South Australian Tourism Commission, $89,112,000

Minister For Tourism, $5,039,000

Membership:

Mr Pengilly substituted for Mr Bell.

Minister:

Hon. L.W.K. Bignell, Minister for Forests, Minister for Tourism, Minister for Recreation and Sport, Minister for Racing.

Departmental Advisers:

Mr R. Harrex, Chief Executive, South Australian Tourism Commission.

Ms S. Rozokos, Chief Financial Officer, South Australian Tourism Commission.

Mr N. Jones, Executive Director, Destination Development, South Australian Tourism Commission.

Ms H. Rasheed, Executive Director, Events South Australia, South Australian Tourism Commission.

Mr C. Miller, Commercial and Contracts Manager, South Australian Tourism Commission.

Mr N. Cayzer, General Manager, Adelaide 500.

Mr A. Kirchner, Chief Executive, Adelaide Venue Management Corporation.

Ms M. Hannaford, Chief Financial Officer, Adelaide Venue Management Corporation.

The CHAIR: The estimate of payments for the Department of State Development and administered items for the Department of State of Development are still open for examination, and I refer members to the portfolio statements in Volume 4. I call on the minister to introduce his advisers, and then he can make a statement if he wishes.

The Hon. L.W.K. BIGNELL: Thank you, Chair, and good afternoon to you and the committee members. It is my pleasure to provide information about the work conducted by the South Australian Tourism Commission in supporting our growing reputation as a destination for tourism and events and in providing revenue to the economy and in creating jobs and wealth for our state.

I would first like to introduce the members of the department who are with me today. We have Chief Executive, Rodney Harrex; Stephanie Rozokos, Chief Financial Officer at SATC; Hitaf Rasheed, Executive Director of Events South Australia; Chris Miller, Commercial and Contracts Manager; Nick Jones, Executive Director, SATC; Nathan Cayzer, General Manager, Adelaide 500; Anthony Kirchner, Chief Executive, Adelaide Venue Management Corporation; and Marie Hannaford, Chief Financial Officer, Adelaide Venue Management Corporation.

I thank you for the opportunity to highlight the great achievements for tourism in South Australia during the past year. Tourism is a key part of the state government's economic development strategy, and we have consistently supported this important industry. The additional funding that the government has put into tourism has allowed the South Australian Tourism Commission to expand its reach, especially into international and interstate markets, and enabled us to win new conferences and events for the state.

This continued investment by the state government has already delivered significant results for tourism operators across South Australia and seen a record visitor economy and jobs growth for South Australia. The supergrowth sector is represented by 18,000 tourism businesses and 36,700 workers, many of whom are young people employed in both the city and the regions. The tourism sector has grown by 5,400 jobs since 2014.

We have experienced unprecedented growth in visitors and expenditure, and we are getting closer to our stretch goal of an $8 billion tourism industry in South Australia by 2020. During the past four years, the state government has invested more than $70 million to market South Australia interstate and overseas. This investment has resulted in strong and consistent growth in tourism. Our national and international visitor survey results show that there were 6.5 million visits to South Australia in the past year, taking the overall visitor economy to a record high of $6.3 billion. We also saw international expenditure pass the $1 billion mark for the first time, to reach $1.1 billion.

State government investment has allowed us to make significant strides in high growth markets, such as China. Since I last presented to the committee, South Australia has also reached a critical milestone in aviation and access. The securing of direct flights by China Southern Airlines between mainland China and Adelaide is a game-changer for South Australia. Chinese visitors make up 11 per cent of South Australia's international visitor numbers and account for a valuable 29 per cent of international expenditure at $315 million, which is up 49 per cent.

From October, Air New Zealand will start flying the new Dreamliner aircraft, offering an additional 400 seats into Adelaide each week and an improved route between Adelaide and the west coast of the United States of America. As at 1 July 2017, international flights to Adelaide were at 46 per week, which equates to 11,518 international seats per week. This will increase to 11,800 in October once Air New Zealand starts flying its larger Dreamliner on the route.

In another major coup, Australia's national carrier, Qantas, will offer direct flights to Kangaroo Island, one of the state's premier tourism destinations, from both Adelaide and Melbourne. The flights will commence from December this year as part of an agreement between Qantas, the state government, Kangaroo Island Council and Adelaide Airport Limited. We are very pleased with these wins, which continue to open up all South Australia's amazing offerings to the world.

South Australia also received significant recognition when we were named one of the five best regions in the world by internationally renowned travel guide, Lonely Planet. We know South Australia is a great place to live and home of some of the nation's best events, and this major accolade will help thousands more people from interstate and overseas discover what our state has to offer. We also won the Best Event State for the second year in a row at the Australian Event Awards, a testament to our strengths in hosting world-class events.

We will continue to invest in events that will bring interstate and international visitors to South Australia and increase the vibrancy and reputation of our state as a world-class events destination. Our managed events have continued to break records and deliver fantastic results for the state. The Santos Tour Down Under injected a record $56.5 million into South Australia's visitor economy, with almost 840,000 spectators lining the streets throughout the event. The first annual Tasting Australia event held in May was a record breaker, with more than 52,000 people visiting Town Square over eight days, which is around 12,000 more than the 2016 event.

