Department of Treasury and Finance, $70,268,000

Administered Items for the Department of Treasury and Finance, $1,752,379,000

Minister:

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

Departmental Advisers:

Mr D. Reynolds, Chief Executive, Department of Treasury and Finance.

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

Ms N. Rantanen, Chief Operating Officer, Department of Treasury and Finance.

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

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

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

Mr G. Raymond, Director, Public Finance Branch, Department of Treasury and Finance.

Ms T. Scott, Director, Accounting and Information Management, Department of Treasury and Finance.

The CHAIR: I acknowledge that there is no quorum, so I will do the initial read-through of things and if people have not appeared in two minutes we will have an early lunch. The estimates committee is a relatively informal procedure. As such, there is no need to stand to ask or answer questions. I understand the minister and the lead speaker for the opposition have agreed an approximate time for the consideration of proposed payments, which will facilitate a change of departmental advisers. Can the minister acknowledge that this is accurate?

The Hon. A. KOUTSANTONIS: Yes.

The CHAIR: In his absence, I presume the lead speaker says so, too. Who is the lead speaker?

Mr KNOLL: Mr Marshall.

The CHAIR: You are happy with the timetable set down?

Mr MARSHALL: Yes.

The CHAIR: Changes to committee membership will be notified as they occur. Members should ensure the Chair is provided with a completed request to be discharged form. If the minister undertakes to supply information at a later date, it must be submitted to the committee secretary by no later than Friday 27 October 2017. This year, estimates committee responses will be published during the 14 November sitting week in the corrected Daily Hansard over a three-day period.

I propose to allow both the minister and the lead speaker for the opposition to make opening statements of about 10 minutes each should they wish. There will be a flexible approach to giving the call for asking questions, based on about three questions per member, alternating each side. Supplementary questions will be the exception rather than the rule.

A member who is not part of the committee may ask a question at the discretion of the Chair. Questions must be based on lines of expenditure in the budget papers and must be identifiable or referenced at the beginning of the question. Members unable to complete their questions during the proceedings may submit them as questions on notice for inclusion in the House of Assembly Notice Paper.

There is no formal facility for the tabling of documents before the committee; however, documents can be supplied to the Chair for distribution to the committee. The incorporation of material in Hansard is permitted on the same basis as applies in the house; that is, that it is purely statistical and limited to one page in length. All questions are to be directed to the minister, not the minister's advisers. The minister may refer the question to advisers for a response.

During the committee's examinations, television cameras will be permitted to film from both the northern and southern galleries. I now proceed to open the following lines for examination: the minister appearing is the Treasurer, the Department of Treasury and Finance and administered items for the Department of Treasury and Finance. I declare the proposed payments open for examination and refer members to the Agency Statements in Volume 4. I call on the Treasurer to make a statement, if he wishes, and to introduce his advisers.

The Hon. A. KOUTSANTONIS: I have with me David Reynolds, the Chief Executive of the Department of Treasury and Finance; Stuart Hocking, the Deputy Chief Executive; Tammie Pribanic, Executive Director, Budget Analysis and Performance; Nicolle Rantanen, Chief Operating Officer; Paul Williams, Director, Financial Services; Greg Raymond, Director, Public Finance Branch; and Garry Goddard, Chief Commercial Officer. Of course, Andrew Blaskett, David Price, Tracey Scott, Graeme Jackson, Kevin Cantley and John Montague will be joining us throughout the day.

The CHAIR: Do you want to make a statement?

The Hon. A. KOUTSANTONIS: No, thank you, ma'am.

The CHAIR: Leader, would you like to make a statement?

Mr MARSHALL: No, thank you.

The CHAIR: Straight to questions then. What budget document would you like to look at?

Mr MARSHALL: My first question to the Treasurer is from Budget Paper 3, pages 14, 15 and 16. They relate to the writedown in state-based taxation revenue. Can the Treasurer provide some explanation to this committee for the massive writedown in state-based taxation revenue since the budget was handed down the previous year?

The Hon. A. KOUTSANTONIS: On page 17 of the same budget statement, there is a heading 'Variations in revenue estimates (parameter and other)'. I can refer you to that. It states:

Since the 2016-17 Mid-Year Budget Review…taxation revenues have been revised down in all years.

Payroll tax revenues have been revised down from 2016-17…

Underlying conveyance duty revenue has been revised down in all years…

Land tax revenue has been revised down in all years primarily reflecting year to date experience, with marginally weaker than expected land tax collections for 2016-17…

Other property taxes have been revised up from 2017-18 primarily due to an increase in guarantee fee revenue reflecting changes in market conditions.

Gambling…revenue [is] down…primarily reflecting lower than expected year to date growth in net gaming revenue—

Mr MARSHALL: Are you reading the document to us?

The Hon. A. KOUTSANTONIS: Yes, it is in there. You asked a question that is explained in the budget papers. Gambling revenues have been written down largely due to the fact that there are a number of contributions that are down from SA Lotteries and other net gambling revenues. Insurance tax revenue has been revised down in all years and there are some GST grants that have been revised down.

Mr MARSHALL: Was there a writedown in the Mid-Year Budget Review over the budget that was handed down in June last year?

The Hon. A. KOUTSANTONIS: Was there a writedown from the Mid-Year Budget Review?

Mr MARSHALL: No, you just went through that, but I am saying in the Mid-Year Budget Review—

The Hon. A. KOUTSANTONIS: Was there a writedown?

Mr MARSHALL: —from the previous budget.

The Hon. A. KOUTSANTONIS: Yes.

Mr MARSHALL: What was that writedown?

The Hon. A. KOUTSANTONIS: On page 14—do you have the graph, the table?

Mr MARSHALL: More of a table than a graph, is it?

The Hon. A. KOUTSANTONIS: The revenue writedown is—

Mr MARSHALL: Just for clarity, if we are looking at the top part of that table—

The Hon. A. KOUTSANTONIS: Just hang on a sec. If you go to page 14, the table gives the parameter and other variations to the 2016-17 MYBR as you asked: revenue taxation is $61 million in 2017-18, $58 million in 2018-19 and $77 million in 2019-20.

Mr MARSHALL: In other words, the Mid-Year Budget Review provided a state-based taxation revenue writedown on last year's budget and then there was a further writedown on state-based taxation revenue in the budget over the Mid-Year Budget Review. Can the Treasurer confirm to this committee that, in fact, using your figures here, that is a $380 million writedown in state-based taxation revenue since last year's budget?

The Hon. A. KOUTSANTONIS: That is about right, yes.

Mr MARSHALL: $380 million?

The Hon. A. KOUTSANTONIS: That is about right, yes.

Mr MARSHALL: You got it horribly wrong last year. Why should we have any confidence that the figures in the current projections for state-based taxation revenue are going to bear any resemblance to what is likely to occur?

The Hon. A. KOUTSANTONIS: Forecasting is very difficult to do. I think Treasury do a very good job in attempting to estimate activity in the economy. They do a very good job at trying to estimate taxation, but estimations can often be wrong.

Mr MARSHALL: Can the Treasurer provide an explanation to this committee as to why other states have state-based taxation write-ups over exactly the same period—write-ups over exactly the same period—and South Australia continues to have writedowns? $380 million is a huge amount of money.

The Hon. A. KOUTSANTONIS: Largely, I am advised this is on the basis of revenue writedowns in terms of property. On the eastern seaboard, as we know, there is a very large property boom occurring. John Fraser, Secretary to the Treasury, called it a bubble. We have seen on the back of massive conveyance duty increases in Sydney and Melbourne massive windfall gains for those state budgets.

Mr MARSHALL: The Treasurer must be disappointed because in previous budgets he has indicated that his stamp duty concessions would increase the volume of transactions and, ultimately, the state-based taxation revenue in that area. Can the Treasurer provide an explanation as to why that promise to the people of South Australia has not been fulfilled? What is going on—a $380 million writedown?

The Hon. A. KOUTSANTONIS: I am advised that revenues have increased, but just not by as much as we budgeted for. I am not often disappointed in this business, but the idea that the opposition is attacking the government for collecting less tax I think is symbolic of their lack of narrative. Given the conveyance duty cuts that we have made are in the commercial sector and not the residential sector, I know how confusing that is for the Leader of the Opposition. There is a fundamental difference: residential properties have received no stamp duty relief other than for off-the-plan apartments and for first-time owner grants. We have not attempted to stimulate that market.

We have seen growth in those revenues, but not by as much as we had forecast. There is a difference between whether there was growth in the previous year or whether there was as much growth as we had forecasted. The numbers are coming up, I am advised, but not by as much as we had hoped. However, forecasting is difficult, and it is very difficult to get these numbers right. For example, the Leader of the Opposition himself forecast he would win 25 seats in the last election, and he got that horribly wrong.

Mr Marshall interjecting:

The Hon. A. KOUTSANTONIS: Yes, I know.

Mr MARSHALL: It seems to me that the Treasurer has had to stick a massive new tax on the people of South Australia to make up for a massive great state taxation revenue shortfall. Can the Treasurer provide any explanation or commitment or guarantee to the people that there is not going to be a further writedown in state-based taxation revenue in the Mid-Year Budget Review to be handed down this year?

The Hon. A. KOUTSANTONIS: First, I have not increased taxes or brought in brand-new taxes on South Australians.

Mr MARSHALL: What about the ESL?

The Hon. A. KOUTSANTONIS: The two new revenue measures that are in the budget are both taxes South Australians will not pay, the first one being stamp duty excise on foreign investors. That is not a tax that South Australians will pay. We are introducing legislation on the major bank levy that will not allow the banks to introduce any new fees or charges to pass on the cost of that levy, so I reject that analysis. In terms of the forecasting, it is always very difficult to get the forecasting accurate. Sometimes we are surprised, sometimes we are disappointed. I have been in parliament now for 20 years, and I have seen forecasts get it wrong and get it right; it occurs. We do our very best to try to get it right.

Mr MARSHALL: You have got it wrong a lot. I would like to ask some questions about the foreign investors surcharge on stamp duties on residential properties, if possible. I refer to Budget Paper 1, page 1, paragraph 8. How will a stamp duty surcharge for foreign investors on residential property increase the housing stock?

The Hon. A. KOUTSANTONIS: Increase the housing stock?

Mr MARSHALL: Yes.

The Hon. A. KOUTSANTONIS: What we are attempting to do is for it to be a disincentive for foreign investors to purchase residential properties, and if they do they pay a surcharge, to make more property available for our own citizens. This tax will not apply to commercial properties and it will not apply to business investments.

Mr MARSHALL: So it will not increase housing stock but just the housing stock available to non-foreigners?

The Hon. A. KOUTSANTONIS: Yes.

Mr MARSHALL: Do you have any data on the number and proportion of apartments purchased by foreign investors in South Australia?

The Hon. A. KOUTSANTONIS: Not here on me, but I can get them for you.

Mr MARSHALL: I would appreciate that. Do you have any evidence or modelling of the impact of this surcharge on demand?

The Hon. A. KOUTSANTONIS: I do not have any modelling here.

Mr MARSHALL: Was any modelling done?

The Hon. A. KOUTSANTONIS: The evidence from interstate has been that, with the surcharges applied in New South Wales and Victoria, they have not seen any slowing of foreign investment in residential properties, and that is why they continue to increase the surcharges in those states. It will be interesting to see what occurs in South Australia, but my primary focus is making sure that South Australians are not priced out of their own suburbs.

Mr MARSHALL: Nevertheless, can you just confirm that no modelling has been done and that you relied on looking at the impact of this foreign investor stamp duty surcharge on residential properties in other states only?

The Hon. A. KOUTSANTONIS: That is right: we relied on the evidence from other states.

Mr MARSHALL: Have you considered whether this will impact the viability of developments in South Australia and therefore overall housing stock availability in this state?

The Hon. A. KOUTSANTONIS: It will not apply to large-scale developments. It will not apply to foreign investors buying large parcels of property to develop; it will only apply to individual purchasers of properties.

Mr MARSHALL: Say, for example, you have a property development happening in the city and a number of foreign investors wanted to buy an apartment—they are not available to do that anymore?

The Hon. A. KOUTSANTONIS: Yes, they are. They are not prohibited.

Mr MARSHALL: My question is: was there any work done, and what are the impacts of your foreign investor stamp duty?

The Hon. A. KOUTSANTONIS: You have just asked a question based on false information. First and foremost, all foreigners who wish to buy a residential property in this country need firm approval. Second, we do not prohibit them purchasing a property, which is what you just said we did: we have not.

Mr MARSHALL: Well, a surcharge.

The Hon. A. KOUTSANTONIS: A surcharge is not a prohibition.

Mr MARSHALL: It is not an incentive.

The Hon. A. KOUTSANTONIS: Yes, but it is not a prohibition, so we are not prohibiting foreign investors from buying properties. What we are saying is that we are attempting to make sure that South Australians are not priced out of their own property market.

Mr MARSHALL: Can you explain why you described the measures implemented by New South Wales and Victoria as being driven by xenophobia?

The Hon. A. KOUTSANTONIS: Yes, I can. My view on this tax is that I wish I did not have to introduce it.

Mr MARSHALL: You described them as xenophobic, didn't you?

The Hon. A. KOUTSANTONIS: Yes, I did, and I think—

Mr MARSHALL: Is your measure xenophobic?

The Hon. A. KOUTSANTONIS: No, it is in response to a surcharge being put in place in New South Wales, Victoria, Queensland, and I think Western Australia as well, which will have the effect of funnelling foreign investment into South Australia. I do not like to stop foreign investment, and that is why we have not applied it to commercial properties, business transactions or large-scale developments. What we are simply trying to do is not price South Australians out of their own suburbs.

Mr MARSHALL: Do you stand by your comments that the introduction of this measure in New South Wales and Victoria was xenophobic?

The Hon. A. KOUTSANTONIS: I think a lot of the commentary around the foreign investor surcharges—

Mr MARSHALL: You have changed your mind.

The Hon. A. KOUTSANTONIS: No, I have not changed my mind.

Mr MARSHALL: So it was xenophobic in those other jurisdictions, but not here?

The Hon. A. KOUTSANTONIS: As I said, a lot of the commentary around those surcharges, especially in New South Wales, was xenophobic. We are simply responding to what is occurring around the country, which is almost every other jurisdiction moving in this space. If we do not move in this space, we will see a funnelling of that investment pricing South Australians out of their own suburbs, and we cannot allow that to continue.

Mr MARSHALL: Nevertheless, New South Wales and Victoria—where the markets were overheating, where there has been a substantial increase in transactions and in prices—are the jurisdictions where they put this in place. I do not think the Treasurer is for one minute suggesting that we have the same conditions and pressures on price and availability as they have in Sydney or Melbourne.

The Hon. A. KOUTSANTONIS: No, thank goodness, no.

Mr MARSHALL: Yes, but then what was your justification for putting that measure that they put in place—

The Hon. A. KOUTSANTONIS: I just explained.

Mr MARSHALL: Do you accept the premise that the differential rates of taxation affect investment decisions?

The Hon. A. KOUTSANTONIS: It can have that impact, yes.

Mr MARSHALL: Has Treasury considered the impact of the foreign investment surcharge on the forecast for housing construction in South Australia?

The Hon. A. KOUTSANTONIS: There are a couple of things. The evidence in New South Wales and Victoria showed that it has not stopped investment, and of course the argument then is that these people, unlike their neighbours, are not paying the same taxes and charges that everyone else is paying to help improve communities and suburbs. The second point is that the advice I have is that about 500 to 700 houses are purchased each year by foreigners. Out of the total sales throughout the year, I hardly think it is going to make a massive impact, but again we have to be careful not to see South Australians priced out of their own suburbs.

Mr MARSHALL: Does the Treasurer have any Treasury advice that suggests that the rate of purchase by foreign nationals will diminish with his new tax and by what amount?

The Hon. A. KOUTSANTONIS: Let's be very clear about this. Where we want to encourage investment is where we have cut taxes, so we have abolished conveyance duty on all commercial property and business transactions and we want to see more investment in that area. We are doing everything we can to try to have a differential between other states in that area to encourage more investment in that area. Where we want to see less investment from foreigners, to make sure that South Australians are not priced out of their own suburbs, is in residential properties.

Mr MARSHALL: That is my whole question. You say that this is to discourage foreign nationals from buying properties in South Australia. What modelling did Treasury do? How many fewer properties are going to be sold in South Australia because of that?

The Hon. A. KOUTSANTONIS: We do not have that modelling. I told you that earlier.

Mr MARSHALL: So no modelling was done by Treasury or independently? You just had a look at what was happening in Sydney and Melbourne, which bears no relationship whatsoever to the housing property market in South Australia.

The Hon. A. KOUTSANTONIS: We are all part of the same country.

Mr MARSHALL: Are you suggesting that we have anything like the conditions in New South Wales or Victoria?

The Hon. A. KOUTSANTONIS: I am suggesting that foreign investors are looking for safe havens for their investment dollars. They are bringing them to Australia. They are looking at capital cities across Australia. To ensure that South Australians are not priced out of their own suburbs, we have introduced this measure.

Mr MARSHALL: The surcharge will come into effect on 1 January 2018; is that correct?

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

Mr MARSHALL: Does this mean that non-Australian nationals who have already purchased an apartment off the plan that will not be completed until next year will be hit with a retrospective tax?

The Hon. A. KOUTSANTONIS: Yes.

Mr MARSHALL: Is that ideal, to have retrospective taxes?

The Hon. A. KOUTSANTONIS: Yes, that is fine.

Mr MARSHALL: That is fine?

The Hon. A. KOUTSANTONIS: They have not purchased it yet.

Mr MARSHALL: Is this part of the overall theme that you think that people who are undertaxed should just basically wear taxes and that they should apply retrospectively?

The Hon. A. KOUTSANTONIS: No. The rule is that, when you purchase a property, you pay the stamp duty. When you pay the stamp duty is when the surcharge applies.

Mr MARSHALL: If a person entered into that contract with a certain rate envisaged, that has changed and your message to those foreign investors is, 'Bad luck. This is South Australia. We can just change things whenever we like.'

The Hon. A. KOUTSANTONIS: The parliament is supreme, yes.

Mr MARSHALL: So your message to foreign investors is, 'Bad luck. We have changed our minds.'

The Hon. A. KOUTSANTONIS: No, my message to foreign investors is that we are cutting conveyance duty on commercial property, on business investment, on business—

Mr MARSHALL: You are a danger to shipping.

The Hon. A. KOUTSANTONIS: We have no foreign surcharge on any business investment in South Australia. This is for residential properties.

Mr KNOLL: On Budget Paper 3, page 42, and looking at the conveyance duty surcharge and foreign buyers of residential property, Treasurer, is it your expectation that this tax is going to reduce the activity of foreign investors in residential property?

The Hon. A. KOUTSANTONIS: The evidence from New South Wales and Victoria is that it has not, and that is why they continue to increase the surcharge. We will have to wait and see.

Mr KNOLL: Because the forward estimates here show that the revenue that should be collected—

The Hon. A. KOUTSANTONIS: I know what you are trying to do. Yes, I understand what you are trying to do.

Mr KNOLL: Essentially, Treasurer, are you willing to admit the fact that you are going to introduce a tax to reduce the activity of foreign investors into residential property markets and that it is actually not going to reduce the level of activity of foreign investors in the market?

The Hon. A. KOUTSANTONIS: We will wait and see. Obviously, there will be a level where it will discourage investment. New South Wales and Victoria are still trying to find that point. We will see how we go here.

Mr KNOLL: Treasurer, you just admitted before that the other states have not actually seen a reduction in foreign investor activity, so is there—

The Hon. A. KOUTSANTONIS: I know that ruins your argument about it ruining foreign direct investment. I know how humiliating that is for you, but the truth is that we do not know at what point it will deter foreign investment. A lot of these investors are very keen to get capital out of their own countries and into other countries as a safe haven. That is fine, but what we are saying is that we want to make sure that South Australians are not priced out of their own suburbs. If the Liberal Party have a different view about it, they should say so.

Mr KNOLL: So this is just a tax grab then. There is no underlying philosophy, it is just a—

The Hon. A. KOUTSANTONIS: No, it is. The philosophy is that we want to make sure South Australians can buy a home in their own suburbs.

Mr KNOLL: If I can move on to Budget Paper 3, page 48 at the sixth paragraph, can the Treasurer confirm in regard to the Adelaide Casino and SkyCity development what concessions have been offered in the finalisation of that deal?

The Hon. A. KOUTSANTONIS: I would refer you to the Attorney-General in committee B.

Mr KNOLL: Treasurer, have you made any decision and can you give any sort of guarantee that there will not be a change to gambling taxation arrangements going forward in regard to the Adelaide Casino?

The Hon. A. KOUTSANTONIS: I have not turned my mind to gambling taxation and the Adelaide Casino.

Mr MARSHALL: Just to that point, the Treasurer has already given, both in this estimates committee and in previous statements to the parliament, a very clear indication that he is open to changing taxation arrangements without notice. He has given a very clear indication here again today, and the question from my colleague is whether he will give a guarantee that there will not be taxation changes affecting this very substantial investment for South Australia going forward.

The Hon. A. KOUTSANTONIS: Like I said, I have no plans to increase taxes on the Adelaide Casino.

Mr MARSHALL: Will you rule it out?

The Hon. A. KOUTSANTONIS: I do note—

Mr MARSHALL: Will you rule out increases?

The Hon. A. KOUTSANTONIS: I do note the concern the Liberal Party has about making sure the Casino is not taxed any more. I think that is a very interesting statement for the Leader of the Opposition to make, and I am sure that it will reverberate around the Adelaide Hills.

Mr MARSHALL: I am just trying to work out what your level of commitment is.

The Hon. A. KOUTSANTONIS: I just gave it. But again, foot-in-mouth disease continues and you have put your foot in your mouth again. If you think that the Casino deserves lower taxes, then say so.

Mr MARSHALL: We are trying to get some certainty for investors of all descriptions to come to South Australia—

The Hon. A. KOUTSANTONIS: I know of your love for gambling.

Mr MARSHALL: You have made it very clear—

The CHAIR: Order!

The Hon. A. KOUTSANTONIS: I understand your love for your gambling.

Mr MARSHALL: You have made it very clear—

The CHAIR: I am on my feet. Looking?

The Hon. A. KOUTSANTONIS: I understand your love for gambling.

The CHAIR: Treasurer.

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

Mr MARSHALL: It is all being recorded; it's fabulous.

The CHAIR: I ask all members of the committee—

Mr MARSHALL: You look like—

The CHAIR: —listening to me, please—

Mr MARSHALL: Yes.

The CHAIR: —to allow the question to be completed and then for the answer to be given.

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

The CHAIR: Hansard needs to hear it as well.

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

Mr DULUK: On Budget Paper 5, page 7, getting back to foreign investment, Treasurer, do you know how many foreign investors obtained off-the-plan concessions prior to 27 June 2017?

