Department of Primary Industries and Regions, $126,885,000

Administered Items for the Department of Primary Industries and Regions, $3,989,000

Membership:

Mr van Holst Pellekaan substituted for Ms Sanderson.

Mr Pederick substituted for Mr Griffiths.

Mr Knoll substituted for Mr Duluk.

Minister:

Hon. G.G. Brock, Minister for Regional Development, Minister for Local Government.

Departmental Advisers:

Mr S. Ashby, Chief Executive, Department of Primary Industries and Regions.

Professor M. Doroudi, Deputy Chief Executive, Department of Primary Industries and Regions.

Ms A. Lloydd-Wright, Executive Director, Regions SA.

Mr S. Johinke, Director, Finance and Prudential Management, Department of Primary Industries and Regions.

Ms A. Barclay, Director, Regions SA, Department of Primary Industries and Regions.

Mr B. Paolo, Director, Major Programs, Rural Solutions SA, Department of Primary Industries and Regions.

Mr M. Williams, Manager, Budget Strategy, Department of Primary Industries and Regions.

The CHAIR: Welcome, minister. I declare the proposed payments open for examination, and I refer members to Agency Statement Volume 4. Minister, I call on you to make a statement, if you wish, and to introduce your advisers. Since you are new to the estimates committee this year, I need to go through a very quick pro forma about the rules and regulations. I understand that there is no change to the agreed timetable. Excellent.

I will allow both you, minister, and the lead speaker for the opposition 10 minutes at the most for an opening statement, if you so wish. We will try to keep the questions even. The questions must be directed to the minister and they must be based on lines of expenditure in the budget papers and be identifiable and referenced. If a minister undertakes to supply information at a later date, it must be submitted to the committee secretary by no later than Friday 28 October. That is all the salient information. Minister, could you introduce your advisers and make a statement if you so wish.

The Hon. G.G. BROCK: Good afternoon, Chair, committee members and everybody here. First, I would like to introduce the members of the department who are here with me today. On my immediate left is Scott Ashby, the Chief Executive of the Department of Primary Industries and Regions. Next to him is Stephen Johinke, Director, Finance and Prudential Management. On my right is Alison Lloydd-Wright, Executive Director of Regions SA. Behind me on my left-hand side is Ann Barclay, Director of Regions SA, and Bengy Paolo, Director, Major Programs, Rural Solutions SA.

The 2016-17 state budget highlights the government's continued commitment to the Charter for Stronger Regional Policy and to providing opportunities for regional South Australia through significant investment in key service areas, programs and infrastructure. It builds on the good work and collective efforts of the government and our regional communities during 2015-16. I will highlight some of the government's regional development activities over the last year.

Country cabinet is one of the many opportunities enshrined in the Charter for Stronger Regional Policy for government to genuinely engage with regional communities in a way that has tangible and far-reaching outcomes. Country cabinet meetings are held three times a year, allowing regional South Australia to have direct input and provide feedback on how government can better support communities to grow and flourish, both socially and economically.

The Regional South Australia Cabinet Committee met regularly throughout the year. Among other things, the cabinet committee ensures that regional development strategies are effectively coordinated across government portfolios and agencies. Since its commencement there has been strong interest in the Regional Development Fund (RDF) grants program. These grants support regional communities and businesses to develop economic infrastructure, create jobs, and leverage both private and federal government investment.

This investment is working, with the 61 projects awarded grants through rounds 1 and 2 of the RDF contributing $933 million to the South Australian economy in 2015-16 alone. In 2015-16, I called and committed two grant rounds of the RDF, ensuring that both 2015-16 and 2016-17 funding could be committed and invested in our regions without delay.

This government is working hard to address the challenges currently facing the Upper Spencer Gulf and outback due to the contraction of mineral prices and changes in the energy sector. Some of the recent measures include:

a $7 million economic support package through the Regional Development Fund and the Upper Spencer Gulf and Outback Futures Program;

a commitment to retaining services in Leigh Creek until at least July 2018, along with a $1 million job creation package for the region;

more than $6 million in financial support for Sundrop Farms at Port Augusta;

the $10 million Whyalla Small Business Loan Scheme to support businesses servicing Arrium through the administration period;

a $50 million commitment to the new owner of Arrium for upgrading technologies; and

underwriting the Nyrstar smelter transformation in Port Pirie.

The once-off $10 million Jobs Accelerator Fund has been fully committed to a package of initiatives that will drive regional economic development including:

$2 million for the Upper Spencer Gulf and Outback Futures Program;

$2 million for the Regional Youth Traineeship Program to subsidise the employment of 57 young unemployed trainees across regional local government authorities; and

$1.4 million to the North West Indigenous Pastoral Project, creating jobs and job-ready Aboriginal pastoral workers, while returning pastoral land to commercial productivity.