The Clipsal 500 Adelaide event was another success for the state. The Adelaide 500 remains the largest ticketed motor racing event in Australia. It is a fantastic showcase for our state, the envy of other jurisdictions and highlights our strengths in hosting major events. Clipsal, the naming rights sponsor of 18 years, announced a change in its sponsorship focus recently, and we thank Clipsal for their generous support since the event's inception. We are currently in negotiations with potential naming rights sponsors and expect to make an announcement once the new contracts are in place.

For the 2017 event, we also secured a new local South Australian grandstand provider in McMahon since Elite Systems went into administration. With regard to the Elite situation, we continue to work closely with the administrator to provide the best possible outcomes for those South Australian businesses affected by the collapse of the company.

Our bid fund initiative has also been a major contributor to the tourism sector. With almost $550 million of economic benefit, it is a proven performer. The state government has invested significantly in the bid fund initiative, contributing $52.5 million from 2014-15 until 2020-21. Through this fund, we have secured 38 leisure events, with an estimated economic benefit of $126 million. Among these event wins were the Green versus Mundine boxing match at Adelaide Oval. Thousands of fans from interstate made their way to South Australia to attend the historic bout, and millions of people from around Australia and the world tuned in to watch the television coverage. Over and above the economic impact, the event generated an estimated $48 million in PR value.

We have also secured 72 conventions and conferences with around 86,000 delegates who will generate an estimated economic benefit of $417 million. Among these are the Australian Tourism Exchange, Australia's largest annual travel and tourism business-to-business event; Perfect China, the largest incentive group ever to come to Adelaide; and World Routes, the largest aviation conference in the world. The additional budget also went towards the development and launch of our new global ad campaign, which showcases the best of South Australia with 17 variations created to suit our different key markets.

We not only continued to make strategic marketing investments in our traditional growth markets but also made significant inroads into emerging markets. We ran more than 85 international campaigns to increase awareness and consumer demand for South Australia across South-East Asia, including India, Europe, America and New Zealand. The successes of these campaigns are clearly reflected in our latest visitor and expenditure result. International expenditure passed $1 billion for the first time and four of our top five international markets have registered growth in expenditure, with one staying unchanged.

The most recent cruise ship season closed with a record 49 cruise ship visits to Port Adelaide, Port Lincoln and Kangaroo Island, and a record passenger and crew capacity of more than 106,000 people, providing a significant boost to the state's economy. The 2017-18 season will begin in October this year, and 68 cruise ship visits are scheduled for South Australia with a total capacity of just over 162,000 passengers and crew.

The state government looks forward to continuing to work with industry, our regions and, importantly, the broader community, to grow the visitor economy and play a vital role in the economic transformation of South Australia. We have committed additional marketing funds to drive demand and strengthen the visitor economy. As the Minister for Tourism and on behalf the state government, I would like to thank all the hardworking people involved in tourism for their efforts in delivering fantastic experiences across South Australia. Thank you to Rodney Harrex and the team at the South Australian Tourism Commission for all they have done and continue to do to support this wonderful industry.

Mr PEDERICK: I refer to Budget Paper 4, Volume 4, page 126, ministerial responsibilities and program tourism events. Minister, was your most recent trip to Europe taxpayer funded or a private trip?

The Hon. L.W.K. BIGNELL: Which trip are you talking about?

Mr PEDERICK: I think it was to do with heading to France. It is under ministerial responsibilities, on page 126, under tourism events.

The Hon. L.W.K. BIGNELL: This year's Tour de France? Yes, I was there. It was great. It was fantastic. I also had the opportunity to visit our sister city in the Great Wine Capitals network in Verona in Italy. I went to the Great Yorkshire Show as well, which is the biggest agriculture show in the UK, and built a lot of really good, important relationships. Christian Prudhomme, the head of the Tour de France, invited me across to the tour this year. It was terrific and great to see an Australian win the green jersey. Unfortunately, Richie Porte crashed out.

It is really important that, with our network of global partners, we keep up these relationships and keep meeting and having chats with them so that South Australia and Adelaide remain firmly in their sights. On Friday night in Qatar, I met with Akbar Al Baker, who is the CEO of Qatar Airways. He spoke again of his great support for South Australia and the tremendous opportunities that are here in this state.

Of course, Qatar Airways began direct flights from Qatar, linking 140 destinations around the world into Adelaide in May last year. Mr Al Baker is very, very buoyant about the numbers they are seeing in Adelaide. It was a terrific trip. I did a great deal across a lot of the portfolios I have responsibility for and I paid for it myself.

Mr PEDERICK: I refer you to Budget Paper 4, Volume 4, investing expenditures summary, page 127. There is a figure of $646,000 in the 2017-18 period for capital works and equipment. Can the minister explain what this expense pertains to?

The Hon. L.W.K. BIGNELL: The money allocated there is for things like pageant floats, Clipsal assets that we have and also for general plant and equipment, such as computers.

Mr PEDERICK: In regard to the Clipsal assets, does the South Australian Tourism Commission still own or is it still in possession of the old Clipsal grandstand?

The Hon. L.W.K. BIGNELL: Yes, we are.

Mr PEDERICK: You talked about the Elite Systems contract debacle. Can the minister advise if any of the $646,000 of taxpayer money will be recovered following the failure of the Elite Systems contract?

The Hon. L.W.K. BIGNELL: I am advised that none of the money owed to the South Australian Tourism Commission is included in that $646,000 that you referred to.