The Hon. A. KOUTSANTONIS: I do not have that here with me but I will get it for you very quickly.

Mr DULUK: What evidence was used in determining the 30 September cut-off date for the preconstruction grants?

The Hon. A. KOUTSANTONIS: I think that was something we developed within Treasury. Of course, we are attempting to stimulate as much activity as possible. We felt that that time line was the most appropriate. Again, it is always difficult to come up with these time lines.

Mr DULUK: So, Treasury did some modelling in regard to the cut-off date, or did you take that from New South Wales as well?

The Hon. A. KOUTSANTONIS: We took our very best estimate.

Mr DULUK: Based on what data?

The Hon. A. KOUTSANTONIS: Based on our ability to try to bring forward as much investment as possible, given what has already been approved through the DAC.

Mr DULUK: On Budget Paper 3, page 45, Treasurer, previously you have referred to the heating property market for your justification for this so-called investor surcharge. It is obviously not as hot as Melbourne or Sydney. How does this view reconcile with the 0.9 per cent nominal growth in property taxes referenced in this part of the budget?

The Hon. A. KOUTSANTONIS: The advice I have from the Treasury is that the 0.9 per cent nominal growth number is indicative of the tax reduction and conveyance duty for commercial property. If that had not occurred, nominal growth would have been 5.4 per cent.

Mr DULUK: That nominal growth of 0.9 per cent has nothing to do with the domestic housing market?

The Hon. A. KOUTSANTONIS: But it also factors in commercial properties.

Mr DULUK: How much?

The Hon. A. KOUTSANTONIS: If you exclude the policy decisions we took in terms of tax cuts, it would be 5.4 per cent.

Mr MARSHALL: I refer to Budget Paper 3, page 53. Did the Treasurer seek any information regarding the potential impact of a state bank tax on horizontal fiscal equalisation for South Australia before its inclusion in the budget?

The Hon. A. KOUTSANTONIS: Yes, we did seek advice and the advice was it would have no impact.

Mr MARSHALL: Who did you seek that advice from?

The Hon. A. KOUTSANTONIS: The South Australian Treasury.

Mr MARSHALL: The advice was provided by the South Australian Treasury?

The Hon. A. KOUTSANTONIS: Yes.

Mr MARSHALL: Have you discussed it with the Commonwealth Grants Commission at all?

The Hon. A. KOUTSANTONIS: The advice we have from the Treasury is that it is a policy decision, not a capacity impact on the ability to raise taxes, so it has no impact on HFE.

Mr MARSHALL: So the advice from Treasury is that the GST relativity will not be affected by the state bank tax?

The Hon. A. KOUTSANTONIS: That is the advice we have, yes.

Mr MARSHALL: Do you have any evidence beyond that advice? Was that advice checked with anyone?

The Hon. A. KOUTSANTONIS: I am advised that it is consistent with our intergovernmental agreements with the commonwealth government.

Mr MARSHALL: Did the Treasury seek any discussions with the Commonwealth Grants Commission to form that opinion?

The Hon. A. KOUTSANTONIS: No.

Mr MARSHALL: Does the Treasurer think it would be prudent to get some clarification of this from—

The Hon. A. KOUTSANTONIS: No, I have faith in the South Australian Treasury.

Mr MARSHALL: Have you received any advice to suggest that the state bank tax could raise the average interest cost for state government and, therefore, ultimately the taxpayers of South Australia?

The Hon. A. KOUTSANTONIS: It is very difficult to know what investors look for when they purchase our bonds. Those numbers go up and down for a number of reasons. I do note today that bank shares are higher across the board since the announcement of the major bank levies. It obviously has not had an impact on them. They have made no market announcement on the announcement of our major bank levy, as they did with the commonwealth one. It is too early to tell. We are not going out to the market for a while. I do note that Queensland went out recently and were not able to fully subscribe their debt and they have no major bank levy. It depends on timing, it depends on the amount, it depends on credit rating, it depends on a whole number of issues.

Mr MARSHALL: When do you next plan to go out to the market?

The Hon. A. KOUTSANTONIS: Probably around August or September.

Mr MARSHALL: August or September this year?

The Hon. A. KOUTSANTONIS: Yes.

Mr MARSHALL: My question was really whether or not you had received any advice. You said that you had formed an opinion that it would not adjust, but have you actually sought any advice and, if so, from whom? Have you received any advice and, if so, what is the nature of that advice?

The Hon. A. KOUTSANTONIS: It is too early to tell.

Mr MARSHALL: So you have not sought any advice on this matter?

The Hon. A. KOUTSANTONIS: These matters are market-sensitive matters and I do not wish to debate them in the parliament for a number of reasons. I do not want to impact our borrowing ability. I do not want to foreshadow any increases or decreases in the way the market operates. I have given you my answer and I stand by it.

Mr MARSHALL: Would you have the people of South Australia believe that you made this major change without seeking any advice as to whether or not it would increase the borrowing costs for this state? That is just downright negligent.

The Hon. A. KOUTSANTONIS: If I refer you to the federal Senate estimates hearing, Senator Ketter asked, 'Has the Treasury done any modelling on the economic impacts of a bank levy?' And the commonwealth secretary, John Fraser said yes. Senator Ketter asked, 'Can you tell us about it?' Mr Fraser said, 'The results are what common sense would suggest: they are trivial.' Senator Ketter asked, 'Trivial impacts, in what relation?' Secretary Fraser replied, 'In interest rates.'

Mr MARSHALL: But my question was whether you have sought advice, not reading from the Senate, which occurred afterwards.

The Hon. A. KOUTSANTONIS: As I said to you earlier—

Mr MARSHALL: Prior to making the decision to impose a differential state-based tax in South Australia, not offered in other states of Australia, did you seek advice as to whether it would affect the interest rates paid by this state? Yes or no, and, if yes, what?

The Hon. A. KOUTSANTONIS: The hysterical way in which the Leader of the Opposition—

Mr MARSHALL: It is not hysterical: it is a statement of fact. Answer the question.

The Hon. A. KOUTSANTONIS: The hysterical way in which you are asking these questions, I think, speaks volumes about your state of mind.

Mr MARSHALL: Hysterical. Spell it. Can you spell that word?

The Hon. A. KOUTSANTONIS: Again, personal insults just show how frustrated you are.

Mr MARSHALL: Answer the question.

The Hon. A. KOUTSANTONIS: It is beneath you. It is getting creepy. It is creepy.

Mr Marshall interjecting:

The Hon. A. KOUTSANTONIS: And so is that laugh. The commonwealth government introduced—

Mr MARSHALL: 'Did you get advice?' is the question.

The Hon. A. KOUTSANTONIS: The commonwealth government introduced its major bank levy. It has had no impact on Australia's credit rating, no impact—

Mr MARSHALL: It is not a differential tax.

The Hon. A. KOUTSANTONIS: It is a differential tax in terms of nations, and the nation borrows money.

Mr MARSHALL: 'Did you seek advice?' was the question.

The Hon. A. KOUTSANTONIS: I know you do not like the way this answer is going for you—

Mr MARSHALL: You have not answered it.

The Hon. A. KOUTSANTONIS: —and I know you are desperate to create conflict to show some sort of semblance that you are strong instead of weak, and it is getting embarrassing. It is getting embarrassing.

Mr MARSHALL: Have you sought any advice regarding the state bank tax?

The Hon. A. KOUTSANTONIS: I am attempting to answer your question, but you just keep interrupting me. Given that there has been no impact on the commonwealth government and there has been no impact on the Australian banks' profitability or on their share price—and the banks have already admitted that they can afford to pay this major levy without any impact on their profitability or their ability to borrow—the question then becomes: why is the Leader of the Opposition so committed to the banks and not to the people of South Australia having more revenue to spend on health, education, roads, police and all the important infrastructure that they keep calling on us to spend more on? We will wait and see if it increases our borrowing costs. I suspect it will not.

Mr MARSHALL: Can the Treasurer just answer a simple question: did he seek advice on the introduction of a state bank tax and the effect it would have on state interest costs, prior to introducing it in the budget? Yes or no?

The Hon. A. KOUTSANTONIS: I have just answered it. Of course we had internal discussions about what the impacts of this major bank levy would be. We looked at the commonwealth government's example. There were no detrimental impacts whatsoever from the commonwealth government's—

Mr MARSHALL: Any independent advice?

The Hon. A. KOUTSANTONIS: We sought independent legal advice. We are on very strong legal grounds with this revenue measure. It is a levy that South Australians will not pay and that is why the banks are so agitated by it, because they cannot pass it on. Yet they have found a new branch, a new ally in the Leader of the Opposition, and that is something he will have to wear.

Mr MARSHALL: What were the estimated credit spreads at the time the budget was formulated?

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

Mr MARSHALL: Can the Treasurer also provide us with advice on what they are now?

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

Mr MARSHALL: Thanks very much. Between Funds SA, ReturnToWorkSA, SAFA and the MAC, what is the South Australian government's total exposure to equities impacted by the state bank tax?

The Hon. A. KOUTSANTONIS: There is no state bank tax; it is a major bank levy. I will get that answer for you.

Mr MARSHALL: Can you also tell us what that exposure is with Super SA?

The Hon. A. KOUTSANTONIS: Sure.

Mr MARSHALL: Can you explain why the revenue peaks in the first year of the forward estimates and then falls away in the second and third years?

The Hon. A. KOUTSANTONIS: I am advised by the Treasury that the decline in the commonwealth major bank levy from 2017-18 to 2018-19 largely reflects the expected timely deductions for corporate income tax purposes, which were the estimates published by the commonwealth for the major bank levy revenues.

That does not apply, so the South Australian Department of Treasury and Finance have now been advised of an estimate of the commonwealth major bank levy on a gross basis. This is an accrual version of the revenue expected to be collected from the commonwealth major bank levy that has not been adjusted to account for changes to other commonwealth taxes.

So the revenue that we will be receiving will be $97 million in 2017-18, $101 million in 2018-19, $107 million in 2019-20 and $112 million in 2020-21. That is a revision up in 2018-19 of $12 million, a revision up of $18 million in 2019-20 and a revision up of $17 million over 2020-21—an extra $47 million over four years.

Mr MARSHALL: What is South Australia's forecast share of GDP in each year of the forward estimates?

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

Mr MARSHALL: Will the tax liabilities fall if South Australia's share of GDP falls, do you think?

The Hon. A. KOUTSANTONIS: Sorry, say that again.

Mr MARSHALL: Will the share of this state bank levy be affected by any decrease in GDP levels that we have here in South Australia?

The Hon. A. KOUTSANTONIS: Yes, the levy will change in line with our share of the national economy so, if our GDP grows, our share grows. If our GDP shrinks—

Mr MARSHALL: What have you forecast then? Did you keep it constant, or did you have a diminishing share of GDP for the basis of determining the revenue from this tax?

The Hon. A. KOUTSANTONIS: I understand Treasury are forecasting a slight decline.

Mr MARSHALL: From what to what?

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

Mr MARSHALL: How does South Australia's share of GDP compare with our share of population?

The Hon. A. KOUTSANTONIS: I am advised it is lower.

Mr MARSHALL: Can you give us an indication of how much lower? We have 7.1 per cent of the nation's population. Do we have 6.5 per cent of the GDP?

The Hon. A. KOUTSANTONIS: I do not have the population numbers here, but I understand our percentage of the national economy is 6 per cent.

Mr MARSHALL: Six per cent?

The Hon. A. KOUTSANTONIS: Yes.

Mr MARSHALL: Our population is 7.1 per cent.

The Hon. A. KOUTSANTONIS: I do not have that in front of me.

Mr MARSHALL: Well, that is a fact.

The Hon. A. KOUTSANTONIS: Is it?

Mr MARSHALL: Yes. So why is there such a massive differential between our share of the population and our share of national—

The Hon. A. KOUTSANTONIS: There are a number of factors in place. Obviously, net migration into—

Mr MARSHALL: Interstate.

The Hon. A. KOUTSANTONIS: —other cities like Sydney and Melbourne from—

Mr MARSHALL: About 7,000 each year are leaving South Australia.

The Hon. A. KOUTSANTONIS: New South Wales and Victoria have had dramatic overseas migration into those communities. I understand that the commonwealth government has nearly doubled our migration intake over a period of time. Most of that is going into the eastern seaboard, so they are getting a disproportionate amount of net migration.

Of course, there are industrial differences in terms of industries. Obviously, Western Australia has a much larger mining industry, as does Queensland. South Australia has attempted to do what we can to grow those industries. You know that I am a very big supporter of the oil and gas industry here in South Australia because I believe that is a good way of trying to grow people coming into the state to work, especially in the Cooper Basin and in our South-East.

I note that we also want to see major investments in copper and uranium. We have released our copper road map. There have been dramatic investments announced at Olympic Dam and Carrapateena. Those two mines alone will account for a great deal of capacity of the world's copper markets. Olympic Dam is forecasting to go above 200,000 tonnes of copper per year for the first time since they purchased the mine off Western Mining. These are dramatic investments that they are making that will help our industrial base grow and our population grow as they employ more people, but ultimately—

Mr MARSHALL: That is great, but why are you actually forecasting a reduction in the GDP? You just told us about three minutes ago that you—

The Hon. A. KOUTSANTONIS: It does not mean our economy is going to shrink. It just means that, potentially, other economies will grow faster than ours because of net migration.

Mr MARSHALL: Basically, what you envisage is that, under the budget which you have handed down, we will see South Australia diminish further as a percentage of the national market, not because we are shrinking but just because the rest of Australia is getting larger, growing faster and getting further away?

The Hon. A. KOUTSANTONIS: If you saw the latest Deloitte Access Economics reports on investment in infrastructure, we are doing exceptionally well. The most recent CommSec State of the States is showing—

Mr MARSHALL: Nevertheless, your forecast is for a reduction in GDP percentage.

The Hon. A. KOUTSANTONIS: Sure, but I am talking about independent financial modelling done on the state of the South Australian economy.

Mr MARSHALL: Your Treasury estimate is for a diminution of our share of national GDP.

The Hon. A. KOUTSANTONIS: Those estimates are done in the Department of the Premier and Cabinet but—

Mr MARSHALL: So they are not Treasury estimates?

The Hon. A. KOUTSANTONIS: —importantly, what you are seeing are independent accounting agencies and banks putting out reports and surveys, from ANZ to NAB to CommSec to Deloitte, talking about dramatic investments in South Australia, improvements in growth, improvements in business investment—the opposite of what the opposition is saying is occurring in South Australia. I am quite confident about the future of our state.

Mr MARSHALL: For clarity, it is the Premier's department that has done the modelling, which shows a diminution in our percentage of the national GDP. If that is the case, does Treasury agree with the modelling that the Premier's department has done in this area?

The Hon. A. KOUTSANTONIS: We are one government.

Mr MARSHALL: So you agree that we are going to get further behind?

The Hon. A. KOUTSANTONIS: We rely on—

Mr MARSHALL: We are going to get further behind. I refer to Budget Paper 3, page 31. Can you explain why you have failed to limit real growth in employee expenses to 0.2 of a per cent, as presented in last year's budget, and in fact allowed real growth of 2.2 per cent? It is quite a massive change from what you had envisaged when we met at this committee last time.

The Hon. A. KOUTSANTONIS: Yes. Well, more nurses, more doctors, more police, front-line services.

Mr MARSHALL: So that accounted for the overall 2.2 per cent increase across the board?

The Hon. A. KOUTSANTONIS: And a dramatic investment, I am advised, in child—

Mr MARSHALL: What percentage did the increase in doctors—

The Hon. A. KOUTSANTONIS: If I could just finish my answer.

Mr MARSHALL: Sorry.

The Hon. A. KOUTSANTONIS: You should be. Dramatic investments in child protection as well. We have seen in the Mid-Year Budget Review over a $400 million investment in child protection and a further $85 million investment in this budget, our commitment to 313 police and, of course, nurses and doctors in our hospitals.

Mr MARSHALL: But were they not all entered into the budget last year?

The Hon. A. KOUTSANTONIS: You are seeing growing activity and growing presentations to our hospitals.

Mr MARSHALL: Can the Treasurer just provide some clarity as to whether or not those increases were—

The Hon. A. KOUTSANTONIS: Sure. I refer you to Budget Paper 3, page 31. There is a headline there saying 'Full-time equivalents'.

Mr MARSHALL: Yes.

The Hon. A. KOUTSANTONIS: FTEs in the general government sector are estimated to decrease by 405 between 30 June 2017 and 30 June 2021.

Mr MARSHALL: How did you go?

The Hon. A. KOUTSANTONIS: This is prospective:

In 2016-17 MYBR outlined that general government sector FTE levels over the forward estimates were higher than those forecast at the time of the 2016-17 Budget. The increase was primarily a result of the reform of the child protection system and acceleration of the recruitment of cadets to meet the government's commitment to recruit 313 officers locally by June 2018.

There is a whole series of other dot points there. Underneath, we have a revision to commonwealth and state funding under the NER Agreement due to updates to enrolments and the funding estimation tool received by the commonwealth government and additional resources under the child dental benefits scheme in recognition of the continuation of the commonwealth government's commitment to provide a benefit cap of $1,000 over a two calendar year period for all eligible children. There are more nurses under the recent nursing and midwifery enterprise bargaining agreement. Of course, all the new initiatives that you support in the budget have all led to an increase in FTEs.

Mr KNOLL: Treasurer, in the same budget line, are you suggesting that this year's budget, as distinct from MYBR or last year's budget or any time previous, was the first time that you had actually budgeted for Recruit 313 to come through the forward estimates?

The Hon. A. KOUTSANTONIS: No, we have accelerated it.

Mr MARSHALL: They were meant to be delivered five years ago; it is one hell of an acceleration.

Mr KNOLL: Hastening slowly. I refer to Budget Paper 3, page 9, table 1.3, paragraph 5. Treasurer, for the period referred to here, with accumulated surpluses of $1.1 billion, what is the cumulative budgeted total of dividends to be paid by the MAC?

The Hon. A. KOUTSANTONIS: I refer you to Budget Paper 3, page 86, table 5.11, which details dividends: a total of $1.6 billion and total returns $2.7 billion.

Mr KNOLL: Treasurer, given your budgeted surplus of $72 million in 2017-18, what would the net operating balance be in the absence of the $321.7 million MAC dividend?

The Hon. A. KOUTSANTONIS: I do not know because I would have made different decisions in the budget. You are asking me a question to try to isolate one measure. When you are formulating a budget, you start from the ground up. You know what you have to work with and you formulate your budget accordingly. If I did not have the MAC dividends, we would have made other decisions.

Mr KNOLL: Treasurer, when you were looking to make the decision about whether to sell off the MAC, were there discussions about what other revenue measures would be put in place as alternatives to selling off the Motor Accident Commission?

The Hon. A. KOUTSANTONIS: As Rob Lucas said this week in the Budget and Finance Committee, there is always a list of savings or revenue measures that Treasury considers. These are all political decisions. We have been in office now for 16 years. All the revenue measures that we have put in place, or the tax cuts that we have put in place, speak for themselves. Again, I say you cannot take one measure out of a budget and say, 'You would be in deficit or surplus had you not done this or done that,' because it is not a fair representation of how a budget is built.

Mr KNOLL: So you are not willing to concede that the only reason you have a surplus is the fact that you sold off the Motor Accident Commission?

The Hon. A. KOUTSANTONIS: No, and I think that any fair person who looks at the budget process would say that, if you have the proceeds of the sale of the Motor Accident Commission, you budget them; if you did not have them, you would not budget them and you would make other decisions.

When you have extra revenue, you make decisions about whether it is time to pay down debt or have more expenditure, to invest in the economy or have more tax cuts. For example, if we had not made the conveyance duty tax cuts we would have extra revenue and have larger surpluses, but I have not had a question from the opposition saying, 'How much larger would the surplus be had you not provided tax cuts in payroll tax, stamp duty concessions and stamp duty abolition in commercial property areas?' There are swings—

Mr KNOLL: We did about 10 minutes ago—

The Hon. A. KOUTSANTONIS: Hang on a second. There are swings and roundabouts in this area.

Mr KNOLL: —when we talked about the nominal 0.9 per cent increase in property taxes.

The CHAIR: Member for Schubert!

The Hon. A. KOUTSANTONIS: Again, in isolation you cannot pick out one measure and say that that measure puts you in surplus or deficit when you are looking at a budget in the whole.

Mr KNOLL: Treasurer, have forecasts for net operating balances assumed proceeds from the Lands Titles Office and, if so, what value and when?

The Hon. A. KOUTSANTONIS: No, it will not affect the operating surplus.

Mr KNOLL: Will there be any impact to net debt and has any impact to net debt been modelled and put into the budget?

The Hon. A. KOUTSANTONIS: Yes. As we told Budget and Finance this week, yes, it will have an impact on net debt.

Mr KNOLL: What is the impact of that?

The Hon. A. KOUTSANTONIS: We are still in the middle of the market process. I will not be disclosing that until it is completed.

Mr KNOLL: If the privatisation does not proceed, will that mean further increases to the state's net debt position?

The Hon. A. KOUTSANTONIS: That is a hypothetical question.

Mr KNOLL: Given the fact that you are actively considering it and you are suggesting that you are still going out to market, you obviously—

The Hon. A. KOUTSANTONIS: No, we are in the middle of the process. We announced it last budget. You voted for it.

Mr KNOLL: So you are saying that you have not modelled any sort of downside if this transaction does not go ahead.

The Hon. A. KOUTSANTONIS: I am not going to waste the Treasury's money on modelling whether a tender process does or does not finalise.

Mr KNOLL: Treasurer, have forecasts for net operating balances and net debt assumed proceeds from the State Admin Centre precinct?

The Hon. A. KOUTSANTONIS: Again, asset sales will not affect operating balance. It affects net debt.

Mr KNOLL: Sure, and that was part of my question: have forecasts for net operating balances and net debt assumed proceeds from the State Admin Centre?

The Hon. A. KOUTSANTONIS: Yes.

Mr KNOLL: What is the value of that and when is that set to impact the budget?

The Hon. A. KOUTSANTONIS: Again, I am not inclined to reveal that while we are out to the market.

Mr KNOLL: Treasurer, have forecasts for net operating balances and net debt assumed proceeds from the sale of the Gillman site?

The Hon. A. KOUTSANTONIS: Gillman is owned by Renewal SA, not by the general government sector.

Mr KNOLL: We are talking about Budget Paper 3, page 9, the net operating balance. What I am asking is: will the sale of the Gillman site have an impact upon this?

The Hon. A. KOUTSANTONIS: No. Obviously, the impacts are the dividends that they pay us but, in terms of its accounting measure, it is treated internally for Renewal SA purposes.

Mr KNOLL: Sure, but you would have to consider the fact that it sits on the balance sheet as part of the net debt figure.

The Hon. A. KOUTSANTONIS: Yes, but they pay down their own debt first. They do not pay down our debt.