I am delighted that an additional $1.5 million has been allocated over two years in this state budget to continue the highly successful North West Indigenous Pastoral Project.

The Regional Youth Traineeship Program is fully subscribed with 57 young unemployed people now working in their region. The two-year program offers the participating local governing bodies $14,500 per annum per trainee to provide entry-level employment and training for young people aged 17 to 24.

Under the National Partnership Agreement on South Australian River Murray Sustainability Program (SARMS), I administer the $25 million regional economic development program. This program includes a suite of regional development, research and innovation programs in the South Australian River Murray region, including the $12.5 million Regional Development and Innovation Fund (RDIF), the $5 million Industry-led Research Sub-Program and the $7.5 million redevelopment of Loxton Research Centre.

In 2015, I commenced an engagement process with regional communities through a series of Regions in Focus workshops across the state. These workshops have identified opportunities for closer partnership between the state government and our regional communities. A number of local priorities were identified by the participants. I am currently undertaking a second round of Regions in Focus roadshows, which will continue through to the middle of this month.

Regions in Focus has been undertaken in partnership with the seven Regional Development Australia associations (RDAs) which continue to be supported by state government funding of $3 million per annum. In close consultation with their local communities, each RDA is delivering a three-year plan to support the government's efforts to tackle regional priorities identified by those communities.

During 2016-17, I will continue to visit our regions to hear what people have to say about what is important to them now and for future generations. It is very important to me that the government acknowledges the contribution of our regions and that their economic and social growth opportunities are recognised and promoted. In concluding these introductory remarks, I reiterate that the state government understands that the prosperity and wellbeing of regional South Australians and their communities underpins the sustainability and wellbeing of the entire state.

The contribution that our regional industries make to the state's economy, our prosperity and wellbeing and the government's role in supporting regional industries and communities remain vital to building a better future for all South Australians. This government will continue to work closely with the commonwealth and local governments, industry, business and communities in striving to get the best possible outcomes for regional South Australia and for all of us.

The CHAIR: Thank you, minister. Member for Stuart, do you have an opening statement?

Mr VAN HOLST PELLEKAAN: Very briefly, I put on the record that contributing to regional development was one of my biggest drivers when I decided to stand for election to become a member of parliament. Six years down the track, it is still without doubt one of my very highest priorities. Regional South Australia has a smaller share of our state's population than other parts of the state but contributes on a per capita basis much more than other parts of the state. Most importantly, at this stage in our state's development, our greatest growth opportunities are in regional South Australia, and they need to be given every opportunity to flourish.

Moving to questions, minister, I refer to Budget Paper 3, page 24, looking at the Primary Industries and Regions line right in the middle of the page. Given that PIRSA's operating expenditure will decrease by $100 million from $263 million in the 2016-17 year to $163 million in the 2019-20 year, what will be the reduction in regional development programs over the forward estimates?

The Hon. G.G. BROCK: The $100 million decrease in projected expenditure across the forward estimates between the 2016-17 budget, which is $263 million, and the 2019-20 estimate, which is $163 million, is mainly due to the timing and planned completion of time-limited, specific initiatives within the next four years. Around $17.4 million of the $100 million relates to my regional development portfolio, in particular:

the regional economic development program component of the commonwealth-funded South Australian River Murray Sustainability (SARMS) program ceasing prior to 2019-20, which is around $2.8 million expenditure in 2016-17;

various regional development grant programs being fully expended and ceasing prior to 2019-20, including the Jobs Accelerator Fund, which is $2.3 million expenditure in 2016-17, and the Riverland Sustainable Futures Fund, which is $1.5 million expenditure in 2016-17;

the timing of additional carryover expenditure included in the 2016-17 budget for the Regional Development Fund, which is $10.1 million expenditure in 2016-17, compared to the base funding of $15 million annually; and

budget initiatives with expenditure in the 2016-17 budget for the extension of the North West Indigenous Pastoral program, which is $0.7 million dollars expenditure in 2016-17 and also 2017-18, being completed before 2019-20.

Mr VAN HOLST PELLEKAAN: I know you made a public statement today with regard to the extension of the RDF funding, with the $15 million carrying over in the last two years of the budget estimates period, those being 2018-19 and 2019-20. Given that announcement was made today, after the budget was delivered, and essentially says that there is $30 million in those last two years which will be delivered specifically for the RDF, does that mean that there will be another $30 million of other programs that were originally planned which now will not go ahead?