Mr PEDERICK: So none of that $646,000 is related to writing off the old grandstand following the Elite Systems debacle?

The Hon. L.W.K. BIGNELL: That is correct.

Mr PEDERICK: Regarding the old grandstand, is the government going to liquidate that to get money back? Does the government own it or just hold it in storage?

The Hon. L.W.K. BIGNELL: I will ask Chris Miller if he can answer that one.

Mr MILLER: That grandstand asset from last year and from the 2015 Clipsal event is held in our store down on Churchill Road, in a warehouse down there. We are retaining that and will consider our options. We received one payment from Elite under the contract; they did not make the remaining payments, so we will consider our options on that on the finalisation of Elite's administration.

Mr PEDERICK: Basically, it is in your possession awaiting where the discussions go.

Mr MILLER: Yes, that is correct. We own it; we have contended from the start that we own it and we have had no argument to the contrary. We are holding that asset, but waiting until the administration is finalised to decide what it is that we choose to do with it.

Mr PEDERICK: Do you have any idea of the time line, how long that will be?

Mr MILLER: I spoke to the receiver manager on Friday. They said that they were acting for the secured creditors. They have just about finished their portion of that, and they will then finalise their parts of the arrangement and then turn it over to a liquidator if a liquidator is appointed.

Mr PEDERICK: Thank you. The EIR Group, a small business that lost over $450,000 in the Elite Systems debacle last year, had to pay payroll tax on the wages paid to staff who worked on the 2016 Clipsal event. Can the minister confirm this small business was refused an exemption for payroll tax relief?

The Hon. L.W.K. BIGNELL: That is a matter you should take up with the Treasurer.

Mr PEDERICK: You have not taken it up with the Treasurer, minister?

The Hon. L.W.K. BIGNELL: No-one has asked me to take that up with the Treasurer, and it is up to the Treasurer to decide on payroll tax and any tax relief.

Mr PEDERICK: You do not have an answer to why this business was not exempt from paying payroll tax on money they were never paid due to the government's failed Elite Systems contract?

The Hon. L.W.K. BIGNELL: As I said, I suggest you contact the Treasurer if you want an answer to that.

Mr PEDERICK: Why did you not lobby the Treasurer in regard to this massive loss of $450,000 to one business?

The Hon. L.W.K. BIGNELL: We run the car race. We did not run the private business. It is up to businesses who want exemptions to go to the person who can grant those exemptions, which, in this case, is the Treasurer of South Australia.

Mr PEDERICK: Do you think this is a fair outcome for the business involved?

The Hon. L.W.K. BIGNELL: As I said, we run a car race and we have no responsibility for a private business and for what happened with the private business.

Mr PEDERICK: It had a direct issue with the Clipsal grandstand supplier. What is the minister doing to support these small businesses who are, collectively, being left over $1 million out of pocket?

The Hon. L.W.K. BIGNELL: We understand that four of the six businesses that have contacted your office have completed additional work at this year's event as well. Those businesses largely still have work they are carrying out at the race.

Mr PEDERICK: But nothing is being done to fix up the debts owed to them from the past 2016 event?

The Hon. L.W.K. BIGNELL: That is for them to work out with the administrators of Elite Systems. We went through all this last year, and we have explained that we did due diligence on this company. They were caught up in the largest maritime insurance payout in the history of the world, and consequences that flowed from that meant that they did not survive as a business. Remember that this company had contracts right around Australia with motorsport, including the Australian Formula One Grand Prix in Melbourne and other supercar events. The due diligence report, at the time we did it, was correct.

Mr PEDERICK: In regard to due diligence, have you tightened up procedures so that these debacles do not happen again?

The Hon. L.W.K. BIGNELL: The thing is that the point of time at which due diligence was done, as I understand it from memory, was several months before the fires that caused the problem. Anyone does due diligence at a particular time when they sign a contract, but things can come along after that point in time that change the circumstances. I would advise all companies, if they are entering into a contract with a company—and they did not enter into a contract with us: they entered into a contract with a company called Elite Systems—to do their own due diligence.

Mr PEDERICK: I will go to Budget Paper 4, Volume 4, page 126, the full-time equivalents workforce summary. The FTE allocation for the 2017-18 period is 128.2. However, in evidence to the Budget and Finance Committee this year the commission advised the committee that there will be 110.7 FTEs within the commission in the 2019-20 period. Can the minister provide detail around which programs within the South Australian Tourism Commission will have full-time equivalents cut to achieve this target in 2019-20?

The Hon. L.W.K. BIGNELL: As at 30 June 2017, full-time equivalents were 126.36, which is 0.16 FTE above the year-end cap of 126.2. During 2016-17, there have been four targeted voluntary separation packages offered, all of which have been accepted. The South Australian Tourism Commission's full-time equivalent cap remains at 126.2 between 2015-16 and 2016-17. The SATC's full-time equivalent cap is scheduled to be 128.2 in 2017-18 and reduce to 126.2 in 2018-19. In 2019-20, there is a scheduled reduction of 17.5 full-time equivalents, resulting in an overall full-time equivalent count of 108.7.

The additional two full-time equivalents in 2017-18 are associated with Adelaide hosting the Australian Tourism Exchange next year. The SATC will work through a workforce strategy to realise these savings at the time. As part of its FTE reduction strategy for future years, the SATC will aim to meet its FTE cap targets through natural attrition, contract and temporary appointments conclusions.