Mr KNOLL: If I can move on, have the forecasts for net operating balances and net debt assumed proceeds from the sale of any or all of the land transferred from TAFE SA to Renewal SA?

The Hon. A. KOUTSANTONIS: There is no proposal to sell any of those properties, I am advised.

Mr KNOLL: I refer to Budget Paper 4, Volume 4, page 166. Treasurer, can you confirm the total budget for the statewide re-evaluation of land currently being undertaken by the Valuer-General?

The Hon. A. KOUTSANTONIS: I refer you to minister Mullighan for that line of questioning.

Mr DULUK: I refer to Budget Paper 3, page 18. Treasurer, can you confirm the impact on revenues from the sale of goods and services as a result of the sale, or proposed sale, of the LTO?

The Hon. A. KOUTSANTONIS: I am advised that the government will continue to collect those fees and charges from the LTO from the services they provide.

Mr DULUK: But what is the impact on revenue?

The Hon. A. KOUTSANTONIS: There will not be any because we will still continue to collect that revenue, I am advised. If I am wrong, I will get back to you and let you know.

Mr DULUK: How much revenue does the LTO currently contribute to Treasury?

The Hon. A. KOUTSANTONIS: We have to find out and get back to you.

Mr DULUK: I refer to page 12 of the same budget paper. Following the release of the budget, you told SACOSS that grants for NGOs would receive indexation of 2 per cent in 2017-18 and 2018-19 and 2.5 per cent in 2020-21. To which grant agreements does this indexation apply?

The Hon. A. KOUTSANTONIS: I will get you a list of those on notice.

Mr DULUK: In addition to that, has this been included in the budget already, or will it be included in the Mid-Year Budget Review?

The Hon. A. KOUTSANTONIS: It is already in the numbers.

Mr DULUK: It is already in the current budget?

The Hon. A. KOUTSANTONIS: Yes.

Mr DULUK: What is the cost of this measure in the current year and each year of the forward estimates?

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

Mr DULUK: Why was this indexation not included in the budget measures?

The Hon. A. KOUTSANTONIS: The bill?

Mr DULUK: No, as part of the Budget Measures Statement.

The Hon. A. KOUTSANTONIS: Because of the agencies; it is in their budgets.

Mr DULUK: Will the indexation apply to multiyear funding agreements that are already in place?

The Hon. A. KOUTSANTONIS: No, I am advised.

Mr KNOLL: I turn to Budget Paper 4, Volume 4, page 178. Treasurer, can you confirm the distribution of funds from the community development fund in 2017-18 and each year of the forward estimates?

The Hon. A. KOUTSANTONIS: I am advised there has been no change from previous years.

Mr KNOLL: Sorry, the question was: can you confirm what the distribution of funds would be for 2017-18 and each year of the forwards?

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

Mr KNOLL: Can you also potentially take on notice to say where these funds are going and which programs or grants these funds are being used to pay for them?

The Hon. A. KOUTSANTONIS: Yes, of course.

Mr KNOLL: Have any commitments been made out of the funding 2017-18?

The Hon. A. KOUTSANTONIS: I am advised not yet.

Mr KNOLL: Are there any commitments made over the forwards?

The Hon. A. KOUTSANTONIS: I will have to check.

Mr KNOLL: Are there any provisions made or funds allocated from funding 2017-18 or any year of the forwards?

The Hon. A. KOUTSANTONIS: Sorry, say that again.

Mr KNOLL: Have there been any provisions made or funds allocated?

The Hon. A. KOUTSANTONIS: Yes, it is all budgeted; we have not allocated it, but it is budgeted.

Mr MARSHALL: My question relates to operating contingencies. These are covered off in Budget Paper 4, Volume 4, page 178. Can the Treasurer explain why employee contingencies have massively increased from the 2016-17 estimated result of $16 million up to $68 million for the current financial year?

The Hon. A. KOUTSANTONIS: I am advised we hold in central contingency allocations of employee entitlements and moneys while we are negotiating enterprise agreements as they come up, and we hold them centrally while they are being negotiated. After they are negotiated, we disburse them to agencies, so a number of agreements are coming up for negotiation.

Mr MARSHALL: Which ones are they?

The Hon. A. KOUTSANTONIS: In Budget Paper 3, page 32, under chapter 2, enterprise agreements, there is a list of them:

…Rail Commissioner (train operation drivers and maintenance employees), assistants to Members of Parliament, wages parity (weekly paid trade), TAFE SA and SA Ambulance employees.

Then we have:

…(salaried and weekly paid), Visiting Medical Specialists, Salaried Medical Officers and Clinical Academics, and…firefighters, the Rail Commissioner’s tram employees, school and preschool staff.

I think that is all of them.

Mr MARSHALL: So the Treasurer is not confident of his budgeted wage increase—

The Hon. A. KOUTSANTONIS: Absolutely.

Mr MARSHALL: —or his budgeted enterprise bargaining agreement outcome?

The Hon. A. KOUTSANTONIS: Absolutely.

Mr MARSHALL: Yet he is providing a very large sum of money.

The Hon. A. KOUTSANTONIS: I believe in being paid a fair day's pay for a fair day's work.

Mr MARSHALL: Why do you not put in the budget then?

The Hon. A. KOUTSANTONIS: Because we are negotiating the agreements now.

Mr MARSHALL: Why are some of these lagging so far behind?

The Hon. A. KOUTSANTONIS: Well, I believe in enterprise agreements, I do not believe in WorkChoices.

Mr MARSHALL: You do not believe in paying the enterprise bargaining increases when they are due—just keep them waiting, that is the gist of it.

The Hon. A. KOUTSANTONIS: That is the way enterprise agreements work while you are negotiating, and after the negotiating you get back pay.

Mr MARSHALL: Can the Treasurer provide any advice as to why the contingency for investing activities has increased from just under $7 million in the last financial year to a massive $114 million for this current financial year?

The Hon. A. KOUTSANTONIS: I am advised that that increase is largely in place for the energy plan.

Mr MARSHALL: What amount of that is going to be expended on the energy plan?

The Hon. A. KOUTSANTONIS: It is budgeted at $75 million.

Mr MARSHALL: That is not included elsewhere? This is an additional $75 million in contingency, or it is part of the—

The Hon. A. KOUTSANTONIS: It is part of the $550 million.

Mr MARSHALL: It is part of the $550 million. So that $75 million is not included anywhere else in the budget, it is only here in the contingency?

The Hon. A. KOUTSANTONIS: That is correct.

Mr MARSHALL: What is the remainder, because there is another $40 million and that is a lot more than three times last year's figure? What other investing activities have you got up your sleeve?

The Hon. A. KOUTSANTONIS: A couple.

Mr MARSHALL: A couple? What sort?

The Hon. A. KOUTSANTONIS: Part of that is for the decommissioning of the old Royal Adelaide Hospital.

Mr MARSHALL: How much of that is for the decommissioning of the Royal Adelaide Hospital?

The Hon. A. KOUTSANTONIS: Over $20 million.

Mr MARSHALL: Over $200 million?

The Hon. A. KOUTSANTONIS: Over $20 million.

Mr MARSHALL: Given that evidence given to the Budget and Finance Committee has suggested that the amount for the decommissioning of that hospital is a lot larger, why is it that only $20 million is being allocated? That is about 10 per cent of what Budget and Finance has been provided with as a cost?

The Hon. A. KOUTSANTONIS: That is our contribution out of the general government sector and it will become a Renewal asset afterwards and they will be spending the remainder from their funds.

Mr MARSHALL: When we look in the budget, though, it is quite clear that you have $360 million allocated for your gas project, $150 million for your storage, as the Premier outlined in his presentation this morning, and $28 million for this additional gas play. That adds up to $538 million. If you add in another $75 million, as you are just predicting—

The Hon. A. KOUTSANTONIS: No, the $75 million is included in that $550 million.

Mr MARSHALL: Can the Treasurer provide some explanation as to why there is a massive increase in the supplies and services contingency from $111 million last financial year to $400 million in the current financial year?

The Hon. A. KOUTSANTONIS: I am advised that a large part of it is the $40 million Better Neighbourhoods Program and a large amount of it is—

Mr MARSHALL: Sorry?

The Hon. A. KOUTSANTONIS: The Better Neighbourhoods Program.

Mr MARSHALL: The better networks?

The Hon. A. KOUTSANTONIS: Neighbourhoods.

Mr MARSHALL: The neighbourhoods program: that accounts for $40 million of it.

The Hon. A. KOUTSANTONIS: The remainder, I am advised, is mainly made up of the energy plan.

Mr MARSHALL: The energy plan again?

The Hon. A. KOUTSANTONIS: Yes. It is $550 million. It is very large.

Mr MARSHALL: Why is it always included in contingencies only?

The Hon. A. KOUTSANTONIS: It is just the way we have budgeted for it.

Mr MARSHALL: It seems a bit sloppy.

The Hon. A. KOUTSANTONIS: There is money in there for Arrium as well.

Mr MARSHALL: Sorry?

The Hon. A. KOUTSANTONIS: The $50 million for Arrium is included in that money.

Mr MARSHALL: In that contingency?

The Hon. A. KOUTSANTONIS: Yes.

Mr MARSHALL: Out of interest, why would you include that in a contingency if you have already negotiated it?

The Hon. A. KOUTSANTONIS: The timing of the payout will be negotiated with the potential new owners. We did not know who the new owners would be. We did not know what the timing of their investments would be. It is very hard to budget, so we keep it in contingency.

Mr MARSHALL: It is just very odd. The total contingencies for this current financial year are $580 million. Last year, they were $134 million. That is a massive increase. Some people in South Australia are a little bit sceptical about your motivations for having such a large contingency in the lead-up to an election.

The Hon. A. KOUTSANTONIS: No, only you.

Mr MARSHALL: What are the contingencies for next year and the year after?

The Hon. A. KOUTSANTONIS: What are you afraid of?

Mr MARSHALL: I am just asking a question.

The Hon. A. KOUTSANTONIS: What are you frightened of? That it might slip through your fingers again.

Mr MARSHALL: I am just asking—

The Hon. A. KOUTSANTONIS: Is that what you are frightened of? You might make a mistake again.

The CHAIR: Order!

Mr MARSHALL: I am interested in good public policy—

The Hon. A. KOUTSANTONIS: Are you?

Mr MARSHALL: —something that has been failed to be implemented by this government over the last 15 years of maladministration.

The Hon. A. KOUTSANTONIS: Really?

Mr MARSHALL: My question is: what are the contingencies over the forward estimates?

The Hon. A. KOUTSANTONIS: They are published, aren't they?

Mr MARSHALL: Can you tell us on what page they are published because I could not find them. If you have read them, perhaps you could just tell us, or did you get that wrong?

The Hon. A. KOUTSANTONIS: The capital investing is in a table on—

Mr MARSHALL: The contingencies.

The Hon. A. KOUTSANTONIS: Yes, the capital investment contingencies are on page 38 of Budget Paper 3, but generally contingencies are kept in place—

Mr MARSHALL: What page was that, sorry?

The Hon. A. KOUTSANTONIS: —to ensure agencies meet their budgets, so that we are able to keep an eye on spending and make sure that money is not wasted.

Mr MARSHALL: My question was the contingencies, Treasurer.

The Hon. A. KOUTSANTONIS: Central agencies often keep contingencies in place to make sure there is ample room in place to make sure that the budget measures are kept to and that things are done on time and money is not wasted.

Mr MARSHALL: My question is regarding what contingencies exist in this budget over the forward estimates beyond those that are contained on page 178 because—

The Hon. A. KOUTSANTONIS: Every year oppositions ask this and every year government ministers are asked this. We keep contingencies in place—

Mr MARSHALL: I am trying to determine whether or not these allegations that people have made, that there is a lot of money in contingencies for pork-barrelling in the lead-up to this election, are true or false. It was $134 million last year and it is $580 million this year, to be expended between now and March. I am asking what it is going to be next year and the year after. I am not sure why you do not want to provide that information to this committee.

The Hon. A. KOUTSANTONIS: Given you have made a commitment to spend $3 billion in safe Liberal seats, I hardly think you can complain—

Mr MARSHALL: Anyway, do you have an answer to the question?

The Hon. A. KOUTSANTONIS: —about anyone making pork-barrelling accusations.

Mr MARSHALL: Do you have an answer to the question?

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

Mr MARSHALL: So, that is a no-answer on that one. Thank you.

Mr KNOLL: If we can move on to Budget Paper 3, page 85 and the table there, Treasurer, there is an $86 million income tax equivalent receipt from ReturnToWork. Can you let us know when the department was advised of when this receipt was likely to be made?

The Hon. A. KOUTSANTONIS: It is a legislative requirement. You would have voted for it in this parliament.

Mr KNOLL: So, Treasurer, why was it not budgeted for?

The Hon. A. KOUTSANTONIS: We did not know if they would make a tax equivalent payment when they had made a profit.

Mr KNOLL: Have you been advised by ReturnToWork what was the cause of this unexpected $86 million IT receipt?

The Hon. A. KOUTSANTONIS: We did not have a predicted surplus from ReturnToWork until later in the year. You wait for the actuarial advice, and once you get it the legislation kicks in and you are required to make a tax equivalent payment.

Mr KNOLL: Treasurer, if it is related to the change in the surplus of ReturnToWork, why is there not a budgeted IT receipt for 2017-18?

The Hon. A. KOUTSANTONIS: A budgeted what?

Mr KNOLL: Why is there not an income tax equivalent in the budget for 2017-18?

The Hon. A. KOUTSANTONIS: Treasury are very conservative. We need to make sure that they are going to make a profit and that they have sufficient solvency that they can make the payment again. If they do not, they do not make the payment, so we do not budget for it.

Mr KNOLL: When would you expect for the 2017-18 year to be advised if they are going to make it?

The Hon. A. KOUTSANTONIS: I will wait for the actuaries to get back to us and let us know.

Mr KNOLL: Do you have an indication of when that is likely to be?

The Hon. A. KOUTSANTONIS: No.

Mr KNOLL: Can you tell us when you were advised that the $86 million—

The Hon. A. KOUTSANTONIS: I will check and get back to you.

Mr DULUK: Sticking with Budget Paper 3, Treasurer, what is the expected date for the Mid-Year Budget Review to be published?

The Hon. A. KOUTSANTONIS: I will let you know when it is closer to the date, like about 9 o'clock in the morning.

Mr DULUK: Do you expect it to be before the end of December?

The Hon. A. KOUTSANTONIS: You will have to wait and see.

Mr DULUK: On Budget Paper 3, page 19, are you able to confirm the average level of carryovers is $84 million in each year of the forward estimates?

The Hon. A. KOUTSANTONIS: We will have to check and get back to you.

Mr DULUK: Thank you; and, on notice, a breakdown of operating expenses which were carried over between 2015-16 and 2016-17, and those which are to be carried over between 2016-17 and 2017-18.

The Hon. A. KOUTSANTONIS: Sure.

Mr DULUK: Continuing with that, on page 19, can you confirm investing carryovers of $231 million are included in the budget for each year of the forward estimates?

The Hon. A. KOUTSANTONIS: We will check and get back to you.

Mr DULUK: And how did that compare with 2015-16?

The Hon. A. KOUTSANTONIS: Sure.

Mr DULUK: And which projects had expenditure carried over from 2016-17?

The Hon. A. KOUTSANTONIS: Sure.

Mr DULUK: And have any projects had carryovers earmarked between 2017-18 and 2018-19?

The Hon. A. KOUTSANTONIS: Sure.

Mr DULUK: You do not know any off the top of your head?

The Hon. A. KOUTSANTONIS: No.

Mr KNOLL: If I can move to Budget Paper 3, page 34, table 2.12—

The Hon. A. KOUTSANTONIS: That is better. Finally, some real right-wingers asking the questions.

Mr KNOLL: I wiped the floor with you the other week. We can keep that going, if you like.

The Hon. A. KOUTSANTONIS: What did you do?

Mr KNOLL: On Budget Paper 3, page 34, Treasurer, can you advise what the state government's average cost of borrowing is at the moment?

The Hon. A. KOUTSANTONIS: We will check and get back to you.

Mr KNOLL: Are you able to provide any more detail about bond issuances?

The Hon. A. KOUTSANTONIS: Bondage? No, I cannot give you any advice on bondage, young man, and, quite frankly, those questions have no place in this parliament.

Mr KNOLL: Bond issuances.

The Hon. A. KOUTSANTONIS: Bond issuances, that is different.

Mr KNOLL: You said July. Do you have anything more specific than that?

The Hon. A. KOUTSANTONIS: No.

Mr KNOLL: No understanding of how much money you are going to be going out to market for in August/September?

The Hon. A. KOUTSANTONIS: Well, you can ask me when SAFA is here and we will go through it then.

Mr KNOLL: How do expectations for the cost of borrowing for debt yet to be issued compare with the cost of borrowing on debt for the last 18 months?

The Hon. A. KOUTSANTONIS: You have asked me these questions earlier in relation to the major bank levy, and I said that I do not believe that there will be any major impact. Of course, it is very hard to factor in what the market thinks, what is going on at any one time. As I said earlier, Queensland went out last week or the week before and was not able to get a full subscription. It depends on timing, it depends on what is going on in the markets and it depends on what the President of the United States is tweeting that morning. The markets are fickle.

Mr KNOLL: Referring to Budget Paper 3, page 47, in relation to guarantee fees, what market interest rates are expected over the forward estimates?

The Hon. A. KOUTSANTONIS: I do not have the SAFA officials here, but if you can ask me that question—

Mr KNOLL: Well, we can move on from that. Referring to Budget Paper 4, page 152, does the $1.1 million HomeStart project refer to the investigation into the possible privatisation of HomeStart?

The Hon. A. KOUTSANTONIS: Yes.

Mr MARSHALL: So we spent $1.1 million before you decided not to proceed with that project?

The Hon. A. KOUTSANTONIS: Yes. We had people like Nick Reade from BankSA contact me personally asking to look at purchasing HomeStart. There was a lot of interest from the private sector, so we did an analysis. We spent the money to see if there was a benefit for the taxpayer or not. The justification did not come back to move ahead with the privatisation or the sale of the book.

Mr KNOLL: Who were the advisers on that project? While you are getting that, Treasurer, is that the total amount that was spent on the project, or is there more expense still to come?

The Hon. A. KOUTSANTONIS: The independent consultants were Moelis and Company. I understand that they did a scoping study to determine the potential commercialisation opportunities for a portion of the HomeStart loan portfolio. I understand that they have not expended the entire $1.1 million. I do not know what the surplus funds are, but they will be returned to the budget, no doubt. We decided not to proceed with the sale of the loan book.

Mr KNOLL: Who commissioned Moelis to undertake this?

The Hon. A. KOUTSANTONIS: Treasury.

Mr KNOLL: So you did, Treasurer?

The Hon. A. KOUTSANTONIS: Yes.

Mr KNOLL: When did you ask that?

The Hon. A. KOUTSANTONIS: I announced it in last year's budget, I believe.

Mr KNOLL: So the total $1.1 million, or something slightly less than that, is the total cost of that project?

The Hon. A. KOUTSANTONIS: Yes.

Mr KNOLL: Have you engaged the same firm to look at the privatisation of any other assets?

The Hon. A. KOUTSANTONIS: Not to my knowledge, no, but I will check. I am advised that they have done no further work on any other privatisations.

Mr KNOLL: Treasurer, when was the decision taken not to proceed with HomeStart?

The Hon. A. KOUTSANTONIS: When I received the report and took the recommendation to cabinet.

Mr KNOLL: When was that?

The Hon. A. KOUTSANTONIS: I cannot remember, but I can get the date for you.

Mr KNOLL: Was that before or after you made a decision on the state bank tax?

The Hon. A. KOUTSANTONIS: There is no state bank tax. The major bank levy was announced as part of the budget process.

Mr KNOLL: Was the decision made before or after the major bank levy?

The Hon. A. KOUTSANTONIS: I think it was made well before—April 2017.

Mr KNOLL: And the decision made for the major bank levy was made after April—

The Hon. A. KOUTSANTONIS: During the budget deliberations, yes. After the commonwealth budget.

Mr KNOLL: And Moelis specifically recommended against proceeding with HomeStart Finance privatisation?

The Hon. A. KOUTSANTONIS: That is my advice. We examined their analysis and determined that it would not be in the interests of taxpayers to proceed.

Mr KNOLL: That is slightly different from the question that I asked: did they recommend not to proceed with HomeStart?

The Hon. A. KOUTSANTONIS: They did an analysis for us. They did an analysis of the implications of the sale. We evaluated that analysis and determined not to proceed.

Mr KNOLL: Did they place any recommendations to suggest that there was a path forward to proceed with the privatisation?

The Hon. A. KOUTSANTONIS: There is always a path forward to proceed with privatisation, but it would mean lower dividends returned to government and, ultimately, a loss for the taxpayer, so we decided on the opposite course of action.

Mr DULUK: Treasurer, I refer you to Budget Paper 4, Volume 4, sticking on page 152. Can you confirm what the $7.3 million in expenditure on the Land Services Commercialisation Project was actually for?

The Hon. A. KOUTSANTONIS: I suggest that it is for Land Services Commercialisation Project. As the title suggests, it is for the commercialisation of the Land Services Group.

Mr DULUK: Can you please provide us with a detailed breakdown of the total expenditure within that.

The Hon. A. KOUTSANTONIS: Sure.

Mr DULUK: Which consultants were employed to deliver this project?

The Hon. A. KOUTSANTONIS: Investec were their lead commercial advisers.

Mr DULUK: And any other?

The Hon. A. KOUTSANTONIS: I understand KPMG and some other lawyers gave us some advice. I will get you those details.

Mr DULUK: What were they paid?

The Hon. A. KOUTSANTONIS: We will take that on notice, if we can.

Mr DULUK: Is the $7.3 million the total amount spent on the project, or is it going to be higher?

The Hon. A. KOUTSANTONIS: The transaction is not completed yet. The project is ongoing. That is the amount we have budgeted. We will not have a final number until it is completed, which I will report to the house.

Mr MARSHALL: Just for clarity, you are suggesting to this house that the full amount for professional services for the privatisation of the LTO will not exceed the budgeted $7.6 million? There is nothing that you have at the moment that would indicate that it would be—

The Hon. A. KOUTSANTONIS: What we have budgeted is our current expectation.

Mr MARSHALL: But there is no advice that you have received that it could exceed that amount for the full professional services and settlement costs of that transaction?

The Hon. A. KOUTSANTONIS: We will know once we have completed, and I will let you know what the number is.

Mr MARSHALL: But my question was whether you had received any advice as to whether the amount would not be sufficient.

The Hon. A. KOUTSANTONIS: The process is ongoing, so it is hard to give you an accurate answer.

Mr MARSHALL: I understand it is ongoing, but have you received any advice to suggest that it would be adequate?