The Hon. G.G. BROCK: I am advised that, as we all know, we had $15 million per annum in the Regional Development Fund for the first four years from 2014-15 onwards, and there was an extra $6.4 million which was allocated from the Treasury towards the $15 million for the second round. As we get on to the end of each year, in the next year, it rolls over. So, each year, there will be another $15 million, and that is what we are talking about.

Mr VAN HOLST PELLEKAAN: This announcement today is a new announcement of an additional $30 million in the last two years of the forward estimates, but it does very clearly say that the money has been incorporated into the forward estimates. So the $30 million is part of the funding that is on this page, but it is a new announcement, made today, that it is going to go to RDF, which means that something that was allocated to be spent on this page has to be taken away. So what is that?

The Hon. G.G. BROCK: What is on that page is a part of the first lot of four by $15 million and it has 2018-19 included.

Mr VAN HOLST PELLEKAAN: But minister, if you did not make this announcement today, what would the money have been spent on?

The Hon. G.G. BROCK: Mr Chair, because it is a technical issue I will get Stephen Johinke to make a comment.

Mr JOHINKE: The $15 million per annum forms part of our approved forward estimates. It has not replaced anything as such. As PIRSA's forward estimates have rolled over each year, the $15 million related to the RDF has been incorporated.

Mr VAN HOLST PELLEKAAN: But it is not actually any extra money at all?

Mr JOHINKE: The original announcement related to the RDF and was about $15 million per annum for four years, which was the extent of the forward estimates at that period. This is, in effect, increasing that $60 million over four years to be $90 million over—

Mr VAN HOLST PELLEKAAN: But there is no more money than is currently in the forward estimates for regional development?

Mr JOHINKE: No. The $15 million is incorporated in those forward estimates figures. They are on page 24.

The CHAIR: I am going to go to the member for Wright for a question, if indeed you have a question?

The Hon. J.M. RANKINE: Yes, I do. Minister, as you know, I have spent many years living in the Mid North and in your hometown. Also, prior to going there, I lived in Peterborough, so those towns are really dear to my heart. Referring to Budget Paper 4, Volume 4, Program 3, Regional Development statement, can you advise the committee on the progress that has been made by the Peterborough community development officer through their role in that regional community?

The Hon. G.G. BROCK: I thank the member for her question. The Peterborough community development officer, Ms Nicole Lewis, was appointed on 12 October 2015. This position exists within the Regional Development Australia Yorke & Mid North organisation. Since her appointment, Ms Lewis has brought a range of benefits to the local community by implementing a variety of activities and initiatives that are proving very successful. The Peterborough community development officer has been appointed to:

promote small-scale economic development initiatives;

assist the District Council of Peterborough and community groups with identifying and facilitating small-scale community infrastructure projects;

facilitate community employment projects, including access to federal, state and local government funding projects;

support the state government's coordination of state government service delivery in Peterborough to maximise resource effort; and

regularly report to Regions SA through Regional Development Australia Yorke & Mid North on progress outcomes achieved in Peterborough.

Many of the key responsibilities outlined in the community development officer's employment plan have already been achieved, including being readily available to the community, promoting economic development and coordinating the delivery of state services.

Some of the activities and initiatives undertaken by the community development officer include:

development of a business association through consultation with local businesses, along with a suite of business development and community engagement programs, which the business association can access and drive. This initiative also includes a monthly networking event;

promotion of relevant state government grant programs and the offering of assistance with applications;

progression of the Main Street Renewal Program, working with the District Council of Peterborough;

development of a community survey to understand the residents' perceptions on local issues and how they can be addressed;

development of a services directory to adequately understand the social needs of Peterborough and the community;

development of a rural driver project to assist people to gain their licence, which is a critical independence initiative and local problem;

progression of the Peterborough Youth Strategy and reopening of the youth centre;

reinvigorating local sporting culture through re-engaging with residents;

progression of the Thriving Communities initiative, in conjunction with the Department for Communities and Social Inclusions and Department of Primary Industries and Regions, South Australia;

development of shearing courses for local students; and

community-wide service mapping and gap analysis.

The community development officer is currently working on a unique project to develop a community-owned bakery in partnership with the District Council of Peterborough. This type of business is not currently available in Peterborough and is a service desired by the community. It is hoped that the bakery will boost tourism visitations, local employment and skills, and provide baked goods for the residents of the community and region.

The Hon. T.R. KENYON: Referring to Budget Paper 4, Volume 4, Program 3: Regional Development, pages 32 to 34, can the minister please provide the estimates committee with information on the Regional Development Fund and specifically about the economic contribution study.

The Hon. G.G. BROCK: I thank the member for his question. I advised that Ernst & Young undertook a study that reported on the overall economic impact of projects awarded grant funding in rounds 1 and 2 of the Regional Development Fund (RDF). The report highlighted that the main benefit to the state is not the grants themselves, but the projects and industries it supports. They support these industries by accelerating companies' own investment, enabling additional investment for further value and allowing projects to progress that otherwise would not have.