Mr PEDERICK: I refer to Budget Paper 4, Volume 4, page 133, highlights 2016-17, the Hybrid World Adelaide 2017. One of the highlights listed for 2016-17 is securing the Hybrid World Adelaide 2017 event. I note the state government has committed to the event for two years: 2017 and 2018. How much has the SATC budgeted for establishing and managing this new event in the 2017 and 2018 periods, and can you confirm the budget across both years?

The Hon. L.W.K. BIGNELL: The inaugural Hybrid World Adelaide will be held from 4 to 8 October 2017. Hybrid World Adelaide supports the state government's agenda in positioning Adelaide as a leading smart city and attracting entrepreneurs and start-ups in the technology industry.

The South Australian Tourism Commission is providing financial support to stage the event in 2017 and 2018. The event organiser, the Adelaide Film Festival, has projected that Hybrid World Adelaide will attract attendances in its first year of 15,000 to 20,000 people, with more than 2,500 visitors from interstate and overseas generating an estimated $2 million in economic expenditure to the state.

Hybrid World Adelaide is a new five-day event for South Australia that explores how the real and digital worlds are intertwined. It celebrates ingenuity, human engagement with technology and advances in digital technology. The event is positioned as a digital playground for both industry experts and the public.

Hybrid World Adelaide will feature a program of public events for people of all ages and digital knowledge, as well as an industry stream that includes a conference and a hands-on lab to mentor and develop selected tech projects. The aim is for there to be something for everyone: from digital savvy experts and industry professionals, kindergarten kids through to grandparents, gamers, YouTubers, drone enthusiasts and people who just want to see what the future holds.

The South Australian Tourism Commission's Events South Australia group is supporting Hybrid World Adelaide as part of its charter to develop and attract new major events to South Australia that have the potential to help drive visitation, create economic benefit and profile the best of the state. The event concept was originally pitched to Events South Australia and later refined and developed by the Adelaide Film Festival. Hybrid World Adelaide supports the state government's agenda in positioning Adelaide as a leading smart city and attracting entrepreneurs and start-ups in the technology industry.

The Adelaide Film Festival, the event organiser, is responsible for managing all aspects of Hybrid World Adelaide, including the event programming, delivery, marketing and budgets. Robert Tercek and Janet Gaeta are the creative directors for Hybrid World Adelaide. Robert Tercek is recognised globally as a leader in the digital and disruptive space, while Janet Gaeta is the creator of ABC TV's Good Game program, Spawn Point and Good Game Pocket, and has been instrumental in bringing the interactive world into Australian homes.

The Adelaide Film Festival will also run in 2017 and 2018 alongside Hybrid World Adelaide, enabling the Adelaide Film Festival to run in consecutive years for the first time. Events South Australia sits on the Hybrid World Adelaide steering committee. Hybrid World Adelaide will be based at the Tonsley Innovation Precinct and will also have a presence in the Adelaide CBD, the details of which are to be announced in mid-August.

The Tonsley precinct has been transformed from a car assembly plant to an emerging economic growth engine for South Australia, uniting industry, research, education and commerce. It is envisaged that Hybrid World Adelaide will enable Tonsley to become a hub of mind-expanding interactive technology.

Hybrid World Adelaide will feature a program of public events, including YouTube master classes, interactive games and video game launches, film, virtual reality, drone racing, music and more. These will be announced by the event organiser in August. Screen and technology-based experiences will form the core of Hybrid World Adelaide. The event has an industry conferencing component led by US-based digital pioneer and co-creative director Robert Tercek, one of the world's most prolific creators of interactive content.

On Thursday, organisers announced that they are bringing Australia's biggest game of zombie-themed tag to South Australia for the first time. This will be based at the University of Adelaide and we understand that it has generated excitement amongst its target market. All questions regarding budgets should be directed to the Minister for The Arts.

Mr PEDERICK: I love estimates! After all that input, are you saying that there is nothing allocated in the South Australian Tourism Commission budget over the two years?

The Hon. L.W.K. BIGNELL: Like all events, the amount of money that we spend on it is commercial-in-confidence. It is the same as every other state government. Their tourism offices, regardless of their political colour, have the same responses to these sorts of questions: we do not divulge how much we are spending on getting new events, creating new events or maintaining existing events.

Mr PEDERICK: What is the SATC's marketing budget specifically for this event?

The Hon. L.W.K. BIGNELL: That is all part of the overall figure, which is commercial-in-confidence. I recall the Leader of the Opposition saying a few months ago that if the opposition ever made it into government they would probably be bound by the same commercial-in-confidence rules that bind us all.

Mr PEDERICK: Hopefully, you will get the chance to ask these questions next year. Can the minister confirm that this event has a budgeted cost of $4 million?

The Hon. L.W.K. BIGNELL: As I mentioned earlier, we are not the organiser of the event. That falls under the Minister for The Arts and is a question best directed to him.

Mr PEDERICK: Obviously you are trying to attract tourists, but you are saying that you have no idea of the money involved. How many interstate and international tourists have you budgeted on attending?

The Hon. L.W.K. BIGNELL: For 2,500 visitors from interstate and overseas.

Mr PEDERICK: Have you done any modelling on the expected economic benefit to South Australia?