The Hon. A. KOUTSANTONIS: Again, I want to give you accurate answers.

Mr MARSHALL: So $7.6 million is the amount that you envisage; it will not go beyond that for professional services for this transaction of the privatisation?

The Hon. A. KOUTSANTONIS: I hope not. I certainly hope not.

Mr DULUK: Minister, I refer you to Budget Paper 3, page 87. What is the current balance held by the insurance fund that backs the government's guarantee of indefeasibility of the lands titles?

The Hon. A. KOUTSANTONIS: I refer you to minister Mullighan for that question.

Mr DULUK: So that is within his portfolio?

The Hon. A. KOUTSANTONIS: Yes.

Mr DULUK: What protections will be stipulated in a contract of sale of the LTO to ensure that the title data is secure from cyber and other types of infiltration?

The Hon. A. KOUTSANTONIS: I am advised that obviously we will still maintain the insurance and guarantee of all titles, but all private information handled by any private provider will have very strict criteria placed upon them in terms of privacy, stricter than those that apply now. Once the process is complete, we will make those public.

Mr DULUK: What are the repercussions for a breach of that privacy?

The Hon. A. KOUTSANTONIS: Once the process is finalised, we will make those public.

Mr DULUK: So you have not given any consideration to what any repercussions would be for a new provider for a breach of privacy?

The Hon. A. KOUTSANTONIS: I am advised that, like most commercial contracts, there will be commercial penalties in place—which we will make publicly available once the process is complete—which will escalate if there are further breaches.

Mr DULUK: Will title insurance be compulsory as part of a private LTO?

The Hon. A. KOUTSANTONIS: No-one will need to take out private insurance because the government will still maintain the insurance of all titles.

Mr DULUK: Can you guarantee increased transaction costs will not be imposed on South Australian consumers under a privatised model of the LTO?

The Hon. A. KOUTSANTONIS: The same indexation rates that have applied since treasurer Lucas was in office will apply for all fees and charges.

Mr MARSHALL: With regard to the previous answer, when the Treasurer indicated that there would be penalties applied to any breaches of confidential information, will that be introduced via regulation or legislation? If legislation, can the Treasurer indicate to the committee when that will be brought before the parliament?

The Hon. A. KOUTSANTONIS: It will be contractual.

Mr MARSHALL: It will be contractual, so in the sale document?

The Hon. A. KOUTSANTONIS: Yes.

Mr MARSHALL: Does that mean that it can be varied over time?

The Hon. A. KOUTSANTONIS: Only if both parties agree.

Mr MARSHALL: Does this not provide a bit of a problem? A breach in 2017 dollars might be completely inadequate in 10, 20 or 30 years' time.

The Hon. A. KOUTSANTONIS: They escalate to the point where the state can step back in if necessary.

Mr MARSHALL: So they escalate by the year in which they occur?

The Hon. A. KOUTSANTONIS: They will escalate to the point where, if the breaches continue, the state will be able to step back in, which will be the ultimate penalty.

Mr KNOLL: If I could move on to Budget Paper 4, Volume 4, page 152, Treasurer, the adviser to your right—

The Hon. A. KOUTSANTONIS: Garry Goddard.

Mr KNOLL: What is Garry's title?

The Hon. A. KOUTSANTONIS: Chief commercial officer.

Mr KNOLL: So he is the bloke who is in charge of looking at what assets you flog off?

The Hon. A. KOUTSANTONIS: No, the cabinet is in charge of that.

Mr KNOLL: I just think he is a pertinent guy to be sitting at this table. What was the total spend on the CTP insurance market reform project?

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

Mr KNOLL: Can you also provide a breakdown of this expenditure?

The Hon. A. KOUTSANTONIS: Sure.

Mr KNOLL: Can you give an outline of what this reform project actually entailed?

The Hon. A. KOUTSANTONIS: Sure.

Mr KNOLL: Sorry, are you saying you do not know what the reform project was actually entailing?

The Hon. A. KOUTSANTONIS: Are you talking about the consultancy or in terms of why we introduced—

Mr KNOLL: What were the major outcomes of the insurance market reform project?

The Hon. A. KOUTSANTONIS: The overriding policy imperative was that I wanted to see the private sector take a greater role. I do not believe that governments are good at running these types of businesses. Insurance is something that has been run well in Australia by the private sector for a long time. We compel South Australians to buy compulsory third-party insurance. It is not an option that they have: it is compulsory as part of their registration.

I believe they can get better value out of the private sector than they can out of the government. We are bringing in now retail competition. Of course, after the period of exclusivity is over, I think you will see even greater competition in this market, with maybe companies like the RAA offering third-party premium insurance. The imperative was greater private competition, removing a government monopoly, ultimately better and more effective pricing, and less risk for the taxpayer.

Mr KNOLL: Treasurer, which consultants were employed to deliver this project and what were they paid?

The Hon. A. KOUTSANTONIS: PwC, and I will get you the costs on notice.

Mr KNOLL: On the same sort of topic, I refer to Budget Paper 3, page 61, note (c), which makes reference to 'for metropolitan postcodes' in relation to motor vehicle charges on CTP. What was the average CTP premium increase for non-metropolitan postcodes?

The Hon. A. KOUTSANTONIS: Say that again.

Mr KNOLL: In Budget Paper 3, page 61 talks about motor vehicle charges, CTP premium, and gives some prices for standard CTP, but note (c) says 'for metropolitan postcodes', so I am asking what the average CTP premium increase is for non-metropolitan postcodes.

The Hon. A. KOUTSANTONIS: I will take that on notice until the next session when the Motor Accident Commission is here and I have my appropriate advisers to give me the answer, so you might want to repeat that question to me then.

Mr KNOLL: I sure can.

Mr MARSHALL: I have a question regarding royalty revenue in Budget Paper 3, page 59. Can you clarify what the significant unforeseen events were that impacted minerals production and royalty revenues, which resulted in royalty revenue being down from a budget of $251 million to an estimated result of just $226 million?

The Hon. A. KOUTSANTONIS: Obviously, one was the statewide blackout.

Mr MARSHALL: What was the cost of the blackout to—

The Hon. A. KOUTSANTONIS: The lost production at Olympic Dam.

Mr MARSHALL: How much did we lose as taxpayers as a result, in terms of royalties, from that blackout event in September?

The Hon. A. KOUTSANTONIS: I will take that on notice. I do not have that number.

Mr MARSHALL: Did it make up the lion's share of that shortfall of $25 million?

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

Mr MARSHALL: What is your feeling?

The Hon. A. KOUTSANTONIS: There were also, of course, other unplanned shutdowns at Olympic Dam that were not involved because of the blackout: obviously, a major upgrade that they are spending to break through the 200,000 tonne per annum mark. But absolutely, of course, the blackout did cause a halt in production.

Mr MARSHALL: But your gut feel is that the lion's share of that shortfall—

The Hon. A. KOUTSANTONIS: Probably, yes.

Mr MARSHALL: —of about $25 million or $30 million to taxpayers was because of the blackout event.

The Hon. A. KOUTSANTONIS: Yes.

Mr MARSHALL: Has Treasury modelled the impact of another blackout event on royalty revenues?

The Hon. A. KOUTSANTONIS: No. That is why we are spending $550 million to make sure we do not have another statewide—

Mr MARSHALL: To fix the mess really.

The Hon. A. KOUTSANTONIS: Yes, privatisation has been terrible for the state. But, of course, you were in school when that happened, weren't you?

The CHAIR: Order!

The Hon. A. KOUTSANTONIS: You were in high school when that happened, you told people on radio.

The CHAIR: Order!

The Hon. A. KOUTSANTONIS: You were in school.

The CHAIR: Order!

Mr DULUK: I refer to Budget Paper 3, page 95. Are there any agencies that did not deliver on their required efficiency dividend in 2016-17?

The Hon. A. KOUTSANTONIS: I am advised that the two agencies that required additional funding for the last financial year were the Department for Child Protection, which was $104.2 million to meet an increase in costs of children in care, particularly in commercial care, and to assist non-government organisations to establish an additional residential care facility.

I am also advised that the Department for Communities and Social Inclusion required $2.5 million for people living with a disability to access a range of services, including accommodation support, community support, community access and respite events. This additional funding recognises the growing needs of people with a disability prior to the transition to the NDIS.

Mr DULUK: So all other departments and agencies met their efficiency dividend?

The Hon. A. KOUTSANTONIS: This is a list of the agencies that required additional funding. In terms of savings targets, I do not have that here.

Mr DULUK: Will you come back and provide those?

The Hon. A. KOUTSANTONIS: If we can calculate it, yes.

Mr DULUK: What efficiency dividends were applied to SA Health in 2016-17?

The Hon. A. KOUTSANTONIS: We do not have 2016-17 here.

Mr DULUK: What about 2017-18?

The Hon. A. KOUTSANTONIS: Do you want me to increase them?

Mr DULUK: Who knows?

The Hon. A. KOUTSANTONIS: In 2017-18, the savings required are $104.2 million.

Mr DULUK: Thank you, Treasurer. What savings tasks were set for SA Health for 2016-17, 2017-18, 2018-19 and 2019-20 in last year's budget?

The Hon. A. KOUTSANTONIS: I do not have those here with me.

Mr DULUK: Could you also come back and let us know how they have changed in relation to this year's budget?

The Hon. A. KOUTSANTONIS: Sure.

Mr DULUK: Regarding the Unlocking Capital for Jobs Program, what is the government's exposure under the Unlocking Capital for Jobs Program as at 30 June 2017?

The Hon. A. KOUTSANTONIS: I am advised that our guarantee has been reduced to $1.9 million.

Mr DULUK: It is no longer $3.5 million?

The Hon. A. KOUTSANTONIS: No.

Mr DULUK: Why has that exposure reduced?

The Hon. A. KOUTSANTONIS: Because Australian Fashion Labels reduced its debt with the bank.

Mr DULUK: That implies that no new businesses are taking up this program.

The Hon. A. KOUTSANTONIS: No, but there are some under consideration as we speak.

Mr DULUK: How many are under consideration?

The Hon. A. KOUTSANTONIS: I do not have that number here with me. I will get that for you.

Mr DULUK: Thank you very much.

Mr KNOLL: If I can go to Budget Paper 4, Volume 4, page 152, how were corporate overheads calculated and allocated?

The Hon. A. KOUTSANTONIS: My advice is that it is based on FTE count.

Mr KNOLL: So, it is essentially an overhead recovery cost per FTE. Is this the same across government?

The Hon. A. KOUTSANTONIS: I am advised that some agencies do it differently depending on the most accurate method to measure costs given that sometimes FTE count is not the most accurate way, but for Treasury it is.

Mr KNOLL: This is not something that is subject to a Treasurer's Instruction?

The Hon. A. KOUTSANTONIS: No.

Mr KNOLL: What is the total value of corporate overheads across your department?

The Hon. A. KOUTSANTONIS: Across Treasury and Finance?

Mr KNOLL: Yes, for 2016-17 if you have anything back from that.

The Hon. A. KOUTSANTONIS: I will take that on notice and give it to you.

Mr KNOLL: Can you also then take on notice what the budgeted value of the overheads is for each year of the forward estimates?

The Hon. A. KOUTSANTONIS: Of course.

Mr KNOLL: When you say cost per FTE, is that on a base headcount, or is that based on a percentage of salary, so if someone got $100,000, you apply a 20 per cent corporate overhead recovery?

The Hon. A. KOUTSANTONIS: I will get you a detailed answer. I think that will be the best way to give you that.

Mr KNOLL: Are you sure there is nothing else? Can you expand on that?

The Hon. A. KOUTSANTONIS: No.

Mr MARSHALL: I have some questions on the Intergovernmental Agreement on Competition and Productivity-Enhancing Reforms. This is covered in Budget Paper 4, Volume 4, page 152, and it is in the highlights for the last financial year. What was the nature of the advice provided regarding the Intergovernmental Agreement on Competition and Productivity-Enhancing Reforms that you have here as a highlight of last year's activity? In fact, it is the second highest-rated highlight of your last year's activity.

The Hon. A. KOUTSANTONIS: We are currently negotiating with the commonwealth government over the Harper reforms. We are working with them to create a national partnership on how to best implement the Harper reforms into the South Australian economy. Obviously, Treasurer Morrison is very keen to do more about the implementation of Harper. He was very keen to try to institute a type of Hilmer reform process—

Mr MARSHALL: Sorry?

The Hon. A. KOUTSANTONIS: —a Hilmer reform process—and a competition payment process. He wanted to put out a bucket of money to incentivise states to move towards these reforms, to be able to access funds. Unfortunately, he was unsuccessful in being able to achieve that. He is still working away at it. That is my understanding of it. I am advised that in the last budget he allocated $300 million for the Harper reforms. We are in negotiation with the commonwealth Treasury about the best way to implement those. Obviously, the state will make a decision on what is best for it. There are some reforms that Harper recommends that would be very difficult, I would imagine, even for you.

Mr MARSHALL: What proportion of the $300 million federal fund is the South Australian government targeting and what projects is it targeting it for?

The Hon. A. KOUTSANTONIS: We are still negotiating our national partnership with the commonwealth government. Once we have completed that, we will make it public.

Mr MARSHALL: Given that this was a highlight of last year's performance, can you indicate what sort of reform projects you have been working on?

The Hon. A. KOUTSANTONIS: We are ahead of the curve on a lot of these matters. Obviously, CTP reform was a very good reform. Planning reforms have moved ahead to try to free up investment. Obviously, Harper boils down to a whole number of deregulations, especially with pharmacies, which is a very contentious topic. I note that the commonwealth Liberal Party is very keen for us to deregulate pharmacies and allow greater access to pharmaceuticals out of supermarkets.

There is a very strong push-back here in South Australia. We have a very strong small business community in the pharmacy industry. There are a lot of family-owned businesses that are very keen to protect their regulated assets. I am a big supporter of theirs, but again the commonwealth government is pushing us towards those reforms. We will have to wait to see how the negotiation on the national partnership goes.

Mr MARSHALL: Yes, but you just indicated to this committee that some of the projects that you were considering were CTP reforms and planning reforms. Are you indicating that you are approaching the federal government to give you money under their $300 million fund, like a retrospective payment, for a form that has already gone through?

The Hon. A. KOUTSANTONIS: Of course we would. If other states have not moved down this path and are being paid for them and we have already done them, we should be recognised for it—absolutely we should.

Mr MARSHALL: So you have some confirmation from the federal Treasurer, or federal Treasury, that you can be given a payment for reform that has occurred in the past that has not been taken up by other states? Really?

The Hon. A. KOUTSANTONIS: Yes, the commonwealth are in negotiations with us. We are pursuing the idea of back payments for reforms that have already been undertaken that fit into the Harper mould, and absolutely so we should.

Mr MARSHALL: How much do you envisage that state taxpayers will receive from the commonwealth for the CTP (reforms)?

The Hon. A. KOUTSANTONIS: I do not know. We will have to wait and see once the negotiations for the—

Mr MARSHALL: But you are—

The Hon. A. KOUTSANTONIS: The thing about national partnerships is it is very interesting. You might have noticed recently that Treasurer Morrison threatened the states that were banning unconventional gas and fracking with GST payments. I noticed you turned your head when I said that because your planned policy reforms could hurt the state in terms of GST receipts.

Mr MARSHALL: Anyway, back to questions—

The Hon. A. KOUTSANTONIS: Your policy on banning unconventional gas could actually hurt South Australia's finances—that is how reckless it is. Even your own federal party disagrees with you and thinks that your policy is reckless.

Mr MARSHALL: Just a question—

The Hon. A. KOUTSANTONIS: Yes, I would move on, too, if I were you.

Mr MARSHALL: —that I would like to get some clarification on, you are currently in negotiation with the federal government to receive a payment to South Australia for CTP and planning reforms, and you envisage money out of that $300 million fund for that?

The Hon. A. KOUTSANTONIS: No, what I said to you was that the Harper reforms—

Mr MARSHALL: No, just to clarify, are you negotiating—

The Hon. A. KOUTSANTONIS: I understand—

Mr MARSHALL: —with the federal government for a payment?

The Hon. A. KOUTSANTONIS: Again, I understand you want to try to look tough because that has not been working, but the Harper reforms are wideranging, and what we are saying is that there are some areas of Harper where we have already moved and other states have not.

If other states are benefiting from having moved post Harper and undertaking the reforms that we have already been taking, we should not be penalised because of that. We should receive a benefit. The commonwealth government never likes doing it, but if they want national reform they need to negotiate with all the states. There are some states, for example, that have done very little reform in this area of regulation, so I think it is important that we argue our case.

Of course, the more dangerous aspect of national negotiations is what the opposition is doing with its attempt to ban unconventional gas in the South-East and its impact on GST receipts. If that did not send a shiver up everyone's spine in South Australia—your reckless policy to ban gas exploration in South Australia will have a detrimental impact on GST receipts. Really, it is an appalling policy to take to an election and you should immediately withdraw it.

Mr MARSHALL: Thank you for your policy advice; it is always welcome.

The Hon. A. KOUTSANTONIS: Good. I am glad. I have more, if you like.

Mr MARSHALL: Nevertheless, when do you plan to conclude these complex negotiations that you have just confirmed on the record that you are having with the commonwealth Treasury regarding CTP and planning?

The Hon. A. KOUTSANTONIS: I said Harper.

Mr MARSHALL: No, sorry, you repeatedly said CTP and planning.

The Hon. A. KOUTSANTONIS: No need to apologise to me again and again and again. What I said to you was that, with the Harper reforms, we want to be recognised for some of the reforms that have already been made and other states have—

Mr MARSHALL: 'When do you think those negotiations will be concluded?' is the question.

The Hon. A. KOUTSANTONIS: When they are finished.

Mr MARSHALL: When do you envisage that will be?

The Hon. A. KOUTSANTONIS: When they are done.

Mr MARSHALL: So you do not have any indication, considering these CTP changes were made several years ago.

The Hon. A. KOUTSANTONIS: The commonwealth Treasurer is very busy.

Mr MARSHALL: Can you provide any evidence that this is actually what you have submitted to this fund? Can you provide any evidence to this committee?

The Hon. A. KOUTSANTONIS: Yes, I have been to the ministerial council on financial relations and we have talked about Harper. The state government is in negotiations with the commonwealth Treasury—

Mr MARSHALL: You have made a submission?

The Hon. A. KOUTSANTONIS: —about us—

Mr MARSHALL: You have made a submission?

The Hon. A. KOUTSANTONIS: —entering into those reforms.

Mr MARSHALL: Has the Department of Treasury and Finance been asked whether the deregulation of shop trading hours could qualify for funding?

The Hon. A. KOUTSANTONIS: It is one of the Harper recommendations, absolutely.

Mr MARSHALL: That is correct, so it would qualify. The deregulation of shop trading hours in South Australia would qualify South Australian taxpayers for funding from the—

The Hon. A. KOUTSANTONIS: Yes, that is right, but at a huge cost to small business. Independent grocers in this state—

Mr MARSHALL: Has any—

The Hon. A. KOUTSANTONIS: Hang on a second. Independent grocers in this state offer a competitive advantage to South Australia. We have the largest penetration of independent grocers—

Mr MARSHALL: How much would we get?

The Hon. A. KOUTSANTONIS: We have the largest independent grocer market share of all the states and those independent grocers, which are family small businesses, are opposed to your policy of deregulating trading hours to help big business take away their market share. They are very concerned about how you have turned your back on small business in this state. They are very concerned about your policies on that.

Mr MARSHALL: Have you modelled up what the likely payment would be?

The Hon. A. KOUTSANTONIS: What we are doing is we will be defending small business in South Australia.

Mr MARSHALL: No, but have you—

The Hon. A. KOUTSANTONIS: We will be defending their right to compete. We will not be allowing multinationals to take away their market share, as you wish.

Mr MARSHALL: Do you plan to regulate shop trading hours in non-metropolitan areas?

The Hon. A. KOUTSANTONIS: If there is a price rise for us to pay of a $300 million fund divided up amongst all the states, it is a small price to pay for the independence of our independent grocers and making sure that they continue to employ those thousands of South Australians they employ who you want to see on the scrap heap.

Mr MARSHALL: Do you plan to regulate shop trading hours outside metropolitan Adelaide?

The Hon. A. KOUTSANTONIS: Again, trading hours are fit for purpose and location.

Mr MARSHALL: Do you plan to regulate—

The Hon. A. KOUTSANTONIS: Regional areas rely a lot more on the grocery chains that are available to provide them services. We have seen a lot of services reduced in country areas, whether it be Australia Post or bank services. More and more are relying on—

Mr MARSHALL: Do you plan to regulate—

The Hon. A. KOUTSANTONIS: —retail outlets, so those retail outlets are afforded the ability to trade longer because of their locations. It makes sense. But in metropolitan Adelaide, where you have multinationals attempting to squeeze out small South Australian family businesses, they have an ally in this government. We will stand with them—unlike you, who are standing with the multinationals over the small family businesses here in South Australia.

Mr MARSHALL: I think there are small family businesses in country SA as well, and I think there are multinationals in country SA as well. My question is: do you plan to reregulate shop trading hours outside metropolitan Adelaide in line with the comments you have just made and articulated in this committee?

The Hon. A. KOUTSANTONIS: No, because it is different market conditions.

Mr MARSHALL: Have you been provided with any advice that would suggest the value of the federal government contribution to South Australia if shop trading hours were deregulated?

The Hon. A. KOUTSANTONIS: It would be a share of the $300 million, I would imagine, and they have not given us any details on what that would be.

Mr MARSHALL: But have you sought or have you received any advice—

The Hon. A. KOUTSANTONIS: We are in discussions with them now.

Mr MARSHALL: On that particular issue?

The Hon. A. KOUTSANTONIS: On all of the Harper reforms.

Mr MARSHALL: Has the Department of Treasury and Finance been asked whether establishing a state-based productivity commission could qualify for funding from the federal government?

The Hon. A. KOUTSANTONIS: I am advised that it is not part of the Harper reforms.

Mr MARSHALL: Nevertheless, that reform is about productivity improvement.

The Hon. A. KOUTSANTONIS: No, Harper was quite specific about what he wanted. I think another layer of bureaucracy is not what Harper is attempting to achieve.

Mr MARSHALL: That is what the Productivity Commission—

The Hon. A. KOUTSANTONIS: You think another state bureaucracy will help improve productivity?

Mr MARSHALL: A hundred per cent.

The Hon. A. KOUTSANTONIS: Well, there you go: form another committee.

Mr KNOLL: Can I ask another question on this same line. Treasurer, were there any GST HFE implications of the CTP changes or the sale of the Motor Accident Commission?

