Defence SA, $18,478,000

Membership:

Mr Duluk substituted for Mr Whetstone.

Mr Marshall substituted for Mr Goldsworthy.

Mr van Holst Pellekaan substituted for Mr Wingard.

Minister:

Hon. M.L.J. Hamilton-Smith, Minister for Investment and Trade, Minister for Small Business, Minister for Defence Industries, Minister for Veterans' Affairs.

Departmental Advisers:

Mr A. Keough, Chief Executive, Defence SA.

Mr R. Barnett, Executive Director, Corporate Services, Defence SA.

Ms J. Barbaro, Executive Director, Strategy, Skills and Intergovernmental Relations, Defence SA.

Mr K. Naughton, Chief of Staff.

The CHAIR: We are back at committee A. We are now opening the portfolio of Defence SA. The minister appearing is the Minister for Defence Industries. I declare the proposed payments open for examination and refer members to the portfolio statements in Volume 1. I call on the minister to make a statement, if he wishes, and to introduce his advisers.

The Hon. M.L.J. HAMILTON-SMITH: Firstly, can I introduce the staff who are with me at the desk: the Chief Executive of Defence SA, Mr Andy Keough, is on my left; on his left is Mr Rob Barnett, the Executive Director of Corporate Services; and on my right is my Chief of Staff, Kevin Naughton, and Ms Julie Barbaro, Executive Director, Strategy, Skills and Intergovernmental Relations, Defence SA.

I would like to make some opening remarks because it has been a very big year in Defence, with a number of very, very significant developments. Principal among them has been the down-selection of the Naval Group, formerly DCNS, to build the submarines, and the victory over the risk of them being built in Japan, which was a very serious concern. Another significant development has been the winning of at least two offshore patrol vessels—we might hope for more—out of the OPV program to cover the valley of death and the wind-down in work there as AWD comes to a close.

The third development has been the handover of the first of the OWDs, the air warfare destroyers, to the Navy. I think the second one is in the water and the third one is taking shape on the shipyard. There is the narrowing down to three designers of the frigate, with a decision due in early 2018 on the preferred designer.

The other big development, which is a big success for the state government, has been the decision by the commonwealth to purchase Techport from the state government for a significant sum. Why that is good is that we have not only won the work but we have also managed to recoup for the state the infrastructure expense down there that can now be put back into hospitals, schools and various other purposes.

It has been a very big year indeed, but unfortunately it is not all good news. Unfortunately, I am losing my CEO. It will be a big loss, but Mr Keough has been made an offer he cannot refuse out in the industry sector. That is the problem: when you hire good people, everybody else wants them. Andrew Fletcher went off to run Rheinmetall. Mr Jackman was offered and drawn away to an important government role, and now Saab is going to get Mr Keough. He will be missed because he was a submariner and I was Special Forces, and the rest of our respective services would not talk to us as a general rule because they regarded us as being a bit odd.

I want to take this opportunity to thank Mr Keough for the outstanding job that he has done over almost two years, running the show at Defence SA at a very, very difficult time in terms of the challenges the state faced. Our loss is Saab's gain, and it will be business as usual on Monday, so to speak. In completing my opening remarks, I want to move on to what I think is the most important decision we face, and that is the decision about who will build the submarine and who will build the frigates.

We have won round 1: the decision has been made that we will build the ships in Australia. Unfortunately, it does appear that the federal government is considering having Naval Group (DCNS)—a foreign, government-owned international, a very good designer and a wonderful company, which has been selected to design the submarine—also to build the submarine. Similarly, we understand the federal government may be considering using a successful frigate designer—either Fincantieri, Navantia or BAE—not only to design but to build the ship. This is a very significant risk to South Australia.

It is one thing to get an architect to design your house; it is another thing to have the architect build the house. Most people use a separate builder. There are a host of risks in using the architect to also do the build, but principal among them is giving the Australian people, industry, unions and workers the confidence that at the end of the process we will have an indigenous capability, that we will have a capability to build and operate and maintain our own submarines and our own frigates. I want to flag that as a major concern of the South Australian government.

We would like to see the federal government select an Australian builder to build the submarine and an Australian builder to build the frigate. We have an Australian builder, the ASC, that built the Collins, and we have capable companies, like the ASC and Austal, that have proven capability and could build frigates and have done major surface ship construction. Surely the federal government can find a way to ensure that we have an Australian-owned company building the submarine and building the ships in partnership with the designer, as either shareholders or design partners, so that we do not become forever reliant, for decades to come, on a foreign-owned, government-owned multinational not only designing but building our ships.

These are wonderful companies producing wonderful designs, but this is an important decision for Australia. I signal that the state government will be talking to other state governments, to industry and to the unions and to senators and federal parliamentarians, wherever we can find them, to focus the Australian-made defence campaign around this core question. Over the coming year, decisions are going to be made that will affect the lives of South Australians and Australians generally for decades to come.

I think we need an Australian builder. We are fully supportive of the ASC and Austal and of other shipbuilders in this nation. Surely we are good enough to build our own submarines and ships in partnership with the wonderful designers that have been identified. I just flag that as a major issue, and bipartisan support for that call from those opposite would be most gratefully appreciated by every industry, company and worker on naval shipbuilding. With that, I am very happy to answer questions.

The CHAIR: Leader, do you have a statement, or are we straight into questions?

Mr MARSHALL: No. I would just like to wish Mr Keough all the very best for his future employment and thank him for his service to the people of South Australia. My question starts with Budget Paper 4, Volume 1, page 199. The minister has just told us that the proceeds of the sale of the Common User Facility will go into providing more, I think he said, schools and hospitals for South Australia. Can he explain to this committee why the Premier, when he made this announcement, had a completely different use for the funds, and in fact clarify to this committee what the use for those funds is going to be?

The Hon. M.L.J. HAMILTON-SMITH: Before I answer the question, I might ask the Leader of the Opposition to clarify his understanding of what the Premier said because often it is not quite what the Premier did say. What are you alleging or suggesting that the Premier said the funds would be used for?

Mr MARSHALL: Well, it is fairly clear. He said that the proceeds of the sale of Techport would provide funds back to new advanced manufacturing opportunities for the naval shipbuilding continuous build program. It had nothing to do with hospitals and schools, and I would just like the minister to clarify. Is this money not being focused on the areas the Premier told the people of South Australia on 12 May when he made the announcement?

