Department for Innovation and Skills, $382,416,000

Administered Items for the Department for Innovation and Skills, $13,365,000

Membership:

Hon. J.A.W. Gardner substituted for Mr Cowdrey.

Minister:

Hon. S.E. Close, Deputy Premier, Minister for Industry, Innovation and Science, Minister for Defence and Space Industries and Minister for Climate, Environment and Water.

Departmental Advisers:

Mr A. Reid, Chief Executive, Department for Innovation and Skills.

Ms N. Chandler, Executive Director, Strategy, Policy and People, Department for Innovation and Skills.

Ms P. Chau, Executive Director, Performance and Business Operations, Department for Innovation and Skills.

Mr A. Dunbar, Executive Director, Innovation in Science, Department for Innovation and Skills.

The CHAIR: I declare the proposed payments reopened for examination. I call on the minister to make a statement, if she wishes, and to introduce her advisers, and then I will call on the lead speaker for this session, the member for Morialta, to either make an opening statement or to ask questions as he wishes. The floor is yours, minister, when you are ready.

The Hon. S.E. CLOSE: Hello and welcome. Without giving an introductory speech, I thank all the public servants who have been involved in preparing estimates and for the work that they do all year round. I would like to introduce my advisers. Adam Reid is sitting on my left, the chief executive. On my right, I have Andrew Dunbar, who is Executive Director, Innovation and Science; Nari Chandler, who is Executive Director, Strategy, Policy and Migration; and Phuong Chau, who is Executive Director, Performance and Business Operations, is sitting behind us.

The CHAIR: The member for Morialta.

The Hon. J.A.W. GARDNER: I indicate to the committee that I have to leave at about 3.15 because the government has scheduled one of my other portfolios in the other chamber. Fortunately, the member for Morphett and I share joint portfolio responsibility for this area, so I am hoping we can start with higher education for that reason.

The Hon. S.E. CLOSE: Sure.

The CHAIR: You will be missed.

The Hon. J.A.W. GARDNER: I have no doubt, sir, by the thousands of viewers of the parliamentary stream.

The CHAIR: I was actually just talking about the committee members.

The Hon. J.A.W. GARDNER: I will direct them to move to committee B at that point, except for Dr Patterson, the member for Morphett's father. I refer to Budget Paper 4, Volume 3, page 169. One of the objectives of the program area is obviously to undertake strategic engagement and collaboration with higher education providers. What level of departmental resources are applied towards this objective?

The Hon. S.E. CLOSE: It was very unfortunate, I think, when I came into office to discover that almost no resources were devoted to higher education policy in the state government. We have gone through a process of determining what is required, and as part of the disentangling from education also we have been able to allocate $1 million a year to establish a proper office for higher education policy.

The Hon. J.A.W. GARDNER: How much was that, sorry?

The Hon. S.E. CLOSE: It is $1 million a year to establish a proper area. Having funding is terrific but we also need the people, and we are in the process of gathering those people. If I can foreshadow that with respect to some of the questions the shadow minister might ask it may be that I have to take them on notice because we are yet to determine the precise answers having had very little policy heft to seek advice from, but I will do my best.

The Hon. J.A.W. GARDNER: The minister, I am sure, will understand then my surprise at the same discovery I found when I became Minister for Education that apparently up until 2018 almost no resources were applied across government to the higher education function for which I then had responsibility, and some responsibility was taken by the Department for Education and some FTEs were hired.

I am wondering whether there have been any machinery of government changes that have seen this department given any of those resources that were in the Department for Education—admittedly less than $1 million worth probably? Have any of those resources now transferred to this department, or have they been held close by Education?

The Hon. S.E. CLOSE: The machinery of government arrangements—which are still winding their way through to completion—in this particular matter involve giving funding rather than people, so that is why we are having to establish it.

The Hon. J.A.W. GARDNER: Can I clarify: is that $1 million the minister referred to all coming from the education department to this department, or is some of that new money?

The Hon. S.E. CLOSE: The $1 million is coming from the education department. On top of that is the funding for the university commission, which is the election commitment, so that sits separately and above.

The Hon. J.A.W. GARDNER: To clarify then, the Department for Education is transferring $1 million to this department to establish the office for higher education and the staff who will fill that office are yet to be hired, but from presumably 1 July 2022 that office will be created within your department?

The Hon. S.E. CLOSE: That is it.

The Hon. J.A.W. GARDNER: Will the staff who are currently performing those roles in the education department remain in education?

The Hon. S.E. CLOSE: I assume so, but I do not have line of sight.

The Hon. J.A.W. GARDNER: They can do what they like.

The Hon. S.E. CLOSE: Maybe they all left when you stopped being minister.

The Hon. J.A.W. GARDNER: Are there any other resources that have come into this program area through machinery of government or through agreement with other chief executives—

The Hon. S.E. CLOSE: For higher education, no.

The Hon. J.A.W. GARDNER: Or for the program area under scrutiny more broadly?