Key findings from the report included the following: over 2,600 jobs and more than $933 million in gross output were generated in 2015-16 by projects supported by the fund. RDF grants awarded to date will support projects worth a combined $426 million in 2015-16 and up to $2.7 billion for the state economy. RDF grants will also help to create 944 ongoing jobs and 1,721 construction jobs over the next seven years. Eighty per cent of the grant funding awarded went to the manufacturing (including food manufacturing) and agriculture industries. The manufacturing and construction industries are expected to contribute the most to the state in terms of value-added in 2015-16, contributing $68 million and $48 million respectively over the period.

The South Australian government is committed to building stronger regions because we know that these are the drivers of our future economic growth, contributing to every priority in the state's economic plan.

Mr VAN HOLST PELLEKAAN: Referring to Budget Paper 4, Volume 4, page 32, can the minister advise the house of the government's progress in protecting the 50-plus jobs and the $9.4 million per year of local economic benefit which are connected to the ongoing viability of the northern forests in response to the Bundaleer and Bangor fires? Are you considering using any of your RDF money to support regional development in that area?

The Hon. G.G. BROCK: Again, I thank the member for his question. Given the bushfire damage in recent years, a business as usual approach for the Mid North forests is not an option. At the current rate there is about five years of log supply remaining, and replanting of the forest would produce logs in 22 years' time at the earliest. In 2014, minister Bignell announced the replanting of 150 hectares of the Bundaleer forest, while options for the future of the whole area were explored with the community. Insufficient rainfall in winter last year meant only 60 hectares of the replant could be completed but the operation to return 150 hectares of the scorched Bundaleer forest to pine was completed in July this year. More than 200,000 trees were planted and well-known Mid North native forest locations, including The Range and Spaniards Gully, are open to visitors once again.

The government has been consulting with the community through the Mid North Forests Future Strategy. Our focus is on jobs and the region's economic development. The strategy's expression of interest phase provided strong evidence of market interest in potential future land management uses. There is a great potential for expanded and new enterprises to employ people in the Mid North region. Recreation and tourism, commercial forestry, grazing and cropping could all deliver greater outcomes.

From January to March 2016 the government conducted the Mid North Forests Request for Proposal. This is the most significant phase of the strategy and almost 40 binding proposals were received. An interagency committee is considering the proposals and will advise minister Bignell of the advice. Proposals are being considered in detail to see how they can retain existing jobs and create new ones, as well as have a broader impact on the community and regional economy. Proposals are also being considered to see how they can address fire risk, represent value for money and complement any existing or proposed uses of the land.

We all understand the need to progress matters as soon as possible. The majority of the proposals received, however, are complex and it is important that the appropriate time is taken to consider them. Ultimately, the state government will make final decisions based on the best outcomes for the regions of South Australia. Being bound by good governance and probity requirements, all stakeholders are being treated fairly and without prejudice. A comprehensive process is under way and is being overseen by an independent probity adviser.

I understand minister Bignell has asked for the decisions on the future direction of the forests, including the finalisation of agreements for the first tranche of successful proposals, to be made by the end of September. The government will keep respondents and the community informed during the assessment process subject to commercial-in-confidence, probity and good governance considerations. I will consider the outcome of the report and then consider the need for any RDF funding support for the project.

Mr VAN HOLST PELLEKAAN: I refer to Budget Paper 3, page 108. As you would be aware, high electricity prices are detrimental to economic conditions in South Australia. What are you doing, minister, within your department to improve a reliable and affordable electricity supply in regional South Australia? It is page 108, under the large heading Regions South Australia, the second paragraph down, 'Key role for regions SA to improve community's resilience and ability to respond to regional economic conditions'.

The Hon. G.G. BROCK: I thank the member for his question. As I travel around the regions various matters are raised with me, including through our forums for engagement with local leaders in the regions in focus forum workshops. The issue of power prices has been raised with me as a challenge facing regional businesses. As an advocate for the regions and a member in cabinet I have passed on these concerns to the minister responsible for that portfolio.

Mr VAN HOLST PELLEKAAN: Passed on those concerns? Strongly advocating, as well as passing on the concerns, minister?

The CHAIR: I do not think the minister needs to go into detail about deliberations of cabinet either, by the way.

The Hon. G.G. BROCK: Like anything at all in cabinet, we will not divulge it, but I strongly advocate for lots of stuff within the regions.

