Department for Industry, Innovation and Science, $61,613,000

Administered Items for the Department for Industry, Innovation and Science, $14,842,000

Membership:

Hon. J.A.W. Gardner substituted for Hon. D.J. Speirs.

Mr Patterson substituted for Mr Batty.

Minister:

Hon. S.E. Close, Deputy Premier, Minister for Industry, Innovation and Science, Minister for Climate, Environment and Water, Minister for Workforce and Population Strategy.

Departmental Advisers:

Mr A. Reid, Chief Executive, Department for Industry, Innovation and Science.

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

Mr C. Markwick, Executive Director, Industry and Workforce Capability, Department for Industry, Innovation and Science.

Ms D. Tembak, Executive Director, Portfolio Delivery, Department for Industry, Innovation and Science.

Ms K. Hunt, Director, Higher and International Education, Department for Industry, Innovation and Science.

Mr M. Smith, Director, Finance and Investment Services, Department for Industry, Innovation and Science.

Mr S. Fisher, Acting Director, Strategic Policy and Migration, Department for Industry, Innovation and Science.

The CHAIR: I open the portfolio of the Department for Industry, Innovation and Science, and Higher Education. Minister, when you are ready, can you make an opening statement and/or introduce your new advisers. Then I will call on the lead spokesperson for the opposition, who is the member for Morialta, to either make an opening remark or go straight to questions.

The Hon. S.E. CLOSE: Thank you, Chair. I think this is the fourth one today. I thank both sides of the committee for their patience as we go through this. I also thank all the people working in the Department for Industry, Innovation and Science for the work that they do for South Australia.

I will introduce my colleagues here: Adam Reid is the Chief Executive of DIIS, and next to him is Callan Markwick, the Executive Director of Industry and Workforce Capability. Next to me is Andrew Dunbar, the Executive Director of Innovation and Science. We have four advisers behind us: Stuart Fisher, the Acting Director of Strategic Policy and Migration; Diana Tembak, the Executive Director of Portfolio Delivery; Karen Hunt, the Director of Higher and International Education; and Martin Smith, the Director of Finance and Investment Services. We will swap around as may be useful for the committee.

The Hon. J.A.W. GARDNER: I will start with higher education. There are references on pages 156 and 157 in the outputs and objectives relating to higher education functions. I think the minister said that there is an adviser here with that particularly in mind. Can the Deputy Premier provide an update on the specific budget and FTE count for the higher education functions within her department?

The Hon. S.E. CLOSE: Four positions.

The Hon. J.A.W. GARDNER: And the budget going forward?

The Hon. S.E. CLOSE: When you say 'the budget', do you mean still for the FTE count or the amount of money that is being spent?

The Hon. J.A.W. GARDNER: The amount of money that I assumed is for those four FTEs.

The Hon. S.E. CLOSE: They will be steady, that is right. The 2024-25 budget for the higher and international education program is $16.468 million. The reason it is significantly higher than the previous year's budget is that for three years we hold the $10 million grants for each of three years to go to the new university for marketing for international students. Last year's was $6.794 million.

The Hon. J.A.W. GARDNER: Can I just confirm: $6.7 million once you have taken out the $10 million that is going to be given to the new university for its international student attraction post. That $6 million strikes me as rather high for four FTEs. What are the other outcomes or outputs from that funding?

The Hon. S.E. CLOSE: In addition to paying for the staff we have $500,000 in 2023-24, dropping to $250,000 for the following two years for the multicultural tertiary courses, which is an election commitment. We have the additional funding for three years of $2 million each year—for 2023-24 through to the end of 2025-26—to supplement what StudyAdelaide is able to spend for attracting international students. StudyAdelaide itself has $2.5 million for each year, ongoing. There are also the scholarships for the teaching profession, which again was an election commitment, and some money for what was the university merger commission that has turned into the support for the independent expert adviser.

The Hon. J.A.W. GARDNER: That was going to be my next question. Do I understand correctly that the $1 million or $2 million funding that was for the university commission has been retained, but for this new purpose? Is that correct, and is it retained in its entirety?

The Hon. S.E. CLOSE: I do not think it has been retained in its entirety. I think what we did was return to the central budget the original election commitment when matters proceeded faster than anticipated and then have been given an allocation to pay for the independent expert. Can you tell it is now my fourth in a row? I am starting to slow down.

The Hon. J.A.W. GARDNER: I understand. It is my first so I am just getting warmed up.

The Hon. S.E. CLOSE: Great.

The Hon. J.A.W. GARDNER: Can you identify the quantum of funds and the period of time that has been allocated for that expert adviser?