The Hon. S.E. CLOSE: We are in the middle of finalising all sorts, but I do not think that is subject to this budget line. It is probably not worth going into the details here.

The Hon. J.A.W. GARDNER: In relation to page 170 and the net cost of providing services, does this include the $1 million that is being transferred from the Department for Education that has just been identified. There is $31,299,000—

The Hon. S.E. CLOSE: No, it does not.

The Hon. J.A.W. GARDNER: So that is yet to be added to the accounting.

The Hon. S.E. CLOSE: I should probably point out also that StudyAdelaide is coming over from the Department for Trade and Investment.

The Hon. J.A.W. GARDNER: StudyAdelaide will become part of this program area as well along with its resources?

The Hon. S.E. CLOSE: That is right.

The Hon. J.A.W. GARDNER: Is it carrying with it any departmental efficiencies?

The Hon. S.E. CLOSE: I do not believe so, but I will correct the record if I am inaccurate about that.

The Hon. J.A.W. GARDNER: The table here shows a relatively significant drop, from $43 million last year to $31 million this year, notwithstanding the $1 million extra that is coming in from Education. There is an explanation underneath that explains $11 million of that drop as a result of a notional allocation of departmental efficiencies.

Can the minister identify the amount assigned to this program as part of those departmental efficiencies for the following three years in the forward estimates? So, if it is $11 million, according to this notional allocation at the bottom of page 170, which presumably is for 2022-23, can you give us the figures for the following years?

The Hon. S.E. CLOSE: We have undertaken a notional allocation for the purpose of these Agency Statements, but the forward estimates are yet to be determined.

The Hon. J.A.W. GARDNER: With regard to the higher education objective, obviously there is $1 million coming into the department from Education to establish this office. Is that $1 million guaranteed to be provided for that purpose, or is any of that subject to be considered as part of fulfilling this departmental efficiency?

The Hon. S.E. CLOSE: Given that it has not yet come over, I guess it is slightly beyond the terms of this budget, but it is my intention to spend that money on higher education.

The Hon. J.A.W. GARDNER: So, in terms of this budget, you can confirm that effectively the higher education objective will not be providing a contribution towards the department's efficiency target?

The Hon. S.E. CLOSE: It is simply too early to determine exactly how we are allocating the efficiency, so I would not want to provide anything as definitive as that, but the intention of having that money is to establish a proper higher education policy unit.

The Hon. J.A.W. GARDNER: As the minister said earlier, there is also an additional $1 million for the coming year to establish the university merger commission. That is on Budget Paper 5, page 90, and the next set of questions will be going towards that one, for those keeping score. Is the plan that the office for higher education policy or any other part of the department resources be used to support that commission?

The Hon. S.E. CLOSE: It is probably a little early for us to be clear about that because we are still, first of all, establishing the higher education policy area and also then determining the precise nature of the commission. The expectation is that the million dollars will be sufficient to run the commission, but we are still setting up both of these entities.

The Hon. J.A.W. GARDNER: Do you expect that the commission will be in place prior to the office for higher education policy or the other way around?

The Hon. S.E. CLOSE: I am hopeful that we will have one or two policy bodies soon and preceding having the commission.

The Hon. J.A.W. GARDNER: In relation to the commission, $1 million is identified for the financial year, including three staff. Is that $1 million included and accounted for in the $31 million on page 170 under the department's program budget, or is that accounted for elsewhere?

The Hon. S.E. CLOSE: It is included. Just to be clear with the three FTE that are there, that is a notional allocation that does not confine us.

The Hon. J.A.W. GARDNER: I understand. Who is going to be doing the work in this commission? Are you expecting that it will be an entirely new group of people advertised for, or are you looking to second public servants?

The Hon. S.E. CLOSE: It is still too early, as we are having preliminary discussions with the interested parties to any reconstruction of the university sector and also trying to stand up a new unit in the department. It is too soon to say how we might staff that, but it will all come out.

The Hon. J.A.W. GARDNER: How will the university merger commissioner be selected? What sort of person are you looking for?

The Hon. S.E. CLOSE: Again, I think it is slightly too early to say anything other than the banalities that we could all agree: someone, or more than one person, who is eminent or a person or persons who are respected by the sector who have an understanding of different structures. We need to do some more work to get into the detail of this and then I think that will help us determine that.

The Hon. J.A.W. GARDNER: Are you looking to undertake an advertisement for the position or seek input from stakeholders? I have some suggestions I am sure the minister would be delighted to hear—

The Hon. S.E. CLOSE: Excellent; I would be delighted, yes.

The Hon. J.A.W. GARDNER: —or are you looking to choose someone and then approach them and go from there?

The Hon. S.E. CLOSE: I think it is unlikely that we would just put an ad in the paper or on Seek, but I am still open to suggestions. People—not your good self yet, but now perhaps—have been suggesting names, but we need the policy effort to exist first so that we can go through this methodically. The current staff in the department have been and are doing their level best to support my thinking in this, but I would rather allow this unit to be established and then prepare for the commission.

