The Hon. A. KOUTSANTONIS: —and that is not the case. I think payroll tax and tax concessions that are available to industries are very different from direct investment.

Mr MARSHALL: That reference that you made that we have not invested a single dollar in wind energy was about direct investment into these projects, rather than providing incentives to business to bring renewable energy to South Australia?

The Hon. A. KOUTSANTONIS: Tax cuts and tax rebates are not investing in business.

Mr MARSHALL: In other words, there have been multiple projects and multiple programs which the state government has put forward to provide incentive for wind power in South Australia?

The Hon. A. KOUTSANTONIS: What we do is incentivise job creation, and the largest incentive for wind generation is the Renewable Energy Certificates initiative which are issued by the commonwealth government on a bipartisan platform by both the Prime Minister and the Leader of the Opposition. Former minister Macfarlane and, previous to that, former minister Bourke, and current shadow minister Butler and current minister Frydenberg all endorse the renewable energy target. The Prime Minister has signed Australia up to meet its Paris obligations, and he expects the nation to meet them, and we support him in that endeavour.

In regard to payroll tax concessions, it is like arguing that by making WorkCover more efficient we are incentivising renewable energy. I do not think it is a fair comparison to directly invest in wind energy. I have no problem with wind energy. I think wind energy is quite good for the state and has a lot of benefits. I do not know why the Leader of the Opposition would think that we would be embarrassed about an investment in renewables. I am just pointing out a fact that we do not directly own any interest in any wind farms.

Mr MARSHALL: No, but you have provided significant encouragement, and indeed incentive, for renewable wind energy to come into South Australia.

The Hon. A. KOUTSANTONIS: The Development Act does support the development of economic assets like renewable energy as it does other forms of investment, and I support that. I do not know why a tax concession is seen as a direct investment, but if that is what the Leader of the Opposition views tax cuts as I think it is a strange definition to have.

Mr MARSHALL: Would a better term be 'incentive'?

The Hon. A. KOUTSANTONIS: No, I think it is trying to improve the efficiency of the economy.

Mr MARSHALL: Has the government provided incentives to bring renewable wind energy to South Australia?

The Hon. A. KOUTSANTONIS: There are a number of incentives in place. We have one of the best regulatory frameworks in the nation for development assessment. We are very proud of that, and we are continually improving it. We have a very proud record of decarbonising our energy mix, and we are working in concert with the commonwealth government. I was very pleased to see the remarks of minister Frydenberg today, where he said that decarbonising the energy system was a bipartisan policy. It seems that someone here in South Australia has not received the memo.

Mr MARSHALL: In 2009-10, the government established the renewable energy fund in South Australia. In 2010, the government announced that it had awarded $1 million to a consortium, comprising Macquarie Capital, WorleyParsons and Baker & McKenzie, for a feasibility study into renewables, including wind projects on Eyre Peninsula. Given this fact, does the Treasurer accept that the statement he made in the media on Monday, that the state government has not invested a dollar in wind generation, remains accurate?

The Hon. A. KOUTSANTONIS: Feasibility studies are not investing in wind generation. What they are doing is looking at whether industries are viable. It is like saying that we are directly investing in the nuclear fuel cycle—we are holding a royal commission to look at it. Whether it is state owned or private owned, or who does the investment, that will all be worked out through the process. I do not think feasibility studies qualify as a direct investment in generation, and I think that fundamentally misunderstands the National Electricity Market.

Mr MARSHALL: Can the Treasurer inform the house or does he concede that the state government has had a policy to encourage and incentivise wind energy here in South Australia and that it remains the position today?

The Hon. A. KOUTSANTONIS: We believe that renewable energy is the energy mix of the future. We want to do everything we can to transition to a low-carbon economy. We want to make Adelaide the first carbon neutral city in the world. These aspirations are public, but we do not invest in direct generation.

Mr MARSHALL: Do these payroll tax incentives for wind energy remain going forward, despite there not being a budget for it?

The Hon. A. KOUTSANTONIS: I will check. I think they do. I understand that it is being reviewed as we speak.

Mr MARSHALL: It is being reviewed at the moment, but you would still like to see more wind energy coming into South Australia?

The Hon. A. KOUTSANTONIS: Absolutely, yes.

Mr MARSHALL: Thank you. Can we move now to Budget Paper 5, page 13, public sector wage increases. Can you confirm which public sector EBAs will be exempt from the new policy of limiting public sector wage increases to 1.5 per cent per annum?

The Hon. A. KOUTSANTONIS: Only the ones whose negotiations have begun in good faith on the basis of the past 2.5 per cent policy.

Mr MARSHALL: Can you outline to us which ones they are?

The Hon. A. KOUTSANTONIS: I do not have them here, but I will get you a list. I refer you to minister Rau on those negotiations.

Mr MARSHALL: I refer to Budget Paper 3, page 100, table 7.1. Given the CPI forecast for every year of the forward estimates is above the 1.5 per cent cap, how can you justify your public comments that this does not constitute a wage reduction in real terms?

The Hon. A. KOUTSANTONIS: There have been very large real wage increases over the last two years, I am advised, which I think have been very generous to South Australian public servants. We value their employment, and we have asked them to help us with restraint. We are not legislating this. We are going to do everything we can to match the private sector. There are a number of people in the private sector who are being asked for very real wage cuts.

I am looking at the member for Giles and thinking about his constituents in the Arrium workforce who have been asked to take up to 15 per cent wage cuts now by the administrators, and they have taken wage cuts previously. There are other companies like Santos and BHP and other very large employers who are asking for wage restraint as well.

I think many South Australians in the private sector are happy with the levels of the public sector that we have got now in terms of numbers, but I do not think they want to see wages grow at a much higher rate than the private sector. I think it is a reasonable question for us to be asking those employees, if they are happy to negotiate with us in good faith, to keep wages growth to about 1.5 per cent per annum.

Mr MARSHALL: Why did you say that it would not constitute a wage reduction in real terms, when your own document provides the CPI forecast above 1.5 per cent for each of the forward estimate years?

The Hon. A. KOUTSANTONIS: I think I have answered that question.

Mr MARSHALL: If we look at table 2.6 within the Budget Statement on page 25, how can you reconcile your comments with the fact that this table shows general government employee expenses falling in real terms in the 2017-18, 2018-19 and 2019-20 years? That is your own table, which shows there is actually no real growth; in fact, it is going backwards in three of the four years of the forward estimates.

The Hon. A. KOUTSANTONIS: I am advised that over the three years to 2014, 2015, 2016 and 2017, CPI is estimated to be 4 per cent, based on current forecasts. This compares to projected wages growth of 7.5 per cent of the previous policy benchmark of 2.5 per cent per annum. The revised wages policy will still provide for maintenance of real wages over the previous and next enterprise agreements for the public sector. I do not believe that the opposition is right to criticise us. The Western Australian Liberal government has announced a similar limit to the public sector wage outcomes of 1.5 per cent per annum. They are currently negotiating a number of agreements on that basis.

Tasmania has confirmed an upper limit of 2 per cent. New South Wales and Victoria have maintained a 2.5 per cent wage outcome, but obviously their budgets and their economies are in much stronger positions than ours. I think we have to acknowledge that South Australia's unemployment rate is unacceptably high and that average weekly earnings in the private sector have only grown by 1.5 per cent in the past 12 months. I think what you are seeing from the government is an attempt to bring some restraint to the public sector without further job losses. I think it is a much better policy.

Mr MARSHALL: Do you accept, though, that there will be a real wages cut in three of the four years if the 1.5 per cent wages cap is in place across the Public Service? That is certainly what your own budget table, table 2.6, is clearly showing. Either the budget is wrong or you got it wrong—whoops—on FIVEaa on 8 July.

The Hon. A. KOUTSANTONIS: I am advised that table 2.6 that you are talking about has a number of factors in it, including FTE reductions, TVSPs, so I do not think your question bears scrutiny.

Mr MARSHALL: Table 2.6 shows that the employee expenses real growth actually diminishes in three of the four years. Do you accept that there is actually a real wages cut in those three years of the forward estimates?

The Hon. A. KOUTSANTONIS: I think you are misunderstanding the table.

Mr MARSHALL: Well, can you explain whether or not you think there is a real wages cut?

The Hon. A. KOUTSANTONIS: I have answered that.

Mr MARSHALL: Can you tell me whether the TAFE EBA is exempt from the 1.5 per cent cut?

The Hon. A. KOUTSANTONIS: The policy is that if negotiations have been entered into in good faith with the employees at a different benchmark, that will be honoured. I would have to refer you to minister Rau. He is doing the negotiating, not me.

Mr MARSHALL: I understand that, but you are the one who has put this cap in place. I would like to know whether it relates to TAFE. TAFE began its EBA negotiations 18 months ago. You are the one who has said 'in good faith'. What does that mean? I would like a determination with regard to TAFE, whether they have entered into negotiations in good faith 18 months ago, or what the situation is.

The Hon. A. KOUTSANTONIS: If they have started their negotiations before the announcement, before budget day—

Mr MARSHALL: Which they have.

The Hon. A. KOUTSANTONIS: —then their negotiations would have been done in good faith at 2.5 per cent. I will have to check with the Attorney-General to confirm that, that those negotiations began before then.

Mr MARSHALL: Thank you very much.

The Hon. A. KOUTSANTONIS: Hang on, I have not finished answering the question. As a proviso, unless negotiations started after the budget, then the new policy applies.

Mr KNOLL: I have one final question on this line in terms of real wage reduction. The final estimate, the 2019-20 estimate of real wage growth, is minus 0.7 per cent, yet if I look at 2019-20 the estimate of full-time equivalents actually goes up by exactly 150 people. Does the Treasurer want to revise his comments before suggesting that it is a reduction in FTEs that actually shows that real wage growth and contend that in that 2019-20 year we are seeing an increase in the number of FTEs but still a subsequent decrease in real wage growth over that period?

The Hon. A. KOUTSANTONIS: I am advised that there are a number of factors, and they are not just FTE reductions. I think I have covered off this question pretty comprehensively.

Mr KNOLL: Except that the other statement that you made in relation to the factors that are included in this include TVSPs, which do not necessarily reduce the wage bill of the government; in fact, they increase it in the short term. We will move on to—

Mr MARSHALL: I have a quick question here. I refer to Budget Paper 3, page 23, Interest expenses. Can you explain the fall in budgeted interest expenses from $375 million in the 2017-18 financial year to $300 million in the 2018-19 financial year?

The Hon. A. KOUTSANTONIS: I understand it is fluctuations in the interest rates we will be paying on the NRAH payments which will see a reduction from a fixed rate to a floating rate which will mean a saving for the government.

Mr MARSHALL: That is the total of the $75 million reduction in that year?

The Hon. A. KOUTSANTONIS: I am advised yes.

Mr MARSHALL: Thank you very much. A question on executive bonuses, referring to Budget Paper 3, page 25 and we can look at the table on 26: can you confirm whether there were any executive bonuses paid either to chief executives or other executives in the 15-16 year and whether there is a provision for any such payments in the 16-17 year?

The Hon. A. KOUTSANTONIS: I would have to check with the Minister for the Public Sector for that. We have not budgeted for any in Treasury and Finance but I will check with minister Rau for you.

Mr MARSHALL: Does the government still maintain a policy of banning executive bonuses?

The Hon. A. KOUTSANTONIS: I would have to refer you to minister Rau.

Mr MARSHALL: You are not aware of whether there has been a change in policy in that area?

The Hon. A. KOUTSANTONIS: I would have to refer you to minister Rau.

Mr MARSHALL: Thank you very much.

Mr KNOLL: On payroll tax, if we go to Budget Paper 3, page 35, table 3.2, can the minister explain why the annual value of the extension of the small business payroll tax rebate is less than the $11.3 million budgeted in 15-16? We have seen a continuation of it.

The Hon. A. KOUTSANTONIS: I am advised there are a number of factors. Obviously the rebate changes depending on your payroll. It is very hard to know the exact number per year and there are a number of issues based on timing, based on businesses which have previously claimed the rebate which had grown or maybe had shrunk, and it changes the amount of rebate that they are offered. It is very difficult for us give you a much more accurate answer. I am not trying to be difficult. It is just very hard to know at any one time how many of these businesses will be eligible for the rebate, I am advised.

Mr KNOLL: If I could go on to Budget Paper 3, page 38, paragraph one, it talks about a $68 million downward revision since the 15-16 budget and it goes on to talk about how payroll tax growth has been impacted by compositional factors including firms moving above and below the payroll tax threshold and differential growth rates of larger employers. Has Treasury performed any analysis to understand the movement above and below the payroll tax threshold?

The Hon. A. KOUTSANTONIS: It is an initial analysis, I am advised, but nothing detailed enough to give you the answer you are looking for. If we do that modelling in the future, I undertake to give you a full briefing.

Mr KNOLL: You have stated in this paragraph the compositional factors, the reasons why there has been a reduction in payroll tax growth, so how did you come up with the $68 million figure?

The Hon. A. KOUTSANTONIS: There are obviously a number of factors. Some are the level of bracket creep that used to occur previously that is not occurring now. We make comparisons with the ABS data that is released quarterly to try to anticipate what is occurring and we are always, I understand, very cautious.

Mr KNOLL: So you are not able to provide figures on the number of businesses that have moved between threshold brackets or indeed those that began or ceased paying payroll tax?

The Hon. A. KOUTSANTONIS: There are a whole number of reasons businesses can cease to pay payroll tax, remembering that we have removed a lot of transactional taxes on restructuring, depending on the grouping requirements that are put in place and how you structure these businesses. It is very difficult to give an accurate answer and follow this because businesses are able to now restructure so freely in this state and you are seeing a lot more of that occur. I cannot give you an accurate answer other than to say that I will undertake to find out how much we do track this and get back to you.

Mr KNOLL: Okay. Except that when you talk about transactional tax freedom you are really talking about the ability of firms to be able to merge together where they were not before—

The Hon. A. KOUTSANTONIS: And separate.

Mr KNOLL: —which would have a positive impact.

The Hon. A. KOUTSANTONIS: Yes, and some can separate, too. We are a very big family business state so there are a lot of family businesses, as you would be aware, running a very successful family business yourself, that seek to separate as people reach a certain age. While, yes, some do consolidate and grow, others do shrink.

Mr KNOLL: We are obviously still on the same page, but also with reference to Budget Paper 5, the table on page 6 talks about the different payroll tax threshold brackets. Can you provide a breakdown in terms of the number of rebates provided within each payroll bracket for which the rebate is available?

The Hon. A. KOUTSANTONIS: I do not have it here but I will undertake to get you a full briefing.

Mr KNOLL: Thanks. Can the minister confirm whether Arrium has been afforded any payroll tax relief or any other kind of state taxation relief?

The Hon. A. KOUTSANTONIS: They do have, under their indenture, royalty relief for feedstock for the plant, which is considerable. I do not know if we have given them in the past any payroll tax relief or any other rebates, but I will check. My memory is that we have not, other than the royalties, which is dramatic, but I will endeavour to find out for you. My initial thought is no, other than the royalties.

Mr KNOLL: Is that royalty relief something that has recently been put in place or is that something that has been in place for a long period of time?

The Hon. A. KOUTSANTONIS: We updated it; it used to be in pounds and pence and we have now changed it.

Mr KNOLL: When was that updated?

The Hon. A. KOUTSANTONIS: I cannot remember. I think it might have been 2015 or 2014. I cannot remember when but I will undertake to find out for you.

Mr KNOLL: Thank you. Can you confirm whether ALDI supermarkets has been provided with or offered any incentives to begin trading in South Australia?

The Hon. A. KOUTSANTONIS: In terms of tax incentives, I am advised no. I do not know if the Coordinator-General has given them any assistance through any other measures or whether Renewal SA has given them any assistance; I would have to check. In terms of payroll tax or any taxes and charges that we would levy against them, I am advised no but, again, I will go back and check and get you a thorough answer.

Mr MARSHALL: I refer to Budget Paper 3, page 6. What evidence does Treasury have that South Australian household income is growing at 4.5 per cent per annum in trend terms?

The Hon. A. KOUTSANTONIS: I am advised that is their estimate of the medium to long-term growth rate.

Mr MARSHALL: So that was an estimate which was done internally in Treasury?

The Hon. A. KOUTSANTONIS: I understand in the Department of the Premier and Cabinet.

Mr MARSHALL: So the economic modelling unit still remains within Premier and Cabinet?

The Hon. A. KOUTSANTONIS: That is my understanding, yes.

Mr MARSHALL: Do they also do the employment modelling?

The Hon. A. KOUTSANTONIS: Yes, they do, but they obviously coordinate with Treasury.

Mr MARSHALL: To clarify, because I think we have been reporting for some time now that Treasury has done the estimates for the employment growth forecast for this financial year, that is incorrect; it is actually the Department of the Premier and Cabinet?

The Hon. A. KOUTSANTONIS: In consultation with Treasury, yes.

Mr MARSHALL: Are you satisfied with their performance?

The Hon. A. KOUTSANTONIS: Yes. It is very difficult to get this modelling right. I have been in politics a long time and forecasting and polling is very difficult to get right. These are statistical averages that you have to try to assume will occur going forward and they are very difficult to model. There are some proven formulas that sometimes just do not work and people get it wrong. I think attempting to criticise or be frustrated by it is counterproductive. I think they are what they are and you work within the parameters you have, and you focus on policy.

Mr MARSHALL: When did that modelling unit move from Treasury to the Premier's department?

The Hon. A. KOUTSANTONIS: I do not know, I would have to find out for you. We will check. The guess is 2013, but I will have to go back and check.

Mr MARSHALL: Does Treasury commission any of its own independent modelling to verify the forecast provided by DPC?

The Hon. A. KOUTSANTONIS: They work cooperatively together, but whether we ask third parties to model and check, I am advised no, we do not.

Mr MARSHALL: What does the Treasurer think of the Deloitte Access Economics employment growth forecast for South Australia this year?