The Hon. L.W.K. BIGNELL: We estimate $2 million in economic expenditure for the state from the 2,500 visitors.

Mr TRELOAR: I refer to Budget Paper 5, page 81, the Events Bid Fund. Can you provide a breakdown of the total amount budgeted in the Events Bid Fund over the forward estimates, perhaps separating the Convention Bid Fund and the Major Leisure Events Bid Fund?

The Hon. L.W.K. BIGNELL: The Events Bid Fund for 2017-18 is $6.5 million; for 2018-19, it is $6 million; for 2019-20, it is $2.5 million; and for 2020-21, it is $2.5 million. The Convention Bid Fund for 2017-18 is $6 million; for 2018-19, it is $2.5 million; for 2019-20, it is $2.5 million; and for 2020-21, it is $2.5 million.

Mr TRELOAR: How much of that is allocated for marketing?

The Hon. L.W.K. BIGNELL: That money is to go out and win events and conferences for South Australia. If there are any marketing costs involved in that they would be met from that budget, but we have a separate marketing budget for the South Australian Tourism Commission. This is to actually have money on the table when our people are sitting around trying to win events.

Mr TRELOAR: So it is for the bid itself?

The Hon. L.W.K. BIGNELL: Yes, and we set up the bid fund for this purpose. There is always the opportunity to come to cabinet for more money for different events, but what we needed to have was the ability for our people out there bidding for events to be agile in the marketplace. If someone comes to cabinet and says, 'We need X dollars to get this bid,' and then the price goes up by $20,000 or $50,000 or $100,000, we want the people making these decisions not to have to come back to cabinet but be able to work that out themselves with a pool of money that has been set aside for the bid fund, both for events and for conventions and conferences.

Mr TRELOAR: So you are quite comfortable with the agility that you have provided?

The Hon. L.W.K. BIGNELL: Yes, it works really well. As I said, if we get something that is bigger and beyond the need or the capabilities of the bid fund, then the old process of coming to cabinet for special money can always be considered as well.

Mr TRELOAR: How many new events has the SATC secured since 2005 that have turned out to be annual and ongoing events?

The Hon. L.W.K. BIGNELL: Are we dealing with back to 2005? That predates my role as minister by about eight years and the chief executive's position by about eight years as well. The bid fund was only established in 2014-15, so to ask questions about 2005 when we did not have a bid fund—

Mr TRELOAR: For the life of the bid fund then, do you have that information?

The Hon. L.W.K. BIGNELL: To date, 38 events have been secured through the Events Bid Fund, which are forecast to inject more than $126 million into the South Australian economy. Two of these events are still to be publicly announced. In addition to benefiting the economy, these events generate significant publicity value and provide visitors with a compelling reason to come to South Australia.

I mentioned in my introduction the Mundine versus Green fight we had here, which had almost $50 million in PR value. I think that in the first 24 hours after the fight was announced for Adelaide we had more than $1 million in PR value, so that really got people talking. We have had Liverpool Football Club versus Adelaide United, and the match at Adelaide Oval in July 2015 was a sellout, with 53,000 fans. The Liverpool Football Club reported that 18,109 visitors travelled to South Australia to attend the match, resulting in a direct economic impact to the state of $11 million.

The 2016 Australian Swimming Championships were also the selection trials for the 2016 Rio Olympic Games, so we had the eyes of the nation on us then. The 2018 Lifesaving World Championships will be held here. It will be the largest international lifesaving sport competition in the world, and it is anticipated that more than 4,000 competitors, as well as thousands of accompanying visitors, will attend the event in November next year. It was announced at the 2015 Pacific School Games that Adelaide would host the 2017 Pacific School Games. The 2015 games attracted 8,900 participants, officials and accompanying visitors, with organisers reporting an economic benefit of more than $13 million to the state's economy.

We have the 2016, 2017 and 2018 ISPS HANDA Australian women's golf tournament. A record 32,064 spectators attended the 2017 tournament at the Royal Adelaide Golf Club. Golf Australia reported that the 2017 event delivered an estimated $7.2 million in economic benefit to South Australia compared with $6.5 million for the 2016 event. It was a huge improvement on when Victoria held it, up until 2015, and about 22,000 fans went along to the four-day tournament; we had over 30,000 both for the 2016 event and for this year. We had the Socceroos here last year and again this year in important World Cup clashes. We had the 2016 International Netball Series test match, Australia versus England, as well as the cricket T20 international double-header and many more events.

If we look at the Convention Centre bid fund, leading event themes include health and biomedical, scientific, agricultural and resources because we want to play to our strengths in South Australia, and those are our strengths. Examples of some successful bids made through the convention bid fund include World Routes 2019, which will attract more than 3,000 delegates, 15,923 bed nights and an economic benefit to the state of more than $20 million, and the 2018 Australian Tourism Exchange will have 2,500 delegates, 21,500 room nights and $10 million in economic benefit to the state.

Those who have been to the Australian Tourism Exchange when it has been in Adelaide in the past will know what an important event it is for our state because tourism wholesalers from right around the world come to Australia once a year to look at what is on offer. Because we are going to have them in Adelaide, we can get them out to our regions and really show off what we have not just in our beautiful city and at the Convention Centre but in the regions as well. It is a huge opportunity for South Australia and one that I am sure everyone, whether or not they are involved in the tourism industry, will get behind and welcome visitors to our state next year.