The Hon. S.E. CLOSE: We have structured this as a base contract for 12 months, with an option to extend for a further six months, and we have the funding for that, which for the total contract term of 18 months would be $576,000.

The Hon. J.A.W. GARDNER: Again, particularly in relation to the objective listed on page 157, which is:

developing and implementing policies and programs and undertaking strategic engagement with education providers to build a progressive higher and international education sector.

Does the Deputy Premier have a role under that objective in working with universities for the three-year-old preschool new degree, which is a three-year degree for zero to five as opposed to the standard four-year degree for zero to eight? It has been announced by other ministers, I appreciate, but given this objective and the minister's role in working with universities, has she had any involvement with that role?

The Hon. S.E. CLOSE: I have not had any operational connection to it. Obviously that was one of the recommendations that came from the royal commission into having three-year-old preschool and has been agreed by cabinet, so my involvement is there, evidently. I am not sure the universities need me to be involved in their structuring of that option, but always happy to have a conversation with them.

The Hon. J.A.W. GARDNER: Is the minister aware of whether any of the three South Australian major universities that include teaching degrees are pursuing the zero to five degree?

The Hon. S.E. CLOSE: The department has been working on the workforce strategy for three-year-old preschool with the Department for Education, but is yet to engage with universities about their offerings.

The Hon. J.A.W. GARDNER: Has the minister received advice from the universities more broadly about teaching degrees and numbers of applications/enrolments in those teaching degrees, the standard ones they have?

The Hon. S.E. CLOSE: We are aware that the universities are generally under cap across their capacity to enrol, which is troubling but unsurprising when there is very low unemployment—people are working. There are also challenges of course with cost of living and contemplation of taking on debt. However, we are yet to engage fully with universities on how they are going to attract enough teaching students to fulfil the aspirations of the teaching workforce required across our ambitious policies for education.

We have had the specific focus of the scholarships that were offered as part of the election commitments, and understand they have been taken up and been very popular. What we want to do in a period of time—maybe a couple of years—is to see how that is translated into numbers in those particular areas that we are interested in, recognising that that was about the diversity of the teaching workforce, as opposed to simply the sheer number, which is now becoming more of a pressing workforce question.

The Hon. J.A.W. GARDNER: I have a couple more questions on this specific budget line, but I do have some questions on scholarships as well, which I am sure you will appreciate the opportunity to talk more about. When it comes to the three-year zero to five degree, last year we talked about the government's commitment to having a minimum ATAR score apply to teachers. I am wondering whether the government's election commitment to minimum ATAR scores applies to the three-year zero to five degree as well. Will that be something you are seeking from the universities?

The Hon. S.E. CLOSE: That was a view about the quality of teaching at the input stage. It is an election policy, it is a policy of the government and therefore I would expect it to be maintained for the three years as well. I personally think that the ATAR score is but one indicator of how well someone is going to do, but I recognise that people need to have confidence in the teaching profession, and that is why there have often been discussions about the minimum ATAR. The three universities have indicated that they have not had challenges with the minimum ATAR for the rest of their teaching, last time I had a conversation, which would have been a year ago. No-one has presented to us a challenge with that for a shorter degree should the universities decide to engage in that.

The Hon. J.A.W. GARDNER: I do not disagree with anything you said, but it was the government's election commitment.

The Hon. S.E. CLOSE: And I do not resile in any way from that being a government policy; I am just trying to give it a wider context.

The Hon. J.A.W. GARDNER: The last question on this line is: does the government anticipate that LANTITE requirements—literacy and numeracy testing for initial teacher education requirements—will be applied to allow for graduates of the zero to five degree as it is for the zero to eight degree?

The Hon. S.E. CLOSE: That test is a federal test that was applied. I think it is an open question whether it would be applied. It is also an open question how useful it is.

The Hon. J.A.W. GARDNER: Can I move to page 157; the highlights include 'support the passage of legislation to create the new Adelaide University.' Can the minister provide an update on how that merger process is going? Feel free to list highlights but also any concerns that have been raised.

The Hon. S.E. CLOSE: In the broad it is proceeding well. It is hitting the marks that were expected, getting the TEQSA, and then the CRICOS registration was a very significant milestone. It sounds like a simple matter when you are outside it, but I am assured that it was a complex matter. These institutions have not been used to certifying a brand-new university being created from two others and so they had to go through the process not only of what the institution would look like but also the transitional provisions in its creation, the transitional council and so on.

TEQSA needed to assure itself that this was a soundly governed institution and they have received, without qualification, seven years, and that is absolutely crucial. They are now, of course, working through all the detail of what it means to have a single institution at the stage of what kind of computer systems can be integrated simply and which will take longer to integrate, the revision of the curriculum, the proposition that there will be a trimester approach rather than a semester approach. Those changes are within the three institutions, if you like, but the two existing universities are progressing.