The Hon. M.L.J. HAMILTON-SMITH: First of all, in May 2017 the government signed an MOU with the Australian government to sell the state-owned Techport assets for $230 million. The estimated book value of these assets at disposal is $235.7 million. The total state investment in these assets since 2007 has actually been $303 million.

Tranche 1 was expected to be in August 2017, and I think still is: $20 million—Maritime Skills Centre, Common User Facility, expansion land and adjacent land parcels. Tranche 2, $210 million, should be paid by 31 December 2017. The state has also committed to fund additional infrastructure at Techport in support of the Australian government's naval shipbuilding precinct, including construction of a pedestrian rail overpass estimated at up to $18.3 million.

In regard to what the money is used for, that will be a matter for the government, advised by the Treasurer, to determine. I am sure both statements are true. It may be used for industry development, it may be used for health and education, or it may be used for a variety of things. They are decisions still to be made, so I am sure both statements are true. The way these things tend to work is that money is often not wholly hypothecated for a single purpose.

But the point that I am making is that this is an incredible outcome for the state government because we took a considerable risk—with bipartisan support, and I thank the opposition for that; in fact, I was the opposition spokesperson at the time. It was very good. It was with bipartisan support. Without that bipartisan support, it would have been very hard for this government to have spent that money building Techport because it would have been an easy thing to rip down, but back in those days oppositions were generally supportive and there was a bit of bipartisanship with defence. I note that some of that has evaporated.

The money not only will come back into coffers but we have won the work, so in every respect it is a win-win situation for South Australia: we have the submarine and frigate work and we have our money back. There will be further announcements at a later time in the Mid-Year Budget Review in regard to future intentions.

Mr MARSHALL: Nevertheless, have you made any representations to the Premier regarding his commitment that all the money would go to new advanced manufacturing opportunities for the naval shipbuilding continuous build program? Have you put forward any potential programs for that $230 million?

The Hon. M.L.J. HAMILTON-SMITH: First of all, I will check what the Premier actually said.

Mr MARSHALL: I cannot believe you did not read his press release. It relates to your area.

The Hon. M.L.J. HAMILTON-SMITH: There are a lot of things you cannot believe, leader, but we will leave that to the side.

The CHAIR: Order! Back to answering the question.

The Hon. M.L.J. HAMILTON-SMITH: I will firstly check the facts to see if what you have just said is true.

Mr MARSHALL: Alright.

The Hon. M.L.J. HAMILTON-SMITH: The second part of your question was: have I made submissions for budget for defence for future purposes? Yes, of course I have. There is a significant amount of money in the budget for investment attraction, with defence listed as the number one priority for the $200 million Jobs Fund, so there will be quite a lot there. We are going after quite a range of investment attractions and quite a range of projects based particularly around the naval shipbuilding work. There are opportunities out there and we will be going after them as they arise.

Mr MARSHALL: For clarity, you have made those submissions subsequent to the Premier's announcement on 12 May?

The Hon. M.L.J. HAMILTON-SMITH: I have been constantly making submissions for investment in defence industries. If that is the best question you have, leader, it is going to be a long hour.

The CHAIR: Order!

Mr MARSHALL: The minister told last year's estimates committee that the state government could decide that it wanted to be a partner with the commonwealth in the future development of Techport.

The Hon. M.L.J. HAMILTON-SMITH: Yes.

Mr MARSHALL: He also referred to other options, but none of them involved a full sale and transfer of ownership to the commonwealth. In fact, he said, and I quote from last year's estimates, 'We value our ownership role.' Can the minister outline to the committee what has changed?

The Hon. M.L.J. HAMILTON-SMITH: Yes, that is a good question. We have valued our role as a partner down there with the commonwealth during the air warfare destroyer program. Actually, an option would have been—and it was an attractive option—for the current arrangements that have applied for the AWD to have been continued; that is to say, we continue to own and operate the CUF and the other infrastructure we had down there in cooperation with the commonwealth on a fee-for-service basis and charge them for use of it and so on and recoup our costs that way.

That would have been an effective option and it would have also kept us at the table, if you like, during the decision-making processes and so on, at all points going forward. The commonwealth expressed a view to us that they were making a very significant capital investment, that they wanted to de-risk the project to every extent possible and that a more streamlined ownership structure down there would reduce risk. Frankly, I can understand their argument.

The commonwealth government then, after a period of negotiations—superbly handled by Mr Keogh and Don Russell, the CE of DPC, who worked on this together—came up with a cheque, and it is very hard to argue with a cheque. They actually proposed to us that, after a period of negotiation, they buy it off us. We did note that as an option, because we considered all options and had a discussion with them about it. When we considered that, we agreed with them that it was a pretty good pathway.

To be fair to the commonwealth, they have a complex project to get underway here and I understand why they would want to have complete ownership of the site before they start spending a lot of money building infrastructure on it. It was something that arrived as part of the negotiations and it presented an opportunity. We will still be involved through, of course, skills and workforce development. Our TAFEs and our universities and our schools will be involved in producing the skilled workforce through our support for the Defence Teaming Centre and industry generally, and industry support programs will be involved.

There will be infrastructure to and from the site. We are building this bridge. There are roads and all sorts of utilities that are involved. There will be industrial and land requirements around the precinct as it grows—maybe an industrial park in the broader precinct. There are already companies in Port Adelaide CBD that are involved.

We will still have a lot of involvement with the commonwealth in terms of shaping things going forward. It is hard to argue with a cheque for $230 million, and it did seem like a very elegant outcome for everyone involved. The commonwealth was happy and we were happy. What changed was that we, with the commonwealth, were able, on considering all the options, to come up with an option that we felt was a win-win for everybody.

Mr MARSHALL: Did you support the sale process in cabinet?

The Hon. M.L.J. HAMILTON-SMITH: It would not have gone through cabinet if I had not. I took it in.

Mr MARSHALL: You took it in with a recommendation to accept it?

The Hon. M.L.J. HAMILTON-SMITH: Yes.

Mr MARSHALL: Has the MOU been signed?

The Hon. M.L.J. HAMILTON-SMITH: Yes, I am just checking the date. I signed the MOU on 18 May and it was countersigned by minister Cormann, the Minister for Finance. The MOU was executed on 18 May.

Mr MARSHALL: Will that MOU be made public?

The Hon. M.L.J. HAMILTON-SMITH: It has been signed by two parties, so we would have to talk to them about that. I try to be as open and accountable as possible on these matters. I will take advice and, if it is possible to make it public, I will be happy to table it in the house.

