Attorney-General's Department, $117,786,000

Administered Items for the Attorney-General's Department, $94,269,000

Membership:

Mr Pengilly substituted for Mr van Holst Pellekaan.

Mr Tarzia substituted for Mr Griffiths.

Mr Wingard substituted for Mr Speirs.

Minister:

Hon. J.R. Rau, Deputy Premier, Attorney-General, Minister for Justice Reform, Minister for Planning, Minister for Industrial Relations, Minister for Child Protection Reform, Minister for the Public Sector, Minister for Consumer and Business Services, Minister for the City of Adelaide.

Departmental Advisers:

Mr R. Cordiner, Chief Executive Officer, ReturnToWorkSA.

Mr D. Quirk, Chief Financial Officer, ReturnToWorkSA.

The CHAIR: I declare the proposed payments open for examination and I refer members to the Agency Statements, Volume 1. Attorney, did you want to make an opening statement?

The Hon. J.R. RAU: Yes, we are starting off with ReturnToWorkSA, as I understand it.

The CHAIR: Yes, it is ReturnToWorkSA for 45 minutes, at 3.45 we will go to SafeWork SA and at 4.45 we will go to Consumer and Business Services, if that is still the plan.

The Hon. J.R. RAU: Okay, thank you. First of all, if I can introduce those who are with me: to my right is Rob Cordiner, who is the Chief Executive Officer of ReturnToWorkSA, and to my left is Des Quirk, who is the Chief Financial Officer.

It has not been my practice to say much by way of introduction and I will be as brief as I possibly can here because, generally speaking, I think this should be time for members and not time for the minister. However, I have to say that the whole philosophy of the Return to Work scheme, as is exemplified by something as simple as the name of the legislation itself—which is the Return To Work Act, not the compensation act—is about providing a very strong stimulus and support for people who are injured at work to get better and get back to work.

It is unequivocally not a pension scheme. It is unequivocally not a scheme which is designed to subtly decondition people by reason of interaction with the scheme to the point where they are not capable of going to work. It is designed to actually acknowledge that some people unfortunately do suffer injuries at work; they need to be supported following that.

That support, initially, if it needs to be in terms of income maintenance, is at 100 per cent of their salary, because it is not intended to be a forever arrangement. It is a temporary arrangement. It is a temporary insurance arrangement which is paid for by their employer, and the primary focus of the scheme is getting people back to work.

All of the studies I have seen suggest that in terms of health outcomes there is no argument but that returning people to a meaningful place in the workforce is good for their health, notwithstanding the fact that they may have had an injury which in some way limits their potential at work. Nonetheless, to be back at work rather than watching one of those appalling American sitcoms all day is an infinitely better outcome. So that is the first thing.

The second thing I wanted to say is that the scheme is still in a transitional phase. By that I mean we have only now just reached two years since the effective cut-in date of the new Return to Work scheme. Whilst we have already been able to see a number of what I regard as highly encouraging trends in the scheme, there is no ground for complacency. There is no ground for making brave, long-term predictions about exactly where the scheme is likely to be landing, I emphasise. Everything I am seeing I am encouraged by, but we are still in a transitional phase of the scheme.

That said, there have been ongoing changes now for the last few years, particularly since the new scheme came in, in relation to return to work rates, which are extremely positive. What I am talking about here, Mr Chairman, is things like: how many people are away from work for more than two weeks? How many people are still away from work after 10 weeks or 13 weeks? How many people are still away from work after 26 weeks? When you start looking at those numbers, what we are seeing is an improvement, not only in the overall numbers of claims that are going in—there are less of them; we are also seeing an improvement in the time it is taking for people to get back to work.

That is in no small measure due to the completely different philosophy around delivery of service at the centre of the claims management aspect of the scheme, which is mobile case managers, people going out there, engaging with the employer and the employee very quickly after an injury and saying, 'Lets make this work.' That is showing positive signs. Again, it is too early—we should not be like George Bush Jr and stand on the aircraft carrier and declare the war is over, but we have made very positive progress in that respect.

The other thing is that the number of disputes in the scheme has diminished significantly. One of the great things about that is not only the cost to the scheme of maintaining a vast number of disputes but, attached to every dispute is an unhappy claimant on the scheme. To some extent disputes are like a proxy reading for how many people are agitated with the scheme, and the fewer people who are in dispute with the scheme—and I appreciate that this is a big generalisation—the less harm is being done to claimants by the scheme, because there is nothing quite as debilitating (and I can say this from some considerable experience in this area) for an individual as to be a long-term complainant involved in disputes and be on the scheme, certainly the old scheme.

Summary: the scheme is making very encouraging progress. It is very early days, but all of the dials are pointing in the right direction. There are no obvious storm clouds on the horizon, but we are at an early phase of the rollout of the new scheme. Things like discount rates on investments, things like stock market performance, things like potential changes in claim management all potentially can have an impact on the scheme.

I am cautiously positive about what is going on. I am very pleased with the management, ReturnToWorkSA, who I think have been doing an excellent job of both managing the scheme but also getting into their heads the fundamental proposition about the scheme, which is that this is about getting people back to work, and I think the scheme managers do get that and they do expect the claims managers who report to them to behave in such a way as to maximise that opportunity. Sorry, I just feel strongly about all that. I feel better now, I've got it out.

The CHAIR: Member for Hartley—you are the lead speaker, clearly. Do you have a statement or just straight to questions?

Mr TARZIA: No. Minister, thank you for your short summary. I refer the minister and his staff to Agency Statement, Budget Paper 4, Volume 4, page 175, where I note that there is an estimated income tax equivalent payment of $86.3 million, and in 2017-18 there is a budget for zero. I have some questions on the $86.3 million figure. First, how did that figure originate, how did they get to that figure?

The Hon. J.R. RAU: I will commence, and when I look like I am getting myself into hot water one of these gentlemen next to me will step in. Most public corporations have within their charters an arrangement whereby they make what is called a tax-equivalent payment. A tax-equivalent payment occurs in circumstances where, were that entity to be a public company, it would be paying tax. Because they are not public companies, they are wholly-owned government entities—and, incidentally, entities in respect of which the government is the underwriter of unlimited liability—there are circumstances where the metrics provide for this tax equivalent payment. That's the short answer. Have I got that right?

Mr CORDINER: Yes.

Mr TARZIA: So is there a reason for zero dollars stated there as anticipated for 2017-18? Is the implication that the Return to Work scheme will have no profit in that year?

The Hon. J.R. RAU: No. It gets back to my opening statement about the volatility of the scheme. Perhaps I can try to explain it this way. I will just give one example, which may help to explain it. The new scheme, when it comes in, immediately changes the actuarial position so far as the unfunded liability of the scheme is concerned. Because when the new scheme came in we were coming off an old scheme, which was actually charging a breakeven average premium rate of 2.75 per cent when in fact the breakeven premium rate was more like 3.15 per cent, the board was prepared to take the risk at the time of only charging 2.75 per cent, which is still twice what other jurisdictions in the country were paying.

The scheme, at the end of 2014, was collecting 2.75 per cent. From 1 July 2015, its actuarially adjusted exposure dramatically changed because of the new scheme coming in, but until there has been a claims experience over the course of that first year, the board is not in a position to adjust its premium until it has a performance basis for the adjustment of the premium. Otherwise, they would be just taking a guess.