There is a site on North Terrace where all the change people are housed so that they are working together.

The Hon. J.A.W. GARDNER: That is a technical term.

The Hon. S.E. CLOSE: I recently went on a tour of it, meeting with the transition council to hear how they believe things are progressing. So there are a number of signs of movement proceeding. That should not indicate in any way that this is a simple matter and nor that it is almost done. There is a great deal of complexity involved in bringing two significant and quite different, in many ways, institutions together. The organisation of that new university and the cultural fit are two elements that are being worked on that I think will probably be the most complex.

People have seen that the university went out with questions about 'Where do you think these different elements of the university ought to fit? How do we group them up?' They have now, I think, received all that feedback. There was what I think was an alarmist reaction that possibly the Elder Conservatorium would not be in the new institution. I am assured that that is far from being the case, that, of course, the Elder Conservatorium is essential to the future of South Australia and would not be abandoned. It is merely a question of what is the construction around that and all the other elements of the university. And people will have strong views.

There will also be a process before too long of identifying who will be the leaders underneath the vice-chancellors, then to be a vice-chancellor, but the next layer will be a process of selecting those people for the new institution. So both universities are dealing with their own institutions functioning and also with the creation of the new institution. It is stretching them. They have resourced themselves to do that, but in no way do I want to be complacent or to minimise the very significant work that needs to be undertaken.

Doubtless, there will at times be things that do not go as well as leadership would like them to; that has not occurred yet, but doubtless that is going to be a feature, because humans are fallible. However, every effort has been made by the transition council and by the leaders, the two vice-chancellors, who worked to create the new university, to plan this out and resource it appropriately. Thus far, I think it has gone as well as one could have expected.

The Hon. J.A.W. GARDNER: I think it was in the MOAA or MOU between the government and the universities that there was a clause that provided for a loan facility from the government to the universities if further funding was potentially and unexpectedly required. In the minister's discussions with them, and the tour that she recently had, has there been any suggestion that that is likely to be called upon?

The Hon. S.E. CLOSE: No; that has not been raised at all with me—and nor with my chief adviser here, I have just confirmed.

The Hon. J.A.W. GARDNER: Good news. Has the methodology for providing Flinders University with funds for its new equity fund been resolved? If so, can you tell us how that is going to work?

The Hon. S.E. CLOSE: I am certainly not one for, 'I'm not talking about it because it's not my budget line,' but it does actually sit with Treasury and the Treasurer. I do not have an immediate update for you. As I understand it, they are working on the guidelines right now.

The Hon. J.A.W. GARDNER: From a policy point of view, then, within the objective on page 158, does the government remain resolved not to provide an equivalent research fund for Flinders University as Adelaide is being provided?

The Hon. S.E. CLOSE: That is the current position, that is right. Flinders, as a good organisation that advocates for itself, will no doubt come back to future budgets with propositions, but that is not something that is being contemplated. What is important in ensuring fairness to the remaining institution, Flinders University—as they like to say, soon to be the oldest university in South Australia—is that they are not going through the expense and complexity of a merger process.

While we need to ensure that their students are not disadvantaged—and I think that Colin Stirling made a very powerful case at the committee that the member participated in—in considering what it means to have a merged institution between two of the universities, he made a very powerful case that if you are going to have a way of supporting disadvantaged students in courses they have chosen to do with the new university, then what if those same disadvantaged students were to actually want to go to Flinders University and do their courses? That was responded to by the government. We have recognised that that would have been unfair.

The research funding is a different proposition, because Adelaide University is going through the immense expense associated with creating this new institution, and we have wanted to recognise and support that in order to help it be successful. None of what I have said, though, precludes Flinders continuing to make advocacy for various options. For example, they were the university that had the election commitment from us coming into government this time to support Line Zero at Tonsley. There was no equivalent allocation made to either of the other two universities.

We have never, in the time I have been involved, seen that what we do for one university we must do for the others automatically. It has always been on a case-by-case basis of what is merited and what proposition is before us. We will continue to operate in that way and Flinders, being a very strong institution and growing stronger, I am sure will make good cases in the future.

The Hon. J.A.W. GARDNER: In relation to the minister's discussions with the leadership of the University of South Australia and the new university, does she have any update on the potential timeline for the closure of the Magill campus?