Mr MARSHALL: Are you satisfied that we maximised the return to the people of South Australia with the $230 million price tag, considering we clearly invested much more than that? You talked about the book value, but I presume that is the depreciated capital value, not the book value. Was there any assessment done of the market value of that site?

The Hon. M.L.J. HAMILTON-SMITH: There was quite a bit of history on this. Initially—and I made public statements about this at the time—there was a suggestion from the commonwealth that we should hand it over for a dollar to enable them to proceed. That was not going to happen. I did not think that was fair or reasonable. I must say that, in terms of its market value, had we not built the CUF down there, the market value of that land would be minimal. It is just industrial land; it would be worth a fraction of what we have received. The fact that we built the CUF and it had valuable infrastructure on it gave it a value, but to only one customer—the federal government. So really it was—

Mr MARSHALL: The question is, though, whether we maximised the value.

The Hon. M.L.J. HAMILTON-SMITH: The point I am making is that I think we did extraordinarily well, and I must say that I think the commonwealth was pretty decent throughout the negotiations.

Mr MARSHALL: I think they did you like a dinner. Did you conduct the negotiation for the price or was that Treasury?

The Hon. M.L.J. HAMILTON-SMITH: I have explained to you that minister Cormann and I signed the result. He appointed his—

Mr MARSHALL: They got a bargain.

The Hon. M.L.J. HAMILTON-SMITH: What was that?

Mr MARSHALL: I said that they got a bargain. They got it for less than the written-down value of the plant and equipment. Imagine buying a business when you buy it for the written-down value, not even any value for the land or the precinct, or the capital values which you have spoken about very glowingly many times—and quite rightly so.

The Hon. M.L.J. HAMILTON-SMITH: If you think that the commonwealth got a bargain, that probably says something about your knowledge of the property industry and the infrastructure industry more broadly—or lack thereof. I think the commonwealth was pretty decent and pretty reasonable during the negotiations. It is a very specialised asset—

Mr MARSHALL: Correct, and they needed it.

The Hon. M.L.J. HAMILTON-SMITH: What would the Leader of the Opposition have done? Would he have refused to sell it to them unless they gave him $300 million or $400 million and put at risk the entire project?

Mr MARSHALL: You sold it for less than the written-down value.

The Hon. M.L.J. HAMILTON-SMITH: Actually—

Mr MARSHALL: Actually—oh yes, that is right.

The Hon. M.L.J. HAMILTON-SMITH: You just continue to embarrass yourself—

The CHAIR: Order! We need to have the question first and then the answer.

The Hon. M.L.J. HAMILTON-SMITH: He has asked the question—

The CHAIR: I know, that is right. So you give the answer.

The Hon. M.L.J. HAMILTON-SMITH: The book value takes into account the depreciated value of the site, so to say that we sold it for less than the book value just demonstrates your lack of knowledge on these matters. You should ask for a briefing.

Mr MARSHALL: Were there any stipulations as part of the contract that were embedded in the contract or the MOU that protected the access of South Australian businesses to that infrastructure?

The Hon. M.L.J. HAMILTON-SMITH: This was a point of negotiation. The South Australian government wanted to ensure that the CUF was available for other commercial uses at various points in the future, should they arise. That might have been for shipbuilding purposes; it could have been to do with the oil and gas industry. An advantage of our ownership of it was that we could influence those calls, so we were keen to protect that access.

Similarly, the commonwealth were keen to ensure that we did not impose upon them any requirement to make the CUF available for a non-submarine or shipbuilding purpose that might interfere with their schedules, so we have entered into what is, in effect, a reasonableness clause. In other words, if the state government reasonably makes a request on behalf of industry, provided it does not interfere with the submarine or shipbuilding program, the commonwealth will consider that request in a reasonable way and act responsibly.

Mr MARSHALL: How is that documented?

The Hon. M.L.J. HAMILTON-SMITH: It is mentioned in the MOU. It is going to require a bit of goodwill, but what we were not prepared to do was to put the whole shipbuilding program at risk or at risk of delay while we entered into a stretched out negotiation, nit-picking over the MOU. There was always a risk that some or more of the work than we hoped for could have been redirected to another state. Frankly, the commonwealth is in a pretty powerful position here. They have the chequebook. It is their project. One thing that the Leader of the Opposition will realise if he is ever in government is that you have to be very careful in these negotiations that you do not overplay your hand.

Mr MARSHALL: I would like to ask a question in reference to Budget Paper 4, Volume 1, page 196, regarding the Land 400 combat vehicle system. I see here that $1 million is to be provided to bidders of the Land 400 combat vehicle system phase 2 project. Can you provide an update as to whether or not that money will continue in the budget, given we see an announcement today that BAE will now join with Rheinmetall in selecting other states to operate in? Can the minister inform the committee how much has been spent on this project to date?

The Hon. M.L.J. HAMILTON-SMITH: In May 2016, the South Australian government provided BAE Systems and Rheinmetall with an offer to establish the Land 400 manufacturing sustainment facility in South Australia. Rheinmetall and BAE Systems have had their vehicles selected to undertake the risk mitigation activity for 12 months with the ADF as part of Land 400.

Rheinmetall undertook a public campaign with all states to elicit a strong response from the respective state governments. In February 2017, Rheinmetall announced that South Australia was not selected as the build location for Land 400 phase 2, should they be the successful tenderer, instead short-listing Queensland and Victoria. It is likely, and today's announcement to which the leader refers sort of confirms it, that BAE Systems were offered a similar package to Rheinmetall by each state, and therefore we assume that South Australia is unlikely to be the site for the BAE Systems manufacturing facility.

I emphasise the point that the commonwealth is still yet to make a decision about which of the two will be selected, but I can tell you that we put together an absolutely sensational offering here. I suspect that what has happened is that it has effectively been copied by the other states. We put forward an offering that was in excess of $20 million in its value, and we did so on the basis of the dollar cost per job.

If the leader has researched this properly, he will know how many jobs and how much investment are really involved with Land 400. Whoever wins this, a lot of the work will be going off overseas. The first tranche is around $5 billion. I think the second tranche will be a bit more than that, about another $5 billion, bringing it to $10 billion. That is a small amount in comparison to the $90 billion in the naval shipbuilding program that is the main focus of our effort.

Of that initial tranche of $5 billion, I think the vast majority will finish up being spent overseas because that is where most of the work will be done. A vehicle will be assembled in Australia and there will be a supply chain. There are two parts to this: there is the assembly and then there is the supply chain.

