Estimates Vote

Department of State Development, $479,748,000

Administered Items for the Department of State Development, $23,810,000

Minister:

Hon. J.K. Szakacs, Minister for Trade and Investment, Minister for Local Government, Minister for Veterans' Affairs.

Departmental Advisers:

Mr A. Reid, Chief Executive, Department of State Development.

Mr C. Wood, Executive Director, Invest SA, Department of State Development.

Mr T. Reaburn, Director, International, Department of State Development.

Ms D. Tembak, Executive Director, Portfolio Delivery, Department of State Development.

Mr B. Edwards, Director, Trade, Department of State Development.

Mr M. Smith, Director, Finance and Investment Services, Department of State Development.

Ms K. Eckhardt, Associate Director, Brand SA, Department of State Development.

The ACTING CHAIR: Welcome to today's hearing for Estimates Committee A. I respectfully acknowledge Aboriginal and Torres Strait Islander peoples as the traditional owners of this country throughout Australia and their connection to land and community. We pay our respects to them and their cultures and to elders both past and present.

The estimates committees are a relatively informal procedure and, as such, there is no need to stand to ask or answer questions. I understand the minister and the lead speaker for the opposition have agreed an approximate time for the consideration of proposed payments, which will facilitate a change of departmental advisers. Can the minister and lead speaker for the opposition confirm that the timetable for today's proceedings, previously distributed, is accurate?

The Hon. J.K. SZAKACS: Yes.

Mr WHETSTONE: Yes.

The ACTING CHAIR: Changes to committee membership will be notified as they occur. Members should ensure the Chair is provided with a completed request to be discharged form. If the minister undertakes to supply information at a later date, it must be submitted to the Clerk Assistant via the Answers to Questions mailbox no later than Friday 5 September 2025.

I propose to allow both the minister and the lead speaker for the opposition to make opening statements of about 10 minutes each, should they wish. There will be a flexible approach to giving the call for asking questions. A member who is not on the committee may ask a question at the discretion of the Chair.

All questions are to be directed to the minister, not the minister's advisers. The minister may refer questions to advisers for a response. Questions must be based on lines of expenditure in the budget papers and must be identifiable or referenced. Members unable to complete their questions during the proceedings may submit them as questions on notice for inclusion in the assembly Notice Paper.

I remind members that the rules of debate in the house apply in the committee. Consistent with the rules of the house, photography by members from the chamber floor is not permitted while the committee is sitting. Ministers and members may not table documents before the committee; however, documents can be supplied to the Chair for distribution. The incorporation of material in Hansard is permitted on the same basis as applies in the house; that is, that it is purely statistical and limited to one page in length. The committee's examinations will be broadcast in the same manner as sittings of the house, through the IPTV system within parliament and online via the parliament's website.

I will now proceed to open the following lines for examination: the portfolio of Trade and Investment in the Department of State Development. The minister appearing is the Minister for Trade and Investment. I declare the proposed payments open for examination. I call on the minister to make a statement, if the minister wishes, and introduce his advisers.

The Hon. J.K. SZAKACS: I wish to acknowledge and introduce the advisers with me today: Mr Adam Reid, Chief Executive of the Department of State Development; Chris Wood, Executive Director of Invest SA; and Taliessin Reaburn, the Director of International. I have other advisers with me from the department should they need to support the inquiries of members.

In my very brief introduction, can I thank all the hardworking public servants from the department for their diligence, for their commitment, for their hard work across this financial year and for their ongoing support and advice and particularly their drive to support a prosperous South Australia.

The ACTING CHAIR: Does the opposition have an opening statement?

Mr WHETSTONE: No, an opening question.

The ACTING CHAIR: Great.

Mr WHETSTONE: Thank you, minister, and to your staff. Referring to Budget Paper 3, page 79, how is DSD actively mitigating the risk posed by the ongoing geopolitical tensions to South Australia's export logistics and trade routes?

The Hon. J.K. SZAKACS: Thank you to the member for his question, one that I know that he and every member of this parliament are very interested in. First and foremost, if I can speak to the measures that have been taken within this budget, and then I will speak broadly to the efforts that we have been undertaking as a department and a government to build resilience, but also now the efforts that we will be making in an acute way across the forward estimates.

In this year's budget, $5 million has been allocated across two years to support a tariff disruption and economic climate response package. That is a really important investment because, notwithstanding the very good state of affairs and shape that our economy and our exports are currently in, the disruption that is caused by geopolitical headwinds is quite significant. It is significant in its impact not only demonstrably from an economic perspective but also from a business confidence perspective.

The member being a regional member and representing the Riverland, which has had its fair share of impact of disruption of tariffs across the last four to five years, is well aware that tariffs are a bad thing for Australia's economy. They are a bad thing potentially for jobs both in Australia and South Australia, they are a bad thing for business resilience, and they are also a really bad thing for the United States. There has been careful diplomacy undertaken by the commonwealth government. We are very fortunate to be in the hands of the Prime Minister, and the Minister for Trade and the Minister for Foreign Affairs, both of whom are passionate South Australians.

What we are seeing from the US with respect to the imposition of tariffs, but also the volatility, sometimes from a day-to-day proposition, is troubling and worrisome. In a further escalation, we of course are seeing in just the most recent fortnight the conflict across the Middle East region, which to date, from the advice that I have received, has not provided significant disruption, albeit that there have been some disruptions to air freight in the last couple of days through Emirates and Qatar, but the impact has been minimal, if not none at all.

The $5 million that I have foreshadowed in respect of the member's question around a direct government response to the economic and geopolitical headwinds will directly support exporters and directly support growing South Australian businesses and enterprise doing two really important things, the first of which is to maintain market share and to maintain market presence.