Mr VAN HOLST PELLEKAAN: I refer to Budget Paper 3, page 109. Of the $30 million ($15 million each year in the next two years of forward estimates), approximately $10 million has been allocated to the Whyalla Small Business Loans Scheme, $5 million has been allocated to the Upper Spencer Gulf and Outback area, $1 million to the mobile phone black spots. With regard to the remaining $14 million over the next two years, will that money be put towards the original purpose of the RDF, or is it likely that more of that money will go to support broader government programs and needs as they come up?

The Hon. G.G. BROCK: I thank the member for his question. First up, my priority is for opportunities in the regions, and at this stage, unless there is some outstanding requirement or emergency, I will be focusing the Regional Development Fund as we are currently at the moment. But, with emerging opportunities, if something came out of left field, I would have to reconsider it in the priorities at the time.

Mr VAN HOLST PELLEKAAN: In the same way that the government is using $16 million of that $30 million for Whyalla, for Upper Spencer Gulf for mobile black spots, it could continue? The remaining $14 million that you have for the current and the next financial year could be eroded even further, and not go to the original purpose of the Regional Development Fund—is that correct?

The Hon. G.G. BROCK: Again, I thank the member for his question. First, up, the fund delivers support for an approach that will provide better infrastructure, drive economic growth, create jobs and leverage increased investment in regional South Australia. If I can just mention the $9.6 million that I think the member indicated for Whyalla—I stand corrected, that was not the figure: that was to enable it to retain jobs, so it is an opportunity for those businesses, as we made quite clear before, who may have had a cash flow problem in that interim period, so therefore I consider we would have saved X number of jobs. The focus will continue to be on maintaining or creating jobs.

Mr VAN HOLST PELLEKAAN: Budget Paper 4, Volume 4, page 34, minister. Are you satisfied that a $2 million contribution to the mobile phone black spot funding is sufficient contribution by the state government to build new mobile phone towers?

The Hon. T.R. KENYON: It is entirely the province of the federal government.

Mr VAN HOLST PELLEKAAN: It is not true, $1 million has come out of here. I am asking the minister for an opinion.

The CHAIR: You are asking the minister for an opinion?

Mr VAN HOLST PELLEKAAN: Yes. Is he satisfied—

Mr PEDERICK: It is in the budget.

Mr VAN HOLST PELLEKAAN: It is in the budget.

The CHAIR: Can you repeat the question for my benefit?

Mr VAN HOLST PELLEKAAN: Is the minister satisfied that a $2 million contribution to the mobile blackspot funding program is a sufficient contribution by the state government to mobile network operators to build new mobile base stations?

The CHAIR: Does that money come out of a budget line that the minister is responsible for?

Mr VAN HOLST PELLEKAAN: Fifty per cent of it does.

The CHAIR: Okay. In that case, you can answer it.

The Hon. G.G. BROCK: I thank the member for his question. About 20 per cent of South Australia is covered by mobile phone signal. The remaining areas, so-called mobile blackspots, are situated in regional, rural and remote areas, which are disadvantaged by not having access to mobile phone services. Today, mobile phones are almost an essential communication service in business, industry and everyday life. That is why on 16 June 2016, in conjunction with the Minister for Science and Information Economy, I announced a $2 million state government contribution towards the second round of the federal government program aimed at extending mobile voice and wireless broadband services throughout regional South Australia.

The program is a nationally competitive grants program which provides funding to mobile network operators to build new mobile base stations across regional locations. Round 2 of the program includes funding of $60 million nationally and favours applications that include co-contributions from state and local governments. It is up to the mobile network operators, such as Telstra and Optus, to submit applications to the commonwealth. However, the South Australian government has sought to work with these operators to influence their priorities. Regional South Australia is the powerhouse of the state's economy, and wherever I travel in the regions I hear that mobile blackspots are impacting growth. That is why I committed $1 million from the Regional Development Fund towards the state government's $2 million co-contribution to this commonwealth program.

Mr VAN HOLST PELLEKAAN: Did you advocate for more than $2 million to go to this program?

Members interjecting:

The CHAIR: Order! The member for Light has a point of order, apparently.

The Hon. A. PICCOLO: Point of order: Mr Chairman, that question would actually require the minister to divulge what is discussed in cabinet, and it is out of order.

The CHAIR: I disagree with that point of order. The minister can answer the question. Do you have an answer, minister?

The Hon. G.G. BROCK: Yes, I have.

The CHAIR: The minister has an answer. The minister seems perfectly happy to answer the question.

The Hon. G.G. BROCK: Firstly, I am advised that Tasmania put forward only $350,000 towards the mobile blackspots. It is hard to know what the federal government is going to do with the mobile blackspots on the allocation. This program is very competitive, so let's wait and see. A minute ago, answering the member's question about what I do in the cabinet, I did say that I strongly advocate for regional issues.