We were prepared to offer a sensible amount of state taxpayers' money to win this on a jobs per dollar basis, but we were not prepared to be reckless. You will have to ask the other states how much they have put on the table, but we know exactly how many jobs are really linked to this in terms of Australian industry involvement. I think, when the figure comes out as to how much has been put on the table by the other states, the parliament will be better informed, but my understanding is it was very, very significantly more.

I must say that one thing about going to an auction is that you have to be very careful that your head and not your heart governs your bottom line. The reality for us is that you reach a point where you can take that money and create two or three times as many jobs in the agriculture sector, or in another sector, and you ask yourself why you are chasing this if it is just costing so much taxpayers' money that it does not measure up.

In regard to the million dollars that you mentioned, my advice is that that has not yet been supplied and that it is unlikely to be supplied if we are unsuccessful. Can I add that, even if this does go to Victoria or Queensland, there will be opportunities for South Australian companies in the supply chain, so all is not lost, so to speak. A lot of our companies with expertise in this area can still get a bit of the work. That is particularly so, I think, with the BAE bid, but we will see how we go.

Funding to secure the Land 400 was spent over several years in design and planning, but we will need to take on notice exactly how much was spent on that design work and planning. I am more than happy to provide that on notice. My understanding is that we have not spent a lot. We earmarked some land up near Edinburgh. We did some design work. We did some promotional work. We did some detailed planning work with the bidders. I am happy to provide that figure, but I will have to get advice on that separately.

Mr MARSHALL: Is the government essentially announcing today that the land systems precinct will not go ahead?

The Hon. M.L.J. HAMILTON-SMITH: No, that is up to the commonwealth. Rheinmetall and BAE have made the statements they have made.

Mr MARSHALL: But are they the only two left in the bidding process?

The Hon. M.L.J. HAMILTON-SMITH: Yes, they are.

Mr MARSHALL: They have both said that there could be some supply chain work in South Australia, but the key assembly work will happen either in Queensland, if Rheinmetall is selected, or in Victoria if BAE is selected; is that correct?

The Hon. M.L.J. HAMILTON-SMITH: Yes, it would be my expectation that the manufacturing facility will be in one of those two states but, until the commonwealth has made its decision and things are finalised—

Mr MARSHALL: So you are still proceeding with the establishment of the land systems precinct in South Australia?

The Hon. M.L.J. HAMILTON-SMITH: Unless those companies were to decide that they wanted to do it in South Australia, and both have indicated that they do not at this stage—

Mr MARSHALL: That is the question: are you going to scrap the plans? It is not even a difficult question.

The Hon. M.L.J. HAMILTON-SMITH: Yes, only you have the ability to make a really simple question difficult. It is common sense that, if the facility is not built in South Australia, we will not be proceeding with the land combat vehicles park. That is common sense. I do not even know why you need to ask the question.

Mr MARSHALL: That is why I am asking whether or not it has been scrapped.

The Hon. M.L.J. HAMILTON-SMITH: What I am explaining to you is that, until the commonwealth has made its decision, the contract is announced and things are finalised, you have to be very careful about what you read in the paper, leader; it may or may not be true.

Mr MARSHALL: What was the value of phase 2?

The Hon. M.L.J. HAMILTON-SMITH: You have read the paper this morning and you are making assumptions.

Mr MARSHALL: What was the value of phase 2? I think you just indicated to the committee it was $5 billion or $10 billion. What was the value of phase 2 of the Land 400 project?

The Hon. M.L.J. HAMILTON-SMITH: My advice is that both phase 1 and phase 2 (the whole of Land 400) are in the order of around $10 billion.

Mr MARSHALL: $10 million? Why did you put out a press release less than a year ago—

The Hon. M.L.J. HAMILTON-SMITH: My advice is—

Mr MARSHALL: —that said it was valued at $20 billion and phase 3 is $30 billion?

The Hon. M.L.J. HAMILTON-SMITH: You are like a jack-in-the-box, leader. Let me answer the question before you jump in. Are you ready now?

Mr MARSHALL: You just said twice $10 billion.

The Hon. M.L.J. HAMILTON-SMITH: Calm–deep breathing.

The CHAIR: Order! The minister can answer the question.

The Hon. M.L.J. HAMILTON-SMITH: If you listened, you would get the answer.

Mr MARSHALL: I doubt it.

The Hon. M.L.J. HAMILTON-SMITH: All will be revealed.

The CHAIR: The minister will answer the question.

The Hon. M.L.J. HAMILTON-SMITH: You doubt a lot, leader.

Mr MARSHALL: I very much doubt it.

The Hon. M.L.J. HAMILTON-SMITH: My advice is that the total value of Land 400 could be $10 billion to $20 billion—

Mr MARSHALL: Ten to 20—

The Hon. M.L.J. HAMILTON-SMITH: —in the acquisition phase. We understand it could even reach as much as $30 billion in the sustainment phase, which is the whole life of the project. If you compare that with the submarine and frigate work, which is $90 billion during the construction phase and another $180 billion in the sustainment phase, that brings it well into the $200 billions on shipbuilding. Compared with these projects, this is about one-tenth the size of the submarine and frigate work.

The fact is that no-one knows accurately exactly what the total value of Land 400 is because it has not been specified accurately by any party, including the commonwealth government. We are speculating, but it could be up to $20 billion and it could be up to $30 billion, including sustainment. That is why in a media release I use general terms. It could be up to $20 billion, that is true, but we just will not know; it could be a lot less.

Mr MARSHALL: In fact, in your press release, which was dated July 2016, you talked about $50 billion for both the acquisition phase and the sustainment phase—that is $50 billion. Do you think that the $20 billion that you put on the table was adequate for a project of this size?

Clearly, two other states have completely outbid South Australia. Why did we lose this project? Was it because the cost-benefit analysis was not done, the due diligence by your department was not done, and have we potentially lost thousands of jobs, which your government had suggested we were in the box seat to win because of our skills in auto and the money that had been allocated in terms of auto transformation?

The Hon. M.L.J. HAMILTON-SMITH: I can make it very clear to you. Our estimation is that the total number of direct jobs flowing from this Land 400 program would have been about 250.

Mr MARSHALL: Over the life of this project?

The Hon. M.L.J. HAMILTON-SMITH: No, during the construction phase.

Mr MARSHALL: How many 'man hours', as you like to refer to these projects as?