The Hon. A. KOUTSANTONIS: I do not have them here in front of me, but—

Mr MARSHALL: It is significantly lower than what is provided in the budget.

The Hon. A. KOUTSANTONIS: Deloittes, CommSec and NAB all come out with estimates. You can take an average of the average, you can rely on the ABS data, or you can rely on the Treasury or DPC data. It is very difficult to have accurate forecasting, so we are better off focusing on policy and doing everything we can—to borrow a term from the Leader of the Opposition—to take the handbrake off and allow the economy to grow by investing in it and cutting taxes.

I have never seen a set of numbers forecast by any government in Australia come out spot on. It is probably the exception rather the rule that they come out accurate. It is very difficult to forecast. I remember talking with treasurer Hockey and current Treasurer Morrison about it as well. It is very difficult to model, and it is a bugbear of the Council of Australian Governments and finance ministers, but it is something that you have to work within.

Mr MARSHALL: Are there better methods of forecasting employment growth? Let's be quite serious: the DPC estimate for employment growth last financial year was double what was actually achieved. Has anything changed or should we essentially halve the estimate this year as well?

The Hon. A. KOUTSANTONIS: The revisions, I am advised, for the last budget were 1 per cent. In the Mid-Year Budget Review, they revised down to 0.25 per cent. In this budget they are back up to 0.5, then going forward, going up to 1 per cent. There is a lot of volatility in them. The best thing we can do is focus on policy outcomes to try to stimulate as much growth as we can. I do not get that hung up on the forecasts.

Mr MARSHALL: What is the employment growth forecast for this year?

The Hon. A. KOUTSANTONIS: It is 0.75 per cent.

Mr MARSHALL: You just said, less than a minute ago, 0.5. Which one is it?

The Hon. A. KOUTSANTONIS: No, that was 2015-16.

Mr MARSHALL: So the forecast for 2015-16 was—

The Hon. A. KOUTSANTONIS: It started at 1 per cent, then we revised it down in the Mid-Year Budget Review, and then back up.

Mr MARSHALL: After you finished the year? You had a forecast after you had finished the year?

The Hon. A. KOUTSANTONIS: We had April data so we put that in.

Mr MARSHALL: How confident are you—are you using exactly the same methodology for this year that was used last year?

The Hon. A. KOUTSANTONIS: I think it is best that politicians do not get involved in the methodology that the independent agencies—

Mr MARSHALL: It is pretty important.

The Hon. A. KOUTSANTONIS: Well, yes, but it is also better that there be no political interference in the way the methodology is done to suit a political preference.

Mr MARSHALL: But it is the same methodology last year and this year?

The Hon. A. KOUTSANTONIS: Yes.

Mr MARSHALL: No changes?

The Hon. A. KOUTSANTONIS: No. I want to make the point that it is very important that politicians do not get involved in the drafting of the methodology to try to draft outcomes to suit policy announcements. It is very hard for agencies to model policy initiatives and what impact they will have on employment growth. It is very hard for them to do that without knowing, obviously because generally policy announcements are kept within government, so it is very hard to go out and consult on them. You try to get as much information as you can from industry groups and individual employers to try to understand it.

Mr MARSHALL: Are we the only jurisdiction in Australia where the employment modelling is done in the Department of the Premier and Cabinet rather than Treasury?

The Hon. A. KOUTSANTONIS: I do not know. I would have to check for you.

Mr MARSHALL: Are you aware of any other jurisdiction where employment modelling has been moved to a Premier's department?

The CHAIR: While we are looking for the answer, which sounded very similar to the question beforehand, I just want to acknowledge that the member for Schubert has retired and has been replaced by the member for Davenport.

Membership:

Mr Duluk substituted for Mr Knoll.

The Hon. A. KOUTSANTONIS: I have just been advised by the Under Treasurer that generally this forecasting is done cooperatively between first ministers and Treasury and their agencies do it cooperatively across the country. Where the individual agency is located between either the first minister and the Treasury might be unique in South Australia, I do not know. I would have to check with other Treasurers. But I do not think it really matters where it is located, because they do work so cooperatively well together, and they have to.

Mr MARSHALL: You are in a difficult position, are you not, Treasurer, because you rely on those models to project state-based taxation revenue, and it is so wildly inaccurate that in the Mid-Year Budget Review you were forced, I think humiliatingly, to have to writedown the forecast for state-based taxation review by approximately $360 million or $370 million, and then a further $100 million in the state budget that has just been brought down. This is a dangerous situation if you do not get those forecasts right.

You are completely reliant, as you have just suggested, on the Premier's department giving you this forecast. Are we heading for another massive writedown in state-based taxation revenue in the Mid-Year Budget Review this year?

The Hon. A. KOUTSANTONIS: Treasury does its own modelling on its tax receipts. You are talking about jobs growth modelling, and I think you should not confuse the two. I do not think there is anything humiliating or otherwise about having to reflect what is actually going on in the economy. We are facing some serious challenges. I do not think there is anyone in the government or the community who says our current level of economic growth is satisfactory or that the unemployment rate is good enough. We want, obviously, to improve all those numbers, so I think terms like 'humiliating' are wearing on the goodwill I am trying to show you in this estimates committee.

Mr MARSHALL: What was the total writedown in state-based taxation revenue effected in the adjustments made to the forward estimates, both in the Mid-Year Budget Review and the budget brought down in July?

The Hon. A. KOUTSANTONIS: Budget to budget, from the total taxation revenue writedowns since the 2015-16 budget across the forward estimates, there is a writedown of $795.9 million.

Mr MARSHALL: What is the driver? Because, let's face it, you have done modelling that suggests what that state-based taxation revenue is, and I think you have just given a figure of $795 million worth of state-based taxation revenue writedowns. What is the driver of that? Is it just the slowing economy? Is it the high level of unemployment? Is it people giving up confidence to effect transactions in this state after a 14-year government?

The Hon. A. KOUTSANTONIS: The biggest reductions are in gambling taxes. Gambling taxes have taken a very big hit, and part of the reason for gambling taxes decreasing is harm minimisation measures are working.

Mr MARSHALL: How much of the $795 million was that?

The Hon. A. KOUTSANTONIS: The big number there was $121 million.

Mr MARSHALL: Can you provide to the committee the breakdown of that $795 million?

The Hon. A. KOUTSANTONIS: I will give it to you now.

Mr MARSHALL: Thank you.

The Hon. A. KOUTSANTONIS: The other one, of course, was payroll tax, which was down $416 million across the forward estimates. So, yes, it is reflecting a low wage growth environment where there is lots of wage restraint in the economy, which is something we are trying to reflect in our own measures in the budget, and our next largest one is gambling taxes. Insurance taxes are down nearly $50 million across the forward estimates, land tax is down $53 million, conveyance duty is down $90 million and motor vehicle taxes are down $51 million. I think that reflects writedowns in changing circumstances in the economy but, as I said, I hope that we get these wrong and that we do return to trend and we have an upside.

Mr MARSHALL: Last year you had a similar story, that they were tough times and that there was a tough forecast. Since that time, in just a 12-month period you have had to write down revenue into the state by almost $800 million over the forward estimates. This year's jobs budget provided a centre point of a $109 million stimulus. Last year's stimulus measures did not work, but this year it is a comparatively small $109 million to solve a revenue problem created by the policy settings of almost $800 million. They are completely inadequate.

The Hon. A. KOUTSANTONIS: Without wanting to quarrel with the Leader of the Opposition, I am not going to increase taxes to fill the gap, which I think is what he is arguing for.

Mr MARSHALL: Well you have. That is exactly the point—you have.

The CHAIR: Order! He is answering your question.

Mr MARSHALL: The emergency services levy, solid waste levy.

The Hon. A. KOUTSANTONIS: I am just following your advice on the solid waste levy, and the emergency services levy is hypothecated and does not go towards—

Mr MARSHALL: Taxi tax.

The Hon. A. KOUTSANTONIS: —our ability to fund measures.

Mr MARSHALL: Sorry, did you just say that it is a hypothecated—

The Hon. A. KOUTSANTONIS: Yes, it goes towards the emergency services. I cannot collect that money and spend it on something else. It goes towards spending within the emergency services.

Mr MARSHALL: It certainly offsets what the government had previously provided out of general revenue. It completely and utterly props up the bottom line of this state government.

The Hon. A. KOUTSANTONIS: That is right. So, by returning those remissions, you would be either having to take a look at whether you would increase taxes or whether you would have to not proceed with tax cuts that are in place or job stimulus measures because you have made the largest spending commitment of the opposition almost immediately after the last state election and you will have to explain to the people of South Australia how you can fund those.

I remind the committee that those remissions are paid for out of other state taxes, and those state taxes are ones that we are endeavouring to try and lower for business. If the Leader of the Opposition returns those remissions, instead of cutting taxes that will create jobs and employment growth, he put South Australians at a disadvantage. I think what the underlying changes in taxation revenues are since the last budget just reflect the changes in the economy. We are trying to consume the closure of Holden, and that has dramatic impacts on our confidence.

One of the biggest problems we have in this state is that our components sector is so large. It does not just supply General Motors Holden: it supplies Toyota and Ford as well. Given the commonwealth government's cuts to the automotive assistance scheme, and losing that industrial base in the nation, we have a much larger over-representation on a per capita basis of those types of manufacturing industries in this state, which is going to make it very hard for us to consume them.

A lot of these numbers reflect the uncertainty that we face with that industry leaving, so that is why we have cut taxes, that is why we have reformed WorkCover, that is why we have campaigned very hard to get the subs, that is why we are investing dramatically in STEM subjects in schools and upgrading schools, and that is why we are offering South Australian businesses jobs incentives to go and employ people by paying them $10,000 or $4,000, depending on their eligibility. I think we are doing a lot within our current circumstances to try to stimulate the economy.

Mr MARSHALL: With respect, it is clearly not working because last year you made it clear that we were in a perilous situation, and you brought down the jobs budget to arrest the situation. Since then, it has got worse by about $800 million in terms of state-based taxation revenues. So, is it going to get even worse? Can you rule out any further writedown or diminution of state-based taxation revenue in the Mid-Year Budget Review or in next year's state budget?

The Hon. A. KOUTSANTONIS: The economy is still growing. It is just not growing as fast as we—

Mr MARSHALL: Can you rule out any further writedowns in state-based taxation revenue?

The Hon. A. KOUTSANTONIS: Hang on—no Treasurer can.

Mr MARSHALL: So you cannot rule out further writedowns.

The Hon. A. KOUTSANTONIS: I do not want to quarrel. I just want to answer the question without you trying to interject constantly. What I am saying to you is that we are forecasting growth, just not as fast as we had hoped. We did create 6,900 jobs—

Mr MARSHALL: Part-time jobs.

The Hon. A. KOUTSANTONIS: They are good jobs. I do not think you should be disparaging people in part-time work. I think the economy is doing better—it is growing. Trying to equate revenue writedowns as a sole link to a healthy or bad economy is unfair. If that is the case, you are arguing against what is occurring in the commonwealth, where they are having similar issues.

Mr MARSHALL: I am not concerned about that. I am concerned about our state budget.

The Hon. A. KOUTSANTONIS: I am concerned about the nation, and I think you should be too. What we are showing is that there is growth in the economy. We are going to create jobs, we are going to grow the economy, we are investing in stimulus and we are cutting taxes. I think there is a much more positive outlook, if the Leader of the Opposition assisted us rather than talking South Australia down constantly, and always refusing to accept that we have created new jobs. I think he hurts the South Australian economy.

Mr MARSHALL: How many hours does somebody need to be working to be qualified as employed in South Australia with the ABS statistics—part-time employed, which seems to be your focus at the moment?

The Hon. A. KOUTSANTONIS: One.

Mr MARSHALL: One hour. So, if somebody works for one hour, this is the employment that you are celebrating in South Australia, that part-time jobs are really good jobs. How do you justify the projected 4.5 per cent increase in household income in your document with the very clear almost strategy of this government now towards the casualisation of employment in this state?

The Hon. A. KOUTSANTONIS: I think that is a damning criticism of the commonwealth government and the Prime Minister and does not serve you well, and probably reflects—

Mr MARSHALL: Just get on with the answer.

The Hon. A. KOUTSANTONIS: I am—it probably reflects why you have had the worst result in this state since 1983 under your leadership. I think that type of—

Mr MARSHALL: Have you got an answer?

The Hon. A. KOUTSANTONIS: I am.

Mr MARSHALL: What is it?

The CHAIR: Order!

The Hon. A. KOUTSANTONIS: It is that type of negative—

Mr MARSHALL: What is your answer?

The CHAIR: Order, leader!

The Hon. A. KOUTSANTONIS: That type of negative commentary—

The CHAIR: Order!

The Hon. A. KOUTSANTONIS: —on part-time employment is really unnecessary.

The CHAIR: Order!

Mr MARSHALL: What, one hour a week is enough?

The CHAIR: Order! Order!

The Hon. A. KOUTSANTONIS: That assumes that every single one of those 6,900 people working one hour a week—

Mr MARSHALL: You do not even know whether we worked more hours last year.

The CHAIR: Leader, leader!

The Hon. A. KOUTSANTONIS: What an appalling thing to do and say.

Mr MARSHALL: You do not know the answer.

The CHAIR: Leader!

Mr MARSHALL: First of all, you said there were 6,000 full-time jobs created in South Australia last year.

The Hon. A. KOUTSANTONIS: Screaming will not—

The CHAIR: I am standing up again, leader!

Mr MARSHALL: You do not care about people in South Australia.

The CHAIR: Leader! Let us have the answer to a question and then you can go into your next question. Treasurer.

The Hon. A. KOUTSANTONIS: I do not think screaming is a substitute for policy, ma'am. It does not suit this committee to have the Leader of the Opposition screaming when it is not going his way.

The CHAIR: Order!

The Hon. A. KOUTSANTONIS: What we are saying is that not every single one of those 6,900 jobs created is just one hour's work. It is the criterion that the ABS uses.

I think that the Prime Minister and all the Australian governments—states, federal and local government—are working very hard to try and do everything we can to improve our nation's economy, and that includes South Australia. There has been a lot of cooperation at a federal and state level, and I think that cooperation has been borne out in infrastructure works across the state.

We have seen the state partner with the commonwealth government on Torrens to Torrens, on Darlington, on the Northern Connector, on the Australian submarine program, on future of frigates and on the offshore patrol boats. We have seen the South Australian government and the commonwealth government partner in focusing innovation. You have seen minister Frydenberg, and the state government talking on the same level about energy intensity schemes being discussed at the COAG. I think cooperation is a much better way to try to solve our issues rather than this fake conflict.

Mr DULUK: Of those 6,000 part-time jobs, is there a breakdown of hours worked within that?

The Hon. A. KOUTSANTONIS: We do not have that here. We will check with the ABS and get back to you.

Mr MARSHALL: I refer to Budget Paper 3, page 96. Can you explain why private new business investment in South Australia declined by 11 per cent in the 12 months ending March 2016?

The Hon. A. KOUTSANTONIS: Sorry?

Mr MARSHALL: It is in your document, Budget Paper 3, page 96, paragraph 3. Can you explain why private new business investment in South Australia declined by 11 per cent in the 12 months ending March 2016?

The Hon. A. KOUTSANTONIS: I am advised that a large portion of that is the resources sector. We have seen a dramatic drop in commodity prices. I think, other than gold, you have seen a dramatic decrease. You have seen, obviously, a decreased level of investment in onshore investment and exploration of petroleum and minerals.

Mr MARSHALL: Have you produced a forecast—if so, who has done it—for private business investment in South Australia for this current financial year?

The Hon. A. KOUTSANTONIS: No, we do not do that. That is the ABS.

Mr MARSHALL: Just to clarify this, there is no projection by government any more regarding likely future investment in this state for this current financial year?

The Hon. A. KOUTSANTONIS: I understand that has always been done by the ABS. I am not sure that is a function that we ever did, but I will check and get back to you.

Mr MARSHALL: Have you not previously produced press releases talking about the number of projects which are on the books going forward? Is that not being done any more?

The Hon. A. KOUTSANTONIS: I think that is a separate question from whether Treasury do modelling on this, whether we tally new private approvals. The major projects directory is still ongoing; that still occurs. I think that is what you are talking about.

Mr MARSHALL: When will that be published next?

The Hon. A. KOUTSANTONIS: I would have to speak to the minister responsible.

Mr MARSHALL: So that is not something which is across government, out of Treasury? That is just sector by sector?

The Hon. A. KOUTSANTONIS: No, I think that is traditionally done by the Minister for Infrastructure.

Mr MARSHALL: Have you done any modelling to potentially look at whether stamp duty cuts would bring forward any investment in South Australia? Currently, we have the stamp duty concessions, which cut in on 1 July next year and 1 July of the year after. Has there been any work done to bring that forward to stimulate further business investment in South Australia?

The Hon. A. KOUTSANTONIS: Have we accelerated the tax cuts; is that your question?

Mr MARSHALL: Correct. Has any modelling been done to accelerate those tax cuts?

The Hon. A. KOUTSANTONIS: No, we have not done any modelling on bringing them forward and what the impacts of those would be. We did bring them forward in the last Mid-Year Budget Review. I am not planning on bringing them forward now with the other measures that are in place. They are working together in concert well. I do not think bringing them forward would create too much instability within the property market in terms of commercial sales. I do not want to increase any uncertainty there. It is now factored into the market and I do not want to change that.

Mr MARSHALL: In the 12 months until the end of March, there was a fall in private business investment in South Australia of 11 per cent. A lot of that was related to mining, as you have already pointed out. What do you envisage that will be for this current financial year? You say you have not done any specific modelling, but—

The Hon. A. KOUTSANTONIS: I hope it improves.

Mr MARSHALL: Do you think it will be an improvement?