The point I am trying to make is that they then adjust their premium down. I think the first adjustment down was to 1.99 or 1.95. That then brings the BEP down, and that was averaged out across all the policyholders. In that one example, if you drew that on a graph, you would be able to see what I mean. There is a dramatic drop in the breakeven premium average number, but there is a lag between the fall in that number and the fall in the premium charged to meet the number, because the premium charged is based on a retrospective assessment of how the last year has gone. That means that there is inevitably at this point in the scheme's evolution going to be a period of time when the BEP is chasing down the actual premium, but that is not going to go on forever. That is going to get to the point where that stops and the two get into equilibrium. That is the idea, more or less.

That is one factor. Another factor is that under the new scheme, under section 56, there is the opportunity for people to receive a payment that was not available under the old scheme. This is a payment which is called, essentially, an economic loss payment, but it is calculated not by reference to a narrative but by reference to a table, where you just calculate the age of the person and the whole person impairment of the individual and you run your finger down the two columns and you get a number.

That number, for a relatively young person, could be $350,000. It is not small money. Again, because the new scheme is so new, we have yet to feel what the real pipeline of people making claims under section 56 feels like, because the people who are eligible to make that claim only had their injury at the earliest on 1 July 2015. So you can imagine that a number of those people have yet to get anywhere near having a stable condition with the whole person impairment entitling them to make an application.

My expectation is that the section 56 costs in the scheme are going to go up. They are not going to go up tomorrow, but over time the section 56 costs will go up, and they will reach an equilibrium as well, but that is some years away.

I am getting back to my point of the scheme being in a moment of transition. We have this moment in time when the income of the scheme through premiums, because of the lag in premium setting, is at a higher level than the actual outgoings. That creates a surplus. We have a one-off actuarial obliteration of the unfunded liability associated with the introduction of the new scheme, and we have the fact that the section 56 payments have not yet begun, in effect. If you take all of those things out, this is why I am emphasising in these remarks the fact that we are dealing with a bubble of what appears to be enormous profitability in the scheme. We need to be very careful about looking at that. I for one do not believe I could say to you with any confidence that that will be there next year.

Mr QUIRK: I would add that the difference between 2016-17 and 2017-18 is, as the minister has said, the actuarial release in 2016, favourable discount rate movements in 2016-17, and also investment markets were stronger than what would be expected in 2017-18. In 2017-18 there was a reduction, as the minister said, in the average premium rate from 1.95 to 1.8 per cent, which is therefore closer to the breakeven premium rate and therefore why we are not forecasting a tax equivalent payment in 2017-18.

Mr WINGARD: Are you expecting a loss?

Mr QUIRK: No.

Mr WINGARD: So, do we break even, or a small profit?

Mr QUIRK: We are aiming to set the premium at close to the breakeven premium rate. As the minister says, the scheme is still in transition. There is uncertainty about it. So, if you look at last year when the rate was maintained at 1.95 per cent, we were seeing some favourable signs in that, but it was prudent for the board to maintain a 1.95 per cent premium for 2016-17.

Mr WINGARD: Does the transfer of the $86.3 million to the government reduce the asset base of the scheme?

Mr QUIRK: It comes out of the net assets, but, as the minister said at the start, it is around competitive neutrality that we pay income tax. We only pay it if we make a profit.

Mr WINGARD: So you are not concerned that that is going to offset against future payments that may need to be made?

Mr QUIRK: No.

Mr TARZIA: Minister, you mentioned market returns in your opening statement. Are you able to tell us what is the investment composition of the ReturnToWorkSA scheme?

The Hon. J.R. RAU: It depends how far you want to drill into the detail. If you want to get down into how many hundred shares they've got in different—

Mr TARZIA: I do want to know how many shares you have in each bank, but, roughly, can you tell us about percentages.

The Hon. J.R. RAU: I can ask them to dig out that information. I do not think we have it in front of us. I can say this: Return to Work, and I think, to be fair, WorkCover before them, did have a reasonably good investment in-house strategy going. They have consistently performed quite well in anticipating movements in the market. That said, the discount rate moves a little bit and they get knocked around one way or the other, and they have absolutely no control over that whatsoever.

Mr TARZIA: So nothing has been done to reduce the volatility in that space?

Mr QUIRK: We have an investment strategy that is reviewed by the board annually. The board has assess to an investment adviser in Willis Towers Watson. The strategy is being looked at for the change in the scheme, because the nature of the liabilities become more long-term for the seriously injured. We have really looked to make minor changes to that strategy to better have the investment asset more closely aligned to the longer term of the liabilities and in that way try to take out some of the volatility.

Mr WINGARD: Are government bonds part of that investment mix?

Mr QUIRK: Government bonds are part of that. It is a mixture of government bonds, Australian equities, international equities, infrastructure property, again to spread the risk, and also looking at both the return and the duration of the investment to match.

Mr WINGARD: Has there been any modelling done on, if the South Australian government's proposed banking tax is voted in, the impact that will have on those bonds and hence those returns?

Mr QUIRK: No modelling has been done on that.

The Hon. J.R. RAU: Des made a very good point. I mentioned amongst the factors contributing to the volatility of the settling down of the scheme, the reality of the average premium chasing down the actual premium because of the retrospective nature of the premium setting, which is a once-off event. The release by the actuaries of unfunded liability, again, is a one-off event. The fact that section 56 payments have yet to become mature as a yearly (annual) feature of the scheme, which is something that will feed itself in, and it might take another two or three years before there is some reasonable indication of the annual actual cost of section 56—they have actuarial predictions of it, but the actual lived experience of section 56 becomes something that the board can talk about.

The bit that Des alerted me to that I had neglected to mention is that under the new scheme we do have the 30 per cent plus long-term people who will gradually, and I emphasise 'gradually', accumulate in the scheme. Those people are long-term claimants on the scheme. We hope there will never be a great number of them but the number that there are will not be cheap and so over the years there will be an accumulation of those people. They will probably get to the point again, over some considerable period of time, with the numbers coming in and the numbers going out, get into some sort of equilibrium, I imagine, but that could be 15 years away. In the meantime, there needs to be provisioning made for that long-term considerable draw.

Mr WINGARD: What are the scheme funding ratio net asset forecasts for 2016-17 and 2017-18? I appreciate you might not have that on you right now.

Mr QUIRK: For the 2016-17 funding ratios, in December that was sitting at 121 per cent, so positive. I expect that to be somewhat lower but still within—the board has a funding target range of between 90 and 120 per cent and aiming to be at around 105 to 110 per cent, which is the midpoint of that range. The audited numbers are still to be completed for this year but we would be sitting slightly above that and projecting pretty much a break-even rate for next year, which would see the funding ratio stay at around that level.

The Hon. J.R. RAU: Again, for the reasons I have just explained, you would expect that funding ratio to be above 100 at the moment.

Mr WINGARD: Because of the offset.

The Hon. J.R. RAU: Because the premium is still chasing down the—and other transitional matters.

Mr CORDINER: If I could try to read what might have been in your question: we have a really clear policy, which is that we are trying to minimise volatility for the premium-paying employers of South Australia, and we are prepared to accept a range of funding between 90 and 120 per cent. For most of its life, the scheme was below 100 per cent. It has now been above 100 per cent since the government passed its legislation and we improved our own performance. So, in effect, our net asset position has not been that volatile, but we are prepared to accept some volatility, otherwise you have to pass that volatility on, year on year, up and down, to employers who actually require some degree of certainty.