The Hon. M.L.J. HAMILTON-SMITH: Just relax, a bit of deep breathing, leader. I will answer your question, but just let me answer.

Mr MARSHALL: I doubt it. We have not had too many so far.

The Hon. M.L.J. HAMILTON-SMITH: Around 250 direct jobs, we thought, during the construction phase and then an indeterminate number of jobs in the supply chain to be spread around Australia. We put in excess of $20 million on the table; you work that out on a dollar per job basis. My Investment Attraction agency has attracted far more jobs than that for far less investment—far less investment—and at a given point you ask yourself where it is wisest to spend your money.

There are projects like Datacom where I think we have created in the order of 600 or 700 jobs for a significantly smaller amount. I think from memory it is in the order of $4 million to $5 million. If the object is to create jobs, you ask yourself how many and you ask yourself what quality of jobs. You can get so focused on winning the auction that in the end you spend far more than it is sensible to spend.

Mr MARSHALL: Two other states thought it was a pretty good investment.

The Hon. M.L.J. HAMILTON-SMITH: Well, perhaps you should be asking them the questions.

Mr MARSHALL: Why would I do that? You are the minister—currently.

The Hon. M.L.J. HAMILTON-SMITH: Let me give you another example. We were able to attract 250 jobs, the same number of jobs from Boeing, for an investment of $10 million. Are you seriously suggesting, because your line of questioning seems to be saying so—

Mr MARSHALL: You just lost a big contract.

The Hon. M.L.J. HAMILTON-SMITH: —that we should have spent $60 million, $70 million, $80 million, perhaps triple the amount—if in doubt, triple the amount, leader?

Mr MARSHALL: Not at all.

The Hon. M.L.J. HAMILTON-SMITH: Well, how much would—

Mr MARSHALL: I am just saying that there needs to be a cost—

The Hon. M.L.J. HAMILTON-SMITH: —you have spent—$60 million, $80 million to attract 250 jobs? What about, let me think, a million dollars a job? Would that be good—$250 million? Where would you stop? If you are putting yourself forward as the alternative Premier, you had better start to apply some business common sense to your offerings.

The CHAIR: Order!

Mr MARSHALL: I appreciate the evidence you have provided to the committee, that you think that the total value of this $50 billion project is going to be a sum total of 250 jobs. I will reconcile that with what the other states think they are going to get and, when the contract comes out, what the value is and what the jobs will be. I think it is a shame that we have lost this, especially given the posturing of this government regarding the importance of this project just 12 months ago.

But I will move on to my next question, which relates to the Defence SA Advisory Board, Budget Paper 4, Volume 4, page 194. On how many occasions during the 2016-17 year did the Defence SA Board meet?

The Hon. M.L.J. HAMILTON-SMITH: The Defence SA Advisory Board plays a critical role in driving our defence agenda. The board has core skills made up of high-level strategy, defence and commercial expertise. Over the past year the board's key achievements have been many. We recently appointed Professor Tanya Monro, the Deputy Vice Chancellor of Research and Innovation, University of South Australia, and leading scientist, to the board; and Professor Pascale Quester, Deputy Vice Chancellor and Vice President of the University of Adelaide; and, as an adviser to the board, Professor Göran Roos, who is also a member of the Economic Development Board, all representing a renewed emphasis.

The focus of the board now needs to move from winning the submarine and frigate work towards delivery, and so we have upgraded the science and innovation expertise on the board. Successful participation at flagship defence industry events including Land Forces 2016, Euronaval 2016 and Avalon 2017 have all involved the board. They meet every two months. There are six board meetings per year. I attend every one of them and the Premier attends most. We get valuable advice.

In addition, there are subcommittee meetings generally before the main meeting. By the way, fees payable are $70,000 for the chairman and $36,000 for the members. The total value of fees paid to board members was $370,000. Without their support, we would not have won the $90 billion worth of shipbuilding work that is underway. There are some costs to do with moving the board around ($115,000 in 2016-17), and the estimated budget for 2017-18 is $472,000.

I just want to take this opportunity to thank the outstanding and absolutely brilliant Air Chief Marshal Sir Angus Houston, who chairs that board and gives us invaluable advice. The members are Neil Bryans; Vice Admiral Russell Crane; Paul Johnson, who left the board on 31 August 2016 for other important duties; Beth Laughton, who left in August 2016 and was another brilliant worker; Lieutenant General Peter Leahy, with whom I served at the Royal Military College and at other places; Steve Ludlam, the former CEO of ASC; and I mentioned Tanya Monro, Pascale Quester and Trevor Ruting. We have a great group of people there. Of course, the CE has been tireless in supporting the board.

Mr MARSHALL: What is the current remuneration of the Chief Executive of Defence SA?

The Hon. M.L.J. HAMILTON-SMITH: It is probably going to be a lot more shortly. He is not telling me.

Mr MARSHALL: That is pretty rude.

The Hon. M.L.J. HAMILTON-SMITH: By the way, just to correct my last answer, $4.85 million was invested in Datacom by the state government to create 684 jobs, almost three times as many as we projected for Land 400.

Mr MARSHALL: That was not even a question.

The Hon. M.L.J. HAMILTON-SMITH: It is worth that. It is sobering. It is that sobering reality check.

Mr MARSHALL: Anyway, back to the questions. The remuneration of the CEO?

The Hon. M.L.J. HAMILTON-SMITH: I have the answer in his own pen: $410,000 inclusive of super.

Mr MARSHALL: Budget Paper 4, Volume 1, pages 196 to 198 refer to the Defence SA annual report. In March 2016, the South Australian and Victorian premiers signed the South Australian and Victorian Government Defence Industry Accord. Can the minister update the committee on the outcomes of this accord to date?

The Hon. M.L.J. HAMILTON-SMITH: Early in my tenure in this portfolio, I met with the Victorian minister, Lily D'Ambrosio. Of course, the Premier of South Australia has met regularly with the Premier of Victoria. The two premiers felt that they wanted to work together in a general sense on behalf of local Australian industry. I think their main focus was making sure that naval shipbuilding was secured, but other projects generally.

By its nature, the MOU is fairly general. I think it is more a statement of intent. There has been quite a lot of cooperation between the agencies in both states on Australian industry content and quite a few dealings between our two governments on how we can work together with the object of securing Australian jobs and investment for defence projects.

Mr MARSHALL: The government made quite a deal of this. It was only signed a year ago. Are there meetings scheduled? What has come out of this accord? Just the vibe?