The Hon. A. KOUTSANTONIS: I hope it does. Given the rate that gas prices are increasing, I think there is now very little argument for the market not to be investing in more exploration in the Cooper Basin. At the upcoming COAG, I would like to see the moratoriums lifted in Victoria and policies in New South Wales liberalised to allow more exploration of unconventional gas, which will no doubt benefit the South Australian Cooper Basin. I would like to see copper prices returned to trend, which would see a lot more investment in South Australia. I would like to see uranium commodity prices improve.

A lot of this is dependent on commodity prices, until they improve. Given that we are heading into a US presidential election cycle, I do not know what impact that will have on worldwide commodity prices in the uncertainty about that, but I understand that will bring about some uncertainty. I do not know what impacts on commodity prices Brexit will have, and I do not know how reliable the growth forecasts are in China or how large their stockpiles of commodities are there.

There are a number of variables to that new private investment. There are things going in our favour: the Australian dollar dropping in value, which I think is quite substantial. I think our permissive regime, our exceptional regulatory framework, does a lot to incentivise a lot more investment here in South Australia than in other jurisdictions. In the end, it comes down to the ability to raise capital, and raising capital is very difficult in the commodities business.

Mr MARSHALL: Would you hope that South Australia would be comparable with other states, though, in terms of attraction? They would be subject to the same international vagaries of exchange rates and Brexit and other issues that you raise. Would you expect that South Australia should be able to achieve the national average private business investment percentage increase this year?

The Hon. A. KOUTSANTONIS: I would like us to meet our per capita results on every metric, but the truth is that with commodities you cannot use those generic qualifications because we have different commodities from other jurisdictions. For example, South Australia has overwhelmingly the largest amount of resources of copper of all the jurisdictions, so copper prices decreasing has a much larger impact on South Australia than it does on other states.

We are the largest onshore producer of oil, so when the oil price drops it has a larger impact on South Australia than on other jurisdictions. When the gold price increases, or the iron ore price increases, it dramatically improves Western Australia's metrics. When the coal price increases and decreases, it affects New South Wales and Queensland. I do not think you can use those generic assessments.

Mr MARSHALL: I refer to Budget Paper 3, page 62, table 4.5. Can you explain what has driven the $181 million revaluation of the workers compensation liability? Could it perhaps be the revaluation related to the changes to cancer compensation for CFS and MFS workers?

The Hon. A. KOUTSANTONIS: I am advised that they are actuarial assessments, but that question is better directed to the Attorney-General.

Mr MARSHALL: On Budget Paper 5, page 89, can you confirm the cost of administering the wireless small business loan scheme?

The Hon. A. KOUTSANTONIS: Can you repeat that, sorry?

Mr MARSHALL: The cost of the wireless small business loan scheme, Budget Paper 5, page 89.

The Hon. A. KOUTSANTONIS: The cost of administering it or the cost of delivering it?

Mr MARSHALL: Administering it.

The Hon. A. KOUTSANTONIS: Administering it. I would have to check with State Development and get back to you.

Mr MARSHALL: Thank you very much. I refer to Budget Paper 3, page 15. I would like to explore the issue of carryover expenditures. Can you confirm the key drivers of the $55 million in carryover expenditures from the 2015-16 financial year into future years? I am generally interested in the mechanism for agreeing to a carryover because often departments are given a budget, 'Use it or lose it,' but in this instance you have authorised $55 million. Can you tell us your methodology for approval and what departments they were?

The Hon. A. KOUTSANTONIS: The Leader of the Opposition is right. We do not generally like approving carryovers, but sometimes they are tied to commonwealth money or commonwealth grants. It could be a time-limited project. Another reason is that infrastructure could be delayed where there are contractor problems. Those are general reasons why we would accept carryovers.

Mr MARSHALL: But I think they are more on a capital item. This is more a current expenditure. No, sorry; they are capital investment expenditures. Okay, thank you very much. I refer now to Budget Paper 3, page 21, which talks about the payment to non-government schools:

In addition, a low interest loan facility of $250 million has been established for capital support for non-government schools. Schools will be able to apply for loans for the construction of new and updated learning facilities…

Is this broader than STEM?

The Hon. A. KOUTSANTONIS: Yes.

Mr MARSHALL: So, they have a different regime?

The Hon. A. KOUTSANTONIS: Yes.

Mr MARSHALL: They have greater flexibility. What is the impact of this loans program on the net operating balance for each of the forward estimates years?

The Hon. A. KOUTSANTONIS: There is no impact on the operating balance across the forward estimates.

Mr MARSHALL: Why is that?

The Hon. A. KOUTSANTONIS: Because it is borrowings.

Mr MARSHALL: Is there not an interest—

The Hon. A. KOUTSANTONIS: They pay the interest. We do not pay the interest.

Mr MARSHALL: Say that again, sorry.

The Hon. A. KOUTSANTONIS: The schools pay the interest. We do not pay the interest.

Mr MARSHALL: They pay the total. There is no—

The Hon. A. KOUTSANTONIS: Subsidy? No.

Mr MARSHALL: No subsidy and no cost for administering the scheme.

The Hon. A. KOUTSANTONIS: We are developing the framework with the independent schools, the Catholic sector and the other religious organisations.

Mr MARSHALL: The costs of administering it are just dealt with in the—

The Hon. A. KOUTSANTONIS: There is a small administration fee. We are not charging guarantee fees or anything like that but there is a small administration fee. They borrow at our borrowing costs and they pay the interest.

Mr MARSHALL: Thank you very much. I am interested in the explanation given on page 24 regarding expenditures between agencies. Essentially, note B on table 2.5 talks about a new treatment. If we look at that same table last year, the budgeted expenditures for 2015-16 were in excess of $15 billion. They are now $13.99 billion. Can you give us details of how this has occurred and whether you will be providing a detailed reconciliation of these figures to demonstrate how the financial report has specifically changed?

The Hon. A. KOUTSANTONIS: I will let the Under Treasurer answer this. Apparently, last year we used the Australian accounting standard to match the agency statements, and this year we used the government financial statistics for a consistent approach. I will allow him to expand on it.

Mr MARSHALL: Thank goodness.

Mr REYNOLDS: In this table last year each agency was listed with their expenditure matching the numbers in the agency statement.

Mr MARSHALL: Yes.

Mr REYNOLDS: That is done on an Australian accounting standards basis the Auditor-General would use.

Mr MARSHALL: Yes.

Mr REYNOLDS: The rest of this document is done on a government financial statistics basis for ABS purposes. That is where you are get net operating balance net lending, so we have made this table match the rest of the numbers in this document. So, now the total number of spend matches the expenditure for agencies on the previous table, otherwise they were an inconsistent treatment. The biggest difference between those is where agencies pay each other. An example of that is where agencies pay Shared Services for their works. Previously, that was accounted twice on this table—once where the agency paid it, and once where Shared Services and DPC purchased the services or their employee costs. So, we have made it internally consistent with the rest of the document so that it only gets counted once.

Mr MARSHALL: Are any other states or territories using this new standard?

Mr REYNOLDS: This is not a new standard. We are just making this table match this document.

Mr MARSHALL: Sure, but is any other jurisdiction using this new interagency reconciliation methodology?

Mr REYNOLDS: Every government across the country uses this methodology. It is just a choice for us as to which numbers we showed on this particular table to add up, but everyone uses government financial statistics in line with the ABS requirements; that is the COAG agreement.

Mr MARSHALL: Is it possible though, for clarity, for you to provide a reconciliation between the table of both methodologies so that we can see that, using the old methodology and the current methodology and what those items would be of where they basically cancel each other out?

The Hon. A. KOUTSANTONIS: I am not sure how that would assist the committee.

Mr MARSHALL: It is a new format and it does diminish by more than a billion dollars. We accept the explanation that was provided, but we would like the detail of what they were.

The Hon. A. KOUTSANTONIS: I will consider the request.

Mr MARSHALL: What aspect of it do you need to consider?

The Hon. A. KOUTSANTONIS: All of it.

Mr MARSHALL: You would have to get a briefing to find out what it even is first; you have no idea. Do you actually know the difference—

The CHAIR: Order!

The Hon. A. KOUTSANTONIS: Either do you; you are asking the questions.

The CHAIR: Order!

Mr MARSHALL: —between a debit and a credit?

The CHAIR: We are nearly there. You have all been very good; let's keep going.

An honourable member interjecting:

The CHAIR: Okay, I was exaggerating.

Mr MARSHALL: I refer to Budget Paper 3, page 24, which is the exact place we were at so you do not even need to turn the page. With the Health and Ageing line, can you provide any plausible explanation as to why the health budget in South Australia is actually falling between the current year and next year and then between next year and the year after? Is the Treasurer suggesting in this table provided in his budget that we are actually going to be cutting overall expenditure to health for the next two years?

The Hon. A. KOUTSANTONIS: There are a number of efficiencies being made in Transforming Health where they are doing the same amount of activity with less and some of the operating portions of capital projects are coming to an end, but it is still a substantial spend across the forward estimates.

Mr MARSHALL: But you do confirm that that is what that is specifically showing: that next year and the year after health expenditure for two consecutive years will be falling? There is no other odd treatment here?

The Hon. A. KOUTSANTONIS: When you say 'health expenditure', we are not talking about treatment of patients, we are talking about—

Mr MARSHALL: Departmental expenditure.

The Hon. A. KOUTSANTONIS: —some expenditure that is dropping because projects are coming to an end or there are efficiencies being made within Transforming Health.

Mr MARSHALL: For clarity, there is no other explanation that the Department for Health is actually going to have a lower budget next year and the year after, two years in a row?

The Hon. A. KOUTSANTONIS: I understand that the Department for Health will be before estimates; you can ask the minister.

Mr MARSHALL: Thank you very much. I refer to Budget Paper 3, page 57 on the HomeStart privatisation. What aspects of HomeStart is the government looking to privatise: the entire loan book, a portion or the entire institution itself?

The Hon. A. KOUTSANTONIS: I think we would like to keep the institution in public hands, but we certainly are interested in the loan book. We have had a lot of interest from the private sector through the unsolicited bid process about HomeStart's book. I would like to do it in an orderly way where we go out to the market and have a look at: is it worth our while offloading the loan book? But I think, as an institution, I would like to keep it in public hands.

Mr MARSHALL: Can you explain what has enabled the $15.6 million return of capital from HomeStart in the 2015-16 year? It is on page 81, table 5.11.

The Hon. A. KOUTSANTONIS: It was a dividend announced in last year's budget.

Mr MARSHALL: But what has enabled that? Was it an overaccumulation in HomeStart?

The Hon. A. KOUTSANTONIS: They were above their benchmarks so they had surplus funds and we took it as a dividend.

Mr MARSHALL: Is there any further repayment likely this financial year in the budget?

The Hon. A. KOUTSANTONIS: Not that we have made any decision on, no.

Mr MARSHALL: What has been done on the privatisation to date? Who is responsible for managing this process? Is it within Treasury and Finance?

The Hon. A. KOUTSANTONIS: I am advised it is an across-government task force with Treasury advisers on board, headed up by the Coordinator-General.

Mr MARSHALL: Thank you very much. When did that process start?

The Hon. A. KOUTSANTONIS: I will take that on notice and get back to you.

Mr MARSHALL: Will the state government guarantee first homeowners and seniors will continue to have access to low-deposit and low-rate mortgages?

The Hon. A. KOUTSANTONIS: Who currently have loans, or are seeking new loans?

Mr MARSHALL: Seeking new loans—although, now that you raise it, both. I would be flabbergasted if you would act retrospectively, but seeing as you raised it—

The Hon. A. KOUTSANTONIS: No-one would be changing people's contract conditions. We will wait to see what this process throws up.

Mr MARSHALL: But can you guarantee that first homeowners and seniors will continue—

The Hon. A. KOUTSANTONIS: It is not my intention to not have the institution offering this service. What I am interested in is to see whether or not the loan book is of value to the private sector. I think there is a value in the government having HomeStart.

Mr MARSHALL: Sure, but there is also a value to low-income earners and seniors to having access to low-rate mortgages.

The Hon. A. KOUTSANTONIS: I agree.

Mr MARSHALL: So how do you balance those two issues off against each other?

The Hon. A. KOUTSANTONIS: There have been no policy announcements or policy shifts that we would stop issuing these types of loans. That is not what I am interested in. What I am interested in is to see what the value of the loan book is.

Mr MARSHALL: Is the government receiving or seeking any external advice on this privatisation process?

The Hon. A. KOUTSANTONIS: Yes, we will be.

Mr MARSHALL: Is that already underway?

The Hon. A. KOUTSANTONIS: I will get more advice for you, but I am advised we are in the process of a recruiting a firm to do the scoping study for us.

Mr MARSHALL: What is the time line for the privatisation?

The Hon. A. KOUTSANTONIS: I can come back to you with a more definitive answer after we have the consultants in place and they have completed their scoping study.

Mr MARSHALL: How will the state government protect the interests of existing HomeStart customers?

The Hon. A. KOUTSANTONIS: They have contracts in place.

Mr MARSHALL: Would you envisage that the privatisation would be complete by the end of this year?

The Hon. A. KOUTSANTONIS: I cannot answer that.

Mr MARSHALL: I refer to Budget Paper 3, page 56. I just have a couple of questions regarding commonwealth/state relations. In relation to the proposal to give states a share of personal income tax revenues, are you able to provide an update on how this proposal put forward by the Premier—

The Hon. A. KOUTSANTONIS: Premiers.

Mr MARSHALL: —and I am sure never supported by you, but publicly you are standing as one with him—is progressing?

The Hon. A. KOUTSANTONIS: Premiers Baird and Weatherill.

Mr MARSHALL: That wasn't the question. How is it progressing?

The Hon. A. KOUTSANTONIS: I am just telling you who was actually putting up the proposal. It was rejected by the Prime Minister.

Mr MARSHALL: Is the proposal included on the agenda for the next COAG meeting?

The Hon. A. KOUTSANTONIS: The Prime Minister put up a separate proposal which was for a different type of ability for states to live with their own income tax, as opposed to what we were advocating, which was for a portion of the national income tax take. We are working at a departmental level. I think it was pretty obvious from the last COAG meeting that the Prime Minister offered a form of tax reform to the states. That was rejected, and we then went off to continue to work on how we reform our tax-based system. I think the Prime Minister will probably have more to say about that over the next few months as he gets his feet under the table.

Our view has not changed: there is a fiscal gap between our health needs and commonwealth funding. I thought it was quite interesting that the Prime Minister made a speech just after the election where he conceded, I think quite bravely, that the 2014-15 budget, which made dramatic cuts to health, did a great deal of damage to the commonwealth government. He acknowledged that there is a gap, and he did go some way to filling that gap, but not entirely. I think this Prime Minister, probably more than the last, understands the fiscal gap and understands state governments better than his predecessor. I am meeting with Treasurer Morrison next week—

Mr MARSHALL: I am just asking about whether it was on the agenda for the COAG meeting. That was the only question.

The Hon. A. KOUTSANTONIS: Tax reform is a constant agenda item.

Mr MARSHALL: Does it remain the position of the state government that we should increase the GST to 15 per cent in South Australia?

The Hon. A. KOUTSANTONIS: It is certainly the position of the government that we should extend GST to financial services.

Mr MARSHALL: Which financial services in particular? For example, would it affect deposits? Withdrawals? Which financial services?

The Hon. A. KOUTSANTONIS: More about turnover from banks rather than individuals.

Mr MARSHALL: Which financial services in particular would you like to see the GST extended to?

The Hon. A. KOUTSANTONIS: That is the whole body of work that the Premier has been asking to be done, is to—

Mr MARSHALL: But I asked him this same question last year and did not get an answer. It is one thing to say that it is our position, a firm position, to extend the GST to financial services. Can we get some clarity for the people of South Australia as to what your policy is? Which financial services? Deposits, withdrawals, insurances—

The Hon. A. KOUTSANTONIS: I think to be fair to the Premier, which I have no doubt you do not want to be, what we are attempting to do is have a discussion with the commonwealth government about the fiscal gap and ways to help them assist the states to meet that fiscal gap from cuts that they have made. One area that is taxed in other jurisdictions around the world is financial services. There is a body of work to be done between the commonwealth and the states about how extensive that tax is and what that extends to. It is far too early to say how far it will extend, other than to say there is a large body of work that needs to be done.

Mr MARSHALL: Will you rule out returning to your policy of increasing the GST to 15 per cent in South Australia?

The Hon. A. KOUTSANTONIS: Unfortunately for the Leader of the Opposition, I have no power to increase the GST. That is a matter for the commonwealth parliament, not the state parliament.

Mr MARSHALL: On competition reform, have you or has Treasury had any advice or conversations with the commonwealth as to whether incentive payments will be made available for the implementation of recommendations from the Harper review?

The Hon. A. KOUTSANTONIS: This is something I am very keen on. I think the Harper review is an excellent body of work and I think he should be congratulated on that. I am very glad that Treasurer Morrison has now elevated the Harper review to a much higher level of scrutiny by the commonwealth government. I think it is important to note that the commonwealth government, in its attempt to advocate this, is talking about incentive payments. We would like to know exactly what they are intending and how that will look. He thinks that the most important thing we can do is obviously work out collaboratively how exactly we are going to do this incentive payment scheme.

Mr MARSHALL: In terms of the omnibus questions, do we need to read them in here for Treasury?

The CHAIR: We are double-checking because I think you can leave the omnibus for everything; is that what you were just asking?

Mr MARSHALL: We did them for the Premier's department, but whether or not Treasury are happy for us—

The CHAIR: Do you have another question while we clarify what we are doing?

Mr DULUK: Treasurer, in relation to targeted voluntary separation packages, Budget Paper 3, page 22, for each department and agency can you provide the number of TVSPs offered and accepted in 2015-16?

The Hon. A. KOUTSANTONIS: Are these omnibus questions?

Mr DULUK: No.

The Hon. A. KOUTSANTONIS: Within Treasury and Finance or within the entire government?

Mr DULUK: For each department and agency.

The Hon. A. KOUTSANTONIS: I will get that for you on notice.

Mr DULUK: Wonderful, and being the total cost of those TVSPs and obviously who paid for them within each department.