At the moment, even though the scheme is yet to mature, that funding ratio is based on the liabilities, with a risk margin for the uncertainty factor of it being a new scheme. So, if you like, you could have some confidence that the funding we have is real—it is not just bits of paper and numbers—to be able to pay for the claims that have been incurred to this day, and that it is sufficient and adequate for us to be able to set realistic premium rates going forward, such as the lower one for this year.

Mr TARZIA: Thank you. Budget Paper 3 (the Budget Statement), Table 5.12, page 86, refers to the full-time equivalent employees as at 30 June, with some estimates and budgets. I note that the estimate for 2017 FTEs for the Return to Work Corporation is 256.5, and in the 2018 budget it is 248. There is obviously a reduction there. Are you able to allude to why that reduction is there, please?

Mr CORDINER: Absolutely. There is no question that, when the government introduced the new scheme in 2015, there was an expectation it would have a premium rate somewhere between 1.5 and 2 per cent for employers and that it created a time-limited scheme to assist people with intensive services for the most part, except for that small number the minister mentioned who go on for lifetime care and support.

Clearly, we have been running a scheme that had high levels of dispute—in fact, very high levels of dispute compared to other schemes in Australia—and relatively low levels of return to work. Once you introduce a scheme that has time-limited periods, you end up with a smaller number of claims. So, at any one time now, we have open claims of around 11,000. If you go back to 2014 and thereabouts, before the new scheme, we had open claims in the 18,000s at any one time.

Clearly, if you have fewer claims to deal with, the same number of employers and fewer disputes (we are at about 78 per cent fewer disputes in the new scheme compared to the old), it is a cheaper scheme to run. That includes my staff, not just the people whom we pay. We have been through an exercise of saying, 'Okay, we have had two years of this scheme and we pretty much have a feel now for what it might look like going forward. What's the right size that we can afford to run this scheme and deliver the appropriate services?' Hence, we are predicting it is lower.

Mr TARZIA: I am referring to Budget Paper 4, Volume 1, page 43, Program 7: Industrial Relations. There were some December 2016 actuarial updates that show an increase of 71 non-catastrophic serious injury claims, with a liability increase of $73 million. The actuary actually states that newly identified non-catastrophic serious injury claims continue to exceed expectations, particularly on older accident periods. Some of these are, no doubt, driven by some of the case law decisions being handed down by the SA Employment Tribunal. Does ReturnToWorkSA see a risk that this unforeseen trend may continue into claims made on or after 1 July 2017?

Mr CORDINER: I understand the report you are referring to, really well. There is no question that, in a scheme that collects just below $500 million in premiums but has $2.6 billion in liabilities, changes in liability movements are a big deal—a much bigger deal than maybe a failure to collect a little bit of premium here or there. So, we look at that extremely carefully. We get an actuarial assessment twice a year, rather than once a year. That is so that we can make adjustments, if you like, as we go.

Right now, we are in the middle of the end of year actuarial process, and it reflects something similar to December; that is, for the transition claims—the claims from the old scheme—that are working their way through to how many of those get into the serious injury or not. That is not over yet. Possibly, by this time next year, they might all have had their assessments—that is our guess, and it is probably a fairly accurate guess. We expect that number will, of course, go up again.

We have a pretty good handle on it now that we have had a couple of years to see who is putting in applications, what their assessments are, etc. The actuarial assessment we do includes the liability, as was indicated there, and we adjust the liability on an ongoing basis to make certain that we can afford it. That funding figure includes that increased liability for what will be the ultimate number, which we expect to be a few hundred—it will not be from the old scheme—and then added to by about 55 a year from the new scheme when it matures.

So is it a risk? I guess my answer is, 'You bet.' If case law or poor performance or bad luck causes more people to go into a lifetime care and support scheme—which lasts, by definition, until you die—then each one of those people has high needs but also has high costs, much more than any other. How well that boundary is managed and whether case law erodes that would obviously be something that, as a corporation, we would be making recommendations to whoever the government of the day was about fixing that erosion. It is a definite risk.

Mr TARZIA: What contingency plans are in place to protect the scheme funding and the average premium rate in that situation?

Mr CORDINER: The issue is that in that actuarial report—and I know it is fairly large and fairly technical—you will notice there is a significant risk margin to meet Australian standards, and they need to. For us it is a genuine protection for the employers of South Australia who pay. There is a significant risk margin already in the assessment of liabilities. In other words, if the straight-line assessment was, say, $200 million then the risk margin means that you have to have $500 million or $300 million or $250 million, depending on what risk margin is accepted.

So, we have a significant risk margin which is partly by accounting standards and partly by us not seeking to erode it either at this new stage of the scheme in the liabilities already assessed. As I said before, we have that in there for a lot of reasons. One of them is that we accept volatility in our funding position in order to protect certainty in our premium position.

Mr TARZIA: What was the significant risk margin that you calculated again?

Mr CORDINER: We do not; the actuary has to calculate that under the Australian standards. I am trying to remember the actual figure. Can you remember, or do we have to go and look it up?

Mr QUIRK: It is around $140 million at December.

The Hon. J.R. RAU: Can I just mention, as well, that this is another one of these once-off transitional issues. We have the old scheme that came into operation back in whenever it was that rolls on and rolls on and rolls on and eventually terminates on 30 June 2015. That scheme has spent 30 years acquiring all sorts of people—and, quite frankly, not making people better. The scheme worked on the basis that if you keep coming back with a certificate saying that you are unwell we will keep paying you, and that is a sort of subliminal training exercise in, 'Stay sick and you'll get some money.' That is certainly the way it worked for some people, no question—and, incidentally, ruined their life in the process.

The new scheme, unequivocally, does not do that, but we have inherited a whole cohort of people who have been built up over 30-odd years in the other scheme. So yes, there will be a bundle of those people, and the corporation is presently working its way through the people who are potentially in that group to see which ones are genuinely 30 per cent plus or are deemed to be in that category. As Rob said, there will be a number of those, and there will be a single lump of them coming into the scheme which will not be repeated in any foreseeable circumstance in the future. However, they will sit there as a lump that will continue to drain the scheme from the moment they get in.

Mr TARZIA: How much did ReturnToWorkSA pay Mr James Large and/or his business PeopleVision for his work as a consultant in the defunct plan to remove self-insurance from the public sector and hand the business to ReturnToWorkSA and its agents?

Mr CORDINER: There are two answers I have to give to that. One is that I cannot tell you that figure off the top of my head, in amongst our expenses. What I can tell you is that PeopleVision has a contract with us to do a number of things, and I almost guarantee that we will not have separated out—and I know because I am the one who manages that contract—what hours James Large might have spent on getting ready for Crown Insurance. He actually spends most of his time on a project we call the portal project, which assists people to get paid more quickly with electronic transfers and those sorts of things, and some other projects we have. I can get back to you with that figure; I just do not actually know it.

Mr TARZIA: Has the minister or his department engaged former CEO of ReturnToWorkSA Greg McCarthy since he left ReturnToWorkSA? If yes, for what purpose and how much was he paid?