The Hon. M.L.J. HAMILTON-SMITH: I know that the two premiers—

Mr MARSHALL: Meet on this issue.

The Hon. M.L.J. HAMILTON-SMITH: —are in regular contact, not only on this but on a range of issues, and cooperate on a range of issues. We have done something similar with the government of the Northern Territory. We are also reaching out to them.

Mr MARSHALL: Yes, I asked questions of the Premier about that the other day, but there was not much coming on that one either. However, on this one here you are saying it is early days and there is some departmental involvement, but not much beyond that at this stage.

The Hon. M.L.J. HAMILTON-SMITH: No, there has been quite a lot of product from it. We cooperated quite a bit on the submarine and frigate program and winning the submarine work. We have also cooperated with the Victorian government—

Mr MARSHALL: Can you mention anything specifically, though, that you have—

The Hon. M.L.J. HAMILTON-SMITH: Defence science. We have set up a defence innovation partnership here which is partly modelled on a similar structure in Victoria.

Mr MARSHALL: But that is South Australian only, is it not?

The Hon. M.L.J. HAMILTON-SMITH: Sorry?

Mr MARSHALL: That is only South Australian, is it not?

The Hon. M.L.J. HAMILTON-SMITH: Yes, it is South Australian but the Victorians have a similar structure.

Mr MARSHALL: So we are copying them.

The Hon. M.L.J. HAMILTON-SMITH: Yes, they have been up and running with their structure since 2010. They have now engaged Greg Combet as an adviser in this area and I have met with him—

Mr MARSHALL: He gets a lot of gigs, does he not?

The Hon. M.L.J. HAMILTON-SMITH: He does, and actually—

Mr MARSHALL: He is well paid, that bloke.

The Hon. M.L.J. HAMILTON-SMITH: —he is pretty sensible, too.

Mr MARSHALL: You might get a few jobs like that after you finish your parliamentary career. I refer to Budget Paper 4, Volume 1, page 194, presence in France. Has Defence SA decided whether to have a person based in either France or London? You said at the estimates committee last year that this was under active consideration. How have you gone with your active consideration over the last 12 months?

The Hon. M.L.J. HAMILTON-SMITH: We have the Agent-General's office in London. Bill Muirhead, our Agent-General, is on the Investment Attraction agency board and has been an invaluable support to us during everything we have done on defence. He was in Paris for Euronaval last year where we made a major push on Australia's trade engagement with France. The Premier, as you know, went straight to France after the announcement and was very well received.

The minister for defence under the previous government, by the way, a Socialist government, Mr Le Drian, who is also the President of Brittany, has been appointed the Minister for Foreign Affairs under the current government, so there is an element of continuity there. The Premier is very keen and the government broadly is very keen to extend the French strategy to include all aspects of our relationship with France. We have a France strategy and I think it is up on our website. The government has appointed an interim representative in France.

Mr MARSHALL: Who is that?

The Hon. M.L.J. HAMILTON-SMITH: I will have to get back to you with the details.

Mr MARSHALL: Based in France?

The Hon. M.L.J. HAMILTON-SMITH: In Paris, yes.

Mr MARSHALL: The Premier was not aware of that last Tuesday. Are you sure that is right, or are you just making it up?

The Hon. M.L.J. HAMILTON-SMITH: The person that the government has appointed in Paris is Ms Corinne Namblard.

Mr MARSHALL: Corinne Namblard was on the board of Qantas and the board of Codan in South Australia.

The Hon. M.L.J. HAMILTON-SMITH: Yes, a very impressive individual.

Mr MARSHALL: Somebody should tell the Premier; he had no idea on Tuesday.

The Hon. M.L.J. HAMILTON-SMITH: She visited here in June.

Mr MARSHALL: What is her role then?

The Hon. M.L.J. HAMILTON-SMITH: Her role is to provide advice to the state government on the France strategy, which includes—

Mr MARSHALL: Is it full-time?

The Hon. M.L.J. HAMILTON-SMITH: It is probably a question better directed to the Premier because it is—

Mr MARSHALL: Well, we asked and he said that they were considering it. There would be a person appointed in Paris but nobody had been appointed yet. You seem to be the custodian of this important information. We would like to share with the people of South Australia that Corinne has been appointed.

The Hon. M.L.J. HAMILTON-SMITH: I will check that—

Mr MARSHALL: This is new, breaking news.

The Hon. M.L.J. HAMILTON-SMITH: You asked me a question and you are answering your own questions.

Mr MARSHALL: Well, I am excited.

The Hon. M.L.J. HAMILTON-SMITH: It is very challenging when you answer your own questions.

Mr MARSHALL: I am giving you some thinking time.

The Hon. M.L.J. HAMILTON-SMITH: It is amusing but it is not very informing.

The CHAIR: The member for Elder has a question.

The Hon. M.L.J. HAMILTON-SMITH: Let me just clarify that before we move on, if I may. I will check with DPC about the exact arrangements as to whether or not Ms Namblard has actually been appointed in writing yet.

Mr MARSHALL: I see.

The Hon. M.L.J. HAMILTON-SMITH: I know that she was out here in June. My understanding was that she has either been appointed or it is intended that she be.

Mr MARSHALL: Do you know what the cost is yet?

The Hon. M.L.J. HAMILTON-SMITH: But I will need to check to be certain that that has actually been instrumented because it has not been done through Defence SA and it is not a question that relates to this budget line. It is something that has been arranged by DPC under a Premier and Cabinet budget line.

Mr MARSHALL: Through the French Engagement Strategy line.

The Hon. M.L.J. HAMILTON-SMITH: But since you have asked me the question and I am so helpful, I have tried—

Mr MARSHALL: Thank you.

The Hon. M.L.J. HAMILTON-SMITH: —to give you as much information as I know.

Mr MARSHALL: It is exceptional.

The Hon. M.L.J. HAMILTON-SMITH: Because I know you are like a sponge for information.

Mr MARSHALL: Quality information.

The CHAIR: Member for Elder.

Mr MARSHALL: I am still on the French Engagement Strategy. Can we finish that line? Last year, you indicated to the estimates committee that you would be looking to access some of the budget line of $1 million for this French Engagement Strategy. Has any of that come to pass at this point?

The Hon. M.L.J. HAMILTON-SMITH: Can you repeat the question?