The Hon. A. KOUTSANTONIS: Of course.

Mr MARSHALL: Shall we read them in just to be safe? Because this is closing in 30 seconds.

The Hon. A. KOUTSANTONIS: I undertake to answer your omnibus questions.

The CHAIR: The adjudication is we have to ask the omnibus questions of each minister, so we are going to have them now.

Mr DULUK: Thank you.

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 everyone for their help and cooperation and look forward to seeing you all again.

Sitting suspended from 13:32 to 14:30.

Departmental Advisers:

Mr D. Reynolds, Under Treasurer, Department of Treasury and Finance.

Mr K. Cantley, Executive Director, Public Finance Branch, Department of Treasury and Finance

Mr S. Hocking, Deputy Chief Executive, Department of Treasury and Finance.

Mrs T. Pribanic, Executive Director, Budget, Analysis and Performance, Department of Treasury and Finance.

Mr A. Blaskett, General Manager, South Australian Government Financing Authority, Department of Treasury and Finance.

Mr T. Burfield, Director, Insurance, South Australian Government Financing Authority, Department of Treasury and Finance.

Ms J. Hart, Acting Claims Manager, South Australian Government Financing Authority, Department of Treasury and Finance.

Ms J. Townsend, Chief Executive, Funds SA

Mr A. Pamula, Deputy Commissioner, RevenueSA.

Mr J. Montague, General Manager, Super SA.

Mr B. Tuffnell, Acting Chief of Staff.

The CHAIR: Thank you, everyone, for being here so promptly. We have no changes to announce to the committee membership, so I shall open the portfolio of Treasury and Finance. Estimate of proposed payments for the Department of Treasury and Finance are still open for examination, and I refer members to portfolio statement Volume 4. I call on the Treasurer, if he wishes to make an opening statement of any variety.

The Hon. A. KOUTSANTONIS: No, thank you, ma'am. I will introduce my advisers. We have with us Mr Andrew Blaskett, who is the General Manager of SAFA.

The CHAIR: The other advisers are as they were. Leader, do you have a statement?

Mr MARSHALL: No, thank you.

The CHAIR: We will go straight to questions.

Mr MARSHALL: On Budget Paper 3, page 52, with regard to SAFA's special dividend, can you perhaps explain to the committee, the dividend payment of $30 million in the 2015-16 year in relation to the return of excess capital from SAFA's fleet and treasury operations?

The Hon. A. KOUTSANTONIS: That was announced in last year's budget. There was an excess of capital needed by SAFA to undertake its operations, so the prudent thing to do was to return that to the budget.

Mr MARSHALL: So it is an excess of capital? Was it through the sale of assets?

The Hon. A. KOUTSANTONIS: I am advised it was retained earnings built up over time.

Mr MARSHALL: To be clear, this is an agency which has a series of areas that it receives income from and then it has its annual expenditure, and there has been a build-up of retained earnings that have been transferred to the balance sheet, and then over a period of time you determined that there was $30 million excess and you have transferred that as a special dividend to the state; is that correct?

The Hon. A. KOUTSANTONIS: I answered it in the earlier question.

Mr MARSHALL: Say that again, sorry.

The Hon. A. KOUTSANTONIS: I answered that in my previous answer.

Mr MARSHALL: What was the retained surplus for SAFA as of 30 June 2016?

The Hon. A. KOUTSANTONIS: We will not know that until the audit is completed, and we will not know that until the Auditor-General has finished his audit.

Mr MARSHALL: Sure, but there is an estimate in the budget for every agency. Every department essentially has an estimate of the result of 30 June, all subject to a range of finalisation of figures, so what was the estimated 2015-16 year result?

The Hon. A. KOUTSANTONIS: We do not have that here; we will provide you that on notice.

Mr MARSHALL: What was on the balance sheet as retained earnings as of 30 June?

The Hon. A. KOUTSANTONIS: We do not have that here; we will provide that to you.

Mr MARSHALL: Did you bring anything with you? I mean these are pretty basic questions.

The Hon. A. KOUTSANTONIS: You can be argumentative if you like.

Mr MARSHALL: It is not argumentative, but—

The CHAIR: Order!

Mr MARSHALL: —I have asked four questions and they are pretty basic questions.

The CHAIR: Order! I need to ask members to refrain from interjecting. So you are getting that on notice.

The Hon. A. KOUTSANTONIS: Yes, ma'am.

Mr MARSHALL: What was the budgeted income for the 2015-16 year for SAFA?

The Hon. A. KOUTSANTONIS: We do not have that here.

Mr MARSHALL: You do not have that here? What have you got? What is in your bag? This is ridiculous.

The CHAIR: Order! Next question.

Mr MARSHALL: What was your budgeted expenditure for SAFA for the last financial year?

The Hon. A. KOUTSANTONIS: The Leader of the Opposition is asking questions that do not make up part of the budget statement, so we will get that information for him.

Mr MARSHALL: What was the budgeted expenditure for SAFA for last year?

The Hon. A. KOUTSANTONIS: I am happy to provide this information to the Leader of the Opposition. We do not have it here. I will provide it to him on notice.

Mr MARSHALL: With respect, Chair, we are here to investigate the budget, and so I ask a question. We have got the SAFA people sitting in front of us. I think it is a reasonable question for this committee to ask the Treasurer what the projected income for SAFA was last financial year and the reply is, 'I don't have that information.'

The CHAIR: I am mindful of the time constraints.

Mr MARSHALL: Then I asked what was the budgeted expenditure for last year, and the reply is, 'I don't have that information.' What was the surplus at the end of the financial year—these are not difficult questions.

The CHAIR: Leader, regrettably we cannot control if they do not have that.

Mr MARSHALL: Can the Treasurer provide the committee—

The CHAIR: Could we perhaps move on to the next question? Keep it moving.

Mr MARSHALL: Can the Treasurer provide any explanation to the committee as to why these figures are not available at this point?

The Hon. A. KOUTSANTONIS: My advice is that the only interaction that SAFA has with the budget statements is in the dividend they provided, so the rest of the questions he is asking do not make it a part of the budget statements. I undertake to bring them to him. I am not trying to hide them; it is just that we do not have them here.

Mr MARSHALL: Extraordinary. I refer to Budget Paper 4, Volume 4, page 170. To what extent was the return of excess capital by SAFA's fleet and treasury operations enabled by the disposal of fleet assets?

The Hon. A. KOUTSANTONIS: Part of the normal operations of SAFA is to buy and sell cars as part of the fleet. They have built up surplus funds over a period of time and they returned a dividend. That is just the normal course of their operation.

Mr MARSHALL: What did SAFA raise from the disposal of the 3,100 vehicles that it disposed of last financial year?

The Hon. A. KOUTSANTONIS: I will get that for you.

Mr MARSHALL: Who is responsible for the IT system which is used in SAFA?

The Hon. A. KOUTSANTONIS: Which IT system?

Mr MARSHALL: Well, that was going to be my question because last year in this estimates committee you provided information about the implementation of a new IT system. I am just wondering whether you can give progress update on the implementation of that new system? I have the name of that if you want to know it.

The Hon. A. KOUTSANTONIS: I understand Findur is in place and operational.

Mr MARSHALL: What is the name of that system?

The Hon. A. KOUTSANTONIS: I think the acronym is F-I-N-D-U-R.

Mr MARSHALL: What does that system cover?

The Hon. A. KOUTSANTONIS: I will get you a much more detailed briefing, but I understand it just covers the general operations of SAFA and their detailed settlement processes. I will get you that on notice.

Mr MARSHALL: What was the total cost of the implementation of that system?

The Hon. A. KOUTSANTONIS: We will get that for you.

Mr MARSHALL: What was the budget?

The Hon. A. KOUTSANTONIS: We do not have it here, and we will get it for you.

Mr MARSHALL: I think we will just finish off with SAFA because so far they have not been able to provide one single, solitary useful piece of information to this committee.

The CHAIR: We are moving to Funds SA?

Mr MARSHALL: Perhaps the member for MacKillop might have a better chance.

The CHAIR: So the member for MacKillop is going to stay with SAFA?

Mr WILLIAMS: I refer to Budget Paper 3, page 66, Insurance arrangements. I have a couple of questions about insurance arrangements with the state. The budget papers state:

All government departments and statutory authorities are included in the arrangements, unless specifically exempted by the Treasurer.

Are there any agencies exempt from these insurance arrangements?

The Hon. A. KOUTSANTONIS: The only bodies that do not have SAICORP insurance, that are government owned, are the desalination plant, the Adelaide Oval and the Convention Centre. They all have private insurance through their operating bodies.

Mr WILLIAMS: So, all the agencies within government are covered under this. One of the dot points here says that moneys that are generated, including from premiums received from agencies, 'pay premiums for the government's catastrophe reinsurance program and other insurances deemed necessary and appropriate in connection with the arrangements'. What is the basis of the catastrophe insurance covered by the government?

The Hon. A. KOUTSANTONIS: Do you mean whether it is for fire, water or a flood?

Mr WILLIAMS: Yes, fire, flooding, storms.

The Hon. A. KOUTSANTONIS: Earthquakes?

Mr WILLIAMS: Yes, those sorts of things.

The Hon. A. KOUTSANTONIS: We buy insurance for property, public and products liability, professional indemnity, directors and officers liability, medical malpractice, aviation liability, terrorism, property insurance and network security and privacy.

Mr WILLIAMS: When you say 'for property', does that include assets such as roads and other infrastructure which might be destroyed or damaged in a fire, and does it include assets which come under the Coast Protection Board's management, such as severe beach erosion?

The Hon. A. KOUTSANTONIS: We insure infrastructure on roads—things like bridges, culverts—but we do not insure land. If a road is burnt, flooded or washed away, if it is not hard infrastructure that is built as part of that road, we do not insure that; we self-insure for that.

Mr WILLIAMS: What about storm damage?

The Hon. A. KOUTSANTONIS: I would have to check on that, but I think not, no.

Mr WILLIAMS: You do think that would not be covered?

The Hon. A. KOUTSANTONIS: No, but I think jetties might be, but I do not think that we cover land erosion, no.

Mr WILLIAMS: Say an esplanade got washed away—

The Hon. A. KOUTSANTONIS: That would be very bad.

Mr WILLIAMS: But if that happened in an extreme storm event? I am quite happy for you to take this on notice.

The Hon. A. KOUTSANTONIS: Sure. The first options are, of course, that a lot of the esplanade is covered by local government, and they would have their own forms of insurance. It would be their own local roads. Local government would cover a large portion of it. I can get you the breakdown. We would cover things like, I imagine, jetties and ports if we owned them. To the extent that we own infrastructure, we would cover it.

In the end, if there was a major event on the esplanade and we lost homes, infrastructure and public utilities, no amount of insurance would cover the full cost of remediation. The government would have to make a decision about how much of that local councils could bear. I imagine that the commonwealth would make the same decision about how much a state government could bear, and there would be some arrangement. Natural disasters being what they are cannot always be insured against because there are a lot of things within a natural disaster that you cannot insure. In the end, we insure ourselves through our borrowing capacity, through the taxes we raise, but we do as much as we can.

Mr WILLIAMS: So you hold a fair bit of the risk within government?

The Hon. A. KOUTSANTONIS: As much as we can. In terms of the major pieces of infrastructure, I am advised, the private operators of the desal plant, for example, are required to take out insurance, as with the Convention Centre, as with the Adelaide Oval. If something were to occur on something that was not government-owned property, and there was a large-scale terrorist attack somewhere on a private hospital or somewhere that impacted on public infrastructure that was not covered, late roads or whatever it might be, yes.

Mr MARSHALL: My question relates to Budget Paper 5, page 88, the South Australian Venture Capital Fund. How many full-time equivalents will be dedicated to administering the program?

The Hon. A. KOUTSANTONIS: It is yet to be determined.

Mr MARSHALL: It is yet to be determined, but I presume that the $750,000 per year operating expenses will be mainly full-time equivalents; is that correct?

The Hon. A. KOUTSANTONIS: As I said, it is yet to be determined.

Mr MARSHALL: How did you come up with the $750,000 budget, or is that yet to be determined?

The Hon. A. KOUTSANTONIS: We have yet to determine exactly how many FTEs we will employ in the fund management process. Once we determine that with State Development, I undertake to come to you and let you know the full details of it.

Mr MARSHALL: Nevertheless, the government has proposed a $50 million venture capital fund as a budget here of $750,000 operating expenses each year. How did you arrive at $750,000?

The Hon. A. KOUTSANTONIS: We do our very best to estimate what we think it will cost.

Mr MARSHALL: That is not the question: the question is: how did you arrive at it? What is it made up of?

The Hon. A. KOUTSANTONIS: You may think it was not the question. I am answering the question the way I see fit. You do not have to agree with me. I have undertaken to come back to you once we have a better understanding of how this will interact with the other agencies. Once I have that, I will undertake to give you a full briefing.

Mr MARSHALL: What are the components of the $750,000 worth of annual expenditure? Are there other issues, other than staff, that would be incorporated into that?

The Hon. A. KOUTSANTONIS: Once we have sorted it all out, I will give you a full detailed briefing.

Mr MARSHALL: What could they be?

The Hon. A. KOUTSANTONIS: As I said, I do not want to hypothecate here in the—

Mr MARSHALL: It is not hypothecating; it is your budget. You actually set this.

The CHAIR: Order! The minister has undertaken to bring you back an answer.

Mr MARSHALL: Hypothecate is not even a word that you would use in this—

The CHAIR: Order! Next question.

The Hon. A. KOUTSANTONIS: It is word you would use here. What I would say is that we are yet to determine exactly the make-up of how this allocation will be spent.

Mr MARSHALL: When was the venture capital fund first envisaged?

The Hon. A. KOUTSANTONIS: I have not finished answering your question.

Mr MARSHALL: When was the venture—

The CHAIR: Order!

The Hon. A. KOUTSANTONIS: I understand that your talking over me gives you an advantage. Once we have determined how this will operate and the structure of it, I am happy for you to be given a full briefing. I am not trying to be tricky here. I am just saying that we are working with other agencies in its administration.

Mr MARSHALL: When was the venture capital fund announced by the government?

The Hon. A. KOUTSANTONIS: We commissioned the McCreadie report, which was released in full. I cannot remember the date it was released, but it was well before the budget. I think the announcement of the innovation fund and the response to the McCreadie report was on budget day, but I stand to be corrected if we made it earlier. I cannot remember

Mr MARSHALL: So this was announced in the budget. This was on a recommendation of the Economic Development Board. It was the McCreadie report. It came to the government and it said that you should actually establish this venture capital fund.

The Hon. A. KOUTSANTONIS: I am not sure if the EDB made a recommendation or not. They may have supported it. It was certainly considered in the budget process.

Mr MARSHALL: What source of funds is being used to provide the $50 million?

The Hon. A. KOUTSANTONIS: Borrowings.

Mr MARSHALL: Yes, so are you going to put that capital fund in place just on an ongoing basis or a proportion of a larger capital raising?

The Hon. A. KOUTSANTONIS: It would just be part of SAFA's normal capital raising.

Mr MARSHALL: It would be part of this, so you are not putting a $50 million fund in place. It would just be as the funds are required that they will be accessed. What do you consider would be the cost of that capital?

The Hon. A. KOUTSANTONIS: It depends on when it would be required and what the borrowing rates are at the time.

Mr MARSHALL: What is the most recent cost of capital?

The Hon. A. KOUTSANTONIS: In the McCreadie report, if you read it, there were a series of stages, so we do not expect this to be ready for access this financial year unless they are well advanced projects that are prepared to access it. It will require, I am advised, matching funds from other venture capital funds. There are a series of toll gates, I suppose.

Mr MARSHALL: Tollgates?

The Hon. A. KOUTSANTONIS: Sort of, yes.

Mr MARSHALL: You mean stage gates?

The Hon. A. KOUTSANTONIS: Tollgates is fine.

Mr MARSHALL: Tollgates? That is just something else you are wanting to—is that a new toll or something?

The Hon. A. KOUTSANTONIS: This little smart alec backwards and forwards between you and me serves no purpose other than you trying to—

The CHAIR: Order!

Mr MARSHALL: You have an answer the question.

The CHAIR: Order!

The Hon. A. KOUTSANTONIS: —puff up your own chest because of your own shortcomings. It is not my fault you lost the last election. None of it is my fault.

The CHAIR: Could we use the word 'marker' perhaps?

The Hon. A. KOUTSANTONIS: I will use whatever word I want.

The CHAIR: 'Marker' will do.

Mr MARSHALL: It is a new tollgate apparently. Who pays that toll on the toll gate?

The CHAIR: Have you finished your answer, Treasurer?

The Hon. A. KOUTSANTONIS: I am trying to be as civil as I can.

The CHAIR: Thank you.

Mr MARSHALL: The question was: what was the cost of the most recent debt?

The Hon. A. KOUTSANTONIS: As we reach those tollgates—

The CHAIR: Markers.

The Hon. A. KOUTSANTONIS: Markers. Tollgates.

The Hon. S.W. KEY: Thresholds.

The Hon. A. KOUTSANTONIS: Thresholds—you would obviously have a requirement once you get to that point where there are matching funds available. I will make a decision then. I cannot give you an estimate now. It would be too premature.

Mr MARSHALL: Yes, but the question was: what was the most recent cost of debt when SAFA issued a bond?

The Hon. A. KOUTSANTONIS: I am advised around 2.5 per cent.

Mr MARSHALL: What period of time was that issued over?

The Hon. A. KOUTSANTONIS: Over a 10-year period, I am advised.

Mr MARSHALL: What was the size of that?

The Hon. A. KOUTSANTONIS: $500 million.

Mr MARSHALL: Can the Treasurer advise the committee what types of projects would qualify for the venture capital funding?

The Hon. A. KOUTSANTONIS: No, I would have to refer you to minister Maher.

Mr MARSHALL: So, this would be completely administered by him?

The Hon. A. KOUTSANTONIS: No, SAFA will administer it but it will be operated by minister Maher.