We have the Australian Petroleum Production and Exploration Association Conference and Exhibition 2018, which will have 2,500 delegates, 11,377 bed nights and a $9.4 million economic benefit to the state. We also have Land Forces 2018, with 1,600 delegates, 5,284 bed nights and $18½ million in economic benefits to the state. We have the 37^th Australian Dental Convention, with 3,500 delegates, 11,000 bed nights and a $10.3 million economic impact for the state.

Next month, we will see the opening of stage 2 of our brand-new Convention Centre. It is a tremendous asset and something that will help us when we go out there with our bid funds. So not only have we put money into the bid fund but we have also put $400 million into stages 1 and 2 of the new Convention Centre. It will really help us attract more and more major conventions and conferences to our state. When we look across the footbridge to the Adelaide Oval, I think everyone is very well aware of the pulling power of the Adelaide Oval. The Convention Centre is just the same.

It is a huge asset for South Australia and something that we will say, when we look back on the history of South Australia, that when it comes to infrastructure the past decade has been really important—and not just the Adelaide Oval and the Convention Centre, but also the SAHMRI site, where we see so much world-leading medical research and the brand-new hospital, which is about to open as well. We have a health and bioscience precinct here that is recognised right around the world. We now have the Convention Centre facilities to match the outstanding infrastructure that is already in place.

Ms WORTLEY: I refer to Budget Paper 4, Volume 4, page 129. Minister, can you update the committee on the importance of aviation access to South Australia? I know that you spoke about it briefly in your opening statement, but that was in reference to only one particular area. Can you provide some more detail on that?

The Hon. L.W.K. BIGNELL: I thank the member for Torrens for the question. The state government has worked hard to increase direct flights into South Australia and is committed to maximising the opportunities airlines bring to the state through cooperative marketing initiatives. We have seen a considerable increase in international airline seat capacity in recent years, growing from 13 flights per week in 2003 to 46 flights in 2017.

In 2016, two new international airlines commenced flights into Adelaide and a third international airline started flights direct to Adelaide in 2017. In May 2016, the state welcomed the award-winning Qatar Airways to South Australia. The airline currently operates five direct flights from Doha to Adelaide each week, offering great connections to services from the United Kingdom and key European destinations.

In December 2016, South Australia welcomed China Southern Airlines. The airline now operates direct from Guangzhou to Adelaide, expanding connections to services from destinations in Europe and the United States of America as well as throughout one of our key international markets, China. Fiji Airways also commenced direct flights to Adelaide from Nadi on 30 June 2017, initially offering two services per week.

These additional flights see our total international seats increase to just over 11,500 seats each week, and we are on track to achieve our goal of 14,500 international weekly seats into Adelaide by 2020. Air New Zealand's announcement on 15 March 2017, regarding increased flight capacity on the Auckland-Adelaide route from 26 October 2017, will again add to our international seat numbers, as they offer a capacity increase of approximately 25 per cent.

Scheduled international flights to Adelaide as at 30 June 2017 are New Zealand, six weekly services from Auckland; Cathay Pacific Airways, five weekly services from Hong Kong; China Southern Airlines, three weekly services from Guangzhou; Emirates, seven weekly services from Dubai; Fiji Airways, a twice-weekly service; Jet Star, a seven times a week service from Bali; Malaysia Airlines, a four times a week service from Kuala Lumpur; Qatar Airways, five weekly services from Doha; and Singapore Airlines, seven weekly services from Singapore.

Aviation access is about not just international airlines but also domestic services. Four domestic interstate airlines currently operate into South Australia: Qantas, Jetstar, Virgin and Tigerair. These domestic carriers scheduled a total of 85,159 seats per week to Adelaide as at April this year. This is an increase of 3 per cent compared with the same time the previous year. Major domestic routes for South Australia are Melbourne, Sydney and Brisbane, with all four carriers servicing these markets, plus additional interstate routes to Adelaide from Perth, Cairns, Darwin, Alice Springs, Canberra and the Gold Coast.

On 30 September 2016, Jetstar commenced a new service from Sunshine Coast Airport, operating twice a week. In addition, Regional Express Airlines (Rex) operates interstate flights from Adelaide to Broken Hill and Mildura and from Mount Gambier to Melbourne. Our regions are also very important. Seven regional destinations in South Australia are serviced by three carriers: Regional Express, QantasLink and Alliance Airlines. I am also delighted by the 5 June 2017 announcement about QantasLink commencing flights from Adelaide to Kingscote and Melbourne to Kingscote, starting in December 2017.

All airlines servicing South Australia, both existing and potential, are important to the state government, and we work hard to build and maintain relationships with each of them. The SATC engages in cooperative marketing activities with airlines operating flights to South Australia in order to support and drive visitation. By aligning our marketing activities with partner airlines, we are able to maximise the impact of marketing messages and further contribute to South Australia's 2020 potential visitor expenditure target of $8 billion.

In the 12 months to March 2017, international visitor expenditure has contributed a record $1.1 billion to the state. Combined with national visitor statistics, our overall visitor economy has also reached a record high $6.3 billion. That comes just after we had $4.9 billion not that long ago. There have been some great increases in recent years in our visitor economy, a 30 per cent increase in terms of the value to our state in this industry.