Tariffs do have the opportunity and do have the risk of disrupting existing market share. We will potentially see that through advanced manufacturing supplies into US supply chains across the defence and advanced manufacturing industries. We also see it, of course, through food and agriculture. We have seen much litigated publicly around the imposition of tariffs on steel. South Australia at this stage is not feeling the proportionate impact that other states are because of our relatively small steel exports, albeit we are with our green steel future very much preparing for an expansion of our steel exports. We want to see market share maintained there.

The second part of the support package that we will be rolling out is to capitalise on opportunity. We have already, prior to this budget announcement, deployed and redeployed resources into North America, particularly Canada. We have seen a 129 per cent increase—I think a 129 per cent increase, at least an over 100 per cent increase—in our exports to Canada in the last 12 months. Of particular interest for South Australian exporters in Canada is what has been the almost wholesale displacement of US wine from the shelves across the OCBOs. That is a really important play for South Australia.

In the coming months, a short number of months, in fact weeks, I will be leading a major mission to North America to directly advocate and capitalise on those opportunities into Canada that have seen the US market displaced.

But directly also to the member's question around response to tariffs, I want to speak to the resilience that has been built within the South Australian economy, the South Australian export market and also investment attraction over the last 12 months and more broadly across the last three years. We have seen a 40 per cent increase in exports in the last three years compared to the previous three years. In fact, the last two years have been 50 per cent better than any other two-year period in our history.

So it is the government's view that, notwithstanding the extraordinary challenges that the geopolitical headwinds will create and the disruption that tariffs have the potential to impose, we have never been in a stronger position to both respond to support and also capitalise on the opportunities that the relative disruption for other markets creates for South Australian exporters.

Mr WHETSTONE: Okay, well, I did not actually ask anything about tariffs, but I will a little later on. Minister, given South Australia's reliance on a stable export supply chain, has the department conducted any modelling on the potential cost impact of prolonged global shipping disruptions on South Australian exporters?

The Hon. J.K. SZAKACS: My advice is no, the department has not itself undertaken any modelling. I will undertake to provide some further information, should it be available to the member, on the work that the commonwealth government has been or may be undertaking. There is a really fulsome collegial approach between the Department of State Development, Austrade and DFAT, particularly in respect of the potentially acute disruptions to shipping. Notwithstanding that, the volatility of shipping is consistently volatile. The disruption to shipping that may impact South Australian exporters at this stage is not something that the department has modelled, nor do they see that doing that would provide an appropriate degree of support response to potential exporters.

Mr WHETSTONE: The reason for that question is that, globally, there are four major shipping lines and, through the period of the pandemic, one pulled out of coming under the equator. That left three, which is obviously a reduction of 25 per cent. We have seen significant disruption to merchandise and commodity being put onto ships because of that reduction in one shipping line coming here, plus a shortage of containers, particularly with the lack of productivity coming to the Southern Hemisphere. That was the reason behind the question on modelling. The long-term shifts in global trade patterns is listed as an international risk. How is the government aiming to reduce South Australia's exposure to these risks?

The Hon. J.K. SZAKACS: It is impossible to reduce our exposure to international risks by the nature of the way that international risk interfaces with global trade. Our priority as a government is diversification, and our priority as a government remains to see diversification of product, diversification of merchandise and diversification of jurisdictions. But to be very frank with the member, you cannot reduce exposure to global uncertainty, particularly in the context of some of the acute uncertainty of the conflict that is currently occurring.

What we need to do—and which we are doing—is build resilience, building upon the existing diversification programs and focus, which the department is driving. We are also, as I have already mentioned in my previous answer, dedicating a response package that does give us the ability to be both nimble and responsive to acute uncertainty. I think the approach that exporters take is not to eliminate risk but to understand risk and to respond appropriately.

I am further advised by the chief executive that—as I think I mentioned in a previous answer around the collegial approach between the department and commonwealth agencies—the department is part of the standing engagement with the commonwealth with respect to risk, security and potential supply chain disruption.

Mr WHETSTONE: Minister, has the South Australian government been in discussions with the commonwealth government, with the businesses that will be impacted or have been impacted by the US tariff on steel and aluminium?

The Hon. J.K. SZAKACS: Yes.

Mr WHETSTONE: Are you able to expand on that?

The Hon. J.K. SZAKACS: Do you have a specific question?

Mr WHETSTONE: Yes.

The Hon. J.K. SZAKACS: What, specifically?

Mr WHETSTONE: You have had discussions with the commonwealth. Are you able to furnish the committee with any of that detail? What support mechanisms will either the state or the commonwealth put in place to support the impact on those businesses of a 10 per cent base tariff and a 50 per cent tariff on steel and aluminium?

The Hon. J.K. SZAKACS: The structures around commonwealth engagement were stood up immediately upon the United States foreshadowing a policy framework of tariffs. The Department of State Development works closely with Austrade, which of course is the commonwealth's lead agency in respect of the response to these matters.

Before I come to programs and packages, I will also inform the member that I speak and meet regularly with the commonwealth trade and tourism minister, the Hon. Don Farrell. As I have mentioned before, Senator Farrell is an extremely important advocate for Australia's national interest and, being a South Australian, he fundamentally understands the unique nature of the export framework for South Australia.

In a previous answer, when the member asked me about geopolitical disruption, I framed tariffs within that. Of course tariffs are an acute geopolitical disruption; they are a disruption to trading order. The view that the department takes and the government takes is that, whether it be tariffs, whether it be armed conflict or otherwise in the Middle East, or whether it be the Russia-Ukraine war, these all create significant risk, potential disruption and material disruption for exporters.

The national task force, which I mentioned that the department is part of, is meeting weekly. That then informs the work that the department undertakes in meeting with, engaging with and seeking market intelligence from exporters. While I will not, to any surprise to the member, provide the contents of this briefing, I can also note that I have briefed cabinet on the work that has been undertaken and the work that is being undertaken on the market intelligence that the department has gathered. In part, that has informed the $5 million of new funding that has been allocated in this budget to a response.