The Hon. J.R. RAU: I will have to get back to you with details of that. I believe Greg has been retained by the government to do some things but by exactly which bit of government and exactly what are the terms and conditions of his appointment, I would have to give you details, and I will get those. You did mention the business about the government insuring with ReturnToWorkSA I would like to actually place on record for you that this is a great missed opportunity which I hope the parliament will in due course reflect upon—a great missed opportunity to have the expert work injury management team in the state, the only people in the state whose sole business it is to manage return to work for injured workers.

This was a chance to have that best of type service in the state extended to state public sector employees and the fact that those public sector employees have been denied that opportunity is very unsatisfactory from my point of view. I am still struggling to understand the thinking behind that. If it is just a case of, 'It's my party and I'll cry if I want to,' fair enough. I think that is very small-minded if that is what it is, but it does strike me that the public sector, as an employer, has a responsibility to do the best it can for its staff in terms of not only the prevention of their injury at work but also the effective return to their work if they are injured, using the best possible means and the best possible resources available.

It is a great tragedy that that was not embraced when the opportunity was there and I have to say ReturnToWork did a lot of work in anticipation of that proceeding, and it is a great shame that all the preparation they went through in order to be ready to proceed was not able to be translated into the delivery of better services to the state employees.

Mr WINGARD: In Budget Paper 4, Agency Statements, Volume 1, page 41 states that the Ombudsman is responsible for return to work. In the highlights for 2016-17 on page 42, it says the Ombudsman commenced an audit of agencies' implementation of the information sharing guidelines. Can you tell me how many agencies will be audited in total, how many have been completed and what has actually commenced as far as the information sharing guidelines are concerned?

The Hon. J.R. RAU: I will have to take that on notice. That is quite a detailed question and I do not want to just have a chop at it and not—

Mr WINGARD: You had a chop at the other ones, and these blokes are sitting right next to you.

The Hon. J.R. RAU: Yes, these blokes do not know. They do not have the answer to that question.

Mr WINGARD: But you can have a go. Has anything been done?

The Hon. J.R. RAU: Again, I will just have to take it on notice.

Mr TARZIA: After the defeat of the return to work (crown claims management) bill, did the minister take a plan B to cabinet and is this plan B or any alternative proposal going to be progressed?

The Hon. J.R. RAU: You know I cannot speak about matters in cabinet.

Mr TARZIA: I did not write that question.

The Hon. J.R. RAU: What I can say is that my view has not changed. When you have a group of people whose whole business it is to deliver these services and to manage these claims, it is kind of weird when they are your employees that you do not use them to do the best job that can be done for all of your other employees.

I think I understand what some people were on about in not supporting it because they obviously had certain groups in their ear. I am more puzzled about how, for example, the opposition could possibly justify settling for a second-rate, patchwork scheme over a first-rate, top shelf—

Mr TARZIA: We ask the questions.

The Hon. J.R. RAU: No, I am giving an answer, though, you see; that is the great thing. It is a rhetorical question.

Mr GOLDSWORTHY: A very long one.

The Hon. J.R. RAU: It is, and please, protect me from your member for Kavel. He is becoming boisterous already. He has only been here—

The CHAIR: Technically he is not here, Attorney.

The Hon. J.R. RAU: I see.

Mr GOLDSWORTHY: No, not yet.

The CHAIR: In any case we are moving on soon, but continue on.

Mr TARZIA: Budget Paper 4 relating to Program 7: Industrial Relations. There is mention of the fact that in 2017-18 there is a $2.7 million increase in income primarily due to an increase in the regulatory fee revenue. How has that arisen or how do you expect that to occur—what basis?

The Hon. J.R. RAU: Can you just please show me again where this appears in the budget papers because these may not be the right people to be asking. This might be SafeWork that you are—I am not sure.

Mr TARZIA: It is Budget Paper 4, Agency Statements, Volume 1, Program 7: Industrial Relations.

The Hon. J.R. RAU: Yes, I am told it is SafeWork that you should ask and they are next up. I can see their smiling faces back there. They cannot wait to get down here.

Mr TARZIA: No problem.

The CHAIR: Let's bring them down, shall we? Thank you, gentlemen, for your time. I would like to formally welcome the member for Kavel to the committee. He has taken over for the member for Finniss.

Membership:

Mr Goldsworthy substituted for Mr Pengilly.

Departmental Advisers:

Ms I. Haythorpe, Chief Executive, Attorney-General's Department.

Mr A. Swanson, Executive Director, Finance and Business Services, Attorney-General's Department.

Mr D. Soulio, Acting Executive Director, SafeWork SA.

Mr M. Spratt, Manager, Corporate Services, SafeWork SA.

The CHAIR: I would like to welcome the Minister for Industrial Relations. We are now looking at SafeWork SA, the same line so we do not need to go through all that again. If you have an opening statement about SafeWork SA, feel free.

The Hon. J.R. RAU: Thank you. As always, it is good to be with you. I will first of all introduce the people who are with us. First of all, the Chief Executive of the Attorney-General's Department to my right, Ingrid Haythorpe; the many-talented Mr Soulio, whose titles are too extensive to fully relay to you today but in his particular manifestation at the moment he is the Acting Executive Director of SafeWork SA; Mr Michael Spratt, the Manager of Corporate Services; and, of course, the evergreen Mr Swanson, Executive Director, Finance and Business Services.

I just wanted to say a few little things about SafeWork SA. SafeWork SA quite frankly is an agency which is in transition. The background to this goes back actually to the whole process with the Return to Work Act. In the course of the conversations in 2013 regarding the Return to Work Act it became very clear that both employers and employees were not happy with SafeWork SA. They had different reasons for being unhappy, but they were all concerned about various elements of the way in which the agency was interacting.

One of the things that came through very strongly was that employers were fearful of asking for help from SafeWork SA, because a visit from an inspector would very likely lead to them being pinched for something. Even if they had actually invited the inspector there in good faith to come and help them with something, the inspector goes to the bathroom and comes back with a summons for them having an inappropriate size toilet roll or something. The response of the employer groups was to be very wary indeed about inviting SafeWork SA personnel into their places to provide them with help.

I came to the view that there was a need to separate, if not legally then certainly administratively, the stream within SafeWork SA which provided help and education to employers from the stream that went out and investigated and prosecuted people. It is what I have called the black hats and the white hats.

An honourable member interjecting:

The Hon. J.R. RAU: Yes, because at least when somebody knocked at your door, if you were an employer, you could tell who was knocking at your door. From 1 July last year administratively this separation has occurred, and we do now have two functions, a regulator function and an educator function.

In terms of the regulator function in the last year there were more than 4400 notifications and nearly 3,000 compliance notices relating to WHS improvements. There has been a proactive compliance campaign, with priority industries being identified for proactive visits from inspectors, and there have been over 8,800 proactive compliance visits. The educator unit, which is completely new, comprises advisers who have no inspector powers at all. So when these people bob up at a workplace they do not scare the employer—that the employer is going to be in effect punished for asking for help. They do not issue notices or fines for non-compliance.

At the customer service centre SafeWork has a great deal of resources there—information and advice and so forth. They have got regional offices. Over the year that this new system has been in operation, I am very pleased to say that nearly 1, 000 businesses, and we are talking here mainly small and medium sized businesses in effect, have asked for a visit from an adviser. That is an absolutely outstanding improvement in the engagement between SafeWork SA and small businesses in South Australia.