Mr MARSHALL: Well, we have SAFA here now. I am just asking what sort of projects are envisaged to be covered by this?

The Hon. A. KOUTSANTONIS: We will administer the contracts. The program would be administered by minister Maher, so you refer those questions to him.

Mr MARSHALL: Would minister Maher be doing the full investigation of whether people qualify not?

The Hon. A. KOUTSANTONIS: There will be a structure established around the Venture Capital Fund to consider and critique the proposals being put to it and there will be a series of requirements for that fund that will be determined out of the basis of the McCreadie report. The McCreadie report was made public in full. I refer that to the Leader of the Opposition; he should read it. If he would like a briefing on it, we could arrange one, and these questions should be directed to minister Maher.

Mr MARSHALL: But I am just asking the question: will it be SAFA who will be doing the due diligence on these deals, or will that be completely done by minister Maher's office or department?

The Hon. A. KOUTSANTONIS: SAFA will certainly play a role but the first part of the McCredie report and the innovation fund is for DSD to work with these early commercialisation grants with people putting up ideas who are eligible for the grants. DSD will work with them, and once they are ready for access to venture capital, they will work with SAFA about their eligibility and the terms of those contracts.

Mr MARSHALL: In fact, SAFA is actually going to be involved in the assessment; therefore, I am asking a pretty reasonable question as to what the scope is.

The Hon. A. KOUTSANTONIS: And I have been pretty reasonable in my answer—

Mr MARSHALL: You haven't given an answer yet.

The Hon. A. KOUTSANTONIS: —saying you should address those to minister Maher.

Mr MARSHALL: I don't think you know the answer.

The Hon. A. KOUTSANTONIS: Well, I have answered the question.

Mr MARSHALL: Is there any appropriation beyond the $750,000 in other departments for this assessment of all of these applications?

The Hon. A. KOUTSANTONIS: You would need to ask those other departments you are seeking information from.

Mr MARSHALL: I am actually asking you and I will tell you the reason why. I am reading from your statement, the Budget Measures Statement. Under the heading of Department of Treasury and Finance, South Australian Venture Capital Fund it says the administration costs are all in SAFA. None of them are in minister Maher's department, as you have just told this committee. Either you are misleading the committee or you just do not know what you are talking about but, either way, we would like an explanation.

The Hon. A. KOUTSANTONIS: Sure. Then refer to the other money I have allocated in the budget on top of the $750,000 that you are referring to.

Mr MARSHALL: Why would that not be in the Budget Measures Statement?

The Hon. A. KOUTSANTONIS: You are asking me about—

Mr MARSHALL: This the Budget Measures Statement as it—

The CHAIR: Order!

Mr MARSHALL: —pertains to the venture capital board.

The CHAIR: Order!

Mr MARSHALL: It does not mention the other department.

The CHAIR: Can we have one question at—

Mr MARSHALL: It only mentions the one that is up for discussion at the moment.

The CHAIR: Could we have one question at a time and allow some time for an answer?

The Hon. A. KOUTSANTONIS: Budget Paper 5, page 78, investment and innovation. You have a whole series of explanations there for the allocation issued in the budget and I would refer you again to minister Maher.

Mr MARSHALL: I am sure that talks about some excellent concepts, but I am actually interested in the Venture Capital Fund. I have asked the question: 'Who is doing the assessment?' and you have said minister Maher, but page 88, which actually deals with the Venture Capital Fund—

The Hon. A. KOUTSANTONIS: I do not think you are interested in any answers; you are just being combative.

Mr MARSHALL: You cannot even tell me who could access this.

The Hon. A. KOUTSANTONIS: You are not interested in an answer; you are just being combative. It is style over substance.

Mr MARSHALL: Is the state government taking an equity position in these ventures or the private financiers with whom the government is intending to partner with?

The Hon. A. KOUTSANTONIS: I am advised that the very definition of applying venture capital is that we will have an equity stake in the venture.

Mr MARSHALL: Who will therefore be making that assessment? Will that be minister Maher's department?

The Hon. A. KOUTSANTONIS: We will develop a governance structure, as I have already told you we would, and I will get back to you about that governance structure, which will advise and help the government make these decisions.

Mr MARSHALL: So this is not providing interest-free loans, this is the government taking equity stakes—

The Hon. A. KOUTSANTONIS: That is what venture capital is.

Mr MARSHALL: —within businesses and minister Maher's department is going to be making—

The Hon. A. KOUTSANTONIS: State Development, yes.

Mr MARSHALL: —those assessments?

The Hon. A. KOUTSANTONIS: I have just said to you—

Mr MARSHALL: Yet there is nothing in the budget for that.

The Hon. A. KOUTSANTONIS: I have just said to you they will be collaborative decisions made between SAFA and State Development and there will be a governance structure around that decision-making process which we will make public.

Mr MARSHALL: What exposure will the taxpayer have under this fund?

The Hon. A. KOUTSANTONIS: Fifty million dollars.

Mr MARSHALL: So we could lose the lot?

The Hon. A. KOUTSANTONIS: If we invested with you, we probably would.

The CHAIR: No, order!

Mr MARSHALL: I would not make an application.

The CHAIR: Order! Next question.

The Hon. A. KOUTSANTONIS: You would not be successful.

The CHAIR: Next question.

Mr MARSHALL: Is SAFA administering the Unlocking Capital for Jobs program as well?

The Hon. A. KOUTSANTONIS: Yes.

Mr MARSHALL: Were there any payments made under this program in the past 12 months?

The Hon. A. KOUTSANTONIS: I am advised that we do not make payments, we guarantee loans.

Mr MARSHALL: Were there any loans guaranteed in the past 12 months?

The Hon. A. KOUTSANTONIS: One.

Mr MARSHALL: That was made in the past 12 months?

The Hon. A. KOUTSANTONIS: On 15 March, sorry; it remains current.

Mr MARSHALL: So there were none made in the past 12 months?

The Hon. A. KOUTSANTONIS: No, only Australian Fashion Labels.

Mr MARSHALL: In fact, there have been none made in the past 16 months?

The Hon. A. KOUTSANTONIS: Only Australian Fashion Labels.

Mr MARSHALL: That does not in any way relate to my question. Can you confirm the state's total exposure under the Unlocking Capital for Jobs program as that 30 June 2016?

The Hon. A. KOUTSANTONIS: I am advised it is $3.5 million.

Mr MARSHALL: How many loans in total have been made under this scheme?

The Hon. A. KOUTSANTONIS: I think I have already answered that.

Mr MARSHALL: Just for clarity.

The Hon. A. KOUTSANTONIS: It is a guarantee fee; it is not a loan process.

Mr MARSHALL: How many loans have been guaranteed under this process?

The Hon. A. KOUTSANTONIS: One.

Mr MARSHALL: And that was a loan for $3.5 million to one company in March 2015?

The Hon. A. KOUTSANTONIS: That is correct, I am advised.

Mr MARSHALL: What has the program cost to administer for the past two years?

The Hon. A. KOUTSANTONIS: It has been absorbed within our existing operations within the agency.

Mr MARSHALL: What is the budgeted cost over the forward estimates?

The Hon. A. KOUTSANTONIS: They will continue to absorb it within their existing structures.

Mr MARSHALL: Has there been any external review of this program carried out?

The Hon. A. KOUTSANTONIS: I am advised that the EDB is conducting a review of it as we speak.

Mr MARSHALL: Who is conducting that?

The Hon. A. KOUTSANTONIS: The Economic Development Board.

Mr MARSHALL: Is it not correct that Ernst & Young have carried out a review of this program?

The Hon. A. KOUTSANTONIS: They may be doing it for the EDB but I will check.

Mr MARSHALL: Have you an explanation as to why the Budget and Finance Committee were not informed when they asked this question? In fact, they were told that Deloitte were doing some work on it.

The Hon. A. KOUTSANTONIS: I do not appear before the Budget and Finance Committee.

Mr MARSHALL: What were the findings—

The Hon. A. KOUTSANTONIS: If the Budget and Finance Committee has information that is not accurate, we will correct the record. I am giving you the best information I have at the advice available. There is no deliberate attempt to mislead you. Whatever the appropriate information, we will get it to you, if indeed the Budget and Finance Committee were told it was Deloitte.

Mr MARSHALL: Has this program been successful as envisaged by the government?

The Hon. A. KOUTSANTONIS: I think if you were an Australian fashion label, you would think it was very successful, yes.

Mr MARSHALL: But as taxpayers, has it been successful?

The Hon. A. KOUTSANTONIS: I think anchoring one of the great South Australian success stories is quite good for South Australia.

Mr MARSHALL: Are you disappointed that no loans have been guaranteed over the past 16 months?

The Hon. A. KOUTSANTONIS: My personal views are irrelevant. I think there are a number of programs that are sometimes oversubscribed and undersubscribed. The question for us is—as long as we are continually trying new policy approaches. Sometimes they work, sometimes they don't.

Mr MARSHALL: Is it time to wrap this one up?

The Hon. A. KOUTSANTONIS: I think it is too early to tell.

Mr MARSHALL: Did you have any applications last year?

The Hon. A. KOUTSANTONIS: I would have to go back and check.

Mr MARSHALL: Well, they are sitting next to you.

The Hon. A. KOUTSANTONIS: I have undertaken to go back and check.

Mr MARSHALL: So you are not aware of one single application in the past 12 months for this program?

The Hon. A. KOUTSANTONIS: I think I have already answered that question.

Mr MARSHALL: How much is this external review by Ernst & Young costing?

The Hon. A. KOUTSANTONIS: I do not know; I will have to get that information for you.

Mr MARSHALL: Who will bear the cost of that review? Will it be the Economic Development Board?

The Hon. A. KOUTSANTONIS: I do not know; I will have to find out and get back to you.

Mr MARSHALL: Isn't this something that is administered under SAFA, which we are here to—

The Hon. A. KOUTSANTONIS: If the Economic Development Board are conducting a review and they have hired external consultants to conduct the review, I undertake to come back to you, as part of the estimates process and give you that full briefing. The media are just asking me if that letter you wrote has been public before so I told them no, it is not; it is exclusive. It is brand new, because you have kept it hidden.

Mr MARSHALL: It is great that the Economic Development Board is going to do a review, but is SAFA doing a review, or have they done a review of their own?

The Hon. A. KOUTSANTONIS: They administer these programs and the review is being conducted by the EDB, as I have previously said.

Mr DULUK: Quickly getting back to the administration of the venture capital fund, in the government's RedFire report, it says the annual cost to run a venture capital fund is typically the equivalent of 2 per cent of the committed capital. So, on a $50 million fund, that would imply a cost of about $1 million. Obviously you would be aware of that. In deriving that figure of $750,000, obviously SAFA would have done some work on how to get to $750,000. What would be behind that?

The Hon. A. KOUTSANTONIS: That is a good question, and we have undertaken to get back to you with a full detailed answer. I have to say, it is a much better reasoned question than that of your leader, but you are a real Liberal—that is the difference.

Mr MARSHALL: Is it SAFA that administers the Nyrstar indemnity facility?

The Hon. A. KOUTSANTONIS: I am advised yes.

Mr MARSHALL: Budget Paper 3, page 93, table 6.1. Is Nyrstar drawing on its indemnity facility?

The Hon. A. KOUTSANTONIS: There have been no calls on us, but they are drawing down on loans that are guaranteed by the government, yes.

Mr MARSHALL: Say that again, sorry?

The Hon. A. KOUTSANTONIS: I was pretty clear. I said there have been no calls on the government, but they are using the guarantees to draw down loans they have made that the government has guaranteed.

Mr MARSHALL: What guarantee fee is Nyrstar paying?

The Hon. A. KOUTSANTONIS: I would have to check and get back to you, but I am advised they are paying a fee.

Mr MARSHALL: What is the total indemnity facility that is in place on this project?

The Hon. A. KOUTSANTONIS: I am advised that the facility is for $291.25 million.

Mr MARSHALL: Can you advise the committee how much has been drawn down so far?

The Hon. A. KOUTSANTONIS: We do not have that on us, but I will get it for you.

Mr MARSHALL: Sorry, what was the answer to what guarantee fee is Nyrstar paying?

The Hon. A. KOUTSANTONIS: We do not have that here, but I will get it for you.

Mr MARSHALL: Has Nyrstar requested any other extension or any other support with regard to their Port Pirie project?

The Hon. A. KOUTSANTONIS: I do not disclose discussions any South Australian company has publicly in the parliament and I think it is disturbing that you are inquiring into it without speaking to me privately, given the—

Mr MARSHALL: You just did. You just said the maximum was $291 million.

The Hon. A. KOUTSANTONIS: —nature of companies wanting to operate in a state where there is a certain level of confidentiality when they are dealing with government.

Mr MARSHALL: With respect, you have just told the committee that there is a maximum $291 million indemnity—

The Hon. A. KOUTSANTONIS: That is public.

Mr MARSHALL: I am just asking whether there has been an approach for any other support from the company.

The Hon. A. KOUTSANTONIS: I do not make those matters public.

Mr MARSHALL: Any other SAFA questions here? Otherwise I think we have to move on, don't we?

The CHAIR: We have some new advisers?

The Hon. A. KOUTSANTONIS: John Montague from Super SA.

Mr MARSHALL: In regard to Super SA, I refer to Budget Paper 3, page 61: the Superannuation Act 1988 requires a triennial review of the South Australian superannuation scheme. When was the last triennial review completed?

The Hon. A. KOUTSANTONIS: I am advised the last review was conducted in 2014.

Mr MARSHALL: So why does your budget paper say that it was conducted and completed and reported back in June and July 2013?

The Hon. A. KOUTSANTONIS: I am advised that, if you read the paragraph, it says:

As required by the Superannuation Act 1988, a triennial review of the South Australian Superannuation Scheme was undertaken by an independent actuary at 30 June 2013 and tabled in Parliament in July 2014. The next triennial review will be undertaken during 2016–17 for the scheme as at 30 June 2016.

Mr MARSHALL: So in fact the last independent actuarial advice regarding this was provided in—

The Hon. A. KOUTSANTONIS: June 2014.

Mr MARSHALL: —June 2013; is that correct?

The Hon. A. KOUTSANTONIS: 2014.

Mr MARSHALL: No, that was when the report was tabled.

The Hon. A. KOUTSANTONIS: July 2014 was when it was tabled in the parliament.

Mr MARSHALL: I understand when it was tabled.

The Hon. A. KOUTSANTONIS: That is when it was provided.

Mr MARSHALL: Can you just confirm that the independent actuarial advice was provided in June 2013?

The Hon. A. KOUTSANTONIS: No, I am sticking to my answer. It was provided to the parliament, as I am advised, in July 2014.

Mr MARSHALL: When was it undertaken?

The Hon. A. KOUTSANTONIS: It began at 30 June 2013.

Mr MARSHALL: That is when it began? I see, so what you are suggesting to the committee is they began an inquiry in June 2013 and they concluded it sometime between then and—

The Hon. A. KOUTSANTONIS: No, I am sorry, I have misled you. The review is as of at 30 June 2013 and it was tabled in July 2014.

Mr MARSHALL: Why did it take 13 months to table?

The Hon. A. KOUTSANTONIS: I am advised that is the normal timing of the way in which the report is conducted.

Mr MARSHALL: So it is perfectly adequate for it to take 13 months from the time of the actuarial work to the tabling? That would be commonplace?

The Hon. A. KOUTSANTONIS: I am advised, yes.

Mr MARSHALL: Can you confirm to the committee that the actuarial advice that you are going to be relying on, as required by the act, has been completed?

The Hon. A. KOUTSANTONIS: I am advised by my officers that the act has been satisfied.

Mr MARSHALL: That that was not the question.

The Hon. A. KOUTSANTONIS: That was my answer.

Mr MARSHALL: The question was, if you have to do this triennial review and it takes 13 months to deliver the report to parliament—

The Hon. A. KOUTSANTONIS: If you are asking me for a legal opinion, I will not offer it.

Mr MARSHALL: I certainly would not be asking you for a legal opinion. I might ask you how long it takes to get to the airport or something—

The Hon. A. KOUTSANTONIS: I am telling you that the advice that I have from my officers—

The CHAIR: We just need to have the answer first, followed by your next question.

Mr MARSHALL: —but I certainly would not be asking you about legal advice; that would be the last thing I would be asking about. I would like a decent—

The Hon. A. KOUTSANTONIS: I am satisfied that the act has been satisfied.

Mr MARSHALL: When do you envisage that that will be presented to parliament?

The Hon. A. KOUTSANTONIS: It was presented—

Mr MARSHALL: You are required under the act to do it every three years; that is what triennial means, so when would you envisage the next one will be provided to the parliament?

The Hon. A. KOUTSANTONIS: I am advised around June 2017.

Mr MARSHALL: So has the actuarial advice that the report would rely on been completed?

The Hon. A. KOUTSANTONIS: No.

Mr MARSHALL: Who is going to do that work?

The Hon. A. KOUTSANTONIS: The actuary.

Mr MARSHALL: Who is the actuary?

The Hon. A. KOUTSANTONIS: I am advised, PwC.

Mr MARSHALL: Did PwC do the last work?

The Hon. A. KOUTSANTONIS: Yes.

Mr MARSHALL: Does the act require the work to be done or the report to be tabled every three years?

The Hon. A. KOUTSANTONIS: I am advised that the act has been satisfied.

Mr MARSHALL: I would like, as a point of clarification, whether the act requires—

The Hon. A. KOUTSANTONIS: You can ask as much as you like, the act has been satisfied.

Mr MARSHALL: Was the 2014 publication of the report in line with the act?

The Hon. A. KOUTSANTONIS: The government abides by all laws.

Mr MARSHALL: I see, so the next one will be provided by July 2017 and PwC will be doing the work. How much will it cost?

The Hon. A. KOUTSANTONIS: I am advised that will be in the order of $150,000.

Mr MARSHALL: $150,000 and that is in the budget for this year?