When we talk about airline connectivity, with my tourism minister's cap on we concentrate on the visitors we bring into the state from interstate and around the world but, with my agriculture, food and fisheries hat on, we must also remember the capacity that that gives those aircraft to take the wonderful produce of South Australia to all ends of the earth. There is increasing demand for the produce we have here in our beautiful premium clean environment, and we want to export as much of that as we possibly can to the rest of the world.

I would like to take this opportunity, too, to thank Nick Jones and his team for the continual work they do in the Destination Development area. You have to have good relationships with these airlines as it is such a competitive sector. We are up against every other state and, in some cases, several different cities within some of those states. It is not an easy task for Nick Jones and his team to be out there, often working alongside Adelaide Airport Limited, to make sure that the rest of the world is very aware of what Adelaide and South Australia have to offer them.

As I mentioned earlier, when I sat down on Friday night in Qatar with the head of Qatar Airways—and he has 140 destinations in the world—he was right across what is happening in Adelaide. He knows what we have to offer with Adelaide Oval, he knows that the new Royal Adelaide Hospital is about to open, he knows that the new Convention Centre is about to open and he knows that we have this great medical and research precinct here. You do not get that sort of connectivity without people doing a lot of work on those relationships.

I mentioned one airline, Qatar Airways, but we also have similar great relationships with Singapore Airlines, Cathay Pacific and Malaysia Airlines, which have been servicing South Australia for decades and have done a tremendous job. Our friends at China Southern also speak glowingly not just to us when they talk to us, but we hear very good feedback from Tourism Australia. John O'Sullivan, who does a tremendous job heading up Tourism Australia, has spoken to China Southern in the past six months and they were really impressed with the launch we had here in Adelaide for those direct flights to Guangzhou on mainland China. It is really important that we continue those great relationships with existing airlines and continue to try to get more airlines to fly direct into Adelaide.

Ms WORTLEY: Thank you minister. Can I have a follow-on from that?

The CHAIR: Yes, member for Torrens.

Ms WORTLEY: How has the Understanding China initiative benefited tourism operators in South Australia?

The Hon. L.W.K. BIGNELL: Yes, that is a really good point. It is something we have been working on closely with tourism operators because it is important if we have people come here. What we always have to do is to change the perspective and think how would we go in China without any English signs or menus that are written in English and people who run hotels and restaurants having no understanding of what our cultural beliefs are.

We have been running a lot of programs here to get tourism operators across what it is that the Chinese market is after. China is a priority market for us regarding attracting visitors to South Australia. We currently attract just over 50,000 visitors from China to South Australia each year, accounting for 2.6 million visitor nights and $315 million in expenditure. We expect these numbers to continue to grow and we are working really hard on that.

To make sure that tourism operators across South Australia are ready to cater for the growth in Chinese visitors, we engaged a China expert to develop a visitor economy assessment and development plan for the China market for South Australia. The work provides detailed information on how South Australia and our service delivery are received by Chinese visitors, as well as recommendations on how we can improve service delivery.

Following the development of this plan, a series of Understanding China workshops and one-on-one meetings were held in all South Australian regions. These were publicly advertised for all tourism operators and interested parties to attend, and more than 1,000 participants attended workshops and meetings between July 2016 and February 2017. The program was applicable not only to tourism operators across the state but the Adelaide city council also took note, adding some Chinese language signs throughout the CBD to help welcome Chinese visitors to Adelaide and help them navigate their way to key destinations within the city.

I also note that when you go around the Yankalilla council area, particularly when it comes to public conveniences, they have signs in Chinese as well, which is a really important place for us as Chinese self-drive tourists make their way from Adelaide down to Kangaroo Island and enjoy the wonderful Fleurieu Peninsula. The state government also installed new signage between Adelaide Airport and the city prior to the arrival of China Southern Airlines. We have also expanded our use of WeChat, China's most popular and powerful social media app with 700 million active users per month.

On 7 December 2016, a workshop was held in Adelaide on UnionPay and WeChat with more than 200 attendees. The workshops provided information on how to engage the South Australian Tourism Commission's WeChat site and how to develop and produce content for individual businesses, WeChat pages and the importance of UnionPay to the Chinese visitor. UnionPay is the card payment most Chinese visitors carry and more than 85 per cent of them are debit cards. It is really important that, if people want to be able to spend money here from China, they can actually do that.

I want to pay tribute to those tourism operators who are doing so well in the China space. We have a few in particular who are doing well not only in terms of their own business. If we look at Andrew Holmes at Hahndorf Inn, he is not only doing great business for his operation but he has little cards in there in Chinese explaining what else is on in Hahndorf so that people go and spend their money not just at his establishment but around the town.

Anyone who has been up to Hahndorf lately and seen the number of Chinese tourists there knows that it is terrific. I am also hearing great stories from places like Kangaroo Island and Mount Gambier about the big increase there as well. As people increasingly find out about Port Lincoln and the wonderful seafood you can have over there, with a 25 or 30-minute flight from Adelaide, those numbers will improve.

Getting back to Hahndorf Inn, Andrew Holmes has also shared his experience with other tourism operators in South Australia. He could have been selfish and kept it all to himself, but he is actually out there as an exemplar, as someone who is spreading the word about how they have been able to engage with Chinese visitors and increase visitor numbers. There are other examples as well.