It is very dynamic, as the member knows. These are not point in time matters that the department undertakes. The chief executive, through across government, is briefing me on this on a very regular basis. As I think I said a moment ago, what we are facing today in respect of tariffs may very well be a different policy setting in, say, four, six or eight weeks. That volatility is also part of the strategic approach that the department is undertaking in the way that they are engaging with exporters.

I will give the member a direct piece of information that was given to me by an exporter. I will not name the exporter for commercial reasons, but they informed me that they had had a conversation or engagement at a high level with US customs around the imposition of a tariff and the way that that tariff was specifically applying to one of their products. Firstly, the US customs official checked if the phone call was being recorded. The exporter said, 'Of course not.' The customs official then said to the exporter, 'Well, we have no idea around the way that the policy setting and the tariff imposition will impact them at the border.'

That is the sort of challenge that we are facing. Austrade and DFAT are acutely working on the challenges—the fact that even the application of the way that these tariffs may or may not be applied is still a matter of contention for US officials.

Mr WHETSTONE: Minister, what is South Australia's exposure with the 50 per cent tariff on steel and aluminium?

The Hon. J.K. SZAKACS: I can advise the member that, subject to section 232 US tariffs, the order under which the tariffs have been imposed for steel and derivatives is: aluminium and derivatives to year ending April 2025, $48.7 million; steel and derivatives to year ending April 2025, $15.8 million; automobile, $0.3 million; and automotive parts, $114.9 million.

Mr WHETSTONE: Is that South Australia's exposure or Australia's?

The Hon. J.K. SZAKACS: That is South Australia's.

Mr WHETSTONE: Structural weakness in China and potential spillover is listed as a risk. Is the government reassessing its trade relationship with China?

The Hon. J.K. SZAKACS: I am not sure in the context what 'reassessing' means. If the member is asking, 'Are we reassessing our priority to grow our trade with China,' absolutely not. We want to grow our trade with China; we want to grow our trade across the North Asia region and the South-East Asia region. The economic benefit for South Australian exporters in respect of the China rebound has been important. It has been critical, not just to wine but to a whole number of associated primary production, of which the member is right across.

But, no, we are not reassessing our trading with China—in fact, quite the contrary. We and the Australian government see that the growth of China, particularly in the middle class, provides a huge amount of opportunity for growing exports and, in doing so, growing South Australian jobs and supporting the resilience of primary producers and exporters.

Mr WHETSTONE: So you have no concern that we again are going down the same path with full exposure to China, with the amount of economic damage that it did last time through geopolitical decisions on tariffs made through what I would consider a political decision more so than a trading decision?

The Hon. J.K. SZAKACS: With respect to the member's question, I agree that there was not a trading decision that informed the imposition of tariffs; it was political. It was a pretty dark period in the relationship between Australia and China. I am not concerned about the growth and the turnaround, particularly for industries that were massively impacted by the profoundly acute politicisation of the relationship with China out of the commonwealth government.

The reason I am not concerned is that the first and foremost priority for our government and the department is diversification: that means that China is important, just as the US is important, as are Vietnam, Singapore and the EU, who we have just hit an all-time record with. They all remain important. To put it colloquially, we are not putting all of our eggs in one basket, but we also recognise the importance of the economic relationship that South Australia has with China.

We as a government will not be dragged into a political game—which I respect was not necessarily the tenor of the former Marshall government but certainly was of the Morrison government—where we will play politics with the economic and trading partnership that we have to grow local South Australian jobs. China remains important. We want China to continue to grow, but we are absolutely not supporting the growth of China to the detriment or the expense of other markets which we equally are aspiring to grow.

The Northern Asia region and the South-East Asia region is the fastest-growing population epicentre in the world. Their middle class is growing at a rate of knots. There is strong economic growth across the region—

Mr WHETSTONE: The middle class are not spending, though.

The Hon. J.K. SZAKACS: The middle class is spending.

Mr WHETSTONE: They are not spending like they were.

The Hon. J.K. SZAKACS: They are not, but the growth in China and the region is still outstripping the US and Europe by quite a rate of knots. When you are talking about the middle class in China, it is growing at the rate of hundreds of millions. When you are looking at India, where the middle class is growing at the rate of hundreds of millions, it is not just about the percentage growth, in which there is strong growth, but also about the scale. The scale is important, whether it be wine, whether it be almonds or whether it be the food security aspirations of a growing middle class, and a middle class across those regions that is looking more and more to the west for inspiration with respect to consumption is really important. Exporters and industries are telling me that as minister and we will continue to back them in.

Mr WHETSTONE: There are obviously no plans to scale back any of the trade missions, or the investment attraction with China?

The Hon. J.K. SZAKACS: Absolutely not.

Mr WHETSTONE: When you talk about diversification, are you putting any of that budget line into, or is that budget focused on, other markets and the relationship with trading partners?

The Hon. J.K. SZAKACS: Yes, absolutely. To answer the member's question specifically of whether there is a plan to scale back from our efforts to grow our nearly $4 billion worth of exports to our largest trading partner, no, absolutely not. We will be continuing to invest, we will continue to grow, but there is no new funding in this year's budget for any additional programs or efforts into China.

What we are seeing—as I have responded to the member in a few ways—is the $5 million worth of tariff response with respect to our other critically important trading partners' markets and exposure. The diversification efforts across South-East Asia and Northern Asia continue to be of critical focus to our government, and Malaysia, Vietnam, Indonesia, Thailand, the Philippines and Singapore, across the region, are in our top 20 export markets.

They are jurisdictions in which there has been considerable effort from an outbound delegation perspective and, in fact, Her Excellency the Governor is in India as we speak. That tempo of engagement, the quality of engagement, the support for industry to engage is important, it forms a part of our strategy, it is an important tactical approach that we are taking and, in my view, as we have ticked over $1.2 billion for India, those markets will continue to grow.