The Hon. J.A.W. GARDNER: To be clear, the policy document, which I think was one of Labor's first policy documents, describes an eminent commissioner with experience in higher education and, in the subsequent period, we have not identified any other criteria on top of that. We are waiting for the establishment of the unit.

The Hon. S.E. CLOSE: That is right.

The Hon. J.A.W. GARDNER: What will be the expectations of the commission? The document states:

…required to address and manage the risks inherent in this ambitious project…The Commission will be required to estimate the cost of a merger and how the investment required would be realised…The Commission will map the staffing of universities in order to charge a path of increased employment stability—

and so on. Are there any other pieces of new information the minister can add to clarify what the commission and the commissioner will be expected to do?

The Hon. S.E. CLOSE: No, I think that probably summarises it reasonably well, which is sometimes surprising for a document conceived in opposition. It is difficult to be very prescriptive from opposition, but that does characterise it. We are working currently on our consideration of the terms of reference and the stages of the process, but we are dealing with a number of stakeholders so I would prefer not to go into detail until we are able to be a bit more public with everybody.

The Hon. J.A.W. GARDNER: Maybe the minister can identify which stakeholders she has met with since coming to office in relation to pursuing this commission, given that the stakeholder feedback seems to be so important in forming the detail of what will be delivered in the commission.

The Hon. S.E. CLOSE: To date, I have had discussions with the three universities, including their management leadership, their governance leadership, and also with the NTEU. I have times being set up with the student unions as well.

The Hon. J.A.W. GARDNER: When you say the NTEU, are you talking about the state body or each of the university branches?

The Hon. S.E. CLOSE: The state body.

The Hon. J.A.W. GARDNER: Are you looking at meeting with the student unions separately?

The Hon. S.E. CLOSE: It will be with each of them separately, that is right.

The Hon. J.A.W. GARDNER: Are there any other stakeholders that you are looking to meet with prior to finalising these details?

The Hon. S.E. CLOSE: I think there are many others who have an interest in the university sector, not the least being industry partners that seek to engage in research projects alongside universities. Once we have the policy unit in place, we have an opportunity to speak to all the stakeholders properly and we start to construct the terms of reference for the commission, then we will be more advanced in being able to include a broader scope of stakeholders.

The Hon. J.A.W. GARDNER: The funding is identified as being entirely within the 2022-23 year. The minister has suggested there are not too many more stakeholders she needs to speak to before finalising the details. Are you able to give us a time line for when you expect this commission to be established and when it will report to government and the university councils, as I believe it is supposed to under the document?

The Hon. S.E. CLOSE: I do not have a precise time line yet.

The Hon. J.A.W. GARDNER: Can you commit to that work being completed by 30 June next year when its funding runs out?

The Hon. S.E. CLOSE: I would expect so.

The Hon. J.A.W. GARDNER: Have any of the vice-chancellors or union representatives the minister has met with, or indeed other groups (alumni groups or anyone else) who may have proactively approached the minister with communications of one form or another, expressed any reservations, concerns or opposition to the plan?

The Hon. S.E. CLOSE: I do not want to use this place to convey discussions I have had with stakeholders, particularly as I have named the stakeholders that I have met with to date. However, as a generalisation, it would be reasonable to assume that anyone who has spent any time thinking about this issue appreciates why the question is asked and also can see the challenges inherent in changing the structure of our university sector.

People who understand universities and understand university policy across Australia for some time recognise the challenges that face the universities as they are currently constructed, but we all also know how difficult it is to change and the opportunity costs that occur during change. It would be unsurprising to the shadow minister that all issues have been raised with me but in a respectful and constructive way.

The Hon. J.A.W. GARDNER: Were the meetings that the minister has had in relation to this matter informal meetings, or were they formal meetings with minutes taken?

The Hon. S.E. CLOSE: There have been no minutes taken that I am aware of.

The Hon. J.A.W. GARDNER: That might have saved somebody some time in your department there. In relation to the policy document, it determines five criteria for the commission to consider in making its recommendation. I am not going to go through them. I am sure the minister is more than aware of them.

I note that of those five criteria that will determine whether or not the commission supports a merger and sets out how it might take place, agreement from the relevant university councils is not one of those five. Is the minister able to give a commitment to the universities that if they do not want to take part in a merger the government will not proceed with the legislation over their wishes?

The Hon. S.E. CLOSE: I am reluctant to engage too much in this because these matters are a delicate conversation to be had. The policy is clear that the question needs to be asked. In fact, it has been asked for as long as I have been conscious of the existence of universities. We came close some time ago. Under the previous government, indeed, there was an announcement that two of the universities were interested in merging, and it looked like it was all happening and then suddenly it was not.