The Hon. A. KOUTSANTONIS: It will come out of the fund; it will not come out of the budget.

Mr MARSHALL: It will come out of the actual superannuation fund itself. Is the Treasurer satisfied then with the accuracy of the numbers presented in the budget for the unfunded superannuation liability, given that there has been no actuarial work done since June 2013?

The Hon. A. KOUTSANTONIS: I have full faith in my advisers.

Mr MARSHALL: Has there been any actuarial advice since 2013?

The Hon. A. KOUTSANTONIS: I am advised that the actuaries within SuperSA give advice and I am satisfied that they are capable of doing a good job.

Mr MARSHALL: Would the Treasurer suggest that the investment environment has been very stable since June 2013 when the last formal actuarial advice was provided?

The Hon. A. KOUTSANTONIS: I am not qualified to make that assessment; I do not think anyone in this room is.

Mr MARSHALL: You are completely satisfied that the last actuarial advice in 2013—

The Hon. A. KOUTSANTONIS: Unlike the Leader of the Opposition who thinks he is the smartest man in the room, I take advice from my officers and I trust them.

Mr MARSHALL: In Budget Paper 3, page 59, I am interested in table 4.2 and in particular note (e) which says, and I quote:

The assumed earnings rate for 2015-16 is 2.1 per cent for the 2016-17 Budget compared with 2.8 per cent assumed in the 2015-16 MYBR.

Can the Treasurer advise the committee what advice has informed the assumption of the earnings rate of 2.1 per cent as outlined in that note?

The Hon. A. KOUTSANTONIS: I am advised it is advice from Funds SA on the earning rate.

Mr MARSHALL: Would this not point to significant volatility?

The Hon. A. KOUTSANTONIS: You just said previously it was stable.

Mr MARSHALL: No, I said would you describe it as stable because you have not sought any actuarial advice since 2013, which presupposes that you think that it is stable.

The Hon. A. KOUTSANTONIS: No, that is not what I said. You are misleading the parliament again.

Mr MARSHALL: One page earlier in your own document and we have got wild fluctuations.

The CHAIR: Order!

The Hon. A. KOUTSANTONIS: No, that is not what I said.

Mr MARSHALL: Is it prudent not to get—

The Hon. A. KOUTSANTONIS: Given the criticism that you are laying on professionals who do not have the ability to defend themselves, which, one, I think is appalling, and given your lack of professionalism in your career, I do not think you are in any position to criticise the professionalism—

Mr MARSHALL: No, I am not—I am just asking questions.

The Hon. A. KOUTSANTONIS: —of these people. They do an exceptional job. I have not received any advice from the Treasurer to say that any of the advice I am getting is substandard. If you have any evidence or advice to say that it is substandard, you should provide it to the committee now.

Mr MARSHALL: None whatsoever.

The Hon. A. KOUTSANTONIS: Then I think these attacks on professionals are completely unacceptable, and given the way you conduct yourself I think it is a bit rich. None of them has humiliated their political party by—

The CHAIR: Order!

The Hon. A. KOUTSANTONIS: —telling them on the eve of the election to vote for their opponents and ruin their election chances.

The CHAIR: Order, Treasurer!

The Hon. A. KOUTSANTONIS: You stand alone as a joke.

The CHAIR: Treasurer!

The Hon. A. KOUTSANTONIS: To take these people on is ridiculous.

The CHAIR: Treasurer, to order thank you. Next question, leader.

The Hon. A. KOUTSANTONIS: You lost a by-election and you—

The CHAIR: Order! The leader has the floor for his next question.

The Hon. A. KOUTSANTONIS: It is a bit rich.

The CHAIR: Order!

Mr MARSHALL: Any answer to the question?

The Hon. A. KOUTSANTONIS: It is a bit rich.

Mr MARSHALL: Any answer to the question?

The Hon. A. KOUTSANTONIS: You just got it—in spades.

Mr MARSHALL: No, the question was: what advice has informed the assumption of the earnings rate of 2.1 per cent this year?

The Hon. A. KOUTSANTONIS: I just gave it to you.

The CHAIR: He has answered that question, or given you the answer he is prepared to give. So we need another question.

Mr MARSHALL: Well, what was the answer then?

The Hon. A. KOUTSANTONIS: You heard it—check the Hansard.

Mr MARSHALL: I think the committee deserves a little bit more respect.

The Hon. A. KOUTSANTONIS: Exactly, I agree with you—it does. I think the way you are treating the officers, and the way you are denigrating them—and they cannot defend themselves—is appalling.

The CHAIR: Order! Next question, leader.

Mr MARSHALL: No, this is actually quite significant, Madam Chair. That is, on page 59 it clearly states that the assumed earnings rate of 2.8 per cent, which was in the Mid-Year Budget Review, was significantly altered from 2.8 per cent to 2.1 per cent, and I would just like to know what is actually driving it. If he does not know, just say 'Don't know—we'll come back to you.'

The Hon. A. KOUTSANTONIS: I refer to my answer in Hansard where I advised you that it was advice from Funds SA, but you are just not listening.

Mr MARSHALL: You said it was from advice, but that was not the question. It was what was driving that advice.

The Hon. A. KOUTSANTONIS: I will get an answer for you from Funds SA. I am advised it was actual returns.

Mr MARSHALL: I have some questions for RevenueSA, if that is possible.

The CHAIR: Yes, just tell us what page you are at?

The Hon. A. KOUTSANTONIS: To my left, I now have Adam Pamula, the Deputy Commissioner for RevenueSA.

Mr MARSHALL: I refer to Budget Paper 4, Volume 4, page 168. RevenueSA is obviously responsible for collecting revenue in the state. Can you provide some explanation to this committee, with the officers now present, why there was a budget for full-time equivalents in this area last financial year of 202 staff members, but this was blown out massively to 229?

The Hon. A. KOUTSANTONIS: I am advised that it was a transfer of FTEs from DPC to Treasury. All the ICT and support was housed in DPC. That has now been transferred to DTF.

Mr MARSHALL: So that is just a once-off transfer. When we look at the FTEs for last financial year, 229, or let's just say 230, rounded off, and this financial year there is an increase of only 2.4 FTEs. I ask the question with the RevenueSA people present: is this going to be sufficient to administer the new $109 million rebate that you have announced in the budget?

The Hon. A. KOUTSANTONIS: As the leader would be aware, we have also cut a number of taxes, which means that compliance and enforcement and work done on those taxes can be redirected to other areas. We are satisfied that we do have sufficient people in place to administer the program.

Mr MARSHALL: How many people will be dedicated to the activities of this subprogram?

The Hon. A. KOUTSANTONIS: We are still calculating that.

Mr MARSHALL: What is the process? If somebody thinks that they qualify for either of the two schemes, they will apply online; is that envisaged?

The Hon. A. KOUTSANTONIS: I am advised that there is a portal through RevenueSA's website that allows eligible businesses to apply.

Mr MARSHALL: Is that in place at the moment?

The Hon. A. KOUTSANTONIS: I am advised that it is, yes.

Mr MARSHALL: So that is currently underway? I could have, as of 1 July, or as soon as it was announced, I think on 4 July—

The Hon. A. KOUTSANTONIS: I am not sure of the start date, but I think it was budget day. That was 7 July. I am advised that, yes, the portal opened up on 7 July. Anyone employed on or after 1 July is eligible.

Mr MARSHALL: Have any applications been made and processed? How does that work? Do they just have to register at this point, and they receive the money back at the end of the year?

The Hon. A. KOUTSANTONIS: Yes, they will have to maintain that FTE count increase for a 12-month period from the anniversary date that they applied, and then they will receive their first payment. If that FTE increase count is maintained for a further 12 months, they will receive a further payment.

Mr MARSHALL: Just to clarify, then, nothing will be paid out this financial year?

The Hon. A. KOUTSANTONIS: Yes.

Mr MARSHALL: When it was announced that this was $109 million over two years, it is envisaged that that two-year payment would be half or one portion of $109 million next year and one portion the year after—nothing in this financial year whatsoever?

The Hon. A. KOUTSANTONIS: Yes; I refer you to Budget Paper 5, Budget Measures Statement, page 13. Operating expenses are set out over the forward estimates.

Mr MARSHALL: What is the cost for next year?

The Hon. A. KOUTSANTONIS: In 2017-18?

Mr MARSHALL: Yes.

The Hon. A. KOUTSANTONIS: It is $30.9 million.

Mr MARSHALL: And the following year would be the remainder of the $109 million less $38 million.

The Hon. A. KOUTSANTONIS: It is $54.6 million.

Mr MARSHALL: Have there been any applications into the system so far, since it was announced?

The Hon. A. KOUTSANTONIS: I am advised that there are.

Mr MARSHALL: How many?

The Hon. A. KOUTSANTONIS: We will get back to you on that.

Mr MARSHALL: Are both schemes starting to receive applications?

The Hon. A. KOUTSANTONIS: I am advised that they are, yes.

Mr MARSHALL: Can you run through what verification processes the RevenueSA will put in place? Is it online, and people have to tick a box to reduce the cost on the applicant? What verification activities will it be? Will it be 100 per cent verification or will it be some sort of audit?

The Hon. A. KOUTSANTONIS: What do you mean by 100 per cent verification?

Mr MARSHALL: I mean is every applicant going to receive a full audit to determine that they actually—

The Hon. A. KOUTSANTONIS: What do you mean by audit?

Mr MARSHALL: Sort of an assessment.

The Hon. A. KOUTSANTONIS: What do you mean by assessment?

Mr MARSHALL: For example, if somebody says, 'As of this date, I had 23 employees,' and then they get to the end of the year and they say, 'I have 38 employees,' how do you verify, audit, assess that that is correct? What evidence do you ask for? My question is whether you will be seeking full evidence from all applicants or whether it is going to be done on a sample basis.

The Hon. A. KOUTSANTONIS: I am advised that we will be asking for business activity statements and return-to-work statements at the beginning, ongoing and at the end of the period. The basis of audit will be on the same risk basis that all our taxation compliance measures have in place now, whether it is payroll tax or land tax or anything else.

Mr MARSHALL: Let's just say an applicant applies on 15 July. What are they are required to provide in terms of evidence of the number of FTEs they have at that point?

The Hon. A. KOUTSANTONIS: Things like their business activity statement, payroll records, if they are paying payroll tax their payroll tax payment records, return-to-work statements.

Mr MARSHALL: Are you suggesting that the applicant needs to attach their payroll, for example, to this online application?

The Hon. A. KOUTSANTONIS: I am advised yes.

Mr MARSHALL: What is to stop somebody from sacking five people, doing their payroll, putting five people on and getting the $10,000?

The Hon. A. KOUTSANTONIS: A number of things. Obviously, there are unfair dismissal laws in place. That kind of fraud would have to have widescale cooperation. They are already committing a crime. It is a very large risk to take to commit that type of fraud. I do not think South Australian businesses are like that. I have a much more considered view of South Australian business leaders and small to medium-size operators.

I do not think their intention is to go out and rort the system. I have a very different view about South Australian family businesses from you. I think that the overwhelming majority of people will provide the evidence, will have a risk-based approach to assessment and need to be in ongoing employment for a 12-month period. The idea that people are going to start wholesale sacking people, ending their entitlements and starting them again will not work.

Mr MARSHALL: You are going to come back to us and let us know how many applications you have actually received in each of those two categories. How many applications are you budgeting or forecasting in terms of your—

The Hon. A. KOUTSANTONIS: As I said on budget day, I hope we exceed our budgeted estimates.

Mr MARSHALL: What is your budget?

The Hon. A. KOUTSANTONIS: It is $109 million. I hope that we go well above that. I hope that South Australians do make the decision, that this does push them over that threshold decision-making process of putting someone else on. In the end, there are a number of reasons people will make a decision to hire someone new. Generally, it is because the business demands it, or they have been holding off on the decision for a while and this scheme may push them over the edge. I think it is a good scheme and I think it will work.

Mr MARSHALL: As I asked this morning—now you have RevenueSA in here they might be able to answer the question—currently, it is very difficult to tell whether an employee is based in South Australia or in Victoria. Is there any safeguard, for example, or is there a question in the application, that gives you some confidence that a South Australian firm based in South Australia is not paying somebody interstate and claiming the $10,000 for themselves? Is there any sort of failsafe mechanism to ensure that cannot occur?

The Hon. A. KOUTSANTONIS: There are always risk assessments in place for eligibility for tax rebates. This is no different. Obviously, with the bona fides provided—whether it is payroll tax, receipts or provisions or return-to-work statements or business activity statements—there are a lot of measures in place to ensure that this only applies to South Australians. Obviously there are other risk-based measures that we have in place that I am not going to make public here today to give the agency the ability to root out people who will attempt to rort this. There are people who attempt to say that an investment property is their principal place of residence to avoid land tax. The agency has measures in place to try to uncover that. This will be no different.

Mr MARSHALL: Before, you said that this would be subject to the same sort of audit procedures as other tax areas. What are those? What sort of sampling have you used? Are you taking one in every 3,000 applicants to do a detailed audit? I cannot imagine that it would be any greater than that?

The Hon. A. KOUTSANTONIS: I am happy to answer this question privately to the member. I do not want to make that public. I am happy to give him a private briefing on the understanding that it remains confidential.

Mr MARSHALL: No.

The Hon. A. KOUTSANTONIS: I would be more than happy for the Leader of the Opposition to be aware of this, but I do not think it should be made public.

Mr MARSHALL: I think it should be. We are expending $109 million worth of taxpayer funds. It is not your money. It is being paid for by people paying their taxes. I think there are a lot of loopholes. I think this was envisaged in a very rushed period of time.

The Hon. A. KOUTSANTONIS: Sure.

Mr MARSHALL: I have looked at some of these other schemes operating in other states, and they have not delivered the benefits and they have been open to widespread rorting.

The Hon. A. KOUTSANTONIS: That is a damning criticism of Mike Baird, and I do not think he deserves that. He is a successful Liberal leader who has done remarkable things for New South Wales, and his Treasurer is doing an exceptional job. For someone like you who has lost an election to attack him I think is a bit rich. He is actually someone who his party can be very proud of, as opposed to what you have done.

In terms of making these things public, I think law-abiding taxpayers would not want the agency that is instructed to make sure that tax avoidance is caught out—what that means is law-abiding taxpayers usually end up paying more because others are avoiding it. I am not going to make public our anti-avoidance measures. I am happy to give you a briefing in private on the basis that you keep it confidential. I am not trying to keep it hidden from the opposition but I do not think it would serve law-abiding taxpayers to make it public, and I am disappointed that is your attitude.

The CHAIR: Can I just ask the leader: do you want to stay on revenue or do you want to move to the Motor Accident Commission because it is 3.30pm already?

Mr MARSHALL: Yes, I know. We have to read in those omnibus questions as well. Can you confirm that there is no greater avoidance measure put in place over and above the normal taxation measures in South Australia?

The Hon. A. KOUTSANTONIS: I do not have the view that you do that South Australians—

Mr MARSHALL: That is not the question. I just want to know if there is anything over and above.

The Hon. A. KOUTSANTONIS: Sure. I do not have the view that South Australian business owners—small to medium size business operators, mums and dads—are setting out to try to cheat the state. I think the overwhelming majority of people do the right thing.

Mr MARSHALL: Sure.

The Hon. A. KOUTSANTONIS: We have a risk based approach to that assessment. I have complete confidence in the agency that they do it exceptionally well, and I am happy to offer you a briefing on those measures on the basis that they remain confidential, but what it looks like is that you are not prepared to keep them confidential which is disappointing.

Mr MARSHALL: No, my question was: is there anything over and above?

The Hon. A. KOUTSANTONIS: I have answered the questions.

Mr MARSHALL: Is there anything over and above?

The Hon. A. KOUTSANTONIS: I do not know why you would believe that South Australian businesses are dishonest. They are not. They are good, hardworking people who risk everything to start a business, and I do not think they deserve to be disparaged in this place by the opposition trying to—

Mr MARSHALL: I am acting here on behalf of taxpayers—

The Hon. A. KOUTSANTONIS: It does not sound like it.

Mr MARSHALL: —who want to make sure that there is no rorting. It is not like—

The CHAIR: I think, leader, we need to move on to another area.

The Hon. A. KOUTSANTONIS: There are antirorting measures in place.

Mr MARSHALL: What are they?

The Hon. A. KOUTSANTONIS: I am happy to offer you a briefing in private.

Mr MARSHALL: What are they?

The CHAIR: Order!

The Hon. A. KOUTSANTONIS: I am not going to let the rorters know what they are so that they can get around them.

The CHAIR: Order!

Mr MARSHALL: What? Is it like one in every 5,000 that are sampled?

The CHAIR: Order! The minister has—

The Hon. A. KOUTSANTONIS: That is an—

The CHAIR: I am on my feet again.

The Hon. A. KOUTSANTONIS: That is an appalling attitude.

The CHAIR: Order! He is not going to give you another answer apart from the one you already have so, unless you want to keep asking the same question, it would be good to move on to something new. Do you want to stay on Revenue or move on to something else?

Mr MARSHALL: No, I think we will read those omnibus questions in for that first section and move on.

The CHAIR: You do not need to do that because it is the same minister and we are quite happy to accept that they are already on the record, if that is okay. You do not need to do that.

Mr MARSHALL: While we are on that area then, before moving on to the Motor Accident Commission, I have a question with regard to the emergency services levy, which is also administered by RevenueSA, in Budget Paper 5, page 15, the budget implications table in particular. Can you confirm the total cost of the response to the Pinery bushfire as well as the amounts recovered through the ESL and consolidated revenue?

The Hon. A. KOUTSANTONIS: We will get those to you.

Mr MARSHALL: Can you explain why the state government decided to donate to the relief fund appeal rather than paying for the fire response directly?

The Hon. A. KOUTSANTONIS: Yes. We wanted to get the donations started by putting in some money up front on behalf of South Australians to start the appeal.

Mr MARSHALL: So to start the appeal?