Mr MARSHALL: I will read it out: how much of the Department of the Premier and Cabinet's French engagement did Defence SA access in 2016-17, given that the minister told the 2016 estimates committee that Defence SA would be accessing this budget line of $1 million? It sounds like the Corinne appointment might be part of that.

The Hon. M.L.J. HAMILTON-SMITH: The overall France strategy is being managed by DPC because it goes beyond defence and cuts across a host of ministers and portfolios. For example, we have a French school, we are doing things at the education level. In the industry space, DSD are doing things quite separately with France. We have a number of collaborations with France in parts of government that go beyond just defence. It is being managed by DPC because it cuts across agencies. I am advised that we have accessed some of that funding. We have used it for studies into the supply chain.

Mr MARSHALL: How much of the $1 million was accessed for that project?

The Hon. M.L.J. HAMILTON-SMITH: I understand that the French Engagement Strategy accessed this fund, which was initiated by Defence SA but developed into a whole-of-government strategy. I think $203,000 of that funding was used for that purpose. I understand we have also accessed some of it for defence supply chain research, as part of that.

Mr MARSHALL: Who has done that work?

The Hon. M.L.J. HAMILTON-SMITH: Deloitte.

Mr MARSHALL: On 14 July 2016, you met with the French president, François Hollande. What did you discuss with him?

The Hon. M.L.J. HAMILTON-SMITH: I emphasised to him the importance of the submarine work to South Australia and signalled to him that the South Australian government would do everything it could to assist DCNS in France with their work. The point that we wanted to convey was that we were here to be a partner with the federal government and DCNS in succeeding with this work. It is the same message that the Premier has given to the French government.

Mr MARSHALL: Where did this meeting take place?

The Hon. M.L.J. HAMILTON-SMITH: It was in Paris, at a reception being held as part of the Bastille Day celebrations. The Australians led the Bastille Day parade in that particular year, and I was able to get some time with the president and with the minister for defence. It was pretty short and pretty sharp; I think it was one or two days beforehand.

Mr MARSHALL: How long did you spend in your meeting with the French president, François Hollande?

The Hon. M.L.J. HAMILTON-SMITH: It was a conversation at the function.

Mr MARSHALL: It was a function? It was like a line-up or something?

The Hon. M.L.J. HAMILTON-SMITH: Yes.

Mr MARSHALL: You conveyed all of that?

The Hon. M.L.J. HAMILTON-SMITH: It is a really intelligent line of questioning, leader.

Mr MARSHALL: Did you convey it in French or English?

The Hon. M.L.J. HAMILTON-SMITH: Do you have anything of substance that you would like to ask, or would you just like to play around with party questions?

Mr MARSHALL: You were just saying that you had this meeting with the French president. I would like to know what you conveyed, but it was just a meet and greet. Do you have any plans to meet with the new French President, Emmanuel Macron?

The Hon. M.L.J. HAMILTON-SMITH: I never said I met with him; I do not think I said I had a meeting.

Mr MARSHALL: You just told us on the Hansard what you actually conveyed; we just wondered whether it was a full-on meeting. You are the one putting in Hansard all the things that you discussed with the French president.

The Hon. M.L.J. HAMILTON-SMITH: You are making it sound like—I do not know—COAG. It was not a COAG meeting, leader.

Mr MARSHALL: You are the one who said what was discussed, not me.

The Hon. M.L.J. HAMILTON-SMITH: If ever you get into government, leader, which I seriously doubt, you will understand how such events unfold. I think it is far more likely you will be out somewhere in the Barossa Valley.

Mr MARSHALL: Do you have any plans to meet with the new President, his successor, Emmanuel Macron?

The Hon. M.L.J. HAMILTON-SMITH: I think that is a stupid question.

Mr Duluk interjecting:

The Hon. M.L.J. HAMILTON-SMITH: Well, what budget line are you referring to?

Mr MARSHALL: Budget Paper 4, Volume 1, page 194, the French Engagement Strategy.

The Hon. M.L.J. HAMILTON-SMITH: I think the leader should just come down to earth and start asking questions about the budget instead of this frolic he is on, which only he understands. Let's get back to the budget, shall we? That is what we are here for.

Mr MARSHALL: Are you refusing to answer the question about whether you have any plans to meet with Emmanuel Macron?

The Hon. M.L.J. HAMILTON-SMITH: I am always available to answer sensible questions, but stupid questions, I think, are the province of those who ask them. So you can let that one rattle around in your head and come up with your own answer.

Mr MARSHALL: Did you put out a press release announcing that you had met with the French President?

The Hon. M.L.J. HAMILTON-SMITH: I do not know; I will have to check.

Mr MARSHALL: I think you did. Do you expect the recent political changes in France to have any effect on the submarine project?

The Hon. M.L.J. HAMILTON-SMITH: Leader, if you do not mind, I did meet him. Have you got that in your head? I did meet with the French President.

The CHAIR: Order! Next question.

The Hon. M.L.J. HAMILTON-SMITH: It might not astonish you to know that I said that. Is that alright with you?

Mr MARSHALL: Given that you have put out a press release, I think it is a reasonable question to ask what was discussed. You have then made it very clear what you did discuss. We asked about where the meeting was held and you said, 'Well, actually, I just met him at a function.' I think it is a legitimate question. There has been a change in government in France, and we would like to know whether the minister thinks there are any changes that will affect the submarine project due to the change in government in France.

The Hon. M.L.J. HAMILTON-SMITH: You are so clever, leader, sometimes it astonishes me.

Mr MARSHALL: Any answer to that question?

The Hon. M.L.J. HAMILTON-SMITH: Ask it again. Try to narrow it down to a sensible question.

Mr MARSHALL: I have asked my question. I would like to ask a question regarding the Woomera Prohibited Area, if possible, Budget Paper 4, Volume 1, page 196. What progress has Defence SA achieved during the past 12 months in ensuring the commonwealth defence department consistently engages and effectively coexists with non-defence users at the Woomera Prohibited Area?

The Hon. M.L.J. HAMILTON-SMITH: Has the leader met with the French President?

Mr MARSHALL: Can we just deal with Woomera? This is a serious line of questioning.

The Hon. M.L.J. HAMILTON-SMITH: Well, if you have not met him, have you met with the PM over the River Murray and lobbied the case for water allocations?

Mr MARSHALL: Would you like to answer questions about—

The Hon. M.L.J. HAMILTON-SMITH: Have you met with—

The CHAIR: Order! The question is about Woomera.

The Hon. M.L.J. HAMILTON-SMITH: Sorry, I lost myself there for a minute.