SafeWork has been doing client surveys, and 96 per cent of customers have rated the service as very useful, so I am very confident that this is a positive and well-received improvement in the services provided. The educator unit has responded to over 46,000 phone calls and 10,000 emails for information and advice. It publishes its performance data online, increasing awareness as to what is going on.

Industry and unions have strongly supported the new approach, and there has been very positive feedback on this separation of functions. However, there is more work to be done. In particular I am concerned to make sure that the investigation and prosecution aspects of SafeWork do hold employers to account where breaches of laws are detected and have led to serious injury or death.

To this end, SafeWork SA is presently channelling a considerable amount of effort into a review of the way it conducts its investigations to ensure that the laws are enforced and that the reasonable and high expectations of the community as to the enforcement of those laws appropriately is being delivered by SafeWork SA. That is a quick around the grounds of where we are.

Mr TARZIA: Budget Paper 4, Volume 1, page 44, sub-program 7.1, the FTEs for 2017-18 look to have been reduced to 218 from 222.1. What are the reasons for this reduction, and what are those positions that are being lost?

The Hon. J.R. RAU: The decrease in FTEs from the 2016-17 estimated number of 222.1 FTEs to 218 FTEs is mainly due to savings allocated to this sub-program in 2017-18. These are notional FTE savings, I am urged to emphasise, that can be adjusted as needed.

Mr SOULIO: There is a savings target that needs to be met. If there other ways of meeting those targets then the FTE cap does not need to drop, but that is the notional amount that we need to drop to meet those savings targets.

Mr WINGARD: So, it is a financial saving and not an FTE saving—that is what you are saying?

Mr SOULIO: That is right, yes.

Mr TARZIA: There is a $2.7 million increase in regulatory fee revenue. Are you able to break down the reasons for that increase, and to whom does the fee specifically apply and in what circumstance?

The Hon. J.R. RAU: I am advised that the increase is due to licence renewal cycles, for example, plant registrations renewed in 2013 are due for renewal again in 2018, so they are a five-year renewal. Apparently there is some volatility in the returns on these renewals because of the cycling of the renewals.

Mr TARZIA: Outright?

The Hon. J.R. RAU: Yes.

Mr TARZIA: What are the corporate support costs of SafeWork SA?

The Hon. J.R. RAU: For which year?

Mr TARZIA: Whatever you have—2016-17, 2017-18.

The Hon. J.R. RAU: I am advised that corporate support from AGD in 2017-18 is supposed to be $231,000. It depends what you mean. I have two numbers here, and you can choose which you feel happier with.

Mr TARZIA: The higher one.

The Hon. J.R. RAU: The higher one—I thought you would say that. The first one is 'Corporate support from AGD'—this is probably not the one you want—$231,000. The second one is 'Other AGD corporate overhead', which is $4,861,000, making a total in the 2017-18 budget year of $5,092,000.

Mr TARZIA: What about prevention initiatives for 2016-17 and 2017-18?

The Hon. J.R. RAU: Prevention initiatives for 2016-17 and 2017-18: do we have prevention initiatives as a discrete line in the budget? No, it is not a discrete line. We can see if we can get you a number, but we do not have anything separate, presently.

Mr TARZIA: Thank you. How many total voluntary separation packages have there been in 2016-17 and 2017-18?

The Hon. J.R. RAU: I have been provided with information here, and it takes up a whole page, but actually they should just have written a number '1' on a piece of paper and handed me that. Believe it or not, that just says '1'. Can you believe that? That is incredible, is it not, but that is true, that is what it says. I am advised that the answer is one.

Mr TARZIA: How many prosecutions?

The Hon. J.R. RAU: This is all prosecutions?

Mr TARZIA: Yes.

The Hon. J.R. RAU: Do you mean commenced or disposed of by the court, or what?

Mr TARZIA: Probably both.

The Hon. J.R. RAU: I will give you what I have here, and if you require anything further, let me know. From 1 July 2016 to 30 June 2017, SafeWork SA referred 15 briefs of evidence to the Crown Solicitor's Office to seek advice on possible prosecution. Of these briefs sent to the CSO, zero had a complaint laid and are currently in the court system, five were closed with no further action, based on advice, and 10 are still being considered.

I have a table here of the number of briefs referred to the Crown Solicitor's Office by SafeWork SA in the last five financial years. For the year ending 30 June 2012, there were 46; year ending 30 June 2013, 48; year ending 30 June 2014, 31; year ending 30 June 2015, 31; year ending 30 June 2016, 34; and year ending 30 June 2017, 15. That is in terms of the CSO's interaction with it. In terms of convictions, from 1 July 2016 to 30 June 2017, eight convictions were recorded in—it says here the Industrial Relations Court, but it was probably the Employment Tribunal, was it not?

Mr SOULIO: No.

The Hon. J.R. RAU: Okay, fair enough. A total of $736,000 in penalties was imposed by the courts. Also, there were some enforceable undertakings. Members would be aware that under the legislation, one of the potential remedies is the enforceable undertaking, a breach of which itself constitutes an offence and subsequent penalties arise from that. There were enforceable undertakings undertaken by Coles, by a company called SRG Building (Southern) Pty Ltd and by Edward John Morgan and Luke Laurence Morgan. In terms of the numbers of these undertakings, on 30 June 2015, there was one; on 30 June 2016, there were four; and on 30 June 2017, there were three.

Mr TARZIA: There is a common reference to the work injury reduction trend on page 44. Do you have any numbers on what the work injury reduction trend is? How is that trending?

The Hon. J.R. RAU: Can I just mention here, whilst they are delving around, there is a high degree of cooperation between ReturnToWorkSA and SafeWork SA in terms of sharing information. Part of the function of ReturnToWorkSA is a risk management function, as you would expect from an insurer. They have a very sophisticated data analytics capacity within ReturnToWorkSA, which benefits from ReturnToWorkSA's own data and data from SafeWork SA. There is a capacity for them to cooperate in terms of attempting to proactively get into workplaces to prevent potential problems. To put it another way, they are cooperating on risk management strategies. This risk management function is significantly or pretty much exclusively managed by ReturnToWorkSA as part of their risk management activity.

Mr TARZIA: Moving onto costings, Budget Paper 4, Volume 1, page 45, notes the projection for 2017-18 is 7,000 proactive compliance and enforcement visits. How many full-time employees are involved in this? Is there a list of organisations that are visited and the corresponding regularity? What type of industries are visited, what are the costs associated with these visits and have any of these resulted in prosecutions?

The Hon. J.R. RAU: I am advised that we will take that one on notice.

Mr TARZIA: Are these random checks, when they are done? Are some random, some regular?

Mr SOULIO: In relation to that question, it is a combination. Sometimes there will be a random visit to a premises, other times it will be in response to a complaint and other times we will focus on a campaign for a particular industry for a particular month, for example. We may announce that we are going to be looking at agriculture in August, or something like that, so it varies.

Mr TARZIA: So, you are able to detail any campaigns you have had in the last year?

Mr SOULIO: I can provide a breakdown. There is basically a standing calendar of different industries, and I can probably provide that separately to you out of session, if you like. For example, there is a campaign coming up in relation to agriculture. There is another one in relation to construction. They will rotate through the course of the year. I am happy to provide a list of industries that are targeted.