The Hon. A. KOUTSANTONIS: Not that we are aware of, no—

Mr KNOLL: If I can move on to Budget Paper 4—

The Hon. A. KOUTSANTONIS: —but there will be from banning unconventional gas. You do not care? You do not care that by banning unconventional gas you will lose GST payments? You do not care that your leader is taking you down a dangerous path? You do not care that he wants to ban something that has been done in South Australia for 50 years? You do not care? You just shrug your shoulders that your leader is leading you down this dangerous left-wing, green path?

The CHAIR: I am on my feet.

Mr KNOLL: Maybe he needs a glass of water, Chair.

The CHAIR: I beg your pardon. That is not on a budget paper.

Mr KNOLL: Actually, I am sure it is, but we closed that this morning when we did the Premier's. On Budget Paper 4, Volume 4, page 154, paragraph 2—

The CHAIR: I ask myself what Speaker Bishop would do with you.

Mr KNOLL: —the South Australian Venture Capital Fund, how many FTEs were dedicated to administering the Venture Capital Fund in 2016-17?

The Hon. A. KOUTSANTONIS: I would refer you to minister Maher for those questions.

Mr KNOLL: Under Treasury Services, can you explain to me what role Treasury played in administration costs for the South Australian Venture Capital Fund? It is in their budget.

The Hon. A. KOUTSANTONIS: I will refer that to SAFA and take that question on notice. My understanding is that SAFA did some work.

Mr MARSHALL: We have been informed that this was specifically the work of Treasury, so why are you referring us to another minister?

The Hon. A. KOUTSANTONIS: Well, because it is his portfolio area.

Mr MARSHALL: But is Treasury not responsible for the—

The Hon. A. KOUTSANTONIS: I am not trying to avoid the question. I am saying to you that I will get you the information when SAFA are here. I will get you the information when the SAFA officials are here after lunch in the next session.

Mr MARSHALL: For the Venture Capital Fund?

The Hon. A. KOUTSANTONIS: Yes.

Mr KNOLL: On Budget Paper 4, page 172, and the table there, Treasurer, what resulted in grants and subsidies under administered items coming in at almost $850 million under the budget for 2016-17?

The Hon. A. KOUTSANTONIS: We do not have that information here for you. I will get it for you on notice.

Mr KNOLL: Can you also find out what is driving the budgeted figure for these expenses up by approximately $734 million between 2016-17 and 2017-18?

The Hon. A. KOUTSANTONIS: We will take that on notice.

Mr KNOLL: Treasurer, why were tax equivalent revenues almost $100 million greater than budgeted for in 2016-17?

The Hon. A. KOUTSANTONIS: ReturnToWork.

Mr KNOLL: The $86 million. Treasurer, what drove the almost $400 million worth of unbudgeted other income in 2016-17?

The Hon. A. KOUTSANTONIS: There is a footnote underneath that table saying that budget figures do not include the return of surplus cash held by agencies at 30 June 2016 to the Consolidated Account in accordance with the cash alignment policy.

Mr KNOLL: So—

The Hon. A. KOUTSANTONIS: So money held in agencies is to be returned centrally.

Mr MARSHALL: I have a quick question I would like to slot in while he is looking for that, if possible, regarding the federal government's Asset Recycling Fund. That has now closed.

The Hon. A. KOUTSANTONIS: Yes.

Mr MARSHALL: But were applications made by the state government to receive money under that asset recycling? There was some talk that the Motor Accident Commission winding up—

The Hon. A. KOUTSANTONIS: Yes.

Mr MARSHALL: Could you perhaps provide some information to the committee?

The Hon. A. KOUTSANTONIS: Yes. We made an application and we received $36 million over two years.

Mr MARSHALL: For the Motor Accident Commission?

The Hon. A. KOUTSANTONIS: Yes.

Mr MARSHALL: Were there any other applications made?

The Hon. A. KOUTSANTONIS: Not to my knowledge, no.

The CHAIR: Before we have the next question, I want to acknowledge the presence in the gallery of a group of students, who are guests of the member for Finniss, from Kangaroo Island Community Education. We welcome them to parliament and hope they enjoy their visit.

Mr KNOLL: Treasurer, essentially what we are saying here is that agencies have held over cash surpluses in their bank accounts, as opposed to returning that money to the Consolidated Account. Can you outline who were the major contributors and who were the major holders of those cash surpluses in which departments?

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

Mr KNOLL: If I move, Treasurer—and your punishment is almost over—to Budget Paper 4, Volume 4, page 174 and the table there, does the betting operations tax refer to the place of consumption wagering tax included in last year's budget measures?

The Hon. A. KOUTSANTONIS: Yes.

Mr KNOLL: Treasurer, can you explain the more than threefold increase in cash flows budgeted for this year compared with $9.7 million operating revenues budgeted for in 2017-18 from last year's budget?

The Hon. A. KOUTSANTONIS: It is a long and complex answer and I will give it to you now, or I could give it to you on notice. It is up to you.

Mr MARSHALL: Now is good.

The Hon. A. KOUTSANTONIS: Okay, you have run out of questions?

Mr MARSHALL: No.

The Hon. A. KOUTSANTONIS: Okay, good. Well, whatever you like, because you asked for an extra half an hour and you have run out of questions.

Mr MARSHALL: You still have not answered all the questions on notice from last year or the year before.

The Hon. A. KOUTSANTONIS: Nice try, darling, nice try.

The CHAIR: Order!

Mr Knoll interjecting:

The CHAIR: Order! You are wasting the time of the committee.

Mr KNOLL: I am just trying to make sure that the South Australian people actually know what a corporate overhead is.

The CHAIR: Order! Member for Schubert, you may think there are no repercussions for speaking over the Chair, but there will be, so please do not continue to do it. We are right on time so, if there is a long answer, let us get started, otherwise we will do it when we get back.

The Hon. A. KOUTSANTONIS: I am advised that when the betting operations tax was introduced as part of the 2016-17 budget—which the opposition voted for—it was announced that we would raise net additional revenue of around $10 million per annum, with around $0.5 million being deposited into the Gamblers Rehabilitation Fund each year. This estimate did not include any net additional amounts from UBET's SA wagering revenue related to racing, which was supposed to be hypothecated to the racing industry.

Currently, UBET SA has a Racing Distribution Agreement with Racing SA under which UBET pays product fees to the racing industry broadly equivalent to 46 per cent of net wagering revenue related to racing. Once the betting operations tax comes into operation, UBET SA will be required to pay the 15 per cent betting operations tax on net state wagering revenue in addition to 46 per cent of the net wagering revenue that it currently pays for the Racing Distribution Agreement.

UBET has indicated that it will be unable to pay both the 46 per cent product fee on the net wagering revenue agreement and the 15 per cent betting operations tax. It is understood that Racing SA will be reducing their product fees payable by UBET under the RDA by an amount equivalent to 15 per cent of the net wagering revenue agreement.

Should Racing SA reduce this amount payable under the RDA, then it will seek funding from the government to meet this shortfall. The government would pay additional funding to Racing SA to a maximum amount of 15 per cent of UBET's wagering tax attributable to racing—around $20 million per annum. This will ensure that the racing industry is no worse off due to the introduction of the wagering tax.

Under such an agreement, UBET will still be paying a combined 46 per cent of the net wagering revenue in product fees and taxation, being approximately 31 per cent of the NWR in product fees and 15 per cent of NWR in taxation, which is above the amounts contributed by other providers.

Betting operations tax revenue estimates have been revised in the 2017-18 budget to reflect the tax on wagering payable in relation to racing by UBET SA. There is no net impact on the budget position from this change. The additional revenue will be offset by grants to the racing industry.

The wagering tax is expected to raise gross revenue of around $30 million per annum. The net impact on the budget position, after expected grant payments to the racing industry of about $20 million per annum, remains at about $10 million per annum, as summarised in the budget.

Mr KNOLL: Treasurer, do you understand whether that is going to be consistent over the forward estimates?

The Hon. A. KOUTSANTONIS: Yes.

Mr KNOLL: Can you let us know then what that $9.7 million operating revenue figure—

The Hon. A. KOUTSANTONIS: The $9.7 million operating figure?

Mr KNOLL: You said it was $30 million minus $20 million given over to Racing SA.

The Hon. A. KOUTSANTONIS: Yes.

Mr KNOLL: I am suggesting that is potentially $9.7 million, which was—

The Hon. A. KOUTSANTONIS: You think we are not taxing enough, we should tax more?

Mr KNOLL: No, I was merely asking whether that figure is going to be consistent over the forward estimates.

The Hon. A. KOUTSANTONIS: The answer is yes.

Sitting suspended from 13:33 to 14:30.

Departmental Advisers:

Mr D. Reynolds, Chief Executive, Department of Treasury and Finance.

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

Ms N. Rantanen, Chief Operating Officer, Department of Treasury and Finance.

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

Mr G. Jackson, Commissioner of State Taxation, RevenueSA.

Mr A. Blaskett, General Manager, South Australian Financing Authority.

The CHAIR: Welcome to the committee. I advise that we are looking at the estimate of proposed payments for the Department of Treasury and Finance, and the administered items for the Department of Treasury and Finance, and that they are still open for examination. I refer members to the portfolio statements in Volume 4. Are there new advisers to introduce or do we have the same group?

The Hon. A. KOUTSANTONIS: We have. We have Mr Andrew Blaskett, who is the General Manager of the South Australian Financing Authority, and Nicolle Rantanen, who is the Chief Operating Officer.

The CHAIR: You are also appearing as the Minister for Finance. Do you want to make a statement?

The Hon. A. KOUTSANTONIS: No, ma'am.

The CHAIR: Does the leader want to make a statement, or are you happy to go straight to questions?

Mr MARSHALL: I refer to Budget Paper 4, Volume 4, page 175. Can you confirm that the $5 million accorded as a forfeited bank guarantee for a building sale relates to the failed sale process for the State Administration Centre precinct?

The Hon. A. KOUTSANTONIS: Yes.

Mr MARSHALL: Is this process continuing?

The Hon. A. KOUTSANTONIS: We have made an announcement. We are going back to the market to sell the building.

Mr MARSHALL: When you say that you are going back to the market, did you or anyone from the department ask Funds SA to consider the purchase of the State Administration Centre precinct?

The Hon. A. KOUTSANTONIS: They did a body of work, supported by Treasury, about whether they could purchase the properties, but were not able to settle that in a satisfactory manner, from their perspective or ours, so we will go back to the market.

Mr MARSHALL: Just to answer the question, did Treasury or did you as the Treasurer go to Funds SA, or did they come to you?

The Hon. A. KOUTSANTONIS: I cannot remember how the process started, to be honest.

Mr MARSHALL: But they have had a look at it now and they do not think it stacks up for their particular investment?

The Hon. A. KOUTSANTONIS: Yes.

Mr MARSHALL: Did they give a reason?

The Hon. A. KOUTSANTONIS: We had a disagreement on value.

Mr MARSHALL: A disagreement on value. So they did not think it was worth what you thought it was worth?

The Hon. A. KOUTSANTONIS: Yes.

Mr MARSHALL: What do you think it is worth?

The Hon. A. KOUTSANTONIS: Whatever the market tells me it is worth.

Mr MARSHALL: What is that?

The Hon. A. KOUTSANTONIS: We will wait and see once we get the results back from the market.

Mr MARSHALL: Did they actually put in an offer?

The Hon. A. KOUTSANTONIS: They told us what they thought it was worth, but it was not so much as an offer.

Mr MARSHALL: Just run us through how this actually worked. Maybe you went to them, or maybe they came to you, you cannot remember, but what was the mechanism? Was it a chat or was it a letter? Was it an unsolicited bid from them? Did you actually ring up Kev and say, 'Kev, me mate, what are you up to? Got some dodgy buildings I want to flog.' How did it work? Just run us through it.

Mr DULUK: They were at Bunnings.

The CHAIR: Order!

The Hon. A. KOUTSANTONIS: After the Commercial and General sale failed—

Mr MARSHALL: The initial what, sorry?

The Hon. A. KOUTSANTONIS: —the Commercial and General sale failed—Funds SA conducted an arm's-length process where they, I understand, took the services to a consultant to evaluate the value of the buildings. They came back with a number. That number was not satisfactory to the government.

Mr MARSHALL: Via an unsolicited bid?

The Hon. A. KOUTSANTONIS: No.

Mr MARSHALL: Sorry.

The Hon. A. KOUTSANTONIS: No, it was not through the unsolicited bids process at all. The Treasury and Funds SA have regular discussions. I am not sure how it came up. There was an arm's-length process done by the board to calculate what they thought the value of the assets was and whether it was worthwhile for the board to make the decision to purchase them or not. They came back with a number. That number was not satisfactory to us, and we moved on.

Mr MARSHALL: Can we just clarify that you did not give an instruction for Funds SA to look at this?

The Hon. A. KOUTSANTONIS: Not to my knowledge, no. No instruction was given at all.

Mr MARSHALL: Can you undertake to find out—

The Hon. A. KOUTSANTONIS: The board acts independently of me.

Mr MARSHALL: Sorry?

The Hon. A. KOUTSANTONIS: The board acts independently. It acts in the interests of the members of the fund, not in the interests of the government.

Mr MARSHALL: You cannot recall how it transpired that they just independently said, 'There is an asset that the state government is selling. We should put in a bid for it.' It does not sound logical.

The Hon. A. KOUTSANTONIS: I think it is completely intuitive.

Mr MARSHALL: Intuitive?

The Hon. A. KOUTSANTONIS: Yes, Funds SA accumulate assets all the time to fund their liabilities. The state owns assets that it is selling. I think it makes complete sense that Funds SA had a look at this. There is nothing counterintuitive about it at all.

Mr MARSHALL: So your evidence to this committee is that you did not speak to them.

The Hon. A. KOUTSANTONIS: First of all, I do not give evidence.

Mr MARSHALL: They decided to—

The Hon. A. KOUTSANTONIS: No, stop.

Mr MARSHALL: —have a look at this asset precinct—

The Hon. A. KOUTSANTONIS: This is not a court.

Mr MARSHALL: —intuitively.

The Hon. A. KOUTSANTONIS: This is not a court: this is estimates. I do not give evidence.

Mr MARSHALL: Well, you have just provided us—

The Hon. A. KOUTSANTONIS: What? What did I just provide?

Mr MARSHALL: You just said—

The Hon. A. KOUTSANTONIS: How is this evidence?

Mr MARSHALL: You have just said—

The Hon. A. KOUTSANTONIS: How is this evidence?

The CHAIR: I am on my feet.

The Hon. A. KOUTSANTONIS: Fool—been in parliament six years and you do not know how it works.

The CHAIR: Part of my role is to ensure that the business of the house is carried out in a respectful fashion, so I assure my members that it would be good to have the question and then the answer so we can actually hear the question and the response for Hansard's benefit, thank you.

The Hon. A. KOUTSANTONIS: As I said, ma'am, I am not sure who reached out to who—I will find out for the benefit of the committee—but Funds SA regularly purchase investments. That is what they do with the money that they receive through superannuation. The government had buildings for sale. They had an arm's-length process to ascertain what they thought a fair value was for their members. They put that number to us. That number was not satisfactory to us.

There was no instruction made to compel them to buy it. There was no instruction made to compel them to do the work. There was no instruction given by the Treasury for any compulsion on the board in any way whatsoever.

Mr MARSHALL: Yes, but just to clarify, the evidence or advice that you have provided to this committee, which is recorded on Hansard—

The Hon. A. KOUTSANTONIS: What a fool!

Mr MARSHALL: —you would not want to mislead the parliament, is that they arrived at this—

The Hon. A. KOUTSANTONIS: Are you making an accusation that I am misleading the parliament?

The CHAIR: Order!

The Hon. A. KOUTSANTONIS: Are you?

The CHAIR: Order!

Mr MARSHALL: I am trying to get some clarification because the story is all over the place.

The Hon. A. KOUTSANTONIS: Do not make things up.

Mr MARSHALL: So your evidence to this committee is that, in fact, Funds SA intuitively decided, that there was no discussion from you to Funds SA, there was no instruction and there was no correspondence. They just intuitively decided to put in a bid to you—not via an unsolicited bid methodology but they just did the work and provided it to you. Is that correct?

The Hon. A. KOUTSANTONIS: No, that is not what I said.

Mr MARSHALL: That is what you have said.

The CHAIR: Order!

The Hon. A. KOUTSANTONIS: No, that is not what I said. You are just verballing me. What I said—

Mr MARSHALL: Poor bugger.

The Hon. A. KOUTSANTONIS: What I said was that it is completely intuitive that, after the asset sale fell through with Commercial and General, Treasury and Funds SA had a discussion about these buildings. There were no instructions given. They did a body of work about whether or not it would be beneficial for Funds SA to purchase. They came up with a number. That number was not satisfactory to the Treasury, and we moved on.

Mr MARSHALL: And that was the independent view? You did not ever suggest that to Treasury to suggest to Funds SA, or go directly to Funds SA, or speak to the chair of—

The Hon. A. KOUTSANTONIS: I absolutely thought it was a good idea.

Mr MARSHALL: Can we just get a straight answer? It was either intuitive that they had nothing to do with you—

The Hon. A. KOUTSANTONIS: I have to say the way you conduct yourself is getting pretty creepy—pretty creepy.

Mr MARSHALL: Answer?

The Hon. A. KOUTSANTONIS: The word 'creepy' comes up a lot.

Mr MARSHALL: Do you have an answer?

The Hon. A. KOUTSANTONIS: It comes up a lot.

Mr MARSHALL: Do you have an answer?

The Hon. A. KOUTSANTONIS: I just gave it to you.

Mr MARSHALL: What methodology did they use to convey what they had as the value of that precinct? Was it an offer?

The Hon. A. KOUTSANTONIS: They had an independent consultant who did a body of work looking at the investment opportunity and how it fits into their mandate. They then decided to put a number to that. That number was not satisfactory to the Treasury and we moved on.

Mr MARSHALL: But how did you see it? Did they get on the blower and say, 'G'day. This is our number,' or did they write to you? Did they apply via the office of the Coordinator-General?

The Hon. A. KOUTSANTONIS: Treasury and Funds SA are in regular contact.

Mr MARSHALL: So just the vibe. What due diligence was conducted on each of the two proposed purchasers of the State Admin Centre that failed to settle on the earlier dates?

The Hon. A. KOUTSANTONIS: We had an agent, JLL, that conducted the process for us. They do the due diligence, the same as they would do with any other commercial transaction.

Mr MARSHALL: So JLL did the due diligence. What format did that take?

The Hon. A. KOUTSANTONIS: I will ask them and get back to you.

Mr MARSHALL: Thanks very much. In the case of the second proposed purchaser, five settlement dates were announced between March and November last year without any payments being made for the property. Why did the delay in settlement not trigger earlier intervention in this process?

The Hon. A. KOUTSANTONIS: We took probity and legal advice the entire process of the commercial transaction and we endeavoured to give Commercial and General every opportunity to settle and they were not able to.

Mr MARSHALL: Who provided the probity and legal advice?

The Hon. A. KOUTSANTONIS: The probity advice was provided by BDO and the legal advice by the Crown Solicitor's Office.

Mr MARSHALL: Can the minister indicate whether any payments have been made to JLL or others handling the transaction to date, or was their payment contingent upon a successful settlement?

The Hon. A. KOUTSANTONIS: The advice I have is that it was contingent on a sale, but we will double-check and go back and make sure that there were no payments made. There might have been some payments made for some work that they did. There might have been some sort of preparatory work that they did for the sale that the state got a value out of, but we will wait and see; I will check.

Mr MARSHALL: Can you, as part of that work, find out the total value that taxpayers have paid to support this sale process to date, because this really goes back now—

The Hon. A. KOUTSANTONIS: Other than the $5 million we received in forfeited deposit by Commercial and General?

Mr MARSHALL: Yes, we would like to know what total cost it was to taxpayers.

The Hon. A. KOUTSANTONIS: Absolutely.

Mr MARSHALL: I think this goes back to—was it 2009 when you originally said you would sell this precinct? Is that the original date?

The Hon. A. KOUTSANTONIS: It might have been in the 2008-09 Mid-Year Budget Review.

Mr MARSHALL: The 2008-09—

The Hon. A. KOUTSANTONIS: —Mid-Year Budget Review.

Mr MARSHALL: That is going back some time now. What are your plans going forward for this speedy sale process that you are overseeing at the moment?

The Hon. A. KOUTSANTONIS: We are going to the market.

Mr MARSHALL: What is the process? Who is going to be appointed to manage it going forward?

The Hon. A. KOUTSANTONIS: We have not appointed a new sales agent as yet, but we will in due course, very shortly.

Mr MARSHALL: You will not be continuing with JLL?

The Hon. A. KOUTSANTONIS: I am not sure. I think we are in the process of selecting someone.

Mr MARSHALL: So the original agreement with JLL was terminated at the time that the previous sale settlement concluded?

The Hon. A. KOUTSANTONIS: My advice is that it has been completed, yes.

Mr MARSHALL: You are currently out to the market to get expressions of interest to manage the sale process for the third time; is that the gist of it?

The Hon. A. KOUTSANTONIS: Shortly, we will be going out.

Mr MARSHALL: Shortly?

The Hon. A. KOUTSANTONIS: Yes.

Mr MARSHALL: When do you envisage that it will be back on the market?

The Hon. A. KOUTSANTONIS: Shortly.

Mr MARSHALL: Can you give some indication as to the value put on this by SAFA relative to the amount that was contracted with the previous two signed contracts?

The Hon. A. KOUTSANTONIS: No, we will not be putting a value on these before we go out to market.

Mr MARSHALL: But was the amount that SAFA offered higher or lower—

The Hon. A. KOUTSANTONIS: Do you mean Funds SA or SAFA?

Mr MARSHALL: Sorry, Funds SA.

The Hon. A. KOUTSANTONIS: It is commercial-in-confidence. We are not going to reveal those numbers.

Mr MARSHALL: Have you had any contact with any other public financial or non-financial corporation to request, instruct or otherwise suggest that they consider purchasing the precinct?

The Hon. A. KOUTSANTONIS: I am not sure if there have been any through the unsolicited bids process, but I will check and get back to you.

Mr MARSHALL: But you have not personally suggested to Super SA or ReturnToWork—

The Hon. A. KOUTSANTONIS: I do not conduct the sale.

Mr MARSHALL: Sorry?

The Hon. A. KOUTSANTONIS: I do not conduct the sale. It is done independently of me.

Mr MARSHALL: You have had nothing to do with it. Good, thank you.

Mr KNOLL: On Budget Paper 4, Volume 4, page 161, the third bullet point under targets regarding the early release of funds on compassionate/hardship grounds, can you explain where the identified need for this is?

The Hon. A. KOUTSANTONIS: Can you repeat the page?

Mr KNOLL: Page 161, 'Implement Early Release of Funds on compassionate/hardship grounds.' It is in relation to super.

The Hon. A. KOUTSANTONIS: It is Super SA.