Mr MARSHALL: You have seven months to go.

The Hon. M.L.J. HAMILTON-SMITH: The answer to the question in regard to Woomera is that the government is very keen to ensure that we cooperate with the commonwealth, the mining industry and the defence industry about the use of Woomera to everyone's mutual benefit. We are of the view that mining and defence can coexist up there, hopefully, if there is goodwill from all sides. We sit on the Woomera committee; it is an advisory board. We are in communication with the commonwealth through that process.

Mr MARSHALL: Can the minister advise what new activities on the Woomera Prohibited Area non-defence users were able to establish during the past 12 months?

The Hon. M.L.J. HAMILTON-SMITH: My advice is that we are in an ongoing discussion through the process about it being open, but I will have to get back to you. I will have to ask the agency to give me a more detailed report if you want specific information about whether individual companies have been given access.

Mr MARSHALL: Or any.

The Hon. M.L.J. HAMILTON-SMITH: I will ask for a briefing and I will reply to that on notice.

Mr MARSHALL: Does Defence SA believe that the Defence Legislation Amendment (Woomera Prohibited Area) Act 2014 of the federal parliament is operating in a manner intended by all parties?

The Hon. M.L.J. HAMILTON-SMITH: Here we go—your smartypants question, leader. You asked me a smartypants question.

Mr MARSHALL: We are just on Woomera actually.

The Hon. M.L.J. HAMILTON-SMITH: I know, but you have given me a smartypants question, so I have to give you a smartypants reply. My media release, from which I am reading, stated:

Defence Industries Minister Martin Hamilton-Smith met the French President Francois Hollande…at a French Defence Ministry event...

I think it is pretty clear. For you to try to pretend that it was some huge COAG meeting is frankly fanciful and beneath you as Leader of the Opposition. I am startled you could not come up with something more substantial.

The CHAIR: Let's get back to Woomera, please.

The Hon. M.L.J. HAMILTON-SMITH: Sorry. What is your next question, leader?

The CHAIR: Woomera.

The Hon. M.L.J. HAMILTON-SMITH: Would you like to know where I went for dinner on Tuesday night?

Mr MARSHALL: Not at all.

The CHAIR: Woomera.

Mr MARSHALL: Can you just answer the question about Woomera? You are the defence industries minister.

The Hon. M.L.J. HAMILTON-SMITH: What is your question?

Mr MARSHALL: I have asked it.

The Hon. M.L.J. HAMILTON-SMITH: I have given you an answer.

Mr MARSHALL: No, I asked specifically—

The Hon. M.L.J. HAMILTON-SMITH: Yes, I did and I told you I would seek advice.

Mr MARSHALL: I asked specifically about the federal legislation.

The Hon. M.L.J. HAMILTON-SMITH: Well, ask it again. Read it again.

Mr MARSHALL: I will go onto another question because we have very little time and we have had very few answers this afternoon. I refer to Budget Paper 4, Volume 1, page 197. What were the unbudgeted industry assistance payments in 2016-17 of $1.9 million associated with the air warfare destroyer program?

The Hon. M.L.J. HAMILTON-SMITH: While the CEO is looking at that specific line, I will mention on grants and sponsorships that Defence SA does provide grants to support the AWD in line with the state's contractual commitments to the project. Defence SA also provides grants to a range of defence industry participants to attract long-term sustainable employment growth. Defence SA receives many requests each year. Defence SA's estimated 2016-17 expenditure on grant subsidy payments is $6.713 million. Defence SA's estimated 2016 expenditure for sponsorship payments was $55,464.

Mr MARSHALL: He is answering a question that was not even asked.

The Hon. M.L.J. HAMILTON-SMITH: You asked about a grant or a subsidy connected to the ASC.

The CHAIR: We have run out of time.

The Hon. M.L.J. HAMILTON-SMITH: I am advised that there was an ASC AWD systems centre rental assistance package of $652,000, a Maritime Skills Centre salary contribution of $42,000, and the $1.9 million figure to which the leader is referring is presented to me as an ASC payroll tax contribution, which had something to do with winning the air warfare destroyer program.

Mr MARSHALL: But why was this unbudgeted?

The CHAIR: This is the last question.

The Hon. M.L.J. HAMILTON-SMITH: My understanding is that we offered to pay some payroll tax as part of an incentive to attract the AWD work. My advice is that they were not sure what the figure would be at the time. Advice was needed from the commonwealth and from the ASC and therefore it was unbudgeted. My advice is that, once the firm figure was known, the figure was budgeted.

Mr MARSHALL: For what period of time was this payroll tax rebate offered, the entire period of the air warfare destroyer contract, which I think must be about 10 or so years, or is this just one year?

The Hon. M.L.J. HAMILTON-SMITH: The first seven years of the program, is my advice.

Mr MARSHALL: For clarity, for seven years the state government knew about the liability, there was never any reconciliation and after the air warfare destroyer continued it was paid for a seven-year period. Is there a further payroll tax liability owing for the remainder of the project and, if so, is that budgeted and what is the amount?

The Hon. M.L.J. HAMILTON-SMITH: I am advised that there were some issues with the headcount that affected the payroll tax figure and therefore it was unable to be precisely determined, and I am also advised that that is the maximum extent of any liability we may have: $1.9 million.

The CHAIR: There being no further time—

Mr MARSHALL: Sorry—

The CHAIR: There is no further time. We are out of time.

Mr MARSHALL: I am happy to step into Veterans Affairs' time because I think this is quite critical. What was the basis of the original contract agreement? Was it for a state-based payroll tax remission for the entire project or for seven years of that project? Who was responsible for calculating this? Was it Treasury? Was it the ASC? Who has made the error which has culminated in a $1.9 million over-budget expenditure into last financial year?

The Hon. M.L.J. HAMILTON-SMITH: I will get Mr Keough to explain it to you so that you can have a break-up.

Mr KEOUGH: It is quite a detailed grant program that was put together to secure the air warfare destroyer program for South Australia. As a part of it, it was effectively a payroll tax relief that was paid retrospectively based on the headcount of ASC. There was a maximum cap that was placed on it, and therefore most of it has already been paid out in the earlier stages of the AWD program. There is a final residual amount, and so we are still working on the numbers from AWD because that program has been re-baselined on a number of occasions.

Mr MARSHALL: But how on earth could you—

The CHAIR: That is the last question and the last answer today. There being no further time for questions, I declare the examination of the proposed payments completed.