There is a legitimate question to be asked about it, and there are legitimate policy imperatives that suggest that the current structure of the universities may not be sustainable in the medium to long term. How those discussions then unfold is a matter of the fine management through the commission and by the government and probably not best managed through an estimates hearing.

The Hon. J.A.W. GARDNER: I thank the minister for the answer. I move to Budget Paper 4, Volume 3, page 169, and it is the original reference that I was talking to and not looking at numbers on the page. There were some other commitments that I understand from estimates yesterday are within the purview of this minister to seek the delivery of in relation to universities and teaching degrees. Has the minister spoken to the South Australian universities about Labor's commitment to require teaching students to have a minimum ATAR of 70, and have they agreed to it?

The Hon. S.E. CLOSE: I have not commenced those discussions yet. I will after 1 July. I do not anticipate that being a difficult conversation to have, although the application at their end may be challenging in some places. I have been really keen to get a policy unit established so that we can do this professionally and not just out of a minister's office.

The Hon. J.A.W. GARDNER: Is the expectation then that that policy would apply for teaching students who are seeking to start their studies at university next year, or are you looking to have it in place for 2024?

The Hon. S.E. CLOSE: I will know more after I have those discussions.

The Hon. J.A.W. GARDNER: Are those discussions set to be with the vice-chancellors or the executive groups you spoke to in relation to the university commission already, or are you looking specifically at deans of education?

The Hon. S.E. CLOSE: That will be up to the universities at the level at which they wish to have this conversation. And it is a discussion; it is not something that can be easily imposed.

The Hon. J.A.W. GARDNER: Has the minister or her office approached the universities yet in order to set up those meetings, or is that something that the minister is waiting for the establishment of the unit within her department?

The Hon. S.E. CLOSE: For those specific meetings? I meet with universities frequently in a variety of forums and for a variety of reasons. Those specific ones are yet to be set up.

The Hon. J.A.W. GARDNER: Is the minister expecting that there will be exemptions to the ATAR floor of 70?

The Hon. S.E. CLOSE: I need to have the discussions before I can answer at that level of detail.

The Hon. J.A.W. GARDNER: Should the universities not be interested in pursuing the policies, is the government willing to legislate, introduce legislation to require them to do so?

The Hon. S.E. CLOSE: I do not want to signal what path we might take before I have even had the beginnings of the discussion with the universities.

The Hon. J.A.W. GARDNER: But you are not ruling it out?

The Hon. S.E. CLOSE: Those kinds of questions always sound like a trick question. I am simply saying I am not going to countenance options until I have at least had those discussions.

The Hon. J.A.W. GARDNER: Does the minister have a view on the fact that many students who study teaching degrees and other degrees are entering university without using an ATAR at this point in time? Is there an expectation that teaching degrees are required to have entrance to university through an ATAR?

The Hon. S.E. CLOSE: That is all part of the discussion. It is interesting, of course, as you would know very well having been the education minister, most people do not understand how many people go to university without having an ATAR.

The Hon. J.A.W. GARDNER: More than half these days.

The Hon. S.E. CLOSE: Exactly. Half the people who start university in a given year are not coming through 'I've just left school. Here's my ATAR.' I understand that, and the universities will understand that very well. The discussion has always been premised on wanting to make sure not only that people who are likely to be very good teachers study teaching but also that there is a degree of respectability associated with the quality of the course that one is trying to enter. That will be the starting point of the discussions for me.

I have always, when I was previously education minister, been interested in the quality of the graduates—less on who starts a teaching degree and more on how they finish it. I also understand the desire for people to ensure that the people who teach their children are intelligent, educated and competent at literacy and numeracy, so this is part of that. I want to have the discussions with universities before getting into what we do about the ones who come through alternative mechanisms. I am very supportive of alternative mechanisms of going to university of course.

The Hon. J.A.W. GARDNER: I recognise there is an enormous degree of nuance and the minister's answer is wise, but there is not much nuance in the Labor policy document the minister is now seeking to implement. It says that there will be a minimum ATAR for teaching degrees of 70. More than half of the students, we have identified, are not there through their ATAR. Will those who are entering through other ways and do not have an ATAR be dissuaded from entering this course? Indeed, will those who would be eligible under non-ATAR criteria, but who also have the bad luck of having an ATAR, have their ATAR applied, even if they would be otherwise eligible?

The Hon. S.E. CLOSE: This is all the nuance of the actual delivery of the policy. The policy intent is clear. Students who start university not through an ATAR process nonetheless go through a process. They do not simply say, 'When you turn 21, you can show up.' There is a selection process that enables students to choose different courses. That becomes effectively an ATAR equivalent. We will work through that level of detail. I do not anticipate it being a particularly difficult conversation. With the intent that there is an expected standard of teaching quality that comes from the quality of people's capacity to undertake work in going into the course, there will be methods for establishing equivalence.