The Hon. S.E. CLOSE: The member will recall that there was a 10-year lease provided to the University of South Australia to stay there, and my understanding is that they have given no indication that they want to exit early, although it is their right to. In fact, I believe there was a statement made last week that indicated they had no plans at this stage to change what is being offered in the near future. I have not seen that statement myself, so I do not want to mislead accidentally through paraphrasing what I have been told. I missed that statement last week. You may have seen it. The 10-year lease is the legal instrument we have.

The Hon. J.A.W. GARDNER: I think the car parking is based on the other side of the road where there is a three-year lease, but I appreciate the minister is—

The Hon. S.E. CLOSE: I will just quote properly, as reported to InDaily, which states:

A spokesperson said in a statement: 'UniSA has not changed its current plans to maintain its teaching and research presence at the Magill campus, as previously indicated.

We have not commenced any planning in regard to relocating Magill programs, nor is this scheduled to commence in the short term.'

The Hon. J.A.W. GARDNER: I have some questions on the same objective that I quoted before on page 157 but on a slightly different line, particularly to do with international students. There are two sets of questions, firstly, in relation to the federal government's budget announcement and, separately but related, in relation to the operation of the Department of Home Affairs on not providing visas. Feel free to be expansive in your answer if you want to cover off on both issues, but let's start with a straightforward question. Has the minister secured any assurances yet from the commonwealth that they will provide exemptions for our South Australian universities when it comes to the new caps on international student numbers?

The Hon. S.E. CLOSE: I appreciate the line of questioning here because this is a matter that I have taken very seriously. I do not think that the right test is exemption. Generally, when one has a piece of legislation governing a sector, one does not just provide a blanket exemption for one state in law, particularly not when the proposition, if it is to be based on the merger, would presumably then be based temporarily while it goes through that process, so I do not think that is the right test.

What we need to assure ourselves of is that the way in which the law is constructed and then the policy is operated underneath the law is one that our universities are not disadvantaged by. From the beginning there has been the right language from the federal government that the conditions that exist in South Australia would not disadvantage South Australia with this law that has been tabled in federal parliament. However, because this is so important to our economy, I have not just said, 'Oh, well, that is fine then. Thank you for the reassurance.'

My view is that I need to advocate by every means before me to ensure they understand what it is that is special and, not entirely unique about South Australia but certainly different to the experience on the eastern seaboard and Sydney and Melbourne specifically, that they understand why it is that we want to be assured that this will not negatively affect us.

The fact of the debate does potentially affect the international student market for all of Australia and the commonwealth are aware of that. They know that people overseas are reading and wondering what the role of international students is in the future. That would be more worrying if it were not the same sort of debate occurring in other English-speaking nations, such as Canada, so we are not competitively disadvantaged in that sense. But the reason I raise it is that a fairly hasty conclusion to this period of 'what is it they are doing' would be very useful because I think the greatest risk to South Australia is not that the legislation will hurt us in itself but that a sense of uncertainty might.

For example, if what the commonwealth is particularly concerned about, and of course is on our minds too, is that there is sufficient housing for international students so they are not competing for domestic housing needs, conversations with developers about student housing are much easier if there is certainty that international students are coming. The uncertainty is what in itself can cause a challenge for us and that is why it is important in my view that the resolution is reached fairly quickly about what this mechanism will look like.

Of course, there is a mechanism in federal parliament right now, but it is the top-level capacity, the power to set a cap for an individual institution. What we need to be reassured of is that the way in which that mechanism would be used would not be to our disadvantage.

Some illustrations of why we do not believe it should are that, at the moment, we have about a 10 per cent vacancy rate in student accommodation, so we are not busting at the seams; however, we would like to build more in concert with developers because, of course, we would like to have more international students come over time. We want that housing, by the way, to be able to accommodate different kinds of international students. Postgraduates will tend to come with families and are not going to want to be in one room with one bed but actually in some family accommodation, so we need to make sure that we can have those conversations.

The percentage of international students at our institutions is significantly lower than you see in some of the Group of Eight in Sydney and Melbourne. One of these Sydney institutions I think is breaching 50 per cent of their total student body with international students. The university here that has the highest proportion is the University of Adelaide, being a Group of Eight institution, and therefore more attractive to international students, and is hovering around 30 per cent. The other two are much lower than that. Therefore, we are not in danger of losing what the federal government might characterise as social licence to have significant numbers of international students.

The sooner that we are able to clearly articulate, when they are talking about high proportions of international students, that they do not mean South Australia would be good. In one of the many conversations I have had face to face with federal ministers recently, I spoke to Minister Clare O'Neil and gave a presentation about what we see to be our workforce challenges, including where international students fit into that. She indicated that her view was that South Australia would be the beneficiary of tightening up what occurs in Sydney and Melbourne because students who wish to study in South Australia regardless are likely to be attracted to a larger Group of Eight in Adelaide University when it is created. That is possible. Any uncertainty, of course, makes people worry, but it is possible that we will be the net beneficiaries.