Mr TARZIA: Thank you. There was a 40 per cent jump in the number of proactive compliance and enforcement visits. Why is that, and what were the costs of the increased numbers?

Mr SOULIO: We will dig that out. The cost is not changed; it is basically a result of a change in the way that the campaigns are recorded. Previously, and this relates to the split between the regulator and the educator, the regulator side of the business, as it was all one at the time, would conduct compliance campaigns and education campaigns. When we split them out, the educator basically started to record them in a lot more detail, so that is why there has been a change in that number. It is more the way it has been recorded.

Mr TARZIA: I note that there has also been a large number of reactive compliance and enforcement visits compared to last year's projection. Why has that increased, or is it based on this year's results? What is the cost per reactive compliance enforcement visit?

Mr SOULIO: I am sorry, can I just clarify the line you are referring to?

Mr TARZIA: The number of reactive compliance and enforcement visits?

Mr SPRATT: Is that the one up from 10,000 to 12,000?

Mr TARZIA: Yes.

Mr SOULIO: We can provide some detail. It is not a significant—

Mr TARZIA: So, it is up 2,000?

Mr SOULIO: Yes, that is right. I think it is more of a focus in relation to the work areas that we want people to focus on and actually get some more targeted approaches to that, but I can provide a more detailed answer to it. My understanding is that it has basically been an escalation in the way that we are operating and issuing notices and undertaking those enforcement visits.

Mr TARZIA: Obviously, there has been a large number of reactive compliance and enforcement visits, and there is a 20 per cent jump from 2016-17. How do you interpret such a jump and how many of those added visits have led to prosecutions over the past two years? It is quite a lot.

Mr SOULIO: There are a lot of visits and with some of those, when we are looking at the way that activities are measured nationally, there may be multiple activities undertaken at the point of one visit for example. So there may be an inspection, there may be an investigation undertaken, there may be notices issued for improvements, and not all of those will result in prosecution outcomes but they may result in improved behaviour by the entities involved.

So, a lot of the focus for some of these may be simply a compliance outcome where SafeWork SA inspectors will issue a notice to say, 'You need to change the way you operate,' or 'You need to put a guard on that machine,' or 'You need to improve your training mechanisms,' and, in response to that, the industry will improve its behaviour and its activities and learn from that. It may not be a matter where there is a breach of the act as such or it may not be something that warrants a prosecution or an investigation outcome but a change in behaviour.

Mr TARZIA: Relating to many of these visits, to draw down into a couple of specific examples, how long did it take between SafeWork SA commencing its investigation into the death of eight-year-old Adelene Leong and the delivery of a brief of evidence to the Crown Solicitor?

Mr SOULIO: I do not know that I have got those details. I might have to take that on notice.

Mr TARZIA: How long did it take between SafeWork SA commencing its investigation into the death of construction worker, Jorge Castillo-Riffo and the delivery of a brief of evidence to the Crown Solicitor?

Mr SOULIO: Again, I will have to take that on notice.

Mr TARZIA: I might give you a couple more then to take on notice.

Mr SOULIO: Sure.

Mr TARZIA: In relation to Mr Castillo-Riffo's death, the Premier stated that a Coroner's inquiry would occur. What is the current status and has SafeWork SA been contacted by the Coroner concerning this inquiry?

The Hon. J.R. RAU: The status of that is that that matter is presently with the Coroner, and as to the question as to whether or not the Coroner's office has—I understand that they have not as yet requested anything of SafeWork SA in respect of that matter, but you would be aware I think that one of the issues that was dealt with elsewhere in the budget was the provision to the Courts Administration Authority of additional resources to enable the Coroner to undertake additional works.

I can indicate to the committee that a new Deputy Coroner has already been appointed as a result of that budget allocation. The Coroner's resources have now increased by one third, effectively, in terms of the number of judicial personnel available to process claims and that was done specifically in order to enable the Coroner's office to deal with a number of outstanding matters including this one.

Mr TARZIA: The prosecution was dropped, according to media reports, just three days before it began. What were the reasons for that?

The Hon. J.R. RAU: Again, can I say from my point of view that I regard that as being a matter of grave concern to me. It really is not good enough, and I say this without pointing the finger at anybody in particular, but it really is not good enough when you have a prosecution for an industrial death which has gone through a process for a very long period of time, for it to be at the very last moment that the family and loved ones of the deceased person discover that the matter is not going to proceed. I feel considerable empathy for the family of anybody who is placed in that position. It must be an awful let-down to have been emotionally preparing for that process only to have it not proceed.

What actually happened was that SafeWork SA apparently completed its investigation into the death of Mr Castillo-Riffo on 27 October 2015, and laid charges. The matter was listed for trial on 13 February 2017. On 10 February 2017, SafeWork instructed counsel to withdraw the charges, based on legal advice. On 7 February, however, it is worth noting that an enforceable undertaking in respect of this particular matter was entered into. Whilst the proceedings did not go ahead, there was an outcome in the matter. I cannot recall the precise dates and details of this at the moment—and I will try to get the details—but I think I have answered questions about this in the parliament, anyway.

The gist of it was that, at some point in time, it came to my attention that SafeWork were of the view that they needed independent legal advice about this matter. I said, 'Fine, you get independent legal advice. If that's what you need, you get it.' They went off and got it. According to that advice, they were advised to resolve the matter in the way they did. I am not for a minute challenging their decision because I have no doubt that they acted with all propriety. It would have, in fact, been an abuse of process for them, had their advice been to not proceed as they did, to have proceeded nonetheless, just to make show of it. That would have been completely inappropriate.

The only problem I have with it is that it took that long to get to that point. That is the only issue I have with it. I am not in a position to argue with the legal advice or to second-guess the judgement of the senior officers of SafeWork SA; that is not my primary concern about it. My primary concern is that the thing was allowed to get to the point where it was three days away from a trial before that resolution occurred, and that is obviously not ideal, by any means.

Mr TARZIA: When can SafeWork SA expect to have a new executive director appointed? How much was spent on their recruitment process?

The Hon. J.R. RAU: That is a process that is, as we sit here now, a work in progress. I think the current acting chief executive is having a terrific time in there, and I am not keen to disrupt him. He is a very energetic agent of change—I think that is what they say, don't they? I am very comfortable with him being in that role for the time being. In fact, it is a shame that he is not able to clone himself because we would have a couple of spots for him. However, as far as I understand about the cost, there is no cost to the present time. It is just a matter of time from people in the department having gone about it, and an ad.

Mr TARZIA: So, there is no appetite at the moment to appoint a new executive director?

The Hon. J.R. RAU: I think the appetite varies according to whom you speak. My position is that I am in no great hurry, unless, of course, a really excellent candidate presents him or herself, in which case I would obviously give Mr Soulio the bad news.

Mr TARZIA: The scope of SafeWork SA is obviously for the public, but also for private businesses. Are inspections done on departments and agencies, for example, Health and Transport?

Mr SOULIO: Certainly there are inspections on, for example, government-run construction sites and roadworks and things like that, and certainly responding to complaints and callouts as required.

Mr TARZIA: Obviously you capture the statistics you accumulate through those visits. Are these statistics integrated in any way with other agencies?