The Hon. J.A.W. GARDNER: My understanding is that most of the occasions when there have been students with ATARs of less than 70 who have been allowed into teaching degrees in recent years have often had compassionate grounds. They might have been carers through year 12 or suffered some sort of injury or health issue. While the ATAR may not have been there, there have been grounds on which the universities have seen fit to allow them in. Can I just get confirmation from the minister that she thinks that is a reasonable approach?

The Hon. S.E. CLOSE: These are exactly the kinds of conversations I expect to be having with universities. We will work through how that translates in order to fulfil the election commitment to the best of our ability, while nonetheless allowing for an estimated equivalence that is reasonable.

I would note that, looking through last year's intake, nearly all the teaching courses had a minimum ATAR of 70. We are not dealing with a dramatic crisis of very low ATARs going into university. There is a stated ATAR selection of 70 for nearly all of them. In fact, the only one last year that I could find was for special and disability education, which was slightly below.

We will discuss this. The universities are very used to being able to have an equivalent assessment for people without an ATAR, or with an out-of-date ATAR, so that they are still nonetheless getting students in who will be successful at the course they are undertaking. They are past masters at this and I bet will be able to resolve it probably in less time than it takes to have an estimates discussion about it between the two of us.

The Hon. J.A.W. GARDNER: This is one of the key points in 'Labor's seven-point plan for teaching quality', right up there with specialist subjects for specialist teachers.

The CHAIR: Member for Morialta—

The Hon. J.A.W. GARDNER: Sir, I am happy to move on.

The CHAIR: —I have given you quite a bit of latitude. I hope you noticed that.

The Hon. J.A.W. GARDNER: I have one more subset—

The CHAIR: Can we have some questions rather than all the commentary, please.

The Hon. J.A.W. GARDNER: I was wondering if the minister is able to identify, in relation to the scholarships, which were part of the same policy document, how many scholarships in each of the categories are expected to be offered in each of the years?

The Hon. S.E. CLOSE: That ought to be reasonably straightforward for the policy unit, as soon as it is established, to negotiate with universities. I think we will be able to deliver that really quickly, but I do not have here in my briefings what that might look like.

The Hon. J.A.W. GARDNER: The scholarships are identified as 400 scholarships over four years at $5,000 each. Are we able to get a breakdown (I am happy for it to be on notice) of what is the proposed expenditure in each year? Sorry, I think the minister said before there is no breakdown yet between the four categories, so the overall in each of the years.

The Hon. S.E. CLOSE: To the extent we have it as of now, I am happy to supply on notice. Otherwise, if we are still evolving it, which I expect is largely the case, then we either have this discussion again next estimates or I am able to answer it through making this information public at an earlier date.

The Hon. J.A.W. GARDNER: Can the minister identify if she expects all these 400 scholarships to be provided between now and the next election, or will a group of them—is the expectation that they will be provided in 2026 for students entering university in 2027?

The Hon. S.E. CLOSE: We have not yet had the transfer over because it was initially allocated to education, so when we know that we will let you know.

The Hon. J.A.W. GARDNER: Is the expectation that Aboriginal students who are likely to receive this scholarship will also be able to receive the Amy Levi scholarship, worth substantially more, that they are currently receiving as well?

The Hon. S.E. CLOSE: I do not know how we will deal with interactions with other scholarships.

The Hon. J.A.W. GARDNER: Has any thought been applied to considering how men wanting to study primary teaching will be assessed?

The Hon. S.E. CLOSE: Not yet.

The Hon. J.A.W. GARDNER: Is it expected that the scholarship will be a lump sum? Is it going to be $1,250 per year for a four-year degree or some other mechanism?

The Hon. S.E. CLOSE: We will work that through with universities on what they believe is their most appropriate way to do it. The lump sum can be very helpful at the beginning of the course, but of course there is a dropout rate so I will be interested to have those discussions.

Mr PATTERSON: Referring to Budget Paper 5, page 87, just around the department efficiencies, it says that the operating expenses reduce from $20.135 million in 2022-23 to $16.5 million in 2025-26. Is the nominal amount for 2022-23 the $11 million you spoke about previously in the industry, innovation and science program?

The Hon. S.E. CLOSE: Yes, the allocation for the next year is $11 million. Beyond that, we have not yet identified in the subsequent years how we will allocate.

Mr PATTERSON: Just for reference, so in the training and skills program—

The Hon. S.E. CLOSE: Other than for that.

Mr PATTERSON: —are you able to give a breakdown of those following? This one is still to be worked through, but it would be along those lines; if you are losing $4 million from that program, you would expect around a similar quantum in this program?

The Hon. S.E. CLOSE: A similar proportion, but bearing in mind that there are other—Adam has areas reporting to him that report to other ministers in other program lines, such as the creative industries and small business. The notional allocation for the industry element has occurred for this coming financial year, but not yet subsequently from within what SACE are reporting to the chief executive.

Mr PATTERSON: We will circle back to that. Also referring to that same line item, it also has some efficiencies from investing payments starting off in 2022-23 of $1 million, building up in 2025-26 of $5 million. Are any of those investing payments part of the efficiencies in the industry, innovation and science program?