What we need in order to make that be true is sufficient accommodation and also a capacity to market this new university as a Group of Eight university with greater capacity before it breaches the 30 per cent-ish line. That is helped by the additional funds we have provided to StudyAdelaide and the additional funds directly to the new university.

They will be put to good use and, in many ways, if you were of an optimistic cast of mind, you would say this is the perfect time because there will be the squeeze, potentially, on those universities interstate. We have set aside some additional money for marketing. We will have this larger Group of Eight with the lower proportion that sits in the University of South Australia, the combined new uni will have a lower proportion, and we should be able to see advantage here. So this is not all bad news for the institutions, but it is something that is of sufficient importance to South Australia—it was, after all, in 2023 our biggest single export sector—that I pay very careful attention to what is occurring.

The Hon. J.A.W. GARDNER: I thank the minister for the answer. Given, as we discussed before, the expectation for the new Adelaide University to fulfil its opportunities, it requires an extra 5,000 to 7,000 international students and also, given Flinders has invested substantial funds in its new campus in the city, which has a particular target for international students, the demand for South Australian universities to fulfil their potential requires, one imagines, approximately an extra 10,000 international students coming here.

So when the minister says that there is a 10 per cent vacancy rate at the moment, how close is that to being sufficient to meet our needs here and how much more accommodation do we need to build for international students specifically to keep us in the safe zone from being capped by the federal government?

The Hon. S.E. CLOSE: I will not do the maths here on what that per cent vacancy rate translates into, but I will return to the point I made earlier that we do want more accommodation to be built under the aegis of the universities, which they do with relationships with developers who will invest if they are certain there will be a market.

So this period of uncertainty is not helpful for that, but I fully expect it to come to an end before too long because the federal government is acutely aware of not doing harm to the sincere endeavours in South Australia but also elsewhere. While universities in Sydney may be full and straining with having sufficient accommodation, some of their regional centres they are keen to be able to continue to grow. It is not just that South Australia is special, although as the South Australian minister—

The Hon. J.A.W. GARDNER: But we are.

The Hon. S.E. CLOSE: We are, of course, and far be it for me to say that we are not, but we are not unique, so the case is made stronger by the fact that we are not operating alone. As soon as the federal government is able to give a bit more of that clarity and certainty, which I fully expect to occur before too long, then that aids the universities in their conversations with developers. What the legislation will do is focus all universities' minds on ensuring that they are getting that pipeline of accommodation in order to avoid that trigger. That is, in fact, a useful element of this legislation.

The Hon. J.A.W. GARDNER: I referred earlier in this line of questioning to issues of visas not being granted in a timely fashion or, indeed, in some areas, at all, by the federal government for higher education providers. I have heard from at least one university that has this as an elevated issue at the moment—I suspect it is two of them—and also quite a lot from RTOs, particularly those specialising in bringing in students who are not from mainland China. Has the minister had similar feedback and, if so, has she had a chance to talk to her federal counterparts about this issue?

The Hon. S.E. CLOSE: Briefly, yes and yes. I have had feedback, of course, not only from the two universities but also from RTOs. I recently attended a round table hosted by StudyAdelaide where we were able to talk with some of the other providers, as well as the universities, about the experience of visa approvals.

There is a meeting of the migration ministers on Friday that I will be attending, where I will again raise this with the ministers. It was a significant part of the discussion I had both with Andrew Giles and Clare O'Neil, and I think we will see some shift. Far be it from me to speak on behalf of a federal minister, but my understanding is that the system they have inherited does not function well. I recall, in the early days of being minister in 2022, hearing from migration agents about how significant the backlog was and how much of a challenge that was presenting for skilled migration.

That was the system that Clare O'Neil has inherited and is trying to fix. There is a pain at present for institutions like Flinders and the University of South Australia, and some RTOs, which I do not like and do not accept but that I am assured is a transitional period of pain and that it is not intended for this to continue for long.

It is one of the great ironies that what we are dealing with is, on the one hand, both sides of politics on the education side at the federal level saying, 'Please don't be so dependent on China because things can change,' and the Home Affairs agency finding Chinese visa applications easier and more straightforward to process than some other nations that these institutions are turning to being regarded as being of greater risk. That is the challenge of operating internationally.