This is about growing the pie. This is not about cutting off different pieces of the pie and making that piece of meringue smaller and taking a piece off somewhere else and making it bigger: this is about growing the pie, growing our scale, supporting more jobs and growing exports.

Mr WHETSTONE: Minister, if we look at a global view, have any investments or projects been delayed or withdrawn due to that trade volatility?

The Hon. J.K. SZAKACS: That is a really good question and I am seeking to amplify my engagement with industry to seek to ascertain that. The short answer is no, but we are gathering that North American capital, in particular, is slowing down. One of the key focus areas of the department is, of course, investment attraction and we have been very pleased with the outcomes with respect to attracting FDI. The largest single source of FDI into South Australia is Canada.

Canada is a jurisdiction that I have already touched upon today, which forms a special part of our resilience building and also our focus in a world of disruption caused by economic policies out of the US. We are seeing an amplification of Canadian capital being invested into South Australia. It is very much the focus of our government and of the department to continue to see that upward trajectory. As I said before, the response to economic uncertainty is also to seek to leverage and exploit relativity, and we will continue to do that.

We think that there is an opportunity for jurisdictions like South Australia and, frankly, for Australia broadly, to be seen, as it should, as a place with incredibly low sovereign risk with good returns, with a strong appetite for investment in an ecosystem that can facilitate quick approvals and strong and high-level government engagement. That is the name of the game. In a high degree of engagements that I have been prioritising since the announcement of US tariffs with capital, both institutional investors and also private capital, that has been what they are telling me will be the key focus of their decision-makers when they are exercising their mandate.

Mr WHETSTONE: Over to page 80, the budget also notes the loss of access to the US might result in other trading nations dumping cheap offshore products in Australia, particularly into South Australia, to absorb some excess capacity. Is there a mechanism here in South Australia to protect those South Australian industries or businesses being undercut by low-cost imports?

The Hon. J.K. SZAKACS: We do not have a statutory mechanism or a constitutional mechanism to do that. In direct response to that, the department, at an officer level, is engaged directly with the taskforce, led by the commonwealth, who are leading this. This will be a key matter of discussion for the commonwealth and state ministers when we meet again, I think next month. It is the commonwealth; they are the constitutionally charged authority with respect to borders and customs.

This is also a key focus of our government with respect to our advocacy of the commonwealth. We have seen what impact around the world second and third tier supply-chain disruption can cause. That is why anti-dumping measures are so important. It is why the commonwealth have already been actively engaging on this. Everything that I have been briefed on to date, the commonwealth is doing—everything that we expect of them—and South Australia is satisfied with the lead the commonwealth is taking.

Mr WHETSTONE: Obviously, the tensions between the US and Iran have been very well documented but, should they escalate, what risks or exposure is there for South Australia should conflict break out? For South Australian businesses doing business in the US, trading with the US, is there a clear understanding of what the current investment by South Australia into the US would mean to our economy?

The Hon. J.K. SZAKACS: Yes, there is. That is materially the information that I provided to the member a moment ago with respect to the market intelligence and information gathering that the department has been undertaking. The member's question was also around the potential for the escalation of conflict, as I said, be it across the Middle East or, as it remains across continental Europe with the immoral and illegal Russian war in Ukraine.

We have seen in previous years the impact that the Ukraine war has had on commodities, on grain, both as a risk and as an opportunity. There is, as I said before, exposure into the Middle East region as well—in which the Emirates, Egypt and Saudi are significant destinations for bulk primary product—and also the disruption that air freight may have. We have seen a very significant uptick. I am not sure of—sorry, I do not have it in front of me—the specific percentage increase in air freight into the Emirates across the last 12 months, but it has been significant. I think it has been over 100 per cent.

So those are all the layers. They are all impactful or potentially impactful. We know our exposure to the US. We know our exposure, in fact, to every country, whether it be our largest trading partners or our smallest trading partners. We have a really strong, outwardly focused department, particularly within trade, international and our TradeStart advisors who are embedded in the regions. I have every confidence that they will continue to work with those that are impacted and also potentially impacted to mitigate against the risk.

Mr WHETSTONE: Minister, obviously the geopolitical tensions would give both the South Australian government and potentially the commonwealth government an opportunity to do some modelling on considering what currency hedging could mean if there is conflict. Are the department or the South Australian government doing any work on currency hedging to help protect South Australian businesses should there be conflict?

The Hon. J.K. SZAKACS: If there were to be, that would be led by the Department of Treasury and Finance. I think the Treasurer may have already appeared before estimates, but to the extent that I can, I can seek the Treasurer's advice. Certainly, my department is not, and we would not be, leading that.

Mr WHETSTONE: It is not about Treasury hedging. It is not about Treasury being involved. It is about your department giving advice or education to South Australian businesses to be able to hedge.

The Hon. J.K. SZAKACS: Your question was: have the department or the government modelled? The answer is: to the extent that I know, within my department, no, we have not. My response with respect to Treasury is simply that it would be the government agency or department that would be responsible for undertaking that piece of work.

Mr WHETSTONE: Minister, given the impact that the drought has had on South Australia, particularly with pulse crops, lentils, etc., and the global uncertainty, particularly in the Middle East, would your department or the government consider pursuing the plant protein program to help meet growing demand, particularly in India?

The Hon. J.K. SZAKACS: Yes. I think all of these matters would continue to be live options. We have a strategic approach with respect to investment attraction that is both open and agnostic to technology for plant protein. It was a key matter of engagement of mine when I was in India earlier this year. I was actually surprised about the slowdown of appetite for advanced plant protein in India in respect of other matters of food security. That sort of surprised me and disarmed me a bit.