The Hon. S.E. CLOSE: The investing payments really do apply across the whole department. They are not allocated against programs, so it is not possible to say which part of IT—investing in infrastructure, for example—would belong to which program. We have not notionally allocated the division.

Mr PATTERSON: These efficiencies are purely for the Department for Innovation and Skills. StudyAdelaide, you said previously, is coming over into this department. Are there expectations for efficiencies with that transfer?

The CHAIR: The question was previously asked and the minister already answered that question prior.

The Hon. S.E. CLOSE: That is still in play, so I am unable to answer that question.

Mr PATTERSON: In regard to these operational efficiencies, you have slated $11 million. We only have it for this year and potentially for other years. Will staff allocated to the skills delivery and employment aspect of industry, innovation and science be part of these efficiency measures?

The Hon. S.E. CLOSE: The skilled staff?

Mr PATTERSON: Or staff involved in delivery around programs for industry, innovation and science?

The Hon. S.E. CLOSE: I see—will FTEs be used to deliver efficiencies? Is that the nature of the question? Almost certainly there will be some reduction in FTEs associated with that. The nature of those is being determined at present. We are looking for operational efficiencies for not putting pressure on those staff who interact with industry in priority areas but to have greater efficiencies behind the scenes. It will require significant change management work, which the chief executive has commenced already.

Mr PATTERSON: I refer to Budget Paper 4, Volume 3, page 170. In the table under program summary it has the FTEs as of 30 June. It shows that in 2023 it reduces down to 116. Does that include the machinery of government changes going off to the Department for Education, or is that just the efficiencies?

The Hon. S.E. CLOSE: It is so complex because people are coming in and people are going out, but the machinery of government changes related to the skills program going off to the education department are reflected separately in the next program line. I know that you are asking about this program line. That drop in FTEs is the way Treasury has allocated notionally what the savings would look like if taken as FTEs.

The Treasurer, however, has been very clear that he has no requirement for how savings are achieved. Therefore, if there are alternative ways of delivering some or all the savings that are allocated to departments, then there is no requirement to drop FTEs. That is just a way that Treasury prefers to give an estimate of the notional impact.

Mr PATTERSON: I will stay on this line item, or go back to the Budget Measures. In terms of those efficiencies then, we are looking at $11 million. There is quite a substantial drop in the grants and subsidies. Are there any grant programs that are being ceased as part of this? If so, which ones are they?

The Hon. S.E. CLOSE: The only grant program that is being discontinued is the EXCITE intermediaries. Other than that, you are correct: the notional FTE reduction is not all of the way that Treasury have captured the savings. They have also done a notional reduction in grants. That does not reflect any decisions that are yet to have been made internally though. We do not anticipate terminating other grants according to that, but we may well be reducing some in order to reprioritise, bearing in mind the $100 million Economic Recovery Fund that the Treasurer has established.

Determining how much effort that would otherwise have taken place within the industry program is going to be able to be undertaken through that program is a process for us. We will work through the grants programs, but, as I said, apart from the EXCITE intermediaries, which are separately listed as a budget measure saving, we are not anticipating discontinuing grants altogether.

Mr PATTERSON: To confirm, potentially that might mean that, as part of the efficiency, there might be underspending in existing programs to meet those efficiencies.

The Hon. S.E. CLOSE: That is right.

Mr PATTERSON: I refer to Budget Paper 4, Volume 3, page 169, highlights, the Australian Cyber Collaboration Centre. Can the minister advise that you will continue the full funding for the Australian Cyber Collaboration Centre over the term of its existing contract?

The Hon. S.E. CLOSE: There are so many different kinds of entities that we support. The funding for that centre was always time limited. It was established as a not-for-profit, intended to be able to find sustainment funding in the future. The agreement runs until the end of 2022-23, which it always was going to, and we will not be pulling back on our commitment. The commitment remains until the end of that time-limited agreement.

Mr PATTERSON: Can the minister advise if there will be an evaluation of the Australian Cyber Collaboration Centre's contract at the end of this contract period?

The Hon. S.E. CLOSE: Yes, indeed, there will be an evaluation towards the end, but the chief executive has just advised me that in fact there is ongoing evaluation of performance. The one towards the end will be retrospective—how did this project work and so on—but there is constant evaluation in order to make sure that things are going as well as they possibly can.

Mr PATTERSON: Who is doing the ongoing evaluation?

The Hon. S.E. CLOSE: It is being undertaken by David Goodman, who is the former Chief Information Security Officer under the previous government and is now working with this department.

Mr PATTERSON: Will Mr Goodman also be doing the final assessment of the contract?

The Hon. S.E. CLOSE: It is highly likely. It seems like it has not been determined for certain, but it seems sensible.