That is not to say that the risk is not real, but it is to say that the institutions are doing their best to respond to the requirement or the request to diversify. This is the mix that we are in at present. What I have done is not only raise the overall challenge that we are experiencing but also making sure that the minister and the minister's Department of Home Affairs are well aware of specific cases that we are seeing where challenges seem to be—refusals or delays seem to be inexplicable, and making requests that they be looked at. We are doing what we can at the state government level to interact with our federal counterparts to make representation on behalf of South Australian institutions.

The Hon. J.A.W. GARDNER: This is my last question on this line. I understand that in 2022, after two years of pandemic and nobody coming into the country, Home Affairs had been drawn down to a husk of its former numbers as a direct result of the pandemic. Have your discussions with Minister O'Neil or Minister Giles given you a sense of whether they are back up to full complement yet, or are they still struggling to recruit?

The Hon. S.E. CLOSE: I have not asked that question so I could not speak on behalf of that government.

Mr PATTERSON: In case we have changed pages, we are still on the same budget paper, Volume 3, page 157, looking at the highlights regarding entrepreneurship. Why has the minister abolished the position of chief entrepreneur?

The Hon. S.E. CLOSE: That was a decision that was made, and with the very good will of Andrew Nunn, who was an excellent chief entrepreneur, to recognise that the evolution of the innovation ecosystem—I do not like using too many buzzwords, but it is one that is used with innovation—had reached a point where having a single chief entrepreneur, albeit with an advisory board, was not the best or only way to interact with those companies that are innovating and that are becoming startups and moving into the maturity scale.

What we proposed was that rather than having a single person have that title we would have a process where we would be able to support through mentorship and other programs many companies to get the kind of support that they need at the particular point that they are at. Andrew Nunn was very helpful in helping us construct that, so I will just give some of the list of the Innovation Leaders Network program. Some of the particular actions are:

the business acumen events, which is panel discussions, and I think Andrew Nunn featured in one of those early on, along with me—he is a very generous man;

boardroom lunch events, which is also about exchanging knowledge, experience, and having different experts in different fields presenting;

a leadership program, which is a structured capability program for leaders of growing innovative businesses; and

a mentorship program, which connects entrepreneurs with expertise and guidance through conversations with more experienced founders.

Those programs we felt were more fit for purpose in the current stage of innovation that has occurred in South Australia, and we felt that was a reasonable shift.

Mr PATTERSON: How much funding was allocated to the office of the chief entrepreneur in 2023-24?

The Hon. S.E. CLOSE: We are just looking for the exact amount, but we have not taken that away, so the people who were working with the chief entrepreneur remain, and we have just refocused what it is they do and how they do it. I will see if we have the figure. I will take that on notice so I am not wasting your time.

Mr PATTERSON: Thank you for that. If you could maybe, in anticipation, take the following on notice as well: how many FTEs were allocated to the office of the chief entrepreneur in 2023-24 and, if you do not have the information available, how much funding is allocated to the office of the chief entrepreneur in 2024-25?

The Hon. S.E. CLOSE: It is a team of 10 staff, and they have remained.

Mr PATTERSON: So 10 FTEs?

The Hon. S.E. CLOSE: Yes, and the office of the South Australian chief entrepreneur has essentially been renamed Innovation and Entrepreneurship Business Unit, but the same 10 people are working, and they are running this innovation leaders program.

Mr PATTERSON: Sorry, I raced ahead too much. I was anticipating it to be on notice. If I could just go back then: how much funding is allocated—I did not write the entire name of the new department down, but innovation and entrepreneur—for 2024-25?

The Hon. S.E. CLOSE: For some reason we have not been able to identify that subset of our budget, so I will take that on notice and provide that to you, but the staffing has not changed, so the budget has not changed. I will provide that exact figure to you on notice, rather than wasting your time by our looking through our papers here.

Mr PATTERSON: Is it funded across all four years of the forward estimates?

The Hon. S.E. CLOSE: Yes, it is. There is no intention to discontinue this activity. It is an important activity, and Jim Whalley and Andrew Nunn were excellent. It is just a different way of doing this with the support of those former chief entrepreneurs as well, which I am very grateful for.

Mr PATTERSON: I refer to page 160 of the same budget papers. Looking at the activity indicators, in particular the leveraged early-stage private investment innovative companies, in 2023 we had the ratio of 4:1 and then the 2023-24 estimated result is dramatically down to 1:1. Why has there been such a reduction?

The Hon. S.E. CLOSE: The 2023-24 estimated result of $7 million consists of private sector investments in 14 companies through stream 2, which is Seed-Start, of the Research and Innovation Fund and the South Australian Venture Capital Fund. The 2023-24 estimated result is lower than the target of $20 million, as the value of private investment into early-stage companies is influenced by the number of investments in a particular year, which can vary depending upon deal flow and the timing of the capital raise. This has also affected the activity indicator to which you are referring, changing the ratio resulting in the result of 1:1 being significantly lower than the projection.