Mr VAN HOLST PELLEKAAN: I put on the record that other states are putting in $10 million, $20 million and $30 million as well. I refer to Budget Paper 4, Volume 4, page 34, the North West Indigenous Pastoral Program. What type of infrastructure has been put in place through this program? What sort of skills are the people being taught? What sort of employment opportunities will be created for them out of this program? Wrapped up in that, obviously it is a pastoral program, but is it specifically for cattle, horses, camels? What sort of a pastoral program is it, please?

The Hon. G.G. BROCK: The North West Indigenous Pastoral Program forms part of the government's regional Jobs Accelerator Fund, which aims to stimulate or fast-track investment to generate new and sustainable employment and participation opportunities.

The North West Indigenous Pastoral Project was established in April 2015 with state government funding of $1.4 million over two years from 2014-15 to 2015-16 to help Indigenous landowners bring more of the land into production and establish viable pastoral businesses by employing and training Indigenous pastoral workers. The 2016-17 state budget announced that the North West Indigenous Pastoral Project will receive an additional $1.5 million over two years from 2016-17 to 2017-18 to employ more Aboriginal pastoral trainees.

The North West Indigenous Pastoral Project has successfully engaged Aboriginal landholders, the business sector, particularly BHP Billiton, and the Indigenous Land Corporation. Of the three million hectares of Indigenous land in the north-west of South Australia only 5 per cent is currently grazed under Indigenous owned stock. The North West Indigenous Pastoral Project aims to address this opportunity by employing local Indigenous pastoral trainees and helping landowners to establish viable pastoral enterprises on their land.

The $1.4 million from the Regional Jobs Accelerator Fund has helped to leverage additional investment into the project. Project partner, Indigenous Land Corporation, and community partner, BHP Billiton, committed $776,000 and $1.1 million respectively for business planning and property reinstatement for Indigenous pastoral landowners. Currently, 16 trainees are employed (with a total of 23 employed over the life of the project) with the Kokatha Pastoral Development Project, the APY Pastoral Enterprise and Bungala's Emeroo Station at Port Augusta.

Newcomers, AMY Nominees at Mabel Creek Station, are positioned to take advantage of an upcoming homestead refurbishment to house an additional three pastoral trainees for ongoing works. The project has created opportunities for Indigenous training and employment with associated infrastructure investment and transitional arrangements to ensure that the positive outcomes of the project continue. The state budget funding will support the employment of up to 20 Aboriginal pastoral trainees, contribute to the repair and development of property infrastructure, and help to implement property management plans and transition existing pastoral trainees to independent employment.

The area that the member asked about, whether it was cattle, sheep or camels; it is mainly cattle.

Mr VAN HOLST PELLEKAAN: Not sheep?

The Hon. G.G. BROCK: No, at this stage I am advised that it is mainly cattle. It will also be about fixing fencing, housing, water tanks, road upgrades and also equipment.

Mr VAN HOLST PELLEKAAN: Are there any employment targets associated with this program, and any targets for local employment going into the future?

The Hon. G.G. BROCK: Are you talking about projects on the land itself?

Mr VAN HOLST PELLEKAAN: No, about employment. It is an employment program essentially, trying to upgrade infrastructure so that people can be employed, so that businesses can run and there is training involved in it to create employment. Is there actually a target for how many people would be employed? You have mentioned how many are currently employed.

The Hon. G.G. BROCK: I am advised that, as mentioned a minute ago, there have been 23 employed and to start off with that is going to be the number. With the extra money we will review that, but the whole concept of this is working with those people to get as many people through the process as we can, to give them as much training as we can to allow them, as I mentioned previously, an opportunity to get some training and for them to be able to get some full-time jobs.

Mr VAN HOLST PELLEKAAN: But there is no particular target for how many of them would actually get jobs into the future?

The Hon. G.G. BROCK: The initial target was 23 employed over the life of the project but, again, as I mentioned earlier, there is that extra $1.5 million over the next two years so that will be reviewed. We want to try to create as many jobs as we can with these opportunities and give indigenous young people the opportunity to get employment.

Mr VAN HOLST PELLEKAAN: I refer to Budget Paper 3, Budget Statement, page 109, under Regional Development Fund. How much of the $10 million Whyalla Small Business Loan Scheme will come from the Regional Development Fund? Is that the $9.6 million that you referred to before?

The Hon. G.G. BROCK: Can I ask the member to repeat the question?

Mr VAN HOLST PELLEKAAN: The $10 million Whyalla Small Business Loan Scheme, which I think is predominantly funded out of RDF money, I am just looking for the exact amount of RDF money that went into that.