Mr PATTERSON: As a confirmation of your answer, does that mean that once the contract finishes there is no funding allocated, so in terms of these budget papers and forward estimates there is no money at the moment in the budget papers post—

The Hon. S.E. CLOSE: It is a time-limited project, that is right, so it exists in the budget up until 2022-23, and then there is not anything on that line, but other things come on. Some projects are intended to be ongoing and some are time limited and cease, which makes budgets look bumpier than they might otherwise be.

Mr PATTERSON: Can the minister advise what the government is doing to maximise the opportunities for South Australia resulting from the $9.9 billion cybersecurity funding announcement made in the March federal budget, which was intended to double the Australian Signals Directorate workforce and, importantly, have 40 per cent of the Australian Signals Directorate's expanded workforce located outside Canberra?

The Hon. S.E. CLOSE: I am going to invite the chief executive to respond directly to that so that I do not lose anything in the translation.

Mr REID: We have as a department responsibility for the Hi-Tech Sector strategy, which includes cybersecurity development. One of the key initiatives was the establishment of the Australian Cyber Collaboration Centre. We are working through the Australian Cyber Collaboration Centre, who are actively engaged with ASD at the moment, on that funding and opportunities for South Australia. It is being led by the chair and the acting chief executive of the Australian Cyber Collaboration Centre right now; in fact, I think there were meetings last week with the Cyber Collaboration Centre on funding initiatives.

Mr PATTERSON: I refer to the same budget line. Has the minister invited the new federal Minister for Cyber Security, the Hon. Clare O'Neil, to visit Lot Fourteen and the Australian Cyber Collaboration Centre?

The Hon. S.E. CLOSE: We are yet to issue invitations, but we will invite not only Clare O'Neil but also Minister Ed Husic, the industry minister, who I have had quite a bit of engagement with before and after our elections. I think he is very enthusiastic about the work that is happening here. I just note that the Premier and I have both been to the centre on Lot Fourteen and we very much enjoyed our tour and education of what is happening there. It is really tremendous, very impressive.

Mr PATTERSON: Going back to an earlier answer from Mr Reid about the role of chief executives, I take the fact that there is an acting one. Can the minister advise whether the role of the Chief Executive of the Australian Cyber Collaboration Centre is still vacant?

The Hon. S.E. CLOSE: I understand that they are actively recruiting at present. While the chief executive has signed off on an extension for the acting chief executive, we expect an appointment to be made reasonably soon.

Mr PATTERSON: Is the department assisting in sourcing the chief executive to fill that role?

The Hon. S.E. CLOSE: The assistance being provided by the department is that the acting chief executive is a member of the departmental staff who has been seconded over there in order to keep things going. I think the recruitment process is occurring separately and seems to be being managed well, so we are hopeful there will be someone appointed soon.

Mr PATTERSON: Has the minister been advised of any cyber breaches or potential risks of cyber breaches?

The Hon. S.E. CLOSE: I have not been briefed about any specific cyber breaches for industry in the time I have been minister, that is, to the best of my knowledge and my adviser’s knowledge.

Mr PATTERSON: Can the minister advise of any other programs outside the Australian Cyber Collaboration Centre (A3C) that the department is providing to assist industry with their cybersecurity requirements?

The Hon. S.E. CLOSE: There is also AustCyber, which plays a crucial role in building a globally competitive Australian cybersecurity sector, enhancing Australia's future economic growth in the digitally enabled global economy and improving Australia's sovereign cyber capabilities.

It was established in 2017 as one of six commonwealth industry growth centres and in 2019 established a national network of innovation nodes to accelerate and expand the growth of the cyber industry across the nation. The South Australian node is housed within the department, and since established has delivered and supported 98 industry events for the cyber industry in South Australia. In February 2021, AustCyber became a wholly owned subsidiary of Stone & Chalk.

I note that if you combine the efforts of A3C and AustCyber during 2021-22, including training and resources, their activities have helped increase the awareness of and resilience to cyber threats in South Australia and will continue in the coming year.

Mr PATTERSON: Given the enormous opportunity in cyber and also the massive risks involved to government industry, will the minister rule out any of the efficiency cuts being applied to these cyber programs?

The Hon. S.E. CLOSE: I agree with you about its importance, but I am not going to prejudge and constrain the decisions that will be made by the chief executive. He will make them sensibly and appropriately.

Mr PATTERSON: Going back to the efficiencies in Budget Paper 5, page 87, can the minister advise whether the Research Innovation Fund will continue?

The Hon. S.E. CLOSE: It will continue.

Mr PATTERSON: Will there be any changes to the criteria proposed for the Research Innovation Fund?

The Hon. S.E. CLOSE: There may well be, but that is still being contemplated.

Mr PATTERSON: Would the Research Innovation Fund be part of potential efficiency savings?