But in direct response to the member's question, we as a government, and particularly we as a department and me as minister, remain open and committed to supporting new investment and new attraction, particularly in respect of food security and food manufacturing. Integra Foods at Dublin were awarded a half a million dollar grant in respect of their plant protein export market development project. I visited them a little while ago and saw firsthand some of the work that they are doing on the development of export markets. The department then backs them in, which is really important. We are always keen to support Integra scaling up and matching with potential investors and capital partners, which is a key piece of work, and also with proponents of new projects.

Mr WHETSTONE: Moving on to Budget Paper 4, Volume 4, page 79: the 2024-25 budget for ministerial office cost of provision was $2.7 million, compared with $2.4 million in this year's budget and a reduction of one FTE. Why is there a $347,000 decrease with a reduction of only one FTE, or is that FTE paid well?

The Hon. J.K. SZAKACS: Not that well. I will take this on notice for the member, but I can advise that the reduction in FTE was a Public Service salaried agreement staff member, so I can assure the member that that was not accounting for the decrease in expenditure. I will take that on notice.

Mr WHETSTONE: Under workforce summary, of the 372.6 FTEs in DSD how many are assigned to trade and investment, and is there any overlap with other programs within DSD?

The Hon. J.K. SZAKACS: I can advise that 125.7 FTE is the trade and investment portion of the department and that includes a proportionate corporate allocation. I may ask the chief executive to provide some insight in respect of the second part of the member's question, which goes to any joint functions or otherwise. There has been, of course, in this financial year a very important decision undertaken by the government to bring together trade and investment functions with industry, innovation, science, migration and higher education, so I might ask the chief executive to provide from his perspective as chief executive how that MoG across his department—of which part is not my responsibility—provided some scale in respect of service delivery to industry and business.

Mr REID: Thank you, minister. It is really an opportunity to bring together all the functions of economic development into one agency. In relation to the question of whether there is any crossover or duplication, the answer is no, but there is very strong alignment now between the functions of industry development, industry policy, trade, investment and our international network.

As you would know, member, we have the functions around workforce development, industry development, manufacturing, research, innovation, higher education, international education and skilled and business migration, so bringing that together and allowing that to seamlessly integrate with trade and investment operations has allowed a function of scale and alignment across the government's priority areas.

We would not see it as duplication at all, but there is now a much stronger alignment between those areas of government that align very strongly to the priority areas of government, and we can align those activities and share the resources across that international network as well as our trade and investment functions.

Mr WHETSTONE: In last year's budget, the trade and investment program was budgeted at $46.9 million for 2024-25, but this year's budget says $49.2 million was budgeted in 2024-25. Can you give me an understanding of that discrepancy?

The Hon. J.K. SZAKACS: Can I clarify the member's question? Is that the net cost of providing services that the member is referring to?

Mr WHETSTONE: Yes. The trade and investment program was budgeted for $46.9 million for 2024-25, but this year's budget says that it was $49.2 million in 2024-25. There seems to be a discrepancy of $2.3 million.

The Hon. J.K. SZAKACS: Not to be pedantic, but can I seek which page number the member is referring to?

Mr WHETSTONE: Budget Paper 4, Volume 4, page 80, under program net cost of services summary.

The Hon. J.K. SZAKACS: Thanks to the member for his clarification. I can advise that the material impacting the variance are the intergovernmental transfers, particularly supplies and services, which have been a matter of accounting and transfers from the machinery of government changes. Perhaps if I can provide for the member some additional information, either now or on notice, if there were to be anything, but if that is specific to the member's satisfaction, they are the intergovernmental transfers, which vary the supplies and services.

Mr WHETSTONE: Referring to the same reference point, the 2024-25 estimated result shows the program underspent its budget by almost $11 million. Were any programs cut to obtain this result? And how will the remaining $11 million be utilised?

The Hon. J.K. SZAKACS: I am advised by the chief executive that the total expenses have not changed materially: $49 million, $48 million across those years. It is, in fact, the impact of the intergovernmental transfers, to which I referred in my last answer, from DHUD in the machinery of government change. The impact of that has meant that the net cost of providing services is impacted, whereas the total expenses are materially unchanged. With respect to the member's specific question: have any programs been cut? No, they have not.

Mr WHETSTONE: Over the page to page 81, under investment programs, DSD's annual investing program almost doubles in this year's budget. What is the additional investment being allocated to?

The Hon. J.K. SZAKACS: Thank you for your question, albeit it is not within my line of responsibility. I am advised that the impacting matter is an investment into Tauondi Aboriginal College, which includes site remediation.

Mr WHETSTONE: Alright, moving on to highlights in Budget Paper 4, Volume 4, page 91. Of the 500 businesses supported to connect with international partners, how many were new versus existing exporters expanding into new markets?

The Hon. J.K. SZAKACS: I am not sure that I have the breakdown of the new or existing going into how long they have been in market. Just pause for a moment. I will speak to my trade adviser and then I will come back to you. I do not have that breakdown with me, sir.

Mr WHETSTONE: Take it on notice?

The Hon. J.K. SZAKACS: Yes.

Mr WHETSTONE: Thank you. Minister, how many businesses and investor delegations did the department host in 2024-25? Do you have any tangible outcomes with these delegations?

The Hon. J.K. SZAKACS: I am sorry. I was distracted then by talking to the member for Flinders. Sorry, would you repeat your question? That was Sam's fault.

Mr WHETSTONE: He has a face for distraction, hasn't he. How many businesses and investor delegations did the department host in 2024-25? And what were the tangible outcomes? Is there some record of these missions in and out?

The Hon. J.K. SZAKACS: So when you when you say 'host', are you referring to inbound delegations?

Mr WHETSTONE: Yes.