The Hon. G.G. BROCK: I thank the member for his question. The total is $9.64 million. I am advised that out of that, $7 million came from the Regional Development Fund (RDF), $2 million came from the Jobs Accelerator Fund, and $0.64 million came from the old Save the River Murray Fund. That gives us a total of $9.64 million.

Mr VAN HOLST PELLEKAAN: What is the time frame for those loans to be repaid?

The Hon. G.G. BROCK: I believe that money was transferred to Treasury, and I believe that should be a question for the Treasurer to answer.

Mr VAN HOLST PELLEKAAN: When the money is repaid will Treasury repay your budget?

The Hon. G.G. BROCK: I am advised that there is no arrangement in the budget for that to be repaid to the RDF. Can I also reinforce what I said a minute ago, that that loans fund is there to assist those businesses that may have a cash flow problem in the interim period—after Arrium went into administration. If that money was not allocated, some of those businesses may not have been able to succeed and some of those people may not have had a job. As I said in a previous answer, it retains the opportunity for those people to continue until such time as Arrium comes out of administration.

Mr VAN HOLST PELLEKAAN: I am not questioning the value of the support for the people in Whyalla. What I am trying to understand—and correct me if I have this wrong—is that the RDF has handed over $7 million, the Jobs Accelerator Fund has handed over $2 million and I think you said the River Murray fund. Regardless, regional development money has been handed over to Treasury, Treasury will lend it to businesses in Whyalla, the businesses in Whyalla will pay the money back but Treasury will then keep that money. So your program has essentially given the money away, which I would be quite understandable if it was used for the original purpose, which is a grant of some sort for regional development, but actually you have given the money away to Treasury.

The Hon. G.G. BROCK: Again, I thank the member for his question. I reiterate: this money is there to maintain those jobs, and 200 or 300 jobs may have been there. As I mentioned a bit earlier, on the question from the member about the extra in the forward estimates, the amounts of $15 million, we also have another $30 million that is coming through the system. In regard to the interest-free loan scheme to support Whyalla businesses, this is part of that.

The interest-free loans are up to $750,000 and will be available to South Australian businesses. Applications for loans will be considered on a case-by-case basis and provided over a term of up to three years. Grants may also be offered, in special circumstances, in place of a loan or in combination with a loan. Again, that is from a press release from the Treasurer and, as I say, I think that question should be referred to the Treasurer.

Mr VAN HOLST PELLEKAAN: Can I respectfully suggest that, when that money is repaid to the Treasurer, you ask him to repay it to you, so that the people in the regions can actually get the value of the money that was originally intended for them?

The CHAIR: Suggestion noted. The member for Light has a question.

The Hon. G.G. BROCK: Chair, can I just point out to the member that this retained, secured, X number of jobs in the Upper Spencer Gulf in a city that is feeling the uncertainty—

The CHAIR: I think we all appreciate that. I think the member for Stuart appreciates that. The member for Light has a question.

The Hon. A. PICCOLO: Minister, in your opening comments, you mentioned an assistance package for the Spencer Gulf economic area. Can you provide some more details on what that package entails? That is in Budget Paper 4, Volume 4, Program 3, pages 32 to 34.

The Hon. G.G. BROCK: I thank the member for his question. On 12 November 2015, I announced a $7 million economic assistance package for the Upper Spencer Gulf and outback as part of the state government's response to the challenges that the region is facing due to the contraction of the mining and energy sectors. These funds include up to $5 million for major projects and community infrastructure from round 3 of the Regional Development Fund, which was opened early, and a once-off $2 million Upper Spencer Gulf and Outback Futures Program for small projects.

The round 3 Regional Development Fund guidelines provide a special focus for the $5 million allocated to the Upper Spencer Gulf and outback area. Unlike previous guidelines, round 3 states that, where project proposals are assessed as being similarly competitive, preference will be given to those located within the area. The comment from the shadow minister for energy that the $5 million is only available to the Upper Spencer Gulf and outback area when a project is better than a project elsewhere is not the case for round 3. As I have said—

Mr VAN HOLST PELLEKAAN: Is this an answer to the same question?

The CHAIR: It is the answer to the member for Light's question.

The Hon. G.G. BROCK: As I have said, the round 3 guidelines give a preference to the area, which is the key distinction from previous rounds, and are a direct response to the challenges being faced in this region. This injection of funding to the Upper Spencer Gulf and outback communities and businesses, along with the other support measures put in place by this government, will promote business confidence, drive structural economic change and diversification and accelerate job creation in the region.

Applications for round 3 of the Regional Development Fund are currently being assessed and I look forward to informing the house about the successful projects in the coming months. The once-off $2 million Upper Spencer Gulf and Outback Futures Program will provide dollar-for-dollar grants for amounts from $50,000 to $200,000. Applications for the Upper Spencer Gulf and Outback Futures Program also being currently assessed.