The Hon. S.E. CLOSE: It may well be, but it will not be discontinued. It is about making sure that we are reprioritising to fit the new government's agenda, as well as being able to deliver efficiencies in order to fund the legitimate expectations of the South Australian community as a result of the election. We also need to make sure that we are focusing on the direction that is appropriate for the times and for the new government. As I say, with a $100 million economic recovery fund in play, we need to make sure that we are not doubling up and being inefficient or wasteful.

Mr PATTERSON: Can the minister advise whether the South Australian Venture Capital Fund will continue?

The Hon. S.E. CLOSE: That fund is held in Treasury, so that will be a decision for the Treasurer.

Mr PATTERSON: Are there any other grant programs that will be put in place to support entrepreneurship and research?

The Hon. S.E. CLOSE: Probably the most substantial one that I am pretty excited about is the $4 million work with Tonsley to work with Factory of the Future to facilitate smaller companies being able to research and trial new approaches and new technologies to be able to participate more in the defence sector.

We know that the ideal path for investment in defence's industrial program is that much of the big work is captured, such as building a submarine, just as an example, on site in South Australia and, importantly, that the work cascades through a supply chain where the components and the services are able to be supplied by South Australian companies.

Having a predominance of small businesses in South Australia (something like 98 per cent of the businesses in South Australia are classified as small), we need to ensure that we are offering the kind of support that lifts their capability to even be able to bid into being part of the supply chain and then to be successful in winning. That funding is targeted specifically at assisting those companies to be ready, particularly in the manufacturing supply chain.

Mr PATTERSON: I refer you to Budget Paper 4, Volume 3, page 169, objectives. Can the minister advise if you intend retaining the role of the South Australian Chief Scientist?

The Hon. S.E. CLOSE: Yes, I do.

Mr PATTERSON: Can the minister advise if there will be any changes to the role of the Chief Scientist?

The Hon. S.E. CLOSE: It is always possible; particularly in an area like industry, innovation and science you would expect innovation and change to occur. I would never rule out any changes in the future. It is an honour to work with Professor McMillen, and to have a portfolio that includes the Chief Scientist is slightly overawing for someone who has a Bachelor of Arts and so on. It is extremely important to me that we show a huge amount of respect to the role that she plays and that any changes be done in a manner that may indeed be suggested by her as much by anybody else.

Mr PATTERSON: On the same budget line, can the minister advise if there have been any changes to the funding of the Office of the Chief Scientist?

The Hon. S.E. CLOSE: There are no changes at this point.

Mr PATTERSON: Going back to Budget Paper 5, budget initiatives, page 88, the EXCITE program, it says that the program will be cut. Originally, there was a BioMed City intermediary. Can the minister advise if the BioMed City intermediary will be continuing?

The Hon. S.E. CLOSE: Yes, indeed it does continue. The change is to not create any additional.

Mr PATTERSON: Can the minister advise what the basis was for stopping this program?

The Hon. S.E. CLOSE: It is the basis of stopping any program. It is always difficult. I am sure the member knows, having been a minister himself, that reprioritisation has to occur. Our sense was that, with generating sufficient funds to do the government's priorities, including the Economic Recovery Fund amongst other priorities, that was one that we were able to enjoy the fruits of the work that had occurred but not need to establish any more.

The project I described earlier at Tonsley I think is a really suitable successor of being an intermediary, in the sense of being able to bring together businesses with university and with big primes in defence and being able to lift capability, so it seemed it was an appropriate one. As I say, no minister ever wants to cut anything, right, but we live in the real world.

Mr PATTERSON: Relating to that same budget line, can the minister advise what provisions will be put in place to ensure that patents developed in South Australia do not go offshore and that product development is patented and developed here in South Australia so that South Australian investors are able to invest in them?

The Hon. S.E. CLOSE: That is not a role that government sees itself taking, protecting the intellectual property of a company, which is properly the responsibility of the company or the research institution. We are of course responsible for protecting our own IP. However, it is a legitimate area for discussion because it can cause an interruption in the commercialisation of research should that research escape and not be sufficiently protected.

It is a legitimate question to ask, but not one that has a focus of attention from the state government at this stage. I am not sure if it occurs in any other state but, having had it raised, it is probably something I will take a little bit of interest in to see whether there are ways that that can occur interstate, just out of interest.

Mr PATTERSON: Knowing that is the intent of the question, can the minister advise if the government has any targets for research and investment?

The Hon. S.E. CLOSE: I am being advised that under the previous Labor government we did have targets for research and development. As I understand it, that did not exist for the last few years, so we do not have any targets that we have established since March. However, I am aware that, although South Australia has higher than average research and development as a whole, it has lower than average investment for Australia's research and development by private business. Therefore, perhaps establishing a target, if it is accompanied by effort and an attempt to lift capability, might be worthwhile, but it is not something I have yet turned my mind to.

The CHAIR: The allotted time having expired, I declare the examination of the proposed payments for the Department for Innovation and Skills and Administered Items for the Department for Innovation and Skills complete, and I refer the proposed payments to committee B for further examination.

Sitting suspended from 15:46 to 16:00.