Mr SOULIO: I do not quite follow the question. If I understand what you are saying, I do not think—

Mr TARZIA: Obviously there are a number of inspections done, and you have now confirmed on public agencies as well. Do you capture the data from those visits and share them with other agencies?

Mr SOULIO: I do not think so, but I will clarify that.

Mr TARZIA: Moving on to costings and Budget Paper 4, Volume 1, page 32. It has been noted under Consumer and Business Services, 'Collaborate with SafeWork SA to streamline the occupational licensing requirements for individuals in the construction industry.' Has there been an overlap of requirements, and who will enforce these requirements going forward?

The Hon. J.R. RAU: This is interesting. This is a collaboration between SafeWork and CBS. This is one of the great examples where the acting chief executive is able to resolve a lot of problems without talking to anybody.

Mr SOULIO: I do have a lot of conversations with myself about this. To answer your question, basically because both CBS and SafeWork regulate similar industries—for example, the construction industry and all licensed industries where CBS also has obligations under the SafeWork legislation, so car dealers and real estate agents and the retail industry in general—where there is an overlap in relation to a licensing requirement, for example, where a builder might have to come to CBS for a builder's licence but also then go to SafeWork for a white card or a working-in-confined-spaces type of licence, we are looking at how we can create a single point of entry to government for those industries to deal with.

Similarly, from a compliance point of view, we are looking at where we can have CBS and SafeWork join up to go to a building site at the same time to look at whether people are appropriately licensed and whether they are managing their obligations under the work health and safety legislation, rather than having two government agencies show up at different times and take people off-line to walk around the site, and things like that. We are looking at ways we can do that in a more collaborative way to make it easier for industry to do business but also to make sure that we are regulating appropriately.

Mr TARZIA: I refer to Budget Paper 4, Volume 1, page 45, talking about education programs. Does SafeWork SA produce any revenue from its education activities?

Mr SOULIO: No; there is certainly no charging for attendance at sites to conduct education, and any materials that are produced are not charged for. So we would not say there is a revenue stream attached to education.

Mr TARZIA: How much is SafeWork SA spending on inspector education to ensure that inspectors have relevant qualifications to properly enforce their areas?

Mr SOULIO: We will have to take that on notice for our training budget.

The Hon. J.R. RAU: I have to say that is very, very important work. If there is one area within SafeWork that I continue to be very interested in it is that area, because I want to make sure that the team that is doing this work is fully trained to be able to do that. In fact, that is one of the projects the acting chief executive is presently very much involved in. It is difficult to emphasise enough how important that is.

Mr TARZIA: I know there has been a significant increase in the number of education engagement and support activities, and it has been noted in other documents such as your annual report of 2015-16 that there is a clear separation from the education function and other functions. I suppose the reason is for this function to provide focused advice and support, as referred to. Can you explain whether there is any overlap between the number of proactive compliance and enforcement visits and the number of education, engagement and support activities done by the educator?

Mr SOULIO: I think I am answering your question. There may be circumstances where there is an education campaign in relation to a particular industry. We might have a campaign where the educator goes out to the construction industry and spends a fair bit of time with them helping them understand their obligations, and there may be a time some time after that the regulators and inspectors then go out and basically assess how much they have understood of that training and do some inspections from that point of view.

There is not an overlap in that they are done at the same time, and the separation is for that particular purpose—to keep the white hats and the black hats separate, as the Attorney referred to earlier—but there is certainly a connection between making sure that industries understand their obligations before we may take some inspection action or regulator action to make sure they have understood the education.

Mr TARZIA: Has the increase in the number of educator inquiries or advice achieved a reduction in prosecutions or breaches of compliance?

Mr SOULIO: Statistics can work in many ways, but certainly I think we are working on the theory that the more people are educated and understand their obligations and that we work with them to make sure their practices are safe, then those numbers of matters that result in prosecutions will come down and have come down because people are basically doing the right thing and understanding their obligations and taking their safety towards their employees seriously to the point that there are less reportable notifiable injuries and that correlates then to less prosecutions.

The Hon. J.R. RAU: Can I actually say from my point of view again as minister, to me, the nirvana outcome is that we get so good at educating employers here that we have hardly any injuries. That means we need hardly any prosecution and it means the return to work scheme hardly needs to be supporting anybody. That is a tick in every box. The figures are quite consistent because, when I read out those numbers before, you notice that we have started to see a falling away of the numbers of prosecutions and referrals to the Crown Solicitor's Office.

That may be some very good news filtering through the system. I agree with the acting chief executive that statistics are able to be interpreted in a multitude of ways, but I have to emphasise that the objective in setting up that separate 'white hat' element to SafeWork was to make the task of picking up the telephone as a small employer and asking for help as simple as possible. The sheer numbers of people who are engaging with the system that we are getting is very encouraging, as is the feedback we get from the client surveys.

The other point too—and this is how committed we are, because I want this to be as transparent as possible—is that there is a dashboard that sits on the interweb where there is a release of the activities that people are up to. For those people who want to monitor how SafeWork is going, all you have to do is go to www.safework.sa.gov.au hashtag. It covers public authorities and government agencies. Hashtag #safety—how is that?

Mr TARZIA: Marie Boland, ex-SafeWork director who resigned suddenly, was to be appointed as the presiding officer. Under the act, the minister makes the appointment. The question is: given that the act covers the building and construction industry, why was Marie Boland appointed and not a person with more relevant experience in the industry?

The Hon. J.R. RAU: You are talking about the long service leave body?

Mr TARZIA: Yes, the Construction Industry Long Service Leave Board.

The Hon. J.R. RAU: A couple of things. First of all, the long service leave body is a body that manages long service leave entitlements, as I understand it. It is not an industrial regulator or inspector. It is more of a trustee body, as I understand it. The second thing was that, as I understand it, there were names put forward. There was a call for nominees, wasn't there? I would have to check out how it went and what the process was. Having worked with Ms Boland for a period of time, I am very sure that she is more than capable of discharging that function very well.

Mr TARZIA: I have been informed that Aaron Cartledge has been reappointed but he has been found guilty, I am informed, by the Federal Court of knowingly and deliberately breaching the right of entry laws of the Fair Work Act 2007. Was this a dishonourable conduct and breach of section 8(2)(b) of the act?

The Hon. J.R. RAU: I thought it might have been the member for Schubert who asked this question because he is usually pretty quick off the mark on this thing but you have beaten him to it.

Mr KNOLL: I have been otherwise occupied.

The Hon. J.R. RAU: Or it could have been the member for Kavel because he is interested in this as well. I knew that—

Mr GOLDSWORTHY: The CFMEU.

The Hon. J.R. RAU: Yes, that is it. You are on to it. I knew that there was going to be a matter of interest about Mr Cartledge.

Mr GOLDSWORTHY: You like that union, John, don't you?

The Hon. J.R. RAU: I knew that you folk were interested in them. I knew that, so what I did was when I saw the advisory council nominees pop up—

Mr KNOLL: Is this the advisory council or long service leave—

The Hon. J.R. RAU: Long service leave, I beg your pardon. Is that what you are talking about?

Mr KNOLL: Yes.

The Hon. J.R. RAU: I asked to be provided with some advice as to the entitlement—

Mr Knoll interjecting:

The Hon. J.R. RAU: Pardon?

Mr KNOLL: How he is still here.