The Hon. J.K. SZAKACS: I am advised that with respect to inbound delegations and inbound hosting from the department and broadly from the government, with respect to the breakdown of numbers, I have core numbers of participants inbound and outbound. I do not have the breakdown for inbound. I will take that on notice for the member. I can also provide some additional information. It is quite extensive in my brief, particularly with respect to the proportionate impact of those inbounds that have been focused on regional South Australia.

Mr WHETSTONE: I have an easier question for you. How many inbound and outbound business missions did the department facilitate? How many businesses participated in those missions?

The Hon. J.K. SZAKACS: I can advise that there have been 366 participating companies and businesses supported across financial year 2024-25.

Mr WHETSTONE: Minister, do you monitor the outcomes of these business missions?

The Hon. J.K. SZAKACS: Yes, I do. There is some rigorous reporting and triaging that the department undertakes with respect to their support of businesses that participate in these missions. There is a rigorous framework within which the department undertakes an EOI process. Not every business that seeks to participate in a mission is supported—for good reason. The department will make their own assessment if they are fit for the mission, whether they are trade or export ready or whether the jurisdiction or the market is appropriate for them.

In respect of macro headline figures, the missions and delegations that have been supported across the last financial year have materially and directly accounted for $110 million worth of new export deals. On those figures, we are very pleased with the efforts of the department and we are very pleased with the hard work of exporters. At a macro level, we are seeing a really significant return on investment, and we are also seeing the support for businesses continuing the tempo of engagement in the market. That is the one thing that continues to be raised with me by industry, particularly, as I have mentioned extensively today, across our key focus areas of Northern Asia, South-East Asia, India and the Middle East. Just being there once and expecting a deal to materialise, and then going away, just does not cut it.

These businesses and exporters work really hard. They need to have a significant tempo of engagement into market. So not only are we seeing material trade outcomes but we are also seeing support of the investment and security in these longer-term relationships. The member has asked me a number of times today about the geopolitical risk: the strength of relationships, the strength of partnership is critical to de-risking and offsetting that risk in this climate.

Mr WHETSTONE: Minister, I am interested in South Australia's participation at the Osaka World Expo. Did you attend it?

The Hon. J.K. SZAKACS: I did. I took the head off a tuna.

Mr WHETSTONE: Sorry?

The Hon. J.K. SZAKACS: I took the head off one of Sam's tunas.

Mr TELFER: With a sabre?

The Hon. J.K. SZAKACS: A sword.

Mr WHETSTONE: What is the good news? What were the outcomes? What businesses participated in Osaka?

The Hon. J.K. SZAKACS: I was in Osaka for a day and a half the week before last with a delegation of key South Australian exporters. The Osaka World Expo is a materially important trade and investment expo that is being supported significantly by the commonwealth. Of course, in previous years, the South Australian government has made a direct investment into our attendance and participation in that expo. What we are seeing now is the execution of that strategy that has been worked on incredibly diligently across multiple government agencies across the last 12 months.

There is a significant number of delegations, one of which I led, the majority of which I am not participating in. The critical delegation that I led was across food, wine, beverages and agribusiness. About 75 per cent of our exports into Japan are across those three categories, but there are further participating delegations across space and aerospace, visitor economy, arts and culture, health and wellbeing, international education and research collaboration, water, oceans, climate and the natural environment. Some of those are being supported by the Department of State Development, some of those are being supported by other agencies. The World Expo, of course, is still running for a number of months. We will be undertaking, as we do with all of our missions, a full evaluation post that mission.

Certainly, in the debrief that I have had with the travelling CEOs that I attended Osaka with the week before last, it has been really positive. I think I can speak for all of them that they were pleasantly blown away by the scale and the opportunity and the work of DFAT in curating a highly commercial environment that is conducive to this not being anything other than a commercial and trading focus of the commonwealth and South Australia.

Mr WHETSTONE: Minister, why is it that you do not see a benefit in displaying bipartisanship when it comes to trade?

The Hon. J.K. SZAKACS: I beg your pardon?

The ACTING CHAIR: Are we still on page 91 of Budget Paper 4, Volume 4? Is that still what this question relates to?

Mr WHETSTONE: Yes, highlights, trade missions. Minister, why is it that you do not see the benefit of a bipartisan approach to trade and trade missions like other trade ministers have?

The Hon. J.K. SZAKACS: I do not accept the premise of your question at all. I am not quite sure what the member is referring to, but bipartisanship is a two-way street. I appreciate the member's commitment to raising with me and with the department the interests of his constituency. It was only a couple of months ago that I was up in the Riverland with you as I welcomed a very significant almond delegation from India. You were good enough to join me as we hosted that delegation with the board and with Almondco. I appreciate your participation and I have every expectation that it will continue.

Mr WHETSTONE: Again, the bipartisan approach has demonstrated tangible outcomes and benefits, which a former minister offered to the opposition that you have decided not to; do you have a reason why you—

The ACTING CHAIR: How does this relate to the budget papers?

Mr WHETSTONE: Trade missions.

The ACTING CHAIR: You would like to go on an overseas holiday; is that your question?

Mr WHETSTONE: I am sure the minister is not on holidays.

The ACTING CHAIR: But he is the minister.

Mr WHETSTONE: I think it is a fair question. It is an open, transparent question.

The Hon. J.K. SZAKACS: The member is asking me to somehow get inside the head of the former minister, which is a dangerous place to be.

The ACTING CHAIR: I think we should probably move to your next question, or does the member for Flinders have a question?

Mr WHETSTONE: Joe, I am in your head rent free; is that what you are saying?

The Hon. J.K. SZAKACS: Tell yourself whatever you need, mate.

Mr WHETSTONE: It was a simple question. If you do not want to answer it I will move on.

The ACTING CHAIR: I think we should move on.

The Hon. J.K. SZAKACS: Through the Chair, I am struggling to—

Members interjecting:

Mr WHETSTONE: Why don't you ask a question?

The ACTING CHAIR: Would the member for Chaffey like to move to his next question or does another member have a question they would like to move to?