Mr KNOLL: I am happy to move on and come back to that; that is fine. Treasurer, on Budget Paper 4, Volume 4, page 157, in relation to RISTEC has any work been done to reassess the use of the existing legacy systems for first home owner grants and stamp duty and whether or not they are going to be viable as an ongoing product to support those taxes?

The Hon. A. KOUTSANTONIS: The advice I have is that the legacy software will be maintaining stamp duty and conveyance up until 1 January 2018. Then they will be moving to a new portal, but some of the operations from the existing legacy software will remain in place to support the new portal.

Mr KNOLL: What is the new portal?

The Hon. A. KOUTSANTONIS: It is part of a new third-party reporting portal that will be in place where conveyancers and lawyers can report publicly on our website.

Mr KNOLL: Is that portal designed to support the tax in the same way as the existing legacy system? I think it is called Storms. Is it designed to replace Storms?

The Hon. A. KOUTSANTONIS: I am advised that Storms is the back office operation that will stay in place for now.

Mr KNOLL: What was the cost of implementing this portal?

The Hon. A. KOUTSANTONIS: I am advised that this is part of a reform process that the commonwealth government have initiated. They have provided $1.2 million for the body of work.

Mr KNOLL: They are the ones who provided it. What taxes are designed to be included as part of this front end?

The Hon. A. KOUTSANTONIS: Stamp duty and conveyance.

Mr KNOLL: In relation to the First Home Owner Grant, has there been any change to the IT arrangements to that?

The Hon. A. KOUTSANTONIS: It stays on the legacy.

Mr KNOLL: And that is designed to stay on the legacy into the foreseeable future?

The Hon. A. KOUTSANTONIS: That is the advice.

Mr KNOLL: And the Storms legacy system is for the back end of stamp duties?

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

Mr KNOLL: With regard to the move from the Valuer-General's office from the justice department to Treasury, was a business case done when that move was first mooted?

The Hon. A. KOUTSANTONIS: It was a government change, and it was not from Justice; it was from DPTI.

Mr KNOLL: Was there any change to the expected revenue provided as part of property taxes as a result of that change?

The Hon. A. KOUTSANTONIS: No, the operation stays the same; it is just where the office is located. It still answers to the same minister.

Mr KNOLL: Was there any change to the budget allocation for the Valuer-General's office in relation to the change? Were they given more cash when they came across?

The Hon. A. KOUTSANTONIS: Not from the change, no.

Mr KNOLL: Has there been a separate budget allocation or budget increase post the move to Treasury?

The Hon. A. KOUTSANTONIS: I do not have last year's budget here with me, but there was an allocation in last year's budget to the Valuer-General to make sure that valuations were fair and equitable across the entire state.

Mr KNOLL: What was the reason for the move?

The Hon. A. KOUTSANTONIS: It makes sense for the machinery of government to have the Valuer-General in Treasury and Finance.

Mr MARSHALL: If that is the case, why were they not there previously?

The Hon. A. KOUTSANTONIS: It is a good question.

Mr MARSHALL: So what is the answer?

The Hon. A. KOUTSANTONIS: I will ask former treasurer Lucas about why he had it in DPTI.

Mr MARSHALL: What savings did you envisage in the move from the Valuer-General's department from DPTI to Treasury?

The Hon. A. KOUTSANTONIS: I do not envisage it in terms of savings: I envisage it in terms of coherent business.

Mr KNOLL: Treasurer, was there any change, either upwards or downwards, of any property taxes as a result of the change?

The Hon. A. KOUTSANTONIS: I have not increased land tax or stamp duty for South Australians. There is the normal indexation for the tax-free threshold that goes up every year as a result of a very good Labor reform, but property taxes have not gone up unless valuations have gone up, which they do in the normal course of business.

Mr KNOLL: I refer to Budget Paper 3, page 48, the sixth paragraph. In relation to the SkyCity casino, is any compensation payable to SkyCity if the government increases tax on gaming machines or other gaming taxes?

The Hon. A. KOUTSANTONIS: I refer you to the Minister for Consumer and Business Services. He is the one who holds licensing.

Mr KNOLL: Treasurer, are you required to sign off on a deed in relation to the completion of the SkyCity Casino negotiations with the government?

The Hon. A. KOUTSANTONIS: Not that I am aware of, but I will check. No, the development agreement is with Renewal SA.

Mr DULUK: I refer to Budget Paper 4, Volume 4, page 173. Can you explain why the budgeted cash equivalent figure was expected to be about $98 million higher in 2016-17 than in both the preceding and subsequent years?

The Hon. A. KOUTSANTONIS: We do not have that here, but we will get back to you about why.

Mr DULUK: In terms of short-term borrowings, page 173, can you explain why there is a sharp increase in 2017-18 compared with previous years?

The Hon. A. KOUTSANTONIS: There are a lot of reasons for it and we will get you a detailed written answer.

Mr DULUK: Surely, off the top of your head you will know three or four reasons why we have gone up almost $2 billion in short-term borrowings?

The Hon. A. KOUTSANTONIS: No, I do not have that information here.

Mr DULUK: I find it very hard to believe that you do not know—

The Hon. A. KOUTSANTONIS: Careful.

Mr DULUK: —that you cannot provide one or two answers for us today.

The Hon. A. KOUTSANTONIS: I have undertaken—

Mr DULUK: There is a huge increase in short-term debt sitting on the state's balance sheet. I am sure it should be tabulated somewhere.

The Hon. A. KOUTSANTONIS: I will endeavour to get that answer, but I resent your accusation that I am misleading the committee.

Mr DULUK: I did not say that at all, Treasurer.

The Hon. A. KOUTSANTONIS: I will provide an answer.

Mr DULUK: Thank you. I refer to Budget Paper 3, page 31, which is going back to employment growth. I assume that Treasury is relying on a real decline of real wages of 2.2 per cent by 2021 despite FTE numbers staying the same. Have you budgeted for wage increases at all in 2021?

The Hon. A. KOUTSANTONIS: It was.

Mr DULUK: If you are relying on a real decline in real wages of 2.2 per cent by 2021, despite FTE numbers staying the same, have you budgeted for a wage increase at all in 2021?

The Hon. A. KOUTSANTONIS: The advice I have is that we have factored in wage increases, but we have also factored in savings that will occur in that year which net off the increases.

Mr DULUK: How much in wage increases have you factored in?

The Hon. A. KOUTSANTONIS: It depends on what the EB says.

Mr MARSHALL: I have some questions regarding Budget Paper 4, Volume 4, page 157, where it states that there was 'an increase in expenditure relating to the administration of the Jobs Accelerator Grant' of $300,000. What was the total budgeted cost of administering the Job Accelerator Grant?

The Hon. A. KOUTSANTONIS: I am advised by the tax commissioner that in 2016-17 we provided $100,000 for administration and $522,000 for capital to build the system. In the following year, 2017-18, we will provide $367,000 in administration and no money in capital.

Mr MARSHALL: What was the amount that you said you spent for the 2016-17 year?

The Hon. A. KOUTSANTONIS: It is $100,000 in administration and—

Mr MARSHALL: It says in your financial commentary, on page 157 in the third dot point, 'an increase in expenditure relating to the administration of the Jobs Accelerator Grant' of $300,000. So how could you have an increase of $300,000 if you are only spending $100,000?

The Hon. A. KOUTSANTONIS: The increase is rounded up from $100,000. It is a $267,000 increase, and we rounded it up to $300,000.

Mr MARSHALL: What was the total amount expended last year?

The Hon. A. KOUTSANTONIS: Last financial year, it was $100,000.

Mr MARSHALL: How can you spend $100,000 last year if the increase was $267,000?

The Hon. A. KOUTSANTONIS: Because the increase is for this financial year.

Mr MARSHALL: Sorry?

The Hon. A. KOUTSANTONIS: The increase was for this financial year, I am advised.

Mr MARSHALL: I will just state the question again: how much did you spend last financial year on administering the Job Accelerator Grant program? You have said $100,000, but the negative variance was $300,000, so it was not going to be a positive cost of $200,000.

The Hon. A. KOUTSANTONIS: I am advised that we estimated a $300,000 spend on administration. The actual cost was $100,000. The following year, we—

Mr MARSHALL: Let's just stick with last year. Can you explain dot point 3 then on page 157?

The Hon. A. KOUTSANTONIS: The estimated result was going to be $300,000. That is what we had budgeted for, but the actual result was $100,000, and that is the variance, so we spent less in administrating than we thought we would.

Mr MARSHALL: Can you explain dot point 3 because the heading there is that the increase in expenditure is primarily due to an increase in expenditure relating to the administration of the Job Accelerator Grant? So you are saying that you underspent?

The Hon. A. KOUTSANTONIS: I have explained it. The expenditure in 2016-17 was $100,000. We revised that up for 2017-18 to $367,000.

Mr MARSHALL: That is not what you said at all, but anyway—

The Hon. A. KOUTSANTONIS: Yes, it was.

Mr MARSHALL: Well, we will check the Hansard.

The Hon. A. KOUTSANTONIS: Why don't you.

Mr MARSHALL: So it was $367,000. It was budgeted to be $100,000 and it was actually $367,000; is that correct?

The Hon. A. KOUTSANTONIS: No, that is not what I said.

Mr MARSHALL: So $367,000 was the budget—

The Hon. A. KOUTSANTONIS: I have answered the question and you are deliberately attempting to confuse yourself, which is interesting to watch, but boring.

Mr MARSHALL: What was the expenditure to administer the Jobs Accelerator Fund last financial year?

The Hon. A. KOUTSANTONIS: It was $100,000.

Mr MARSHALL: What is it this current financial year?

The Hon. A. KOUTSANTONIS: It is an increase of $267,000 to $367,000.

Mr MARSHALL: What was the original budget for expenditure on administering the Job Accelerator—

The Hon. A. KOUTSANTONIS: Last year or this year?

Mr MARSHALL: Last year, because you have just told me what the budget is this year.

The Hon. A. KOUTSANTONIS: It was $100,000.

Mr MARSHALL: So the budget was $100,000 and you expended $100,000 last year. The budget this year is $367,000. What is the reason for the increase?

The Hon. A. KOUTSANTONIS: Last year, people were just registering for the grant. This year, we are actually administering payments.

Mr MARSHALL: How many people work in this area?

The Hon. A. KOUTSANTONIS: They have multiple functions. It is not just people focused on the Job Accelerator Grant.

Mr MARSHALL: Of the applicants to the Job Accelerator Grant to date, how many have been for apprentices or trainees?

The Hon. A. KOUTSANTONIS: We do not have information on registration. We only have that information on payment and payments have only just begun since the end of the financial year.

Mr MARSHALL: Does the $367,000 cost this financial year versus the $100,000 last financial year include any advertising associated with the Job Accelerator—

The Hon. A. KOUTSANTONIS: No.

Mr MARSHALL: Where does that appear in the budget?

The Hon. A. KOUTSANTONIS: I will correct that answer. We spent about $700 out of the $100,000 to create flyers for businesses to know how to apply, but I do not have—

Mr MARSHALL: In evidence already provided, we understand that there was an initial half a million dollars spent.

The Hon. A. KOUTSANTONIS: All the advertising budget for these matters are all held in DPC.

Mr MARSHALL: We understand that there was half a million dollars originally allocated to the Jobs Accelerator Fund advertising and that was increased by another $500,000. So $1 million to date has been budgeted or expended on advertising the Job Accelerator Grant but that is not included in anything with Treasury. The question is: who did the application for that funding, and indeed the revision to that original request for funding, and has there been any subsequent to the $1 million that we already know about for the Job Accelerator Grant Scheme?

The Hon. A. KOUTSANTONIS: It is administered by the Department of the Premier and Cabinet.

Mr MARSHALL: Yes, but that was not my question. My question was—

The Hon. A. KOUTSANTONIS: Well, that is my answer.

Mr MARSHALL: —did your department do the application to the PCAG?

The Hon. A. KOUTSANTONIS: No, that was done by DPC.

Mr MARSHALL: So DPC did an application to the PCAG, not through your area which administers this part of the budget.

The Hon. A. KOUTSANTONIS: I will check but that is my advice.

Mr MARSHALL: There would be the original application ($500,000), then my understanding is there was a revised application, so these applications were not submitted by Treasury.

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

Mr MARSHALL: That is your advice. Can you check that for us?

The Hon. A. KOUTSANTONIS: Yes.

Mr MARSHALL: Can you also see whether any subsequent application has been made over and above the $1 million?

The Hon. A. KOUTSANTONIS: Sure.

Mr MARSHALL: Thank you very much. While we are talking about government advertising, did the money that has been allocated for advertising the budget go through the same PCAG process?

The Hon. A. KOUTSANTONIS: All the advertising is done by the Department of the Premier and Cabinet.

Mr MARSHALL: Was an application submitted by Treasury to the Premier's department? The Premier looks after all that advertising, so he looks after—

The Hon. A. KOUTSANTONIS: They manage it themselves.

Mr MARSHALL: So no application was contributed to by your office for that process.

The Hon. A. KOUTSANTONIS: No.

Mr MARSHALL: No.

The Hon. A. KOUTSANTONIS: That is the advice I have.

Mr MARSHALL: Given that the Liberal Party has indicated that it will be moving to block the implementation of the state bank tax—or whatever you call it, the major bank levy—and that crossbenchers have indicated that they will be supporting blocking that measure, can you indicate—

The Hon. A. KOUTSANTONIS: Constitutionally, they cannot block it. The constitution does not allow the upper house to block money bills and budget bills. It only allows them to make suggestions. So, misleading the committee by saying they are going to block it is a high offence, and you should know that after being here so long.

Mr MARSHALL: Nevertheless—

The Hon. A. KOUTSANTONIS: Nevertheless, other than you just making things up—but go on.

Mr MARSHALL: I think the practicalities of it are that it is not going to pass.

The Hon. A. KOUTSANTONIS: Okay.

Mr MARSHALL: If it does not pass—

The Hon. A. KOUTSANTONIS: Constitutionally, you cannot block it in the upper house, so how are you going to stop it?

Mr MARSHALL: How is it going to pass?

The Hon. A. KOUTSANTONIS: You are the one telling me you are going to block it, so how do you remove it from the budget bills?

Mr MARSHALL: Well—

The Hon. A. KOUTSANTONIS: Under what process?

Mr MARSHALL: —this is the basis of my question.

The Hon. A. KOUTSANTONIS: Under what process, member for Dunstan? Through the power of your personality? How will you do this exactly?

The CHAIR: Order!

Mr MARSHALL: How did it occur during the car park tax? What happened there?

The Hon. A. KOUTSANTONIS: The car park levy was removed by the government.

Mr MARSHALL: Does the government envisage—

The Hon. A. KOUTSANTONIS: So, you think—

The CHAIR: Order!

The Hon. A. KOUTSANTONIS: —miraculously you can get me to remove it?

Mr MARSHALL: I am just saying. I am just trying to work out how you are going to deal with this issue.

The Hon. A. KOUTSANTONIS: You must be very powerful.

Mr MARSHALL: My question is: will the government be removing this offending component of the Budget Measures Bill so that it can pass?

The Hon. A. KOUTSANTONIS: Both houses will have their say on the bill soon.

Mr MARSHALL: Yes, so what contingencies has Treasury taken to administer—

The Hon. A. KOUTSANTONIS: Given there is a 175-year precedent that no opposition has blocked or amended a budget bill—

Mr MARSHALL: Except for the car park tax, which we discussed less than a minute ago.

The Hon. A. KOUTSANTONIS: No, the government removed the car park levy.

Mr MARSHALL: The government has it within their ability to do precisely the same.

The Hon. A. KOUTSANTONIS: Given the dangerous and reckless nature of your leadership where you proposed a gas ban, opposed more discussion on the nuclear fuel cycle, and now breaking a 175-year precedent on budgets—

Mr MARSHALL: Has the parliament actually operated for 175 years? Somebody should inform the State Library and the Parliament Research Library because they will be fascinated to know it was operating about 15 or 20 years before they had previously thought.

The Hon. A. KOUTSANTONIS: How many budget bills have been blocked?

Mr MARSHALL: Well—

The Hon. A. KOUTSANTONIS: How many?

Mr MARSHALL: —can you explain why—

The Hon. A. KOUTSANTONIS: How many have been blocked?

Mr MARSHALL: —you took the action you took on the budget measure with relation to the car park tax as distinct from this offending component to the current Budget Measures Bill?

The Hon. A. KOUTSANTONIS: I would refer you to the Hansard.

Mr MARSHALL: I would like to know what contingencies you are putting in place if the Budget Measures Bill does not pass in time—

The Hon. A. KOUTSANTONIS: This is the unfortunate part of the government's dilemma with the opposition. The opposition have no criticism of any of the spending in the budget. Not once have any of them brought up any budget measures or any spending opportunities that they want halted. In fact, in all their budget reply speeches members have advocated for more spending in the budget—

Mr MARSHALL: Anyway, what are you going to do if it does not pass?

The Hon. A. KOUTSANTONIS: —you do not like the answer—yet, when it comes to measures to balance the budget, the opposition will use its numbers to attempt to block it, breaking a long-held tradition in this parliament. Until the opposition are able to actually advocate what parts of the budget they disagree with in terms of expenditure, I think it is a bit rich for them to be arguing with us about revenue measures.

Mr MARSHALL: Will you be using the existing mechanism to pass through payroll tax concessions if the Budget Measures Bill does not pass?

The Hon. A. KOUTSANTONIS: First, I do not answer hypothetical questions and I expect—

Mr MARSHALL: Well, when the Budget Measures Bill does not pass.

The Hon. A. KOUTSANTONIS: So you are voting against payroll tax cuts as well. That is a new admission by the opposition now—that they will be voting against payroll tax cuts as well to small business. First, it was just the major bank levy; now they are going to be voting against payroll tax cuts. Foot-in-mouth disease returns again to the Leader of the Opposition.

Mr MARSHALL: I am asking whether you are going to use the existing measure that already is there, without legislation, to pass through the payroll tax concessions?

The Hon. A. KOUTSANTONIS: The Budget Measures Bill offers a permanent tax cut, to lower the rate to 2½ per cent—

Mr MARSHALL: That is not my question.

The Hon. A. KOUTSANTONIS: If the opposition wish to block that as well, that is something they will have to deal with with their constituents.

Mr MARSHALL: Well, no, we made it very—

The Hon. A. KOUTSANTONIS: So you support that measure? Do you support that measure or don't you?

Mr MARSHALL: We are very clear—

The Hon. A. KOUTSANTONIS: It is a very simple yes/no answer. Do you support it or don't you? Why are you equivocating?

The CHAIR: Order!

Mr MARSHALL: We are not answering questions from you, especially nonsensical ones.

The Hon. A. KOUTSANTONIS: Okay, well, fair enough.

Mr MARSHALL: Will you be using the existing mechanism for the current payroll tax?

The Hon. A. KOUTSANTONIS: I expect the Budget Measures Bill to pass.

Mr MARSHALL: Have you made any plans, a contingency plan, to ensure that those payroll tax concessions can be passed on?

The Hon. A. KOUTSANTONIS: The easiest way for them to be passed on is for the opposition to vote for the bill.

Mr MARSHALL: The easiest way would be for you to remove the offending part of the Budget Measures Bill which does not enjoy the pleasure of the other place.

The Hon. A. KOUTSANTONIS: I had no such criticism of the major bank levy from the commonwealth government. I had no such concerns from the opposition saying that they would make Australia a lesser place to invest in, that it would hurt foreign direct investment into Australia, that there would be a differential tax rate for Australian banks. I heard no comments from the Leader of the Opposition whatsoever when that occurred. He has simply taken orders from the banks.

Mr MARSHALL: Has the Treasurer or Treasury uncovered any rorts with its administration of the current Job Accelerator Grant program?

The Hon. A. KOUTSANTONIS: No.

Mr MARSHALL: Of all the applications to date, the government has conducted a reasonable audit of the before and after employee numbers and determined that there is not one case in which there is reason to believe that the number that has been put forward is not the correct number.

The Hon. A. KOUTSANTONIS: There are risk mitigation strategies in place for the applications and they do a risk assessment of the applications, and thus far they have found no evidence of rorting. I have a great deal of faith in the South Australian people—obviously a lot more than the Leader of the Opposition.

Mr MARSHALL: Can you provide details to this committee on what those audit procedures are?

The Hon. A. KOUTSANTONIS: We keep them secret deliberately so that—

Mr MARSHALL: Secret?

The Hon. A. KOUTSANTONIS: Yes, so that people do not try to get around them.

Mr MARSHALL: Do you think they keep other audit methodologies in the finance world secret so that people do not know what they are going to be caught out on?

The Hon. A. KOUTSANTONIS: I do not mind you having a political go at me. I think that is fair enough because we are in politics, but the tax commissioner is independent.

Mr MARSHALL: We are just asking what the audit procedure is.

The Hon. A. KOUTSANTONIS: That sort of mockery just demeans the position of the Leader of the Opposition, but you have been very good at that.

Mr MARSHALL: What is the audit cost to the taxpayers? You only spent $100,000 last year. How much of that $100,000 was involved in conducting this significant audit that makes you very comfortable that there is no rorting going on? How much of that massive $100,000 was expended on this comprehensive audit?

The Hon. A. KOUTSANTONIS: As I said earlier, the administration costs cover the audit costs. They are done on a risk basis. The employees in the tax commissioner's office are the ones who instigate the risk mitigation procedures. They cover them as the applications are made and, as they are paid out, they do an assessment. I have faith in them. If the Leader of the Opposition has any evidence to the contrary, he should provide it to the committee now.

Mr MARSHALL: No, that is not the point at all. My question is: what evidence—

The Hon. A. KOUTSANTONIS: So you have no evidence, but you are making an accusation anyway?

Mr MARSHALL: Not at all.

The Hon. A. KOUTSANTONIS: Typical.

Mr MARSHALL: I am just trying to be prudent with state taxpayer dollars. There are plenty of examples in other jurisdictions that have looked at programs exactly like this where there was widespread rorting. It concerns me that the Treasurer says that they have an audit methodology, he will not tell us what the audit methodology is and he admits that the total expenditure for managing this process, including auditing, is $100,000. We are talking about administering a very large sum of state taxpayer dollars, and it does not seem like there is a very robust methodology for ensuring that those funds are going to be expended with full prudential regulation and oversight.

The Hon. A. KOUTSANTONIS: What jurisdictions are you talking about?

Mr MARSHALL: Others around Australia. We heard, anecdotally, one of the reasons why—

The Hon. A. KOUTSANTONIS: Anecdotally? You come into the committee with anecdotal evidence?

Mr MARSHALL: Well, it is published—Tasmania, for example.

The Hon. A. KOUTSANTONIS: Tasmania—there has been a major rorting of the Tasmanian government subsidies.

Mr MARSHALL: There has been media coverage of the fact that—

The Hon. A. KOUTSANTONIS: Which one?

Mr MARSHALL: This is why they closed it down.