Richard Beere, a China expert who was actually a former Tourism Australia employee and one of the first in the China office, came here and brought so many ideas. He also thanked the tourism operators who were open enough to have him come in and look at their business. Even at places like Adelaide Airport, who thought they were doing a terrific job, he walked through the airport with them and was able to point out a couple of places where they could improve. To the airport's credit, and to all these other tourism operators' credit, they listened to what Richard had to say.

We want to aim to be the most China-friendly city and destination in Australia, and it is through working together with all the tourism operators, the thousands of tourism operators around this state, that we will make those improvements. It is important that we, as the government, help lead that process because if you are sitting out there on your own, as so often is the case with a two-person tourism business or a one-person tourism business, it is pretty hard to find all the answers. The more workshops we can do, the more knowledge we put out there on our websites and other things, the better it is going to be not just for our tourism operators, and for the 35,700 people they employ, but also for those visitors from China and around the world who come to our great state.

Mr PEDERICK: I refer you to Budget Paper 5, page 81, and this is in relation to The Bend Motorsport Park in Tailem Bend in my electorate. There was a $3 million commitment over three years to support the licensing costs of hosting a second South Australian V8 supercar event at Tailem Bend, and this has been listed as an initiative prior to the 2017-18 budget for the South Australian Tourism Commission. Can the minister confirm that South Australia will host a second V8 supercar race in 2018; if that race is secured, what additional contribution will the SATC make to the event, or will it be entirely privately managed?

The Hon. L.W.K. BIGNELL: The ultimate decision on whether South Australia gets a second event will rest with Supercars Australia. Obviously we are very keen to have it, and we are working with James Warburton and Supercars Australia to hopefully realise that dream. We are big backers of Tailem Bend and your part of the world, member for Hammond, as you know. It is great to work with the local councils down there, the Coorong council and the neighbouring council at Murray Bridge. These are councils that really want to see their local areas go ahead in an economic sense.

When I took over the motorsport responsibility, there were about four or five different proponents racing around saying that they wanted to build a motorsport complex in their part of the world. There were two from Gillman and there were a couple out in the northern suburbs. No-one really had a firm proposal, but people were identifying the old Mitsubishi test track at Tailem Bend as a possibility. We got CAMS, as the governing body of motor racing in Australia, to come and do a pros and cons assessment of all the sites. They came up with Tailem Bend as the preferred site at about the same time as the Shahin family, through the Peregrine group, identified that they were interested in purchasing land and building a motorsport complex.

I want to thank not only Sam Shahin in particular, with whom I have had the most dealings in the Shahin family, but all the family for putting back what is an enormous of money—I think it is up around the $100 million mark—in terms of the development. We have been on board since the beginning, and in February 2014 the South Australian government committed $7.5 million towards the establishment of a privately built and operated motorsport park at Tailem Bend with the capacity to host a second supercar race in South Australia. The 2017-18 budget included a grant of $3 million over three years to Peregrine Corporation to offset the cost of licensing and set-up associated with the attraction and running of a second race as part of the Virgin Australia Supercar Series.

The Bend Motorsport Park is proposed to have facilities for a variety of activities, including drag racing, carting, and four-wheel driving, as well as a hotel, caravan park, camping, airstrip, service station and transport hub. The South Australian Tourism Commission has a sanctioned agreement with Supercars Australia to host the opening round of the championships, currently known as the Adelaide 500, through to 2021.

Supercars Australia and Peregrine Corporation have advised that negotiations to host a second supercars race in South Australia are in their final stages. The timing of the event will be negotiated between all relevant parties, ensuring an appropriate distance from the Adelaide 500 in the calendar. We believe that South Australia, with our strong motorsport heritage, and given the very different events that would take place, can successfully play host to two supercar races.

Talking to the Shahins, I do not think that they want to rest with having just a supercar race there. They have some wonderful ambitions for down the track to host, perhaps, Moto GP and other facilities. Again, I would like to place on the record our thanks to this private family-owned company for their commitment to building this because, if we had to go out and find $100 million to build a motorsport complex in South Australia, I am not sure that the money would be there. We know that we have 7 per cent of Australia's population but that we have 11 per cent of participants in motorsport in South Australia. Up until Tailem Bend was conceived, we only had the Mallala track north of Adelaide.

That put us in a pretty dire position in terms of having one track and no real security over the future of that facility. So we were delighted with the contribution of the Peregrine group and the Shahin family. We think this will be a wonderful asset, up there with our Convention Centre, our hospital and Adelaide Oval, but one that has been largely funded through private resources.

Mr PEDERICK: In regard to the operations and management of a second V8 supercar race at Tailem Bend, will the SATC have any involvement in its operations and management? Will they have additional marketing expenditure associated with the event?

The Hon. L.W.K. BIGNELL: The private operators, the Peregrine group, will own the race and run the race but we will work closely with them. We have some pretty good resources as part of the Adelaide 500, and we have some good database material, and I am sure we will work closely to make sure that we grow the pie rather than anyone being cut out of a piece of the pie.

As I said, we have had a good relationship with the Shahins and with the Peregrine group dating back to 2014, right from the very first discussions around the Tailem Bend motorsport park, and we look forward to continuing that close involvement between the government and the Tailem Bend motorsport park.

The CHAIR: The time having expired for this line, I declare the examination of the proposed payments completed.

Sitting suspended from 14:16 to 14:30.