Mr WHETSTONE: I have plenty of questions. Minister, one of the 2024-25 highlights was increasing uptake of the state's brand to more than 10,000 businesses, yet last year you stated there was a goal to reach 10,000 registrations by the end of June 2024. What was this year's uptake compared to the previous year?

The Hon. J.K. SZAKACS: I can advise there was a 23 per cent increase in the uptake—sorry, registrations from year on year.

Mr TELFER: Total number?

The Hon. J.K. SZAKACS: I do not have the total number—23 per cent.

Mr WHETSTONE: Is there a difference between uptake and registration?

The Hon. J.K. SZAKACS: No, I incorrectly used the word uptake; it is registrations.

Mr WHETSTONE: So that is the interpretation I have then?

The Hon. J.K. SZAKACS: Yes.

Mr WHETSTONE: One of the department's targets last year was to address the perceived value of buying local amidst the cost-of-living challenges. What was the target achieved?

The Hon. J.K. SZAKACS: I can advise the member that, with respect to measuring and understanding that question, Brand SA, through the Department of State Development, has undertaken market research on the return on investment in respect of the domestic and local value proposition of buying local and supporting local consumption and local economic input. As a result of that market research, 90 per cent of South Australians believe that buying local is important, which was a 6 per cent increase from previous years—obviously it is a pretty high point, so a 6 per cent on that base is impressive; 55 per cent actively seek South Australian products when shopping; 71 per cent are more likely to buy local after seeing and engaging with the work that Brand SA does; and 48 per cent rank price and value as their first consideration when buying.

Mr WHETSTONE: I refer to Budget Paper 4, Volume 4, page 91, under targets. Is there a target for the number of businesses on missions to priority markets that the government hopes to achieve, and what are you deeming as the government's priority markets?

The Hon. J.K. SZAKACS: I am advised by the chief executive that the department does not set a target for the number of businesses participating across a financial year, particularly because it is highly demand driven and there needs to be flexibility in respect of tailoring the participation of businesses in those missions. As I said before, the department undertakes a high degree of early work in triaging and supporting through EOI processes the participation of businesses.

With respect to target markets and as for the department's focus on what those target markets are, it is twofold. One is the markets with which we have existing strong long-term relationships of trade: US, UK, continental Europe and China. Then we also have a higher degree of focus across the North Asia region, the South-East Asia region, India, and the Emirates in the Middle East. Sorry, Chair, I said 'US'; I should say 'North America'. I do not mean to slip into non-specific—

Mr Telfer interjecting:

The Hon. J.K. SZAKACS: Quite not, but North America—so, Canada and the US.

Mr WHETSTONE: Under program summary on page 92, grant programs dropped by $7.8 million in 2025-26. Which programs will not exist or which programs are coming to an end?

The Hon. J.K. SZAKACS: I am advised by the chief executive that there is no cessation of recurrence. The impacting accounting for this financial year compared with next financial year is because of a couple of one-off grants, BioCina and Healthy AI, which were one-off grants that have been executed in this financial year.

Mr WHETSTONE: The FTE count is expected to drop from 125.7 to 119. Can you give me an understanding of what roles will be affected?

The Hon. J.K. SZAKACS: They are time-limited FTEs. The member asked me about the Osaka World Expo earlier. I am advised that there are some FTEs that are focused on the delivery of our trade focus and investment attraction focus in Osaka which will be ceasing. There are also a small number of residual FTEs transferring over from DHUD into DSD, that have been accounted for in the MoG, that will be winding up. There are no material reductions in FTEs, other than specific time-limited programs which are expected.

Mr WHETSTONE: Under performance indicators on page 93: minister, can you give me a breakdown of the $870 million of investment secured under that program?

The Hon. J.K. SZAKACS: I can provide some information now, but I will just say there are a number of matters which are subject to commercial sensitivities, or existing NDAs that are not yet public. They need to be public and managed through listed companies, which I am not at liberty to disclose to estimates today. I will provide the member now what I can, noting that there is a portion and there are other material attraction efforts that have yet to be disclosed through proper regulatory processes.

I have just been receiving some advice from my chief executive who has advised me, just to ensure that we do not step foul of commonwealth regulators, or otherwise from market disclosure, that we provide that to the member on notice. We will provide everything we can, and we will also note what we cannot.

Mr WHETSTONE: In 2023-24 and 2024-25 the department had a target of 4,000 new jobs secured through Invest SA and it only managed to achieve 881 and 1,000 in those last two years respectively. What was the reason for that shortcoming?

The Hon. J.K. SZAKACS: Since being established Invest SA has secured over 6,500 new jobs across the 2022-23, 2023-24 and 2024-25 reporting period. I am advised that since the budget papers were published the projected actuals for the end of the financial year is 1,017 jobs in 2024-25. The 2024-25 financial job creation has been lower than anticipated with that figure of 1,017 jobs created. I am advised that there have been several factors contributing to the lower job creation, albeit that 1,000 jobs is good, but we as a government always want to see more jobs. I think it is safe to say that, on becoming minister, I have pushed the department pretty hard both on being ambitious and also on being acutely focused on what growing trade and growing investment can do for creating good, meaningful, secure, well-paid jobs.

Of course, in doing that, we know that businesses that are trading are more resilient, are more financial and are more capable of mitigating against global risk. The factors that have contributed, I am advised, to the lower figures for this financial year include tight labour markets, unemployment rates between 3½ per cent and 4½ per cent nationally over the last two years, and South Australia has, of course, led this trend.