The Hon. A. KOUTSANTONIS: Which one? What program?

Mr MARSHALL: I am not here to answer your questions.

The Hon. A. KOUTSANTONIS: Was it a jobs accelerator grant program?

Mr MARSHALL: In that line of support, yes.

The Hon. A. KOUTSANTONIS: What was it?

Mr MARSHALL: I am not here to answer your questions. You are not—

Members interjecting:

The CHAIR: Order!

Mr MARSHALL: I am not. I am asking questions, legitimate questions—

The Hon. J.M. Rankine interjecting:

Mr MARSHALL: Are you the Treasurer now? Because God help us all if you are. We would be in so much trouble.

The CHAIR: I am on my feet again. You cannot see me, I know, but I am on my feet.

Mr MARSHALL: It is difficult to discern whether you are up or not.

The CHAIR: I know. I am going to get that little step. I will just remind everybody that the questions need to be asked and answered one at a time, for Hansard's benefit, with no interjection.

The Hon. A. KOUTSANTONIS: The tax commissioner advises me that we sought advice from the New South Wales government about their risk mitigation programs and how they manage their risk in their applications. They had a similar program in place, I think up to $1,000, that then treasurer Baird introduced in New South Wales, and I understand that there were learnings from that that we have implemented.

Mr MARSHALL: So our audit procedure is as per the New South Wales jobs accelerator grant? That is good because I am catching up with them this week.

The Hon. A. KOUTSANTONIS: No, we tailored it for the South Australian condition.

Mr MARSHALL: Why did you reference New South Wales if you are not using their audit procedure? Who designed the audit procedure?

The Hon. A. KOUTSANTONIS: The reason the Treasury went to the New South Wales experience is that we wanted to learn from any mistakes that they may have had, or any experiences that they might have had, and we implement the appropriate audit risk mitigation services in place. I know that the Leader of the Opposition has run out of questions and he is just trying to badger—

Mr MARSHALL: Not at all.

The Hon. A. KOUTSANTONIS: —public servants who cannot defend themselves. It is a measure of the man, I suppose.

Mr MARSHALL: I still do not have an answer to who designed your audit process.

The Hon. A. KOUTSANTONIS: It is a measure of the man.

Mr MARSHALL: Who designed your audit process?

The Hon. A. KOUTSANTONIS: RevenueSA designed the audit process.

Mr MARSHALL: RevenueSA. Thank you very much.

Mr KNOLL: Can we move on now to SAFA, Super SA and MAC.

The CHAIR: What volume are you on, member for Schubert?

Mr KNOLL: Budget Paper 3, page 34, table 2.12.

The CHAIR: We have a change of advisers now.

Departmental Advisers:

Mr D. Reynolds, Chief Executive, Department of Treasury and Finance.

Ms N. Rantanen, Chief Operating Officer, Department of Treasury and Finance.

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

Mr D. Price, Director, Commercial Projects, Department of Treasury and Finance.

Mr A. Blaskett, General Manager, South Australian Financing Authority.

Mr G. Jackson, Commissioner of State Taxation, RevenueSA.

Ms J. Townsend, Chief Executive Officer, Funds SA.

Mr J. Montague, General Manager, Super SA.

Mr P. McAvaney, Director, Policy and Governance, Super SA.

Ms T. Minett, Acting Chief Executive Officer, Motor Accident Commission.

The Hon. A. KOUTSANTONIS: Andrew Blaskett is back, ma'am.

The CHAIR: We are at Budget Paper 3; is that right? What page are you on?

Mr KNOLL: Page 34. Treasurer, these are questions you referred to SAFA before. What is the state government's average cost of borrowing?

The Hon. A. KOUTSANTONIS: The cost of finance for the actuals for 2016-17 is 2.76 per cent; for 2017-18, 2.8 per cent; for 2018-19, 3.04 per cent; for 2019-20, 3.11 per cent; for 2020-21, 3.2 per cent; and for 2021-22, 3.36 per cent. Those numbers have been factored into the budget.

Mr KNOLL: Thanks very much. Treasurer, can you give an explanation of what is driving the increased cost of borrowing?

The Hon. A. KOUTSANTONIS: Market expectations on interest rate rises, I am advised.

Mr KNOLL: Has the spread on SAFA bonds increased since the state bank tax was announced?

The Hon. A. KOUTSANTONIS: It depends on what time or date you are looking at the spread. It depends on how much you are going out for and what other announcements are in the market, so I do not think you can definitively say yes or no. I do not accept the premise that the major bank levy will have any major determinant impact on our borrowing costs. If that were true, you would see that for the nation.

Mr KNOLL: Obviously, that is the borrowing cost over the forwards, as you provided for the actual plus the forwards. Are you able to provide, for this time last year, what those forecasts would have been over the forwards as they were then?

The Hon. A. KOUTSANTONIS: It would have been a different borrowing profile. We do not have them with us, but we can get them for you.

Mr KNOLL: I refer to Budget Paper 3, page 47. Obviously, we have dealt now with exactly what those forecasts are over the forwards, but can you identify when these forecasts were developed? Those figures you have provided just then—

The Hon. A. KOUTSANTONIS: They are in the budget papers now, so they were developed during the budget process.

Mr KNOLL: Have you actually sought any advice, or has SAFA sought any advice on the impact that the major bank levy is going to have—

The Hon. A. KOUTSANTONIS: Again, I refer you to the commonwealth Treasury and the secretary of the commonwealth Treasury, Mr John Fraser. He has said that the impacts of the major bank levy at a commonwealth level were minimal.

Mr KNOLL: So SAFA has also not undertaken any advice on the changes to their borrowing costs?

The Hon. A. KOUTSANTONIS: I have to say that if the advice that the commonwealth Treasury gives to the commonwealth estimates process is wrong, we are in all sorts of trouble. John Fraser is a well-respected secretary of the Treasury. He has a very strong banking background. I understand he used to work for UBS. He is someone who is held in high regard in financial markets. The scare campaign and the fear tactics of the opposition will not work.

Mr KNOLL: Would you concede that there are differences between the federal government's bank tax and the state government's major bank levy?

The Hon. A. KOUTSANTONIS: Yes, one collects a lot more money than the other.

Mr KNOLL: You believe that, given the fact that one is a state-based differential tax rate—

The Hon. A. KOUTSANTONIS: I understand the point.

Mr KNOLL: —versus one that is a major bank levy—

The Hon. A. KOUTSANTONIS: I think it is an intelligent question. I think it is an important question to answer. I think what you are saying is—

Mr KNOLL: The state bank tax is not the federal bank tax? That is right.

The Hon. A. KOUTSANTONIS: The difference between the commonwealth tax and the state tax is that the commonwealth covers the entire country. We are of course in an international community and in an international borrowing framework. If the commonwealth major bank levy has made Australia less competitive, or has made our banks less profitable, you would have seen impacts on the share market.

What you have seen at the share market, since the announcement of the major bank levy both at a state and federal level, is share prices have gone up. What you have seen is banks continue to lend. You have seen that Australia's international reputation has not been tarnished in any way whatsoever by what the commonwealth government have done, despite fears that the banking association voiced at the time of what it would do to Australia's international reputation. This is wrong. It has not done this in any way whatsoever, and I think the same can be said for South Australia.

If you look at the latest Deloitte report, the latest ANZ report, the latest CommBank report and the latest NAB surveys, they all show increases in business confidence and increases in investment in South Australia. We have also had, since the announcement of the major bank levy, two of the world's most respected billionaires make investments in South Australia: Mr Sanjay Gupta and, of course, Mr Elon Musk. Now, today, we see another international investor make a multimillion dollar investment in the Adelaide Casino, so all of your arguments are falling flat on their face.

Mr KNOLL: Treasurer, of the three bank surveys that you have discussed, have any of them, as part of the period of the survey that we are actually talking about, happened after the announcement of the bank tax?

The Hon. A. KOUTSANTONIS: They are all for the June quarter.

Mr KNOLL: What date was the state budget handed down?

The Hon. A. KOUTSANTONIS: 22 June.

Mr KNOLL: Well, you have answered your own question. Thanks very much. Treasurer, you stated earlier—

The Hon. A. KOUTSANTONIS: So you think a $20 million tax on Westpac will change the gross state product of the state? Really?

Mr KNOLL: You stated earlier, Treasurer, that confidence is not about the state GDP, it is about a whole variety of measures.

The Hon. A. KOUTSANTONIS: What do you think banning unconventional gas does to confidence? What do you think having fewer GST payments to the state because of faux science bans on the exploration of minerals does to the confidence of the state? What do you think it does to the confidence of the state when you try to have a discussion about the nuclear royal commission and you have a Leader of the Opposition taking the side of Tammy Franks and the Greens rather than that of the commonwealth Liberal Party?

Mr MARSHALL: And the citizens' jury that you put in place.

The Hon. A. KOUTSANTONIS: No, you take all your advice from Tammy Franks.

Mr KNOLL: Treasurer, on the same budget line, you stated earlier in your answers that you do not believe that this tax is going to be passed on to consumers.

The Hon. A. KOUTSANTONIS: Yes, hence the anger of the banks.

Mr KNOLL: By virtue of that fact, would you concede that the cost of borrowing of the banks is going to increase as a result of the major bank levy?

The Hon. A. KOUTSANTONIS: Because of a $20 million per year tax? No.

Mr KNOLL: Hang on. So you are saying that consumers will not pay and now you are saying—

The Hon. A. KOUTSANTONIS: It will come out of retained profits and earnings.

Mr KNOLL: —that banks will not pay.

The Hon. A. KOUTSANTONIS: It will come out of profits and earnings. The Australian banks made $30 billion last year—$30 billion. We are not talking about organisations that are just getting by. We are talking about organisations that are making super profits. The major bank levy that the commonwealth government introduced takes a considerable amount more out than our levy does. The idea that Westpac having to pay an extra $20 million per year is somehow going to impact on its borrowing costs is ridiculous.

The Hon. J.M. Rankine interjecting:

The CHAIR: Order!

The Hon. J.M. Rankine interjecting:

The CHAIR: Order! I am in charge. You are asking a question?

The Hon. J.M. RANKINE: Yes, I am.

The CHAIR: I cannot hear you, so pull the microphone down.

The Hon. J.M. RANKINE: Do you have any information that compares the payments to chief executive officers of these banks?

Mr DULUK: What budget paper and what page?

The Hon. J.M. RANKINE: The same line.

Mr DULUK: What is it?

The Hon. J.M. RANKINE: Page 47, the same page that the member for Schubert was on.

The Hon. A. KOUTSANTONIS: Yes, I do.

The Hon. J.M. RANKINE: Do you have any information about the comparison of their wages and the major bank levy that they might be paying here in South Australia?

The Hon. A. KOUTSANTONIS: I also point out that the NAB survey, which showed an increase in business confidence, was taken immediately after the announcement of the major bank levy. The NAB pays its chairman $700,000 per year, its chief executive $6.7 million per year and its total board and senior executives $35.8 million per year. Westpac pays its chairman $800,000 per year, its chief executive $6.8 million per year and its senior board and executives $41.4 million per year.

The ANZ pays its chairperson $800,000 per year, its chief executive $5.1 million and its senior executives and board $44.7 million. The Commonwealth Bank pays its chairperson $900,000 per year, its chief executive $8.8 million per year and its senior executive and board $48.5 million. Macquarie pays their chairperson $900,000 per year, their chief executive $18.2 million per year and their board and executives $120 million. The total in wages for chief executives, chairmen, boards and senior executives only is $290 million per year—per year.

The idea that a state major bank levy that raises about $100 million a year between the five banks of about $20 million each, which is a lot less than Macquarie from memory, would have any impact on (1) their profitability, (2) their ability to borrow or (3) any investment climate in South Australia is ridiculous, but they have found an ally in the Liberal Party.

Mr KNOLL: Treasurer, now that you have SAFA, Super SA and MAC here, what is the total exposure to bank equities from each of the funds management organisations?

The Hon. A. KOUTSANTONIS: Funds SA is the only one with any exposure through shareholdings of about $1.5 billion.

Mr KNOLL: Can you let us know what dividends are paid on these equities?

The Hon. A. KOUTSANTONIS: We do not have that with us, but we will get that for you.

Mr KNOLL: Treasurer, you have suggested that consumers will not pay. You have said that borrowing costs will not change. Will you now concede that equities, or 'retained earnings' as you call them, will now be footing the bill for this tax and that the state government actually has exposure to changes and variations towards that?

The Hon. A. KOUTSANTONIS: Given that share prices went up during the debate about the major bank levy and that share prices in all the banks have gone up since the announcement of the major commonwealth bank levy, no.

Mr KNOLL: If I can ask the question again, will you concede that there will be a change to dividends as a result of this major bank levy?

The Hon. A. KOUTSANTONIS: That is a matter for the individual boards. Boards decide their dividends on all sorts of different policies. The idea that the Commonwealth Bank would pay its shareholders a lower dividend on the basis of the commonwealth government's major bank levy has not borne through, or that—

Mr KNOLL: This is magic pudding economics. Either consumers pay, or borrowers pay or shareholders pay. You can decide which one of those pays, but one of them has to pay. The money has to come from somewhere. It does not just hide in a secret box under somebody's bed. One of those three groups gets to pay. Which one of those three groups is going to pay?

The Hon. A. KOUTSANTONIS: It is a nice speech, but the reality is that dividend payments are calculated differently by each bank—

Mr KNOLL: Which one of those three groups, Treasurer?

The Hon. A. KOUTSANTONIS: —and those banks decide, on the basis of their retained profits and earnings, how much they will return in dividends.

Mr KNOLL: If there is $100 million left as a result of this major bank levy—

The Hon. A. KOUTSANTONIS: Even if there is no change to dividend policy whatsoever and there is no increase in dividend policy, there are still plenty of retained profits to pay this tax out of and a lot more after that.

Mr KNOLL: So nobody is going to pay?

The Hon. A. KOUTSANTONIS: The banks will.

Mr KNOLL: Nobody is going to pay.

The Hon. A. KOUTSANTONIS: The banks will pay out of their profits.

The Hon. J.M. RANKINE: Maybe fewer annual bonuses for them.

Mr KNOLL: It is either shareholders or—anyway, that is fine. The magic continues.

The Hon. A. KOUTSANTONIS: If shareholders are worse off—

Mr KNOLL: This is brilliant. And you are the Treasurer of this state.

The Hon. A. KOUTSANTONIS: If shareholders are worse off then people who hold shares should recuse themselves from this vote.

Mr DULUK: Treasurer, given that no modelling has been done from your department—

The Hon. J.M. RANKINE: Sorry, what paper are you on?

Mr DULUK: The same page, member for Wright. Given that no modelling was done by SAFA or Treasury in regard to the bank tax, why request only $90 million a year? Why not a higher amount of tax?

The Hon. A. KOUTSANTONIS: That is a good question.

Mr DULUK: Why not $200 million? Why not $500 million? If it has no impact, why not a higher level?

The Hon. A. KOUTSANTONIS: That is a good question. The way we decided on the level of taxation that we thought would be fair was we commissioned a series of reports during the tax debates that were being conducted when premier Baird and Premier Weatherill were having discussions with then prime minister Abbott and then treasurer Hockey about the tax mix. We commissioned a report by Michael Evans, which found that the Australian banks were not contributing the appropriate amount of taxation through financial services taxation to the Australian economy. Subsequently, I understand that the commonwealth Treasury did a body of work as well, saying that that number was around $4 billion.

The commonwealth government's levy will raise about $1.6 billion per year. What we did is we said that if every other state levied this and raised another $1.6 billion, that would take the total to still under the $4 billion mark. We have set that figure based on the commonwealth major bank levy. We take a proportion of our economy as a share of GDP and apply it to that $1.6 billion figure. If every other state applied the same levy as us, it would raise exactly the same amount of commonwealth levy.

Mr DULUK: If the state started going over that levy, would you then concede that your bank tax in the long run, if every other state were to buy in and go above, the same as WA did, would then affect the profitability of banks and then, over time, the cost of funds to banks and then be passed on to consumers?

The Hon. A. KOUTSANTONIS: No; because of their implicit guarantee, they get lower costs of borrowing anyway, but the truth is that, even with every other state applying this levy, that would take their profitability for one year from $30 billion down to $26 billion. A $26 billion profit for one year is a very healthy margin. It is a lot more profitable than other international banks or other banks in comparable countries. The question here is: do I like taxation? No, I have cut more taxes than any Liberal treasurer in the history of this state. The taxes that we have cut as a government have been aimed at people who are active in the economy, people who are—

Mr KNOLL: Let's move on.

The Hon. A. KOUTSANTONIS: —let me finish my answer—active in the economy and want to go out and do things like buy land or buy a business, like your family business, for example. Your family business can now expand and buy other properties, other businesses and other plant and equipment without paying stamp duty. In any other jurisdiction, if they were to buy a new warehouse, if they were to buy new equipment, they would pay stamp duty on the goodwill of the business they purchase, they would pay stamp duty on the plant and equipment and they would pay stamp duty on the property that they bought—not in South Australia.

We have cut taxes dramatically. This is a part of the economy that is undertaxed. It is under taxed and they are not paying their fair share, and that is money we want spent on hospitals, schools and job creation. Again, I go back to the important matter here that in all the spending we have announced in the budget not once has the opposition mounted any opposition to any of it.

Mr MARSHALL: My question relates to Budget Paper 3, page 85. Are you able to provide an update on whether any decision has been made to retain surpluses in SAFA or Funds SA to Treasury?

The Hon. A. KOUTSANTONIS: Nothing on top of the standard dividend policy across government for SAFA. We do not take money out of Funds SA.

Mr MARSHALL: What is the quantum of refinancing to be undertaken in the 2017-18 year?

The Hon. A. KOUTSANTONIS: I think I answered that earlier.

Mr MARSHALL: No, you said that you would be going out in August, but I am wondering about the quantum of refinancing.

The Hon. A. KOUTSANTONIS: It is $4.75 billion.

Mr MARSHALL: Will that all be going out in August?

The Hon. A. KOUTSANTONIS: Yes; $2 billion will be rolled over in short-term borrowings, and the $2.57 billion will be done over a 12-month period—four or five tranches of borrowings.

Mr MARSHALL: Four or five tranches beginning in August this year?

The Hon. A. KOUTSANTONIS: August, September.

Mr MARSHALL: What new or extra financing needs are to be raised beyond this financial year?

The Hon. A. KOUTSANTONIS: On average about $4 billion a year.

Mr MARSHALL: Of the $4.75 million that you are going out to the market for this year, what proportion is refinancing versus new finances that you are looking for?

The Hon. A. KOUTSANTONIS: It is all refinancing.

Mr MARSHALL: It is all refinancing, so there is no additional—

The Hon. A. KOUTSANTONIS: Not this year, no.

Mr MARSHALL: The debt position does not deteriorate at all this year?

The Hon. A. KOUTSANTONIS: No.

Mr MARSHALL: In terms of the Motor Accident Commission, is there a current valuation of the tail of the Motor Accident Commission?

The Hon. A. KOUTSANTONIS: It is up in the annual report, which will be tabled in parliament later this year.

Mr MARSHALL: What is the most recent valuation of the tail that is published?

The Hon. A. KOUTSANTONIS: From last year's annual report, I imagine.

Mr MARSHALL: What does that show?

The Hon. A. KOUTSANTONIS: I will dig out the annual report and give it to you.

Mr MARSHALL: Can you indicate whether or not there has been a revaluation or a devaluation?

The Hon. A. KOUTSANTONIS: We will announce that in the annual report we will table in the parliament.

Mr MARSHALL: When is that due to be tabled?

The Hon. A. KOUTSANTONIS: Later in the year.

Mr MARSHALL: Is the government still investigating options for selling off that tail?

The Hon. A. KOUTSANTONIS: The current decision is that we will maintain the tail.

Mr MARSHALL: The current decision?

The Hon. A. KOUTSANTONIS: That could change, of course.

Mr MARSHALL: When was that decision taken?

The Hon. A. KOUTSANTONIS: Earlier this year.

Mr MARSHALL: The government has previously indicated that it was exploring options.

The Hon. A. KOUTSANTONIS: Yes, we do everything we can to maximise the value for the taxpayer.

Mr MARSHALL: Yes, excellent work.

The Hon. A. KOUTSANTONIS: Good. Thank you.

Mr MARSHALL: Who undertook that investigation?

The Hon. A. KOUTSANTONIS: PwC.

Mr MARSHALL: Was it presented to Treasury or to the board?

The Hon. A. KOUTSANTONIS: It was late last year.

Mr MARSHALL: Was the recommendation from PwC that the tail not be sold? Was that the recommendation?

The Hon. A. KOUTSANTONIS: It was a cabinet decision.

Mr MARSHALL: Was that in accordance with the recommendation from PwC and the board?

The Hon. A. KOUTSANTONIS: Cabinet deliberations are secret.

Mr MARSHALL: What was the value of that external work done on the sale of the tail?

The Hon. A. KOUTSANTONIS: I do not know, but I will get it for you.

Mr MARSHALL: To this point in time, and there is no reason for you to envisage it would change, the decision by the government has been not to sell that and to continue operating. What are the costs associated with the ongoing management of that tail?

The Hon. A. KOUTSANTONIS: It is just maintaining Allianz as our claims manager and maintaining the funds for the staff. I will get the costs for you.

Mr MARSHALL: Allianz are managing it, but I presume there is some overhead associated with the continuing operation of the Motor Accident Commission?

The Hon. A. KOUTSANTONIS: I understand it is relatively small, but I will get it for you.

Mr MARSHALL: How many people are still employed?

The Hon. A. KOUTSANTONIS: I do not know, but I will get that answer for you.

Mr MARSHALL: So you will be able to provide us with the number of people who are employed by the Motor Accident Commission—

The Hon. A. KOUTSANTONIS: Yes, of course.

Mr MARSHALL: —and the annual costs of continuing to operate the Motor Accident Commission—

The Hon. A. KOUTSANTONIS: Absolutely.

Mr MARSHALL: —and the cost that was put together—

The Hon. A. KOUTSANTONIS: Yes, of course.

Mr MARSHALL: —to bring that case to the Motor Accident Commission board. Is there still a board in place?

The Hon. A. KOUTSANTONIS: Of course there is.

Mr MARSHALL: Who is the chair of the board?

The Hon. A. KOUTSANTONIS: Dr Bill Griggs.

Mr KNOLL: If we can talk now about a number of things about CTP, Treasurer.

The Hon. A. KOUTSANTONIS: Yes, you wanted the answers.

Mr KNOLL: I refer to Budget Paper 4, Volume 4, page 152.

The Hon. A. KOUTSANTONIS: You wanted the answers on the registration. I have done some research, and the increase for metropolitan registration was 3 per cent. The corresponding increase for regional areas was 3 per cent.

Mr KNOLL: Can you confirm that these remain capped for the same period as metropolitan premiums?