The Hon. J.R. RAU: No, what the entitling or disentitling circumstances are for membership of that body and what the role of the minister is in lawfully dealing with that matter. In broad terms, I was advised that it was not—I was not given any reason, having asked for legal advice—legal reason to say that Mr Cartledge was not able to discharge his position as a member of the Construction Industry Long Service Leave Board. Given the fact that he occupies a position within an industrial organisation in that work space, it tends to make sense that he would be interested. I did actually ask the question, 'Is there anything about his circumstances that would render him disentitled?' and I was informed not.

Mr KNOLL: Just to add to that—

The CHAIR: Before you speak, member for Schubert, I should welcome you to the committee and note that the member for Mitchell has requested to be discharged in order to be replaced by you. Go ahead.

Membership:

Mr Knoll substituted for Mr Wingard.

Mr KNOLL: Thank you. Under the act, a member may be disqualified if he or she has undertaken dishonourable conduct—is guilty of neglect of duty or dishonourable conduct. If the myriad of offences that Aaron Cartledge and the state CFMEU have been found guilty of does not constitute neglect of duty or dishonourable conduct, what will?

The Hon. J.R. RAU: Sorry, what was the question?

Mr KNOLL: You said you got some legal advice to suggest there is nothing to stop him from being on the board. As part of the Construction Industry Long Service Leave Act, section 8—Conditions of membership, the Governor may remove somebody if—

The Hon. J.R. RAU: I understand the question now, sorry.

Mr KNOLL: So, where is the threshold?

The Hon. J.R. RAU: Again, it did occur to me that one of you gentlemen would ask me this question so I did think: I am going to try to be out ahead of this one, and I—

Mr KNOLL: You could have just not appointed him, but sure.

Mr GOLDSWORTHY: Ahead of the game.

The Hon. J.R. RAU: Ahead of the game. I thought: what I will do is I will ask this question first before these chaps get a chance to ask it and I will see what the answer is, so I asked that question of the Crown. I said, 'Look, just tell me what the story is. Is this a problem or is it not a problem? You tell me the answer. I'm not telling you what I want, because I don't have a view about what I want. I want to know what you think.'

What I was told, and I am paraphrasing this for obvious reasons, was that because the convictions are civil matters, none relate to serious dishonesty charges and all are on the lower end of the scale of what might be considered dishonourable conduct, there was no reason not to appoint him.

Mr KNOLL: So, essentially what you are saying is: Mr Cartledge would need to commit a criminal act and be convicted of a criminal act in order for him to be discharged from this committee?

The Hon. J.R. RAU: I did not ask the Crown that question, so I do not have an advice specifically on what it would take for him to be out. I only asked them, 'Given his CV, what side of the line do you think he falls on?' and they said, 'It's not enough.' I think it is a question of fact and degree, is it not?

Mr KNOLL: What you are saying is that the civil penalties and the civil offences that Mr Cartledge has been found guilty of, which include harassing and bullying on worksites, including making threats, including disrupting a number of significant worksites across South Australia, are essentially not of a serious enough nature, that they are in effect trivial, so as to not trigger section 8 of the construction—

The Hon. J.R. RAU: I am not going to use words like 'trivial' or 'not serious'. All I am going to say is: I gave the Crown a summary of Mr Cartledge's circumstances and I asked them the question, 'What do you say I should do?' because, as I said, a little bell did ring in my ear, metaphorically speaking, that one or other of you chaps would ask me this question. So, I thought: I want to know what the answer is before that happens. What came back to me was that in all of the circumstances this was not, in their view, a sufficient reason to render him disqualified.

Can I say too that this is a body which meets, I think, 11 times a year, and I think the maximum payment that a member will get is $170, or something, multiplied by the number of attendances. It is $177, and in the last year he received $885, so let us just get this in perspective. It is a thing where there are occasional meetings. He is not at all of the meetings. He only gets paid for the ones he bobs up to. In the last 12 months he bobbed up to a couple—sorry, five—and his total payment was $885. I did ask the question, and it was an open-ended question; I did not expect or even hint at an expectation of any particular answer.

Mr TARZIA: Minister, are you able to release that advice?

The Hon. J.R. RAU: No. I do not give out legal advice. These documents are—look, I assure you—

Mr TARZIA: Legal professional privilege; okay. Are we able to ask some questions about the South Australian Employment Tribunal?

The Hon. J.R. RAU: Sure, please.

Mr TARZIA: Budget Paper 4, Volume 1, page 45, paragraph 2. I note that Deputy President Karen Bartel recently resigned from the IRCCSA, which is now the SAET. Apart from any annual leave or long service leave payments, did Karen Bartel receive any other payments such as redundancy?

The Hon. J.R. RAU: I do not believe so, but I will check.

Mr TARZIA: If she did, why did she, given she resigned, and how much was the payment?

The Hon. J.R. RAU: Again, I will check.

Mr TARZIA: Is she entitled to a pension, and, if so, is it a lifetime pension, and how much is it?

The Hon. J.R. RAU: Again, I will check. There is some complexity with her because, as you may or may not be aware, she was a joint appointee, so she had both commonwealth and state jurisdiction. So, she was wearing a couple of hats. I need to be very clear on who was paying her what and whether it was a case of the state subsidising the commonwealth or the commonwealth subsidising the state, and who was in it for what. I am happy to find out the answer to those questions.

Mr TARZIA: Do you intend to replace her?

The Hon. J.R. RAU: No. I think what we did as a parliament was draw a red circle around commissioner McMahon and commissioner Bartel when we passed the Employment Tribunal bill last year, or the beginning of this year (I cannot remember when it was), so as and when either of those people depart the scene they are departing the scene and that is the end of that. Once she goes her position vanishes when she leaves.

Mr TARZIA: Is the government intending to make any more appointments to the SA Employment Tribunal before March 2018?

The Hon. J.R. RAU: If you are talking about as a commissioner in the old sense, in the sense that commissioner Bartel was a commissioner, the answer is no, because the law will no longer provide for the appointment of such a person at that level. But, until she resigned, she was able to carry on as she was, and commissioner McMahon is able to carry on as he is until he decides he wants to be elsewhere.

It may well be that there are roles for conciliators who are now, I think, by reason of the changes in law, referred to as commissioners, if I am not mistaken, and they come up periodically. Whether some of them are coming up before the end of the year, I do not know—I can check, but I am not sure.

The other thing is that, if you are talking about the presidential members of the commission, I believe that before the end of the year the president of the Employment Tribunal will retire by reason of age. Exactly how that will be dealt with, whether that is an internal appointment or an external appointment is a matter to be determined.

Mr TARZIA: You pre-empted by question, Attorney. Obviously the president will retire later this year. Is the government intending to replace him or her with an internal or external replacement?

The Hon. J.R. RAU: We have not made up our minds.

Mr TARZIA: Therefore, we do not know who that will be?

The Hon. J.R. RAU: No.

Mr KNOLL: We are moving on to Consumer and Business Services.

The Hon. J.R. RAU: I am really happy to jump into Consumer and Business Services.

Mr KNOLL: I wanted to ask a couple of questions on the SkyCity Casino deal that was announced.

The Hon. J.R. RAU: I am the wrong chap, really. Can we formally change over?

The CHAIR: I am happy to, if that is the wish of the committee. Thank you, everyone.