The Hon. A. PICCOLO: Minister, you also in your opening comments made comment regarding the government's Regional Youth Traineeship Program. I did not quite get the whole picture there. Could you provide the committee with some details of the success of that program to date?

The Hon. G.G. BROCK: The Regional Youth Traineeship Program is one element supported by the $10 million Regional Jobs Accelerator fund. As a result of the program, 57 young people living in regional South Australia, who were either unemployed or did not have a full-time job, have been given the opportunity to gain a traineeship in regional local government as a result of the $2 million Regional Youth Traineeship Program. The program is now fully subscribed, and councils and other local governing authorities across non-metropolitan regions have finalised recruitment and signed contracts of training.

The program is being delivered by the Local Government Association of South Australia on behalf of the state government. The two-year program offers the participating local governing bodies $14,500 per year, per trainee, to provide entry-level employment for young people. The program has also been designed to encourage the continued employment of these trainees after the two-year traineeship period.

The trainees will have the opportunity to gain skills and experience in many areas, including business administration, horticulture, civil works, IT and community services, and gain formal accreditation in the process. Trainees who are participating in the program will gain an invaluable foothold into the local labour market, and this will help retain young people in their regions. A series of welcome to local government induction workshops are currently being rolled out for all 57 trainees and their supervisors in 10 regional areas.

I have had the pleasure of meeting a number of these trainees during my regular visits to the regions, and they have all impressed me with their enthusiasm and their gratitude for the opportunity that has been presented to them by this traineeship. I can say to members here that these people are forever grateful for the opportunity to have full-time employment and get something on their CV to allow them to get full-time employment.

Mr VAN HOLST PELLEKAAN: I refer to Budget Paper 3, page 108. Minister, as part of your agreement with the Premier to help the Labor Party form government, you got a commitment from the government that one minister would spend at least one day, each week, in a regional area. Have you been keeping track of whether that commitment has been fulfilled?

The CHAIR: The minister can choose to answer this, but it is not related to the budget at all. The minister can choose to respond or not, or we can go on to the next question.

Mr VAN HOLST PELLEKAAN: It is related to the very first paragraph of that page.

The CHAIR: Well, I do not have my glasses on.

The Hon. J.M. RANKINE: It is not a budget line.

The CHAIR: It is not a budget line, but the minister can choose, for the next two minutes, to entertain us with his thoughts.

Mr VAN HOLST PELLEKAAN: It would be a very easy 'yes' if it was true.

Members interjecting:

Mr PEDERICK: They are undermining your authority, Lee.

The CHAIR: No, I am saying it is up to the minister. If he chooses to give us his thoughts ranging around the idea of his agreement with the Premier, that is fine, but it is not related to the budget, and we have about a minute left.

The Hon. G.G. BROCK: First up, can I point out that the agreement is not with the Minister for Regional Development. The agreement is with the member—

The CHAIR: So, it is doubly irrelevant. In that case, I rule it out of order, and we will go on to the next question.

The Hon. G.G. BROCK: I am quite happy to answer the question; however, I just want to point out the agreement is with the member for Frome. The visits to the regions by the ministers are well-received. They are appreciated by the ministers going out there, and they are monitored by the Department of the Premier and Cabinet.

Mr VAN HOLST PELLEKAAN: And how are they going? Are they fulfilling the obligation?

The Hon. J.M. RANKINE: You are doubly out of order.

The CHAIR: Yes, that is right. You may get away with asking the Premier that question, since it is being administered by the Department of the Premier and Cabinet.

The Hon. G.G. BROCK: It is proving very successful.

Mr VAN HOLST PELLEKAAN: I refer to page 109 in the same book. Was the expenditure for the independent report prepared for the government by Ernst & Young into the value of RDF to which you referred a while ago paid for out of RDF funding? If not, where was the payment from?

The Hon. G.G. BROCK: If I may, I will get the CE of PIRSA, Mr Scott Ashby, to answer that because it comes from another area.

Mr ASHBY: Sorry, could you just repeat the question, so I can be clear?

Mr VAN HOLST PELLEKAAN: The independent Ernst & Young report, which the minister referred to before, is a self-evaluation, essentially, of the impact of RDF. Was that report paid for out of RDF funding and, if not, what part of regional development funding did pay for it?

Mr ASHBY: No, it was not paid for out of the RDF. It was actually paid for out of the Regions SA operational budget.

Mr VAN HOLST PELLEKAAN: Okay, thanks, Mr Ashby.

The CHAIR: There being no further questions to the Minister for Regional Development, I declare the examination of those proposed payments completed.

Sitting suspended from 15:45 to 16:00.