The Hon. A. KOUTSANTONIS: Yes, they are.

Mr KNOLL: Is 2017-18 now the last year for which capped premiums apply?

The Hon. A. KOUTSANTONIS: There is one more after that.

Mr KNOLL: We are talking about—

The Hon. A. KOUTSANTONIS: 2018-19.

Mr KNOLL: —the middle of 2019. Have any estimates or forecasts been produced about premium increases post the capped period?

The Hon. A. KOUTSANTONIS: It depends on the market.

Mr KNOLL: That was not the question. Have any estimates or forecasts been produced?

The Hon. A. KOUTSANTONIS: Not that I am aware of, no.

Mr KNOLL: You have not done any modelling, no understanding of whether—

The Hon. A. KOUTSANTONIS: It would be a free market then. Are you opposed to a free market now as well?

Mr KNOLL: No, Treasurer.

The Hon. A. KOUTSANTONIS: Good.

Mr KNOLL: When you brought this in, you said that this was going to help bring down prices. You then set a mandated three-year period by which there were capped increases. I suppose the proof in the magic pudding will come post 2019.

The Hon. A. KOUTSANTONIS: We will see.

Mr MARSHALL: Has Treasury done any analysis of what has occurred in other jurisdictions when that cap has been removed?

The Hon. A. KOUTSANTONIS: I think it is hard to compare jurisdictions because our model is very different. We had a much broader range of competitive tension in place and a lot more providers. I think the examples in other jurisdictions were for sole providers, but I will go back and check for you. I do not think you can compare apples with apples here.

Mr KNOLL: Continuing on with CTP and MAC, what is the balance of the Highways Fund?

The Hon. A. KOUTSANTONIS: I do not have that number here, but I will find out for you.

Mr KNOLL: Where would be the appropriate place to get an answer on where the balance of the Highways Fund would be?

The Hon. A. KOUTSANTONIS: Minister Mullighan would be the appropriate place.

Mr KNOLL: I refer to Budget Paper 4, Volume 4, page 162. Still on compulsory third party, in relation to the insurance regulator is that regulator funded for 2019-20?

The Hon. A. KOUTSANTONIS: Yes.

Mr KNOLL: And it is funded across the subsequent years of the forward estimates?

The Hon. A. KOUTSANTONIS: Yes.

Mr KNOLL: What is the budget for this subprogram in each year of the forward estimates?

The Hon. A. KOUTSANTONIS: I am advised that it is stable across the forward estimates, but I will get you a more accurate number.

Mr KNOLL: Treasurer, are any of the costs of the third-party insurance regulator being recovered by the companies that are writing CTP premiums?

The Hon. A. KOUTSANTONIS: Yes, it comes out of premiums. That is the best practice model for regulation.

Mr KNOLL: Has the compulsory third-party insurance regulator done any modelling or forecasting in relation to what they believe the market is going to do post the middle of 2019?

The Hon. A. KOUTSANTONIS: No.

Mr KNOLL: Do you anticipate that they will be doing any modelling?

The Hon. A. KOUTSANTONIS: I do not know. It is a matter for the independent regulator. I will not be instructing her to.

Mr KNOLL: I refer to Budget Paper 4, Volume 4, page 172. We asked before about what drove almost $400,000 million worth of unbudgeted other income in 2016-17. We are asking whether or not this is related to the MAC.

The Hon. A. KOUTSANTONIS: I think we answered that. That was the cash alignment policy. I think you asked another question about the MAC. It was not this one.

Mr KNOLL: We can move on to the South Australian Venture Capital Fund, Budget Paper 4, Volume 4, page 154. These are questions you asked us to refer to SAFA in this line. How many FTEs were dedicated to administering the VC Fund in 2016-17?

The Hon. A. KOUTSANTONIS: The Venture Capital Fund started operation on 4 July 2017. That was previously publicly announced. SAFA were on the implementation working group. They contributed three FTEs.

Mr KNOLL: Did those three FTEs start on 4 July, or did they start prior to that?

The Hon. A. KOUTSANTONIS: I am advised that the implementation working group was operating for the preceding 12 months leading up to the announcement.

Mr KNOLL: In addition to SAFA's three staff, how many other staff were part of this?

The Hon. A. KOUTSANTONIS: I would have to refer you to other ministers but, if you would like, I can try to corral an answer for you.

Mr KNOLL: Which other areas would staff have been seconded from to this VC Fund?

The Hon. A. KOUTSANTONIS: State Development.

Mr KNOLL: In 2017-18, across the forward estimates, how many staff?

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

Mr KNOLL: But in terms of SAFA's personnel contribution?

The Hon. A. KOUTSANTONIS: There will be no new FTEs assigned. They will be using existing resources and they will be offering commercial legal advice.

Mr KNOLL: Sorry, those three staff will remain ongoing for the life of the VC Fund?

The Hon. A. KOUTSANTONIS: Not full-time, no.

Mr KNOLL: Treasurer, what is the total cost of administering the fund in 2016-17 against the budget?

The Hon. A. KOUTSANTONIS: I refer you to minister Maher.

Mr KNOLL: Treasurer, referring to page 154, one of the highlights from Treasury is completing the establishment of the South Australian Venture Capital Fund.

The Hon. A. KOUTSANTONIS: That is right, the establishment.

Mr KNOLL: So, Treasurer, then you are obviously willing to take the credit for the work done, but you are not willing to answer questions about it?

The Hon. A. KOUTSANTONIS: First of all, I do not take credit for anything. I am simply part of a team—a very good team, a very successful team—and that team is working diligently to try to do all it can to grow our economy. One of the weapons in our armoury is the Venture Capital Fund, and it is being administered very well by minister Maher.

Mr KNOLL: Treasurer, the costs of administering the fund, will they come out of the $50 million?

The Hon. A. KOUTSANTONIS: There was a budget allocation made last year in last year's budget for the management and operation of this fund. I understand that was $750,000, I am advised.

Mr KNOLL: That is separate from the 500?

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

Mr KNOLL: It is separate.

The Hon. A. KOUTSANTONIS: It is additional, yes. You could ask the Treasurer of the Liberal Party. Apparently he has involvement with Blue Sky.

Mr KNOLL: I was just about to ask that. From which pool of funds will the fund manager, Blue Sky, be paid?

The Hon. A. KOUTSANTONIS: From the fund that I just announced. They will be paid out of the $750,000 fund and a small portion of the Venture Capital Fund will come out in fees.

Mr KNOLL: They have a fixed fee as well as a percentage fee of the $50 million. Is that percentage based on a performance—

The Hon. A. KOUTSANTONIS: You will have to refer this to minister Maher.

Mr KNOLL: Treasurer, what will the SAFA staff be responsible for, given now that we have an external fund manager?

The Hon. A. KOUTSANTONIS: I told you that earlier—commercial and legal advice.

Mr KNOLL: And the three staff, you said, will be part-time. Is there some sort of FTE allocation?

The Hon. A. KOUTSANTONIS: No, they will be using existing resources to assist.

Mr MARSHALL: I have a couple of questions now regarding SAicorp's performance, referring to Budget Paper 4, Volume 4, page 159. At the bottom of page 159, there is a table which is basically a performance indicators report. There was a substantial increase in the operating expense per $100 of premium revenue between the 2015-16 year and then the target for 2016-17. Why was that revised up so substantially in the forecast? What were you envisaging was going to occur there that presumably did not occur?

The Hon. A. KOUTSANTONIS: The 2015-16 actual came in under what we had envisaged would be the cost. We hope it does it again. I am advised that the target estimate in 2016-17 is the same as the one that was in place in 2015-16. We just came in under.

Mr MARSHALL: Why did it come in under then in the 2015-16 year? Why were you budgeting for it to be so high that year and then it came in under and then you repeated it the following year?

The Hon. A. KOUTSANTONIS: Again, conservative budgeting and good performance in the administration.

Mr MARSHALL: Now you are actually offering a target which is lower, so it seems to change that prudential forecasting. What is driving it lower again? $5.50 is what was expected and you came in at $4.84 with great prudential management, why have you gone down again?

The Hon. A. KOUTSANTONIS: Because we think they can do it better. They are stretching the target and they have been performing, so we alter the targets appropriately.

Mr MARSHALL: Do you have any indication of how that cost of operating expenses compares with other jurisdictions?

The Hon. A. KOUTSANTONIS: No.

Mr MARSHALL: Is any benchmarking done to suggest what that operating expense rate should be per $100?

The Hon. A. KOUTSANTONIS: We do not have it with us, so I will get an answer for you.

Mr MARSHALL: But $4.74 is the forecast which you are comfortable with for the current financial year?

The Hon. A. KOUTSANTONIS: Yes.

Mr MARSHALL: Down from $5.50 just last financial year?

The Hon. A. KOUTSANTONIS: Yes.

Mr MARSHALL: But you cannot provide any explanation as to why you budgeted so much higher last financial year?

The Hon. A. KOUTSANTONIS: They do speak to their peers. It is a very open and transparent community. They talk to each other, they understand the industry well, they have set benchmarks and they have come in under. They will set a benchmark again if they come in under again. They are backing themselves to come in at cheaper prices, so I back them as well.

Mr MARSHALL: Just while we are on SAicorp, how do you manage any surplus funds? Do they result in transfers to the Treasury or lower premiums internally for the following year?

The Hon. A. KOUTSANTONIS: The same dividend policy applies to SAicorp as applies to everyone else. If they are meeting their sufficient solvency ratios and there are surplus funds, they pay that into the Consolidated Account. If they do not, they do not.

Mr MARSHALL: When was the last time a payment was made into the Consolidated Account?

The Hon. A. KOUTSANTONIS: This current year.

Mr MARSHALL: What was that transfer? Is that on page 73 of Budget Paper 3? It says net assets, so free reserves of $161.2 million as of 30 June. If you made a transfer post 30 June 2015—

The Hon. A. KOUTSANTONIS: So, $3.1 million was the income tax equivalent. I will get the dividend answer for you in a moment.

Mr MARSHALL: What we would be interested in is what was the transfer, presuming you finished the financial year 30 June 2015, and in that last financial year you made a transfer from that accumulated surplus of funds; is that correct?

The Hon. A. KOUTSANTONIS: If it met the dividends policy, yes. If it did not, no.

Mr MARSHALL: So there was a payment made last financial year—

The Hon. A. KOUTSANTONIS: They would have made a tax equivalent payment if they made a profit.

Mr MARSHALL: In the 2016-17 financial year, or the 2015-16—

The Hon. A. KOUTSANTONIS: The approved dividend income tax equivalent payment policy to SAFA's insurance operations resulted in interim distributions into the Consolidated Account on 20 June 2017 of $16.78 million.

Mr MARSHALL: When was that?

The Hon. A. KOUTSANTONIS: 20 June.

Mr MARSHALL: Which year?

The Hon. A. KOUTSANTONIS: It was 2017. The amount of $7.63 million is a dividend and $9.15 million is the income tax equivalent.

Mr MARSHALL: That was based upon the accumulated surpluses as of 30 June the previous year, so that was just retained for almost a year. When do you determine that—

The Hon. A. KOUTSANTONIS: It is based on the expected profitability on 30 June. That is an interim payment.

Mr MARSHALL: Just before 30 June this financial year, there was a transfer made of $16 million?

The Hon. A. KOUTSANTONIS: I told you: $16.78 million.

Mr MARSHALL: $16.78 million, based upon the expected surplus. Interestingly, as of 30 June the previous year, it states here that the free reserves of SAicorp were $161.2 million, so what transfer was made the previous year?

The Hon. A. KOUTSANTONIS: I am advised that this financial year is the first year that SAicorp have ever paid a dividend.

Mr MARSHALL: What was the estimate of the net assets or free reserves as of 30June this year?

The Hon. A. KOUTSANTONIS: Last year, it was $161.2 million and this year it is $191 million.

Mr MARSHALL: You can see where my question is going. If there has been such a substantial increase in the free reserves, why have you not made a major contribution? You have contributed only $16 million out of the additional $30 million free reserve accumulation over that 12-month period.

The Hon. A. KOUTSANTONIS: We take actuarial advice and the actuarial advice is that we should keep between 120 and 165 per cent of net liabilities and then pay a dividend over the average profits of the previous five years. It is a very conservative process.

Mr MARSHALL: And that is the first time you have made a distribution?

The Hon. A. KOUTSANTONIS: That is the advice I have, yes.

Mr MARSHALL: If you sought actuarial advice in the past and they said, 'No, let's just retain the money in surplus funds, net assets, free reserves,' is this a transaction that you would only ever contemplate towards the end of the financial year, or could there be further interim flows?

The Hon. A. KOUTSANTONIS: I would imagine you would only do it at the end of the year, after actuarial advice.

Mr MARSHALL: Thank you.

Mr DULUK: I refer you to Budget Paper 4, Volume 4, page 159, the sixth bullet point, Treasurer—the low-emission vehicles. What was the total spend on vehicle purchases in 2016-17 against your budget for vehicle purchases?

The Hon. A. KOUTSANTONIS: Just low-emission vehicles or all vehicles?

Mr DULUK: We will get there. We will do both.

The Hon. A. KOUTSANTONIS: We will do both? Alright. We do not have a low-emission breakdown, but I can get that for you. Total vehicle was—

Mr DULUK: You do not have the breakdown but you highlight that you have increased the number of low-emission vehicles in the government's fleet.

The Hon. A. KOUTSANTONIS: I will get the cost.

Mr DULUK: Thank you very much. And the total number of—

The Hon. A. KOUTSANTONIS: It is 11.8 percent.

Mr DULUK: Of the total fleet was low emission?

The Hon. A. KOUTSANTONIS: Yes.

Mr DULUK: How many vehicles in the total fleet?

The Hon. A. KOUTSANTONIS: There are 7,151, including your car. Is yours a low-emission vehicle?

Mr DULUK: No. Proudly, no. Has the government entered into any form of fleet-buying arrangements with the manufacturers of low-emission vehicles?

The Hon. A. KOUTSANTONIS: Can you explain what you mean?

Mr DULUK: Has the government entered into any form of fleet-buying arrangement with manufacturers of low-emission vehicles?

The Hon. A. KOUTSANTONIS: We have bought low-emission vehicles from manufacturers, yes.

Mr DULUK: Good. Who are those manufacturers?

The Hon. A. KOUTSANTONIS: I imagine they are Nissan and Toyota.

Mr DULUK: They are the two?

The Hon. A. KOUTSANTONIS: They are the two.

Mr DULUK: What is the average cost per unit for low-emission vehicles compared with comparable vehicles that are not marked as low-emission vehicles from within the fleet?

The Hon. A. KOUTSANTONIS: We will have to get that for you. I do note, however, that the commonwealth government has left its luxury car vehicle excise in place.

Mr DULUK: We are not here to talk about the commonwealth government, Treasurer.

The Hon. A. KOUTSANTONIS: No, I bet you stay right away. Advance to the rear.

Mr DULUK: Was the state fleet impacted at all by the Volkswagen diesel vehicle recall?

The Hon. A. KOUTSANTONIS: We would need to confirm that, but I doubt it.

Mr DULUK: Following the exit of Holden, what options are there for fleet purchases going forward?

The Hon. A. KOUTSANTONIS: That is a good question. It is very difficult to replace a manufacturer with the range of vehicles that General Motors made for us. They suited our purposes beautifully, especially our law enforcement vehicles. It is very difficult to find a comparable motor vehicle of the quality of the Holden Calais and the Holden Statesman. They were very good vehicles. It is going to be very difficult to find a cost equivalent.

If you look at the cost comparisons between an equivalent foreign-made vehicle compared to what we were able to buy Australian-made vehicles for, there is going to be a dramatic increase from the commonwealth government's decision to rip out the heart and guts of the Australian automotive industry.

Mr DULUK: I refer to Budget Paper 3, page 166, table C.3. Could you explain what the government banking contract rebate is and who pays for this rebate?

The Hon. A. KOUTSANTONIS: This is a contractual arrangement we have with the Commonwealth Bank which we do all our banking through. There are triggers within that contract so that they pay us payments depending on transactions and amounts held in their accounts, and they pay us fees in exchange for that. It is part of the contractual arrangements we have in place through a competitive process when they won the tender off Westpac.

Mr DULUK: Has that rebate been reviewed at all in the last couple of months?

The Hon. A. KOUTSANTONIS: I understand that contract is up for negotiation or extension later this year.

Mr DULUK: Staying on page 166, can you explain the sharp increase in sundry recoupment, up from $156,000 to $961,000?

The Hon. A. KOUTSANTONIS: Not here right now, but I will get you a detailed answer.

Mr MARSHALL: Sorry, I do not know whether I heard any questions regarding the state fleet. Had you done those?

The Hon. A. KOUTSANTONIS: Yes.

Mr MARSHALL: And did you provide an explanation as to what we were likely to move towards?

The Hon. A. KOUTSANTONIS: No, it is very difficult to do this because the versatility of the fleet that we were getting out of Holden, Ford and Toyota was very, very good for our purposes. In terms of passenger sedan vehicles that we are going to need, especially for the police force, they are going to be very difficult to replace. The police force needs a certain type of vehicle with a certain amount of space.

Those equivalents that are European-made are very expensive. They are a lot more expensive than their Australian equivalents, but we are hopefully going to enter into some sort of national arrangement with law enforcement around the country to have perhaps one contract to supply the nation's police fleet. We will see how those negotiations go on.

Obviously, there are special-needs vehicles that we cannot do without: fire vehicles, ambulances, and four-wheel drives that we currently purchase for certain agencies such as fire and rescue. Generally, we will be going out to the market to look for the best value.

Mr MARSHALL: How many new vehicles are purchased or leased per year?

The Hon. A. KOUTSANTONIS: We will be purchasing 2,700 vehicles in the coming year.

Mr MARSHALL: In other words, from October onwards there are going to be a couple of hundred every month. What is the plan for October this year?

The Hon. A. KOUTSANTONIS: We will be diversifying the fleet dramatically as of October. We will be purchasing consistent with government policy on obtaining low-emission vehicles. Obviously, manufacturers who make low-emission vehicles will have an advantage—people like Toyota, Nissan and Honda.

I am not sure what American brands will be imported through the General Motors brand. Obviously, there is a very large dealer fleet that I am very concerned about. I am very concerned about the Holden franchisees around the state and how we manage them, but I would like to see the fleet diversify. The great thing about diversifying the fleet is that we get increased value in terms of our return, but we will be focusing on best fit for purpose vehicles.

Mr MARSHALL: But, given that in eight weeks' time there is no longer going to be Holdens to purchase, and you would envisage that people would be looking at models about now if they are going to get them delivered in October—

The Hon. A. KOUTSANTONIS: We are looking at models now.

Mr MARSHALL: —when will you be making a decision?

The Hon. A. KOUTSANTONIS: For example, we are diversifying the fleet now. We are already moving to hybrid and low-emission vehicles now.

Mr MARSHALL: What ones in particular?

The Hon. A. KOUTSANTONIS: Toyota Camry is a low-emission vehicle. You have Nissan Pathfinders and Toyota Corollas.

Mr MARSHALL: What are you going to be driving the next time you go to market for your ministerial vehicle? We know you like driving quite quickly.

The Hon. A. KOUTSANTONIS: Do we?

Mr MARSHALL: Yes.

The Hon. A. KOUTSANTONIS: You have interesting habits with your vehicle late at night, too. Do you want to discuss those?

Mr MARSHALL: Sure.

The Hon. A. KOUTSANTONIS: Really?

The CHAIR: Which budget line are we referring to now? Private vehicle—

The Hon. A. KOUTSANTONIS: Are you sure?

The CHAIR: Order! Private vehicle—

The Hon. A. KOUTSANTONIS: It is really creepy.

The CHAIR: Order! Treasurer, you are defying the Chair.

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

The CHAIR: The Chair is not happy. Back on task, please.

Mr MARSHALL: I am trying to get through a couple, so I hope you will not mind if I jump over the place. I was going to ask a question when we were on Funds SA about whether or not you have had any consideration of Funds SA managing other government funds, for example, like ReturnToWorkSA? What analysis has been done and who is doing that work?

The Hon. A. KOUTSANTONIS: There was a body of work done by Rod Chapman, I understand, on behalf of the Economic and Finance Committee. I think it was the Economic and Finance Committee. He did a body of work, I understand, looking at consolidating funds management under one umbrella. I think that makes a lot of sense. SAFA's insurance money is already with Funds SA. I would like to see ReturnToWorkSA go under the one management umbrella.

Mr MARSHALL: Any others?

The Hon. A. KOUTSANTONIS: Yes, but it is very difficult. Obviously, there are independent boards in place and members to consider.

Mr MARSHALL: What is the advantage to the state of greater critical mass?

The Hon. A. KOUTSANTONIS: Greater purchasing power and greater contractual ability to go out and get better deals.

Mr MARSHALL: What other agencies could there be, over and above ReturnToWorkSA?

The Hon. A. KOUTSANTONIS: Public Trustee, SAicorp, Super SA and Health Services Charitable Gifts Board. I am advised Funds SA currently has nine government clients and ReturnToWork and the Public Trustee are managed independently of Funds SA, but they could be easily brought in to be managed by Funds SA.

Mr MARSHALL: We will quickly do the omnibus questions, but then I would be quite keen to ask some questions around superannuation services.

The Hon. A. KOUTSANTONIS: Sure.

Mr DULUK: Thank you.

1. Will the minister provide a detailed breakdown of expenditure on consultants and contractors above $10,000 in 2016-17 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 2016-17 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 2017-18?

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 2015-16 and 2016-17.

4. For each agency for which the minister has responsibility:

(a) How many FTEs were employed to provide communication and promotion activities in 2016-17 and what was their employment expense?

(b) How many FTEs are budgeted to provide communication and promotion activities in 2017-18, 2018-19, 2019-20 and 2020-21, and what is their estimated employment expense?

(c) The total cost of government-paid advertising, including campaigns, across all mediums, in 2016-17, and budgeted cost for 2017-18.

5. For each agency for which the minister has responsibility:

(a) What was the cost of electricity in 2016-17?

(b) What is the budgeted cost of electricity in 2017-18?

(c) What is the provisioned cost of electricity in 2018-19, 2019-20 and, 2020-21?

6. For each grant program or fund the minister is responsible for please provide the following information for the 2016-17, 2017-18, 2018-19, 2019-20 and 2020-21 financial years:

(a) Balance of the grant program or fund;

(b) Budgeted (or actual) expenditure from the program or fund;

(c) Budgeted (or actual) payments into the program or fund;

(d) Carryovers into or from the program or fund; and

(e) Details, including the value and beneficiary, of any commitments already made to be funded from the program or fund.

The CHAIR: The Chair would have let you know that you could have read the omnibus questions at the end of the day because it is the same minister, but you have done that now for the whole of the day.

Sitting suspended from 16:15 to 16:30.