Mr PATTERSON: I was going to follow up with some other questions around that, so we might retouch upon that. Just so I understand: the amounts have come down, and of course because of ebbs and flows maybe. I suppose what I am trying to understand is, previously you had quite a significant leveraging of private investment of 4:1. So for every dollar that government puts in you get $4 of private investment, which is what we want to see—just enough to get them over the hurdle, but really they can take off. It now seems to have gone 1:1. Has the program changed in terms of its requirements? You talked about the Seed-Start grant program.

The Hon. S.E. CLOSE: I think this is essentially about timing and possibly a shift in capacity for capital raising, given interest rates and other pressures in the economy. The 1:1 is the minimum required, so it is joint funded for Seed-Start, and then you expect over time to see the capital raising, seeing that private investment going up. At this stage, we have not seen that for this estimated result. That may change.

In 2022-23, an actual of $51 million, which translated into the 4:1, is significantly higher than both the target and the estimated result due to a number of the venture fund portfolio companies completing significant capital raisings in 2022-23. They may not have started them then, but they landed then, including Ferronova at $4.68 million, Lumary at $7.84 million, Fivecast at $24.84 million and BiomeBank at $9.7 million. So it could be in retrospect that we will see a bumper year in a couple of years that is the result of that, but I say that cautiously given that the economic times that we are in now, with the squeeze on interest rates, may also result in not achieving that degree of capital raising—we will see.

Mr PATTERSON: You may have answered this before but I am not sure. In terms of your performance indicators, you indicated there was $7 million from early-stage companies now at a ratio of 1:1. I am assuming then that the funding provided in 2023-24 was around $7 million. Did you say that before? I am not sure, and I apologise if you did, but maybe if you can provide the amount of funding. I would appreciate the breakdown in recipients. I think you said there were 14. If you are able to provide a detailed list and the amounts provided, that would be much appreciated.

The Hon. S.E. CLOSE: The leveraging investment is a combination of Seed-Start and the Venture Capital Fund and the $7.429 million. The venture capital fund, which is $4.973 million, went to Seonix and to BiomeBank, and then for Seed-Start we have MAXM Skate, Global Movement, Frigid Solutions, Flux Robotics, sequential and organ transport trading as Vital Organ Technologies.

Mr PATTERSON: Thank you very much. If I look at going forward, as you said, you have touched on the 2024-25 targets, so the projection in terms of the leveraged amount is 2:1 with the aim then to get private investment of $10 million. I am inferring then that you are expecting around $5 million of funding out of the Seed Grant program or the venture capital to then leverage that 2:1. Why is there a reduction then in the amount of grant being allocated from 2023-24 to 2024-25?

The Hon. S.E. CLOSE: I am just being advised that it might be most useful to talk about the RIF, the Research and Innovation Fund, from which comes Seed-Start, which is stream 2 of that, and then stream 1 is larger efforts, such as a CRC. We do not have a specific amount each year that we say, 'This must be what Seed-Start has.' What we have is the RIF.

If I look back, in 2021-22 the actual was $6.8 million, and what we have at present is just a whisker under $11 million each year, going through to the forwards. That amount is not declining and has in fact gone up since a couple of years ago, but how we choose the balance of how we invest it is determined by people who understand what is happening in the economy and see opportunities for the maximum benefit.

It may be that a larger investment in a research facility is of greater value to small businesses than Seed-Start and so we might tip the balance. Other times, we might see that we want to put more into Seed-Start. That will vary, based on what is before us and how the economy is tracking.

Mr PATTERSON: Thank you for that answer. On the same page, looking at the same activity indicators but now looking at workspaces available at Lot Fourteen, 2022-23 had 210. There are 180 for this financial year and then the projection going forward is 180, so it is about a 15 per cent reduction. Why has there been a reduction in numbers, and what is the minister doing to regrow this number back to 210?

The Hon. S.E. CLOSE: This is not a decline, really. A total of 30 places were in the McEwin Building. They are still existing as places, but they have been reallocated into the SmartSat CRC and Defence Innovation. We are still using start-up places; it is just not attached to that hub at Lot Fourteen. There is a level of complexity. People sometimes share. Different companies will share the same desk, so a place might service more people, more companies, at some times than at others. Right now, as of 1 June, there are 184 residents across 55 companies in Stone & Chalk, just for your information.

Mr PATTERSON: Because I have my defence and space industries hat as well, I can go speak to your counterpart. Is it the Defence and Space Landing Pad where those workstations are or SmartSat CRC? Is that where I would find them?