The Hon. A. KOUTSANTONIS: Yes, and I think it was a very good measure.

Mr MARSHALL: Was the donation funded from the Consolidated Account or the ESL via the community emergency services fund?

The Hon. A. KOUTSANTONIS: The Consolidated Account.

Mr MARSHALL: So it was from the Consolidated Account rather than funding it directly. Thank you very much.

The Hon. A. KOUTSANTONIS: So I am advised.

Mr MARSHALL: I will move on now to the Motor Accident Commission, if possible.

Departmental Advisers:

Mr D. Reynolds, Under Treasurer, Department of Treasury and Finance.

Mr A. Chia, Chief Executive Officer, Motor Accident Commission.

Mr S. Hocking, Deputy Chief Executive, Department of Treasury and Finance.

Mr G. Goddard, Chief Commercial Officer, Department of Treasury and Finance.

Mr K. Cantley, Executive Director, Public Finance Branch, Department of Treasury and Finance.

Mr D. Price, Director, Market Reform, Department of Treasury and Finance.

Mr A. Blaskett, General Manager, South Australian Government Financing Authority, Department of Treasury and Finance.

Mr T. Burfield, Director, Insurance, South Australian Government Financing Authority, Department of Treasury and Finance.

Ms J. Hart, Acting Claims Manager, South Australian Government Financing Authority, Department of Treasury and Finance.

Mr B. Tuffnell, Acting Chief of Staff, Treasurer.

The CHAIR: We have some new advisers.

The Hon. A. KOUTSANTONIS: Aaron Chia, who is the chief executive of the Motor Accident Commission, and Mr Gary Goddard, Chief Commercial Officer.

Mr MARSHALL: Why are CTP premiums rising by 2.9 per cent this year—

The CHAIR: Any particular page that you will start on, leader?

Mr MARSHALL: Yes, page 54—rather than Treasury's forecast increase in CPI of 1.75 per cent?

The Hon. A. KOUTSANTONIS: I am advised that is the determination of the independent Third Party Premiums Committee.

Mr MARSHALL: Sure. But you have repeatedly said to the people of South Australia that we would have CTP increases capped, I think, for three years at no more than CPI. Now your own Treasury documents provide that the CPI—

The Hon. A. KOUTSANTONIS: Do you want to revise that statement? Is that what I said? Do you want to revise your accusation to me?

Mr MARSHALL: It is not an accusation.

The Hon. A. KOUTSANTONIS: You just said that I said it would be just CPI. Is that what I said in the parliament?

Mr MARSHALL: I think—

The Hon. A. KOUTSANTONIS: Are you sure? Are you positive?

Mr MARSHALL: You tell us what you said.

The Hon. A. KOUTSANTONIS: Are you prepared to mislead the committee?

The CHAIR: Order!

The Hon. A. KOUTSANTONIS: Is that what I said? You know what I said.

Mr MARSHALL: What did you say?

The Hon. A. KOUTSANTONIS: I said they would be CPI-like, and the idea that I have capped it at CPI—

Mr MARSHALL: Sorry, CPI lite?

The CHAIR: Order!

The Hon. A. KOUTSANTONIS: I have said that publicly many times.

Mr MARSHALL: What is CPI lite?

The CHAIR: Order! Leader, we are having an answer.

The Hon. A. KOUTSANTONIS: Not lite; like.

Mr MARSHALL: CPI like. So it is like the CPI?

The Hon. A. KOUTSANTONIS: Oh, my goodness.

Mr MARSHALL: So it is like the CPI but it is not the CPI?

The Hon. A. KOUTSANTONIS: I have made it very clear from the very beginning—

Mr MARSHALL: Not really that clear.

The Hon. A. KOUTSANTONIS: I know you are opposed to the private sector entering the compulsory third-party premiums industry and that you would prefer government monopolies to run these issues, and that is why I have always reached out to the younger members of the Liberal Party to retake their party and retake the badge of conservatism off—

Mr MARSHALL: Anyway, any answer to the question?

The Hon. A. KOUTSANTONIS: —left-wing green Liberals.

Mr MARSHALL: Any answer to the question?

The Hon. A. KOUTSANTONIS: As I have said, it is a recommendation made by the independent Third Party Premiums Committee and I have always told the parliament that it would be CPI-like increases.

Mr MARSHALL: Are you suggesting to this committee that 1.75 per cent is like 2.9 per cent?

The Hon. A. KOUTSANTONIS: No, what I am saying—

Mr MARSHALL: That is ridiculous.

The CHAIR: Order!

Mr MARSHALL: That is preposterous.

The CHAIR: Order!

The Hon. A. KOUTSANTONIS: Posing a question and then laughing at your own joke afterwards is not policy.

Mr MARSHALL: Anyway, sorry, go on. Try to explain this one.

The CHAIR: Order!

Mr MARSHALL: Try to explain—

The CHAIR: Order! Let's just have the answer first and then we can analyse that shortly.

Mr MARSHALL: Here comes Einstein with an implausible explanation.

The CHAIR: It might be, it might not.

Mr MARSHALL: What percentage was it out by? What is 1.2 as a percentage of 1.75?

The Hon. A. KOUTSANTONIS: The important matter to remember is that the costs in this industry, which are generally based on healthcare costs, increase—

Mr MARSHALL: Based on which costs?

The Hon. A. KOUTSANTONIS: Healthcare costs.

Mr MARSHALL: Healthcare costs?

The Hon. A. KOUTSANTONIS: Yes; it is insurance against injury. I know this is a complex issue for you.

The CHAIR: Order!

Mr MARSHALL: No, I just want to know how you are going to explain that 1.75 is like 2.9.

The Hon. A. KOUTSANTONIS: I am telling you now.

The CHAIR: We are getting to the bottom of it, aren't we?

The Hon. A. KOUTSANTONIS: Given that the costs in this industry are growing at around 5 per cent to 6 per cent per annum and the announced increase is 2.9 per cent for class 1, I am advised, and 2.5 per cent across all classes, what you are seeing is the major impact on the cost of these premiums being well above the increase being charged to motorists. It is actually a very good outcome for the people of South Australia, let alone the fact that it is a good reform. It is a reform that I think will incentivise more private sector jobs in South Australia and remove South Australians from being forced to pay a government monopoly to operate compulsory third-party premiums. Why shouldn't South Australians have a choice about who their insurer is?

Mr MARSHALL: What has happened in other jurisdictions when they have moved from a government-guaranteed scheme to a private scheme? Have the CTP premiums gone up or down?

The Hon. A. KOUTSANTONIS: I do not think there has been a scheme like this that has been—

Mr MARSHALL: No, that was not my question.

The Hon. A. KOUTSANTONIS: I am explaining the answer.

Mr MARSHALL: I doubt it.

The Hon. A. KOUTSANTONIS: Generally, when assets are privatised, there are two types of privatisations that are undertaken. There is one like you have defended recently (the privatisation of ETSA) which is privatising to a monopoly to maximise the sale price. We have not done that here. What we have done is, by allowing the private sector to enter the market, we have actually increased competition, not decreased it. The stats that I read out to you earlier show that the actual inflators in this industry are well above the premium increases, because the costs associated with this industry are around 5 per cent to 6 per cent for healthcare costs.

The increases that consumers are getting are well below those inflators. We have actually done a good job of keeping those costs down, and have more competition in the market. I cannot speak for other jurisdictions that have attempted to maximise the sale price of their assets, like you did when you were in government. You sold ETSA and privatised it to a monopoly to try to maximise your sale price and stop all other competition so that the people who bought the assets. That is what the ACCC was complaining about in the Financial Review yesterday.

We are trying to create more competitive attention by the private sector. I completely disagree with your assertion. I do not understand why a modern Liberal Party would fear this type of reform; I thought you would be embracing it. In fact, I would have thought you would be calling out for it. Instead—

Mr MARSHALL: I just asked a question and we have not had an answer. A load of rubbish.

The Hon. A. KOUTSANTONIS: You are embracing it?

The CHAIR: Order!

Mr MARSHALL: I said it is a load of rubbish from you.

The Hon. A. KOUTSANTONIS: Well, there you go; that is what I mean. This sort of—

Mr MARSHALL: The question was: in other jurisdictions, when it was not a government-guaranteed scheme, are the premiums paid on compulsory third-party premiums higher or lower? I think the answer is 'higher', and we have just had five minutes of waffling. Please do not do it again.

The Hon. A. KOUTSANTONIS: It is not fair to compare other jurisdictions—

Mr MARSHALL: This is a complete waste of time. I have Peter Goers' birthday party to go to. It will be far more interesting that this.

The CHAIR: Order! They might have finished all their hamburgers by now.

Mr MARSHALL: No, I am on my way.

The Hon. A. KOUTSANTONIS: It is unfair to compare other jurisdictions. There are different healthcare costs in other jurisdictions—

Mr MARSHALL: What do you think will happen—

The CHAIR: Hang on, he has not finished his answer.

The Hon. A. KOUTSANTONIS: I think the important comparison here is the cost of providing healthcare services for injured motorists in South Australia, and how they are increasing every year, compared to the premium increases that are being offered to motorists. If you compare the two, we have done exceptionally well.

Mr MARSHALL: The reality is, Chair, that motorists in South Australia have been absolutely gouged; 2.9 is nothing like 1.75. When you said that the CTP insurance increase will be 'CPI-like', nobody thought it would be 60 or 70 per cent more than what the CPI actually is. It was incredible that you would even say that without your fingers crossed behind your back.

The Hon. A. KOUTSANTONIS: It is 2.5 per cent on average, and I am stunned that the Leader of the Opposition—the leader of a once proud party, is arguing against—

The CHAIR: I need to call you both to order. Unfortunately, I cannot hear either of you if you—

The Hon. A. KOUTSANTONIS: The feeling of—

The CHAIR: Hang on, whose turn was it?

Mr MARSHALL: I was asking a question, you might recall.

The CHAIR: Well, it is hard to keep up when there are so many overrides happening.

Mr MARSHALL: You said that this new rate of 2.9 per cent was—

The Hon. A. KOUTSANTONIS: It is for class 1.

Mr MARSHALL: —determined by the CTPI Regulator. When was this determination made?

The Hon. A. KOUTSANTONIS: I am advised that these arrangements were entered into before the legislation was enacted or passed—

Mr MARSHALL: I was wondering about that.

The Hon. A. KOUTSANTONIS: —and before the regulator was enacted because of your delays in the upper house to supporting the legislation. So, we used the standing provisions in place, which was the old CTPI committee, which came up with these figures.

Mr MARSHALL: So in fact it is not correct to suggest that the independent regulator has come up with this because in fact the independent regulator's legislation did not pass the parliament until April of this year. We have not even set up the regulator yet, have we?

The Hon. A. KOUTSANTONIS: You delayed it. You are delaying the reforms, yes.

Mr MARSHALL: That is not the question. The question is has—

The Hon. A. KOUTSANTONIS: Well, it is a consequence of your question. You say the legislation was delayed. Yes, it was delayed because the Liberal Party's support—

Mr MARSHALL: But this was not determined by the independent regulator because the regulator was not even in place.

The CHAIR: Order! Leader, we are still getting the answer.

The Hon. A. KOUTSANTONIS: I think what is occurring is that the leader is not actually looking for answers: h is looking for conflict. In looking for conflict, he is trying to argue an ideological point that no other Liberal leader in the country holds.

The CHAIR: So the answer revolved—

Mr MARSHALL: Did you just informally—

The CHAIR: Order! Hold on just a second. Treasurer, continue your answer and then we will have the next question.

The Hon. A. KOUTSANTONIS: I answered it earlier. I told the committee earlier it was the CTPI committee (the Third Party Premiums Committee) that came to these numbers. These numbers are nearly half what the inflators in this industry are, which are running at 5 to 6 per cent. So, it is a good outcome for motorists.

Mr MARSHALL: Is the Treasurer indicating that, post the regulated three-year period, motorists in South Australia could be forced to endure 5 to 6 per cent increases and that the only reason they have been protected from this under this new arrangement is simply that a cap has been put in place as part of this legislation? Because that is what he just told the committee, and that is a real worry for what is going to happen to CTP insurances once this cap is complete.

The Hon. A. KOUTSANTONIS: The independent regulator will determine the rates and it will be based on a number of costs and indicators, including the cost of health care, the cost of how the facilities are running within the premium class, whether they are solvent or not or what level of solvency they have, how many accidents and crashes and how many payouts they have had in every class. It will depend on the insurer, it will depend on the number of claims—there are a whole series of variables. To make blanket statements that it will be above 5 per cent is inaccurate.

Mr MARSHALL: No, but you just informed the committee that if the cap were not in place for the regulated period (this year, next year and the year after), we would have seen 5 to 6 per cent increases.

The Hon. A. KOUTSANTONIS: No, I never said that.

Mr MARSHALL: I am sorry, but you did.

The Hon. A. KOUTSANTONIS: No, I did not say that. I said to you that the healthcare costs, the inflators in this industry, are running at—

Mr MARSHALL: You said it was a good deal, that 2.9 per cent was a good deal.

The Hon. A. KOUTSANTONIS: —5 to 6 per cent.

Mr MARSHALL: You said it was going to be CPI-like, which is 1.7 per cent.

The Hon. A. KOUTSANTONIS: What I am saying to you is the independent Third Party Premiums Committee that did the assessment of this has come out with premium increases that are almost half of what the inflators are. It is a good outcome for the industry and a good outcome for motorists. This is an ideological argument. This is not an argument about good reform. There is no-one in the Liberal Party who agrees with the leader on his position here, other than maybe Tammy Franks and Mark Parnell.

Mr MARSHALL: Has the CTP regulator been appointed?

The Hon. A. KOUTSANTONIS: Yes.

Mr MARSHALL: Who is the CTP regulator?

The Hon. A. KOUTSANTONIS: Kim Birch.

Mr MARSHALL: When was he appointed?

The Hon. A. KOUTSANTONIS: She was appointed—

Mr MARSHALL: When was she appointed?

The Hon. A. KOUTSANTONIS: I will check the Gazette. She began her role on 1 July, but I do not know when the Governor and Executive Council appointed her.

Mr MARSHALL: On page 81, in relation to return of equity from the Motor Accident Commission over the forward estimates, can you confirm these estimates reflect the expected cost of winding up the tail?

The Hon. A. KOUTSANTONIS: The numbers in the budget that you are seeing across the forward estimates are what we expect to return from the tail. We have already funded and conducted work.

Mr MARSHALL: It is the net, and there are costs associated with winding up the tail.

The Hon. A. KOUTSANTONIS: That is already funded.

Mr MARSHALL: Can you tell us what the costs are likely to be for that?

The Hon. A. KOUTSANTONIS: I will take that on notice.

Mr MARSHALL: What is the remaining value of the Motor Accident Commission's asset portfolio as of 30 June 2016?

The Hon. A. KOUTSANTONIS: These are unaudited numbers, so I will get you the numbers once they are audited.

Mr MARSHALL: What are the last audit numbers?

The Hon. A. KOUTSANTONIS: I am advised it was $823 million.

Mr MARSHALL: As of what date?

The Hon. A. KOUTSANTONIS: 30 June 2015.

Mr MARSHALL: So, $823 million was the total assets on the balance sheet for—

The Hon. A. KOUTSANTONIS: Net assets.

Mr MARSHALL: Net assets, so what were the total assets?

The Hon. A. KOUTSANTONIS: I am advised that it was $2.88 billion.

Mr MARSHALL: Has the state government considered appointing an external provider to finish winding up the tail?

The Hon. A. KOUTSANTONIS: We will be doing a body of work over the next six to nine months to make an assessment about the best way to extract the maximum value out of the tail, whether it is the government retaining control of it or allowing a third party to take control of it, but until that work is done we will not be in a position to say.

Mr MARSHALL: Who is doing that work?

The Hon. A. KOUTSANTONIS: It will be Treasury, the Motor Accident Commission and the private sector consultants.

Mr MARSHALL: You will be appointing a private sector consultancy to do some work about alternatives to winding up the Motor Accident Commission liability tail?

The Hon. A. KOUTSANTONIS: We will try to calculate what the optimal strategy is, yes.

Mr MARSHALL: When will that work be done?

The Hon. A. KOUTSANTONIS: As I said, six to nine months.

Mr MARSHALL: Have you put anything in the budget for this consulting work?

The Hon. A. KOUTSANTONIS: I just told you that we had. We are estimating for 2017-18 $60 million; 2018-19, $56 million; and 2019-20, $34 million.

Mr MARSHALL: This is the cost of winding up?

The Hon. A. KOUTSANTONIS: No, the cost is already factored in. That is the actual return.

Mr MARSHALL: Yes, but my question was: did you have a budget—

The Hon. A. KOUTSANTONIS: Yes, we do have a budget for the cost, and I have already undertaken to bring that back.

Mr MARSHALL: —for the consulting work to determine the optimal strategy.

The Hon. A. KOUTSANTONIS: You already asked that question and I already answered it, and I undertook to bring you back that answer.

Mr MARSHALL: There were two questions, I do not want there to be any lack of clarity: one was what would be the envisaged cost of winding up the tail at the moment and, secondly, what would be the cost of getting the work done to work out the optimal way to wind up the tail.

The Hon. A. KOUTSANTONIS: Yes, I understood.

Mr MARSHALL: You nod, but you get a lot of things confused. I am just trying to clarify it for you. Which specific assets from the Motor Accident Commission's portfolio have already been sold?

The Hon. A. KOUTSANTONIS: I do not have that here. I will give you a detailed answer.

Mr MARSHALL: It would be good if you could provide that for last financial year and what is envisaged for this financial year. Who is handling the asset sales on behalf of the Motor Accident Commission?

The Hon. A. KOUTSANTONIS: It is JLL.

Mr MARSHALL: JLL?

The Hon. A. KOUTSANTONIS: Yes.

Mr MARSHALL: Which of the Motor Accident Commission's assets are currently in the process of being sold?

The Hon. A. KOUTSANTONIS: I will get you that.