Before COVID, South Australia's share of job vacancies was 2.8 per cent, and this has now grown to 5 per cent, representing a 79.8 per cent growth in share of vacancies, highlighting the lack of labour availability in the market. This comes even as there are now more people in South Australia working than ever before. Since July of 2022, employment has grown by 67,000, or 7.4 per cent, to over 975,000 jobs in May 2025. A small share also of overseas arrivals, compared to our share of national population, is 5 per cent compared to 6.9 per cent. We also have the fourth highest wage price index growth of 5.3 per cent in South Australia, 5.1 per cent nationally, which is driving companies to prioritise technology and automation investment.

The Premier reflects on this often, and he may have done so in his estimates a couple of days ago. For the first time that I can ever recall, South Australia is not facing a jobs crisis; we are facing an availability of workforce problem. We see across the forward estimates, we see across the next 10 years, the material and substantial industrial growth across the state. We know, through any measure, the number of jobs that will be created as a result of that. Our challenge as a government is to find workers, to invest in the workforce, to grow the skills, to support solid and articulate skilled migration.

Notwithstanding the fact that our ambition remains to see jobs directly matched with investment attraction, we also have the complexity of challenges within our economy and workforce, where the availability of that workforce, in some cases for investors, may not be there and, therefore, they are continuing to proceed with investments, to grow the economy in more productive ways.

Mr WHETSTONE: Of those just over 1,000 new jobs in 2024-25, how many are permanent or full-time positions?

The Hon. J.K. SZAKACS: Over 600—between 600 and 650 is my advice.

Mr WHETSTONE: Sixty per cent, okay. Minister, you have the same target for 2025-26 of 4,000 jobs to be created. What are you going to do differently?

The Hon. J.K. SZAKACS: It is a question I have asked my department, and they are continuing to drive their ambition, with the challenges that we face. Certainly, we all hope to be back here in 12 months in different ways. If I am lucky enough in any capacity to be answering a question from you in 12 months' time, I hope that I have the opportunity to talk about high workforce participation, strong economic growth, strong state final demand. The reality is that we have brought online more ongoing investment attraction programs, both within my department and also within the broader government, and we are going to continue to work really hard on being ambitious. The signal or message I want to give to the department—not they are seeking to be less ambitious—is that I want them to be ambitious, and I want 4,000 to be the material goal for next year.

Mr WHETSTONE: You have used the word 'ambitious' a lot in that answer.

The Hon. J.K. SZAKACS: We are an ambitious government and we think ambition is good.

Mr WHETSTONE: Minister, how is client satisfaction measured? Can you give me an understanding of the result used to determine a 95 per cent satisfaction rate?

The Hon. J.K. SZAKACS: To the member's question, I am advised that there is an extensive process of survey and quantitative and qualitative analysis that is undertaken post mission, post delegation, post engagement, whether it be from our staff here or offshore. That is the manner in which the 95 per cent, I think it was, was achieved. It is something that I do note. It is very much worthy of putting on the record in this place the extraordinary appreciation that I have for the department for their high-quality standards and the extraordinary service delivery that they are undertaking for the business community.

Mr WHETSTONE: So they are ambitious to get to 100 per cent, are they?

The Hon. J.K. SZAKACS: That would be good. I am not sure that I would like to impose that sort of burden on them; 95 per cent is pretty good, but let's get to 100 per cent.

Mr WHETSTONE: No pressure.

The Hon. J.K. SZAKACS: No pressure.

Mr WHETSTONE: Minister, I refer to trade offices, Budget Paper 4, Volume 4, page 91. One of the department's objectives is listed as connecting local exporters through global trade offices. How many trade offices does South Australia now operate independent of Austrade?

The Hon. J.K. SZAKACS: I advise that, of the 17 international trade and investment offices, there are two that are independent of Austrade. That is not to say that they do not work very closely with Austrade, but they are not co-located. They are the Office of the Agent General in London and the DSD office in Jinan, China.

Mr WHETSTONE: In last year's estimates, you said that the Frankfurt trade office was targeting opportunities in green hydrogen and renewables. With the collapse of the Office of Hydrogen Power and the Hydrogen Jobs Plan, what is the Frankfurt office's current objective?

The Hon. J.K. SZAKACS: I can absolutely assure the member that hydrogen is still a very strong focus of the Frankfurt office and all international trade offices because that is exactly what industry is telling us that they want. The member asked before about the Osaka World Expo. There is a significant amount of higher level corporate engagement that we are seeing from Japan and Korea, as an example.

I am advised that this is consistent with continental Europe as well, a fuel future and green future involving hydrogen. There is no less appetite for a future that involves solid ecosystems for which investment in hydrogen can be facilitated. The work of DSD in Frankfurt remains. Certainly, to the member's question, it has not excluded the work in hydrogen, simply because the market and commercial and capital, both industry here as well as offshore, are telling us that that is what they want.

Mr WHETSTONE: Minister, you say you have two standalone trade offices. Is the government giving any consideration to a standalone office in India?

The Hon. J.K. SZAKACS: I do not like the idea of standalone offices, and the reason I do not like the idea of standalone offices is that I see firsthand the really important scale that South Australia can gain by our collaboration with Austrade. Not only do I see it firsthand and when I speak and meet with all of our offshore trade directors and regional directors but I hear that directly from ambassadors. I hear that directly from the new CEO of Austrade.

They are glowing about the efforts of our extraordinary staff offshore. Amongst the first things, if not the first thing, that Austrade and DFAT raised with me at the highest of levels was the scale that South Australia brings by being a jurisdiction that is committed to strong collaboration. We see that from TradeStart here onshore, and we see it offshore as well.

Mr WHETSTONE: I do not speak ill of Austrade at all. The performance of standalone offices is what I am really looking to better understand. Do you as a department keep KPIs, performance indicators, of your trade offices?

The Hon. J.K. SZAKACS: Yes.

The ACTING CHAIR: The allotted time having expired, I declare the examination of the Department for Trade and Investment, the proposed payments for the Department of State Development and the Administered Items for the Department of State Development complete.

Sitting suspended from 10:30 to 10:45.