The Hon. S.E. CLOSE: It is a combination of both, but we can take it on notice so you have clarity about where they are.

Mr PATTERSON: Also, if I look through it, the number of skilled nominations made by South Australia are 8,800 in 2022-23 and 2,300 in 2023-24. It seems like there is a caveat there around numbers not being available from the commonwealth. Have those come through yet and, if so, are you able to provide them or at least maybe give an indication of where that is at? Are you likely to get near that 8,800 number?

The Hon. S.E. CLOSE: We wanted more. The commonwealth government gave us 2,300 for this most recent year just about to finish. We have applied for next year but have not yet heard how many we will be getting. I do not know if that will come out for the migration ministers' round table on Friday or if it will be a topic of discussion on Friday as to what our places are looking like. It is an interesting dynamic that all of the state governments appreciate the role that skilled migration plays in filling skills shortages that are necessary to be filled for our economy but are also dealing with the challenge of housing shortage, so it is a finely-judged matter for the federal government.

Mr PATTERSON: From what I can take of it, it does seem like it is a real reduction.

The Hon. S.E. CLOSE: It was a real reduction.

Mr PATTERSON: It is not like there is going to be something coming.

The Hon. S.E. CLOSE: It was a real reduction last year, yes.

Mr PATTERSON: So how do we go forward in terms of looking to make up a shortfall of nurses, police, housing construction, other frontline workers?

The Hon. J.A.W. GARDNER: Chefs.

Mr PATTERSON: Chefs have been suggested to me as well. What is the government then looking to do in its place when there are these very real shortages? We have seen it in housing supply.

The Hon. S.E. CLOSE: Indeed. It was a real shortage that was commensurate with a drop across all states, so South Australia was not singled out. All states got a small percentage of what they had asked for and what they had had previously. The challenge, first of all, what matters most of all, is that we train our people into the areas that have jobs attached to them and, secondly, that we make a good case for prioritising those fields that we desperately need.

For example, we recently asked, and it was agreed to, that Andrew Giles added construction to the list for the DAMAs, so that we are able to get people, through a DAMA, to work in construction because it is very hard to get housing if you do not have enough people building the housing. That is an example of an intervention that we made, where we said, 'When we are updating the DAMA can we add this qualification?' The commonwealth government said yes, so that helps. This is the kind of work where it is not just about the rhetorical, 'We need more skilled places,' but, 'Let's talk about where specifically you can help us, federal government,' and we have seen some movement that has been helpful to us.

The Hon. J.A.W. GARDNER: I refer to page 158, grants and subsidies, going back to the scholarships we were talking about before. Maybe I can roll up a few questions into one long question and have you answer what you can and take on notice what you cannot. Last year, there were going to be 30 scholarships in Adelaide and 35 at Flinders and UniSA. I am wondering if the minister can confirm that that has continued this year and, particularly for last year and this year, if possible, how many scholarships in each of the categories have been offered, noting that there were four or five different categories for each of those scholarships? I am also wondering whether the program will change with the creation of the new university, noting the equity funds that have been provided for Flinders Uni and Adelaide Uni.

The Hon. S.E. CLOSE: Yes, we will work through what it means to work with two universities, not three. What I have for the 2023 academic year is Flinders University was 15—high ATAR, nine; First Nations, one; women in STEM, five; and men in teaching, zero—but the Flinders University numbers are low because they only awarded scholarships in semester two. The University of South Australia was 34: high ATAR, 18; First Nations, two; women in STEM, three; and men in primary school teaching, 11. The University of Adelaide was 24: high ATAR, 14, First Nations, two; and women in STEM, eight.

The Hon. J.A.W. GARDNER: Is there any analysis being done on the effectiveness of this program to identify, for example, whether it is attracting new people who were not already going to be doing these courses? For how long is this program funded? Is it ongoing, or does it have an end point?

The Hon. S.E. CLOSE: It was treated, as were most election commitments, as a term, and then a decision can be made about whether that is something that could be started again. We are interested in that analysis, and I would probably counsel that we should have that analysis before we make a determination about continuing scholarship programs.

The Hon. J.A.W. GARDNER: Will that analysis be conducted by this department?

The CHAIR: That is the last question.

The Hon. S.E. CLOSE: It will come to me as the minister, whoever conducts it, yes.

The CHAIR: The allotted time having expired, I declare the examination of the Department for Industry, Innovation and Science, and Higher Education complete. The proposed payments are referred to Estimates Committee B for further examination. Thank you to the minister, shadow minister and advisers for your attendance today.

At 14:46 the committee adjourned to Tuesday 25 June 2024 at 9:00.