Mr MARSHALL: Which, if any assets, will be retained in the Motor Accident Commission's portfolio?

The Hon. A. KOUTSANTONIS: There are some strategic assets being held by Funds SA in a defensive positioning to maintain a level of solvency. I will find out what they are and get back to you.

Mr MARSHALL: Do you envisage that any assets will be transferred to another part of government?

The Hon. A. KOUTSANTONIS: Funds SA already manage their assets now, so if you are talking about whether will we be transferring other funds to agencies—is that what you are asking?

Mr MARSHALL: Yes, or any other transfer. I am not limiting it.

The Hon. A. KOUTSANTONIS: Not that I am aware of now but, if we do, I will inform you.

Mr MARSHALL: Thank you. On Budget Paper 4, Volume 4, page 163—which also deals with some of these matters to do with the Motor Accident Commission—dot point 1 states:

The increase in expenditure is primarily related to:

Additional expenditure for the Compulsory Third Party Insurance Market Reform project in 2015-16…

It was a $10.9 million variance on the compulsory Third Party Insurance Market Reform project. What is the total budget for the compulsory Third Party Insurance Market Reform project?

The Hon. A. KOUTSANTONIS: We will have to take that on notice.

Mr MARSHALL: Are there any additional expenditures budgeted for in the current budget or forward estimates for this project, or is that project complete?

The Hon. A. KOUTSANTONIS: No, there are, and I will take that on notice and get you what they are.

Mr MARSHALL: Given clause 24, of part 7 of schedule 2 of the Motor Vehicle Accidents (Lifetime Support Scheme) Act 2013—which I am sure you are familiar with—requires that a review of the CTP scheme be conducted by the Social Development Committee as soon as is reasonably practicable after 1 July, can you confirm when this review is scheduled to commence and when it is expected to be completed?

The Hon. A. KOUTSANTONIS: It is a bit difficult for me to answer on behalf of the Social Development Committee, but I understand that the referral is automatic and that they will do the work within their schedule.

Mr MARSHALL: How will the outcome to the review be implemented now that you have privatised the provision of the CTP insurance?

The Hon. A. KOUTSANTONIS: I do not know what the outcome of the review is going to be.

Mr MARSHALL: Yes, but regardless of what it is going to be, have you any method of affecting it. Are you in breach of the act?

The Hon. A. KOUTSANTONIS: I understand that it has been contemplated within the contracts with the insurers that we can impact the outcome of that review.

Mr MARSHALL: Let's just be quite serious. We now have a situation where you have given a CTP price determination—not via the regulator as envisaged but, in fact, by somebody else because the regulator was not in place—

The Hon. A. KOUTSANTONIS: Because you delayed the legislation.

Mr MARSHALL: Thank you. Now there is a requirement under the act to do an annual review of that. Could you go back and change it? If the Social Development Committee—

The Hon. A. KOUTSANTONIS: I just told you that there were provisions within the contract with the insurers to allow us to implement the findings of that review. That is the second time I have said that, and then you just went off on your pre-prepared statement anyway. You are not listening to the answers I am giving you.

Mr MARSHALL: When will it be going to the Social Development Committee?

The Hon. A. KOUTSANTONIS: On the third-year anniversary. It is a matter for the Social Development Committee on the timing of their investigation.

Mr MARSHALL: When will be going ahead?

The Hon. A. KOUTSANTONIS: Do you have members on the Social Development Committee? You can ask them. You were complaining before about not being able to ask questions. Ask one of your colleagues who is on the Social Development Committee.

Mr MARSHALL: Actually, you are responsible for this reform, and it seems that there has been a bit of a slip-up.

The Hon. A. KOUTSANTONIS: I do not think there has been any slip-up, and I do not think that is fair either.

Mr MARSHALL: Tell me your feeling on clause 24, part 7 of schedule 2 of the Motor Vehicle Accidents (Lifetime Support) Act 2013, which requires the review of the CTP scheme to be conducted by the Social Development Committee as soon as practicable after 1 July.

The Hon. A. KOUTSANTONIS: I am sure the committee will fulfil its duties as required by the act. Your members are on it. This criticism of your own members on that committee I think is stunning; nevertheless, off you go.

Mr MARSHALL: You privatised the CTP insurance component.

The Hon. A. KOUTSANTONIS: I have just said to you we have clauses in the contract.

Mr MARSHALL: Do you need to go back and tidy up the act?

The Hon. A. KOUTSANTONIS: We have clauses—

Mr MARSHALL: Do you need to go back and tidy up the act?

The CHAIR: Order! We just need to hear the answer.

The Hon. A. KOUTSANTONIS: The Leader of the Opposition is criticising a committee he has members of his own party on. I find that stunning.

The CHAIR: Order!

Mr MARSHALL: I am asking a question—

The CHAIR: Order! We are listening to the answer.

The Hon. A. KOUTSANTONIS: Quite frankly, probably it will be telling for him very, very soon anyway. On top of that, the committee will conduct its inquiry within its time frames and abide by the act. When they come down with their findings, we have made provisions within the contracts with the insurers to implement the outcomes of those findings. That is the third time I have had to say it now, and I know it does not suit your pre-prepared rant.

The CHAIR: Order! New question.

Mr MARSHALL: Do you envisage any changes to the act?

The Hon. A. KOUTSANTONIS: I do not know what the committee is going to find.

The CHAIR: We have a new question. What was it?

Mr MARSHALL: My question was: does he envisage there is any requirement to amend the act?

The Hon. A. KOUTSANTONIS: He is asking me if I can predetermine what the outcome of an independent inquiry will be.

The CHAIR: And you have already said you cannot.

The Hon. A. KOUTSANTONIS: How can I?

The CHAIR: Order! We are going to another question, which is?

Mr MARSHALL: He does not know.

The CHAIR: He cannot know.

Mr MARSHALL: No, this is the whole point of being a legislature: you have to predict outcomes and put the legislative environment in place.

The CHAIR: Order!

Mr MARSHALL: Clearly, you have not even thought about this.

The CHAIR: Order! Just another question.

The Hon. A. KOUTSANTONIS: Well, let's–

The CHAIR: Let's have another question.

The Hon. A. KOUTSANTONIS: Ma'am, it is important to unpack that. The Leader of the Opposition is saying he wants me to conduct—

Mr MARSHALL: The next question is on Budget Paper 3, page 81.

The Hon. A. KOUTSANTONIS: No, do not change the subject when it does not suit you.

Mr MARSHALL: Sorry, we have a ruling.

The CHAIR: We would like another question.

The Hon. A. KOUTSANTONIS: Yes, I bet you he does, because he has just said to the parliament that he wants the committee to have a predetermined outcome on their independent inquiry. That would be corrupt.

The CHAIR: We are going on to page 81.

Mr MARSHALL: Can you confirm the number of FTEs employed—

The Hon. A. KOUTSANTONIS: I think you call that a whoops moment, don't you?

The CHAIR: No, stop. Let's go on to the next—

Mr MARSHALL: Not at all.

The Hon. A. KOUTSANTONIS: Is that what you call it, when you say—

The CHAIR: Order!

The Hon. A. KOUTSANTONIS: —the committee should have a predetermined outcome?

The CHAIR: Order! Our next question is on page 81.

Mr Marshall interjecting:

The Hon. A. KOUTSANTONIS: Do not give that confused look on your face. You have just said to the parliament—

The CHAIR: Leader, can we have the next question?

The Hon. A. KOUTSANTONIS: Take the glasses off now, wave them around.

The CHAIR: Leader, next question.

The Hon. A. KOUTSANTONIS: This confused looked will not do you any good.

The CHAIR: Order! On page 81, what is our question, please?

Mr MARSHALL: I cannot fathom how you became the Treasurer of South Australia.

The Hon. A. KOUTSANTONIS: By beating you easily.

The CHAIR: Order!

Mr MARSHALL: Oh, dear! I refer to Budget Paper 3, page 81. Can you confirm the number of FTEs employed by the Motor Accident Commission?

The Hon. A. KOUTSANTONIS: I am advised 36.

Mr MARSHALL: And that is at the beginning of this financial year?

The Hon. A. KOUTSANTONIS: At the end of 30 June.

Mr MARSHALL: How many are there currently?

The Hon. A. KOUTSANTONIS: There are 36.

Mr MARSHALL: There are 36 now and at the end of the year. I have no other questions on the Motor Accident Commission, unless any of my learned colleagues have a question to ask. They will not get any answers anyway, but—

The CHAIR: Order!

Mr MARSHALL: —he did a better job than SAFA.

The CHAIR: Are you going to the party or are you going to ask another question?

Mr MARSHALL: No, I have more questions to ask.

The CHAIR: What are you looking at?

Mr MARSHALL: On SAICORP, apparently.

The CHAIR: SAICORP, what page is that on, sir?

Mr MARSHALL: In Budget Paper 3, page 67.

The CHAIR: We have a change of advisers.

Departmental Advisers:

Mr D. Reynolds, Under Treasurer, Department of Treasury and Finance.

Mr S. Hocking, Deputy Chief Executive, Department of Treasury and Finance.

Mr A. Blaskett, General Manager, South Australian Government Financing Authority, Department of Treasury and Finance.

Mr K. Cantley, Executive Director, Public Finance Branch, Department of Treasury and Finance.

Mr T. Burfield, Director, Insurance, South Australian Government Financing Authority, Department of Treasury and Finance.

Ms J. Hart, Acting Claims Manager, South Australian Government Financing Authority, Department of Treasury and Finance.

Mr G. Goddard, Chief Commercial Officer, Treasury and Finance.

Mr B. Tuffnell, Acting Chief of Staff, Treasurer.

The Hon. A. KOUTSANTONIS: Andrew Blaskett and Tim Burfield from SAICORP and SAFA.

Mr MARSHALL: We read in the budget papers on page 67 about the net assets, free reserves as they are referred to here, as at 30 June 2015 of $168.2 million. What is the current value of these free reserves?

The Hon. A. KOUTSANTONIS: I am advised that we will have to wait until the audit report for that.

Mr MARSHALL: Was there any transfer of the free reserves last year into general revenue?

The Hon. A. KOUTSANTONIS: I am advised no.

Mr MARSHALL: What methodology is used to determine whether a transfer will take place?

The Hon. A. KOUTSANTONIS: I am advised that there is no dividend policy for this area of government operation.

Mr MARSHALL: Has there been a transfer to general revenue of free reserves in the past?

The Hon. A. KOUTSANTONIS: Not in relation to SAICORP, no.

Mr MARSHALL: So there has never been a transfer? There is just this ongoing accumulation on the balance sheet of free reserves; is that correct?

The Hon. A. KOUTSANTONIS: That is the advice I have been given.

Mr MARSHALL: And the last value that the Treasurer is aware of is at 30 June 2015?

The Hon. A. KOUTSANTONIS: The auditor report, yes.

Mr MARSHALL: Have you any other?

The Hon. A. KOUTSANTONIS: I said to you that once we get the audited reports I will make them available to you.

Mr MARSHALL: That is only done once per year. Also, on page 67, it says that the total liabilities as of 30 June 2015 included claim liabilities of $322.2 million. Medical malpractice claims accounted for $259.3 million of the outstanding claim liability. Are you able to provide an update on the value of medical malpractice claims since the $259.3 million reported as of 30 June 2015?

The Hon. A. KOUTSANTONIS: I understand that valuation is still being finalised.

Mr MARSHALL: Is it higher or lower?

The Hon. A. KOUTSANTONIS: I understand that it is still being finalised.

Mr MARSHALL: How many claims were made in 2015-16?

The Hon. A. KOUTSANTONIS: We will have to get that for you.

Mr MARSHALL: Do you have any indication whether that number is higher or lower than the previous one?

The Hon. A. KOUTSANTONIS: I will get that for you once we have it.

Mr MARSHALL: How many claims were paid out in 2015-16?

The Hon. A. KOUTSANTONIS: We did not bring those numbers here with us, but I will get them for you.

Mr MARSHALL: It is the same people; they did not bring much at all. I might just ask one question which follows on from some questions that I was asking last year in this committee because I think SAICORP administers the building indemnity insurance; is that correct?

The Hon. A. KOUTSANTONIS: Yes.

Mr MARSHALL: Has there been any change to the arrangement that was in place at this time last year?

The Hon. A. KOUTSANTONIS: I am advised no.

Mr MARSHALL: Can you provide an explanation to the committee on how that works? QBE is providing the indemnity insurance, but it is underwritten by SAICORP; is that correct?

The Hon. A. KOUTSANTONIS: There has been no change since last year.

Mr MARSHALL: This was originally only an interim arrangement which was put in place, and it was envisaged that there would be a period of government guarantee, I think for 12 months. It was extended to two years as of last year, which I think was the third year. I could be wrong; it could have been a fourth. I think it was the third year. There was no plan to change that. Is this now a permanent position?

The Hon. A. KOUTSANTONIS: I hope not. I hope that the private sector does step up to the plate and offer products that we can transition out of. I understand and I am advised that other jurisdictions are finding the same difficulty. It is an area where the government has to step in due to market failure.

Mr MARSHALL: What is the potential liability to the taxpayers for providing this building indemnity insurance?

The Hon. A. KOUTSANTONIS: I do not have it here in terms of our risk exposure, but I think the other costs that would be much larger would be a dent to the industry itself and what that would do for construction. Despite whatever the liability on the government is (and I will get you those numbers), I think the bigger risk for us is the dent in the confidence of the industry if we were not stepping in to fill the market failure. That is what I am really concerned about.

Mr MARSHALL: Yes, I understand that, but what is the potential?

The Hon. A. KOUTSANTONIS: I said I will get that for you. I do not have it here, but I will get it for you.

Mr MARSHALL: Is there any cost in administering this on an annual basis?

The Hon. A. KOUTSANTONIS: All those costs are absorbed. There is no additional cost, I am advised. It is just absorbed through normal operations.

Mr MARSHALL: So, it is just simply an underwriting.

The Hon. A. KOUTSANTONIS: That is my advice, yes.

Mr MARSHALL: What is the total value that we underwrite?

The Hon. A. KOUTSANTONIS: I told you I would get you that.

Mr MARSHALL: What was the last reported one then, if you do not know the current one? What was the last reported level of the underwriting?

The Hon. A. KOUTSANTONIS: All I have here which I can help to inform you is that there has been $24 million in premiums written, but I do not have the other numbers.

Mr MARSHALL: So, $24 million in premiums.

The Hon. A. KOUTSANTONIS: That is for three years.

Mr MARSHALL: That is a three-year period, but I mean the liability is going to be a lot higher than the premium.

The Hon. A. KOUTSANTONIS: From 1 July to 30 June 2016—yes, but I do not have those numbers here with me so I will get them for you.

Mr MARSHALL: I have a couple of questions to finish off, referring to Budget Paper 4, Volume 4, page 173, regarding procurement policy: is the procurement board investigating ways of ensuring Australian steel is used in government projects where possible?

The Hon. A. KOUTSANTONIS: I am advised that the board does not play the role and now the role is played by the Industry Participation Advocate which has assisted more than 10 South Australian-based steel fabricators via grants to progress through category one of the National Structural Steelwork Compliance Scheme (NSSCS). Five steel fabricators have already achieved certification through category one of the NSSCS. Four fabricators are currently undergoing audits to achieve category one certification. Five fabricators are about to commence the certification process.

Through the government target to ensure that government construction contracts use steel from Australian standard certified mills and fabricators through a surveillance program, the government established a steel surveillance program in collaboration with the Australian Steel Institute to ensure contractors working on state government projects comply with requirements that their steel is sourced from mills with an Australasian certification for reinforcing and structural steel.

Steelwork must be sourced from steel fabricators independently certified by the National Structural Steelwork Compliance Scheme. The progress of South Australian-based steel fabricators through the categories two and three of the National Structural Steelwork Compliance Scheme with the assistance of further grant funding, five steel fabricators have already achieved certification through category two. It is a policy of the cabinet that has been implemented by the Industry Participation Advocate.

Mr MARSHALL: Can you confirm whether the State Procurement Board collects information on the use of Australian components in government projects?

The Hon. A. KOUTSANTONIS: What components are you talking about?

Mr MARSHALL: Steel components.

The Hon. A. KOUTSANTONIS: Steel?

Mr MARSHALL: Yes.

The Hon. A. KOUTSANTONIS: I just told you that that is now done by the Industry Participation Advocate.

Mr MARSHALL: In all government projects?

The Hon. A. KOUTSANTONIS: Yes.

Mr MARSHALL: So, we can get detailed information going forward—

The Hon. A. KOUTSANTONIS: Yes.

Mr MARSHALL: —on every steel component, whether it is sourced in Australia or not, thank you. Can you explain the difference between subprogram 4.4, procurement policy and governance of the Department of Treasury and Finance, for which you are responsible as the Minister for Finance—

The Hon. A. KOUTSANTONIS: That is true.

Mr MARSHALL: —and sub-program 7.4, strategic procurement of the Department of the Premier and Cabinet, for which minister Rau is responsible as Minister for the Public Sector?

The Hon. A. KOUTSANTONIS: The Procurement Board sets the policy. That is based in DTF. The operational aspects of the actual procurement are done by DPC.

Mr MARSHALL: Just one final question: I am not sure whether it is in the right area, but I am sure he is a generous chap. The State Admin Centre: can you provide an update on whether or not you still expect the settlement of the State Admin Centre to occur this year, and whether there are any pending legal proceedings in relation to that sale?

The Hon. A. KOUTSANTONIS: I think I have already answered this question in parliament.

Mr MARSHALL: What was the answer?

The Hon. A. KOUTSANTONIS: I am advised that there are no pending legal matters.

Mr MARSHALL: So do you expect settlement before the end of this year?

The Hon. A. KOUTSANTONIS: Yes.

Mr MARSHALL: When do you envisage that that will be?

The Hon. A. KOUTSANTONIS: By the end—within this year.

The CHAIR: Thank you everybody for your attendance.

Sitting suspended from 16:16 to 16:30.